Some turn to gold and silver as economy falters; experts advise diversification is best

Collector Brian Loughman of Grand Junction examines a coin through a magnifying glass as shop owner describes flaws on the coin at International Coin and Stamp, 440 Main St.

There is a near run on silver locally, and gold is getting harder to find at coin dealer shops as dealers say more people are placing their wealth in tangible assets they can monitor.

“In the last three or four months, I have seen people taking their money out of the banks and putting it into precious silver, because they want hard assets,” said Teresa Mays, owner of International Coin & Stamp Inc., 440 Main St. “My customers are telling me they have little faith in the U.S. dollar. They are trying to put their wealth into something they think will increase in value.”

Mays closed a sale Wednesday for someone buying 134 ounces of gold in one transaction. Mays and other dealers are seeing silver either obsolete or in very small amounts. 

“About three months ago, it started to become a little more difficult to get some of these products. Then about a month ago, it’s like the door closed,” Mays said. “There is not any silver available.”

The U.S. Mint halted production a month ago on the gold eagle coins, and production of the silver eagle has been on and off since March, she said.

“Therein lies the mystery,” she said. “Why can’t they get the planchets? Why aren’t these (domestic mining) companies producing planchets like they did before?”

While people rush toward the coin counters, they should start small first, says one local dealer.

“If you had $100,000 in the bank, and you buy $100,000 of silver bullion, and tomorrow the price of silver goes down, you got hurt pretty bad,” said Don Taylor, owner of Century Coin Shoppe, 532 Iowa Ave., in Palisade, where there is still some silver inventory that he said likely will be sold by week’s end. “Have some silver, have some gold. But don’t put your whole nest egg in it.”

The price of silver dropped for a bit in mid-2008, he said. Both gold and silver dropped between spring and summer, he said. Silver is now at $15 an ounce and is fluctuating daily, while gold is running around $900 an ounce.

“I do more of the rare coins, and that market is out of control. It’s gone nuts,” Taylor said. “When the value of the dollar starts falling, precious metal starts going up.”

Mays advises people to continue to diversify their portfolios.

“Some people are cashing out of stocks altogether,” she said. “I really don’t recommend that. I recommend them to diversity and think about adding some gold and silver to their portfolio.”


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