Why are certain extremely rare coins cheap? ... (gold libertads and possibly others)

I'm a bullion investor who very occasionally veers off into numismatics. While looking at bullion coins I came across some gold Libertads with very low mintage (500 - 600) that were selling for <20% over spot.

Now, I know if a US coin only had 500 minted the price would be astronomical. Why are these Libertads so seemingly cheap? I know ... supply/demand and all that ... but really?! It seems like in a country with 113 million people (Mexico) there would be 500 who would want to snap this up.

Are there other coins that have this same "problem"?

I guess my thinking is that someday somebody is going to say "Hey! There's only 'x' number of these around".

Thanks

 

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It's just gold bullion.. its gold and thats about it :/..

 

'Rare' Coins aren't Valueable of Oldness. But the rare part makes them valueable. So don't know why... Sorry

 

Well i mean, its gold bullion, why buy a rare bullion for more, when you can get the same thing for spot price?

Just the way i see it, when people buy gold they're looking for an easy investment,

if you bought a rare bullion and the price crashed, that bullion is going to go down none the less :/.

 

Bullion to me is for investing, not for collecting per se, so mintage or number created is almost irrelevant to value, the gold is what gives it its value. Most people just want their gold in a pretty format like a round coin or bar, not as a nugget, so bullion it is for those investing in gold.

 

The use of RARE is over used.
Depending on the type of coin that you are talking about a mintage of (500-600) is far from rare

In a proof coin that is a low mintage but not rare as they were meant for collectors.
While in a business strike depending upon the year and if they were released into circulation. If the survivability rate of a coin is high then the price will stay low while if the rate is low the price will rise.

If it doesn't have a demand for the product it could have a mintage of 50 but if no one want's it 50 can be alot of pieces to try to move and make you money on. Supply and demand is what makes the price.

 

Libertad are cheap primarily because the demand isn't there and the coin is unknown to most Asians/Europeans , also Mexicans don't invest in gold in the same level as Asia or even US. IMO it ranks below Britannia, Panda, Sovereigns, Leaf, Philharmonic, Krug. and AGE when it comes to recognition...

Also sadly people use various coin guides and use that as basis for their bids. Forgetting that some of BVs are just estimates.

 

So is there any "consolidated" source for what coins are popular?

Is there some place that keeps track of price changes over time frames, let's say, by grade?

I'm not a complete noob. I collected coins as a kid, and I know about a few coins like the 1909-S VDB, 1916 dimes, 1921-D Walking, certain Morgan O's and CC's and that sort thing, but realistically I have limited knowledge of which coins are desirable and even less of the market from an investment perspective. For instance, I have no idea how to find out about "survival rate" of coins.

Not too long ago I read an article that listed a handful of coins that had the best investment performance over a few time frames. I was very surprised by the compounded returns of some. It would be nice to have a more expanded version of this data.

Maybe these questions would be better as a new thread. Let me know.

Thanks

 

Excellent feedback!

Thanks

 

Actually the NGC price guide is free and shows trends for several years on any particular coin in any particular grade. All you have to do is look it up in their online price guide and click on any of the prices for any grade. It gives you something like this: http://www.ngccoin.com/poplookup/NumismediaPrice-History.aspx?c=13689&g=G

 

There's only 4 of this around on earth, but they are worth almost nothing.

 

The coins may be rare, say a libertad had a mintage of 30k and a certain 1995 W silver eagle had a 30k mintage as well. Now consider how many people collect each series. There you have it. Say 500k people collect silver eagles and 100k collect libertads, that means not everybody can have one so they price goes up. The less there are per the number of people collecting the series equals the price, as determined by the law of supply and demand.

 

The key to pricing a "rare" item is demand - low demand makes for a low price. There are certain issues with Mexican gold - particularly how it is taxed in Mexico that make for a low demand. They are sold for quite a premium in Mexico which greatly reduces demand. That said they are pretty coins and I really like my Mexican gold. I have some gold medals from the 1950s that I bought at spot, I am sure they only have mintages in the couple of hundreds - but they are totally cool.

 

"Why are certain extremely rare coins cheap?"

Simple answer: Because nobody wants them (i.e. demand is low).

 

Oh yes I realize that. As with other price guides, they are most useful for trend data than actually pricing an auction estimate. The prices in that guide are for slabbed coins anyhow. =)

 

Which begs the question, "Why doesn't anyone want them?"

Granted, I don't profess to understand coin collecting psychology (I look at most collectibles from an investment perspective), but if I described a car as exotic (like gold), beautiful and rare, the markup and demand would be huge.

In US coins, the "key date" coins seem to be "key" because their mintage is low. Other than being Mexican vs. US, that doesn't seem to apply to these Libertads. Thus my confusion.

No big deal. I'll keep buying bullion and the occasional numismatic coin, as well as keep buying my nephews a slabbed coin for Christmas every year. They seem to like it as much as the toy I buy them.

 

Hmm some of the slabbed pf68+ rare dates for Libertad are selling for over 50% over spot price so it is not like they are dirt cheap. As i said earlier Libertad are not that well known internationally and it is demand in Mexico is quite weak. So you have weak domestic and international demand unlike with other Bullion like Panda, Sovereigns etc.