September 2008
METALS PRICES PLUMMET, YET BULLION
COINS IN SHORT SUPPLY
Precious metal prices dropped sharply during the first half of
August. Closing spot prices for gold and silver on
Friday, August 15, were $786.50 and $12.75, respectively, according to Kitco.
That represents declines of more than 20% for gold from its all time
high and nearly 40%
for silver from its multi-decade high, both reached in March
2008. By late August, gold and silver were both trading modestly
above their mid-month lows.
Other commodities have declined as well, with oil
retreating nearly 25% from its record price set just several weeks ago.
A strengthening U.S. dollar is partly responsible for lower commodity
prices.
However, the dollar has risen only about 10% from its all time low
versus the euro.
While some see lower metals prices as a buying opportunity, supplies of
gold
and silver bullion coins have become tighter.
In some cases,
dealers are paying over spot to acquire bullion coins for their
customers. Shipments of "bullion quality" uncirculated 2008 silver
eagles were
suspended by the U.S. Mint twice earlier this year, with insufficient
quantities to meet demand available at other times. On August 15, many
of the distributors authorized to purchase silver eagles from the Mint
had none available. Where coins could be found, suppliers were
quoting about double the usual premium over spot silver.
During August, the U.S. Mint suspended sales of gold American Eagles
for ten days and instituted a rationing plan for authorized purchasers
upon resuming sales. Collector quality "classic" U.S. gold coins
(minted prior to 1933) in circulated condition have regained a
significant premium over their bullion value. With the run-up in the
price of gold to previously unseen levels, some of the most common
pieces, particularly those with a $20 face value, had been trading near
the value of the gold they contain.
Note: This article has been written for informational purposes only and
does not imply anyone should or should not buy, sell or hold precious
metal bullion
in any form. Telesphere Numismatics does not offer gold bullion coins.
As of
the publication date of this newsletter, we have a limited supply of
uncirculated 2008 silver
eagles in stock.
JACKSON DOLLARS, ALASKA QUARTERS ISSUED
August 14
was the official release date for Andrew Jackson Presidential dollar
coins. Jackson served as the nation's 7th President from 1829 to 1837.
Jackson also appears on U.S. $20 Federal Reserve Notes, and his
portrait was used previously on other denominations of U.S. currency.
Ironically, Jackson was adamantly opposed to fiat money (anything not
having an intrinsic value from gold, silver, etc. equal to its
stated value).
Sales of a corresponding "First Spouse" half ounce gold coin began
August 28. Because Jackson was not
married while President (his wife Rachel having passed away just months
before his inauguration), the coin will feature a representation of
Liberty based on Bust coinage in circulation at the time of his
presidency.
A ceremony to officially launch the Alaska state quarter has been
scheduled for August 29 at the state's annual fair in Palmer, a
few days after the U.S. Mint began accepting orders for bag and roll
quantities. The penultimate
coin in the series commemorates Alaska's natural beauty and abundant
wildlife with a design depicting a grizzly bear having just captured a
salmon.
Telesphere Numismatics expects to have individual coins and rolls of
Andrew Jackson dollars in stock soon and Alaska quarters by
mid-September.
CURRENT SPECIAL
2008-S proof Presidential Dollars are now on sale for only $10 per set
of four coins. More info about this offer is
available on our Current
Special page. This sale will end no later than
than September 22, 2008.
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Telesphere Numismatics
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