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$5 Indian Half Eagle & $20 Saint-Gauden Double Eagle Prices
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163 posts in this topic

I don't collect sets of gold coins due to the cost, but I really like some of the ones produced over time, so I have a handful of them.  Some of the ones I really like are the gold half eagles and double eagles, and I think the early 1900's $5 Indian Gold Half Eagles (see pic) in particular look really nice with no edge and the sunken relief, as well as the early 1900's $20 Saint-Gaudens Gold Double Eagles.

So, I am looking into adding one or both early 1900's XF/AU gold Half Eagles or Double Eagles when the price is right.  I am not sure if historically the price for these coins are significantly affected by the spot price of gold, which is pretty low now, or if the price is more affected by collector demand which seems to still be high now.  It seems like current prices are a little above RB/NGC book values, so waiting for a while may be better even though spot prices will likely go back up, but I'm not sure.  Any insight would be appreciated.

1911-S $5 Indian Gold Half Eagle Obv & Rev.jpg

1911-S $5 Indian Gold Half Eagle NGC Prices.jpg

Edited by EagleRJO
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I think you will find that most common date gold in conditions other than UNC will go for spot plus a couple of dollars.....  Collectors dont really collect gold in grades lower than XF unless they are really special pieces.

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On 7/22/2022 at 12:14 PM, JT2 said:

I think you will find that most common date gold in conditions other than UNC will go for spot plus a couple of dollars.....  Collectors dont really collect gold in grades lower than XF unless they are really special pieces.

That may be why I don't see lower grades on the larger dealers' sites.  But if I look at that 1911 half eagle in XF grade (and other ones that are early 1900's) dealers are asking for a little over $700 (more for a TPG slabbed one).  But spot value would be about $424 for that coin, with a weight of 0.242 troy oz and a current spot price at about $1,750 an oz.

So, does that mean prices for those coins I mentioned even in XF or AU grades will not really be affected by spot prices that much? 

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The markup over spot might be similar, but the total cost is much greater at present due to the absurdly speculative price of gold.

PS: When discussing gold from the early 20th century, it's best to refer to design type - your previous post seems to lump Liberty and Saint-Gaudens/Pratt types together.

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On 7/22/2022 at 1:41 PM, RWB said:

The markup over spot might be similar, but the total cost is much greater at present due to the absurdly speculative price of gold.

For coins with numismatic value, right ?

I'm unaware of any excess premium for bullion-substitutes among Liberty's and Saints.

Edited by GoldFinger1969
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On 7/22/2022 at 1:41 PM, RWB said:

The markup over spot might be similar, but the total cost is much greater at present due to the absurdly speculative price of gold.

PS: When discussing gold from the early 20th century, it's best to refer to design type - your previous post seems to lump Liberty and Saint-Gaudens/Pratt types together.

I did lump them together in terms of what I find appealing, but my question for now is really specific to the early 1900's Indian Gold Half Eagle since that would be first on my add list.

I am getting the feeling that I should hold off on getting that coin for a while.

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On 7/22/2022 at 11:03 AM, EagleRJO said:

I don't collect sets of gold coins due to the cost, but I really like some of the ones produced over time, so I have a handful of them.  Some of the ones I really like are the gold half eagles and double eagles, and I think the early 1900's $5 Indian Gold Half Eagles (see pic) in particular look really nice with no edge and the sunken relief, as well as the early 1900's $20 Saint-Gaudens Gold Double Eagles.  So I am looking into adding one or both early 1900's XF/AU gold Half Eagles or Double Eagles when the price is right.  I am not sure if historically the price for these coins are significantly affected by the spot price of gold, which is pretty low now, or if the price is more affected by collector demand which seems to still be high now.  It seems like current prices are a little above RB/NGC book values, so waiting for a while may be better even though spot prices will likely go back up, but I'm not sure.  Any insight would be appreciated.

First, you've come to the right place, Eagle (great name, no wonder you want Eagles and Double Eagles ! xD ).

Second, you should read the "Roger Burdette Saints Book Thread" if not the book itself.  I would also recommend the books on Double Eagles by Bowers and the Gold Coins 1907-33 book by Akers (covers Indian Heads and Saints).

