Highest Rated
- Gold Price Gains and Losses over the Last 3 Months
(5.00 out of 5) - Gold Coins Rare Launches New Blog (5.00 out of 5)
- How is the Price of Gold Today Determined (5.00 out of 5)
- How to Buy Gold Coins (5.00 out of 5)
- Still a Good Time to Invest in Gold? (5.00 out of 5)
- IRS Invades Privacy of American Investors (5.00 out of 5)
- Selling Price of Gold Coins (5.00 out of 5)
- India to Buy More Gold from IMF (5.00 out of 5)
- Is this Gold Bull Market Over? (5.00 out of 5)
- When to Buy $20 Liberties and $20 Saint Gaudens? (5.00 out of 5)
Archive for November, 2009
India to Buy More Gold from IMF
(2 votes, average: 5.00 out of 5)
Loading ...
Email This Post
As reported by Bloomberg.com, India bought 200 metric tons of gold valued at $6.7 billion from the International Monetary Fund on November 3rd, 2009. That gold purchase cleared out just under half of what the IMF was offering for sale; consequently the IMF is still offering another 203 metric tons for sale. India proclaimed that the purchase was due to their fear of a collapsing dollar and their desire to hedge their foreign currency reserves.
The first purchase by India at $1,045 per ounce occurred over a two week period and made an impact on the value of gold which rose to over $1,190 per ounce just before the Thanksgiving holiday. Since the first purchase India has realized an $800 million profit. What is most significant is that India is currently in negotiations on the other half that the IMF is offering. A second purchase could push gold prices much higher in the near future.
This recent purchase by India highlights the recent shift of foreign central banks from net sellers of gold to net buyers of gold, which will likely continue. The average country has 10% of their foreign reserves in gold, China only has 2%. If China were to purchase the other half it is speculated by David Rosenberg, chief economist and strategist with Gluskin Sheff & Associates Inc, that gold would rise to $1,300 per ounce.
It is likely that we will hear very soon as to which country will purchase the second half of the gold offered by the IMF and when we do watch for new record gold prices to be set.
Spot Price of Gold is on the Rise
(1 votes, average: 5.00 out of 5) Loading ... Email This Post
As you may have noticed the price of gold is on the rise, and has been for the past 9 years. It started at a low of $252 per ounce in 1999 and as of this writing gold has set a new record spot price of $1,149 per ounce. It should be noted that the current record of $1,149/oz when compared to the past record of $850 per ounce set in 1980 is not really a new record. When you adjust the $850 gold price for inflation, in today’s dollars it would be somewhere around $2,300 per ounce. This is one reason why many experts believe that gold is going much higher in the future.
No one will argue that we are in a gold bull market, but when considering investing in anything it is important to understand how bull markets work. Gold is currently in the second phase of a common three phase bull market. The first phase is the accumulation phase. This is where the asset goes up without too much attention being paid by the general public, and very few people are participating. The second phase is the awareness phase. This is where Wall Street starts to pay attention and then participate, and the general public begins to take notice and some people participate, driving prices higher at a little faster pace to its fundamental value. The third and final phase is the panic or speculation phase. This is where everybody is seeing what is happening and are afraid of missing out, and most people are participating, driving prices up far above fundamental values.
The most recent examples of the third phase of a bull market are the dot com boom in 1999-2000 and the housing bubble of 2004-2005. These markets shot up like a rocket and shortly there after corrected themselves.
Gold was in the first phase from roughly 2000-2005; we then entered the second phase which we are still currently experiencing. You can tell we are in the second phase by the action in the market. Many advertisements for gold are popping up. The general public is beginning to talk about it, but only some are actually entering the market. Many experts argue that we will see a blow-off top or third phase in the gold market, and when we do prices will rise very rapidly.
The Great Gold Confiscation of 1933
(1 votes, average: 5.00 out of 5) Loading ... Email This Post
The 1920’s were good for most Americans. The stock market was thriving and most citizens were employed and happy. The stock market ended in frenzy in 1929 on what is now Called Black Tuesday. All of the prosperity of the 1920’s was virtually erased and many Americans were left broke and unemployed. The Great Depression then ensued and eventually Americans looked to Washington for help.
Back then the United States was on a gold standard. What that meant was the U.S. could only print one dollar for every 1/20 of an ounce of gold it had in reserves. Therefore in order to inflate the economy, in other words “to bail it out,” the government needed to be able to print more money and flow it into the hands of the banks and consumers. Because the dollar was pegged to gold the only way this could be done was to increase its gold reserves. Thus the confiscation of all privately owned gold in the U.S. was cooked up under executive order 6102.
