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The factors that influence the prices of collectible coins

by , 18 June 2015

Just like other assets, a number of different factors influence the price of collectible coins. And these price movements tend to go in cycles.

So what are the main factors determining the prices of coins?

There are internal and external factors to consider.

Read on to find out what these are…


Internal factors that drive the prices of collectible coins


Like all assets, including stocks, currencies, and commodities, supply and demand very much drive the prices of collectible coins.

Coin investors buy coins until their prices become too high. Then they sell until the prices of coins fall and buyers start to push the prices up again.

These supply and demand factors are always working away pushing the prices of coins up and down in a cyclical manner.

This is why investing in rarer coins gives you the best chances of retaining higher prices as there isn’t the supply to dilute this effect.


External factors that move the prices of coins


There are also external factors that play a role in the prices of collectible coins too.

The price of gold and silver
As coins either tend to contain gold or silver, changes in the prices of these metals can have an impact on collectible coins. For instance, if the price of gold slumps, the price of collectible gold coins tend to also lag too.

Investing in rarer coins can help to offset this effect.

The stock market
The collectible coin market tends to do well when the stock market is in a decline. Yet, collectible coins can also do well with the stock market is in an upward trend.

But when the stock market is soaring, coins don’t tend to perform as well.

Inflation
In periods of high inflation, collectible coins tend to perform very well. This makes them a good hedge against inflation.

So there you have it. The factors that influence the prices of collectible coins.

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The factors that influence the prices of collectible coins
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