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"What Color Are Your Assets"
by Lawrence D. Goldberg

An Insiders Guide to
Rare Coins
and Precious Metals

Find out more

Read Introduction

Mailing Address
2219 W. Olive Avenue, Suite 218
Burbank, CA 91506

Phone: 800 334-3325
Direct: 818 557-0901
Fax: 818 557-0902

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Special August 2020 edition

IMPORTANT UPDATE: Rare Coins and the Economy, Special August 2020 Edition

August Rare Coin Report

Special Notice: I will be attending the Las Vegas Coin Show next week. I do not plan to have a table, but will be walking the show. That said, I will have coins to sell, and I will be buying, so if you are going to be at the show or in the Las Vegas area, and would like to meet up and maybe do some business, call or text me on my cell phone (818) 590-9067 and we can make some Covid-19 SAFE arrangements.

Rare Coins and the Economy, August 19, 2020

Unless you’ve been a hermit for the last few weeks, you know that the gold and silver prices have been rising like a rocket ship. Today, gold closed at $1,928.40 and silver at $26.60. The torrid pace of increase seems to have stabilized, at least for the moment, as the market catches its breath and wonders what tomorrow will bring. It is important to remember that precious metals are a supply and demand market. Thus, many people have achieved significant profit by selling into the rising market, and the higher prices go, the more incentive there is to sell. Naturally, their ability to sell depends on the willingness of other people to buy, and the significant premiums above the spot price indicates that demand is still the stronger side of the equation. How long that will last is anyone’s guess.

The premiums are particularly strong for American Silver Eagles. In many cases, the difference between common silver rounds and common date Silver Eagles start at $4 per ounce and goes up from there! I’m guessing here, but I believe that is largely because that series has become more and more the province of the collector. This is not surprising for a few reasons, one of which is that the ASE is one of the most beautiful coins ever minted. Another is that the mintages vary widely, so some of the more rare years trade at premiums of $5, $10, $20 and even more per coin above common silver eagles.

A large part of the rise in gold and silver prices is in response to the massive influx of new money as the Federal Government tries to prime the economy in the face of the China virus. So far, that figure is in the $4-5 Trillion dollar range. If Democrats win the election, you can expect another couple of trillion to bail out New York, Illinois, California and other poorly run, “throw money at the problem” States. Some of this is likely to occur even if Republican’s keep power, depending on how things go. In any event, this whole crisis has set us up for a round of future inflation, and that concern is the main driving force behind the upward move in precious metals prices.

This dynamic combined with the Pandemic has left rare collector coins in a curious situation. On the one hand, powerful up-shifts in precious metals prices tend to push up the prices of rarities and have actually done so for coins which have significant bullion value. On the other hand, the Covid-19 protocols have completely disrupted the coin show circuit. One of those disruptions is in dealer to dealer business, a very important part of the rare coin market where dealers trade or sell the coins for which they do not have ready customers in order to obtain the coins for which they do have ready customers. The second disruption is that it has severely limited the ability of collectors and accumulators to buy the coins they truly want by completely hobbling an active market place. These two conditions have suppressed market demand for rarities. However – and this is critical – because the collector class has been inhibited in their ability to purchase coins, despite the fact that it has significant funds available has created the building up of what economists might call “pent-up demand.” As these forces balance out, rare coins prices will have risen some, but I believe there is a great deal more to go, especially if and when the kinks in the marketplace get straightened out and we return to a more normal (i.e. more active) status.

Despite all the confusion and uncertainty about the direction of today’s market, the future looks extremely positive. While metals may not rise at the same pace as they have in recent weeks, they are now at prices that enable almost anyone who has purchased them in the past to sell at a significant profit. The threat of inflation is here to stay at least for the foreseeable future, so there are plenty of buyers, meaning that significant demand both for rarities and precious metals will likely continue. This means more people selling into a rising market, and a market eager to devour that influx.

This is a win for buyers - collectors in particular - who are likely to see some great coins at attractive prices. And it is a great win for sellers also, who can now easily sell at significant profit. That said, market volume is definitely hindered by the Covid-19 situation, so once that threat sufficiently diminishes, I expect to see record numbers of both buyers and sellers, and will be able to say “Let the good times roll!”

Best Wishes,

Lawrence Goldberg
Customized Numismatic Portfolios, Inc.
800-334-3325

 

Customized Numismatic Portfolios, Inc.

www. cnpcoins.com

Phone: 800 334-3325