Gold, silver bullion on rise, but ATB 5-oz silver coins settle down

By Steve Roach - http://www.steveroachonline.com
First published in the February 28, 2011 issue of Coin World

On Feb. 8, silver and gold made a big jump as the U.S. dollar showed signs of weakening and the market reacted to China increasing interest rates in an effort to fight inflation.

However, the 2010 America the Beautiful 5-ounce .999 fine silver bullion coins have not benefited from silver’s rise as prices for the coins have declined sharply.

Silver jumped nearly a dollar on Feb. 8, opening at $29.35 an ounce on Feb. 8 and advancing to $30.40 during the day on the New York markets.

Gold also experienced large gains, leaping to $1,369.30 an ounce after opening at $1,349.50.

After opening the year on Jan. 4 at $1,405.50 an ounce in London, gold gradually sunk to a low of $1,316 on Jan. 28.

Silver has been even more volatile, starting the year at $30.67, before dropping to $29.21 the next day and finding a low of $26.68 on Jan. 28.

Even copper is finding itself at record levels, trading at $4.64 a pound on the Comex division of the New York Mercantile Exchange on Feb. 7. Investors worried that the copper supply may be constricted as Chile — a large copper producer — could face power outages resulting from a drought.

For the 2010 America the Beautiful 5-ounce .999 fine silver bullion coins, what a difference a week makes!

As the number of coins in the marketplace increases, the prices are falling fast for all but the top-quality certified Mint State 69 coins, as dealers seem to be quickly taking profits, liquidating their positions and moving on to put their money into other things.

On Jan. 1, uncertified Uncirculated five-coin sets brought as much as $2,700. A month later, on Feb. 1, uncertified five-coin sets were trading wholesale for $1,900 to $2,000 and a day later they were they were down to the $1,700 to $1,800. By Feb. 8 the prices for the five-coin sets had fallen to $1,400 to $1,550 and on eBay, certified Professional Coin Grading Service "Choice BU" sets were selling for a "Buy it Now" price of $1,650.

Collectors who waited for the initial sizzle to fizzle are now being rewarded with significantly more affordable silver bullion coins.

One wonders how the prices for 2010 issues will hold up several years from now. Will collector demand continue as the series expands with five new coins each year?

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Steve Roach is a Dallas, Texas, based rare coin appraiser and fine art advisor who writes the world's most widely read rare coin market analysis each week in the pages of Coin World.  He is also a lawyer and helps create estate plans for collections. Visit him online at http://www.steveroachonline.com, join him on LinkedIn at http://www.linkedin.com/in/stevenroach or follow him on twitter @roachdotsteve