Proof sets lose ground
February 22, 2018
In the 1990s, when Congress was reviewing legislation for the U.S. Mint to issue a series of state quarters, it projected that it would generate an extra $1 billion of profits that would be turned over to the U.S. Treasury. Public demand for these coins proved to be much stronger than that. By the end of the first year of five issues in 1999, the Mint had bumped up its profit forecast to $5 billion for the series.
This new series of quarters probably stimulated the largest influx of numismatic attention from the general public since the John F. Kennedy half dollars debuted in 1964. In one survey it commissioned, the Mint claimed that there were 130 million people who were collecting the state quarter series. If it had been true that about 40 percent of the American people were collecting these coins, that would be one of the greatest marketing feats ever.
However, many of these new accumulators became impatient having to wait 10 weeks for their next fix of a new issue. Some percentage of the newly minted numismatists (pun intended) started to wonder what other kinds of coins they could collect.
Before you read on, please reflect for a moment on how you might expand your collecting interest if you were a novice would-be coin collector.
Many collectors from my generation began collecting coins out of circulation. While there was some of that after the state quarter series debuted, what more people sought were affordable coins with precious metal content or in beautiful condition that were not available in circulation – meaning proofs.
Remember, in the first few years of the state quarter series, the spot price of silver was above and below $5. As a consequence, dealers experienced a surge in demand from statehood quarter buyers starting to pick up bullion-priced silver Eagles, proof silver Eagles and proof sets. They tended to start with current year or birth year issues, then would go on to fill in a run of dates.
What impact did this have on such issues?
For the U.S. silver proof sets from 1950 through 1964, including the flat pack from 1955 and also the 1960 small- date cent set, the Coin Dealer Newsletter bids for this group at the end of 1998 totaled $993.75. By the end of 2002, these bids totaled $1,747.75. By the end of 2005, the bids were up to $2,070. Since then, prices of this group have partly been supported by higher silver prices, though the rarer sets fell in price as demand waned. By the end of 2017, the combined bids were down to $1,662.
For the run of regular proof sets from 1968 through 1998, the total bids for the group at the end of 1998 came to $260.65. By the end of 2002, bids had increased to $364.75. After demand peaked early this century, prices have mostly declined since. At the end of last year, this group had total bids of just $152.45.
As for the regular proof silver Eagles issued from 1986 through 1998, their combined bids were $292.75 at the end of 1998. Absent much of a boost in the silver spot price, the group bids still increased to $616 by the end of 2002. Then, when the price of silver rose, proof silver Eagle prices rose further. The peak came about the end of 2005, when bid for the group reached $916. Prices have fallen since; by the end of 2017, the combined bids were down to $590.50.
The debuts of the annual Native American dollar in 2000 and the President dollar series in 2007, both of which were initially entered into circulation, also prompted some new collectors. However, the numbers of new numismatists that they sparked was dwarfed by the collecting surge for the state quarters. Similarly, the beginning of the America the Beautiful quarter series in 2010 did not spark an impressive increase in the number of collectors.
A very small percentage of Americans introduced to numismatics because of these new series of coins have gone on to become serious numismatists. Still, the numbers have not been large enough, especially when you compare them to the surge in collectors in the mid-1960s, to take large amounts of other kinds of U.S. and foreign coins off of the market. Consequently, you have not seen U.S. rare coin price spikes on the scale that we witnessed in 1974, 1980 and 1989.
Should the U.S. Mint come out with an interesting new series of coins that enters circulation, there may yet be another surge of new collectors. However, I anticipate that the response will again be muted such as happened with the Native American and Presidential dollars and the America the Beautiful quarters rather than the massive influx sparked by the state quarters.