Buying mood sweeps markets

The gold market and the stock market seem almost giddy. A rate cut on the overnight federal funds rate of one-half of one percent Sept. 18 have sent both metals and stocks rocketing higher.

Gold has pushed through the May 11, 2006, high and returned the precious metal to a level not seen since Jan. 21, 1980, the date of its all-time high. The Dow Jones Industrial Average is nearing its all-time high, which was just over 14,000 hit on July 19 of this year.

Enthusiasm from both markets has a tendency to spill over into the coin market, but because there isn’t a publicly reported average like the Dow, it is more difficult to pick up on it.

Rising gold prices tend to improve coin dealer cash flow and they attract an investor crowd into numismatics. When dealers have more money and investors are chasing specific coins, coin prices tend to rise.

The stock market part of this deal affects collectors themselves. Because so many of them are in retirement plans that benefit from stock market gains, collectors can feel more free to spend money on their coins.

About the only thing that remains to be seen is what happens to house prices. Rising home prices also make collectors feel pretty optimistic and more willing to buy coins.

The timing of the Long Beach Coin, Stamp and Collectibles Expo, which starts Sept. 27, couldn’t be better. It will be an opportunity for all of the market players to assess the state of things in light of the new reality in the gold and stock markets.