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Demand for silver and the price of gold in 2010 PDF Print E-mail

Anyone who watches the precious metals charts or who buys gold and silver will have noticed that their spot prices move in tandem, even though gold is much more valuable. In other words if gold is moving up or down, so will silver, so that the daily and weekly and monthly charts will look similar, even though the scales are wildly different. So silver reflected gold's recent $25 drop on the charts, even though it only dropped by 40 cents, as gold is worth $1126.70 an ounce and silver is worth about $18.20 an ounce currently.

Why would this matter to a collector of gold bullion coins? Some commentators are predicting that demand for (and the price of) silver will increase substantially this year, as manufacturers who use it in their products start to replenish their stocks after years of cost cutting. Many leading edge technologies predicted to grow in the future such as hybrid car batteries require the use of silver. Full article here.

The usual caveat: no one really knows where the price of gold will go this year, though it does no harm to follow the more informed predictions.

Non destructive gold testing PDF Print E-mail

Collectors who buy gold coins often worry about purchasing fake gold coins (or fake gold jewelry) instead of the real thing, especially in face to face purchasing situations. This is clear from the number of people who search for answers to questions like "How do I tell fake gold from real gold?"

There are ways of testing gold - a traditional one has been to use an acid testing kit, which involves using a scrape or sample of the gold coin, which is obviously not good for the coin!

There are many non-destructive electronic gold testers on the market now, some of which are portable, and which you could carry with you to markets or estate sales if you have concerns about being sold a fake coin. Many if these testers are listed here, though there are many other places online which also sell them.

The gold content of American gold coins PDF Print E-mail

A poster on the Coin Collector's Blog has just answered a very common question - what is the actual gold content of all the various American gold coins issued through history?

You may know that the actual gold content of currency gold coins was never 100%, and that the coins were alloyed with silver and copper so that they would not wear so quickly, as pure gold is very soft. 

The actual gold content varies of currency gold coins from 0.8892 to 0.9000 to 0.9167, while the modern bullion gold eagles are 0.9167 and the gold buffalo is 0.9999.

If you want to know the actual composition of the coins from different eras, see here.


$3000 gold and 'stagflation' PDF Print E-mail

I've often commented here that collectors of gold coins should be interested in the spot price of gold, as it determines the base value of their collections; and also that predictions of the future movements in the price of gold, whether up or down, are to be viewed with caution.

This is because many of the factors that determine how the price of gold moves are simply unpredictable: government decisions (particularly in more closed societies with some economic power and big gold reserves), new gold discoveries, gold extraction technology improvements, natural disasters, market or investor panics, and so on.

However, one of the constant themes of gold and precious metal commentators is the concept of 'stagflation' - an economic event which can last for years which combines inflation and economic stagnation. One of the causes of this dire situation is thought to be excessive growth in the money supply. Does this ring any bells?

One respected commentator has written about this very subject in his predictions for 2010, and believes that in the short term (this year) gold will go to $1500 an ounce, and in the long term to $3000 an ounce. Within his article is a warning though that there will be many ups and downs in the price along the way.

But again, since gold coin collectors like us are (or should be) in this game for the long haul, it all looks bright. If you like to believe predictions...

Coin grading and the 70-point grading scale PDF Print E-mail

If you are new to coin grading, here is a 'made simple' guide to how the coin grading scale works.

Also, if you want to try grading your own coins yourself, there is a very clear explanation of how to go about this.

The explanation of how there are really only three 'buckets' to put coins in initially was helpful to me. The critical consideration of course, when grading a coin, is to be able to accurately assess how much wear a coin has had, assuming the coin was perfectly minted to begin with. 

When you have accurately graded your numismatic coin, then you can begin to be able to assess its market value: but that is another story.


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