@WCC said:
It doesn't take hyperinflation to generate a much higher price. The price run-up after the October 2008 low of $680 > was in anticipation of much higher price inflation which never materialized from QE "printing".
I disagree. ALL commodities were depressed reflecting fears of a global depression. The lifting of prices reflected GDP growth, not inflation, and the rise to $1,800 was helped by global debt and EU problems.
I think gold is relatively overpriced, compared to other physical goods and probably many services. It's definitely > > not cheap compared to other commodities, including silver.
I don't know about cheap, but it has been basing around $1,800 for the better part of a decade-plus. Rising demand as I have posted here and elsewhere with lower supplies means a rising price.
Just go back to the 1970's: supply is up about 120% but demand is up about 300%.
Still looks like it is "breaking out" past chart "resistance". Whether it does or doesn't, its price isn't contingent upon >any "fundamental". It's psychological, what people believe, not anything that happens or doesn't.
I would agree with the gist of this statement. I do believe gold will get more publicity when it is closer to $2,500 an ounce and $3,000 an ounce then when it has laid just at or below $2K an ounce.
I wouldn't hold my breath. People have been calling for $3000 or even $5000 gold for decades. Lost in the gold lust is the simple fact that the vast majority of gold usage is discretionary. How much gold jewelry will get sold at those prices?
Short of hyperinflation, I don't see gold getting to $3000 any time soon. And in such an inflationary environment, I have no interest in Gem Saints.
The price of gold isn't based upon its utility. If it was, it never would have reached 1980 or 2012 prices.
It doesn't take hyperinflation to generate a much higher price. The price run-up after the October 2008 low of $680 was in anticipation of much higher price inflation which never materialized from QE "printing".
I think gold is relatively overpriced, compared to other physical goods and probably many services. It's definitely not cheap compared to other commodities, including silver.
Still looks like it is "breaking out" past chart "resistance". Whether it does or doesn't, its price isn't contingent upon any "fundamental". It's psychological, what people believe, not anything that happens or doesn't.
Yes and no. Gold isn't priced based on its utility but it is priced based on its demand. If industrial demand drops, hoarding has to increase to compensate.
@Cougar1978 said:
Picked up a nice lustrous 1927 PCGS 65 Saint for $2300 walkup customer at recent show offered to me at my table. Just laid out the Bens. Very nice and lustrous. I sold it later in the show for $2700 to a nice, very sharp young woman who is a para legal.
Nice move....I don't have a dealers mentality so let me ask: did you buy that coin on the cheap relative to FMV or did you just sell it at a rich premium to FMV ? A $400 spread on a common Saint seems very nice.
Seems you sold it for a really rich price rather than got it on the cheap.
That’s not a rich price at all. Not even a 30 pct margin. Somewhat Narrow spread really. Are you a tirekicker lol? Nor was it purchased cheap vs bid. It sold less than CPG MV and everybody knows 10c on the dollar does not cut it in the coin biz. We don’t do this for free lol…..I did well sell it that quick usually those stay in inventory a long time which erodes profits.
@Cougar1978 said:
Picked up a nice lustrous 1927 PCGS 65 Saint for $2300 walkup customer at recent show offered to me at my table. Just laid out the Bens. Very nice and lustrous. I sold it later in the show for $2700 to a nice, very sharp young woman who is a para legal.
Nice move....I don't have a dealers mentality so let me ask: did you buy that coin on the cheap relative to FMV or did you just sell it at a rich premium to FMV ? A $400 spread on a common Saint seems very nice.
Seems you sold it for a really rich price rather than got it on the cheap.
That’s not a rich price at all. Are you a tirekicker lol? Nor was it purchased cheap vs bid. It sold less than CPG MV and everybody knows 10c on the dollar does not cut it in the coin biz. We don’t do this for free lol…..I did well sell it that quick usually those stay in inventory a long time which erodes profits.
@Cougar1978 said:
That’s not a rich price at all. Are you a tirekicker lol? Nor was it purchased cheap vs bid. It sold less than CPG MV and everybody knows 10c on the dollar does not cut it in the coin biz. We don’t do this for free lol…..I did well sell it that quick usually those stay in inventory a long time which erodes profits.
Agreed, and good job. I just thought the market for 1927's MS-65 was if anything a bit under $2,700 -- even with tax, S&H, and online commission (if won at auction).
But again...I don't know how your coin looked, could have been a super-nice coin. Also, whatever day you sold it the price of gold could have been anywhere from $1,825 - $2,050 the last few weeks.
@jmlanzaf said:
Yes and no. Gold isn't priced based on its utility but it is priced based on its demand. If industrial demand drops, hoarding has to increase to compensate.
That chart you posted showed industrial usage for gold as miniscule. It's NEVER been seen as an industrial metal.
Central bank buying (selling) -- more buying now for sure -- institutional demand (SWFs, endowments), and ETFs (easy to play a rising price) all seem bullish for the next few years.
Jewelry demand has always been the big swing factor. Look at autos and ICEs for palladium (killed) and platinum (going nowhere) the last year or two.
I read through this thread with some amusement and some moments of waxing nostalgic. I was at the Spring Baltimore show in 2019 and was offered a generic common date MS63 Saint for spot plus $75... I'd have been all in for less than $1300. At the time, I had just moved out of my house and was in a rental, scrimping money for a down payment on my own house once my divorce was finalized. I did end up getting a common date $5 and a nice raw $2.5 around the same time, but I really felt I missed out...
Fast forward a couple of years and my thrift paid off... I was able to get a mortgage loan for 2.9% before the interest rate hikes started taking off. Had I waited just six more months, I'd have likely been priced out.
Timing is everything...
Collecting: Dansco 7070; Middle Date Large Cents (VF-AU); Box of 20;
@jmlanzaf said:
Yes and no. Gold isn't priced based on its utility but it is priced based on its demand. If industrial demand drops, hoarding has to increase to compensate.
