August 30, 2017

Silver Typically Soars in September

https://townhall.com/columnists/mikefuljenz/2017/08/29/silver-typically-soars-in-september-n2374416

Silver is entering its “sweet spot” of the year. This September, silver has another special reason for rising – rising industrial demand.  Since 1975, silver has gained an average of 4.1% every September, making September far and away the best month for silver.(Second place is January, at +2.9%.)September is also the #1 month for gold, due to the beginning of the jewelry fabrication season for the gold gift-giving holidays in India (Diwali, followed by the wedding season), America (Christmas, followed by Valentine’s Day) and China’s New Year. Silver often follows gold’s lead – as silver often acts like “gold on steroids.”

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A secondary reason for silver to rise strongly this September is that major industrial metals are making a strong recovery due to rising economic growth in China and the rest of the world. This year is the first year since 2007 in which all 45 of the leading economies followed by the Organization for Economic Cooperation and Development (OECD) are all rising in tandem.  As a result, copper is at up over 20% this year, reaching a three-year high.  Iron ore is up 35% just since the end of May.  Zinc is at a 10-year high, while aluminum and other industrial metals are at multi-year highs even though oil is down.

Silver holds a unique position as a precious metal and an industrial metal. According to the Silver Institute, industrial fabrication was responsible for over half (54%) of demand for physical silver in 2016.With industrial production rising in 2017, that demand can only grow, since silver is an essential part of some very popular products, like LCD touchscreens and other modern electric devices using silver switches or printed circuit boards.  Silver is also essential for the photovoltaic cells which make up solar panels, a popular new form of alternative energy.Demand for silver in photovoltaic cells is expected to more than double between 2016 and 2018.  Meanwhile, new silver supplies from mining operations have declined due to the low cost of silver recently.

Rising demand and sinking supply should lift silver prices.

As a precious metal, silver attracts attention from investors who cannot afford multiple ounces of gold bullion.  Since silver tends to follow gold up, but in greater percentage terms, if gold makes a move this fall, silver will also rise.  We are entering a period of crisis domestically over the debt ceiling debate, and internationally over North Korea and other hot spots.  During the crisis of 2008, gold rose 15% from mid-August to late September. During the debt ceiling debate of 2011, gold rose 28% from July to September.

If we see a similar crisis in September of 2017, it is likely that gold will rise … and silver will soar.

Gold Rose Above Key $1300 Level

Gold rose above $1,300 on Monday, while stocks were flat.  Overall, August was bad for stocks but very good for gold and silver.  Over the weekend, the meeting of the world’s leading central bankers at Jackson Hole, Wyoming, did not bring forth any startling news.Perhaps the speakers were reticent to say anything controversial for fear it would be misinterpreted, so they stayed close to their prepared texts.  The one speech that helped drive gold higher was when European Central Bank (ECB) President Mario Draghi said that the ECB would continue quantitative easing (QE) and bond-buying, which pushed the euro higher and the U.S. dollar lower. A falling dollar tends to push the gold price higher in dollar terms.

Put Away Some Gold for a “Texas Rainy Day”

While we in Texas are struggling through high waters this week, I have heard from some clients and news reports, in the past, that some banks may not be “on-line” to honor their debit cards or other electronic fund exchanges.  Even though we recommend that you keep the bulk of your rare coins and precious metals in bank safety deposit boxes, it is also important in these crisis situations to maintain a small amount of gold and silver bullion at home, so that you can convert these forms of “real money” into paper money at various coin shops and bullion dealers in your area.  You never know what kind of disaster can limit the electronic transfer of funds in the future, so be sure to keep some emergency bullion coins at home. Call it your Texas Rainy Day fund.

Terror and Threats of War Tend to Boost Gold and Gold Coin Prices

After gold popped on President Trump’s war of words with North Korea, gold coin sales rose strongly. Gold coin purchases by collectors, investors and dealers are up dramatically. We and many other dealers across the country – both small and large – have seen an increase in coin sales. We enjoyed a rise of about 40% vs. the average of recent weeks. This is an important early sign for future sales growth, too, since higher gold prices have been the primary reason behind the beginning of past multi-year rare coin bull markets in which prices rise by 100% to 1,000% in only a few years.  Any significant rise in gold’s price builds a base of new customers who will first buy bullion coins, then rare coins – for years to come.

