Detailed Prognosis of the Fall 2006 Antiquities Market: Essential Reading for Collectors
(MEDFIELD, MA -- July 23, 2006) Every summer for the past 10 years, I’ve tried to take a step back from the antiquities market to assess which direction things might head in the fall when dealers and collectors return in earnest. I’m sharing my assessment with you this year because it can help you take advantage of the summer lull and actually strengthen your collection.
From my July 3, 2006 analysis (http://antiquities.blogs.com/antiquities/2006/07/antiquities_mar.html#trackback), the trend lines coming out of 2005 and into the spring of 2006 are clear. The market continues to move aggressively higher. Objects with superbly documented provenance and/or objects from established “provenanceable dealers” have led the charge. (Fragments of Time, Inc, -- http://www.fragmentsoftime.com -- for example, is proud to be one of roughly two dozen active international dealers who can be found as a published provenance in Christie’s and Sotheby’s catalogues!) Here is my personal assessment of the antiquities market looking ahead to the busy Fall buying season.
Supply. Thanks to better enforcement in source countries against clandestine looting, supply is as it should be -- relatively fixed. There are only so many objects legally on the market. I see no drivers on the horizon to change this dynamic. Though there is some discussion about source countries creating a legal de-accessioning program of secondary material to help fund conservation, we do not believe that any of the countries evaluating this idea can execute such a program in 2006 or even 2007. Prognosis: No change.
Demand. The top end of the market is extremely tight. Well provenanced objects continue to trickle slowly out of established European and North American collections, but these are few and far between and almost always touch off a feeding frenzy. In the middle of the market ($1,000 - $100,000), there are more objects to choose from, and I expect demand to be flat to moderately higher. But selectivity is key. The web has made it easy for “virtual dealers” to market objects aggressively which they must generally do for cash-flow reasons. This constant marketing and re-marketing of the same objects can dilute the perceived value of an object for an unsuspecting buyer. The best objects in this range may well be found in the inventories of established dealers with broad inventories. Again, for the best objects, expect to pay a premium. Like this past spring, I expect few bargains to be available in this segment of the market. Prognosis: Continued strong to increasing demand.
Antiquities Market News. Expect a continued torrent of popular news coverage on the Getty trial in Italy, the James Ossuary Trial in Israel (assuming the war coverage abates), and the St Louis Museum’s fight against Egypt over the return of an important mummy mask. I also believe we have not seen the last of these high-profile repatriation battles, which means more scandal-mongering ink in the popular press. While it creates an unfortunate negative stigma for the field overall, all the publicity actually fuels demand and drives prices even higher. The more that Newsweek, 60 Minutes and other popular outlets publicize these cases, the more we see new collectors emerging who were never aware that a fully legal market for antiquities exists. Prognosis: more news means more collectors and greater demand.
Exchange Rates. One Euro currently costs $1.27, a major decrease in U.S. buying power compared to the 80-cent range Euro just a few years ago. While many had wanted to see the Euro cool and the dollar regain equilibrium, this has not happened. US monetary policy seems to be favoring a weak US dollar to make American goods more appealing abroad and help close the widening trade gap. I see no drivers to change this within the current administration. This means an under-current of higher prices this fall simply due to exchange rate realities. The other affect of the weak dollar is that the increased buying power for European collectors means objects in the American market look like bargains! This increases demand and means that US collectors must snap up objects they like quickly to avoid disappointment. Prognosis: Weak US dollar keeps prices high and increases competition among American collectors.
Macro-economic Issues. While it has backed off from its frenzied pace, the art market in general continues to push higher. New world records are being set literally every week in all areas including paintings, photography, furniture, and even baseball collectibles. Many articles have been written over the past two years analyzing the art market and have lent credence to art as a dependable asset class that can potentially outperform real estate, stocks and inflation. A study by Barclay’s bank last year concluded that art can be successful in a diversified portfolio. With a frustrating stock market, I expect many people to continue to look for additional areas to invest. Besides, you can enjoy a beautiful object indefinitely, whereas the same can not be said for most stock certificates. Should inflation rear its head this fall, which I put at a 20-30% probability, you will see an even stronger push into tangible goods as a hedge. This has been the pattern through almost every prior recession. Prognosis: A stymied stock market means art continues to look attractive; signs of inflation mean an acceleration of prices and demand.
Global Politics. A protracted conflict in Lebanon would be a negative driver for antiquities. The Middle East plays an important role in the legal antiquities market and a healthy, vibrant economy there is good for the antiquities market. Events of the past week bear watching but I am personally optimistic that a more stable situation and period of relative prosperity is possible if the conflict is contained and results in a stronger democratic Lebanon. Prognosis: The sooner the conflict ends, the better for the market in general and the antiquities market in particular.
Summary. Antiquities collectors should continue to pay attention to all these factors and consider them in their buying strategies. The best deals going into the fall may well be in U.S. dealers’ existing inventories, especially objects purchased between 2002-2004 with much stronger US dollar exchange rates. The holiday season is traditionally one of the periods of highest demand. Don’t wait til last minute to buy as you can expect even higher prices and less selection.
About the Author: John Ambrose is founder and director of Fragments of Time, Inc., an internationally recognized firm specializing in classical antiquities. Ambrose is frequently quoted as an expert on the global antiquities and ancient art market.
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