I am feeling a little cocky. I hope you will allow me my 15 minutes of fame.
You see, the forecasts I made one year ago about the price of gold and silver bullion at the close of 2005 look pretty darn good.
My column in the Jan. 11, 2005, issue put my name and my forecasts out there for all to see. Had they been terrible, I would have had to write a column about how badly I did. Happily, they make me look good instead.
At the close of 2004, gold stood at $437.50 per troy ounce. I forecast $520 per ounce. As this is written, which admittedly is still a few days away from the end of 2005, the price is $528. I count that as a solid win.
Gold?s current price is now at a level it hasn?t visited since 1980 in the immediate aftermath of its all-time record high $850 a troy ounce Jan. 21. I have waited for almost 26 years for that figure to be something other than a fond memory. It is pleasing.
With silver also, I did pretty well. It was $6.807 per troy ounce at the close of 2004. I forecast $8.75. It is currently at $8.79. I count this as a win.
Boy, if I am that good, I must be rolling in it, right? Well, no. As I so often point out, this is not an investment advisory column or newspaper. It is a hobby newspaper whose sole purpose is to promote coin collecting.
That is not to say that collectors don?t make money or are not interested in bullion. They are. They most definitely are. However, it is not their primary motivation. We collect.
I bought coins this year made of silver. I don?t remember buying gold this year. I have never collected more than a few pieces of gold. It would be nice, but with a limited budget, you have to make choices and my choices have steered me to silver coins and to paper money.
But I am interested in bullion, its fluctuations and its impact on the numismatic marketplace. I know my readers are also. For that reason, I have always followed gold and silver closely, basically daily since I bought a 100-ounce bar of silver in 1969 when I was 14.
My career at forecasting bullion prices primarily has been a quiet one. It started at the end of 1978, my first year here, when Coin Market editor Bob Wilhite and I started a last-day-of-the-year habit of forecasting where we thought gold and silver would be one year hence. We carried it on until he retired at the end of 1999. Others joined in and this year-end forecasting goes on.
I am not always on target. I have had some very good calls and some very bad ones. All coin collectors tend to have a bias in favor of bullion. The only question is how strong that bias happens to be.
Because bullion was so frisky in 1979, it was a great year to start. We also have had some deadly dull years. That is why it is critical not to lose sight of the basic goals of collecting. If you make a little money in bullion, great. That can give you more money to spend on coins. But because you might lose a little money on bullion, don?t get so deep into it that it affects your hobby life, or worse, your whole financial life.
When I get excited and tend to get carried away with any investment enthusiasm, I dig out my record forecasting the stock market. I don?t do nearly so well there. I forecast in that very same Jan. 11, 2005, column that the Dow Jones Industrial Average would be at 12,000 at the end of 2005. It is currently 10,768, which is down slightly since the year began. I can even dig up my memory of speculating in egg futures. Most people don?t even remember that egg futures were ever traded. So I have enough black marks on my record to remind me that I don?t want to go soaring off into any investment enthusiasm.
I am an active contributor to my corporate 401(k) plan. I hope all readers plan for their retirement and diversify in this way. However, I never forget that my bread and butter is numismatics.
So what do I think will happen by the end of 2006? Are you sure you want me to tell you? Yes? OK. My forecast for gold is $650. For silver, I choose $11. For the Dow, 14,000. Remember my record. Don?t bet the mortgage on it.
