When I started writing this blog in 2005, gold was around $470 per ounce and silver was around $7.75 per ounce. The economy was going strong and the numismatic market starting to really move lead by the strong housing market. For collectors, we wondered how high gold and silver would climb and how much more our collections would be worth.
As the economy is collapsing under the pressures caused by the failures of large financial institutions, gold opened the year at $846.75 per ounce, climbed to a high of $1,006.75 on March 18, and closed at $813.00 as I write this on September 18. After the some predictions of gold closing the year over $1,000.00, gold is now down for the year by over $30.
Additional pressure on the market will be the sale of $40 billion in 35-day bonds that will help the Federal Reserve fund the AIG bailout. While some see this as good for the government, there are others who think investors will run away from the market and look to gold as a safe haven.
Overnight, it is being reported that Morgan Stanley is talking with China about cash investments and mergers.
This has made all markets a bit skittish and looking for “safer” investments. Those looking to buy American Eagle bullion coins has been having a difficult time finding coins since the Mint admitted that they have a shortage of gold and silver.
While researching a future post, I visited the Kitco website and found the following note on their front page:
In order to reflect the current strong demand for Silver Maples and Silver Eagles, Kitco is temporarily increasing its current bid (buyback) price for these particular products. Please visit our Selling to Kitco page for more details.
The good news for those buying bullion, the prices are probably the best in a year. For example, the current price for American Eagles at Kitco are selling with a 6½-percent premium for gold and 11.2-percent premium for silver. These are better prices than purchasing from the US Mint.
Given the current environment, it is difficult to say where the financial markets are going and how it will affect the market for coins. We do know that generic gold and silver (common date) coins and bullion will rise and fall with the market. But it makes it difficult to consider what will happen in the collectible market. I will have some thoughts in a few days.