Numismatics is a discipline full of mantras passed down from collector to collector and dealer to dealer, with one of the most frequently uttered being “the value of a coin is what collectors will pay for it” - indicating that auctions set the price for a coin, after which time the market knows its true value. It is true that pre-auction estimates have little to no bearing on the final price a coin will realise, but this approach can be dangerous if misunderstood, and must be taken with a pinch of salt.
Dix Noonan Webb’s January sales seem to reinforce the extraordinary amount of interest in British hammered silver evident at NYINC. Some examples in DNW’s sale fetched record results even despite an extra 34% on top of their hammer prices (consisting of 24% buyer’s premium, VAT and 5% import); a James I Shilling brought a mind-blowing all-in total of over £8,000, whilst two Commonwealth Halfgroats fetched £650 hammer apiece. The atmosphere in the auction room was one of stunned disbelief, the coins admittedly fantastic but bringing results beyond anyone’s expectations.
These are exceptionally impressive prices, but they are nonetheless exceptions. One motivated buyer can drag bidding up with them, but when they come to resell, the house of cards can come crashing down. The question of ‘value’ is a perpetual one in numismatics, with the generic answer being ‘it’s worth what collectors will pay’. However, it takes two to tango, and without a similarly motivated adversary in the auction room, a coin will not make the sort of prices that DNW’s sale exhibited.
DNW’s sale provides its own example of this effect. In March 2019 at Spink & Son’s impressive Miller sale, several hammered British coins left their pre-auction estimates and attracted substantial prices, including £1200 hammer for a James I Sixpence on a £90-120 estimate. When a particularly exciting sale comes up, prices can race beyond reality as everyone scrambles to chip off a piece of the assemblage for their own. This same Sixpence went on to sell in DNW’s January auction for £600 on an estimate of £400-500 – a 50% drop within ten months.
The trick to avoiding such plummeting results, and there is a trick, is to establish the difference between a new trend forming and a one-off outstanding result. Every single coin to have gained enormous popularity had to have had those first few bidders daring to spend a little more, leaving everyone else wishing they’d bought at the previous auction’s price every single time. Growth has to be organic and steady (steadiness a difficult trait to assess in a market where data points may be several months or even years apart), so always think twice before being the first to spend three or four times the record price for a type – you may struggle to recoup that cost.