Gold is already up 12% this year, and it has a history of going up strongly in the first year of a new President from a new party.  Back in 1993, Bill Clinton’s first year, gold rose 19.3%.  In George W. Bush’s first year, gold rose only 2.2%, but more importantly the uncertainty after 9/11 gave birth to a major gold bull market running from 2001 to 2011.  Then, in 2009 – Barack Obama’s first year – gold rose 24.4%.  Gold tends to rise in a President’s first year in part because new Presidents tend to face huge problems before they gain the experience necessary to handle those problems wisely.  We’re seeing that happen once again with the threats coming from North Korea, Russia, China and other global hot spots.

Sharply higher gold prices have been the primary reason for past rare coin bull markets where prices rise 100% to 1000% in only a few years.  When gold rises sharply new customers contact coin dealers in droves and many new customers eventually end up buying rare coins.

This is not the time to be selling gold coins or any other precious-metals-based investment. This is the time to increase your allocation in hard assets.  The kind of chaos you’re seeing around the world should continue for several years to come.

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August 29, 2017

Experts Identify First Proof 1865 Indian Head Gold $3 Coin With Medal Turn

http://www.coinworld.com/news/us-coins/2017/08/1865-three-dollar-gold-coin-struck-with-medal-turn.all.html#

1865-proof-three-dollar-gold-lead.jpgThe first Proof 1865 Indian Head gold $3 coin struck with dies oriented in “medal turn” instead of “coin turn” has been identified.

Centennial Auctions will offer the coin, graded Proof 61 by Numismatic Guaranty Corp., in its Oct. 17 sale in the ballroom of the Holiday Inn at 9 Northeastern Blvd., in Nashua, New Hampshire. The live auction begins at 4:30 p.m. ET.

1865 gold $3 Gold

Identification of the Proof 1865 Indian Head gold $3 coin struck with medal turn was made recently, by numismatists Julian Leidman and John Dannreuther during the Aug. 1 to 5 American Numismatic Association World’s Fair of Money in Denver.

According to Steve Schofield from Centennial Auctions, the die orientation is not noted on the grading label insert contained within the NGC encapsulation.

Schofield said he brought a number of the lots to be offered in his firm’s Oct. 17 auction to the ANA convention, including the gold $3 coin. Schofield said Leidman, with Bonanza Coins in Silver Spring, Maryland, took particular interest in the Proof $3 coin, spending considerable time examining the coin’s obverse and reverse. The reason for Leidman’s extended evaluation was the orientation of the coin’s obverse and reverse. Numismatist and gold specialist John Dannreuther from John Dannreuther Rare Coins in Memphis, Tennessee, also examined the coin and concurred with the attribution.

With coin turn, when a coin is rotated on its vertical axis, the reverse is oriented 180 degrees opposite to the obverse, so the reverse appears upside down. With medal turn, the reverse appears right side up relative to the obverse.

The reported production in Proof for the 1865 Indian Head gold $3 coin is 25, and, according to Schofield, possibly half that mintage survives.

“While there are coins that grade higher — the [Ed] Trompeter Proof 66 piece, sold by Bowers and Merena in 2004 for $60,375, comes to mind — none of this date have ever been identified as a medal strike,” Schofield said. “Maybe [Mint officials] noticed the die rotation and corrected it. After 150+ years, you would think at least one other would exist, would have been found, and would be known. That is not the case.”

