Buyers Not Reckless Even at Gold Record
By David C. Harper
market tops are characterized by frenzied buyers
paying any price to get in on the action, then
activity in the coin business indicates we are
still not near one in the current gold market.
Trading on the world’s commodity markets took
the precious metal convincingly through the
$1,100 mark, changing hands at $1,115 a troy
ounce Nov. 11.
“It’s created some new buyers that have never
bought gold before,” said Greencastle, Ind.,
dealer Julian Jarvis. “There’s been a few
sellers because it’s the highest they’ve been
able to sell their gold for, and there are a lot
of other people just waiting to see what’s going
Supplies of the popular gold bullion coins are
“They’re still pretty readily available,” Jarvis
said. “I have had no problem getting quick
delivery of anything.”
Silver is trading around $17.50 a troy ounce,
nowhere near a record.
“I think silver supplies are extremely tight,”
As evidence he cited dealer buying behavior with
silver bars. They would not be paying as close
to spot as they are for their purchases if
supplies were plentiful.
He said at a coin show last week a dealer was
paying full spot price and since then one buyer
was paying 15 cents over spot for 100-ounce
Dealer Pat Heller of Liberty Coins in Lansing,
Mich., said gold coin supplies are still
abundant enough that there is no waiting for
delivery. Since he believes interest is
increasing, he doesn’t know how long this will
remain the case.
But, he said, “the easy money has been made,”
referring to profits that have rolled in since
gold bottomed around $250 in 2001.
He said he thinks gold could be $1,500 six
months from now.
He acknowledged that American Eagle gold coins
remain popular with gold investors and its
Buffalo counterpart also had a strong three
weeks after it first went on sale in the middle
Interest in the Buffalo coin is waning a bit
now. Buyers who favor it do so because it is
made of .9999 fine gold, Heller said. This
highly pure bullion is popular in the Far East,
as well as among buyers who expect that the
coins will be melted at some point, he
For buyers of the .9167 fine American Eagles,
the fact that there is copper and silver alloyed
to the gold to make it harder helps it stand up
much better to any handling it might receive.
At today’s prices, Heller said collectors might
want to look at gold coins with somewhat lower
premiums over gold value. He cited Austrian 100
coronas and Mexican 50 peso coins and even
American Arts gold medallions.
The coins are less popular because they do not
contain even troy weights of gold, so value
calculations involve lots of decimal points. The
low premium for the medallions have something to
do with what might be called their strangeness.
Though they are not coins, they are official
U.S. Mint products that were last sold in 1984.
Heller said there are some in the business who
do not know what they are. The medallions depict
Americans from the arts like Mark Twain and
Heller said he is even more optimistic about
silver’s future than gold’s, but presently
silver owners tend to sell as soon as it nears
the $18 mark. Heller said previous failures by
silver to stay over the $18 mark have helped
instill this caution.
He likes bags of 90 percent silver pre-1965
dimes, quarters and half dollars. There is still
interest in 10-ounce and 100-ounce bullion bars,
but this is less than in prior bullion upturns,
he said. The 90 percent silver coins have the
advantage of being able to be cashed in one coin
at a time, where the silver in a bar has to be
sold all at once.