In times past, gold “spiked” to a peak and then fell back, so that the peak would have been a good time to sell bullion. That is probably not the case this time. Gold has not spiked to a sharp peak, this time around, as it did in 1979-80. This rise has taken five years and this last rise has been gradual. The 2011 rise from $1,500 to $1,900 was fairly sharp, but gold prices stayed above $1,500 for another 18 months in that case.
The main reason to stay with rare coins is that they tend to keep rising, as they lag the bullion market. It takes time (about six to 18 months) for many of the new masses of bullion investors to “graduate” to the numismatic market and start bidding up the rare gold and silver coin market. Far from selling any rare coins, now is the time to finish accumulating any key numismatic sets that you may have already started building. Important rare coins are likely to increase in price over the next two to four years, well after bullion prices have peaked.
As for the bullion market, I believe there is still plenty of room left to rise. One major concern is that the gold market has consistently risen for nine straight weeks without a major correction. Technically, the charts and market momentum still suggest the price of gold and silver will move higher, but it is natural to see corrections along the way, so we should not be discouraged when such corrections occur. As of Tuesday afternoon, gold has pulled back to $1,917 and silver has receded to $25.20.
Why do I think gold will continue to rise? In addition to supply and demand fundamentals, there are the unique outside threats. In addition to coronavirus concerns, the 2020 Presidential elections are certain to be contested; U.S./China trade tensions remain high, and China’s belligerence against Hong Kong and Taiwan continues, as Mainland China’s military jets reportedly flew over Taiwan’s air space last week.
This year has already seen a “perfect storm” of domestic and global threats. There is no end in sight, and the gold market has reflected those realities for the last six months.