The heyday for coin collecting was the lead-up to decimalisation in 1971 until the mid-1970s. Collecting coinage from change to form date-runs of denominations which were soon to vanish almost became a national occupation. Many of these "casual" date collectors became numismatists proper and began to form collections of historical coins, only to stop collecting in the Eighties.
It was not because the coins themselves lost their appeal, but because they became too expensive to collect. The 1970s was a decade of rampant inflation and it became fashionable to put money into collectables as savings accounts did not pay a real return.
The sharpest rise in prices for British historical coins occurred in 1973-1974 when the stock market was collapsing. Although the coin market paused for breath in the first few months of 1974, it then started on a steady upward climb. Five years later prices for English coins on average had increased 150 per cent.
In the late 1970s there was a further price boom caused by two inter- related factors. There was a great deal of investment buying in the States where, until the Reagan administration stopped the concession in 1980, buyers could invest in collectibles via retirement plans and receive tax relief on their purchases.
Even before the purchase of coins for pension funds had stopped, there was the great bullion boom of 1979-1980. On 18 January 1980 silver peaked at $52.50 and gold at $835 an ounce. Many coin dealers trade in bullion as an adjunct to their main businesses. The profits they were generating from this activity were substantial. As the coin market was buoyant, the money was channelled into their coin dealing operations. The price for US historical coins rose so sharply and suddenly that European coins looked extremely cheap by comparison.
American coin dealers crossed the Atlantic and invaded the London and continental auction houses. As money was no object, prices for material boomed even further. No wonder at that period, one prominent member of the London coin trade commented, "There are no longer any coin collectors, just investors."
Inevitably the bubble burst, in the first half of 1983, and prices fell. Those who had purchased coins as an investment were disillusioned, while many genuine numismatists had long since stopped making additions to their collections as the specimens they sought were financially out of their grasp.
Even now prices are well below peak levels. In both 1965 and 1966 Mr B purchased two examples of a gold Cromwell broad, or pound piece, at pounds 325 and pounds 350. The pieces, which were both in mint condition, were gifts for his two grandchildren. They were auctioned in February 1982 for pounds 8,200 and pounds 9,200. Today they would be likely to sell for pounds 6,000 each.
In recent years the market for British coins has been stable, with prices on average being at or marginally above the levels of the mid-1970s. Given inflation over the past 20 years, coins are more affordable now than in the past. This factor, linked with greater disposable incomes, is undoubtedly the main reason why the collectors of the 1960s are returning to the pastime that gave them so much enjoyment in the past.
Although great rarities can cost thousands, for every expensive coin, hundreds of thousands can be purchased for modest sums. Contrary to popular opinion, a coin's value is not influenced by age. A reasonable example of a Roman or medieval coin can be purchased for a few pounds.
The most important determinant of value is a coin's condition, which ranges from mint state to poor. An uncirculated 1887 silver crown bearing the Jubilee portrait of Queen Victoria, would sell for around pounds 60. However, one with considerable signs of wear on its raised surfaces would be worth only pounds 10, while one in poor state would be worth pounds 2-pounds 3. Incidentally, never clean a coin as this slashes its value.
The future for coin collecting looks good and prices will undoubtedly rise. Britain's adoption of a single European currency would generate considerable new collector demand. However, there is one thing which has been learnt from the past - coins are not an investment. When the financial aspect outweighs the interest in coins for their own sake, that is when the problems will begin again. Coins are a fascinating subject in their own right, for every coin tells a story and a nation's coinage tells its history.
Coinex '96 is organised by the British Numismatic Trade Association and takes place today at the London Marriott Hotel, Duke Street, Grosvenor Square, London Wl. It is open from 9.30am to 5pm, admission pounds 2.There will be 68 exhibitors from around the world. Free valuations are offered.
For a complete list of BNTA members telephone 0181-398 4290.
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