I was talking with Tommy of "The Elusive Spondulix" yesterday, a truly classic coin dealer, he's worked as a grader at both NGC and PCGS. He was saying that one of the reasons for the slide in the bids on higher mint state generic gold is due to PCGS opening European offices. http://www.coinnews.net/2010/05/13/pcgs-opens-paris-office/ Apparently Heritage pulled many of its bids in consequence for losing some of their muscle in European gold buying. Anyone know if this is one of the main reasons for the continuing slide in MS62 and above generic gold?
Owle, the slide as you call it, isn't really a slide. It's nothing more than generic gold doing exactly the same thing it did over the past few years. It's following the spot price of gold - that's all. There is no great mystery or other reason. Look at this auction for 1924 MS63 Saint from back in 2002, when gold was about $300 oz - http://coins.ha.com/c/item.zx?saleNo=284&lotNo=7133 The coin sold for $736. The coin had numismatic value, back then, even though it was a generic issue in a common grade. But as the spot price crept upwards, that numismatic value was eaten away until there no longer was any numismatic value and the coin sold based purely on its bullion value. So now that the spot price of gold is dropping, that very coin is dropping in value with it. There is, still, no numismatic value. And there won't be if, and until, gold drops down around $750 oz. It's really just that simple. It has nothing to do with anything else. And anybody that tells you otherwise is blowing smoke up your skirt.
There are numerous dynamics in current bid and asks on generic gold; it is basically an honest market, I don't know that any hedge funds or players as in the oil and energy or precious metals markets are manipulating the current prices on generics. Factors integral are: elevated metals spot prices; supply and demand fluctuating based on the numbers of effective tele-marketers and other sales people effectively placing mint state type gold; price supports or the lack thereof from the major players in the market.
Owle, generic gold is following and has been following the spot price of gold for several years now. You can say whatever you want, but that is a very simple and undeniable fact. And it's not gonna change until the spot price drops below the numismatic value threshold. Regardless of integral factors, or telemarketers, or what somebody says or blah, blah, blah. Now you can either believe that, or not. But it really is just that simple.