Third, I have posted charts for MS-65 and MS-63 Saints vs. Gold bullion prices (I'll try and track them down or repost them as I am travelling right now).  The current premium is not dirt-cheap but it's not at elevated levels, either.   Ironically, while not a perfect relationship, if you go back over decades the time to buy Saints and other gold coins -- if not bullion itself (the best play) -- has been when those premiums are HIGH.  Sort of like buying cyclical stocks when the P/E's are high (because of depressed earnings) and not when they are low (because the cyclically boomed earnings are about to get slammed by a recession).

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Keep in mind that when you buy a Liberty or Saint you are buying 0.9675 ounces of gold, so the price should reflect that 3% discount in gold quantity.  A circulated common pre-1933 gold piece with no numismatic value should be a bit less than a common modern gold bullion piece.

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On 7/22/2022 at 1:27 PM, EagleRJO said:

That may be why I don't see lower grades on the larger dealers' sites.  But if I look at that 1911 half eagle in XF grade (and other ones that are early 1900's) dealers are asking for a little over $700 (more for a TPG slabbed one).  But spot value would be about $424 for that coin, with a weight of 0.242 troy oz and a current spot price at about $1,750 an oz.

So, does that mean prices for those coins I mentioned even in XF or AU grades will not really be affected by spot prices that much? 

They'll be affected, but it's not a 1-for-1 deal.

Remember, fractional gold is easier for more people to buy than 1 ounce coins.  This and the "volume discount" we see whenever you buy something in bulk means you'll pay MORE for the fractionals.  Whether you buy a $2.50 Indian Head or a 1/4 ounce American Gold Eagle you'll pay more than a larger coin in the series with more gold, assuming the grade is the same and the population doesn't change much resulting in condition rarity (which might be the case for the Indian Head).   I can't speak to the specific premiums on Indian Heads for various grades as I am not familiar with them that closely.

The more the numismatic premium, the less the gold price (unless it's a BIG MOVE) will impact it.  Check out the prices for the MCMVII High Relief Saints, which are over 6x the spot price of gold in AU-58 or higher condition.

Populations matter along with grades; when there are tens of thousands of mint state coins that supply dwarfs collector demand and it has to be bought by the gold investment crowd and they are looking to pay bullion prices or close to that.

Edited by GoldFinger1969
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On 7/22/2022 at 2:16 PM, EagleRJO said:

I did lump them together in terms of what I find appealing, but my question for now is really specific to the early 1900's Indian Gold Half Eagle since that would be first on my add list.   I am getting the feeling that I should hold off on getting that coin for a while.

Don't rush in....read about the coins...study the population data vs. various grades.....check out some current auctions on HA and GC as well as past sales.

The coins are ALWAYS AVAILABLE so make an informed choice for a coin you won't regret weeks or years later. (thumbsu

Edited by GoldFinger1969
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On 7/22/2022 at 2:18 PM, GoldFinger1969 said:

First, you've come to the right place, Eagle (great name, no wonder you want Eagles and Double Eagles ! xD ).

Yes, I love eagles, go figure you could tell 😉.  Very majestic and powerful creatures in nature, and I'm glad it is used on a lot on US coins and why I gravitate towards collecting ASEs, Gold Eagles, Morgans and more recently Half Eagles and Double Eagles as well as some late 1800s to early 1900's German coins which I also am adding to the collection (like the attached, and I have a bunch from the early 1900's).

On 7/22/2022 at 2:18 PM, GoldFinger1969 said:

... Second, you should read the "Roger Burdette Saints Book Thread" if not the book itself. ...

Sounds like you guys have quite the Double Eagle expert in your mists, and some earlier comments make more sense now.  Who would have thought ... ;-).  Good thing to know since I am interested in adding some Double Eagles to the collection eventually.

I have bought a bunch of gold bullion as well as gold ETFs as an investment and hedge over the years, so I am familiar with spot prices, price spreads or bid/ask prices, order boards, pivot points, and volume discounts for gold.  But getting into buying gold coins (other than bullion coins) is a newer endeavor for me, where my experience with bullion seems to only be partially related to gold coins that are mostly of numismatic value.  So, I have been looking into prices, availability, auctions like at HA and GC, etc. and it just seems like prices are over inflated right now, and why I decided to post the topic.

