Gold’s Drop Hits Double Eagles, Bullion Coins

by Richard Giedroyc

Generic gold coins, especially $20 double eagles, were being hit hard at the time this commentary was being written, this being due to the spot price of gold declining to $1,453 an ounce. The yellow metal has now declined to its lowest level in about three months. As might be expected, common-date gold American Eagle bullion coins followed. Generic silver coins didn’t perform well either, for the same reasons, but the slide in intrinsic value for silver coins wasn’t as dramatic.

While dealers were trying to protect their financial positions in such coins, collectors upped demand due to the sudden opportunity. The biggest problem is that buyers outpace sellers at a moment when supply is important. Coins whose values are based more on demand and scarcity performed better, holding their values with few exceptions. The very highest end of the market is holding its own, but considering the almost unprecedented prosperity in the United States, multiple record prices might be anticipated but simply haven’t materialized. The upside simply hasn’t been there for most coins. This will discourage investors and speculators, but it ushers in a great opportunity for collectors aggressively looking to add to their collection rather than to their wallet.

Are we looking at a golden opportunity (no pun intended) for the scarce to rare coin buyer, with the economy booming but interest in this area of collecting not being sufficient to counter supply? Opportunity appears to be knocking for the advanced collector but without necessarily breaking a collector’s budget.