Jim Bisognani: Gold is Riding High

Now, as I type away this Wednesday afternoon, spot gold has designs on breaking through $3,050! There is even a new Utah law that passed the state legislature on Tuesday, which allows state vendors to be paid in gold and silver. The bill, HB 306, is just waiting for Governor Spencer Cox's signature... What a ride!

Breaking down the numbers

I fondly recall getting my first British and Australian gold sovereigns for between $12.50 and $15 each back in 1972, when spot gold was around $50. Back then, the minimum US wage was about $2 per hour. So, in those glory days, a minimum wage worker would have had to work about three days (25 hours) to facilitate the acquisition of one ounce of gold.

Flash forward to 2025, with gold spot trading at $3,045 per ounce. Though many states still adhere to the unrealistic minimum wage of $7.25 per hour (which, for the record, would mean that the minimum wage worker of 2025 — before taxes — would need to put in a whopping 10.5 weeks of work in exchange for one ounce of gold spot), the District of Columbia offers $17.50 per hour minimum wage, so I'll be using that for this exercise.

At $17.50 per hour, this would mean a minimum wage worker in the government's seat (Washington, D.C.) would have to labor for 174 hours for one ounce of gold. That's 21.75 days, or 4.35 weeks. Even my gold sovereign with AGW of 0.2355 at melt value would fetch $717, or equal to just about one full week's work.

Should your 401(k) give way to gold 3K?

Of course, for those who can afford collecting and investing, the premiums have never been lower and — in some cases — nonexistent for many slightly better-dated US gold coins. Yes, my friends, in actual numbers, gold coins are definitely out of reach for the average US citizen. For those feeling shut out (and there are many), there is still the great white hope: silver.

Now, as silver has broken $34 per ounce, in its relationship to gold, it still appears to be a sleeping giant of opportunity. To me, silver is the most affordable and desirable model for a multitude of coindexters. "Junk" 90% silver, US Silver Eagles and Morgan Dollars are prime options. Also, be sure and scan the multitude of world silver coins by assessing their ASW info given on the NGC World Coin Price Guide.

Still, for all the hoopla, there is concern by many collectors, dealers and market pundits as to just what the worldwide ramifications are to all this. When that first domino falls, most assuredly there will be others standing in line.

One well-known numismatic source voiced their concerns to me: "Gold breaking $3,000 speaks to the uncertainty of American democracy under the current administration and is costing in the coming international backlash against American foreign and trade policies. The average collector has more to worry about than coins."

With all this in mind, I decided to reach out to a panel of numismatic experts and notables to get their take on this historic run-up.

Interviewing Numismatic Experts About Gold Spot

What was your first reaction when gold spot broke $3,000?

Bob Green

Well, it's about time! I've read market commentary for five or more years calling for $3,000 gold from top investment firms. I'm not surprised at all. Next stop, $5,000?

Jeff Garrett

Gold has been drifting upwards for several months and I'm not surprised that the $3,000 barrier was broken. Investors hate uncertainty, and there is a lot of that going around these days. Gold has been a monetary safe haven for over 2,000 years.

Kevin Lipton

I was surprised it took so long to get there!

Michael Contursi

My first reaction was that this is an exciting milestone for tangible assets! The new record for gold shows that consumer, institutional and government demand are strong, as they hedge against economic and geopolitical uncertainty. This should have a spillover effect to other real assets, such as rare coins.

Ian Russell

Whether gold is $2,999 or $3,001 should really not make that much of a difference. But in reality — psychologically — those extra two dollars really make a difference. It means it's on the news around the world, which breeds more interest and puts it in everyone's mind.

James Sibley

I believe gold's price is symbolic of all the instability in the world — the many changes being made by the Trump administration (whether you agree or disagree, it's still unsettling), the existing and threatened "hot" wars (Ukraine, the Middle East, China's preparations to invade Taiwan, concerns over Iran's nuclear capabilities...), the decline in the value of the dollar, just to name a few disruptions. Not to mention the fear that inflation generates. Folks are anxious, so much that they are willing to forego a minimum $150 per ounce of annual return (assuming a 5% CD or bond) to hold an asset which pays them nothing other than the ability to sleep a bit better at night. In short, I wasn't surprised.

Chris B.

It's about time — some rudimentary trajectory on the charts looks like $3,200 is the next stop. Of course, this is for entertainment purposes only.

Jeff Kierstead

My first reaction is that it's great for all the people I know who own gold. My second reaction is: Who's going to be able to collect gold coins? I'm thinking that there's going to be a whole lot of melting going on!

John Brush

I thought, "this will be interesting." It certainly brings out lots of new buyers who think they should own some gold. For some reason, collectors always buy when it jumps. In the past, I've always thought that this is when they should really consider selling.

Jim Stoutjesdyk

I wasn't surprised to see spot gold break the $3,000 barrier. Gold has been on a pretty steady trajectory upward from when it was around $2,000 an ounce in February 2024 until it recently broke the monumental $3,000 barrier. There are many factors propelling the price of gold — economic uncertainty, the wars in Ukraine and Israel, tension and terrorism in the Middle East and the rising and seemingly uncontrollable US debt, which ultimately leads to a decline in the value of the dollar. I was excited to see gold price rising over $3,000. Historically, the rare coin market tends to do well when the price of gold is rising, and now is no exception.

What does this mean for the average collector? Will there be any ramifications in the coin market as a whole?

