What makes the price of coins go up?

I respectfully disagree. I will not go so far as to be absolute, but for us here at cointalk, supply and demand affect price and all other things affect supply and demand.

 

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Okay, but inflation does cause a general increase in prices (on all commodities) based on the fluctuation of the dollar. Maybe at CT the emphasis is on supply/demand, but overall, inflation will to some extent affect the prices.

 

Inflation will affect supply or demand or both.

 

Regarding why prices of collector coisn go up every year, I think the big reason is the fact most people get a little more money every year.

Think about a collector of Roman Republican denari. He used to pay $50 a month for a Vf coin. He was comfortable spending that much a month on his hobby. Over the years it went to $60, then 70, then 80 now its around $100. The $100 he spends per month is about the same in his budget as the previous $50 a month used to be, inflation has just raised it. Dealer will charge what the market will bear, and for many collectors they budget one coin a month or so. If they get more money they are willing to spend more proportionally on their hobby.

 

Interesting thread. Two things:

1. Of course price guides merely "report" observed prices, but they also have one of the strongest influences on the very prices they're "reporting". When people say guides only "report" the prices, that leads many people to assume the assertion is they have no influence on price, which of course isn't true. Because, in many sales, the price guides do "set" the price. Or at least the starting price and minimum price a dealer would be willing to accept. Where the buyer and seller reach an agreement is anyone's guess.

2. Due to the nature of the market and that supply rarely changes after a coin has ceased to be produced, of course demand in the coin market is what causes fluctuations, but don't think for a second that supply isn't just as important. When people comment about a particular low mintage coin that does not command a high price in the market as proof, that isn't proof. For every example of low mintage numbers not commanding a high price, I can show you ten examples where the opposite is true. The only thing that means is that not very many people are interested in buying that particular coin, so the relatively low number of coins in existence are sufficient to satisfy demand. To convince me otherwise, you'd first have to show that all coins are equal.

 

I can show you many sir, how many do you want? All sogdian coins are rare, many officiana's with certain reverses on RI are rare, most central asian like hepthalites are rare, the lists goes on and on.

With world coins, I just bought a coin with a mintage of less than 10k for melt. I have had opportunities to buy world coins with mintages less than 1k for melt.

I hear what you are saying, sir, but I believe demand is absolutely key. With US coins there are probably well over 100k 16d dimes and 09sVDb cents, but US collectors call these "rare". Heck, I can go to almost any ancient catalog and find a coin in which the experts believe only a handful exist, and they sell for about the same price. I think "rare within a series, in which people are attempting to collect the series" would have to be the correct analysis. If not, how do you explain the prices of SL halves from the 1880's? All of those coins are MUCH rarer than most "keys" in US coins, yet are lower priced. The reason is no one really attempts to collect all SL halves anymore.

 

As many times as you want, just make sure your examples are comparing apples to apples.

Sogdian coins, by nature, are a very poor example. What I mean by that is there are no year by year mintage numbers to show that two coins that are virtually identical except for mintage numbers are not fetching a different price.

Great! Are these also ancients?

What might be a good way to test your theory is to go out and buy 900 of these coins that had a mintage of 1k. Sure, the price would go up in the short term because of the increased demand that you put on the market, but once you stop buying them and allow the market to adjust, I bet it wouldn't return to it's original price point.

Perhaps you don't hear what I'm saying, because comparing US coins with ancient coins is not comparing apples to apples.

This is much closer to what I'm saying, but still not exact because you're still not comparing apples to apples. You're comparing SL halves to other coins. How about comparing years with dramatically different mintage numbers within the same series. That would be a good indicator of how supply is affecting price.

Either way, demand is still one half of the equation, as is supply. Those that say it's "ALL" demand, or it's "ALL" supply, probably don't fully understand economics. I'm not trying to say it's "ALL" supply. I did agree that by nature demand causes almost all of the fluctuations in price. What I am trying to say is that supply and demand work together just as they do in any market, to determine price.

 

Well I was just going off of your comment:

For every example of low mintage numbers not commanding a high price, I can show you ten examples where the opposite is true.

Read more: http://www.cointalk.com/t215585-4/#ixzz29Nu3imCi

If I was taking it out of context I apologize.

 

Yes, there is "series rare" and "rare" and I agree, they are two different things.

While price is set by supply and demand, the mint for example, can try to set the optimum price by trying to determine demand then tailoring supply to that demand to set the price.

 

No apology necessary. Perhaps I just didn't explain well enough...