That chart you posted showed industrial usage for gold as miniscule. It's NEVER been seen as an industrial metal.
Central bank buying (selling) -- more buying now for sure -- institutional demand (SWFs, endowments), and ETFs (easy to play a rising price) all seem bullish for the next few years.
Jewelry demand has always been the big swing factor. Look at autos and ICEs for palladium (killed) and platinum (going nowhere) the last year or two.
That chart spoke to usage demand elasticity. I could not find a total demand including hoarding that coveted 1975. You have yet to post a reference or graph.
@jmlanzaf said:
I couldn't find a chart of U.S. only demand. However, if you look at the global gold demand, what you see is > declining demand during times of rising prices. Note the late 1970s and then the period after 2000.
This speaks of the demand elasticity I mentioned
Yes, but note that demand elasticity changes over time as rising per-capita incomes offset rising prices.
Look at the huge increase in Jewelry demand when prices were much higher 20 years later after the 1979-80 peak.
Disposable income rises exponentially after subsistence means are taken care of. Those are the people who can buy a little gold or other discretionary items.
Maybe you should go buy some. I am not in the biz for some lousy 10c on the dollar. Everybody where the elevator goes to the top knows 10% markup does not cut it on the coin biz rofl. Saints aren’t bullion coins either. Additionally - Many bullion coins low pop rarity pieces in their own right and command much more over BV.
@Cougar1978 said:
That’s not a rich price at all. Are you a tirekicker lol? Nor was it purchased cheap vs bid. It sold less than CPG MV and everybody knows 10c on the dollar does not cut it in the coin biz. We don’t do this for free lol…..I did well sell it that quick usually those stay in inventory a long time which erodes profits.
Agreed, and good job. I just thought the market for 1927's MS-65 was if anything a bit under $2,700 -- even with tax, S&H, and online commission (if won at auction).
But again...I don't know how your coin looked, could have been a super-nice coin. Also, whatever day you sold it the price of gold could have been anywhere from $1,825 - $2,050 the last few weeks.
@GoldFinger, don’t pay any attention to him. He did charge a high price for the coin and considering that it was a generic Saint, he did work on a large buy-sell spread. Read a few more of his posts and you’ll get the picture about the type of dealer he is and his attitude towards retail buyers and sellers.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
@jmlanzaf said:
Yes and no. Gold isn't priced based on its utility but it is priced based on its demand. If industrial demand drops, hoarding has to increase to compensate.
That chart you posted showed industrial usage for gold as miniscule. It's NEVER been seen as an industrial metal.
Central bank buying (selling) -- more buying now for sure -- institutional demand (SWFs, endowments), and ETFs (easy to play a rising price) all seem bullish for the next few years.
Jewelry demand has always been the big swing factor. Look at autos and ICEs for palladium (killed) and platinum (going nowhere) the last year or two.
ETF demand in gold tonnes dropped this year as the gold price climbed sharply the past several months other than a spike in Europe the last week in October. ETF funds sold gold and money went back into bitcoin and stocks during their recent rally's. However, overall gold ETF demand should rebound soon, as it does tend to follow the price over time. This to me suggests gold should have some continued upside to a record high into the new year.
Gold jewelry demand is relatively stable around 600 tonnes per quarter and does not really change much with the gold price.
I wouldn't hold my breath. People have been calling for $3000 or even $5000 gold for decades. Lost in the gold lust is the simple fact that the vast majority of gold usage is discretionary. How much gold jewelry will get sold at those prices?
Short of hyperinflation, I don't see gold getting to $3000 any time soon. And in such an inflationary environment, I have no interest in Gem Saints.
The price of gold isn't based upon its utility. If it was, it never would have reached 1980 or 2012 prices.
It doesn't take hyperinflation to generate a much higher price. The price run-up after the October 2008 low of $680 was in anticipation of much higher price inflation which never materialized from QE "printing".
I think gold is relatively overpriced, compared to other physical goods and probably many services. It's definitely not cheap compared to other commodities, including silver.
Still looks like it is "breaking out" past chart "resistance". Whether it does or doesn't, its price isn't contingent upon any "fundamental". It's psychological, what people believe, not anything that happens or doesn't.
Yes and no. Gold isn't priced based on its utility but it is priced based on its demand. If industrial demand drops, hoarding has to increase to compensate.
"Investment" demand (what most people call investment) is entirely speculation. That's what led to the price spikes in 1980 and 2012. This is true of every financial type asset.
No reason is required for any price move, up or down. People use reasons to rationalize their decisions.
Jewelry demand has always been the big swing factor. Look at autos and ICEs for palladium (killed) and platinum (going nowhere) the last year or two.
Outside of developed countries, a noticeable proportion of jewelry demand is almost certainly also or primarily for financial reasons. It's not like these people have access to coins or bars where they can buy it from their local dealer or order it online. This is most of the world's population, even though a much lower proportion of those who can afford to buy gold at all.
Palladium and platinum aren't monetary metals. That's the difference. Coin forum members claim both as "precious metals" but it's obvious the public doesn't think of either as anywhere near equivalent to gold.
Maybe you should go buy some. I am not in the biz for some lousy 10c on the dollar. Everybody where the elevator goes to the top knows 10% markup does not cut it on the coin biz rofl. Saints aren’t bullion coins either. Additionally - Many bullion coins low pop rarity pieces in their own right and command much more over BV.
Common date Saints in sub-gem grades are pretty much bullion. For example, the Upstate bid/ask spread on MS-63 Saints is 2120/2220 against a melt value of about $2000.
As for MS-65 Saints, the Upstate bid/ask spread is 2400/2500 which is barely over FOUR percent.
You are, of course, free to pay as little as you like and charge as much as you like. But I'm not sure I would publicly advertise that. It makes people want to neither sell to nor buy from you.
Every ethical dealer I know does the bulk of their business in the 10% margin or less arena. A lot of coins, including bullion and key dates, fall into that realm. Maybe your elevator goes to the top because the top is the basement?
