This is one of the most frequent questions coin buyers in San Diego, CA get asked. Why are some coins more expensive than the others? How come other rare coins from the same period are sold at a lower price? What is the reason behind these differences and can people looking to sell their coins predict if their rare coins will sell well? The answer varies. The simple answer is that the price of rare coins is determined by one simple rule: supply and demand. If you know anything about the economy and its guiding principles, you are likely familiar with the term. To put it simply, if a store has too many avocados in their supply, they will drop the price in order to sell them faster. Likewise, if they are the only store in the neighborhood to sell mulberries, their price will likely be set higher. While sudden price drops are more common for products with a limited expiration date, the same principle can also be applied to coins.

Rare Coin Supply and Demand

Let’s take the Morgan dollar as an example. At the time, the price of silver dropped due to increased mining of the metal. After the 1883 financial crisis, the silver coin was produced in a reduced quantity. By 1904 the production of this particular coin was halted completely. But back then, this coin was not valuable at all since there were so many of them still in circulation. It was not a collectible item. However, the Pittman Act in 1918 changed that. The act decreed that nearly half of the entire silver coin capacity in the US should be melted to supply Great Britain. This significantly reduced the number of Morgan dollars in circulation. Much of the remaining quantities of the Morgan dollar were lost or ruined. At the same time, the number of coin collectors in the US increased. Since the coin also has historic value, the demand increased. That’s how a once common coin became a rare collectible for numismatics on the hunt for this rare survivor of the said Pittman act.

Can You Determine the Value Yourself?

But a history lesson is not what you are here for. You want to know whether you can determine the value of a particular coin. That’s where you consult numismatists. They gather everything they know about a coin’s history, condition and availability and compare it to the current market value to predict its price. Naturally, there are certain unpredictable factors that can quickly change the supply and demand ratio. Just like with rare toys on Christmas. Some savvy traders will use the opportunity of a sudden fall in prices to buy large quantities of a particular coin and plan resell it later at a higher value when prices rebound.

Looking for Reputable Coin Buyers in San Diego, CA?

If you have a rare coin or a collection you are looking to sell, be sure to stop by Leo Hamel’s. Our experienced staff will give you a price for your rare coins and provide a safe, confidential transaction on site. You can come by at any time without an appointment, or contact us at 619-299-1500 if you have any questions.