A Bet on the Highest Possible Gains in Gold
jimmy1024 —Tue, 10/18/2022 - 17:30
Background:
Rare coin investors make up a very small percentage of the stock market's investors, despite the fact that there are more than a million active American coin collectors. However, due primarily to the Internet, a growing number of middle-class men and women would likely turn to the rare coin market in order to safeguard their wealth in the event that gold was to break $1,000 and silver would reach $17 per ounce. The Wall Street executive and the Kansan farmer, who would never be able to go into a coin shop and probably never will, can now easily find gold and silver on the Internet. Additionally, if the price of precious metals continues to rise, many individuals will discover that rare coin prices typically rise faster than the metals from which they are made. Since the 1990s, when E-Trade was a much more popular investment site, gold and silver coins have only been available for sale online for a little more than ten years. Many of those years were bad for the prices of precious metals.
Tens of millions of dollars worth of coin orders—a tiny investment speck in the trillion-dollar financial world—could conceivably be placed on precious metals websites overnight, despite the fact that this has not yet occurred.As businesses scrambled to fulfill orders, it remains to be seen how a sudden rush of capital into rare gold coins would affect the tiny market. Even though precious metals websites have only been around for a short time, they haven't been able to handle a huge spike in orders. Although there have been brief bursts of intense activity following disasters like 9/11 and Y2K, these bursts have been short-lived primarily due to the fact that, as they have done numerous times before, central banks have successfully contained the price of gold and prevented financial panic. However, there would unavoidably be a significant rush of orders into gold shops if, as I believe will occur, gold began to surge out of central bank control.
Imagine a few dozen understaffed coin shops all over the country that only take a small number of daily orders. I believe that a typical precious metals specialist at any major corporation is lucky to receive more than ten phone orders in a day, and there are probably less than 2,000 of them nationwide. The only other orders they receive are through the Internet. It's a small company. When a metals specialist receives an order for, say, ten Saint Gaudens double eagles in MS-64, their firm rarely has them in stock:
The company must buy them from the market, hoping that the price is low and that no other companies are looking for the same gold coins. Unfortunately for them, as the common date market heats up as a result of rising gold prices, demand rises and supply decreases: Invariably, coin holders decide to only sell to high bidders because they are unsure if they will be selling too cheaply, which sets off a price increase chain.
Because of this, several well-known common date coins saw increases in value that were twice as high as the gold price at the beginning of 2006.
Previously, going to a coin shop that could typically only be found in major cities and towns made it nearly impossible for many people to buy rare coins. It was necessary to leave the house.
Buyers could either order unseen coins from dealers or magazines at the risk of receiving a coin of lower quality than expected, or they could only view the inventory that each store had on hand. Despite the fact that many of the coins they could see had been graded, these grades indicated the opinion of a shop owner rather than an independent specialist. Also, some sellers might have been tempted to grade a $ 10 Indian Head with MS - 62 as a more valuable MS - 63.
The rare coin market is now much more transparent thanks to the Internet, making it easier than ever to buy and sell them. Additionally, any coin can be certified with an opinion that is widely accepted by investors and collectors with PCGS and NGC grading, making it easier for novices to confidently participate in the market. Many businesses' prices can be compared online, and the open nature of the Internet itself frequently reveals unethical businesses. The rare coin market is a relatively new way to diversify one's assets away from other financial markets when these factors are taken into consideration.I believe that this tiny market, a speck in the $ 140 trillion global asset ocean, may develop into a miniature NASDAQ.
Tens of millions of dollars worth of coin orders—a tiny investment speck in the trillion-dollar financial world—could conceivably be placed on precious metals websites overnight, despite the fact that this has not yet occurred.As businesses scrambled to fulfill orders, it remains to be seen how a sudden rush of capital into rare gold coins would affect the tiny market. Even though precious metals websites have only been around for a short time, they haven't been able to handle a huge spike in orders. Although there have been brief bursts of intense activity following disasters like 9/11 and Y2K, these bursts have been short-lived primarily due to the fact that, as they have done numerous times before, central banks have successfully contained the price of gold and prevented financial panic. However, there would unavoidably be a significant rush of orders into gold shops if, as I believe will occur, gold began to surge out of central bank control.
Imagine a few dozen understaffed coin shops all over the country that only take a small number of daily orders. I believe that a typical precious metals specialist at any major corporation is lucky to receive more than ten phone orders in a day, and there are probably less than 2,000 of them nationwide. The only other orders they receive are through the Internet. It's a small company. When a metals specialist receives an order for, say, ten Saint Gaudens double eagles in MS-64, their firm rarely has them in stock:
The company must buy them from the market, hoping that the price is low and that no other companies are looking for the same gold coins. Unfortunately for them, as the common date market heats up as a result of rising gold prices, demand rises and supply decreases: Invariably, coin holders decide to only sell to high bidders because they are unsure if they will be selling too cheaply, which sets off a price increase chain.
Because of this, several well-known common date coins saw increases in value that were twice as high as the gold price at the beginning of 2006.
Previously, going to a coin shop that could typically only be found in major cities and towns made it nearly impossible for many people to buy rare coins. It was necessary to leave the house.
Buyers could either order unseen coins from dealers or magazines at the risk of receiving a coin of lower quality than expected, or they could only view the inventory that each store had on hand. Despite the fact that many of the coins they could see had been graded, these grades indicated the opinion of a shop owner rather than an independent specialist. Also, some sellers might have been tempted to grade a $ 10 Indian Head with MS - 62 as a more valuable MS - 63.
The rare coin market is now much more transparent thanks to the Internet, making it easier than ever to buy and sell them. Additionally, any coin can be certified with an opinion that is widely accepted by investors and collectors with PCGS and NGC grading, making it easier for novices to confidently participate in the market. Many businesses' prices can be compared online, and the open nature of the Internet itself frequently reveals unethical businesses. The rare coin market is a relatively new way to diversify one's assets away from other financial markets when these factors are taken into consideration.I believe that this tiny market, a speck in the $ 140 trillion global asset ocean, may develop into a miniature NASDAQ.