Investors rushing back to stocks, currencies, and other risk-based assets are overlooking one of the greatest values in the market today…
“The shortage of gold and silver coins and bars we experienced last year has largely been overcome…The premiums for investment-size coins and bars have returned to normal levels. In 2008, premiums were two to three times their normal price – if product could be found. Oftentimes, it was unavailable at any price.”
That’s from Asset Strategies International’s most recent “Always Something Interesting” Alert from last week. Rich & Michael Checkan went on to report that bullion bars and coins were available to investors at a reasonable premium (“mark-up”) across the board.
In last year’s stock market crash and the ensuing financial panic, you may recall a spike in demand for physical gold. Premiums for coins and bullion soared, and demand ballooned far too fast for supply to keep up. If you actually managed to find a few gold coins, chances are you were looking at a mark-up of about 20% …something that really spoiled the opportunity.
Now, to be sure, the situation has calmed…but we’re not necessarily out of the woods yet…
Another of our precious metals dealers – Nick Bruyer from First Federal – focuses on buying investment-quality coins with serious value potential for collectors. He usually looks over hundreds of different issues each year, just to find the handful of rare, high-quality coins that are sought after by investor and collector alike.
Well according to Nick, there’s still a bit of a supply squeeze at the high-end… “[we quickly] sold out of the last 2008 tenth Oz. China Gold Pandas, and hundreds of callers were being turned away. Worse yet, the U.S. government had not released the 2009 Tenth Ounce Gold Eagle bullion coins – sold out since last summer – and later announced that they have no plans to produce ANY this year!”
For the last word on coins and premiums, we went to our Investment Director and Commodity Expert, Eric Roseman…
“Premiums have come down – especially on gold coins – in some specific situations…but silver premiums – especially at retail – remain too high for most investors to consider.”
“Precious metals are an important keystone in any portfolio…and we always recommend keeping about 10% of your portfolio in gold and silver, especially coins. Not only is this a long-term bid to preserve your purchasing power, but also portfolio insurance…a hedge against the catastrophic risk that’s all too apparent in today’s markets.”
“August is traditionally marked by high volatility across all asset classes, including the metals. But we remain very bullish on the gold mining sector as we soon approach the strongest stretch of seasonal strength for the sector. So – assuming you can find some reasonable premiums in the market – this could be a great time to build your stash of coins for the uncertain months ahead.”
Yours in Personal Sovereignty,
Matthew Collins, A-Letter Editor
Original Source: The Sovereign Society