I've been punching in some numbers onto my spreadsheet over the period of time I've built and inventorized my collection, and I decided to see which region's coins I was spending the most on. Rather, it may be more accurate to say how much of a premium over melt each region's coins cost me. This was done by comparing the spot silver price and the actual purchase price by region. By far, US coins top the list, with Asian coins not too far along. Do these figures roughly display how the numismatic market demand by region looks today? I'm sure that coin collectors from different regions will place different emphasis, but in this internet age, the prices paid for coins seem to be pretty consistent no matter where the online seller actually lives in the world. The more important question may be, am I paying too much? Anyway, below's one part of my results: the premium over spot paid by given region. If you have a better way to calculate or look at things, I'm all ears. % Premium Above Spot Silver Price + US : 329.04% + Asia : 280.75% + Europe : 157.26% + South America : 111.35% + Australia & Pacific Islands : 84.75% + Middle East : 76.21% + Africa : 75.88% + North & Central Americas (non-US) : 50.98% Some caveats... - Most coins were purchased raw, so if you prefer to purchase slabbed coins, then the overall percentage for each coin type would increase. - Some high grade CRH coins were included at a cost of face value. - Some regions don't have nearly as many coins as others, so a greater number of coins in that region's collection would give a more accurate depiction of how much I'm valuing that region's coins. Conversely, I have relatively fewer coins from Australia and the (non-Asian) Pacific Islands, but those relatively few available coins tended to cost more on average. - Perhaps it's not so much as how much I'm valuing the coins, as how expensive the coins of that region are (e.g. perhaps silver coins from Asia are more expensive due to relative scarcity). - I like to buy high grade raw coins at or below market value. So, some of the premiums aren't necessarily represented perfectly. That said, some coins were given bias in that I was willing to pay above average prices (e.g. for rare coins). - Perhaps I could sub-divide Asia even further, or combine Asia with the Middle East. Various combinations could have been made, but the regions above is how I categorized my coins.
As a major buyer of World Silver coins (including Bullion) I learned a long time ago not to make a purchase based on Premium over melt. I buy what I like. Sure it's fun to make a score now and then but if I only focused on that I would never add to my collection. As it is, I have many coins in my collection that are worth more than what I paid, and much more than melt. As well as some that go the other direction. My best answer to why some regions demand higher premiums is 1) Supply and demand and 2) Quality of the product(milk spots) One way to get ahead is to look at mint and proof sets which have large silver or multiple coins. 1970 Austria Proof set for $16.50 that has 1.646 oz. of silver. 1974 Jamaica Proof set for $30.50 with 1.9138 oz. 1978 Panama Proof set for $100 with 5.6931 oz. Just a few examples.
Question: Did you also note in your spreadsheet what bullion spot prices were at the time you purchased your coins? Because if you are making this calculation using today's spot prices, you numbers will not be valid, as spot prices fluctuate and you didn't buy all those coins at the same time
Great point about the proof sets. I got an excellent deal for a 1967 South Africa proof set, and that's probably a great way to score great deals. I don't really look at premium over spot for purchasing decisions. It's more of an after-the-fact calculation, as I'm sure there's plenty of bias on certain coins (e.g. I place lots of emphasis on US coins in general and any silver type that I don't yet have). Anyway, thanks for the reminder about the proof sets, that is a great way to add to a collection .
That's a good point and I haven't done that. I have my total silver melt value and dynamically pull data off a website to get current prices. I also have silver prices calculated in dollar intervals. I could pull that data on the dates of purchase, but that'd be a lot of work.
Yes it would. If like many people you started collecting US coins and then gradually went on to foreign, that would explain why your premium for them is calculated as so high since silver has been gradually devaluing for some years.
I don't really think of it as "premium over melt." It's more like "numismatic premium," to me. In pure % of melt terms, probably the most I've spent is $150 on a small cent. At today's copper and zinc prices, that amounts to (literally) over 1,000,000% over melt.
This probably is a strong factor. I also think that I spend more on US coins because I'm more comfortable with assessing the value of them over world coins (more info on the 'net, too). So, I'll probably go for a much better condition and be more daring at a rarer, key date.
When I'm buying "collector" coins, I don't give PM melt value a consideration. For example, I just added a 1853 Arrows Seated Dime to my Type Set collection. When bidding on the coin, I gave no consideration to the current price of silver. IMO, it has no bearing on the value of that particular coin. When adding cool looking bullion pieces, I strongly consider the PM prices. My willingness to pay premium is also directly related to how much I like the design.
I'm a little different. I look at precious metals prices to see if I should hold out or if I should buy now, before present average sale prices are forecast to drop or rise, respectively. There are, of course, exceptions.
Can you explain this to me a little more? I'm not exactly sure what you mean. Is this strategy purely for bullion pieces?
No not only for bullion pieces. I've noticed that silver coins in general rise in demand when spot silver prices rise, usually after the price of silver rises (the more newsworthy the price change is, the more buyers come in to bid). So, if silver does really well on a Friday, or for that entire week for that matter, I may avoid making a large silver coin purchase that weekend. Granted, many sellers simply set a buy it now price, but auctions are a different story. I don't make spot silver prices a priority for rare coins, errors, etc., though it's always on the back of my mind - I can't help it!
It seems this only works with coins that are considered "junk". Coins that are of value to collectors never sell for spot unless sold by someone who know no better.
Maybe it's just me, but I've noticed prices to be higher when silver jumps in price. It's as if people get hyped about silver, including collectors, and start to buy (more) silver coins that are on their wish list or just decided to add.
There is a distinct difference between collector coins and bullion level coins. For example some common date gold coins reflect the price of gold, other less common ones the price of gold does not play a part in the price. Of course these type coins will always hold the price of the pm itself. Even looking at morgans you currently get around 11 dollar melt price - so for the few collector coins I own my ratio would be in the 1000's. Not the same if I was just buying low grade morgans at spot plus a premium - then it might just be around your percentages.
As others have said already, when purchasing a coin for numismatic purposes, the price of the base metal has almost no influence on my acceptable price paid or the list price. So many other factors come into play that the value of the metal is simply inconsequential. Bullion is entirely different. Unless I truly love the design, I am not likely to get far above spot. I really feel that bullion collectors and coins collectors, while they can be the same person, think very differently. If you buy bullion like a coin collector, you lose your shirt. If you buy coins like a bullion collector, you miss a number of opportunities to own important pieces. For example, no sane person would buy a Fugio with the consideration of copper value in play.
I do agree that when PM prices are on the rise, the numismatic coins also see more activity. I also agree there is a bit of "better get it now hype" that goes along with the activity.
I'm not a bullion collector, at least not in the strict sense. I collect new 1 oz silver coins released by various countries, but I buy coins for their aesthetics. Bullion coins will be heavily affected by silver prices, but I'd argue that non-cull coins such as Morgans and Peace Dollar prices are affected by noticeable changes in silver prices, too. Although I don't fill albums with each year of a given coin type's series, many people do. I suspect that these aren't all "high" grade coins, and if people get hyped on rising silver prices, auction bids should reflect that. Sometimes I wonder why people bid so much, and why they engage in a bid war; however, I have to remind myself that people aren't all rational and the act of bidding can stimulate irrationality.
