By Jeff Garrett for Numismatic Guaranty Company…
The steady rise in gold and silver prices in recent months has stunned nearly everyone. The price of gold has now topped the magic $4,000-per-ounce price that was once only a figure bandied about by hardcore gold bugs. No one really thought that $4,000 gold was possible. Now, even mainstream financial figures are touting the advantages of buying gold. This week, Kevin O’Leary (of Shark Tank fame) said that investors should have about 5% of their assets in gold. The bandwagon has certainly left the station.
Silver, which until very recently was lagging behind gold’s advances, is now catching up. The price of silver is nearing its all-time highs of about $50 per ounce. The ratio of gold versus silver was about 100 to 1 a few months ago. The ratio has dropped to about 80 to 1 and seems to be heading even lower. As gold continues its stratospheric rise, many are turning to silver as their hard asset of choice.
There is a slew of reasons for the rising prices of gold and silver, but the weakness of the US Dollar is one of the prime factors. Gold prices are not being driven by Wall Street speculators but by Central Bank purchases. There is fear the US Dollar will lose its appeal as a reserve currency. Political uncertainty and massive federal deficits are dissuading the rest of the world from buying US Dollars as they have in the past. Gold is proving its 3,000-year history of being considered real money on a global basis.
Hobby leaders and those who run rare coin operations of every size are now trying to figure out what $4,000 gold and $50 silver mean for the hobby. On the surface, you may think it is “happy days” and making money hand over fist. The reality is somewhat different. Most shops around the country are very busy, but they are not seeing the lines down the street that were experienced in the 1980s gold and silver booms. In those days, everyone rushed to sell. This was a great decision, as gold and silver crashed shortly after and stayed depressed for decades.
Today, a majority of the people who own gold and silver are reluctant to sell. This is mostly because of the financial fears mentioned above. They purchased precious metals less as an investment and more so for insurance against market chaos. In contrast to the 1980s, there are a lot of buyers of gold and silver at these elevated levels. This would also lend credence to the belief that we will not see a market crash like those of the past. Nothing goes up forever, but high gold and silver levels seem to be here for the near future at least.
One of the biggest impacts on the numismatic hobby is the rising price points for gold and silver coins. As gold and silver prices rise, collectors could be priced out of the market for many issues, and they may turn to more affordable series instead. The lack of demand has been manifesting for quite some time for common-date US gold coins. The premium above the coins’ melt value have all but disappeared for $5, $10 and $20 gold coins. I have not heard of many dealers sending US gold coins to the refinery, but I’m sure this has been happening for lower-grade coins.
The premium (or should I say lack of premium?) for US gold coins is at historic lows. Anyone thinking of collecting Double Eagles now faces minimum prices of about $4,000 per coin. This price point is too painful for nearly all but a small number of well-heeled buyers. I have been told that the number of “generic” US gold coins being sent to NGC for grading has dropped significantly. The added cost of having the coins graded is difficult to recoup with demand being depressed by high bullion prices.
Silver coins are not immune to the pain of increased price points. A very active online seller told me this week his sales of American Silver Eagles have dropped in the last couple of weeks, as silver closed in on $50 per ounce. The early dates from 1986 to 2001 that he had been buying for around $35 and selling for $45 are now costing closer to $55 and have been harder to sell at the current asking price of $65. The magic “price point” for his Silver Eagles was less than $50 per coin.
Price points have been a major factor for the many mass market companies that advertise widely. In the past, they could buy or have made interesting one-ounce silver coins for about $50 all-in, including striking fees, grading fees and other miscellaneous costs. They could sell the coins for $95 and still make money, even with expensive advertising expenses. With silver at current levels, they will have to price the coins closer to $125 each to make money. By breaking the $100 price point, sales will almost surely suffer.
The World Money Fair in Berlin is all about companies and world mints that make many of the coins mentioned above. The upcoming show in Berlin, which is slated for late January 2026, will be very interesting. My guess is that many of the mints will be offering lower bullion weight options that can help dealers battle the price point issue. Even the US Mint has reacted to the price point issue. Many of the popular issues, such as the DC Comics commemoratives, are being made in half ounce gold versions. Some of the recent issues have not sold out, and my guess is that elevated price points played a major role.
Over time, as rare coin consumers become accustomed to $50 silver and $4,000 gold prices, demand may stabilize. It will also take time for buyers to become convinced that these prices are here to stay, and that these levels are just the new normal. A lot of dealers are selling gold as fast as they buy it, for fear of becoming caught in serious market adjustment. The cost of doing business is also a burden for dealers that are not well capitalized. Ten Double Eagles now cost about $40,000 to buy and sell!
