Gold and silver prices are slipping once again, coming close to setting new lows not seen in over five years.
As of Nov. 11, Kitco reports the price of gold at $1,086 with silver at $14.35. Since Oct. 12, gold is down seven percent from $1,165 while silver has seen a 10 percent drop from $15.96.
At their lowest points since February of 2010 for gold and August of 2009 for silver, gold was at $1,080 on July 24, 2015 and silver at $14.27 on Aug. 27, 2015.
Julian Jarvis, owner of Julian Jarvis Rare Coins, Greencastle, Ind., said the low prices during the summer brought on bullion shortages and high premiums, something that hasn’t appeared during this latest drop in price.
“The shortage has really eased up,” he said. “I can call in an order for anything and get it shipped right away. The manufacturers and distributors are all caught up.”
Premiums are dropping now that the shortage is over, he said.
“Right now, distributors are selling them for just barely over what they’re paying for them,” Jarvis said. “With advertising and shipping costs, there’s not much room for profit for them.”
Michael Fuljenz, owner of Universal Coin & Bullion, Beaumont, Texas, said he’s seeing the same changes.
“For silver Eagles I can get any quantity quickly for just $2.30 over spot,” he said.
He said the lower prices have slowed sales of bullion coins rather than sped them up.
“There has been a slowdown in bullion sales,” Fuljenz said. “People don’t like staying with something that is dropping.”
Jarvis said bullion buying now isn’t the frenzied purchasing seen when metals dropped during the summer.
“I get calls about buying bullion everyday, but its nothing like it was two months ago when everyone was calling, wanting bullion immediately,” he said. “There’s still people accumulating, storing it away though.”
He said it’s impossible to predict where gold and silver prices will go in the future.
“There are two groups out there, one that says it can’t go lower and the other says it’s going to go lower,” he said.
He said he believes metal prices would have to rebound at some point.
“It’s really low,” Jarvis said. “Unreasonably low. I’ve been through this many times before and I just don’t see how this can continue.”
Fuljenz said he believes a number of factors are suppressing gold and silver prices in the short term.
“When you have the stock market doing well, you have people taking money out of exchange-traded funds (ETFs), which can involve gold and silver, and putting it into stocks,” he said. “When metals are doing well, they can take money out of the stock market and put it into ETFs.
“With news coming out about the Federal Reserve’s future plans and the job reports, investors have kept this in mind.”
He said gold and silver prices have a weak short term outlook but growth in the long term.
“In the short term, the price may go lower,” Fuljenz said. “Production costs of gold and silver still have to be factored in though.”
“We’re on a roller coaster right now. Gold is good in the long term, but for the time being, you have to buckle up, keep your arms and legs in the ride and hold on tight.”
This article was originally printed in Numismatic News.
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