Will Gold Shoot to New Records?

By David L. Ganz, Numismatic News April 20, 2010

Gold charged forward, hitting $1,161 a troy ounce on April 12, suggesting perhaps the beginning of an assault on the $1,200 an ounce mark achieved last December.

The Dow Jones Industrial average was 10,452 on Dec. 1 when gold hit $1,214.80 on Kitco’s close; today the Dow is above 11,000. What about gold?

Each time that gold ticks upward, the numismatic consequences are enormous. That’s because double eagles are such a significant component of the rare coin market, and each contains almost a full ounce of gold. The U.S. $20 gold piece, which was produced in circulating quantities from 1850-1932, contains .9675 troy ounces of gold.

At $1,150 an ounce, the current base camp before assault on the golden peak, an uncirculated double eagle has a starting point, before numismatic value, of about $1,112 in gold. Some market analysis say that this makes MS-60 and MS-61 double eagles a great purchase opportunity.

Gold’s movement over the past 12 months has also seen its effect on gold bullion coins. The Engelhard gold quote at $1,161 was $898 a year ago. The Krugerrand and Canadian Maple Leaf have gone from $940 to $1,209. Coming up next is the American Eagle, moving in the same year period from $949 to $1,214. The U.S. Eagle gain is 27.9 percent. Slightly higher at 28.6 percent are the Krugerrand and Maple Leaf.

Meanwhile, silver is at $18.47 (up from $12.74 a year ago); platinum was $1,243 and is now $1,728. The silver gain is over 44 percent, platinum a bit less.