Gold and silver owners received their holiday gifts in December when gold passed the $1,300 level and silver rose beyond $17.
By the year-end close, gold was at $1,306.30 and silver came to rest at $17.06.
In percentage terms, gold rose 13.6 percent in 2017. Silver advanced by 7.1 percent.
Not bad for aficionados of hard money.
The Grinch has been lurking ever since.
From the beginning of February 2018, silver has spent most of its time below its year-end value.
Gold, however, took until today to sink below its 2017 close.
I checked the Kitco website this morning and see gold at $1,296.30, down $16.70.
What are we to make of this?
Anyone who has been following precious metals for more than five minutes will recognize it as a trader’s market.
There has been no financial crisis followed by quantitative easing to supercharge prices as in the 2008-2011 period.
Likewise, there is no huge surplus of either metal looming to cause them to plummet as at the beginning of the 21st century.
Silver is still higher than it was at the close of 2016.
Today, it is at $16.21, compared to $15.936 almost 17 months ago.
Gold has retained nearly all of its 2017 gains.
It closed 2016 at $1,150.
Are you bored yet? I hope not.
Individuals who trade gold and silver based on the metals’ entertainment value are doomed to be frustrated in the end.
In 2001, both metals were incredibly cheap.
Recall gold for under $260?
Stories in Numismatic News about collecting gold coins pretty much fell on deaf ears.
There is always a core of interest from plucky individuals with a long-term outlook, but few newcomers could be persuaded to take advantage of low prices to buy collectible gold coins at the time.
It is those plucky individuals who will notice, for example, on the APMEX website that you can buy Liberty Head gold $20s in VF condition for just a 3.6 percent markup from melt value today.
An XF is 4.4 percent above melt value.
Both of these are below the 5.4 percent markup over melt applied to one-ounce BU 2018 gold American Eagles.
You have to accept a random year for the $20s.
That might be too much for a collector to stomach.
However, my point is that you can buy collectible coins for historically low prices relative to gold value.
Take advantage of current conditions.
Don’t buy your gold just before the tax filing deadline when all last-minute Individual Retirement Account contributors are buying.
Don’t wait for the Mint to suspend production of proof Eagles to decide to buy gold.
The premium then was through the roof.
Be smart. Take advantage of boring markets to buy your gold coins as close to melt value as is possible.
Acquire something that holds value over thousands of years.
If you want to be entertained, feel free to ignore my advice and go chase Bitcoin.
Buzz blogger Dave Harper won the Numismatic Literary Guild Award for Best Blog for the third time in 2017 . He is editor of the weekly newspaper "Numismatic News."
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