2008 was a quite a disappointing year for the stock market. Most types of investments finished the year in the red after severe declines. However not all investments were a loss. The one bright spot, as the reporter discovered recently at the “2009 Coin Auction Winter Conference”, was gold and silver coins. After a volatile 2008, the value of some gold and silver coins categorized as old, refined, and rare have remained strong. Certain high-grade products have seen values reach new highs. Compared to other categories of collection investing, the ability of high-grade gold and silver coins for risk protection is apparent.
High Auction Prices for Fine Coins
The "Shanghai 2009 Coin Auction Winter Conference" began precisely at 1:30 in the afternoon of October 10th at the Shanghai Eastern International Auction House. This auction event showcased 186 auction items, including among others gold and silver coins, gold, silver and copper badges, and paper notes, and attracted over 200 avid coin collectors from all over China. Sources say that this auction event also attracted some well-known people from within the coin-collecting industry. Indeed, several of them arrived from Hong Kong upon hearing of the conference.
Compared to the coin auction conference held in June of 2008, this time fine coins continued to dominate the event. These included the 1981 commemorative gold coins replicating the design of a rhinoceros copper figure, an excavated artifact (First Set), the 1993 18 liang (about 900 g) commemorative gold coins of Kuan Yin, and the 1990 20 oz. Dragon Phoenix gold coins.
From the results of the auction, 160 items closed deals among a total of 186. The rate of deal close reached a high of 86.02% and transactions totaled RMB 4,875,526 (over USD 700,000). The closing prices for fine coins were even higher. For example the 1993 Kuan Yin coins reached a high closing price of RMB 825,000 (over USD 120,000) while the 1990 Dragon Phoenix coins achieved a closing price of RMB 500,500 (over USD 73,000).
According to the Vice Secretary of the Chinese Coin Collector’s Association, Mr. Ruiyong Huang, the success of this auction depended on several factors. Foremost is the entrance of a group of knowledgeable young collectors. Furthermore besides coins, the number of deals that closed for badges far exceeded expectations. Worth mentioning is that deal-closing prices for some high-grade coins maintained resilience, demonstrating the mentality that “risk investing trend has passed, yet collection investing is very timely”.
Coin Combination is Key to Collection Investing
The reporter has found that since 2008, the values of calligraphy painting, porcelain and other artworks have followed the financial crisis leading to severe declines. In fact, the market value of coins has also been impacted to varying degrees. For example, after the Beijing Olympics, the value of the first 3 sets of Olympic coins declined steeply, losing over 40% in many cases. It is obvious that such risk is high. Mr. Huang explained that the steep declines are most commonly seen in medium-grade coins, whereas the low-grade coins are cushioned by the price of gold, thereby these have experienced lesser or even zero decline in value. As for high-grade coins, the lack of supply has driven collectors’ ever-strong demand.
Experts advise that coin-collecting as an investment requires thoughtful combination. As well as a variety of hard currencies such as the Panda coins that are similar to gold in quality, also to be considered are high-grade coins that possess obvious artistic characteristics. These include the limited circulation of 200 large standard gold coins, 500 large standard silver coins, 1000 small standard gold coins, and 2000 small standard silver coins. Badges whose material approximates gold yet possess good themes and have limited circulation are relatively safe investments. Examples include the 1979 View of Beijing gold badges, Chinese Zodiac gold coins (8 g) of the lower-price level, and other Kuan Yin gold coins from certain years. Experts also advise that silver and gold coin investments are different from other types of investments in that realizing immediate value is not a strong possibility. Therefore, an appropriate allocation should be made according to one’s own personal assets for long-term investment.
Press Morning Newspaper
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