This Week’s Letters (2/15/08)

From the Feb. 15 Numismatic News E-Newsletter:

Q. With gold over $900 an ounce are you more likely or less likely to buy additional gold coins?

Regarding the question of buying gold coins at the present rates, I have to say that, for myself, it is not likely. I truly rue the days (about three years ago) that I held off buying some fine specimens because I thought the price might come down just a little bit more. Ha!
?Ya snooze, ya loose.? Oh, well.

J. Jackson
Monroeville, Ind.

Believing in the old saying, ?Buy low and sell high,? I?m less likely to buy gold at this time. With the coming influx of more cash being sent to taxpayers, it?s possible that the economy will rise and gold will fall, for a while. Consequently, if gold rises, it may not be for long.

Kenyon Miers
Esperance, N.Y.

I will continue to buy gold coins , but not at $900 an ounce. I will buy my one-tenth ounce coins as before. They are not out of reach of the average person as of yet. I am satisfied with them as long as my budget allows. They are fascinating coins to look at and I enjoy looking at them and my other coins almost every day.

James Dorsey
Philadelphia, Pa.

I will buy gold coins at current gold prices, so long as their value is not tied to bullion. Rare coins have never been too impacted by bullion costs.

Brett Whitford
Reno, Nev.

I cannot conceive buying gold at the current or higher price. I believe it will retreat back to a reasonable level in the future.

Skip Foster
Knoxville, Tenn.

I have ordered and received several gold coins over the past few years. I also ordered the Bald Eagle two-coin platinum set which I received about three weeks ago (lucky me) because not only is gold going up but platinum is also taking off. Palladium is a big surprise, (but I blew that!) When gold was $544, palladium was $188. For $564, I could have bought 3 ounces of palladium. (You do the math.) I wanted to invest but was a chicken since I am not a big collector or investor. Well look at palladium now. As I write this it?s $446. My $564 would at this price bring me $1,338. I feel it could have been a very good investment.
Now to answer your question. With gold going up the way it has, I wouldn?t buy it now. I feel that sooner or later it will go back down. How far and for how long is anybody?s guess. That?s when I?ll jump on it.

Jim Marotta
 N.Y.

I always thought the way to profit from investments was to buy low and sell high. No, I won?t be buying gold coins at the current prices.

Gregory Kipp
San Mateo, Calif.

No, probably not. I think of all the $10 gold eagles I had bought and sold $150-$175 and the $20 Double Eagle at $350.Remembering when platinum was less than gold.

Jim D.
San Antonio, Texas

Definitely more likely to buy gold. It?s the item that holds intrinsic value in an unstable market. Selling it ain?t too bad, either.

Brad and Holly Paino
Adelanto, Calif.

Most of my gold coins I have had for many years. I suppose gold could go higher, but at my age I am selling. At 81, I can?t afford to wait much longer. In other words, no, I am not buying.

Howard Stegmann
Address withheld

Here?s a few thoughts for those gripping about the law against melting U.S. cents and nickels. WHY can?t we do it? Because the government says so. The government doesn?t just make up laws willy-nilly. (Well, most of the time, anyway.)
The law doesn?t so much take control of what?s in ones piggybank, but rather dictates how one may dispose of those contents. Those contents must be used in an exchange of money for goods, services, or other money. (Unless of course, you?re a bank, and have the right to refuse accepting rolls of coins. What?s up with that? In an effort to reduce their costs, the bulk exchange of coinage has been farmed out to third-party companies, like CoinStar.) To just sell ones nickels and cents for scrap value, in exchange for paper or electronic credit, is contrary to the idea of having ?hard? assets vs. ?full faith and credit? assets.
The disruption caused to the U.S. economy by small change scrapping would probably outweigh any industrial production benefit to its society. Crime may increase as more homes are broken into to get at ?stashes? of coins. Merchants would have to raise cash prices (vs. charge and debit cards), as they would have no change to hand out. Tourist spots would have to start elongating dimes, instead of cents and nickels, thus furthering the scarcity of small-change.
The spectacle of people selling their coins at scrap yards is too ridiculous to imagine. Ever see people redeeming beverage containers at a recycling center? Dimwits who sort their containers AT the center, instead of doing it at home BEFORE they bring them in, really slow down the process. Once again, this is why we have CoinStar. Perhaps paycheck-cashing businesses, (as they probably already have counting machines), could be the first step of a journey to scrapyards, but I?m not holding my breath.
I believe a simple solution for those wanting to ?cash in? on the melt value of coins, is for them to collect obsolete foreign coins. After all, a Mexican 20-centavos has a lot more copper in it than a pre-1982 U.S. cent. Remember, Mexico did a 1000 old pesos equals 1 new peso devaluation back in the 1990?s. Monetarily speaking, practically all their late 20th-century coinage is worthless. And all of the European countries who now use the Euro, no longer accept their previous coinage as legal tender. THAT is basically worthless metal sitting around, which could be used in industry. A starting point to see if it would be worthwhile to melt such coins for their metal content would be to get a figure for a (high) mintage year type coin, determine its weight, and find its current scrap value. Then determine how many months of demand would this supply satisfy? How many high mintage years are there for this type coin? How many such coins of various denominatons are estimated to still be around? These are the types of questions and scenarios we should be contemplating, not destroying our coins which still circulate.

Steven R. Desens
Covina, Ca

I am tempted to buy gold now, but not when I see the price over $900/oz. I think the price of gold will go down a bit in the near future, IMHO, so maybe then. I will always like the old-fashioned gold coins, since they have both bullion value and numismatic value.

Ginger Rapsus

To answer your question I am not selling any of my gold coins and I will buy on any dips. I have found that buying on eBay from a reputable seller is often the least expensive method.
I would advise your readers to look at the many gold coins available. There are many .900 coins for sale at bullion value or even less. Do your homework on the gold content and coins like British sovereigns, half sovereigns, Netherlands Gulden, Panama Balboas and others can be acquired at very reasonable prices.
I look at the price of platinum, which historically has traded at about par with gold, and is now over $2000 per ounce. I am inclined to believe there is some Central and large bank manipulation of the price of gold. (see GATA)
Kind regards,

Roger John Rickards
Port Alberni BC
Canada

I have bought gold coins at these prices and will continue to do so.

Michael Emmerson
Brookfield, Conn.

Normally I don?t buy any gold coins. However, this year I have already ordered a proof Bald Eagle set which includes a gold coin and plan to buy a fractional buffalo when offered late r this year - probably the tenth ounce variety. I?ve heard that the US Mint may be offering some type of solar system commemorative coins with the planets as silver dollars and the sun in gold. Since astronomy is one of my favorite topics, I may get the coins providing the golden sun is not outragiously priced. That said, my main collecting interest is in US type coins of the non-gold variety. Hence, my gold coin purchases will be limited. Wither gold cointinues to climb upward or falls back below $700, the ?priciness? of gold will deter me from accumulating a serious gold coin collection, but I will continue to pick up a gold coin from time to time as it suits my fancy.

Robert H. Ball, Jr.
Detroit, Michigan USA