Market jitters spark local gold rush
Bullion 'just not available in this town,’ Palisade coin shop owner says
Local coin dealers watched gold bullion disappear from their cases on the heels of the silver dry-up.
Hardly an ounce of gold bullion remains at local coin dealers, riding the trend of no availability after people sought tangible alternatives in which to invest hard cash as consumer confidence shook from the Wall Street crisis.
“I bet I’ve had five people just this week looking to spend $10,000-plus buying gold,” said Don Taylor, owner of the Century Coin Shoppe in Palisade, where one collector gold coin remained Friday morning. “It’s just not available in this town. I’ve had to give people phone numbers to big exchange houses back East. There’s just nothing in the valley. Everybody’s just hanging on to it.”
Silver became scarce in the late summer in the Grand Valley and was altogether unattainable one week ago. Gold soon followed.
Both locally and nationwide, retail investors who didn’t want the high risk of trading in the futures markets reportedly increased their holdings of gold coins.
And last week, the U.S. Mint announced a temporary suspension of selling American Buffalo gold, 1-ounce, bullion coins after demand depleted inventory.
They also halted sales of the American Eagle 1-ounce, gold coins in August.
“I have one gold coin in the shop, and it’s a collectors coin, and it’s a 1926 ten-dollar coin that’s been graded and encapsulated,” Taylor said. “It’s $1,800, according to gold value, and there’s probably only $450 worth of gold in that coin. The collector type coins are quite a bit different than gold bullion. This one has gold, but also collector value. They don’t move quite as fast. I think they’re a lot more solid investments. In 10 minutes, gold can drop 100 bucks, and that gold piece is not going to move that fast.”
Gold, just like stocks, can turn in a heartbeat.
“If I was a multimillionaire, I still wouldn’t put more than 5 percent, 10 percent max, of my money into gold,” said Chris Doyle, owner of Doyle Center for Financial Strategies in Grand Junction. “When inflation goes away, you see the price of gold drop like a rock. That’s the large purpose of diversification.
“Take the money you know you may have to spend in six to nine months and put it into bank accounts and money markets. The money you have to keep your hands off of, put into bonds and stocks and mutual funds. Maybe a little bit of gold, 5 to 10 percent into gold or gold mutual funds. ... At times like this, liquidity to move money from one place to another is crucial, in my book.”