I wouldn't hold my breath. People have been calling for $3000 or even $5000 gold for decades. Lost in the gold lust is the simple fact that the vast majority of gold usage is discretionary. How much gold jewelry will get sold at those prices?
Short of hyperinflation, I don't see gold getting to $3000 any time soon. And in such an inflationary environment, I have no interest in Gem Saints.
The price of gold isn't based upon its utility. If it was, it never would have reached 1980 or 2012 prices.
It doesn't take hyperinflation to generate a much higher price. The price run-up after the October 2008 low of $680 was in anticipation of much higher price inflation which never materialized from QE "printing".
I think gold is relatively overpriced, compared to other physical goods and probably many services. It's definitely not cheap compared to other commodities, including silver.
Still looks like it is "breaking out" past chart "resistance". Whether it does or doesn't, its price isn't contingent upon any "fundamental". It's psychological, what people believe, not anything that happens or doesn't.
Yes and no. Gold isn't priced based on its utility but it is priced based on its demand. If industrial demand drops, hoarding has to increase to compensate.
"Investment" demand (what most people call investment) is entirely speculation. That's what led to the price spikes in 1980 and 2012. This is true of every financial type asset.
No reason is required for any price move, up or down. People use reasons to rationalize their decisions.
I just call it hoarding. Lol. If people stopped hoarding gold, it's price would collapse.
I wouldn't hold my breath. People have been calling for $3000 or even $5000 gold for decades. Lost in the gold lust is the simple fact that the vast majority of gold usage is discretionary. How much gold jewelry will get sold at those prices?
Short of hyperinflation, I don't see gold getting to $3000 any time soon. And in such an inflationary environment, I have no interest in Gem Saints.
The price of gold isn't based upon its utility. If it was, it never would have reached 1980 or 2012 prices.
It doesn't take hyperinflation to generate a much higher price. The price run-up after the October 2008 low of $680 was in anticipation of much higher price inflation which never materialized from QE "printing".
I think gold is relatively overpriced, compared to other physical goods and probably many services. It's definitely not cheap compared to other commodities, including silver.
Still looks like it is "breaking out" past chart "resistance". Whether it does or doesn't, its price isn't contingent upon any "fundamental". It's psychological, what people believe, not anything that happens or doesn't.
Yes and no. Gold isn't priced based on its utility but it is priced based on its demand. If industrial demand drops, hoarding has to increase to compensate.
"Investment" demand (what most people call investment) is entirely speculation. That's what led to the price spikes in 1980 and 2012. This is true of every financial type asset.
No reason is required for any price move, up or down. People use reasons to rationalize their decisions.
I just call it hoarding. Lol. If people stopped hoarding gold, it's price would collapse.
People will continue hoarding gold until the government starts acting in a fiscally responsible manner and stops spending money they don't have.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
@jmlanzaf said:
I just call it hoarding. Lol. If people stopped hoarding gold, it's price would collapse.
As people's incomes go UP, their disposable income rises faster for poor people close to the subsistence level. I don't know if a big surge of gold buying will come from the United States the next 5-10 years. Maybe BitCoin gets those $$$. I do believe that people who barely had money to pay for food and shelter can now indulge in a cell phone, internet access, and PMs.
I also think peak (mined) gold could also be a factor going forward.
Every ethical dealer I know does the bulk of their business in the 10% margin or less arena. A lot of coins, including bullion and key dates, fall into that realm.
Baloney lol - 10c on the dollar does not cut it in the coin business. There is no such thing as a coin business where Opex is under 10 pct rofl!
Maybe you should go buy some. I am not in the biz for some lousy 10c on the dollar. Everybody where the elevator goes to the top knows 10% markup does not cut it on the coin biz rofl. Saints aren’t bullion coins either. Additionally - Many bullion coins low pop rarity pieces in their own right and command much more over BV.
Common date Saints in sub-gem grades are pretty much bullion. For example, the Upstate bid/ask spread on MS-63 Saints is 2120/2220 against a melt value of about $2000.
As for MS-65 Saints, the Upstate bid/ask spread is 2400/2500 which is barely over FOUR percent.
You are, of course, free to pay as little as you like and charge as much as you like. But I'm not sure I would publicly advertise that. It makes people want to neither sell to nor buy from you.
Every ethical dealer I know does the bulk of their business in the 10% margin or less arena. A lot of coins, including bullion and key dates, fall into that realm. Maybe your elevator goes to the top because the top is the basement?
Baloney - 10c on dollar does not cut it in the coin business.
And yet it does since the 5% bullion spreads are liquid and without risk. Most BM operations do 60 to 80% bullion and scrap at sub 10% margins.
Maybe you should go buy some. I am not in the biz for some lousy 10c on the dollar. Everybody where the elevator goes to the top knows 10% markup does not cut it on the coin biz rofl. Saints aren’t bullion coins either. Additionally - Many bullion coins low pop rarity pieces in their own right and command much more over BV.
Common date Saints in sub-gem grades are pretty much bullion. For example, the Upstate bid/ask spread on MS-63 Saints is 2120/2220 against a melt value of about $2000.
As for MS-65 Saints, the Upstate bid/ask spread is 2400/2500 which is barely over FOUR percent.
You are, of course, free to pay as little as you like and charge as much as you like. But I'm not sure I would publicly advertise that. It makes people want to neither sell to nor buy from you.
Every ethical dealer I know does the bulk of their business in the 10% margin or less arena. A lot of coins, including bullion and key dates, fall into that realm. Maybe your elevator goes to the top because the top is the basement?
Baloney - 10c on dollar does not cut it in the coin business.
And yet it does since the 5% bullion spreads are liquid and without risk. Most BM operations do 60 to 80% bullion and scrap at sub 10% margins.
