Gold rose for the sixth straight year in 2021. Counting gold’s increase from an artificial date like New Year’s Day makes little sense, since people buy gold all through the year, so if you measure gold by the average daily price throughout the full year, 2021 was the sixth straight year that gold has increased.
In the last six years, gold is up 55%, an average of nearly 6% per year, compounded. In the past 20 years, gold has risen 564%, from an average $271 in 2001 to $1,799 in 2021. That’ an average of over 10% per year, compounded.
U.S. Mint Gold Bullion Sales Rose 45% to 48% in 2021
The U.S. Mint sold 48.3% more ounces of Gold American Eagles in 2021 than they sold in 2020, and they sold 44.6% more Gold American Buffalo Coins in 2021 than in 2020. Two-year sales figures over 2019 were far higher, at +724% and +469%, respectively. American Eagle sales were helped by the first design change in the series since 1986. Silver Eagle sales slipped a little but were up 90% over 2019.
Silver sales would have probably been higher if the U.S. Mint had not faced production challenges due to COVID-19 in 2021.
Market Update
I just returned from a conference of professional numismatists in Florida, where we talked about numerous issues affecting our industry.
One of the topics in this rising coin and precious metal market included the danger of the increasing pop-up ads for counterfeit coins on Facebook, which is a less-regulated medium than most magazines or television outlets. Some counterfeiters take the money and run, others deceive buyers by putting genuine coins on the top and bottom of gold and silver coin rolls and then place their counterfeit coins in the middle. Counterfeit ads use logos that look like a reputable company, but if you look closely, they may not use the same address, phone number or spelling. Most counterfeit coin and bullion products come from China.
In other news about our industry, the National Coin and Bullion Association (NCBA), which I serve on the executive board, has helped secure full or partial sales tax exemption for coin transactions in 39 states and are working hard toward sales tax-free status in these other states.
Many dealers also told me that the current market is very active. Dealers are struggling to find product in their areas. These dealers were very optimistic. Their inventories are at lower level than this time last year, and they are all rushing to meet demand. On the rare coin side, many series have escalated in price as we enter the New Year. For over four decades, I’ve contributed to price guides like, The Official Red Book – Dealers Guide Book to United States Coins. The 75th annual (2022) edition is now out. Prices change so rapidly that most dealers consult daily price guides and auction records. I was recently talking to the editor of a leading daily price guide, who said that in a rising market like we’ve seen in recent years, it’s hard to keep up, even monthly, with the price changes in many series. He said, “prices change horizontally and vertically across a series,” meaning that prices must change by both date and grade in fast-moving markets. I empathized with him as I have done this job in the past.
Specifically, he was significantly raising prices on some popular series, like the $5, $10 and $20 Carson City gold coins, which have been appreciating substantially, as are most $3 Gold pieces. Many other gold coin prices were rising at the start of this New Year, including CAC certified coins and PCGS and NGC certified coins with very low populations sought by collectors for registry sets.
In January, I was also the featured speaker about gold coins at the big Money Show of the Southwest in Conroe, Texas. Convention officials were pleased with the increase in the number of dealers participating in the annual show. With gold and silver rising and more customers and dealers participating in the coin market, 2022 is looking like a very good year to buy gold and silver coins! I’d like to also mention that while there, I met with a long-time friend, Dr. Ralph Ross of Houston, current President of the American Numismatic Association.
Mike, to put this information in context, why don’t you tell us how the S&P 500 has performed during the past six years as well as the past 20 years ?