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Rare Gold Coins Resist Risk-on Rhetoric

The advantage of gold coin investment cannot be made clearer than by the effect panic has had on current gold prices. Everywhere you turn there are signs that what Egon von Greyerz of Matterhorn Asset Management calls “a time bomb of colossal magnitude” could explode at any moment. “It is guaranteed that we will see losses in the trillions in the next few years. That is why wealth preservation is so critical and investors should not worry about a relatively small correction in the price of precious metals,” Greyerz says.

Yet for household investors it is hard not to worry. Despite centuries of gold proving itself as a store of wealth, they live in a world where price is paramount. When money is as tight as it is today, the fear of further investment loss is palpable, even when no evidence exists that gold has mysteriously become a risk-on asset.

There is, however, no lack of wishful thinking among financial pundits and their collective voice is drowning out reason. A recent post in Seeking Alpha typifies the rhetoric: “What will happen to the price of gold once investors realize that things are once again getting better in the world and start selling their gold … make no mistake; they WILL get better, no matter what the doom and gloomers tell you.”

By associating gold coin investment with the radical fringe element they muddy our perception of the current situation and call our common sense beliefs into question. None-the-less, gold “is the only investment that protects your wealth against the destruction in value of most asset including paper money and also avoids counterparty risk,” Greyerz says.

Investors in rare gold coins enjoy that protection without worry about counter-intuitive drops in the gold spot price. The numismatic value of gold coin investments has proven time and again to resist short-term swings in the gold price, regardless of the severity.

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