The continuing rise in the spot price of gold hit the milestone of $3,500 an ounce just as this commentary was being written. This record benchmark immediately impacts bullion Gold American Eagle coin values. It is likely that it will also impact the prices of gold coins that are priced more often as collectibles than for their intrinsic value, but the price of these will likely take longer to adjust as dealers wait to see if this is a momentary adjustment or appears to be more for the long term. There have been some recent incidents in which the price of some of these collectible coins has modestly decreased due to a lack of demand. Commemorative gold coins currently being issued by the U.S. Mint are least likely to feel the immediate effects, since these coins are priced at what I will dare to call exorbitantly above their intrinsic value; however, the value of many past issues for which there has been little secondary market demand will adjust accordingly.
Coins composed of silver have been likewise impacted. While gold keeps setting new spot price records, silver also continues to rise in value. The difference is that silver may have a long way to go. The record value for this white metal was created artificially when the Hunt brothers attempted to corner the market years ago. “The other white metal,” that being platinum, has also seen some dramatic price increases. Demand for platinum coins is not strong, but due to the increase in intrinsic value, Platinum American Eagles have likewise become more expensive. One irony in the PAE series is that the value of Proof 1/10 PAE type coins continues to be lower than that of Mint State type examples. The question for collectors and investors is whether it is too late to buy or not. The way the dollar is adjusting on the world market, it appears the answer is still “buy.”