Gold bugs rejoiced as gold hit a new all-time high on July 13,
reaching nearly $1,590 an ounce in New York before closing at $1,583.50.
Gold is up more than 10 percent in 2011, climbing for each of the
last 10 years.
The source of the rise — the sixth day in a row where the price of
gold increased — was a broad increase in the global demand for gold as
a safe haven asset.
The July 13 rise was fueled by comments by Federal Reserve Chairman
Ben Bernanke to Congress that suggested there might be another round
of monetary stimulus, combined with Congress’ inability to reach a
deal on the debt ceiling, which may mean that the Treasury could run
out of money to pay existing loans.
Globally, concern in Europe with Italy, Spain, Greece, Ireland and
Portugal all experiencing credit problems made precious metals
attractive, and silver rose more than 7 percent on July 13 to a high
of $38.43 an ounce, an impressive gain but still more than 20 percent
below its recent high of nearly $50 an ounce in April.
Comparatively, gold’s July 13 gain of more than $23 an ounce was
just a 1.5 percent gain.
The renewed confidence in gold may be what it takes to break the
pre-1933 generic U.S. gold coin market out of its recent sleepy period
as most generics still trade at multi-year low premiums relative to
their melt values.
Further, the widespread media coverage of the Langbord 1933
Saint-Gaudens gold $20 double eagle trial may bring some new blood
into the hobby, interested in the coin’s dramatic story and introduced
to the beauty and availability of Saint-Gaudens double eagles.
In other market news, initial buyers of the Mint’s recent offering
of Proof 2011-W American Eagle silver dollars were able to make some
fast profits. Several big dealers are paying $66 for these coins,
which can still be purchased from the Mint for $59.95 as of July 13,
but 100-coin ordering limits imposed by the Mint prevent dealers from
getting large quantities.
The Proof gold American Eagle market has also seen a boost recently,
with dealers paying slight premiums for 1988 to 1991 four-coin sets,
and quarter-ounce $10 and half-ounce $25 coins. However, the release
of the 2011 issues has added enough supply to make a repeat of last
year’s big American Eagle gold coin prices unlikely. ■