August 15, 2017

Could a North Korean Missile Launch Send Gold Soaring Later This Year?

https://townhall.com/columnists/mikefuljenz/2017/08/09/could-a-north-korean-missile-launch-send-gold-soaring-later-this-year-n2366451

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Gold hit a 6-week high of $1,274 last week (and silver reached $16.84) but both metals corrected on Friday when the dollar staged a surprise recovery. The proximate cause was the U.S. dollar rally after a positive jobs report came out on Friday morning. Gold traded at $1,268 at 8:30 am, right before the jobs report came out. Gold fell to $1,254 by 10:00 am before rebounding. The U.S. Dollar Index rose over 1% on Friday at the same time gold fell by 1%. The dollar has declined all year long, and there is a chance the dollar recovery will limit gold’s rise this year, but some unexpected international event could send gold soaring quickly – no matter what the dollar does – and such a moment may be brewing in North Korea.
On July 27, after the death of the 22-year-old American student Otto Warmbier due to torture by the North Korean government, the U.S. government announced a ban of all U.S. citizens traveling to North Korea, citing “mounting concerns over the serious risk of arrest and long-term detention.” That reason was a credible cover for keeping all American citizens out of harm’s way during any potential attack on the renegade North Koreans over their nuclear missile testing and capability of sending atomic bombs as far as the U.S. mainland. Earlier this year, President Trump thought he had gained some cooperation from the Chinese in limiting trade with North Korea and solving the problem locally, but China has since increased its trade with North Korea, a country whose only bordering nations are China and South Korea.
The U.S. travel ban will come into effect August 26. It was published in the Federal Register July 27 with a 30-day lead time. But right after the U.S. recalled U.S. tourists, North Korean dictator Kim Jong Un launched another ICBM test in a way which seemed to virtually dare the U.S. to intervene to stop them from further nuclear missile testing. Since China has shown no interest in disciplining its neighbor, a prudent U.S. military response would be either a military blockade of sea-born trade, or a pre-emptive strike. Such a move could send gold sharply higher, even if the U.S. dollar rallies as a “safe haven.” Sharply higher gold prices have been the primary reason for past rare coin bull markets where prices rise 100% to 1000% in only a few years. When gold rises sharply new customers contact coin dealers in droves and many new customers eventually end up buying rare coins.

July 25, 2017

The Art Behind the Liberty Head $10.00 of 1838

While other denominations of gold coins were struck with minimal breaks in production, the ten dollar gold piece was deemed not necessary or convenient for 34 years between 1804 and 1838. Its relevancy to the channels of commerce was revived by two mint provisions of the mint act that was passed in January 1837. The first changed the legal fineness of all gold coins from the awkward standard of .9167 gold and .0833 copper to .900 gold and .100 copper. The second section of the mint act (actually Section 10) provided a reduction in the weight of these coins: ‘ … the weight of the eagle shall be two hundred and fifty eight grains …’ The previous weight for ten dollar gold pieces had been 270 grains. This 12-grain reduction was enough to make it unprofitable to melt U.S. gold coins, thus ensuring these pieces would actually circulate.Benjamin_west_omnia_vincit_amor_1809.jpg

Christian Gobrecht was Assistant Engraver at the mint at that time. It fell to him to redesign the new gold coins, and his designs from 1838 were minimally altered until major changes occurred in 1907 and 1908. Gobrecht apparently copied the head of Venus in Benjamin West’s painting Omnia Vincit Amor. According to Breen, he slightly changed the headdress ‘but with the same triple-beaded cord on her bun, and the same coronet (here inscribed LIBERTY).’ Only 7,200 business strikes were produced in 1838 (plus four proofs), and high grade survivors are rarely encountered.

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June 12, 2017

Bullion Rise Outpaces Coin Prices

http://www.numismaticnews.net/article/bullion-rise-outpaces-coin-prices

Gold is up. Silver is up. I don’t think it comes as any surprise, but common date, common condition silver and gold coins continue to follow the spot prices of their respective metals higher.

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Scarce to rare coins continue with what I would term a mixed market. The market for more desirable material is mixed in that while some coins have declined in value recently, there are some coins that have appreciated noticeably. The challenge is to determine which have the upside potential since no pattern is emerging.

Coins are a hobby, but they are also an emotional commodity and they are acting accordingly.

Gold hit a seven-week high as this is being written. Silver continues to resist the $18 per ounce level, but remained stronger than it has been since late April.

