Gold at $1,000; Plenty of Eagles
By David C. Harper
closed above the $1,000 mark Sept. 11 and then
skittered along just above it in the three
trading days following, closing at $1,018.90
Twice before, in March 2008 and in February
2009, gold traded above $1,000, but failed to
Will this time be different?
Pat Heller of Liberty Coin Service, Lansing,
Mich., thinks there is a good chance that the
price will hold.
"If it doesn't this time, it will not go under
$1,000 by very much or for very long. By the end
of the month, it will be over $1,000 to stay,"
What's making this happen?
"The economic factors pushing the price up are
getting stronger each time," he explained. "The
announcement by a Chinese official that the
government is going to adopt a partial gold
standard and a technical default by Barrick
Corp. on its gold hedges are new factors pushing
gold prices higher that weren't factored into
the market before this month."
So far though, there has been no surge in buying
of gold bullion coins to accompany the increase
"Right now we are seeing a sharp increase in
people selling to us," Heller said about his
business in Lansing. "We have had some people
buying from us, but we haven't seen any
particular increase in people buying from us."
Heller said the reluctance to buy into this
rally will likely end if gold surpasses the
Why is that number significant?
"That's approximately the intra-day high of
March 2008," he replied.
In the meantime, for those who were looking to
buy one-ounce American Eagle gold bullion coins,
he was charging 5.7 percent over spot price on
10-piece quantities for immediate delivery. When
asked what the significance of gold over $1,000
is, Greencastle, Ind., dealer Julian Jarvis
replied, "It's about time" and chuckled.
Why is it happening?
"Everything that's being done by the congress in
Washington, D.C.," Jarvis said. "You can't spend
our way to prosperity. It's going to kill the
He's seeing people selling off their scrap gold
because of financial problems.
"They are selling for a fraction of what it is
worth," Jarvis said, citing some of the common
mass promotions to buy gold that have been seen
on TV and elsewhere.
Jarvis also said there is no shortage and no
wait for gold. In fact, the markup on gold
bullion coins is "the cheapest its been for two
Jarvis is asking $50 on a single one-ounce
"That's a 5 percent markup," he said, "$45 on 10
to 50 coins."
Physical supplies of silver bullion coins are
much tighter, he thought.
John Kamin, editor of the Forecaster Moneyletter
of Tarzana, Calif., was in a somewhat playful
mood when he was asked to comment about the gold
"Well, you want me to play devil's advocate?" he
"I've heard that true collectors are not
interested making money on coins ... That would
mean that all those so-called true collectors
need not be concerned about the gold price,"
He warned, "people who expect a one-way trip
(higher) are unrealistic," but then went on so
say, "It's not that gold is better, but that the
dollar is worse. It's sick. It's being pushed
down so that recession-flagged American
companies can sell more cheaper American
Kamin said potential buyers of gold include the
Chinese, OPEC oil producers and Russia.
Kamin noticed another set of buyers.
"Lately, I've had large rental property owners
trying to diversify from troubled properties and
one method they use is to buy some gold coins."
Whether gold goes up or down from the present
$1,000, if you are betting prices will go higher
by buying gold bullion coins, you are paying
premiums over melt value that are the lowest in
a long time.