Golden Opportunity Might be in Mintages
September 19, 2007
With gold bullion knocking on a door not opened to it since January 1980 in terms of prices, smart collectors should be thinking about the opportunities that might open up in the gold coin market.
This has nothing to do with gold speculation and everything to do with being a true collector.
If we learned any lesson at all in 1980 it is that mintage figures and condition meant less and less as gold hit higher and higher highs. For a time, everything but the true jewels of the various gold series saw their values simply boiled down to a formula of actual gold weight times the day's price of gold. It seemed like cultural vandalism. The only decision collectors had was "are you selling, or not?" There were plenty of people in line to dump whatever they could at the record prices.
In such a market, distortions develop. A coin that is relatively scarce that can be bought for metallic value might just be a good deal long term. When gold prices stabilize, relative scarcities reassert themselves.
One of those relative scarcities to consider is in the new First Spouse series. Mintages have been 20,000 apiece, proof versus uncirculated in the sellouts. That is historically unusual. Collectors prefer proofs over time by a factor of 3:1 or 4:1. The numbers would seem to indicate that the proofs might just be undervalued relative to the uncirculated pieces.
Of course, all bets are off it gold goes to $100 an ounce, but that doesn't seem likely.
Every collector should keep at least one eye on long-term values and scarcity relationships when considering the purchase of coins with high bullion values. It could pay off in the long run.
On June 11, 2008 Paul
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