Saturday, June 9, 2012
Spring gold coins auctions: The middle gets slowly crushed.
rare gold coin market serves as a reflection of the broader economy: and as in the broad economy, the high end is doing very well, thank you very much, while the middle gets slowly crushed.
In the broad economy the US leads the world for wealth and income inequality as the top 1 percent takes in 25 percent of the income and owns between 70 and 75 percent of the wealth - and the the skew has been accelerating even after the financial crash of 2008.
The rest of the world is not far behind.
What this means, of course, is that the top 1 percent has the most wealth to protect and they are actively seeking to diversify out of paper and into tangible goods. This movement takes place regardless of what appears to be happening in the broad stock market, the bond market, and the broad commodities market.
Rather it is the High End "Collectibles" market where we see high end money flooding into the market, and competing for rare, high quality historically significant items.
This is equally true in coins, manuscripts, paintings, antiquities just as it is true with modern "classics" such as cars, jewelry, and wine and sports memorabilia.
In the Ancient and Medieval coins world we see this with condition rarities just as well as with numeric rarities. High end darics, Alexander Staters, Alexander Portrait staters, Kroisos staters, gold Carthaginian staters all continue to moves to ever higher levels, while the same coins in the middle end of the market are stagnant in price, and quite slow to sell.
Rarities in good condition, of course, are still bid to astronomic levels, while rarities in off condition are stagnant in price though they generally do sell.
In fact, good high end material is ever in very short supply. In this entire round of spring sales there was only one auction of consistent high end rare material and that was the NAC Auction of Roman Republican coins which realized fantastic prices for even off quality rarities (see the coin above), as is often the case when a collection of fantastic breadth is presented thus drawing the interest of an array of wealthy bidders.
Many other auctions, most of which are now represented at Sixbid, had coins of material interest to specialists and collector/investors, but most of which were buried in an avalanche of mediocre to poor material, which means that broad high interest was notably lacking thus presenting opportunities for the diligent.
All of which is to say that it is still only the very wealthy that 'gets' the idea that wealth must be protected by a movement out of paper into tangibles, while the middle class concerns itself largely with issues of survival and fleeting pleasures.
This will change of course when gold resumes its bull run. Unfortunately by the time it will have become clear to the middle class that wealth must be protected at the expense of momentary pleasure, the Upper 1 Percent will have stripped the market of most of the valuable tangibles.