Gold and stocks played see-saw the second week of August, as the Dow repeatedly plunged and gold surged to almost $1,800 an ounce.
“It’s really getting ugly,” said John Maben, president of ModernCoinMart, on Aug. 9 after the Dow had plummeted over 600 points the day before. “People are losing faith.”
So with gold on the upswing, folks are putting some of their money into gold coins and bars.
“We are getting a lot of first-time buyers,” said Michael Haynes, president of American Precious Metals Exchange. “It’s definitely a higher ratio than we’ve experienced in the past.”
APMEX has a variety of precious metal products, Haynes said, but the current customer focus is on gold.
“You’re seeing headlines that gold is up and stocks are down,” Haynes said. “That kind of headline is going to attract people directly into gold.”
But it doesn’t appear people are being rash in their purchases, he said.
“I would be reticent about people buying willy-nilly without regard to anything,” He said. “I think it’s measured and cautious and I think that’s a good idea for people who haven’t purchased this product before.”
People don’t have to hand over thousands of dollars to get into the gold market, Haynes noted.
“We have over 3,500 different types of precious metal items from bars to coins in various weights and sizes and countries,” he said, “and some really interesting gift items like pendants.”
Price points are “all over the place” for gold and silver, Haynes said. In fact, on Aug. 10 APMEX had sold out of some smaller items like a 5 gram APMEX gold bar .9999 fine. It had been selling for $288.47.
Maben said his company focuses on selling gold and silver coins that have the added bonus of collector value.
“We’re selling a lot of gold coins,’ he said. “We don’t sell just straight bullion. We aren’t the company to go to if you want to buy 1-ounce gold Eagles. But we have a lot of coins closely linked to bullion.”
Among those would be half-ounce First Spouse gold coins that have a small premium over bullion, and 1-ounce Buffalo gold coins.
“We’re selling a lot of coins they can buy for 5 to 15 percent over spot,” Maben said. “With the higher premium coins they get the added bonus of a coin collector value.”
A 2007 First Spouse gold coin in MS-69 or MS-70 is going for premiums of 10 to 12 percent over spot, Maben noted.
“We have the people who want the precious metals play but are also getting something more interesting,” Maben said. “They can build a modern type set. It’s more interesting and the premium is not that expensive.”
But what about silver?
Haynes said that experienced buyers who are seeking a bit more diversification are picking up silver bars and coins.
“The are seeing it favorably priced to gold and feel gold will pull up silver prices over time,” Haynes said.
Maben said the overlooked metal of the moment is platinum.
“Platinum seems to be just totally ignoring this rally,” Maben said. “Platinum has continued to be the laggard of the three, which says to me that platinum is undervalued by comparison.”