The rare coin market seems very healthy and the demand for most numismatic items is robust. Companies selling coins on social media have created a surge for rare coins in the lower price points. Circulated Type coins have never been hotter. The rare coin market is trying to adjust to higher gold and silver prices, and it will be very interesting to see how the next several months play out. Then next time you see something in a store priced at $9.99, you will have a better appreciation of the power of price points.
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Gold is now at record highs! How cool is that?
Great article. I need to rethink precious metals as an investment.
This is full of good, interesting, and hopeful information.
Interesting.
Trying to find reasonably priced bullion has become very difficult. Insightful article!
Really cool!
Let the good time roll!!
Obviously, it is time to audit and re-evaluate the reserves. Fifty plus years for a new audit is ridiculous.
Keep climbing/GOLD & SILVER
If I coould afford it I would have bought Gold a long time ago. Now it’s way betond my reach unless I extract my gold teeth.
This is what aI gey for not checking my spelling. Sorry. for the typo’s.
Great info for understanding the market!
Gold and Silver prices are great. However, the weakness of the US dollar will have negative consequences.
I still remember when gold hit $2,000 per ounce, back in 2020. Now five years later it’s $4,000 per ounce.
Very enlightened insight on the factors influencing gold and silver pricing and demand.
I believe the tariffs now in place are affecting Wall Street investors to the point they are turning to gold and silver. A weak US dollar also affecting decisions. When (if?) things eventually stabilize, will we see the bubble burst as it did in the 1980’s? High prices are nice for those that have. They get there slowly. I seem to remember them falling quickly.
gold and siver coins holding premiums over melt will be the focus of collectors now
timely and interesting article relating precious metals pricing, and gold and silver coin premiums and price points
Crazy Bullion Prices!! :O
Those old family heirloom gold coins are worth more than ever I guess.
Very Interesting Reading.
Much needed information. Thank you.
Good article. Upcoming domestic coin shows are going to be interesting to watch.
Gold and silver are going crazy
Very interesting article.
Its interesting to see how prices have climbed recently, looking at the last 6 months both silver and gold have climbed quite a bit. Makes me want to invest more into gold and silver, my stack is currently a bit weak lol but something is better than nothing :)
I think Mr. Garret is correct in that the focus of collectors/hobbyists will probably shift somewhat to varieties and error-coinage, as well as notes, etc. With gold at such high prices it is out of reach for most collectors, and the price point on silver will deter some. In my humble opinion most true collectors are after ownership of the coinage more than the value. Value, for me, is more a bonus to the item. which is never set in stone. I collect for the rarities, varieties and beauty of the piece(s), though there is an intrinsic investment consideration to the collection.
Billy
Everything is going. Fiat is dying. Silver and gold are real money
It seems that most, if not all, of your articles just draw me in. Then again, that’s the process of learning. Interesting articles are a big draw to me.
Thanks
Most people knew that the price of Gold was being held back by the powers that be. It seems people are now opening their eyes and seeing what the price of Gold should have been
Great article..interesting read!
$4K US per ounce…who’d a thunk it!?!?
I still prefer coins over bars.
Wish I had bought more gold when I came back from Viet Nam. I went to a coin shop and wanted to buy a 50-Peso Mexican gold coin for $54.00 but I was married and didn’t have the cash to spend.
Beautiful
Thanks for the info
Gold is going fast.
The increase in price for gold and silver has meant that a good amount of lower grade coins have been melted and I’m sure this will accelerate as the price continues to rise. I don’t love seeing the older coins get melted
May be too late to get in as an investment. Record highs are normally a good time to sell. Even people that buy and hold want some assurance that prices will go up over time.
Price points for gold and silver are at elevated levels. However, world conflicts may keep or increase these elevated price points for the near term as history has shown.
You can win two ways. Buy bullion or collect coins. Collecting coins though is more fun.
Good luck on the coin giveaway everybody!
How much higher can it go?
Great article. I often wondered about a coins value with rising metal values.
I don’t think it’s going to be good for the hobby in the long term.
Glad I bought when gold and silver was $15. $20 and $30. / oz.
I have some silver. Would live to add gold to my book. Someday soon I hope.
Gold is where it’s at for sure!
Wait for a pull back then buy and buy
Wait for a pull back then buy and buy buy buy
I’ve been waiting since 1980 for gold to do this.
Thanks for the info. Very cool!