The executive order stated that all gold coin, gold bullion and gold certificates needed to be turned in to a Federal Reserve Bank or Branch. If this order was willfully violated, that person could suffer up to 10 years imprisonment or up to a $10,000 fine or both. The depository institution that received the gold was instructed to pay the value of the gold in the equivalent paper currency or coin.
After the government confiscated gold they could now print more dollars. The catch here was that they paid people in paper dollars then immediately devalued the U.S. dollar and increased the value of gold. So not only did citizens have to turn in their only true safe haven, but they also were given paper dollars in return that were then devalued.
Many experts today believe that the falling dollar will once again be pegged to gold and that privately owned gold will once again be confiscated. The only gold that was protected from confiscation was coins that were of numismatic value (coins having a recognized special value to collectors of rare or unusual coins). This emphasizes that all portfolios should contain some U.S. rare gold coins, as they were not confiscated in the past.
Rare Gold Coins for Collecting
(1 votes, average: 5.00 out of 5) Loading ... Email This Post
Coin collecting is a prestigious hobby across the world today, but many do not realize that collecting coins didn’t become popular until the 16th century. This started with the resurgence of interest in Ancient Greek and Roman cultures. By the late 1500’s coin collecting had become very popular amongst nobility and the first rare coin auction was held in Leyden, Holland in 1598.
Over the years this once hobby to the kings has become popular to many well known persons, such as, John Quincy Adams, Cornelius Vanderbilt, Enrico Caruso, Theodore Roosevelt, Buddy Ebsen and Chris Schenkel. Today there are many collectors around the world. It is estimated that there are between 5-7 million collectors in the United States and as any as four to five times that worldwide.
Some of the world’s greatest coin collections are housed in popular museums around the world, like the Smithsonian in D.C. Because coins have been minted for over 2,000 years collectors have many options to choose from including: ancient Greek and Roman coins, U.S. rare gold coins and modern proof coins to name a few examples.
Values are determined not only by supply and demand (availability), but also rarity and quality. Rarity and quality are probably the two biggest factors in determining a coins value. The higher the quality/grade of a coin the more valuable, and the rarer a particular coin is the more valuable it will be. Values can range from under $100, up to multi-million dollar coins such as the 1933 $20 Saint-Gaudens which sold at auction for $7.9 million in July of 2002.
When amassing a coin collection many use the set building strategy, of which there are two basic forms: building by type or series. A type set is built with coins that share a single characteristic, ie design, designer, or denomination. A series is built with one coin from each date and mint of a particular type.
Other strategies are collecting by
die variety, historical period, mint mark and individual year or first and last year of issue of a particular coin.
Can I Profit from Owning Gold Coins?
(1 votes, average: 5.00 out of 5) Loading ... Email This Post
It is first important to distinguish between bullion and rare gold coins, which you can read more about in this blog or click on the rare gold coins link. Owning gold coins for long-term appreciation has proved to be lucrative in the past. It fact PCGS, one of the top two grading companies in the world has documented rare gold coin performance since 1970. They claim in their mint state rare gold coin chart (which is an index of coins) that since 1970 a $1,000 initial investment would be worth roughly $115,000 today. When comparing this chart to the DJIA (Dow), mint state rare gold coins have outperformed the Dow close to 11 to 1. You can do this calculation yourself to check out this comparison.
Rare gold coins have been accumulated by investors and collectors alike for many centuries and some collections have been documented as performing very well. Check out these examples:
1. Harold Bareford reportedly bought a collection of American gold coins for $13,832 in the early 1950s which was resold at auction in 1978 for $1.2 million.
2. Louis Eliasberg, built a collection that cost approximately $300,000. In 1982, it sold for $12.4 million at auction.
You can see that rare gold coins have performed well in the past, and it should be noted that past performance is no guarantee of future performance. We are currently experiencing a bull market for gold. Gold has gone from $252.85 in August of 1999 to $1,113.20 where it is now, at the time of this writing. That is a 340% increase in ten years. Gold bull markets make all gold boats float higher, and as a result we have seen rare gold coins perform very well and I fully expect them to go even higher as we enter the final or third phase of the gold bull market.
The third phase is the speculative or panic phase. This is where everyone wants in and everyone is putting their money into the asset driving prices above its fundamental value and usually very rapidly. We have not seen this third phase yet in gold and I believe it is still a few years out before we will.
Selling Price of Gold Coins
(2 votes, average: 5.00 out of 5) Loading ... Email This Post
People always want to know what the prices of gold coins are. First you have to determine if you are buying bullion gold coins or numismatic also known as rare gold coins. These two types will vary in price dramatically.
