Is It Time to Invest In Gold?
Gold, silver, and platinum prices have soared to new highs, echoing past spikes tied to economic upheavals. But should collectors cash in—or hold for the long game?
Gold, silver, and platinum recently set all-time record spot prices. This is the fourth time in what I will call modern history that metals, particularly gold, have suddenly increased dramatically in value. The metals spiked in 1971 as the Bretton Woods international monetary system ended. The 2008 Great Recession brought on the next spike. A third but lesser upsurge occurred due to the COVID-19 pandemic in 2020.
Silver experienced a value surge of its own that ended abruptly in 1980 due to price manipulation by the Hunt brothers. Historically, each of these previous times, the prices dropped precipitously once whatever triggered their rise was no longer perceived as a problem.
Coin collectors collect first, but always keep a watchful eye on the value of what they collect. It can be tempting to sell when there is a profit to be had, but which comes first, collecting or a profit? There are investors in the market. To them, coins are merely the vehicle through which they anticipate taking a profit. They will sell once they reach their goal or perceive the market is about to re-adjust downward. The bigger questions for collectors may be multiple.
Will the precious metal markets re-adjust downward through a correction? What will be the new trading range for each of these metals once the dust settles? Would it be wise to sell that set of silver Washington quarters or whatever you collect now, take some profit, wait for prices to back off, then reassemble that collection, perhaps being more affordable in higher grades than they were the first time? Higher prices now may not deter collectors later. All these price gyrations leave collectors in flux.
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