The rare coin market got a harsh reality jolt when gold and silver
suffered big, sharp drops as a three-day sell-off reminded dealers and
collectors alike that what comes up may well go down.
Gold was trading at the $1,800 to $1,900 an ounce level for much of
September, but on Sept. 23, gold began to quickly fall from the $1,700
level to the $1,630 level in the afternoon. Overnight in Asian
markets, gold dropped to $1,531 an ounce early Sept. 26 before opening
at $1,625 in New York, and dipping below $1,600 several times before
closing at $1,629.60 an ounce there.
Gold regained a bit of its luster, and found some stability on Sept.
27, opening at $1,668 and closing at $1,649.70 an ounce. However, the
concept of gold as a “safe- haven” asset was challenged by the huge
swings of the past several days, as some analysts rushed to lower
their optimistic year-end estimates for gold.
Silver’s volatility was even more pronounced. After closing on Sept.
21 at $39.62 an ounce in New York, it fell to $30 on Sept. 23, dipping
to $26 in foreign markets early Sept. 26, before rebounding to close
at $31.21 an ounce on Sept. 26.
Platinum found a 16-month low early morning Sept. 27, falling to
$1,471.25 an ounce before rebounding slightly to close at $1,553 on
As the global economy responds to efforts by the Federal Reserve to
stimulate the sagging economy, the rise and fall of the dollar can
play havoc on bullion markets. A rally in the dollar was a culprit in
the massive bullion sell-off, while a drop in the dollar index on
Sept. 27 was credited with helping prompt a recovery from the massive decline.
The factors that have made gold a safe-haven asset — problems with
debt both in the United States and in Europe, fluctuations in
currencies and general economic concerns — are still very real, as is
the recent reminder that gold is not immune to price fluctuations.
The huge swings in precious metal prices affect dealers big and
small. The U.S. Mint halted the sale of many of its silver coins for
repricing, and some dealers liquidated pre-1965 90 percent silver
coins and generic classic U.S. gold at sharp discounts on Sept. 26,
likely trying to mitigate damages in the event that gold and silver
reverted to their prices of last year at this time, $1,300 and $22 an
ounce, respectively. ■