You'd think that as a dealer, he’d understand that bullion and bullion-related coins typically trade at smaller margins than rarer, less liquid coins. Perhaps he’s unaware of the many large, highly successful bullion-based businesses. 😀
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
Not exactly germane to the conversation, but there are almost certainly collectors here who will see $15,000 common MS-65 Saints in their lifetime (assuming no gradeflation). If we assume a value of $3,300 today, inflation alone at 4% a year would do that in 38 years. At 3%, it takes about 52 years..... still very plausible.
@BryceM said:
Not exactly germane to the conversation, but there are almost certainly collectors here who will see $15,000 common MS-65 Saints in their lifetime (assuming no gradeflation). If we assume a value of $3,300 today, inflation alone at 4% a year would do that in 38 years. At 3%, it takes about 52 years..... still very plausible.
MS65 common Saints are more like $2400 right now so that’s going to change your math a bit. It’s still certainly possible, maybe even likely for collectors who are <20 but I wouldn’t call it almost certain.
@BryceM said:
Not exactly germane to the conversation, but there are almost certainly collectors here who will see $15,000 common MS-65 Saints in their lifetime (assuming no gradeflation). If we assume a value of $3,300 today, inflation alone at 4% a year would do that in 38 years. At 3%, it takes about 52 years..... still very plausible.
It could happen from a gold spike or a coin bubble or a fixation for Classic American Gold Coins if some "influencer" has a wide following.
But the experience the last 40 years is that gold and Saints and gold coins all move in spurts, not evenly or linearly.
@jmlanzaf said:
And yet it does since the 5% bullion spreads are liquid and without risk. Most BM operations do 60 to 80% bullion > > and scrap at sub 10% margins.
My LCS is at about a 3-4% spread. I think that's fair.
@jmlanzaf said:
And yet it does since the 5% bullion spreads are liquid and without risk. Most BM operations do 60 to 80% bullion > > and scrap at sub 10% margins.
My LCS is at about a 3-4% spread. I think that's fair.
Agree. It moves around a bit but it is rarely over 5%. On large deals, it is often only 1 or 2%. But VOLUME!!!!!
@BryceM said:
Not exactly germane to the conversation, but there are almost certainly collectors here who will see $15,000 common MS-65 Saints in their lifetime (assuming no gradeflation). If we assume a value of $3,300 today, inflation alone at 4% a year would do that in 38 years. At 3%, it takes about 52 years..... still very plausible.
It could happen from a gold spike or a coin bubble or a fixation for Classic American Gold Coins if some "influencer" has a wide following.
But the experience the last 40 years is that gold and Saints and gold coins all move in spurts, not evenly or linearly.
Well, of course the price of gold, the price of generic Saints, and inflation don't move in a linear fashion or even in lock-step with each other. But, from 1960 to 2022 inflation has averaged 3.8%. The premium between gold and Saints wanders around a bit, but they're pretty closely tied to each other. It's extremely unlikely generic Saints will trade at a multiple of the spot price of gold and more or less impossible that they'll trade for less than melt value.
Gold, BTW has done better than inflation and has averaged about 7.8% growth over the last 50 years. Using that as a rough estimate (assuming the premium doesn't change too much), and starting with $2,400 for a generic MS65 Saint, they will take only 25 years to hit $15,000 each. Somewhere around 2048. The time value of money is relentless and severely underappreciated by most people.
If I'm still around then, I'll find this thread and we'll see how close I was.
Being successful in RCI is being able buy low / sell high to make money NOW. Without those skills one will lose money. Buying it right, shopping around, having material can get keystone, developing good procurement contacts key. Auction pickoffs can yield a lot. Material that can bring 50-100 pct markup can be key in the smash mouth game of the bourse. Having a gold position is good but you will get burned on it in market drops. The idiocy of the 5-10 pct spread is just BS. Sure a shop may get that on bullion but they have stuff that walked in at a song enabling keystone. eBay fees alone are 10 pct of sales. So the 10c on dollar argument defunct. It takes at least about a 30 pct margin make it in the real coin business if not more. Any player for real knows that. As far as $15 k generic saints one day that’s just bar room speculation. Hey it could go the other direction. Would luv see them drop to $500. Go keystone!
@Cougar1978 said:
That’s not a rich price at all. Are you a tirekicker lol? Nor was it purchased cheap vs bid. It sold less than CPG MV and everybody knows 10c on the dollar does not cut it in the coin biz. We don’t do this for free lol…..I did well sell it that quick usually those stay in inventory a long time which erodes profits.
Agreed, and good job. I just thought the market for 1927's MS-65 was if anything a bit under $2,700 -- even with tax, S&H, and online commission (if won at auction).
But again...I don't know how your coin looked, could have been a super-nice coin. Also, whatever day you sold it the price of gold could have been anywhere from $1,825 - $2,050 the last few weeks.
@GoldFinger, don’t pay any attention to him. He did charge a high price for the coin and considering that it was a generic Saint, he did work on a large buy-sell spread. Read a few more of his posts and you’ll get the picture about the type of dealer he is and his attitude towards retail buyers and sellers.
Mark - I don't think anyone would accuse you of being a shrinking violet but in this one particular case I think you are still being much too kind.😉😉😉
@GoldFinger, don’t pay any attention to him. He did charge a high price for the coin and considering that it was a generic Saint, he did work on a large buy-sell spread. Read a few more of his posts and you’ll get the picture about the type of dealer he is and his attitude towards retail buyers and sellers.
Mark - I don't think anyone would accuse you of being a shrinking violet but in this one particular case I think you are still being much too kind.😉😉😉
Like heck that’s a high price lol - it was below CPG. Dropping you with an F. Your blocked!
@GoldFinger, don’t pay any attention to him. He did charge a high price for the coin and considering that it was a generic Saint, he did work on a large buy-sell spread. Read a few more of his posts and you’ll get the picture about the type of dealer he is and his attitude towards retail buyers and sellers.
Mark - I don't think anyone would accuse you of being a shrinking violet but in this one particular case I think you are still being much too kind.😉😉😉
Like heck that’s a high price lol - it was below CPG. Dropping you with an F. Your blocked!
