Coins As A Commodity

Coins As A Commodity
A recent business headline stated: "Gold slides two percent on China return, round in stocks." The current reality is that coins, precious metals commodities, and oil are moving in tandem in the direct opposite direction of the stock market.

The substantial surge in precious metals and oil recently has correlated to better prices for most bullion and collectible U.S. coins. Unfortunately these moves are likely to be only momentary moves in a continuing volatile market that we are continuing to experience.

Should the price of oil once more decline, it is almost predictable other commodities, including coins, will follow suit. You may be shaking you head at the idea of coins being a commodity. Collectible coins are not always a commodity, but in the current market, they are acting as such.

True rarities continue to be a mixed bag of results, with some pulling away from this situation, while others follow the markets. There is no question that the bullion and generic gold and silver collectible coins continue in parallel market to traditional commodities.

Can coins break out of this mold? They have surged on their own in the past, but only when there are sufficient buyers. Right now this is simply not the case at all. The recent spike in the price of precious metals at the expense of stocks, was refreshing in a way.

But the chances that gold, silver, and collectible coins are going to climb in value independently of what goes on with the stock market and the oil markets is unlikely at the moment.

You must understand that coins are not passé as a collectible hobby, or as an investment, but the demand at the moment is failing to outstrip the supply of average collectible as well as some of the better rare coins. In other words, the coin market continues to be spotty.

Of course what is lesser known is how much the silver commodity has been manipulated over the years. At any given time there are more outstanding contracts for silver than there is a physical supply of silver to fulfill the contracts. If the day comes that too many of the holders of these contracts actually pushed to have the physical silver delivered, the silver commodity market is going to crash big time.

One only has to really research how the Hunt Brothers actually demanded that the silver contracts that they bought be fulfilled with the physical commodity, instead of simply playing the shell game or rolling over their contracts.

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