James Sibley

I don't think it's a positive. With the exception of those few, super-rich collectors who can battle over a million-dollar coin, I'm guessing that the vast majority of today's coin collectors (perhaps 90% or more) have a beer budget for new coins. I believe it's natural to start to lose interest in something which you may no longer identify with, at least to the same extent as you did when you could occasionally find a Double Eagle to add to your collection. And post-COVID inflation has made everything more expensive, particularly nice coins; if you assume that the majority of today's collectors are retirees pursuing their own childhood hobby, people who are living on a fixed income, what conclusions would you draw? No, I don't think $3,000 gold is a positive for our hobby / business.

Chris B.

Well, perhaps the "Gold Coin Club" has gotten just that; more exclusive and elusive. But perhaps average income will catch up with the inflation in the coin market. I will say that collecting gold and silver coins has not really been the hobby of the poor — it is a hobby of the "affluent" or of the "lucky to have started at least 50 years ago," or one of those who have just started by inheriting a nice collection.

Jeff Garrett

The price increase above $3,000 makes many gold coins unaffordable. The retail market for modern mint products has been getting crushed as a result. On the other hand, sellers are very happy.

Kevin Lipton

As gold ran up, premiums shrank as there was less retail demand. The last two weeks have seen a dramatic uptick in our business due to consumer uncertainty. As I always preach to the world, retail demand affects the premium on gold products, not the spot price of gold!

Bob Green

The moderate common-date gold collector will need to pay more from the gold content, but premiums are very low so it makes sense. The market as a whole will come to terms with the new levels, and perhaps those who have been on the sidelines will jump in, which will increase demand.

Michael Contursi

It's hard to predict whether gold bullion prices will continue to increase or fall back to historical levels. The same can be said for more generic or semi-rare coins. In any case, many collectors are bullish and continue to drive considerable demand, while others are re-balancing bullion holdings and diversifying with rare collectibles where they can make strategic acquisitions at less than market value.

Ian Russell

For coins, it's great. It lifts all interest in coins. Of course, those with high intrinsic value may go up dollar for dollar, but even a rare-date $20 Liberty or Saint-Gaudens might be just that little bit stronger, as there's more interest in numismatics.

John Brush

The coin market has returned a good bit of strength since the ANA show in February. Coins are selling and collectors are buying. I generally think that the rise in metals doesn't affect most collectors financially, but it definitely gets them excited.

Jim Stoutjesdyk

Five years ago, the spot price of gold was around $1,475. So today, the average collector is paying double what it cost five years ago to buy coins for a gold type set or buy bullion coins for investment. For dealers, buying a few dozen one-ounce gold bullion coins from their clients can now easily tie up $50,000 to $100,000 or more. Dealers are experiencing cash flow problems as they try to quickly sell the bullion that they've purchased, knowing that their clients will steadily be bringing more into their coin shop to sell.

Any other commentary regarding gold and silver?

Ian Russell

For strict bullion — as new records are set, it will routinely bring out new buyers, which is another interesting aspect. The idea of buying when out of popularity is largely ignored. It's only when new records are being set that more people are interested.

Michael Contursi

Many people previously worried that cryptocurrencies would negatively impact the precious metals market. However, we are seeing increased interest and demand in both markets, with many crypto buyers finding their way to owning tangible and real assets such as gold, silver and rare coins for their portfolios. Some are even making such purchases using their cryptocurrencies!

Jim Stoutjesdyk

The strong price of gold has really killed the premium on generic raw and slabbed vintage US gold coins. As of writing, Heritage is paying slightly less than melt for raw $10 Liberties, $10 Indians, $20 Liberties and $20 Saint-Gaudens and selling them for 1 to 1.5% over melt. Just recently, we offered a special on spotted slabbed MS 64 Saints at only half a percent over melt! As a side note, the price of silver really seems to be lagging. I would expect silver to easily be $40 to $50 an ounce right now, so I predict that a surge in the price of silver should be coming.

Jeff Garrett

Gold prices are a reflection of the value of paper currencies. Every country has made promises to their citizens that will be hard to keep. Printing too much money will have consequences, and gold reaching $3,000 is one of them.

Bob Green

As a newsletter editor for the company over the past several decades, I've continued to recommend buying or adding more gold and silver to portfolios. It has paid off handsomely for our clients. My "buy" recommendation stands!

James Sibley

Newton, I think, is the one credited with saying, "What goes up must come down," or something similar. How many of us are so adroit as to be able to time the ups and downs of the gold market (or the stock market, for that matter)? I just hope the gold bugs among us aren't buying this shiny metal on a credit card (or cashing in their 401(k)). While there's no question that the long-term trend has been up, as a Houstonian, I can remember when oil was approaching $150 back in 2007, versus $70 a barrel today.

Chris B.

There are some nice consequences to the growing list of US states making bullion and coin investments tax exempt, including the heavily populated state of New Jersey as of January 1, 2025, for purchases of $1,000 or more. Perhaps this will entice new buyers looking for a tax-exempt purchase alternative to the volatile US equity market. There is also some degree of safety in a relatively commoditized rare coin and bullion market, thanks to third-party graders like NGC.

As an aside, I really wonder what makes a state's leaders believe that anything below $1,000 is not an investment and should be taxed. It seems laughable. Is New York State at risk by losing its tax-exempt status for purchases of $1,000 or more? If New York State repeals, how many other beleaguered states will follow suit? This, too, could create a buying rush in a heavily populated state before the tax situation changes for the worse.

Thanks again to all my contributors for their assistance in this historical event!

Until next time, be safe and happy collecting!

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