Economic Indicators

ECONOMIC INDICATORS

Many factors contribute to the price appreciation of coins, a finite supply and growing demand being the chief factor. However, exogenous economic factors also play a role.

Economic phenomena drive the coin market. The economy follows a cycle of boom and bust, with inflationary spikes, recessions, periods of recovery and periods of growth thrown in at various points of the cycle.

Historically, the rare coin market has demonstrated long-term appreciation despite the short-term fluctuations in the economic cycle. Still, these fluctuations can and do have an impact on coin performance and different sectors of the rare coin market.

For instance, during periods of high inflation, or the threat of high inflation, the coin market has been known to literally skyrocket as investors flock to tangible assets. However, inflation is not an imperative for rare coin performance. The rarest of the rare coins are a true luxury item akin to fine art more than to gold. During periods of economic growth and prosperity, these kinds of coins have set records. Finally, during periods of economic uncertainty associated with recessions and depressions, many investors turn to hard assets; during these periods, coins with high gold and silver content tend to hold their value relative to the depreciating paper investments surrounding them.