Weekly Market Report: Gold Nears Seven-Year High; MS64 and MS65 Gold Coins Soar Once More

Gold is once again the main story as the glittering metal flirted with seven-year highs today [February 4], spiking to $380 an ounce before falling back slightly. While the dollar was falling against major currencies gold soared $11.25 an ounce in Hong Kong overnight, hitting its highest mark since November of 1996.

Time magazine once published an article stating that gold is "shockproof." That is no longer true, as the threats of war are believed to be the principal impetus behind the quickly rising prices. Meanwhile, the spillover from bullion to generic and rare gold coins is torrential throughout the rare coin industry.

"Selling as fast as they can get them."

"Every major dealer seems to be selling gold coins as fast as they can them," says Marc Crane of Marc One Numismatics in Newport Beach, California. "There is demand for all kinds of gold, with $20 pieces leading the way."

Is there still a supply problem? "The lack of supply is absolutely scary at times. It's like the coins have vaporized. I do not know where all the coins have gone. Fortunately, there are a few people who don't believe in this market and they'll sell coins when they get them. For the most part, though, it's a matter of buying a coin here and a coin there."

What increases in price have been seen since gold took off? "It's amazing," Crane answered. "Since about December 15th $20 Libs in MS64 have gone from $700 to $1,200 and in MS65 from $1,700 to $3,000. MS64 Saints have climbed from $500 to $675 and MS65 pieces from $725 to $1,150. The best deals are still the MS66 Saints. They've only risen 15% during this time. They're definitely the best place to take a position."

Marc, can you look into your crystal ball and tell us what's going to happen? "I think $400 gold is a major threshold. If we surpass that and then have a war, gold will go to $500 instantly. That's not based on any charts or technical analysis. It's just my opinion."

Ouch! Smashed my feeder finger!

There's a new Mint error discovery to report, courtesy of Fred Weinberg of Encino, California. It seems that the errors that have appeared since 1996 that were designated as "Struck on aluminum scrap" are in fact struck on the feeder fingers from the new Schuler presses.

"I was taking a tour of the Philadelphia Mint with a couple of other coin dealers and we discovered a 2002 Indiana quarter struck in aluminum sitting on top of a scrap box. While we weren't allowed to touch the coin we also saw some tips of the feeder fingers and noticed that they were the same shape as the coins. We were able to discern for certain that this was the source of the aluminum and the reason for the errors."

How many coins are there in existence from this source? "There's nothing new coming out due to the new security measures, but it appears that there are about 35 coins total minted through 2001 from these tips. That includes nickels, dimes, Statehood quarters and even a couple of Sacagawea dollars," Weinberg said.

Is it really true that there's no supply of 2002 errors? "I have seen less than six pieces on eBay for all my searching. When the people in the counting rooms hear the big prices that the errors are bringing maybe a few new pieces will come out."