Jeff Garrett's Opinion of Current Gold Market
Here is an excerpt from this week's NGC article by Jeff.
With gold on the rise again, Jeff Garrett explains why there is no better time to invest in the gold coin market.
In the last few weeks, gold has finally started to move in a positive direction, as it briefly topped $2,000 for the first time in months. Tensions over global conflicts and concerns about the massive federal debt have once again made gold look attractive as a safety play. Almost daily we have clients calling and asking about how to buy gold to protect their assets. It will only take one headline crisis for gold to move to the next level.
Many dealers whom I have contacted have bought much more than they have been selling. That is one of the reasons that the premiums for bullion-related objects are near recent lows.
This oversupply is also playing out in the rare, or nearly rare, coin market. Generic date, common issues of United States gold coins are selling for very low premiums once again. Much of this surplus is fueled by an avalanche of pre-1933 gold coins flowing back to the United States from Europe. During the Depression and before, large quantities of US gold coins were shipped to Europe as a standard course of international trade. No one really knew how much US gold remained lurking in the vaults of European banks and other financial institutions.
Today the rare coin market is being faced with an unprecedented quantity of gold coins entering the market. These coins have been quietly entering the market for some time, but in the last few years some retailers have been loudly touting this newfound supply of US gold coinage.
By now you are probably thinking that this part of the market should be avoided due to oversupply. I urge you to consider otherwise. There has never been a better time to start a collection of US gold coins. Premiums for most Double Eagles, other than scarce or rare issues, have been crushed in the last year or so.
There is also a lot of market uncertainty due to the fact that no one really knows what is in the recent flows coming from Europe. A few of the major players have an idea, but I doubt any one person or group knows the full extent of what exists in these foreign holdings. Markets hate uncertainty, and that is one of the reasons prices have fallen so much. In time, this will be resolved as the coins are absorbed and more information becomes clear to researchers and collectors.