So How Has the World Pandemic Lockdown Affected the Numismatic Trade?

You don't need me to let you know what life has been like since March 12th - that distant bygone date when the World Health Organisation (WHO) officially declared COVID-19 as a pandemic.

Just in Australia, we've had restricted movement not only internationally and interstate but within states and within regions. This has forced many of us to be at home for many, many more hours than we otherwise would have been, and as the Devil is said to find work for idle hands, many of us have turned to our hobbies to keep ourselves occupied and with some sense of forward movement.

As the magnitude of this disease unfolded around the world, and we began to read forecasts of the impact it would and could have on incomes for businesses and individuals, I absolutely expected the economic consequences to be far worse than we've seen so far.

Collectors Without Income or Savings - Forced Sellers

I was concerned we'd see people who were without income and savings being forced to sell items from their collections and wasn't sure just what demand there would be for them from those that happened to be better positioned to cope.

How wrong I was - whether it's due to the Commonwealth Government's JobKeeper program, the better financial health of the general man than I expected or complete indifference to financial ruin, many collectors have been quite content to focus on their collections over the past two and a half months.

Will this activity run out of puff as soon as JobKeeper ends its run? Once the next few credit card statements come in? Or are we going to keep ticking along well into 2021? One thing we do know about markets is that they feed off themselves - as behaviour is reinforced positively with movement upward in prices, market momentum builds over time.

Online Shopping and Payments Facilitates Activity

Online shopping is obviously facilitating this activity, it's a way of keeping busy while remaining isolated at the same time. One interesting nuance of this current situation is the impact that social distancing; concern for health and the prevention of anything-but-local travel is having on the oft-quoted "supply chain" for numismatic items on the secondary market.

It's been some time since I was active in any meaningful way in coins and sets offered directly from Australia's mints, but I expect if I were actively selling them and I sold out, I could replenish my stocks as soon as they ran out, simply by placing an order with the relevant Mint.

The Supply Chain for the Secondary Market - Will It Break Before We Return to "Normal"?

When it comes to products on the secondary market however, re-supply isn't quite as simple. When I know that a customer has a specific coin, note or set that they're no longer beholden with, I know I can contact them with an idea of perhaps selling it or trading it against something else that suits their current collecting patterns more closely. In the absence of that, it is challenging to locate regular supply when the general public and collectors aren't entertaining heading out and about to deal with a relatively complex project such as selling a collection of coins or notes.

I reckon most of us are specifically focused on getting through each day or week at the moment and are waiting for some kind of indication that life is returning to "normal" before we get stuck into anything that requires a good degree of planning and exercise of the grey cells.

One major challenge for someone looking to sell a valuable collection of tangible assets without being able to physically deliver it to a dealer and discuss it in detail is, how do you deliver it and discuss it in detail without leaving yourself open to the risk of loss in transit or having a whole lot of hassle once it has been delivered?

That's a whole other discussion that'll be forthcoming in the coming months, but I've mentioned it because if this situation doesn't change in the coming months, dealers such as myself will find it challenging to replenish their stock by any means! If the conversations I've had with my colleagues that run auction houses are any guide at all, they're in exactly the same position - this means we could see some strong price movement as dealers begin to compete with an already-active cohort of collectors.

Numismatic Auction Activity Between March and June 2020

So how has the Australian and world numismatic industry fared during this pandemic lockdown?

If I remember rightly, the IAG Auction 91 was held just after the WHO pandemic declaration, but before Australia's interstate borders were closed. That was a solid sale, one that went ahead in unprecedented conditions and brought a lot of buyers and sellers together.

Noble 123 was held (virtually) in Sydney in the weeks that followed - those conditions were also unprecedented, yet did little to dent enthusiasm for the coins and notes on offer.

The next event was Downie's Auction 336 - total turnover including the buyer's premium cracked the million-dollar mark. The clearance rate sat at 91.87% overall, which is remarkable for a sale containing 3,678 lots. The average lot value was around $250, which although relatively low reflected the material on offer. Just 3 lots valued above $10,000 got away, which again was a reflection of the material available rather than the demand at play.

IAG held their 15th online sale just last week, and that was also a bumper event. A clearance rate in excess of 90% coupled with interest from more than 1,300 participants shows activity is certainly widespread at the moment.

One additional auction held that has a lot of relevance to our market didn't take place within Australia's boundaries - it was the Caranett Collection of Commonwealth sovereigns, sold by Heritage Auction Galleries in Dallas (USA). Heritage is acknowledged as the largest auctioneers of collectables in the world, their systems and reach are, without doubt, first-class.

The Caranett Collection Auction - Heritage in Dallas (USA)

The Caranett Collection was a named set of gold sovereigns of the British Commonwealth, one that had been well known and admired on the PCGS Registry Set boards for some years. At the time it went to auction, it had a current #1 rank in at least five different sets.

The collection included 285 different coins across 4 countries, which makes the total realisation of US$694,490 (equivalent to A$1,083,543) from 387 bidders all the more remarkable. 

I don't have the time right at the moment to show you the prices realised for the Australian gold sovereigns in this auction in their full context - ideally, I'd like you to see just how strong they were against the "catalogue" value they have.

This is, of course, problematic, in that the current printed catalogue is a woefully inadequate guide to this market, if not to the value of coins that can be readily understood under the "raw" standard, then certainly to coins in superlative condition.

So we will simply show the results as-is. Those of you that have some knowledge of this area of the Australian numismatic market will know just how strong some of these results are, and just how different some of them are relative to where they were 5, 10 or 20 years ago.

How Does This Bode for the Market for Australian Gold Coins?

The old saying goes that one swallow doesn't make a spring, but there's no doubt to me the above activity is more a reflection of the demand that has been ticking along for the past few years rather than a sudden jump in activity due to the pandemic lockdown or the recent rise in precious metal prices.

The market for Australian gold sovereigns and half sovereigns is truly global, as this auction indicates. The difference is though, this is arguably the first auction of a comprehensive collection of such coins that has been PCGS-graded and features a wide range of coins in superior grade.

I believe the results here show a market that is perhaps 8 years behind the market for Australian Commonwealth coins - values in that segment boomed when it was clear to collectors just how much additional value could be gained for top-quality examples that have been independently assessed by PCGS.

Good quality Australian gold coins that have been independently assessed by PCGS look to be well in favour with collectors at the moment - the amazing thing is that these results have been achieved at a time when those collectors have been active without fanfare or recognition.