Curious....Why such glee when gold drops?
topstuf
Posts: 14,803 ✭✭✭✭✭
I'm curious to find out why some posters seem to find such glee in gold dropping.
The BULK of a ..local.. coin dealer's profit comes from regular bullion buyers and sellers which then gives him the operating funds to stock more rare coins.
MOST coin dealers have a set amount of ounces that they maintain. They may add if a significant drop occurs.
But generally speaking from my experience in the shop, the RARE coin market BENEFITS from more bullion activity. Which gives YOU as a collector a high element of liquidity when you wish to sell a coin.
I just don't get it when some wish for doleful metals which depress the mood of the dealers to the point that they don't feel like reaching very deep to buy a coin when business stinks.
Any enlightening comments?
The BULK of a ..local.. coin dealer's profit comes from regular bullion buyers and sellers which then gives him the operating funds to stock more rare coins.
MOST coin dealers have a set amount of ounces that they maintain. They may add if a significant drop occurs.
But generally speaking from my experience in the shop, the RARE coin market BENEFITS from more bullion activity. Which gives YOU as a collector a high element of liquidity when you wish to sell a coin.
I just don't get it when some wish for doleful metals which depress the mood of the dealers to the point that they don't feel like reaching very deep to buy a coin when business stinks.
Any enlightening comments?
0
Comments
Cameron Kiefer
If gold is down, times must be good.
Liberty: Parent of Science & Industry
A 300-400 oz gold deal is a stone $800-$1000 day.
Personally, I don't like to see any gold posts, because to put money in gold is speculation. Most people who do this don't have a clue re the difference between investing and speculating. And, I hate to see basically good people lose their *** due to ignorance. I'm a CPA, and it's just like day trading. These people do hundreds of stock trades, and the only one who makes any money is the outfit that collects $X per trade.
I can understand why a dealer stocks some bullion; it brings in foot traffic. However, a dealer who sells lots of bullion related coins typically doesn't carry much in the way of collector coins, so it's unlikely I'd do business with him.
"Seu cabra da peste,
"Sou Mangueira......."
<< <i>I don't think folks are considering the effect on local shops. I think they are happy they guessed right and want to tell the others who said gold is going higher "I told you so". >>
I agree Carl....That's what it is....
And Topstuff.......I hear you on the attitude and mood thing....26 years behind my counter. I
try to buy a lot of scrap. It's easy and usually profitable. Unless gold is in the headlines, it doesn't come in.....
Paul
middle east stability, oil down, gold down
isreali-palestinian peace, middle east stability, oil down, gold down
democracy in middle east countries, stability, see above-see Bush doctrine
Islam is fine, radical fundamentalist Islam's tenets will hurt you, cannot run countries-Bush doctrine
There is very good news in and for the world today. Gold is down. Bad for you, but it's not personal
Oil is down. Good for world.
There will be a quiz later.
Apropos of the coin posse/aka caca: "The longer he spoke of his honor, the tighter I held to my purse."
Two words, CHEAPER COINS!!!
Sellers => Expensive gold
It's a matter of what you want to do.
coinpage.com
-g
I'd give you the world, just because...
Speak to me of loved ones, favorite places and things, loves lost and gained, tears shed for joy and sorrow, of when I see the sparkle in your eye ...
and the blackness when the dream dies, of lovers, fools, adventurers and kings while I sip my wine and contemplate the Chi.
I like Baley's answer the best:
Isn't gold a hedge against "bad times"?
If gold is down, times must be good.
Perhaps the gold-bugs took showed too much glee at the recession.
I just don't get it when some wish for doleful metals which depress the mood of the dealers to the point that they don't feel like reaching very deep to buy a coin when business stinks.
Perhaps dealers with different business models will offer stronger money. Sam Walton did well where others did not because his model was different.
The logic has always eluded me. To someone who collects mainly numismatic gold coins, it is foolish for them to wish that 90% of their current holdings goes down, so that they can add another 5-10% of new holdings at bargain prices to their collection. Net effect is a loss. No different logic than to wish that all your Morgans fall in value so you can buy a few new ones cheap?? I wish the same thing for my type coins every week.
My local dealer has been able to stock up his store with many fine numismatic coins because of constant bullion purchases and sales over the past few years. As he says, the bullion pays for almost all of his overhead. It would be a bummer if that went away. I told him he is in a position to become a wealthy man and be able to retire in the next 10 years as the bullion markets eventually go exponential. It will be a busy time for him when it comes, and he'll be exhausted every day. But he'll be set for life once it's complete.
Why such glee when gold drops? Because it only sets it up for the next wave up.
roadrunner
Have a Great Day!
Louis
<< <i>I'm curious to find out why some posters seem to find such glee in gold dropping. >>
it is a counter-irritant from those who promote gold as the next sure thing.
Gold's price makes no difference when he skims the Bid/Ask spread on every trade. A crash bringing panic sellers would hand him more profit than today.
Surely you haven't forgotten the poor dealers who were forced to Buy gold well below spot once everybody figured out Y2k was a great big nothing. I guess they lost money and no longer stock good coins?
No, not necessarily true. Kind of like buying a stock and averaging the purchases over time, you anticipate that over time your investment will appreciate and that you made a wise choice in your selection of investments. If you made a poor choice then you will lose anyway. No one buys only one thing for one time only, particularly coin collectors and coin dealers because they collect or accumulate assets over time.
We collectors have suffered the recent spike in our gold coin prices. The dealers selling them probably bought these coins in the previous year at considerably cheaper prices and are enjoying the higher prices because of demand for gold anything. I have been to three shows in the last 6 months and seen larger dealers going to the smaller dealers and buying all their slabbed gold coins for resale because of the higher interest in gold because of the higher bullion prices and then charging all that the market will bear for their coins. Now, a lack of speculation in gold will bring the coin prices down because there is less demand.
So, it's a game for coin people...when gold is up then the sell side is ahead but when gold is down then the buy side is favored. Over time, we all hope that things continue to appreciate and with gold, I'm sure that will be the case. So when the buy side opportunists or the sell side opportunists are ahead the other side is always moaning and groaning...and that's the way it is.
<< <i>The dealers selling them probably bought these coins in the previous year at considerably cheaper prices >>
Dealers do NOT buy inventory for next year's prices. LOTS of people think that. Dealers (solvent, prudent ones) buy for TURNOVER. Customers always wondered why I was never unhappy to buy their gold for more than they paid me for it. Conversely, they were always amazed that I would continue to buy as the market fell OR rose.
"I buy coins" every day....every market.....was my constant rejoinder.
What people do not realize is that coin dealers are like any other business. They pay less than they sell stuff for. And they sell (and buy) every day. They just lay off any overage or buy back any shortage before they go home at night.
Up or down markets do NOT harm dealers. Unless they are STUPID dealers.
"Up" markets are BETTER for dealers as it brings more customers from publicity.
That's the whole story.
CG