Coin business well positioned for market's ups & downs
Gary Galbo, now owner of Nashua Coins and Collectibles, said his first business was called Small Cents, for Lincoln and Indian pennies. (SIMON RIOS/Union Leader Correspondent)
NASHUA - At 6 years old Gary Galbo's love for coins began, fueled by his father's pocket change, which he would rifle through with the fervor of a would-be collector.
"I started going through my dad's change every day and saving stuff, and then of course in 1979 when silver hit $50 an ounce, I suddenly had a lot of coins," said a smiling Galbo, who owns Nashua Coins and Collectibles on Main Street.
"I've been a penny guy forever," he said, leaning back in his desk chair. "My original company name was Small Cents, for Lincoln and Indian pennies. I do a little bit of everything, but that's probably my specialty."
Galbo had a shop on West Pearl Street from 1995 to 2004. He took over the Main Street store in July, where only about 10 percent of the coins he purchased from walk-in customers have any collectible value. Because of this, the coin business has brought him inevitably to dealing with bullion, which he said goes hand-in-hand with coins.
"Ninety percent of what we buy over the counter is either a silver coin that's going to be traded as silver, or wheat pennies that we'll trade just as wheat pennies, or what we call junk coins that are going to be traded for low values," he said.
Trading in both collectibles and metals, Galbo is well-positioned in both bear and bull markets. He said collectibles do better when things are going well and people have money to spend, while the opposite is true for gold and silver.
"Bullion values go down when the economy is doing really good. Bullion values go up when everything else is not doing well - when the stock market's not doing well, bullion values tend to go up. When inflation is strong, bullion goes up."
Gold is experiencing its longest slump since January 2010. Gold futures fell to $1,655.90 an ounce Friday, according to Bloomberg news, dropping 0.3 percent this week for the fifth straight decline.
Silver futures are also in a five-week slide, falling nearly 1 percent this week to $29.975 an ounce.
As he was talking, a customer walked into the store with 10 one-ounce Canadian Maple Leaf silver coins he'd gotten for Christmas. The man scoffed when Galbo told him the current silver price, but he couldn't complain too much - Galbo gave him $1 over the silver value of each coin.
Also based in Nashua, Bruce Breton has been in coins and metals for 32 years. He agreed that dealing in both markets offers shelter from market changes. But Breton said activity picks up whenever markets fluctuate.
"Our business goes up a lot when there's a lot of fluctuations, both up and down, because if it's going down more people might want to add to their position, or some people think it's going to be a loss so they sell."
Breton said if metals prices rise, the same thing happens - some sell to take profits while others buy because they think prices will continue to rise.
Other variables can affect the price of heavy metals, he said, like governmental deficits and money-printing by the U.S. Treasury.
"If we're running huge deficits then essentially the currency will depreciate over time, and it would lead people to buy gold and silver - they hedge."
As for the fiscal cliff, Galbo foresees a rise in gold and silver. And though he doesn't think it's a bad idea to invest in precious metals, Galbo, a coin man at heart, prefers rare coins.
"The thing about rare coins is, the rare coins they're not making anymore. It's like land - it is what it is. There's only so many available, and the more people are collecting, the more demand there is."
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Simon Rios may be reached at email@example.com.
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