Why Lower Gold Prices Shouldn’t Get You Down

By Joshua McMorrow-Hernandez, Editor

Gold prices have been trending downward lately amid a strengthening US dollar and the ongoing threat of tariff wars. Meanwhile, many coin dealers, collectors, and bullion investors are antsy about gold hovering around the $1,200 mark for so long. It flirted with $1,175 in mid August and many industry analysts have suggested in recent weeks the yellow metal could even dip below the $1,000 mark if current conditions persist.

What a contrast to the bullion situation back in the spring, when gold was bouncing above $1,350 and some market luminaries predicted gold would hit $1,600 – even $1,800 – before the end of the year. How things have changed… Of course, anything is possible and we at CDN Publishing don’t have a crystal ball and are only reporting what we see happening; nobody can reliably predict the price of gold later today, tomorrow, next week, next month, or next year. But at this point, it’s time to start looking at the bright side of lower gold prices. And, yes, there is – pardon the pun – a silver lining to lower gold prices.

Here are just three reasons softening gold prices aren’t necessarily a bad thing:

• Pre-1933 gold coins are becoming more affordable – Have you seen what’s been happening to pre-1933 gold coin prices lately? If not, you may be in for a pleasant surprise. Premiums for generic pre-1933 gold coins have virtually evaporated, and many circulated and low-end uncirculated common pre-33 gold coins can be bought for nearly their bullion spot price. This means you’ve got the opportunity to buy classic collectible gold coins at relatively low prices.
• You can acquire more gold for less money – It’s a simple math equation that some people forget when commodity prices fall. But, just as lower stock prices afford investors the chance to buy more shares without necessarily spending more money, so, too, do lower gold prices offer the chance to stock up on more gold coins. When gold prices eventually do trend upward again, you’ll be glad you stocked up.
• Lower gold prices may trigger new market activity – Imagine what would happen if major coin dealers could start advertising common Saint-Gaudens $20 doubles eagles for $999 again on TV, in magazines and newspapers, and online. It would trigger widespread buying of the likes our hobby hasn’t seen in years. And this, in turn, could help increase participation in the hobby and, potentially, push up premiums on collectible gold coins. Seems like a win-win scenario.

So, gold prices going lower doesn’t have to be a bad thing. It’s all about perspective. If you take advantage of the buying opportunities that dipping bullion prices offer and are willing to hold your gold coins for the long haul, at the end of the day you just may end up striking gold.