I sourced a respectable gold coin collection over the course of my years and stopped buying when spot levels got up around $1500.00 or so and won’t touch the stuff at these levels. And it got me to thinking….. If the average coin collector wouldn’t consider adding gold at these sky high spot prices…. Just how liquid is the stuff? Are folks still clamoring to add gold at these prices?
Based on my experience at today's local show, margins are compressing, and buy prices from dealers are lagging spot. I just checked pacificpreciousmetals.com, and they're quoting spot gold at $2181.71, and offering to sell random-date 1oz AGEs at $2221.71 each (in lots of 10+), with a buy-back price of $2158.53. That's around a 3% buy-sell spread, which I guess isn't out of line for the high-volume online dealers. There were certainly people interested in buying gold at the show. I guess they figure there isn't that much difference between $1500 and $2200 if it's going to go up to $3K or $5K or...
The big movers of precious metals is interest rates. Speculators chase the price up with borrowed money using futures contracts. All they need to know is the direction of interest rates. And when rates even start to wander lower, it’s Katie bar the door Spring loaded for gold and silver
I think that the spot price of precious metals these days is based less on people exchanging physical and more on action in ETFs. That money (big money) doesn't worry about premiums, stacking, buy-back prices, etc. They only care about "Number go up" and "Number go down". I have to admit, I swing trade precious metal ETFs when the spot prices hit what I feel is a bottom (I'm up about $1K on a $10K buy over the past few weeks ). Shares in an ETF won't do you any good if society collapses to the point of apocalypse, but buying into and out of ETFs is superior in pretty much any scenario short of that. Negligible middle-man premiums (0.0014% per day), don't have to haul and store the stuff, can buy or sell in an instant, etc, etc.
Yep. They're buying at ~1.1% below spot, selling at ~1.8% above. Sell price is 2.9% above buy price. Sometimes buy offers are above spot, but this apparently isn't one of those times.
You guys are all discounting the market that hasn't yet participated. You're all "in the know", and got in early. The buying frenzy doesn't come from those who understand the market . . . it comes from those who don't.
My LCS is having a difficult time getting gold bullion from his supplier. And his gold coins are less inventory than normal.
Well…. Most pre-33 stuff is pretty tied to spot. Some have numismatic value over and above spot. But most common stuff is pretty tightly tied to the market.
Most everything goes up or trends upward nicely during an Election year. I have noticed this through the years of employment. I don't know the gold market I just buy dips. When I do purchases, its usually Gold Indians the pre-33 AND A few AGE. Is comparing Ebay prices to the coin you are looking at bad idea? Because I know the spot price of gold but not what they are going for or worth. I paid 340.00 for a 1912 Indian and another one for 325.00. 1911. last week on purchases waiting for ship. It was either pay or trade 26 ounces of silver.
After the government changed the reverse of the bullion gold coins, I have been looking to buy a type set, hoping the bullion price would go down. In contrast, the price has only gone up. I can’t believe it’s almost $2,200 now. I formed my previous type set when gold was about $325.
Just because you (and I) lived through much MUCH more affordable times for PMs doesn't mean it was always going to stay that way. Who are you to decide that prices are sky high right now? Maybe they're still way low? You can decide this for PMs but you can't decide to not participate in everything else in life. Such as going to the grocery store. I used to be able to spend 300 to 350 on groceries with a few extras here and there and we were pretty good for the month. Like 3 years ago! Now, LOL! Now it takes about a grand a month. This month the grocery stores have already taken $500 from me and the month is still young. Luckily my salary has went up by multiples since I started working to try to keep up with it. Dec. 2020 I took a picture of a gas pump. $1.87. Yesterday I got gas for $4.14. I had to buy a car battery last week. 5 to 10 years ago that basic battery would have been $75. It was $190. If you need a plumber they run $90 to $100/hr around here! Absolutely everything is up! Considering what's going on in life, gold really isn't up that much compared to everything else IMO. It was in the 1600 to 1800 range in the 2011s-2012s with a brief break in between then and now. It's not like gold is $3600 today. It certainly hasn't doubled or tripled with everything else. I told someone the other day, it took this entire country's history to rack up one trillion dollars in debt from the beginning to the 1980s. Now we tack on 1 trillion, with a T worth of debt roughly every 100 days. That is a notable change. At some point, no matter what all the rose colored glasses people want to say, at some point, THAT IS going to have an affect on life in this country and I think we're seeing it now. Goes way beyond a brief period of stimulus checks. If the governments budget was a household budget it'd be like taking in 100k a year and spending 200k a year. They're unable to cut anything. The rest of the world is also buying up gold. This isn't to say it won't fluctuate down again. I'm sure it can and will. But the longer it holds at these levels, I believe it's solidifying a new floor and the skys the limit. I mean let's pretend gold dropped to $300 an ounce today. It'd all immediately be sold and there'd be no product left to sell anyone which would send prices up again. If it dropped to $1k it would immediately all sell out because this is what we're used to now. This is the equilibrium price vs demand at this time. I fear fewer and fewer will be able to retire just because a fixed income based on a salary earned 20 years ago at any point in time going forward is going to be left in the dust and will be hard to live on. No matter how good people think they're doing today. Gold is just a reflection of what we're living.
We all are doing better than we were four years ago. Unless your one of the ones put in a refrigerator truck because Morgues were full.
That was a well thought out response. Frankly when silver gut stupid in the early 2000’s and I was far less educated, I participated in some of that frenzy. So looking at it from that angle, I certainly can see your point. I guess I am portraying myself as the average collector. For twenty years whenever I had a good month I would put whatever I had left on a gold coin. It wasn’t a financial plan or anything. I wanted what I couldn’t afford as a poor coin collector. That simple. If I had a really good month I bought a $700.00 Saint….. I suppose that the market is much wider than the simple collector buying a gold coin here and there, but my initial question came from that frame of mind.