@jmlanzaf said:
And if gold drops to $1500, they are back to $1800. It's all speculative and down or flat are also possible.
Absolutely....I've said ever since 2011 that I don't know where the next $300 move in gold is, but I am sure the next $1,000 move is UP
Unless BitCoin goes on a tear and sucks more $$$ in, all the underlying fundamentals for gold are lining up for nice, steady moves and a higher price in the next few years and certainly by the end of the decade.
The good thing about gold coins like Saints is you can enjoy them whatever happens to the price.
@BryceM said:
Well, of course the price of gold, the price of generic Saints, and inflation don't move in a linear fashion or even in lock-step with each other. But, from 1960 to 2022 inflation has averaged 3.8%. The premium between gold and Saints wanders around a bit, but they're pretty closely tied to each other. It's extremely unlikely generic Saints will trade at a multiple of the spot price of gold and more or less impossible that they'll trade for less than melt value.
I think you have 3 big periods in that 62 year time frame: the slowly rising inflation of the 1960's....the soaring inflation of the 1970's...and the disinflation since 1981. We could be entering a new period of slightly rising inflation and interest rates similar to the post-WW II era that began about 1946 but took decades to play out.
Saints and other gold coins are in uncharted territory because the gold price has never been this high before and certainly won't be as we go higher, either. In the past, even when Saints were higher-priced, they traded at bubble-like premiums to spot gold. I doubt we see THAT again (500-700% premiums).
Gold, BTW has done better than inflation and has averaged about 7.8% growth over the last 50 years. Using that as a rough estimate (assuming the premium doesn't change too much), and starting with $2,400 for a generic MS65 Saint, they will take only 25 years to hit $15,000 each. Somewhere around 2048. The time value of money is relentless and severely underappreciated by most people.
If you eliminate timing biases by using rolling time frames, gold and other commodities STINK as investments over most time periods. You have to really time it right and buy low and get out high. Gold etc. al do NOT pay dividends or interest which makes it impossible for them to match the returns from common stocks or even real estate. They even trail bonds over most time periods.
I'm bullish on gold longer-term but would NOT recommend moving $$$ earmarked for traditional investments into gold or PMs.
BTW, I think a near-8% return for gold is too optimistic. The gold price was surpressed for decades by price-controls. Starting from 1980 and using a starting price of $600 you get under 3% a year to the recent highs. Even starting a few years later from $300 after the big decline only brings it to about a 5% CAGR. Without dividends or income in the down years, gold and PM's just can't compete.
@Cougar1978 said:
Being successful in RCI is being able buy low / sell high to make money NOW. Without those skills one will lose money. Buying it right, shopping around, having material can get keystone, developing good procurement contacts key. Auction pickoffs can yield a lot. Material that can bring 50-100 pct markup can be key in the smash mouth game of the bourse. Having a gold position is good but you will get burned on it in market drops. The idiocy of the 5-10 pct spread is just BS. Sure a shop may get that on bullion but they have stuff that walked in at a song enabling keystone. eBay fees alone are 10 pct of sales. So the 10c on dollar argument defunct. It takes at least about a 30 pct margin make it in the real coin business if not more. Any player for real knows that. As far as $15 k generic saints one day that’s just bar room speculation. Hey it could go the other direction. Would luv see them drop to $500. Go keystone!
There’s a large world out there, apart from the space in which you operate. And you continue to talk as if you’re completely oblivious to how large bullion dealers operate.
As just one clue for you, they don’t sell their low margin material on eBay. And what you refer to as “The idiocy of the 5-10 pct spread is just BS” is reality for many, even if you don’t participate or know about it. Try removing your blinders.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
@Cougar1978 said:
Being successful in RCI is being able buy low / sell high to make money NOW. Without those skills one will lose money. Buying it right, shopping around, having material can get keystone, developing good procurement contacts key. Auction pickoffs can yield a lot. Material that can bring 50-100 pct markup can be key in the smash mouth game of the bourse. Having a gold position is good but you will get burned on it in market drops. The idiocy of the 5-10 pct spread is just BS. Sure a shop may get that on bullion but they have stuff that walked in at a song enabling keystone. eBay fees alone are 10 pct of sales. So the 10c on dollar argument defunct. It takes at least about a 30 pct margin make it in the real coin business if not more. Any player for real knows that. As far as $15 k generic saints one day that’s just bar room speculation. Hey it could go the other direction. Would luv see them drop to $500. Go keystone!
You don't sell bullion on ebay. You also don't stock bullion, you sell it immediately with a phone call.
I know you have a hard time seeing outside yourself, but that is how BMs operate... successfully.
Hyperinflation might be necessary for $5k gold but it certainly isn't needed for $3000 gold. Frankly, it should already be at $3000 imo if our experience is any indication, based on the widespread demand alone. I can't remember a time short of 1980 when gold was this easy to sell. $2000 is a very important support level and I'm gratified to see it being held, for now at least. There might be some post-holiday selling for cash flow generation but I'm thinking the impact on the market will be minimal. Too much insecurity out there, leading to more stacking...and widget numismatic gold will go along for the ride. As to the MS65 question... I think that gem Saints won't hold a significantly higher premium due to a) the higher base levels and b) the fact that a lot of today's 65s are yesterday's 64s. jmho
@WCC said:
I think gold is relatively overpriced, compared to other physical goods and probably many services. It's definitely >not cheap compared to other commodities, including silver.
The gold/silver ratio goes all over the place, tough to assign relative value to a couple of speculative PMs.
The REAL speculation and lack of intrinsic value could be said to be BitCoin, which keeps going up. I don't know if gold was fairly valued at $35/oz. and if it was in NutSoLand at $800...but those numbers pale in comparision to the current value of BitCoin compared to where it was in 2018 or 2012.
@MFeld said:
I call bologna on your prediction.
