The dazzling run of gold and silver is having a mixed impact on the rare coin market, which could take a while to stabilize.
By Jeff Garrett
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| Plain Truth Report on Gold and Silver prices and how the rising price of both metals are impacting coin collectors |
The steady rise in gold and silver prices in recent months has stunned nearly everyone. The price of gold has now topped the magic $4,000-per-ounce price that was once only a figure bandied about by hardcore gold bugs. No one really thought that $4,000 gold was possible. Now, even mainstream financial figures are touting the advantages of buying gold. This week, Kevin O’Leary (of Shark Tank fame) said that investors should have about 5% of their assets in gold. The bandwagon has certainly left the station.
Silver, which until very recently was lagging behind gold’s advances, is now catching up. The price of silver is nearing its all-time highs of about $50 per ounce. The ratio of gold versus silver was about 100 to 1 a few months ago. The ratio has dropped to about 80 to 1 and seems to be heading even lower. As gold continues its stratospheric rise, many are turning to silver as their hard asset of choice.
There is a slew of reasons for the rising prices of gold and silver, but the weakness of the US Dollar is one of the prime factors. Gold prices are not being driven by Wall Street speculators but by Central Bank purchases. There is fear the US Dollar will lose its appeal as a reserve currency. Political uncertainty and massive federal deficits are dissuading the rest of the world from buying US Dollars as they have in the past. Gold is proving its 3,000-year history of being considered real money on a global basis.
Hobby leaders and those who run rare coin operations of every size are now trying to figure out what $4,000 gold and $50 silver mean for the hobby. On the surface, you may think it is “happy days” and making money hand over fist. The reality is somewhat different. Most shops around the country are very busy, but they are not seeing the lines down the street that were experienced in the 1980s gold and silver booms. In those days, everyone rushed to sell. This was a great decision, as gold and silver crashed shortly after and stayed depressed for decades.
Today, a majority of the people who own gold and silver are reluctant to sell. This is mostly because of the financial fears mentioned above. They purchased precious metals less as an investment and more so for insurance against market chaos. In contrast to the 1980s, there are a lot of buyers of gold and silver at these elevated levels. This would also lend credence to the belief that we will not see a market crash like those of the past. Nothing goes up forever, but high gold and silver levels seem to be…