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Will Gold Coin Prices Ever Recover?

I receive dozens of emails each day from readers who have questions about the gold coin market. Usually, the emails are from people who are interested in buying gold coins, and the questions have to do with which type and size coins to purchase, storage and pricing. This week, however, I have received an inordinate number of emails who want to know one thing: Will gold coin prices ever recover?

This is a touchy and polarizing subject. First, because defining the “gold coin market” is easier said than done. You have gold bullion coins, certified modern-day coins, pre-1933 gold coins, European gold coins, ancient gold coins, shipwreck gold coins, etc. Just because coins in one section of the market are doing well, it doesn’t necessarily mean that coins in other sectors will perform satisfactorily. As a matter of fact, the opposite is often true.

Secondly, “recover” is a relative term. Only a decade ago a one-ounce gold bullion coin was trading at less than $300. Today the same coin is worth almost $1400. Yes, gold bullion prices did reach $1900 a couple of years ago, but in the same manner that billionaire John Paulson said he has not lost money on gold (because he bought at $950) gold coins are not “down” over the long-term.

Yes, gold prices were higher last year than this year, and some people believe that gold could fall even more. I don’t know. Nobody knows, actually. What we do know is that the Federal Reserve has held interest rates far too low for far too long. We know that too much unbacked money is being printed, and we know that gold is priced in that unbacked currency. Reasonably, then, we can conclude that gold coin prices will move higher with the gold spot price over time. Whether that will be in a week, a month, a year or two years remains to be seen. But the parameters for gold coin prices to rise are still there, maybe even stronger than before. That said, the only types of gold coin investments that we can be sure will rise with inflation are bullion coins and investment-grade PCGS and NGC coins. Outside of those two categories, where gold coin prices will go next is anyone’s guess.

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