October 2008
PRECIOUS METALS IN DEMAND, PREMIUMS RISE
Fears of a potentially deep global recession and plunging stock prices
have stoked already strong demand for physical gold and silver. Recent
developments have led to an unusual combination of weak metals prices
in the face of surging demand for physical metals (as opposed to paper
holdings, such as mining company stocks). The discrepancy between
metals prices on financial markets and the demand from individuals
seeking a perceived safe haven for their savings has led to higher
premiums for gold and silver in coins, bars and other forms.
Spot and contract prices for gold have fallen more than 20% from their
all time highs, and silver is off more than 50% from the multi-decade
highs set earlier in 2008. Meanwhile, the United States and world Mints
have been struggling for much of the year to
acquire sufficient blanks for new gold and silver bullion coins, and
many dealers have been unable to meet the demands of their customers.
In late September the U.S. Mint suspended sales of American Buffalo
gold bullion coins, as it had done earlier in the year for gold and
silver American Eagles. As of October 14, the Mint increased the
premium on silver American Eagles from $1.25 to $1.40 per coin over
spot silver. Because it cannot produce enough bullion coins to satisfy
demand, the Mint continues to allocate sales to authorized purchasers
each week. The limited number of authorized purchasers have in turn
raised premiums to their customers. On October 14, premiums for 2008
silver eagles were nearly $5 over spot silver in quantities of 500 or
more.
Premiums for older "classic" gold coins above their metal value, which
had all but disappeared earlier this year as gold reached record highs,
have widened considerably. So called junk silver coins (common U.S.
dimes, quarters and half dollars dated 1964 and earlier) are now
trading
above the intrinsic value of the metal they contain.
If you have gold or silver coins to sell, we'd like to hear from you. We're currently paying over
bullion value for both older and modern gold and silver coins.
PLAIN EDGE DOLLARS FOUND IN MINT SETS
If you've purchased any 2008
uncirculated coin sets from the U.S. Mint or from a dealer, check the
Presidential dollar coins for a valuable striking error. A small number
of 2008-P James Monroe dollar coins without edge lettering have been
authenticated, and a few 2008-P Andrew Jackson dollars have been
spotted with missing, weak or partial edge lettering. All of these
coins were found in annual uncirculated coin sets issued by the U.S.
Mint, which are popularly called Mint Sets. The Mint Set packaging
design adopted with the advent of the Presidential dollar series allows
for the edge of the coins to be viewed without being removed from the
packaging.
In accordance with the legislation that brought about the Presidential
dollar series, the date, mintmark and the phrases E PLURIBUS UNUM and
IN GOD WE TRUST are struck incuse on the edge of the coin (beginning
with 2009 Presidential dollars IN GOD WE TRUST will appear on the
obverse). A relatively large number of George Washington dollars and
some subsequent 2007 Presidential dollars were struck without their
edge lettering. The Mint determined that the error was the result
of bins of newly struck dollar coins going directly to counting and
bagging operations instead of first being fed to a separate edge
lettering machine. The striking process has been revised to integrate
the edge lettering step without moving the coins to another location.
How plain edge dollars have been produced after this change has yet to
be determined.
CURRENT SPECIAL
Our annual proof coin sale is now
underway. Prices for 2008 and selected other recent
proof coins have been reduced through October 22.
Please see our Current
Special page for the sale prices.
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Telesphere Numismatics
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