From the April 19th Numismatic e-newsletter:
Gold and silver prices have sagged. Is it time to buy?
Here are some answers sent from our e-newsletter readers to Editor Dave Harper.
I’m a numismatist, not a money pumper (i.e. investor), but investments of any form (stocks/real estate/coins) all follow the same rules, the first of which is “buy when it’s on sale” (note “on” sale, not just “for” sale). Prices on things go both up and down, so buy when they’re down.
This is exactly the opposite to human nature – if it has gone up they buy and if it has gone down they don’t.
St. Joseph, Mich.
Buy all you can afford, physical gold only, no exchange traded funds or mining stock.
The question should read: Who is willing to sell a gold coin (i.e. American Eagle bullion) at $1,400. and silver at $23? Certainly not a collector. The collector will wait.
However if you are an investor/dealer and you are buying and selling in bulk, you certainly will be grabbing all you can at these bargain basement prices. And reselling them as the market goes up. That is the business.
When was the last time the average collector could afford to buy even 10 ounces of gold bullion American Eagles? That is $14,000 at currant prices.
Which brings us to another question.Should gold or silver bullion American Eagles even be considered a collector coin? With the big numbers that AE bullion coins are minted, they can never truly be considered a rarity. Even when graded at MS-70. But they are attractive and in demand. They will always be worth the spot price of gold and silver.
American Buffalo gold bullion and proofs on the other hand are not minted in the big numbers as the AE. They are 24 carats and .999 pure gold. I don’t see the Buffalo getting the attention of the bullion traders or the collector.
I look at the Mint Statistics each week in Numismatic News and see the 2012 Buffalo proof with a mintage of 19,765 which was down from 28,693 in 2011. March 2013 Buffalo bullion was 11,000 while the Eagle was 54,000 for the 1 oz.
Which coin should be more of a collectible?
It wasn’t too long ago when gold was selling for close to $2,000 and predictions were of $2,500 and higher. How many of us said I wish I bought this or that at $1,400. Well here is a second chance. But what do you want, and who will sell it to you?
Old Bridge, N.J.
A good a time as any. The spot price of both gold and silver is probably the lowest they’re going to be for a long while.
Sometimes, as in the stock market, we sell short. Since gold and silver have slid in price, why not buy short. It’s never really a bad time to but these precious metals. When the price goes up, you’d feel like a hero. Since the current price is under $24 per ounce, it is the magical time to buy. The recent high had been $40 per ounce. Yes, 40 percent lower.
An educated guess on my part is that by the end of 2014, a $40 price point on silver will be seen again. A $2,000 price on gold can’t be far behind.
Berkel en Rodenrijs, Netherlands