Are the premiums for generic double eagles so low partially due to a $1600 gold price?
jkrk
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I'm waiting for the... "premiums are low due to a supply/demand imbalance". Too many coins coming in from Europe, etc.
I am really asking to speculate whether premiums would be higher if gold was selling for $800 rather than $1600? Thus , perhaps a higher demand due to lower total costs?
That's my belief, anyway.
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Seems that their value has been closely mirroring spot for a while now. Most can be bought around melt.
I certainly would think so. I would be much more likely to buy at a $100 premium to $500 spot than at a $20 premium to $1600 spot.
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Maybe a little. But, frankly, a $50 premium is much easier for a dealer to live with on an $800 coin than a $1600 coin; it's twice the percentage. So, it is just as likely that the premium shrinks as the price shrinks.
It's a bullion coin, no matter how you cut it. The premium on AGE's also fluctuates with gold price a bit. So, whatever factors you want to list, the fact is that they are bullion and they are likely to stay bullion with essentially zero numismatic premium.
All comments reflect the opinion of the author, even when irrefutably accurate.
I was primarily thinking about double eagles not AGE's but your answer might be the same for those as well?
They sell close to spot because the market is flooded with them.
And might the market be flooded with them double Eagles because of the historically high spot price.
On one hand, you could say this is a good time to buy them because they’re so close to spot. On the other hand, you better hope spot stays high.
Yes, I bought a 1/10 th ounce AGE for my local club show raffle at the Collectorama on Friday. The dealer gave me a good deal. I was temped to buy the coins we will need for rest of the year, but the price paid was based on today’s high gold prices.
Do I think that these high bullion prices will hold or increase? I’m not so sure given the volatility I have seen precious metal prices during my long years as a collector. I think the price will come down eventually. It has at other times when double eagles were selling for melt or close to it. Back then it seemed that collectors knew more than precious metal traders.
I have found nice slabbed gold close to melt whether mods, classic, world. I budget what pct of total enterprise investment but their value will be tied to gold whether up or down. The plus thing for this material is it is highly liquidable.
Supply and demand. The current market is gold stackers, not collectors.
What I meant was that AGEs, which are bullion, behave the same way as $20s. In the end, that is because generic $20s are also just bullion with no numismatic premium.
All comments reflect the opinion of the author, even when irrefutably accurate.
According to PCGS Coin Facts, the estimated number of surviving 1924 Saints is a little over 1.9 million coins. That's just one date in the series. I'm not surprised these coins are being treated as bullion.
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
With the massive national debt rapidly ballooning I'm not too concerned about a collapse of the spot price of gold.
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
Now also figure in the rest of the common date P mints, and that's a lotta Saints!
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Your hobby is supposed to be your therapy, not the reason you need it.
For those who stacked gold back around the $300-400/0z. range, today's prices look real good.... not for buying... if liquidating....Not sure what would drop prices back to such a level....not in the economic future at this time. Cheers, RickO
Currently the bond market is driving the bus for Gold pricing.
Even with the S&P 500 Up 33.1% for CY2019 there was a net Outflow of U.S. equity funds of $41.3 Billion for CY2019.
New Inflows of taxable bond funds for CY2019 were $413.9 Billion.
IF you want to see the direction of Gold pricing worldwide, just follow the worldwide bond market.
Currently $14.3 Trillion of Negative sovereign debt worldwide and Currently the United States 10 year note is yielding 1.588%.
500 days ago the 10 year was yielding 3.231% and Gold LBMA PM fix was $1,203.80...
Almost no one is familiar with the relationship of bond yields to everything else.
Our banks love that.
I have herd that some of the major players have countless numbers of 20's in stock, and aren't moving very fast.
In my area, no body is buying gold except for 1/10th and 1/4 oz age's, rest no intrest even at 2% below spot.
I been passing on large gold/large quantity that is tight margined because I have no where to sell it except refinery
Where are all those young, wealthy, eager coin collectors we here about on this forum when we need them?
The supply has been high for years, including when the spot price of gold was considerably lower.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
U.S. 10 Year 1.588%
U.K. 10 Year 0.650%
Sweden 10 Year 0.013%
Spain 10 Year 0.287%
Portugal 10 Year 0.289%
Netherlands 10 Year -0.314%
Japan 10 Year -0.032%
Italy 10 Year 0.925%
Germany 10 Year -0.398%
France 10 Year 0-0.157%
Belguim 10 Year -0.176%
Australia 10 Year 1.058%
You look at Germany and Japan and you can see why this past week we saw Gold at ALL TIME HIGHS vs. the Euro and the Yen...
People are Chasing Yield everywhere in the world...
What I would say is that the majority of US households cannot have $1600 tied up in a gold coin, and for those that can, there is probably something more fun, more rare, more elusive that they would rather own. That leaves stackers or well off coin collectors looking to diversify their portfolio as the only real market. I see various entities trying to differentiate stickered gold for higher premiums, but except for rare coins, I am not sure why people would pay a higher premium.
Seen some blowing them out take bullion profits.
People chase yield in the stock market. I"m not sure they chase yield in gold, since gold has no yield.
Negative interest rates are really a currency play: if you expect the Euro to increase relative to the dollar, you buy Euro-denominated bonds because a negative nominal interest rate is a positive real interest rate. Gold is a similar play against the dollar since gold is denominated in dollars. So if you expect the dollar to drop relative to the Euro, gold will increase in dollars even if it stays the same in Euros.
All comments reflect the opinion of the author, even when irrefutably accurate.
I use yield as in bonds and yield as in capital appreciation (Gold). Gold has been disconnecting from the USD for the past 15 months. Gold has appreciated (in USD) as the USD has appreciated vs. the Euro and the Yen.
The difference between real interest rates and nominal interest rates is inflation...
Or deflation. The negative interest rates are due to deflation not inflation.
https://marketwatch.com/story/here-are-four-reasons-why-investors-buy-negative-yielding-bonds-2019-08-21
In a negative interest rate environment, the expectation is deflation not inflation. So, you can't exactly make an inflationary argument for gold. It is also hard to make a fundamental argument for gold in most of those countries because demand isn't growing. Hence, you are left with either wild speculation or, if you believe the market is rational, a currency play which essentially means a bet against the U.S. dollar.
It is true that over the last year gold has appreciated despite a rising dollar but I'm not sure that is any different than the shorts in Tesla growing at the same time Tesla was appreciating.
All comments reflect the opinion of the author, even when irrefutably accurate.
I’m definitely Not making an argument for inflation. Quite the contrary. I’m making an argument that many are purchasing Gold because they are looking for yield (capital appreciation). The only yield in $14 Trillion of Negative sovereign debt is hoping that interest rates continue a downward slope and that many are averse to chasing the High P/E’s of the United States stock markets and are looking for yield (capital appreciation) in Gold. I am making a case that IF interest rates worldwide continue to go Down then Gold will continue to appreciate in any currency that interest rates are declining…
If the United States 10 year note yields 100 basis points we will see Gold at $1,800.00/oz. in USD regardless of the USD strength vs. any other currency ( or regardless of what happens to Tesla stock)…
Yes, but isn't that more correlation than causation? If U.S. yields drop to 1%, it's because of money flows into treasuries and away from risk assets (stocks) which is also bullish (historically) for gold.
All comments reflect the opinion of the author, even when irrefutably accurate.