Let's suppose for a minute that I think that gold prices are going to continue to drop. Am I correct in thinking that a drop in melt price will eventually (with some lag) lower the price of pre-1933 U.S. gold coins? Maybe not the same amount but close? I.e., if melt drops $100 and stays there, a few weeks/months later the coins should be at least $50 less, maybe a little bit more?
Yeah but there will be a floor. Two things happening. One is strictly bullion, pm market will affect it. Second is collector demand. As gold declines, the collector value increases as an effect to the price. Two extremes would be a beat up, ugly 1924 double eagle, and the other a MS66 ultra high relief double eagle. The first will probably always trade near its bullion value, whatever that is, since most collectors do not want such a common date in such poor condition. The second the price of gold obviously has nothing to do with its value. Most of our coins are somewhat in between, with gold values having some, but certainly not all, of the effect on the pricing. Bottom line, innately scarcer and more desired coins will decline less with gold going down than ultra common and less desired pieces. Look at barber coins. When silver was high they traded at bullion, now silver is back down they again trade at a premium. Same thing.
It works the other way too, especially for graded Mint products of recent vintage. If and when silver goes high enough, that premium you paid for a MS-68 commem half dollar will evaporate. It will be just another...90% silver half. I have almost a full roll of now-circulated Proof silver Kennedy 50c of the 1990s, taken from bags. Don't know what to do with them, so I keep them in a tube with the loose bulk 90%. Under a glass, they have tiny marks from jostling around in a bag with other 90%. I have also found 3 Columbians and a good many Barbers while searching bags or rolls. Dealers tell me that they simply don't have time to search bulk 90%, and for the most part, I believe them.
The easiest thing to do is search Heritage auctions from back in 2002-2004. Common MS slabbed Saints and Libs were selling for $300-500 per coin on a regular basis.
What good does it do to look at auction prices more than a decade old? Everyone's in a state of denial regarding whether "things are different this time..." In the past 10 years, we've ADDED over $4 trillion to the money supply, the national debt has DOUBLED, and the countries of some of our g-grandparents, Italy, Greece, Spain, Portugal, etc., are running on fumes. And the Fed's bag of tricks is empty. Sounds "different" to me. The only generality I make now -- "it's a good time to raise cash!" Anyone who says he can predict the outcome of this deplorable situation deserves a beeeeeg horse-laugh.
But your post just did. Your post is predicting the future sir. Sure we added debt and liquidity, but we have added trillions in value as well. Have you thought about that point?
Value in what? What is now worth trillions more? Housing in the aggregate? Don't think so. GDP, adjusted for inflation? Don't think so. What is even priced trillions more, let's leave "worth" out of the equation? My only prediction, "...it's a good time to raise cash," as opposed to, "...it's a good time to spend cash." There are so many countervailing forces now, I won't even predict inflation vs. deflation.
Good because that has nothing to do with the subject of this thread. The topic of this thread is about how spot vale and numismatic value relate to each other. So either get back on topic, or keep quiet. If you want to talk about "your" topic, go do it in General Discussion.
