Member Journal Entry:

Gold vs Platinum

Posted: 2/23/2012 2:26:49 PM | Views:772

The race is on

Once upon a time in America, and around the world for that matter, PLATINUM used to be more expensive than gold, MUCH MORE EXPENSIVE in fact. Since sometime in 2011, that has not been the case.

I remember that 10th Anniversary Platinum American Eagle Set from the U.S. Mint and the going price for that limited edition set. Does anyone else remember how that came in a nice wooden case with a 1/2 oz Proof and a 1/2 oz Reverse Proof Platinum coin.

I also remember getting a 2007 1 oz. Proof Platinum Eagle at what I call a "closeout" price from the U.S. Mint. I found the coin on the Mint's web site early in 2008 and it was basically a leftover coin. At the time, Platinum was either near or AT its record high of about $2,500 per ounce. Despite this, however, the 1 oz. proof coin, pictured below, was still priced by the U.S. Mint at $1,749, so I grabbed it right quick!

I was also fortunate that when I sent it to NGC, it earned a PF70 Ultra Cameo Grade, and according to the Mint's web site, this particular issue had a mintage limit of 6,000 coins (substantially less than say, the 2011 25th Anniversary Silver American Eagle 5-coin sets with 100,000 sets issued).

Within a week of my purchase, the US Mint increased the price on this very same coin by over $200, and within a week after that, the Mint FROZE SALES of ALL noble metal coins because the prices were soaring too high for them to keep up. Does anyone remember that?

It took a while, but it was after that run-up that the Mint FINALLY, for better or worse, started updating prices for bullion issues regularly, and also SIGNIFICANTLY reduced the return period for bullion issue coins due to the volatility of the bullion coin market.

With that kind of action, and the limited nature of the coin, combined with the perfect grade from NGC, and what seemed like ever-rising prices for Platinum, I was under the impression that this was going to be a RETIREMENT coin -- HA!

Ironically, economic turmoil, stock market volatility, U.S. budget deficits, international debt and financial instability in parts of Europe and elsewhere has had people flocking to GOLD and SILVER for years, which had driven the prices to record highs, though they'd dropped, but are on the climb again.

Which brings us to February 2012, a full FIVE YEARS LATER.

Where are we now?

As of a couple hours ago:

GOLD is up slightly to approximately $1,778.00
SILVER has rebounded a bit and is at approximately: $35.00
PLATINUM is FINALLY closing in on GOLD after languishing for years distantly behind gold, now approximately: $1,720.00

I might be wrong, but I think $58 lower is about the closest that platinum has been to gold in a while.

The price has essentially now come FULL CIRCLE. I bought the coin FIVE YEARS ago at $1,749 when platinum was $2,500. Now, platinum is FINALLY just catching up to the price I paid for the proof eagle in January of 2008. Isn't that just a hoot? Perhaps the joke is on me.

In fairness, with the PF70 Ultra Cameo grade, NGC's online price guide shows the coin in my Registry Set valued at $2,470.00. So, I guess it's not ALL bad.

I wanted to attach the photo, but I can't seem to find the actual .JPG file. However, here's a link to the coin in my Registry Set, and its photos, obverse and reverse.

So, I'll close with a question to ponder to oneself: Are precious metals REALLY a great of a "hedge" investment? Or, perhaps, are they JUST as volatile as the stock market and perhaps just as cyclical?

There's an old adage about eggs and a basket. Despite the make-up of my collection, which, if you scroll through some of the pages of my Registry Sets you'll see, includes plenty of silver, gold, and platinum from the U.S. and other parts of the world, I for one think the old saying applies.

I welcome comments or thoughts about this or any of my previous entries. I'm a bit of an insomniac, which sometimes accounts for my late night and lengthy entries. It fills the time in the dark of night when there's not much else to do other than laundry or dishes.


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