Thanks for the help and insight guys.

German 1880 Eagle.jpg

Edited by EagleRJO
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On 7/22/2022 at 3:20 PM, EagleRJO said:

So, I have been looking into prices, availability, auctions like at HA and GC, etc. and it just seems like prices are over inflated right now, and why I decided to post the topic.

Well, when gold was knocking on $1,900 I didn't see any outrageous prices.  They have remained sticky to the upside as gold fell almost $200 in a few months so maybe that is what you are seeing.

It will depend on the specific coin grade and year/mint you seek.  But for generic commons in MS-65 and MS-66 which I track pretty closely, I detect no unwarranted price spikes in the last year or so.

Keep in mind all that stimulus money and stay-at-home-activity led to people getting into our little neighborhood so demand HAS increased.

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The premiums over spot price for the half eagle to my knowledge is not low, unless maybe it's for a low grade Coronet common date, VF or XF.

I'm not aware the Indian Head eagle has a low premium at all.  It's not a series I follow but I don't recall the premiums over spot being low when I have checked.

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On 7/22/2022 at 1:41 PM, RWB said:

The markup over spot might be similar, but the total cost is much greater at present due to the absurdly speculative price of gold.

Gold is relatively historically overpriced, versus most physical goods and maybe many services.

It's entirely a psychological premium, due to the perpetual debasement of your beloved fiat currency and mismanagement of the financial system.

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Gold is very expensive when compared to the past eight years or so, see the chart

image.thumb.png.0d505cd289d4c6a2adc852d86af48c92.png

Since the China flu boondoggle it has seen a significant rise, slight pull back, another spike and now a slight pull back.   This is the irrational "run to safety" that some people choose in light of the economic and social events of the past two years.   So any dealers and collectors who bought during the two spikes that want to sell now are not likely to discount because they bought at the peaks and will hold (if possible) until the right buyer is found or they are under a financial pinch and have to sell.   That is why you are not very likely to find a "deal" on gold coins regardless of if those coins have any numismatic premium or not.

Now the big question is will our dictator continue to spend like a drunken sailor and continue to push inflation unabated as we have seen this year.   Or will smarter head prevail and provide solid financial guidance to curb the hyper inflation.   If you can answer that question, you will then know if now is the time to buy or the time to wait.

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On 7/22/2022 at 3:52 PM, GoldFinger1969 said:

Well, when gold was knocking on $1,900 I didn't see any outrageous prices.  They have remained sticky to the upside as gold fell almost $200 in a few months so maybe that is what you are seeing. ...

It's more like a $325/oz swing for me, up and then completely back down again, after getting a bunch of gold bullion as well as some gold coins in early April 2021 where it looked like a low pivot with spot at around $1,725/oz, up to $2,050/oz in early March 2022 (I knew I should have sold then, darn ... lol), and now back down to around $1,725/oz again.  Thanks Putin ... lol.

So that's a $325/oz or 16% drop of bullion just in the last 4 months, but I haven't seen the same drop in some gold coins I was watching, like a 1910 $20 gold double eagle and now more recently the $5 gold half eagle.  It seems like they have come down a little, but nowhere near the drop in bullion.  And still with a significant premium over spot like Colonial was saying.

On 7/22/2022 at 3:52 PM, GoldFinger1969 said:

... It will depend on the specific coin grade and year/mint you seek.  But for generic commons in MS-65 and MS-66 which I track pretty closely, I detect no unwarranted price spikes in the last year or so. ...

Same for the XF/AU coins, which are more of the "in-your-hand" style for me.  You might be right about all that extra money floating around, combined with the market tanking and people maybe looking for more tangible alternatives.  So, it looks like I am going to just be patient and see where the prices go over the coming months.

Gold Spot Price July 2020 to July 2022.jpg

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On 7/22/2022 at 5:12 PM, World Colonial said:

Gold is relatively historically overpriced, versus most physical goods and maybe many services.

Curious....where do you think gold should trade if it headed to "fair value" ?