Even if gold were to hit your $3000 target, it’s extremely unlikely that MS65 Saints would approach $4000. In order for them to do so, they’d need to trade at an even higher premium to gold than they do now. And in general, the higher the price of gold, the lower the numismatic premium for gold coins.
In defense of the OP, if gold hits $3000, demand will be high and supply will be low. No telling what premiums will do. Silver gave us a good lesson in 2023 on just how crazy premiums can get when threat of a shortage looms. They were actually higher than the OP's scenario.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
@WCC said:
I think gold is relatively overpriced, compared to other physical goods and probably many services. It's definitely >not cheap compared to other commodities, including silver.
The gold/silver ratio goes all over the place, tough to assign relative value to a couple of speculative PMs.
The gold/silver ratio is an excellent tool to know when to stop buy/start selling one of the metals and start buying/stop selling the other metal. Currently it is screaming "buy silver."
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
@MFeld said:
I call bologna on your prediction.
Even if gold were to hit your $3000 target, it’s extremely unlikely that MS65 Saints would approach $4000. In order for them to do so, they’d need to trade at an even higher premium to gold than they do now. And in general, the higher the price of gold, the lower the numismatic premium for gold coins.
Silver gave us a good lesson in 2023 on just how crazy premiums can get when threat of a shortage looms.
There was never a shortage, just a bunch of snake oil salesmen brainwashing you into the fairy tale that gutter metal was scarce. Why did premiums drop like a rock? It's not like the worlds gutter supply suddenly doubled. SMH!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
And what’s Bitcoin, besides another electronic-based fiat that doesn’t even have the weight of the US gov’t behind it to intimidate people into using it?
With Wall Street’s involvement, you think that cryptos won’t be tracked AND manipulated? Good luck with that.
None of this means that I’d be averse to using it, but mainly in a transactional way, much like a bank account. As an income stream? Prolly not.
Q: Are You Printing Money? Bernanke: Not Literally
@MFeld said:
I call bologna on your prediction.
Even if gold were to hit your $3000 target, it’s extremely unlikely that MS65 Saints would approach $4000. In order for them to do so, they’d need to trade at an even higher premium to gold than they do now. And in general, the higher the price of gold, the lower the numismatic premium for gold coins.
Silver gave us a good lesson in 2023 on just how crazy premiums can get when threat of a shortage looms.
There was never a shortage, just a bunch of snake oil salesmen brainwashing you into the fairy tale that gutter metal was scarce. Why did premiums drop like a rock? It's not like the worlds gutter supply suddenly doubled. SMH!
"looms" indicates fear of potential shortage. Such fear drives demand. I never said there was a shortage, I used the word "threat."
Premiums dropped when the feared shortage never materialized.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
@WCC said:
I think gold is relatively overpriced, compared to other physical goods and probably many services. It's definitely >not cheap compared to other commodities, including silver.
The gold/silver ratio goes all over the place, tough to assign relative value to a couple of speculative PMs.
The REAL speculation and lack of intrinsic value could be said to be BitCoin, which keeps going up. I don't know if gold was fairly valued at $35/oz. and if it was in NutSoLand at $800...but those numbers pale in comparision to the current value of BitCoin compared to where it was in 2018 or 2012.
There is no difference between "investment" in this context and speculation. There is also no such thing as "fair value". There is only relative value. It's two of many claims conventional finance just made up.
Comments
I disagree. ALL commodities were depressed reflecting fears of a global depression. The lifting of prices reflected GDP growth, not inflation, and the rise to $1,800 was helped by global debt and EU problems.
I don't know about cheap, but it has been basing around $1,800 for the better part of a decade-plus. Rising demand as I have posted here and elsewhere with lower supplies means a rising price.
Just go back to the 1970's: supply is up about 120% but demand is up about 300%.
I would agree with the gist of this statement. I do believe gold will get more publicity when it is closer to $2,500 an ounce and $3,000 an ounce then when it has laid just at or below $2K an ounce.
Unfortunately......
Yes and no. Gold isn't priced based on its utility but it is priced based on its demand. If industrial demand drops, hoarding has to increase to compensate.
That’s not a rich price at all. Not even a 30 pct margin. Somewhat Narrow spread really. Are you a tirekicker lol? Nor was it purchased cheap vs bid. It sold less than CPG MV and everybody knows 10c on the dollar does not cut it in the coin biz. We don’t do this for free lol…..I did well sell it that quick usually those stay in inventory a long time which erodes profits.
10 cents on the dollar is rich for bullion.
Agreed, and good job. I just thought the market for 1927's MS-65 was if anything a bit under $2,700 -- even with tax, S&H, and online commission (if won at auction).
But again...I don't know how your coin looked, could have been a super-nice coin. Also, whatever day you sold it the price of gold could have been anywhere from $1,825 - $2,050 the last few weeks.
That chart you posted showed industrial usage for gold as miniscule. It's NEVER been seen as an industrial metal.
Central bank buying (selling) -- more buying now for sure -- institutional demand (SWFs, endowments), and ETFs (easy to play a rising price) all seem bullish for the next few years.
Jewelry demand has always been the big swing factor. Look at autos and ICEs for palladium (killed) and platinum (going nowhere) the last year or two.
I read through this thread with some amusement and some moments of waxing nostalgic. I was at the Spring Baltimore show in 2019 and was offered a generic common date MS63 Saint for spot plus $75... I'd have been all in for less than $1300. At the time, I had just moved out of my house and was in a rental, scrimping money for a down payment on my own house once my divorce was finalized. I did end up getting a common date $5 and a nice raw $2.5 around the same time, but I really felt I missed out...
Fast forward a couple of years and my thrift paid off... I was able to get a mortgage loan for 2.9% before the interest rate hikes started taking off. Had I waited just six more months, I'd have likely been priced out.
Timing is everything...
