Anyone following the Greek Gold knows that the prices for high quality coins have blown out over the last year. Three years ago the above pictured portrait stater of Alexander The Great dating to about 334 BCE sold regularly at auction for around 5-7000 dollars in near mint state condition. It is a rare coin. Perhaps 50 exist. Yet they used to appear at auction 3-4 times a year.
Now the last two coins in this condition to reach the market over the last year sold for 25,000 and 35,000 respectively. While, it's clear that this phenomenon is not limited to rare gold coins - we see it in a range of art commodities: Chinese art, Old Master Paintings, historic documents, high grade gem stones etc. etc - I view rare gold coins as a leading indicator for the gold market in general.
Why? Inelasticity of supply.
Right now, smart money the world over is seeking to change paper into hard assets. Everybody is worried about paper as an adequate store of wealth. And rightly so. One place that paper money flows is into objects that are perceived to represent cultural heritage.
For almost every country on earth except the United States ancient gold coins are representative of cultural heritage. Of course, even in the US some people can understand the Greek culture lies at the root of American art, language, philosophy, political organisation. But for countries with longer histories - and a stronger appreciation of education (almost every other country on earth) - the recognition that ancient culture lies at the root of modern culture seems obvious.
So there is a natural movement for those who understand gold as money to seek out the most ancient specimens. And there the supply is very limited. So it is natural that these ancient gold coins are being bid up at a much faster rate than modern bullion gold coins.
Yet.... Even modern bullion gold is in relatively tight supply. Relative to what? Paper. Paper is in near unlimited supply. There is currently about 4 trillion dollars of gold - including all the gold ever mined. World GDP stands at about 60 trillion a year. World financial assets are now measured in the quadrillions.
My point is this: The ancient gold market is being overwhelmed by demand. But the modern gold market is still tiny compared to the world financial asset market. It would only take another panic like the one we saw in 2008 to create the same inelasticity we see in the ancient gold market.
What are the chances of that happening?