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On 7/22/2022 at 7:50 PM, Coinbuf said:

Gold is very expensive when compared to the past eight years or so, see the chart

You can't go by the absolute price and compare over a set period of time.  Gold has made moves of 100-300% excluding the 1970's (which I consider an outlier).  A move of 50% over 6 years and reaching highs achieved over a decade earlier does NOT strike me as excessive, a bubble, or overvalued.   I suspect moving averages would confirm this.

On 7/22/2022 at 7:50 PM, Coinbuf said:

Since the China flu boondoggle it has seen a significant rise, slight pull back, another spike and now a slight pull back.   This is the irrational "run to safety" that some people choose in light of the economic and social events of the past two years.   So any dealers and collectors who bought during the two spikes that want to sell now are not likely to discount because they bought at the peaks and will hold (if possible) until the right buyer is found or they are under a financial pinch and have to sell.   That is why you are not very likely to find a "deal" on gold coins regardless of if those coins have any numismatic premium or not.  Now the big question is will our dictator continue to spend like a drunken sailor and continue to push inflation unabated as we have seen this year.   Or will smarter head prevail and provide solid financial guidance to curb the hyper inflation.   If you can answer that question, you will then know if now is the time to buy or the time to wait.

Compared to the move in certain financial assets and crypto, I think gold is dirt-cheap in the aggregate.  It's gone nowhere for a decade.  It's up 50% in 6 years and now down 10-15% in a few months.

I'm not one of those gold bugs you see on YouTube, but I think buying A POSITION here is OK.  By all means, be prepared to buy more another 5-7% lower and then 15-20% lower if alot of things go wrong for gold fundamentals (I don't think they will).

As I've said before....I don't know where the next $200 move is in gold, up or down...but I am sure the next $1,000 move is UP.

Edited by GoldFinger1969
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On 7/22/2022 at 7:53 PM, EagleRJO said:

It's more like a $325/oz swing for me, up and then completely back down again, after getting a bunch of gold bullion as well as some gold coins in early April 2021 where it looked like a low pivot with spot at around $1,725/oz, up to $2,050/oz in early March 2022 (I knew I should have sold then, darn ... lol), and now back down to around $1,725/oz again.  Thanks Putin ... lol.  So that's a $325/oz or 16% drop of bullion just in the last 4 months, but I haven't seen the same drop in some gold coins I was watching, like a 1910 $20 gold double eagle and now more recently the $5 gold half eagle.  It seems like they have come down a little, but nowhere near the drop in bullion.  And still with a significant premium over spot like Colonial was saying.  Same for the XF/AU coins, which are more of the "in-your-hand" style for me.  You might be right about all that extra money floating around, combined with the market tanking and people maybe looking for more tangible alternatives.  So, it looks like I am going to just be patient and see where the prices go over the coming months.

Sorry for you loss, you can subscribe to my forthcoming newsletter and hotline service.  xD

Prices are sticky on the downside, that's no secret.  But it takes a few months, if not a year or so before lower gold bullion prices impact gold numismatics tied to the spot price.

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On 7/22/2022 at 7:53 PM, EagleRJO said:

Gold Spot Price July 2020 to July 2022.jpg

That's a very steep drop in the gold price the last 3 months, basically equal to the late-2021 drop but in half the time.

I don't know if Russia/Putin dumped Central Bank reserves or what.  Financial assets were weak for the most part, crypto got blasted....so no idea what happened with gold.

But remember:  a bear market wants to WEAR OUT THE LONGS before making a sustained move upward.  A big decline or an annoying trading range with what appears to be unbreakable tops is not unusual.  When we have people here asking if $3,000 is the top and are the predictions of $4,000 and $5,000 gold reasonable....THEN it'll be time to dump if you're a trader. (thumbsu

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On 7/22/2022 at 9:16 PM, GoldFinger1969 said:

Sorry for you loss, you can subscribe to my forthcoming newsletter and hotline service.  xD

Not a big deal because even with the massive drop I'm at a break even less the spread.  I did end up buying at a relative low point not much above spot and didn't sell earlier this year, even though prices were dropping, because I didn't like the alternatives and decided to hold it for the near term.  I probably will end up buying some more bullion, instead of some coins, if it looks like there is another well-defined bottom pivot I can identify.  I just feel sorry for people who bought earlier this year near the high and can't hold it till it recovers.

