By Steve Roach
First published in the Nov. 1, 2010, issue of Coin World
Gold is currently the engine that is driving the rare coin market.
It seems that Coin World's Market Analysis of late has been alternating between gold one week and everything else the next week. However, an emphasis on gold is appropriate as the market has never seen gold hit the levels that it is currently hitting.
On Oct. 11, the price of gold hit a record London PM fix of $1,351 an ounce and at one point during the day hovered at $1,360.
On Oct. 12, the banking investment firm Goldman Sachs raised its gold price forecasts to $1,400, $1,525 and $1,650 for three-, six- and 12-month horizons, citing falling interest rates and a slowdown of the U.S. economic recovery.
Other investment firms are similarly bullish on the prospects of gold to continue rising in value.
Gold is up nearly 25 percent in 2010, and if trends continue, gold will be heading for its tenth consecutive annual gain.
The U.S. Mint's release of Proof 2010-W American Eagle gold coins in early October has taken pressure off the secondary market for earlier 1-ounce issues.
At an issue price of $1,585, the 2010 1-ounce coins are trading at the same level as older issues in the wholesale markets, where several dealers are paying up to $1,600 an ounce for coins available for immediate shipment to fill orders from wholesalers who still have customers demanding these coins for inclusion in Individual Retirement Accounts.
As of Oct. 12, the Mint's Web site posts an expected delivery date of Oct. 27 for new orders of Proof 2010-W gold American Eagles.
The recent announcement that the Mint will produce Proof 2010-W American Eagle silver coins has also cooled off the market for earlier coins tremendously.
Immediately after the news about the Proof 2010-W silver coins broke, market makers reduced their buy prices for Proof silver American Eagles from $55 to $45, in line with the Mint's $45.95 price of the Proof 2010-W coins when they go on sale Nov. 19 at noon with a household limit of 100.
The Mint has not given any indication of how many Proof 2010-W American Eagles silver coins may be produced.