It’s easy to get complacent when the metals prices are low or stagnant. It's human nature to assume things will not change and procrastinate making any decision to buy. Who knows, gold and silver prices could remain low for months or years. But it only takes one crisis to send prices skyrocketing. Look, I’m not predicting a massive bull market in the next six months. You should know by now I rarely jump up and down scaring people into buying. I’m not the eternal bull always predicting higher prices. In fact, over the past 35 years I have given more “sell” recommendations than any dealer I know. For two decades I begged people to sell common US gold coins such as $20 St Gaudens and Liberty coins, or trade them for gold bullion coins like Eagles, Maple Leafs or any coin that trades based on the daily gold or silver price. Today these common US gold coins have mostly lost their collector premiums. Gold Liberty coins including $20, $10 and $5 have almost no premium even in grades as high as MS-63 and MS-64. Same is true of $20 St Gaudens and $10 Indian Head coins. For example a $20 St Gaudens in MS-65 condition is worth less today than when gold was $400 an ounce! What a terrible investment they turned out to be. Other slightly rarer coins such as $5 and $2 1/2 Indians have done even worse. From 2005 through 2007 I urged investors to unload these coins too, even though they were being highly promoted by several other dealers.
The result has indeed been a drastic fall in prices even though gold is substantially higher (even at today’s low gold price). One example is the $2 1/2 Indian Gold coin. It has fallen from a high bid of around $7000 to a current bid of $1300. Over the past 7 years I have warned about the latest trend which was modern foreign coins. Coins like high grade Pandas, Koalas and a huge variety of coins produced by foreign Mints have been promoted as the rarities of the future. Many of these coins are worth 25% of what they were being sold for just a couple years ago. I’m not claiming to be a genius at seeing these horrific crashes but I have been 100% correct in my recommendations. On the other hand there have been opportunities to make profits too. When premiums on certain coins were extremely low we have jumped in to buy those coins when it made sense and when the risk was extremely low. This usually takes place in markets similar to the current one. That is to say when fewer investors are buying. It only makes sense that when demand and prices are low, there are bargains to be had. Of course that is when it’s the hardest to convince people to buy. If you could only really embrace the buy low, sell high philosophy when markets seem stagnant, you could drastically increase your odds of profiting. Many investors claim to agree but the fact is most only buy when prices are quickly appreciating and refuse to jump in when they are not.
Proof Gold American Eagles
There are some really great buys out there today for investors who can stand to buy when things are cheap. I have written about Proof Gold Eagles several times this year. I believe they are by far the best gold buy in the market. Premiums are as low as they have ever been. You can buy them today for hundreds of dollars less than just 18 months ago. Certain coins have recently gone up about $100 an ounce even as gold has dropped. Of course at this point not all Proof Gold Eagles have done this but it is the beginning of a trend and there is still time to take advantage of this market. I won’t go into detail at the moment but you can read my logic by following this link.
There is an alternative for investors stuck in what they thought were rare collectibles such as the Modern Foreign and common US gold coins minted prior to 1933 mentioned above. Classic US rare coins have been doing very well. I have not recommended them for over 20 years but it’s time to start getting back in certain parts of this market too. The higher dollar super rarities are moving at a fast rate. I’m not talking about MORGAN Dollars or most of the “rare” coins that are a dime a dozen. Only high grade, well recognized rarities are getting the attention. This is a small part of the rare coin market but a very profitable part of the market. Take a look at the chart below.
So if you are sitting on rare coins that are doing nothing, or worse yet have done nothing but lose value, it’s time to reconsider your position. I’d rather have clients in a couple of great coins than 100 so called rare coins that will likely never go up in price. So many clients are sitting in portfolios worth $20,000 to hundreds of thousands of dollars in coins that are destined to continue to be losers. Why not trade into truly rare coins that have the potential to make substantial gains over the next few years. This elite part of the coin market is your best bet for recouping lost money and seeing substantial gains. If you’re just tired of rare coins all together put the money into Proof Gold Eagles which will move with the price of gold and have the additional probability of higher premiums which could double or triple your profits when gold does go back up.
Whether you are looking to add coins or bullion or just want to investigate how to turn your current holdings into something much more profitable give us a call. We can tell you where you stand currently and what if anything can be done to greatly increase your position. I know most people will continue to do nothing because the gold and silver markets are low but I also know a few of you will take advantage of the new trends and greatly profit over the next few years. Please be one of the few who takes advantage of the phenomenal opportunities in today’s market. Call Don, Carl or myself to see if we can help.
In honor of July 4th holiday coming up I will cut our commissions by 30% for any trades started by July 10th.