Have the Gold and Silver prices bottomed?

It has been a wild decline in both gold and silver prices over the past few months.   It looks like both have found some stabilization at these levels.   Although, we believe that prices have further to go down, we do see a small bounce here over the next couple of months.   Silver could climb back to $20 and gold $1300, but we believe the upside is very limited.  We are recommending to customers to take advantage of these higher prices to sell jewelry, coins and bullion.

We still believe $13 silver and $950 gold may be a longer term bottom.

Institutional Gold and Silver BETS are hugely short

It is not a secret in the industry that the big boys are betting that gold and silver go lower.   They are mostly to the short side.   For those who may not understand, when a financial firm makes a "SHORT" bet, they are of the belief that the price will go lower, and thus they will make money if it does.   If the price goes higher, they will lose money.  You may say to yourself, well if the big boys are of the belief that gold and silver prices go lower, then I should SELL now.   In most cases when everyone is leaning one way, you want to be a contrarian and go the other way.   The reason is that if most of the money is invested on the short side, then much of the selling pressure has already been consumed, and as the price starts to go higher, those same shorts need to BUY in order to limit their losses or cover their gains.  We are of the belief that any break below $1150 in gold will probably start us on a slide to $1000.   If gold can stabilize here, then we may start a new bull run.  Stay Tuned!



Is it a good time to sell gold or silver in CT?

Gold and silver prices have been in the mainstream media conversation for over 5 years now.  Most people never took notice (or cared) about gold and silver prices prior to the run up in prices.  In CT, we have many customers who don't want to sell their gold or silver at current prices because they are waiting for prices to go back up to $1800 for Gold and $45 for Silver.   What they are not understanding is that Gold and Silver are still at very high prices from a historical point of view.  Gold for many years traded at $300 and Silver at $4.   So it is a good time to sell gold or silver?  The old saying buy low, sell high is all you need to say to yourself.


Gold and Silver Prices going foward

No doubt Gold and Silver prices have recovered nicely from the lows posted of the last few months.  Needless to say many people took advantage of the increase in price and sold gold, silver jewelry, coins and bullion.  The million dollar question is can gold get back to the highs of roughly $1900 that were posted not to long ago.   I maintain that gold and silver prices will be in a tight trading range for the next year or so.   Of course, if a global event such as a war happens, all bets are off!   Right now, we are faced with a potential war with Syria, but gold prices seem to be stable.  The other catalyst that may drive gold higher is a sudden rise in interest rates.  Interest rates have been rising slowly, but the FED's announcement of a tapering of their "Quantitative Easing" programs may cause Gold and Silver prices to drop.

For now, we may have hit the short-term highs in Gold and Silver.   Any break above $1450 in gold may signal the start of a new uptrend.  Otherwise now may be a good time to sell gold or silver.



Why does Gold and Silver move Up and Down?

Many customers ask us what causes Gold and Silver to go down and up.   The answer is not very simple.   Gold and Silver are traded on the futures exchanges just like copper, rice and pork bellies.   On any given day, gold will trade within a 2% or more range.  The prices are correlated to a number of factors, and those correlations can change within a momemts time.  Since the economic crisis Gold and Silver have been somewhat correlated to the dollar.  As the dollar goes down, Gold and Silver (as well as the stock market) have been going up.   That correlation over the past couple of months has seem to been broken.   You will now notice that when Gold goes down the stock market is up and many times visa versa.   Gold seems to be acting the way it did for many years prior to the financial crisis.   That is not to say that this will last forever.  As stated before the correlations of gold and silver can change pretty quickly.  

So the million dollar question is, "will gold go higher".   Nobody can say with certainty.   You will notice for every expert predicting $5000 an ounce gold, there is one who is predicting $500 per ounce.  I believe Gold and Silver will be in a tight range between $1000 and $1400 for the next year or so.  After that, the economies around the world will dictate where it goes.

Why do U.S. coins have more collectible value than foreign coins?

Many customers wonder why their foreign coins are almost worthless.  Obviously, foreign coins with gold or silver content will at LEAST be worth the precious metal content.  The issue is with clad (or non precious metal) coins.  Even old foreign coins don't have much value, and the reason in that collectors are not really interested in them.  For the most part, US coins are the "GOLD STANDARD" in collectible coins.

Also, foreign countries were very inconsistent when placing silver in their coins, sometimes they would start the year off with 20% silver and end the year with 5%.  It is not easy for a collector to know which foreign coins contain what percent of silver. Collectors will usually bag up a pound of random foreign coins and sell them as a group for less than $10.

If you are starting a coin collection, stick to U.S. coins.