Wednesday, May 7, 2014

The Bently Effect and the Saddle Ridge Hoard

What really struck me was this paragraph (emphasis mine):

The Bently Effect is a set of circumstances that have come together to create the Perfect Wave in the history of the dated gold market. A market hungry for rare coins like 1864-S half eagles and eagles. A lack of availability of these coins (partly due to the fact that Mr. Bently had bought nearly every available example in the last 5+ years). A shift in taste in the dated gold market with Big and Western suddenly being the new “in” coins. The ability of Heritage to properly catalog, market and sell these coins (Kudos to whoever is managing the Bently collection and resisting the temptation to sell too many duplicate coins at once, as have other ultra-comprehensive sales in the past). And, last but not least, the power of the new Internet-driven market which has forever changed the coin business, in ways in which we still do not (in 2014) totally understand.

So - this person bought up a powerful pile of gold, which undoubtedly helped increase prices, especially as availability dried up.

Now Heritage is dribbling them out a little at a time - probably so as not to depress prices.

But eventually, unless the faucet drips ever so slowly, these will affect prices, I'd think.  That will be interesting to watch over the next few years.

It's also interesting to muse as to how gold prices might affect this. If gold goes down, it doesn't necessarily affect the price of rarer series and dates.  In fact, with lower prices making gold more generally collectible, the rarer pieces might even climb upward.  I'm not sure that there have ever been examples of that, but the data is certainly available to anyone who wanted to test that theory.

The Saddle Ridge hoard that will be popping up at Amazon in a few weeks will certainly affect prices too, but which way? Will the influx lower prices or will the mystique drive prices upward?

Note:  All my coins are in a safe deposit box.  I keep nothing in my home. 

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