The performance of gold and silver continues to be tied tightly to the market for common date, common condition 20th century silver circulation strike coins.

Proof and mint sets are flat line. Commemoratives, be they the classic series or the modern issues, are likewise remaining horizontal in value.

Interest in half cents and large cents as well as small cents remains strong, but only the scarcest of the scarce are appreciating. I know I’m repeating myself, but I interpret the current coin market as a buying opportunity. If you are a collector with a reasonable time horizon, there are opportunities presenting themselves that probably will not come again for many years.

Prices of desirable coins tend to rise with collector incomes, but these movements come in fits and starts. Act to buy now before the next leg higher.

June 8, 2017

Collectors get Buying Opportunity

http://www.numismaticnews.net/article/collectors-get-buying-opportunity

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If you are an investor, right now you might feel like you should run for the hills. If you are a collector, you should be preparing to buy. The price of gold and silver continue to sink, taking the value of all but the scarce to rare coins with it.
Gold is way below the $1,300 per ounce benchmark, while silver is threatening to go below $16. The scarce to rare coins appear to be trading horizontally for the most part. However, there are dips in values appearing without any particular pattern for specific dates as well. To sum up this current activity, this is a serious buying opportunity! As with any buying opportunity, the challenge is to find the coins. Many sources that normally might be selling will become more hesitant at the increasingly depressed prices.
There is an old saying that you should buy low and sell high. You’d think that would prompt people to buy now. Instead I am receiving reports of selling that is exceeding demand. One seller, as an example, recently dumped six Julia Tyler First Spouse $10 half-ounce gold coins each grading Professional Coin Grading Service MS-70. The sudden increase in supply caused a price decline.
If you seek top-of-the-line condition or date and mintmark rarity, expect to still pay premium prices for these premium value coins, but otherwise as a collector, the best thing to say is: “Have at it.”

April 3, 2017

A US silver dollar from 1804 sold for $3.3 million at auction

http://www.businessinsider.com/r-prized-1804-us-dollar-sells-for-33-million-at-auction-2017-4

(Reuters) – An 1804 U.S. silver dollar sold for $3.3 million in one of a series of auctions that brought in a record total of more than $100 million for a renowned private coin collection, organizers said on Saturday.

The silver dollar, one of only eight of its kind, was snapped up at auction on Friday in Baltimore. It was one of more than 200 coins sold at the event.

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The auction series, beginning in 2015, generated a total of nearly $107 million in sales, according to Stack’s Bowers Galleries, which conducted the auctions along with Sotheby’s.

The collection belonged to Dallas real estate developer Mack Pogue and his son Brent, who had collected coins since the 1970s. Coin dealers Kevin Lipton of California and John Albanese of New Jersey jointly bought the prized silver dollar, Donn Pearlman, a spokesman for the two men, said in an email.

“In coins, everybody’s heard of the 1804 dollar, it’s what I call the ultimate trophy coin,” said Q. David Bowers, co-founder of Stack’s Bowers Galleries.

The coin is emblazoned with the bust of a woman with flowing hair who represents liberty. Minted by the U.S. government, it was intended as a gift for foreign heads of state.

Brent Pogue began collecting coins in 1974 when he was a teenager and later brought his father into the enterprise.

The first coin the younger Pogue bought was at an auction of the trove that belonged to railroad scion T. Harrison Garrett. In a fitting finale of the Pogue Collection auctions, the last sale was held at the Garrett family’s former mansion at Johns Hopkins University, Bowers said by phone.

Mack and Brent Pogue’s collection consisted of more than 650 pieces. The father and son sold them because “the thrill of the chase” of being collectors had passed and they wanted to move on, Bowers said.

Even before Friday’s sale, the Pogue auctions had already surpassed the value of what had been the record-setting sale of the collection amassed by late dealer and collector John J. Ford.

(Reporting by Alex Dobuzinskis in Los Angeles; Editing by Tom Brown)

Read the original article on Reuters. Copyright 2017. Follow Reuters.

