The gold market is very active, and the prices are rising, but not because of the sale of the Double Eagle. The demand for physical metals caused by economic uncertainty has driven up the prices for gold and silver coins.
While discussing the demands for precious metals with dealers, they say that the demand is for coins. Their customers are buying American Eagle coins causing the supply of coins to decrease. When customers cannot buy American Eagles, they look to purchase silver coins from other state mints. Canada’s Maple Leaf and Mexico’s Libertad are popular alternatives to the American Eagle.
Investors are looking to purchase physical assets that have some backing. They are not buying bullion or contracts. As a result, the price of bars and other bullion products is reasonable compared to higher-priced coins. Contracts are paper-based trading of bullion. Many smaller investors traditionally do not like to trade based on paper. They are looking for something physical, like coins.
Bullion investing increases when investors perceive there are uncertainties in the markets. The current market run started last year during the beginning of the pandemic and has not stopped.
The markets are not responding to the sale of the 1933 Double Eagle. It is the only 1933 Double Eagle coin that is legal to own and has a story that inspired two books. Using this coin as an example of a reason to invest in gold coins is not representative of the reality of the bullion coin market. Beware of those who will try to sell you bullion based on the sale of this coin.
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