Successful BST transactions with: SilverEagles92; Ahrensdad; Smitty; GregHansen; Lablade; Mercury10c; copperflopper; whatsup; KISHU1; scrapman1077, crispy, canadanz, smallchange, robkool, Mission16, ranshdow, ibzman350, Fallguy, Collectorcoins, SurfinxHI, jwitten, Walkerguy21D, dsessom.
That chart spoke to usage demand elasticity. I could not find a total demand including hoarding that coveted 1975. You have yet to post a reference or graph.
Yes, but note that demand elasticity changes over time as rising per-capita incomes offset rising prices.
Look at the huge increase in Jewelry demand when prices were much higher 20 years later after the 1979-80 peak.
Disposable income rises exponentially after subsistence means are taken care of. Those are the people who can buy a little gold or other discretionary items.
Maybe you should go buy some. I am not in the biz for some lousy 10c on the dollar. Everybody where the elevator goes to the top knows 10% markup does not cut it on the coin biz rofl. Saints aren’t bullion coins either. Additionally - Many bullion coins low pop rarity pieces in their own right and command much more over BV.
@GoldFinger, don’t pay any attention to him. He did charge a high price for the coin and considering that it was a generic Saint, he did work on a large buy-sell spread. Read a few more of his posts and you’ll get the picture about the type of dealer he is and his attitude towards retail buyers and sellers.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
ETF demand in gold tonnes dropped this year as the gold price climbed sharply the past several months other than a spike in Europe the last week in October. ETF funds sold gold and money went back into bitcoin and stocks during their recent rally's. However, overall gold ETF demand should rebound soon, as it does tend to follow the price over time. This to me suggests gold should have some continued upside to a record high into the new year.
Gold jewelry demand is relatively stable around 600 tonnes per quarter and does not really change much with the gold price.
My US Mint Commemorative Medal Set
"Investment" demand (what most people call investment) is entirely speculation. That's what led to the price spikes in 1980 and 2012. This is true of every financial type asset.
No reason is required for any price move, up or down. People use reasons to rationalize their decisions.
Outside of developed countries, a noticeable proportion of jewelry demand is almost certainly also or primarily for financial reasons. It's not like these people have access to coins or bars where they can buy it from their local dealer or order it online. This is most of the world's population, even though a much lower proportion of those who can afford to buy gold at all.
Palladium and platinum aren't monetary metals. That's the difference. Coin forum members claim both as "precious metals" but it's obvious the public doesn't think of either as anywhere near equivalent to gold.
Common date Saints in sub-gem grades are pretty much bullion. For example, the Upstate bid/ask spread on MS-63 Saints is 2120/2220 against a melt value of about $2000.
As for MS-65 Saints, the Upstate bid/ask spread is 2400/2500 which is barely over FOUR percent.
You are, of course, free to pay as little as you like and charge as much as you like. But I'm not sure I would publicly advertise that. It makes people want to neither sell to nor buy from you.
Every ethical dealer I know does the bulk of their business in the 10% margin or less arena. A lot of coins, including bullion and key dates, fall into that realm. Maybe your elevator goes to the top because the top is the basement?
I just call it hoarding. Lol. If people stopped hoarding gold, it's price would collapse.
People will continue hoarding gold until the government starts acting in a fiscally responsible manner and stops spending money they don't have.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
As people's incomes go UP, their disposable income rises faster for poor people close to the subsistence level. I don't know if a big surge of gold buying will come from the United States the next 5-10 years. Maybe BitCoin gets those $$$. I do believe that people who barely had money to pay for food and shelter can now indulge in a cell phone, internet access, and PMs.
I also think peak (mined) gold could also be a factor going forward.
It is not infrequent for common coins to appreciate at a rate lower than inflation .
Baloney lol - 10c on the dollar does not cut it in the coin business. There is no such thing as a coin business where Opex is under 10 pct rofl!
And yet it does since the 5% bullion spreads are liquid and without risk. Most BM operations do 60 to 80% bullion and scrap at sub 10% margins.
If that works for you - enjoy. Try it on eBay where sellers fees are 10 pct. You will sink like a rock lol.
You'd think that as a dealer, he’d understand that bullion and bullion-related coins typically trade at smaller margins than rarer, less liquid coins. Perhaps he’s unaware of the many large, highly successful bullion-based businesses. 😀
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
Not exactly germane to the conversation, but there are almost certainly collectors here who will see $15,000 common MS-65 Saints in their lifetime (assuming no gradeflation). If we assume a value of $3,300 today, inflation alone at 4% a year would do that in 38 years. At 3%, it takes about 52 years..... still very plausible.
MS65 common Saints are more like $2400 right now so that’s going to change your math a bit. It’s still certainly possible, maybe even likely for collectors who are <20 but I wouldn’t call it almost certain.
Ah, arright. It takes a bit longer then.
Hope today's YNs live a long time.
It's going to track gold (and gold will more-or-less track inflation) and reflect underlying gold demand/supply factors.
If gold goes up 7% a year it's $3,000 by 2032 or so and MS-65's are probably at least $3,500.
It could happen from a gold spike or a coin bubble or a fixation for Classic American Gold Coins if some "influencer" has a wide following.
But the experience the last 40 years is that gold and Saints and gold coins all move in spurts, not evenly or linearly.
And if gold drops to $1500, they are back to $1800. It's all speculative and down or flat are also possible.
My LCS is at about a 3-4% spread. I think that's fair.
Agree. It moves around a bit but it is rarely over 5%. On large deals, it is often only 1 or 2%. But VOLUME!!!!!
Well, of course the price of gold, the price of generic Saints, and inflation don't move in a linear fashion or even in lock-step with each other. But, from 1960 to 2022 inflation has averaged 3.8%. The premium between gold and Saints wanders around a bit, but they're pretty closely tied to each other. It's extremely unlikely generic Saints will trade at a multiple of the spot price of gold and more or less impossible that they'll trade for less than melt value.