[Plus, I still have a bunch from a previous buy at what turned out to be another low pivot point in March of 2020 at about $1,475/oz where I am still up vs the current spot at about $1,725/oz.  As long as Russia doesn't screw things up to badly as one of the top producers of gold in the world, I think there will be a pretty quick rebound.]

On 7/22/2022 at 9:16 PM, GoldFinger1969 said:

Prices are sticky on the downside, that's no secret. ...

I hear you.  Seems particularly true with the gold coins I am looking at, with more numismatic value well above spot even for the more common XF/AU grades.

00 Gold Spot Price Jan 2017 to July 2022.jpg

Edited by EagleRJO
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If I see a 1909-D or 1913-S $20 Saint-Gaudens Gold Double Eagle AU coin (with the lower mintages) going for about what others in the 1909 thru 1916 range are going for does that mean either: (1) the others are overpriced; (2) there may be an issue with those coins (cleaned, not AU, etc.); or (3) it might be a good deal to scoop up.  I'm not sure if the lower mintages are that significant in terms of collectability or if there may be other factors in play.

Also, is it redundant referring to them as both "$20" coins in addition to "Double Eagles" like above as that essentially means the same thing?

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On 7/23/2022 at 12:30 AM, EagleRJO said:

If I see a 1909-D or 1913-S $20 Saint-Gaudens Gold Double Eagle AU coin (with the lower mintages) going for about what others in the 1909 thru 1916 range are going for does that mean either: (1) the others are overpriced; (2) there may be an issue with those coins (cleaned, not AU, etc.); or (3) it might be a good deal to scoop up.  I'm not sure if the lower mintages are that significant in terms of collectability or if there may be other factors in play.

If you click on the price for a 1909-D you will see the price has fallen (?) almost $700 in a couple of months.  The price was flat going back years at about $2,700 or so.  It's always possible existing supply hit dealers and caused a larger price drop though this is rare.  It's also possible that hoards from Europe or other areas are coming back also increasing supply.

As for the relative prices....it's always dangerous to compare 2 different years when the grades and scarcity value differ.  An AU-58 1924 should trade at bullion price as should a 1927 AU-58.  I'm not entirely sure what you are asking with your 3 choices....but if different coins in different grade conditions (or even the same graded condition) traded at similar prices (bullion or 25% over bullion, doesn't matter).....and then one rises in price....unless there's a reason for the divergence (increased demand or increased supply)....yeah, this could be a trading opportunity.  But I'm not sure they happen that often to the extent it would be profitable to look for this.  And if it did, you'd want to know about the demand/supply variables.

If 2 coins in MS-65 trade at bullion+25% and then one suddenly cheapens, could mean a bunch of existing coins hit the market all at once...OR....new supply hit from overseas or domestic hoards previously unknown.  This happened to the MCMVII High Relief a few years ago as European hoards trickled in.

Also, the mintages are IRRELEVANT....it's the SURVIVORSHIP that matters.  As for cleaned coins, they don't matter at the grade level where the coins trade like 1 ounce (or 0.9675 ounces) of gold.

On 7/23/2022 at 12:30 AM, EagleRJO said:

Also, is it redundant referring to them as both "$20" coins in addition to "Double Eagles" like above as that essentially means the same thing?

Semantics, whatever you are comfortable with.  Most people don't know that an Eagle meant $10 and a Double Eagle meant $20.

 

Edited by GoldFinger1969
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On 7/23/2022 at 1:17 AM, GoldFinger1969 said:

If you click on the price for a 1909-D you will see the price has fallen (?) almost $700 in a couple of months. ....

Interesting that only the AU-58 grade for a 1909-D Double Eagle dropped about $700 recently, including a $525 drop over 5 days at the end of March earlier this year, while all the other grades (including AU-55 and MS-60) for that year/mint, as well as other years/mints around that time, were either mostly flat or had a drop of about $100 from the beginning of the year.  I wonder if anyone on the forum knows why that happened, with a wag being that a bunch of AU-58 were submitted/graded around then.

