Published: May 5, 2020
Dr Alain Baron is the founder of coin trading company Numismatica Genevensis SA and the curator of the exhibition “Coins of Islam: History Revealed” at Abu Dhabi’s Sheikh Zayed Grand Mosque. The exhibition, which showcases one of the world’s most significant collections of Arab and Islamic coinage ever assembled, is temporarily closed due to the coronavirus but is due to be extended later in the year. We sat down with Dr Baron to talk about the bullion and rare coin market as the pandemic upends economies around the world.
It’s a good time for gold right now, what’s the spot price today?
The spot price of gold, at the time of writing, is $1,728 per ounce, so it’s very close to the old-time historical high ($1,917.90 in 2011), but everybody anticipates that it is going to go up even higher.
What forces or players are driving the market up right now?
The gold coin market is being driven by the world market at large, because there is a high level of uncertainty there due to the coronavirus. Tangible assets are one of the only few safe havens – and gold has always been the king of tangible assets. Everyone is moving to gold now to protect their capital.
What concepts or ideas is that confidence built on?
People have always had faith in gold as a reliable store of value during times of economic and geopolitical uncertainty. This consistent confidence in gold as a safe haven asset contrasts with deteriorating investor confidence in institutions such as the government and banks.
There was a big dip in March that has since seen a recovery exceeding its prior position, what caused that?
People were covering their losses and their margin calls on the stock exchange so they had to sell everything that was liquid, including gold. The same phenomenon happened during the 2008 recession when people sold their gold, which dropped from roughly $1,000 to $700. Within three years, by 2011, it was back up to almost $2,000.
Do you feel there will be continued strength if the outbreak continues its economic devastation for another year?
Yes, of course. If this economic devastation continues, which is unfortunately inevitable because the economy has been hit too hard, gold will continue to strengthen in the weeks to come. I expect it to reach $2,000.
Does the spot price have a significant effect on numismatics and coin collecting?
The spot price has an effect on every coin whose value is fairly close to the gold price. But it also has a psychologically stimulating effect on numismatic coins, whose price is not really related to the price of the metal.
Is it tough to move a coin right now? Are certain price points better than others?
At the moment, coins are going pretty well, whether bullion or numismatic. All tangible assets are coming back into fashion. The higher gold goes, the greater the demand will be.
Where are the areas of opportunity in coin collecting right now?
There are, as always, opportunities to buy in the market, and certain fields of numismatics are a bit softer than others, for instance, Roman gold coins – now is definitely the right moment to buy them. Also Russian coins are at an affordable price.
What’s the mindset of a coin collector right now? Are they looking to sell? Buy?
I would say the mindset of the collector now is that they have more time so they can look at their particular interests and can dedicate a bit more focus to their collections. The auctions we have seen online lately achieved very important results, showing no drop in the coin market at all.
Have you seen any real rarities hit the market since the outbreak?
A few rarities have been seen on the market lately and have been fetching good prices. In the United States, a few coins have sold above the $1 million mark recently, and my own company Numismatica Genevensis has sold some very rare and important Islamic and ancient coins.
Has the outbreak caused any trends that you would not have anticipated?
I would say that, since the outbreak, the numismatic market has been strong and stable and obviously the bullion market has been incredibly strong with an unprecedented demand on all types of bullion coins whose value is close to the price of gold. This is exactly what I would expect in times of crisis.
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