This article was originally printed in the latest issue of Numismatic News.
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Gold raced toward $1,400 a troy ounce Oct. 13, closing the day at $1,369.50, another record. Silver joined the party, almost hitting $24, at $23.914.
Lansing Mich., dealer Pat Heller of Liberty Coin Service said that he had “done pretty well in our store today. Our phone is ringing constantly.” He noted a “surge in both buying and selling.”
As someone who has noted that client behavior will alert him to when the market is nearing a top, he said, “It is not a frenzy, but it is going slightly in that direction.
“People are not sensitive to prices,” he explained and this applied to both buyer and sellers.
Sellers were bringing in a lot of jewelry, gold coins and 90 percent silver, Heller said. With the 90 percent silver, he said as much was coming in as going out, so he made the spread in both directions.
In addition to American Eagles, gold buyers were looking for Austrian 100 coronas, Mexican 50 pesos and American Arts gold medallions.
“We’ve trained a lot of customers to look for the low premium form” of gold, he explained.
Greencastle, Ind., dealer Julian Jarvis said prices are moving so fast that dealers occasionally have problems keeping up with the rapidly escalating prices.
“It’s kind of difficult to keep up,” he said and as an example related a story of a buyer of circulated silver dollars that he knew who was able to pick up 200 of them from a competitor for $18 apiece just the day before and then turn them around for $1.50 a coin profit.
Higher prices are also bringing out sellers of scrap gold.
“I don’t go out and solicit. I just buy from my regular dealers that I buy from ... Volume’s up 30 percent in the last month,” Jarvis said. Scrap is usually 10 karat or 14 karat gold.
However, the direction of bags of 90 percent silver coins has changed at his business.
“In the last two days I’ve sold more to investors than I’ve bought, which is unusual.”
Previously, sellers of 90 percent silver coins have outnumbered buyers and Jarvis had to wholesale out his oversupply.
Current silver investors seem to be trying to avoid the U.S. Mint’s recent price hike to $2 per silver American Eagle from $1.50 by buying older dates on the secondary market or even silver rounds and bars.
“I’m selling as many rounds and bars as silver Eagles right now,” he said.
Jarvis said of the silver American Eagles that he does sell, “I can sell older BU rolls pretty reasonable compared to the Mint.” He said he charged $1.75 to $1.90 per coin over bullion value.
But demand for silver American Eagles is not disappearing, he explained. “The 2010s are selling very well.”
Interest in making precious metals investments is still growing as far as Jarvis can tell.
“I’ve still got new buyers virtually every day,” he said.
Gold buyers are currently going for the Canadian Maple Leaf.
“Seems I have a lot of customers that prefer pure gold to Krugerrands,” he said. The K-rand is .9167 fine compared to the .9999 fine Maple Leaves.