Bullion gold coins are based on the spot price of gold plus a premium. The spot price of gold is the cash price for immediate delivery, usually on 100 troy ounce contracts. Gold coins will usually be priced higher than gold bars of the same ounce size because they are more costly to produce. Individual buyers of gold bullion coins almost never buy them at the spot price. If you did you would be buying them under the wholesale value. Therefore one can expect to pay the spot price plus a premium depending on the broker/dealer you are working with. Typically the premium will be 10-12% above the spot price on gold bullion coins. In addition, depending on supply and demand factors some gold bullion coins may be priced higher than others. For example, 1oz American Eagle coins and the time of this writing are more sought after than the 1oz Canadian Maple Leaf, therefore one can expect to pay a few dollars more for the American Eagle.
Rare gold coins on the other hand are much harder to price due to quality and rarity factors involved. Rare gold coins are graded on a scale from 1-70, 70 being perfect condition. Typically the lower a coin is on the grading scale the closer it will be to the spot price and vice versa, the higher a coin is on the grading scale the further away it will be from the spot price. Rare gold coins also vary in rarity. Some coins are very rare and some are fairly common and thus easier to come by. The rarer a particular coin the more expensive it will be. Therefore prices on rare gold coins can range from close to the spot price all the way up into the seven figure range. Both types of gold coins will do different things for your portfolio. This is why it is important to work with a company that you trust that will help you to determine the best gold coins to meet your goals and objectives.
Storing Gold Coins
(1 votes, average: 5.00 out of 5) Loading ... Email This Post
Storing gold bullion and rare gold coins after you purchase them is the next very important step to securing your wealth over the long-term. You want them to be safe and secure without degrading in value over time. There are a few options to you depending on what you feel most comfortable with.
Storing gold bullion whether it be in coin form or bars and ingots is slightly trickier than storing rare gold coins. Gold bullion is considered to be a monetary metal; therefore the government frowns upon you holding it in a bank safe deposit box. It is considered to be hoarding like cash. Therefore with gold bullion one must keep it in a home safe, whether it be a gun safe, fire proof safe or a floor safe. Some people choose to hide them around their home or bury them in their yard. Others keep them in a private safe deposit box that is run by a business vault (not a bank). If hiding them in your home you will need to find a safe place that no one will be able to stumble upon them.
Rare gold coins can be kept in a bank safe deposit box; therefore many individuals choose this option. However, many are scared to do that since bank failures are at an all-time high, and the red tape can mire your ability to get to your coins should your bank fail. In the case that bank failures scare you, you would then have the same options that you have with gold bullion for storage. The beautiful part about acquiring rare gold coins is that if they are graded then they are sealed in a sonically sealed transparent plastic container which protects the coin from any degradation over time. The transparency of the plastic allows you to be able to see the coin and enjoy them while they are protected.
What are the Best Gold Coins to Buy?
(1 votes, average: 5.00 out of 5) Loading ... Email This Post
If you have been doing research you probably know by now that there are a couple of different ways you can acquire physical gold. Now you are trying to determine which type to buy. This decision should depend on what you are trying to accomplish with the gold. So what are your goals? This should be the question you ask yourself. Only then can you approach the gold market for an answer.
There are two types of gold that you can acquire which will do different things for your portfolio. Bullion gold is used purely for speculation and as a hedge against inflation. 1 ounce of gold 100 years ago could buy roughly as many loaves of bread as 1 ounce of gold today. Therefore over the long-term gold keeps up with inflation. With gold now in the second phase of the bull market you can also speculate purely on the price of gold hoping that it will enter that third and final phase and explode in value.
You can also acquire rare gold coins, which by many standards is considered the best way to own gold. Rare gold coins from the U.S. were minted between 1795 and 1933. They are non-reportable, so the transactions are private and confidential. They are also considered to be non-confiscateable. Bullion has been confiscated in the past while numismatic or rare gold coins have been excluded. History has also shown that rare coins have outperformed bullion significantly in the past. This can be best measured over the last 38 years on PCGS’s index for mint state rare gold coins.
In my opinion the best gold coins to buy are $20 Liberties and $20 Saint Gaudens minted between 1877 and 1933. These coins are highly liquid and affordable to most portfolios and can add great privacy and protection for your assets. Liberties and Saints are easy to track and have a market in which coins are traded every day. These coins can be bought in very common dates like 1904 and 1924, or they can be bought in very rare dates like 1861 and 1933. Acquiring these coins in my opinion should be done between the grades of mint state 62 and mint state 66 as these are the most sought after, thus increasing the demand.
Recent Comments