What kind of a week will we have where gold is trading at record prices over $1,700 an ounce?
An interesting one I expect.
In some ways it is a designer financial crisis.
In a flat out panic, individuals will buy anything that they think will protect themselves from financial calamity.
As far as the flight to gold is concerned, this is true.
However, I use the term designer crisis because in recent days, unlike 2008, there are still plenty of gold American Eagle bullion coins available to the market. As long as this is true, it is a sign that people are being choosy in what they buy and that fits the word “designer.” They are buying fashionably rather than in a panicky way.
Will these 2011 gold American Eagles now be snapped up and the Mint once again be forced to ration supply?
If it happens, it is a sign of panic.
Last week the Mint lifted all order restrictions on the 5-ounce American Eagle bullion coins that are available.
Three of the five designs are in abundant supply.
There are 46,000 of the Olympic National Park available as well as 99,200 of Vicksburg National Military Park and 111,500 Chickasaw National Recreation Area. These are 5-ounce coins, so they represent well over a million troy ounces.
Will someone be backing up the truck now to buy these as well?
That would be another sign of panic.
Silver American Eagle 1-ounce bullion coins are still being rationed. However during the month of August the Mint stopped producing them at the San Francisco Mint. There is an unsold inventory there.
Resumption of production at the Western mint might be another indicator of panic.
Today as we look at the roiling financial markets, keep in mind what the numismatic sign posts of panic are.
We haven’t passed them yet.