February 23, 2017

The Best Time to Buy Gold and Silver in 2017 is…

https://goldsilver.com/blog/the-best-time-to-buy-gold-and-silver-in-2017-is-in-2016/

Can’t decide if you should buy gold now or wait?

We all want the best price we can get on our gold and silver purchases. It’s only natural, and any good consumer will consider the timing of their buying decisions. It’s a question almost every investor asks: am I getting a good price now, or will I get a better price in the future?
Well, history has an empirical answer for you.

I looked at the historical data to see if I could identify the best time of year to buy. I suspected January would be best, but what I found was interesting.

We calculated the average gain and loss for every day of the year since 1975 (when it was legal to buy gold again in the US) and put it in a chart. Here’s what it looks like.
You can see that on average, there’s a nice surge the first couple months of the year. The price then cools down through the spring and summer, and takes off again in the fall.goldchart1

So, the lowest price of the year—and thus the best time to buy—is the second week of January. It’s also good in mid-March and early April. The second week of July is probably the “last train out” before gold takes off in fall.

What’s also interesting is that the gold price, on average, does not historically revisit its prior year low. The low of the year is indeed in January—but it’s the low of that year, not the prior year.

So your best bet is to buy gold at these low points during the year, and also to not wait for the following year.

Obviously there were years where the gold price did fall. But there were also years it soared. Smoothing out all those surges and corrections and manias and selloffs, investors are, on average, better off buying the prior year than waiting for a downturn the following year. Prices are indeed seasonally weaker in the summer, but they still don’t touch the prior year’s price. Meaning, you are likely to pay more even then than during an upswing in the current year.

The conclusion is simple:

• On average, you’ll likely get the best price on gold in early January, mid-March, early April, and early July. You’ll also want to buy this year and not wait for next year.

We ran the same data for silver and here’s what we found.
It’s easy to see silver’s higher volatility. And that its annual low is clearly in early January. About the only other good time to buy, on average, is when it dips in June, though you’ll likely pay a higher price then than January.

What also sticks out is that historically, silver doesn’t come close to touching the prior year’s price.silver-chart2

As with gold, there were certainly years where the silver price fell below where it started. But the historical data says that on average, it rises more often in the following year than it falls.

You are thus better off buying silver now than waiting for a dip the following year. If you wait, history says you will likely pay a higher price.

The conclusion here is obvious. While there are always corrections along the way…

• On average, you will likely get your best price on silver in early January, and in June. And like gold, you want to buy this year rather than waiting till next year.

Of course, any correction is a buying opportunity if you don’t have enough bullion to offset an economic or monetary crisis. In that type of environment—and one we think is inevitable—physical gold and silver are one of the few assets that will prevail.

Mike and I and everyone else at GoldSilver continue to buy our gold and silver regularly. We’re not waiting. We’ll buy more if it falls, but the point is, we’re prepared for the future now.

I hope you are, too. If not, I encourage you to buy physical gold and physical silver for you and your family on any dip. And now you know when those dips are likely to occur.

February 1, 2017

Not chump change: rare coins could outperform as investments this year

http://www.marketwatch.com/story/not-chump-change-rare-coins-could-outperform-as-investments-this-year-2017-01-31

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Coins typically have a higher correlation with inflation than other asset classes. Coin collecting isn’t just for nerds anymore.

With inflation expected to rise this year, and a concurrently strengthening U.S. dollar seen eating into any gains that might be made by pure gold, investors may want to consider a niche asset class as a protection against market turbulence: rare coins.

While such a strategy may seem akin to putting your money in baseball cards, coins have long been used as an investment, and one that could be particularly beneficial in the current economic climate.

“Rare coins deliver a higher annual return than gold, and they provide an excellent hedge against inflation,” said David Beahm, chief executive officer of Blanchard and Company, a rare coin and precious metal investment firm. “We believe that with President Trump and some of the policies he’s set forth, that we should see inflation, possibly double-digit inflation, in the very near future.”

Trump has proposed massive corporate tax cuts and fiscal stimulus, both of which are expected to stoke inflation this year. That could increase the appeal of gold, which has traditionally been viewed as an inflation hedge.