I understand there are many factors that can affect the price of a coin, so I guess my last question was really an oversimplification of a very complex issue.  In any event I have been looking at lower grades like XF-45 or AU-50 which are a little less expensive but still look really good, at least to me, and are commonly available raw which I prefer.  A $100 difference, or roughly a 5% drop in price for a common double eagle, doesn't correlate with a 16% drop in gold bullion or very poor overall market conditions.  So, it's not looking like in a few months I will be kicking myself for not getting some of the gold coins I like when the price of gold was way down.

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On 7/22/2022 at 6:13 PM, GoldFinger1969 said:

You can't go by the absolute price and compare over a set period of time.

Of course you can, and I stand by what I said, gold is very expensive compared to any time in its history.   Here is a 100 yr chart of gold prices, you can make all the excuses you want but gold has never cost as much as it does now.   As this longer look shows gold (taking out the 80's bubble) was on an upward but flatter and controlled climb until 2006ish.   Since then the price of gold has shot much higher in a very short timeframe when compared to its long history.

I am not looking at gold in relation to other asset classes, yes the cost of living has spiked in the same timeframe as the gold price runup, and that has more to do with the price than anything else.   Gold is finite but it is not rare, it costs more now to mine for gold which is the real driver of the higher price of gold than any other single factor.   Yes I agree that gold prices are more likely to increase vs decrease, however that is the result of our government continuing its assault on the people of the US and the resulting hyper inflation we are suffering, not because gold is cheap in relation to other asset classes.

 

gold.png

Edited by Coinbuf
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On 7/23/2022 at 9:58 AM, EagleRJO said:

Interesting that only the AU-58 grade for a 1909-D Double Eagle dropped about $700 recently, including a $525 drop over 5 days at the end of March earlier this year, while all the other grades (including AU-55 and MS-60) for that year/mint, as well as other years/mints around that time, were either mostly flat or had a drop of about $100 from the beginning of the year.  I wonder if anyone on the forum knows why that happened, with a wag being that a bunch of AU-58 were submitted/graded around then.

Well, I would NOT use the NGC or PCGS price graphs as accurate, thought I think for the most part they are in the ballpark.  The most recent pricing, which in this case shows a sizeable drop, is most likely to be off and you should check out HA/GC auctions.

On 7/23/2022 at 9:58 AM, EagleRJO said:

I understand there are many factors that can affect the price of a coin, so I guess my last question was really an oversimplification of a very complex issue.  In any event I have been looking at lower grades like XF-45 or AU-50 which are a little less expensive but still look really good, at least to me, and are commonly available raw which I prefer.  A $100 difference, or roughly a 5% drop in price for a common double eagle, doesn't correlate with a 16% drop in gold bullion or very poor overall market conditions.  So, it's not looking like in a few months I will be kicking myself for not getting some of the gold coins I like when the price of gold was way down.

For many Saints, you don't have to go down that low in grade to buy one that is available for spot gold, maybe with a modest premium.  Why spend $1,730 now for an XF or AU coin when for a few hundred more you can buy an MS nice-looking one ?  Of course, if a particular year is more scarce, then of course you may have to drop in grades.  Do you plan on getting only 1 or 2 of the coins or a decent amount over time ?

Remember, only Saints that trade as bullion should move 1-for-1 with the gold price.

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On 7/23/2022 at 11:02 AM, Coinbuf said:

Of course you can, and I stand by what I said, gold is very expensive compared to any time in its history.   Here is a 100 yr chart of gold prices, you can make all the excuses you want but gold has never cost as much as it does now.   As this longer look shows gold (taking out the 80's bubble) was on an upward but flatter and controlled climb until 2006ish.   Since then the price of gold has shot much higher in a very short timeframe when compared to its long history.

I am not looking at gold in relation to other asset classes, yes the cost of living has spiked in the same timeframe as the gold price runup, and that has more to do with the price than anything else.   Gold is finite but it is not rare, it costs more now to mine for gold which is the real driver of the higher price of gold than any other single factor.   Yes I agree that gold prices are more likely to increase vs decrease, however that is the result of our government continuing its assault on the people of the US and the resulting hyper inflation we are suffering, not because gold is cheap in relation to other asset classes.

