magic formula for Gold
by Francine Sawyer
Faulkenberry has seen the price of gold go as
high as $1,028 an ounce.
He has also seen the price fall low.
He has spent decades as a gold and coin dealer.
He knows the price will fluctuate and it does
not make him wake up at night in a cold sweat.
At his store, Tom's Coins and Antiques on Middle
Street, he is either buying or selling gold all
He said many people are selling gold now because
they say they need money.
"There are any numbers of factors that influence
the price of gold. Inflation and world turmoil
play roles," he said.
He said there is no magic formula.
"The value of gold is affected by emotion," he
said. "For example, looking at the possibility
of Hurricane Gustav in the Gulf has jumped oil
prices, and that is just on the possibility of a
hurricane. If the hurricane moves in and
develops oil prices will go up because oil
production will shut down in the Gulf. That will
drive the price of oil up and it will also drive
he price of gold up."
He offered another example of "emotion." He said
word could come out that housing starts were up
last month. "That would be great for the economy
but it would drive the price of gold down," he
As the price of gold goes up or down, collectors
or investors are motivated to buy or sell. "It's
exciting when it is moving in either direction,
but when the market is stagnant and not moving
either way, there is no motivation to buy or
sell," he said.
While the price of gold goes up and down like a
thermometer, Faulkenberry said, the best way to
describe how the up or down prices do not effect
him is to draw two pictures.
"One picture is a $20 gold piece and one is a
picture of a paper dollar. Ask this question
which one is going to remain stable? If paper
money was stable, why would the government quote
the exchange rates on a daily basis?"
He said another way of thinking would be a
person with a pile of gold in one hand and a
dollar bill in the other. "Which would you put
faith in? The gold, of course," Faulkenberry
He said he does not give up on the gold
business, no matter the market.
"The value of currency is what we believe it is
as consumers. If we think a 1974 dollar is worth
the same as a 2008 dollar, we would all be
broke," he said.
Faulkenberry offered several analogies as to how
gold keeps its value.
When he graduated from college in 1974, he
bought an Oldsmobile Cutlass for $6,300. He said
a comparable car would cost $40,000 today. But
roughly the same amount of gold that would have
paid for the car in 1974 would buy the
equivalent car today.
He gives another example: the price of a 1925
car. He said it would have cost $800. "That's 40
twenty-dollar gold pieces. Today the car would
cost $40,000 and with today's prices that would
be 40 twenty-dollar gold pieces." When customers
come into his store to sell gold coins or gold
pieces to him, he goes to a New York gold
exchange network to get the up-to-the-minute
He can get the price quote for gold, scrape
gold, gold coins, silver coins, gold and silver
bars, platinum and palladium.
He said the recent bombardment of commercials on
television advertising the opportunity to sell
scrap jewelry and getting top dollar should be
thought out carefully.
"I have had several customers come in and tell
me that they sold gold to the businesses
advertising on television, but did not get top
dollar," he said.
Faulkenberry began collecting coins when he was
7 years old. In 1976, with a business degree
from East Carolina University he worked
part-time on the weekends in the precious metal
He realized he made more money on the weekends
than he did during his other job with his
father, who had an automobile parts business in
While he is the only certified personal property
appraiser in New Bern, and is also a real estate
broker and a licensed and bonded auctioneer, he
keeps his hand in gold.
He recommends that people put 10 to 20 percent
of metal investment into their portfolio. "It's
like an insurance policy. When the dollar is
weak because of inflation, metals will help
balance the value of the portfolio.
He said it is not a hard and fast rule, but
generally when stocks are not doing so good,
metal is doing OK.