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If gold & silver drop, how long would it take the market to adjust?
2ltdjorn
Posts: 2,331 ✭✭✭✭
No one can tell me what the price of gold & silver will be this time next year, but a lot will attempt to speculate. So if the current prices of PM's drop, and hold at levels <1000 for gold, and <15 for silver... how quickly will the current market place for numismatic items adjust? For you old timers you should have experienced this first hand in the 1980s... I want to know is it expected that items so closely related to PMs will also drop? Or will their be a resurgence of the "numismatic" premiums? If gold is $800/ounce, will you be able to buy common date $20 DE for 10-15% premiums over melt?
WTB... errors, New Orleans gold, and circulated 20th key date coins!
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<< <i>The price of silver & gold doesn't effect classic coins with the possible exception of common gold. >>
Hence my question?
<< <i>The price of silver & gold doesn't effect classic coins with the possible exception of common gold. >>
It does indirectly. One would be crazy to think that that boom in metal prices didn't affect dealers most of who were sitting on stock piles of the stuff bought cheap. That in turned pushed up auction prices and sale offers as dealers were trying to close more transactions and saw their operations shift towards Metal dealing. If there was a bubble pop in metal prices I suspect buying on the classic side would dry up very quickly and it would become a buyers market very quickly. I think this would exacerbate what we are already seeing around all the main hobbies where true quality moves quickly for strong money and they rest is depressed. The only difference between now and then would be the where the line on "quality" sits for the few with buying power left.
If metals fell quickly, most dealers would have to absorb the loss on credit lines and would be slow to adjust their business model away for them. They would then be working off the debt of the hit on slimmer margins pushing their offer prices down hurting liquidity in the market. It is a slippery slop towards a depressed market with a lack of consumer confidence.
But the price of silver could go to 200 or 300 an oz. and it would not affect the price of a 1859-S dime in vf-xf...or any grade really.
Governments can print currency. Only the people can print faith in it — and they’re running low on ink.
The name is LEE!
If so, old fixed price lists are what I would use.
<< <i>The market adjusts constantly. >>
+1
Here's another question: are you sure the drop isn't the adjustment in and of itself?
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