Gold, BTW has done better than inflation and has averaged about 7.8% growth over the last 50 years. Using that as a rough estimate (assuming the premium doesn't change too much), and starting with $2,400 for a generic MS65 Saint, they will take only 25 years to hit $15,000 each. Somewhere around 2048. The time value of money is relentless and severely underappreciated by most people.
If I'm still around then, I'll find this thread and we'll see how close I was.
Being successful in RCI is being able buy low / sell high to make money NOW. Without those skills one will lose money. Buying it right, shopping around, having material can get keystone, developing good procurement contacts key. Auction pickoffs can yield a lot. Material that can bring 50-100 pct markup can be key in the smash mouth game of the bourse. Having a gold position is good but you will get burned on it in market drops. The idiocy of the 5-10 pct spread is just BS. Sure a shop may get that on bullion but they have stuff that walked in at a song enabling keystone. eBay fees alone are 10 pct of sales. So the 10c on dollar argument defunct. It takes at least about a 30 pct margin make it in the real coin business if not more. Any player for real knows that. As far as $15 k generic saints one day that’s just bar room speculation. Hey it could go the other direction. Would luv see them drop to $500. Go keystone!
Mark - I don't think anyone would accuse you of being a shrinking violet but in this one particular case I think you are still being much too kind.😉😉😉
Like heck that’s a high price lol - it was below CPG. Dropping you with an F. Your blocked!
*You're
Absolutely....I've said ever since 2011 that I don't know where the next $300 move in gold is, but I am sure the next $1,000 move is UP
Unless BitCoin goes on a tear and sucks more $$$ in, all the underlying fundamentals for gold are lining up for nice, steady moves and a higher price in the next few years and certainly by the end of the decade.
The good thing about gold coins like Saints is you can enjoy them whatever happens to the price.
I think you have 3 big periods in that 62 year time frame: the slowly rising inflation of the 1960's....the soaring inflation of the 1970's...and the disinflation since 1981. We could be entering a new period of slightly rising inflation and interest rates similar to the post-WW II era that began about 1946 but took decades to play out.
Saints and other gold coins are in uncharted territory because the gold price has never been this high before and certainly won't be as we go higher, either. In the past, even when Saints were higher-priced, they traded at bubble-like premiums to spot gold. I doubt we see THAT again (500-700% premiums).
If you eliminate timing biases by using rolling time frames, gold and other commodities STINK as investments over most time periods. You have to really time it right and buy low and get out high. Gold etc. al do NOT pay dividends or interest which makes it impossible for them to match the returns from common stocks or even real estate. They even trail bonds over most time periods.
I'm bullish on gold longer-term but would NOT recommend moving $$$ earmarked for traditional investments into gold or PMs.
BTW, I think a near-8% return for gold is too optimistic. The gold price was surpressed for decades by price-controls. Starting from 1980 and using a starting price of $600 you get under 3% a year to the recent highs. Even starting a few years later from $300 after the big decline only brings it to about a 5% CAGR. Without dividends or income in the down years, gold and PM's just can't compete.
There’s a large world out there, apart from the space in which you operate. And you continue to talk as if you’re completely oblivious to how large bullion dealers operate.
As just one clue for you, they don’t sell their low margin material on eBay. And what you refer to as “The idiocy of the 5-10 pct spread is just BS” is reality for many, even if you don’t participate or know about it. Try removing your blinders.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
You don't sell bullion on ebay. You also don't stock bullion, you sell it immediately with a phone call.
I know you have a hard time seeing outside yourself, but that is how BMs operate... successfully.
If gold steadily goes up in price and $3000 is the new norm the premiums should increase on pre 1933 gold coins across the board.
Hyperinflation might be necessary for $5k gold but it certainly isn't needed for $3000 gold. Frankly, it should already be at $3000 imo if our experience is any indication, based on the widespread demand alone. I can't remember a time short of 1980 when gold was this easy to sell. $2000 is a very important support level and I'm gratified to see it being held, for now at least. There might be some post-holiday selling for cash flow generation but I'm thinking the impact on the market will be minimal. Too much insecurity out there, leading to more stacking...and widget numismatic gold will go along for the ride. As to the MS65 question... I think that gem Saints won't hold a significantly higher premium due to a) the higher base levels and b) the fact that a lot of today's 65s are yesterday's 64s. jmho
RIP Mom- 1932-2012
I think we got moved, huh ?
The gold/silver ratio goes all over the place, tough to assign relative value to a couple of speculative PMs.
The REAL speculation and lack of intrinsic value could be said to be BitCoin, which keeps going up. I don't know if gold was fairly valued at $35/oz. and if it was in NutSoLand at $800...but those numbers pale in comparision to the current value of BitCoin compared to where it was in 2018 or 2012.
In defense of the OP, if gold hits $3000, demand will be high and supply will be low. No telling what premiums will do. Silver gave us a good lesson in 2023 on just how crazy premiums can get when threat of a shortage looms. They were actually higher than the OP's scenario.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
The gold/silver ratio is an excellent tool to know when to stop buy/start selling one of the metals and start buying/stop selling the other metal. Currently it is screaming "buy silver."
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
There was never a shortage, just a bunch of snake oil salesmen brainwashing you into the fairy tale that gutter metal was scarce. Why did premiums drop like a rock? It's not like the worlds gutter supply suddenly doubled. SMH!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
I think that the dollar is what’s overpriced.
And what’s Bitcoin, besides another electronic-based fiat that doesn’t even have the weight of the US gov’t behind it to intimidate people into using it?
With Wall Street’s involvement, you think that cryptos won’t be tracked AND manipulated? Good luck with that.
None of this means that I’d be averse to using it, but mainly in a transactional way, much like a bank account. As an income stream? Prolly not.
I knew it would happen.
"looms" indicates fear of potential shortage. Such fear drives demand. I never said there was a shortage, I used the word "threat."
Premiums dropped when the feared shortage never materialized.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
There is no difference between "investment" in this context and speculation. There is also no such thing as "fair value". There is only relative value. It's two of many claims conventional finance just made up.