Coins We Love: What's Up with Gold?!

We often get an uptick in activity when gold makes a run, especially when it nears record highs. This past month, gold has broken and held a $2,000+ price for 6 straight days, currently at $2,017 at this time of this note. In the past, this level has been reached only to have large sell-offs and then settle back down between $1,650-$1,750 an ounce. Is this time different?

A few factors all combined at the same time could keep the popular precious metal in the $2k territory for much longer.  Without getting too technical, here are some factors that are spurring the interest in gold. The Fed Funds rate is nearing 2007 levels (currently at 4.83%), the National Inflation rate is just over 6% (compared to the long-term average of 3.2%), recent bank defaults, and upcoming elections - all are swirling around the heads of investors and collectors now. The anxiety of an uncertain economic forecast can steer markets to new heights. Right now, stabilizing above the $2,000 level will be key to a bullish near-term future.

So, the question for us is how does this affect the classic coin market? Well, for one, a newly added interest in precious metals often has some positive carry-over effects on the coin market. People learning about buying/collecting bullion-related material often gravitate to more historical (and more interesting) items in US coinage. There is also a percentage of coin collectors that hold bullion and wait for the upward movement to cash out and move funds over to numismatic material that hasn’t yet increased in price. While neither of these factors noticeably affects numismatic interest in the collecting community, the increased volume at shows, shops, online retailers, and auctions is quietly noticeable within the industry. Price movements in gold are certainly not directly correlated, but the influence and interest definitely are. We feel that to be an overall positive for the hobby!

That’s all we have for this week! We hope you are able to find something that piques your interest in the highlighted coins below.

Numismatically Yours,

Jason Smith

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