I have coins in both gold and platinum that I’m thinking about selling but as long as the price has stayed high, I haven’t been in any rush.
However I have been curious about the relative prices of gold and platinum. Historically, platinum has sold for up to a few hundred dollars per ounce more than gold but over the past few years, it has been just the opposite.
If I decide to sell now, should this be a concern or should I simply take advantage of the historically high prices of both?
I know that this is a request for advice, but since I’m looking for informed, factual advice, I’m putting it here. Please move if that was a bad call on my part.
There’s more to it. Since so many people have been un- or under-employed for several years now, probably a lot of former collectors have sold off their coins, keeping the prices down. I think this would offset the high price of bullion, possibly permanently. How many people have sold their collections when times were tough, and began collecting again when things improve? I’m thinking, not many.
The total value of the gold and platinum(and silver) coins in collections is miniscule in the world of precious metal prices. They don’t move the market.
What’s skewing your idea of the price of platinum being higher than that of gold has been influenced by the extreme price of platinum in the years 2003-2008, relative to the price of gold at that time. Platinum hit an all-time high of $2275. US in early March of 2008. Gold at that time was about $900. US.
Gold was moving up steadily based on demand from investors worired about uncertainty in the world. It’s only continued its climb, leveling off in the last two years.
Platinum, after hitting that high in early 2008, plunged by the end of 2008 to $800 US. The car industry consumes roughly half the platinum supply every year. The plunge in the auto industry accounted for much of the fall.
My assumption would be that the price of platinum won’t go much higher unless the demand side of the equation increases. Good luck with that in the short run.
I did sell off a few sets of gold coins when the prices were higher, which turned out to be a good move. And then regretted not selling more when the upward trend seemed to lose momentum. That turned out to be unfounded. But now with the stock market hitting new highs and people feeling it might be safe to invest in equities again, I’m wondering if PM prices might not again stagnate and drop.
Even with platinum, given the move to hybrid vehicles that require much less platinum for their catalytic converters, I have to wonder if even those prices are sustainable. Even if the need for such catalysts remains high, palladium is a perfectly adequate substitute at a 2-1 ratio. And unless one or both metals have some electrical use that would make them necessary to the new generation of cars in the same way as rare earths, I have to wonder about the long term viability of the present price levels.
Precious metals are a fluctuating and very speculative market, as you know. It’s basically a matter of how much risk you can accommodate, much like stocks. I bought 23 ounces of gold many years ago at about $265/oz and sold it at somewhere north of $600. I was happy with that, even though gold eventually took off for higher ground. I recently sold nearly all my gold and silver coin collection, which I bought at various prices over the years. Gold bullion coins that I bought for a few hundred dollars went for about $1500, and of course silver was way up, which meant that coins with little collector value still brought a decent price for silver content.
Basically, I’m just saying that you can’t look back. Profit is still profit, and regrets are pointless. I’d look at it as a matter of percentage of gain, rather than worrying if it’s going to go higher.
Very true. But there’s also the rainy day aspect of it. I don’t mean ‘rainy day’ in the doomsday prepper sense, just that I wouldn’t want to see such a precipitous fall in value that I could no longer count on it for that purpose - if that made any sense.
What I tell to anyone trying to time the market on anything ever is: Suppose I came up with a very good, sound, convincing reason why the price of {gold/platinum} is going to go {up/down} significantly in the next year, and it is such a good argument that everyone hearing it would think it is obvious that I am right and the price of gold will do what I say.
I have no special information about commodities markets, so if I made that argument, its a good bet that a lot of people know about it, and will already have made trades to take advantage of the compelling advice given in that argument. If the argument says {gold/platinum} will go up, they will have already bought until the current price is almost as high as the expected price in a year, and vice versa if the argument says it will go down.
That’s the way the market destroys all but the most useless advice – people take good advice until the shift in price from people taking it causes the advice to be no longer good.
If you’re worried about metals crashing and wiping out your value, you might want to buy some long-dated put options struck at something below current value. They should be relatively cheap now, but if the market crashes they will become valuable, and if the market doesn’t crash your coins will be valuable, so either way you have some valuable stuff.
Thanks leachim, but the scenario I have in mind will play out over a year or two. There is too much invested in the physical metals right now and still too much uncertainty in financial markets that there would be a wholesale selloff anytime soon - at least in my very humble opinion.
In addition to that, for things like gold, as long as there is global population growth, there will be growing global demand for things like gold jewelry which do influence the spot price. One must also consider the ever increasing costs associated with pulling the metal out of the ground and refining it not to mention finding new sources worth exploiting.
So my “disaster” scenario is really one where gold is completely abandoned as an investment vehicle or hedge. My personal feeling on this is that now is probably the right time to move a good chunk of my remaining collection since I think the reticence people have shown toward financial types of investments is gradually waning and that nascent inflation encouraged by an ongoing program of monetary easing may soon blossom into the mid to high single digits. While this will this is the archetypal argument favoring gold, I think it will favor things like equities and real estate more.
I just looked at this morning’s future’s charts, something I haven’t done in a while and saw something I didn’t think I see again for years - platinum beating out gold by a fairly convincing $40 margin. Since the link is real time, the current price is almost $1700 for platinum and about $1660 for gold. Still both crazy numbers imho, but interesting.