By Richard Giedroyc
The surprising and rapid recovery of equity markets in a “V” rather than a “U” shape curve has impacted the spot price of precious metals inversely. This, in turn, has been impacting the value of bullion and bullion-impacted coins. Consider that the bad news. The U.S. Mint may disagree, as the Mint continues to be challenged to keep up with demand for gold and silver American Eagle coins regardless of their intrinsic value. The good news is the balance of the coin market, be these people collectors, speculators or investors, has shrugged off this news. Each of these groups continues to buy unabated. It now appears that there has been an influx of new collectors and serious investors encouraged initially by the coronavirus recession and a dramatic increase in precious metal prices.
Prices realized at auctions speak for themselves, with many coins selling near or at their all-time records. Over-the-counter sales have yet to recover, but the lockdown and subsequent social distancing that created this problem is only now being lifted in many states. Coin shows are only now getting the go-ahead to re-open.
Despite several dips in the spot price of gold and silver, speculators continue to buy in the bullion-driven sector of the coin market. It appears at the time this commentary is being written that these metals will remain in a tight trading range for some time, with underlying indicators suggesting gold and silver may once again break out further to the upside. Overall, the price of collectible coins remains steady regardless of commodity values.
Good opportunity is almost everywhere, but especially in several sectors which still remain surprisingly “soft.”
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