But the price was artificially suppressed for decades prior to 1973.  The "history" of the price is false, since government dictated it.

If gold was $800 in 1979-80...and even if you use a pre-bubble spike price of $500 -- it still is less than 4x higher after 42 years.  That's not 4% a year in appreciation, which I would hardly call the price today "expensive."  Global demand has increased as the number of middle-class people worldwide who can afford to buy gold every now and then has probably gone up by 1 billion people.

I don't think gold is dirt-cheap here or maybe even cheap.  Let's call it fairly-valued, neither expensive nor cheap.  As I have said before, I don't know where the next $300 move in gold is, but I am very sure that the next $1,000 is up.  (thumbsu

When we have newcomers join this site with 1 or 2 posts to this site, CB, and they are asking us if a common Saint for $3,200 might move up to $5,000 in a few years.....then you'll know it's time to take profits. xD

Edited by GoldFinger1969
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On 7/22/2022 at 8:48 PM, GoldFinger1969 said:

Curious....where do you think gold should trade if it headed to "fair value" ?

I'd have to compare it to other commodities and goods people buy, liked houses and cars.  The problem is getting access to the historical data.  It's cumbersome.

The last time I saw a chart of relative valuation versus other commodities, it was "significantly" overvalued but that's dated now.  It was very overvalued when commodities crashed into the 2020 low.  The relative overvaluation should be noticeably less since gold has underperformed against it recently.

I understand why gold has sold for this psychological premium, but it's still historically expensive.

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On 7/23/2022 at 12:29 PM, GoldFinger1969 said:

But the price was artificially suppressed for decades prior to 1973.  The "history" of the price is false, since government dictated it.

If gold was $800 in 1979-80...and even if you use a pre-bubble spike price of $500 -- it still is less than 4x higher after 42 years.  That's not 4% a year in appreciation, which I would hardly call the price today "expensive."  Global demand has increased as the number of middle-class people worldwide who can afford to buy gold every now and then has probably gone up by 1 billion people.

I don't think gold is dirt-cheap here or maybe even cheap.  Let's call it fairly-valued, neither expensive nor cheap.  As I have said before, I don't know where the next $300 move in gold is, but I am very sure that the next $1,000 is up.  (thumbsu

When we have newcomers join this site with 1 or 2 posts to this site, CB, and they are asking us if a common Saint for $3,200 might move up to $5,000 in a few years.....then you'll know it's time to take profits. xD

I'd ignore the price between 1933 and about 1970 for the reason you gave.

Some might ignore prior to 1933 because of the gold exchange standard but I think it's a relatively accurate indicator of "normal" relative prices, before government took over "management" of the economy and credit started inflating to the moon.

Nothing is absolutely overvalued or undervalued.  Something can only be relatively overvalued or undervalued versus something else or versus its past price.

I consider other commodities the best comparison.  There are caveats though that one like silver is no longer an equivalent monetary metal but it's still relatively "cheap".

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On 7/23/2022 at 1:58 PM, World Colonial said:

The last time I saw a chart of relative valuation versus other commodities, it was "significantly" overvalued but that's dated now.  It was very overvalued when commodities crashed into the 2020 low.  The relative overvaluation should be noticeably less since gold has underperformed against it recently.  I understand why gold has sold for this psychological premium, but it's still historically expensive.

Most other commodities -- metals, foodstuffs, energy/oil -- have DOUBLED in the last 12-18 months.  It's not gold which is expensive, it's the other stuff. (thumbsu

I don't know how you measure "relative valuation" but it's tough to do that for non-interest bearing, non-growing assets like commodities.  I can tell you that the NASDAQ is pricey relative to the non-tech S&P 500 based on historicals, but gold and other commodities are a different breed.  

Is gold expensive here relative to palladium ?  Oil ?  Natural gas ?  Farm land ?

I just don't see any overvaluation in gold.  Doesn't mean it can't go down in price, just means that being barely double the price 42 years ago and less than the price 10 years ago should count for something in the valuation metrics.

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