Invest-able coins are defined as ones minted between the late 1700s and 1933, when gold ceased to be an ingredient in their construction. Prices are determined both by their scarcity and their condition, and they’re scored on a scale of zero to 70, with Blanchard focusing on the ones graded above 50.

Between 1979 and 2014, the most recent year for which data is available, coins with a minimum score of 65 posted an average annual return of 11.9%, according to a study by Penn State University. That’s near the average annual return of 13% posted by equities SPX, -0.09% and more than twice the 5.5% average annual gain of gold bullion GCZ7, -0.27% Coins with a lower score, between 63 and 65, had an average annual return of 10.1%.

Coins posted a higher correlation with inflation than other asset classes, according to the study, with the relationship about twice as strong as for gold. The correlation between coins and inflation is 0.58 (perfect correlation would be 1.0). It’s 0.27 for gold bullion and 0.15 for stocks. The higher the correlation, the better it works as a hedge.

“The rarity factor builds on the actual value of the gold, increasing it’s value,” Beahm said.

He added that the more common rare coins, such as Morgan dollars, could be had for as little as $20, while the scarcest ones, including Brasher Doubloons, the first gold coin minted for the U.S., have sold for more than $7 million.

“There’s a wide range, so this is really for everyone,” he said.

December 14, 2016

Trump’s Election Boosted the Sales of Many High-Priced Coins

http://m.townhall.com/columnists/mikefuljenz/2016/12/14/trumps-election-boosted-the-sales-of-many-highpriced-coins-n2259430

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While gold bullion has declined since the November election, demand for extremely rare coins has risen. There’s a growing sense of optimism among entrepreneurs and collectors I talk with that business and income will generally improve during Trump’s presidency. This seems to be manifesting itself in a surge of high-end numismatic sales that is atypical for December. Shortly after the election, for instance, one major Texas dealer sold all eight $50 gold pieces he had in stock. A California dealer also told me there has been a resurgence in demand for coins priced at over $100,000. Perhaps this new demand is based on the fact that high-end customers believe that business will be better and high-end collectibles will soar in price.

We’re also awaiting the official Donald Trump presidential inaugural medal, expected to be available before his January 20 inauguration. The sale of official inaugural medals began in 1901 for the second inauguration of President William McKinley. There is an active collectors’ market for presidential memorabilia that many coin dealers and collectors now offer. Private mints compete for the contract to produce the official inaugural medal. The winner of the contract can strike and sell medals in different sizes, metallic versions and set combinations approved by the Inaugural Committee or a subcommittee.

The New “Sharia Standard on Gold” Was Launched Last Week

The Sharia Standard on Gold – a new platform for the use of modern gold financial products that will meet the requirements of Islamic law – was released last Monday. Before then, the 1.6 billion members of the Islamic faith were uncertain about how to invest in gold in accordance with the laws of their faith. This new Standard carries the potential of opening up the gold market to over one billion new customers.

Basically, the Sharia Standard requires that approved gold investments must be backed by actual physical gold. This means that gold “futures” contracts are out, but gold-backed exchange-traded funds (ETFs) are acceptable. To meet the Sharia Standard, gold investments must also include the proper calculation of Zakah – the Islamic requirement to contribute to charity. Beyond that, the Sharia Gold Standard allows Islamic investors to invest in vaulted gold, gold savings plans, gold certificates, physical gold ETFs and gold-mining shares within certain parameters. The World Gold Council estimates that this new market for gold products could add hundreds or more metric tons of new demand from the Muslim world each year.

Metals Move in Opposite Directions

Gold declined $10 last week, but silver kept inching upward. Silver has now more than doubled gold’s gain for the year so far. The metals moved in opposite directions in the London market, where gold fell from $1,173 to $1,163 last week, while silver rose from $16.35 to $16.95. Meanwhile, the U.S. stock market seems to be euphoric over the Trump victory and the business-friendly corporate leaders who have recently been named to his cabinet and key advisor posts. Also, the expectation of an interest rate increase by the Federal Reserve this week has added to Wall Street’s list of reasons to sell gold and buy stocks.