I must have been asked this question 200X during the past month.  Yes, prices for many Modern Chinese coins have pulled back.  Let's face it, nothing can continue to climb without taking a breather.  This pull back is a good time to purchase some of the coins you have been waiting to purchase.  Please remember, not all Modern Chinese coins have experienced price declines.  Some coins and series have continued their upward movement. 

I will discuss many of the contributing factors that I consider important to this slow down.  I will also mention why some issues continue to increase. 

In my opinion, the slow down is a direct result of the ANA, the Hong Kong Show and the Long Beach Show all practically back to back.  For many of us, this was an exercise of packing and flying for almost four full weeks.  The reason these shows play a more important role than in the past is because of the amount of Modern Chinese coins on the bourse floors of each show as well as the amount of auctions.  The amount of auctions is the major problem during this time.

There were way too many auctions in such a small window.  Do you realize one company auctioned over 800 lots of Modern Chinese coins in one auction.  Logic and common sense dictates that no one can auction this many coins, in one auction, without erroding the pricing in the market.  It did not help that there were probably another five or six Modern Chinese coin auctions after this 800+ lot venue.  Prices for the common and better than average coins had no choice but to fall due to the amount of coins being seen everywhere.  It is difficult to call a coin rare and then have three of the same pieces or sets in one auction, not to mention these same pieces and sets in some of the other auctions.  Nothing seems rare when seen this often.  This did nothing but hurt the collector, consignor and dealer as we see right now.  The value of everyone's holding has been decreased.   

The next part of the auction equation is paying for these auction lots.  Since the auctions occured primarily late August through early September, most people pay for their auction lots within a 30 day time frame. A great amount of $ were sucked out of the market and eventually has to be paid.  This puts us at the time period we are in right now.  Market slow down at the same time all of the auction paymnets are due.  This is not a coincidence that prices are soft.  Dealers are facing large auction bills. 

Another contributing factor is that Gold has fallen from approximately $1900 to a low below $1600.  Gold has rebounded and is currently holding steady above $1650.  This is a major hit for those bullion based.  It also means dealers will not pay as much for common coins.  It also results in the collector and investors to go in the wait and see mode.  This means less sales.

There is another variable to consider.  Many overseas dealers are paying for their 2012 issues being delivered.  This is yet another cash drain on top of all of the other expenses and bills.  Everyone is more cautious and wanting to acquire certain coins for much less than market. 

Another variable is almost everyone and their brother are trying to get a piece of the Modern Chinese coin action.  This means there are more people trying to sell these coins they know nothing about.  Since they have no clue, they will price incorrectly unless they have the advice of someone who knows.  Many times these people get frustrated and sell cheap.  Why not, many of these coins were purchased at melt.  This means the perceived price of the public is even lower than originally thought.  It is a massive trickle down affect.

Some rare coins are coming out of the woodworks.  The more you see of a certain coin with a low mintage, the less this coin is worth, even with the low mintage.  The key is not to flood the market with many of the rare coins at the same time.  For some reason, non-educated sellers think they will shop a coin.  What happens is the person they ask a price now feels like they can broker this coin they do not own.  They might act like they own this coin or sets but they do not.  So now the original owner asks 8-10 people for prices.  Five or six of these people have no intention of purchasing but have every intention of trying to make some money for a coin they do not own.  Now they call about another five to six people.  I think you get the story.  There is one coin being shopped around by 20-30 people.  This coin loses its luster and is now beated down because everyone thinks there are several of this coin on the market.  Moral of the story, shop this coin to one or two professionals you trust.  Work with a professional in this area.  You will get a stronger offer.  No one likes when a coin they are considering to purchase gets shopped to death - I don't.

The above explains why the market is soft in our opinion.  Now let's look at the stronger end of the market.  Rarities, Rarities, Rarities..............  I have always preached that rarities do not go out of style.  This has held true for the most part.  I am still an active buyer of rare, low mintage coins.  It may cost a great deal but I enjoy adding new coins to my collection. 

Rare coins have still been very strong for me.  I was at a late lunch today with two friends.  I explained I only like the high-end coins because the people purchasing know exactly what they want.  I sell rare coins worth $100,000+ faster and easier than I do a coin worth $5000.  The reason is simple, you can find the $5000 coin in 50 places.  It is common and becomes a commodity.  To find the rare coin I am selling is extremely difficult and sometimes not available at all.  I like the coins that no one else has or that none are on the market.  This makes selling these coins much easier.  Of course there are problems associated with these expensive coins as well.  For the most part, these coins have held steady and remain strong.  

With real estate, they say location - location - location.  For coins, it is all about the rarity and popularity of the coins or sets.  

Please contact us with any questions, we are here to help.

                 COLLECT - INVEST - HAVE FUN.........................