Market Alert 4-17-20
The good news is that PCGS has reopened. The bad news is that CAC has extended their closure until April 27th. The U.S. Mint at West Point is also closed. The worst news is the virus is still raging.
I’m glad PCGS has reopened. The submissions that were in limbo will now start to get attention and we can submit coins to them again. It doesn’t mean that they will stay open. People come first, so if they have to close again, everyone will understand.
Certified Acceptance Corporation has extended their shut down until the 27th of April. I know John Albanese would rather work than not, but he shows his character not just in the coin business for many years, but by putting people first. When he feels things are safe, CAC will reopen. However, I would not be surprised if the closure was extended again. New Jersey is very close to a hot zone area.
One thing to take into consideration is that many of the CAC coins currently in the market, may be pieces that are not nice! Exercise the same diligence as always when buying coins. First, be sure you like the coin and the grade is justified. Then, use the same criteria to be sure the CAC sticker is justified. If not, wait for another piece, there are CAC coins that have been languishing in the market because they may be a mistake, be cautious!
I was communicating with an officer of a major auction firm and asked what effect that the virus has had on auction prices. His quote was, “We’ve found the market to be stronger and more active than it was pre-COVID. People must be home bored and we are seeing more bidding activity and stronger prices across the board in all categories."
So, if your coins are nice, don’t worry. It appears that COVID may act as a catalyst for the rare coin market! Now is the time to get rid of the marginal coins for nice pieces.
The mint closure will put even more pressure on the gold and silver Eagle supply. Watch premiums start to escalate. They already have, but now it could really jump. Be prepared to pay more for Eagles. If the mint closure is long, the existing supplies could dry up. However, if short the mint will start striking them again in short order. Premiums will come down. Also, if we are able to resume some normalcy in the country, I expect gold and silver prices to weaken in the short term. Especially if a vaccine is found.
Investors don’t care how the stock market is manipulated to go up! As long as it goes up, they will eat the pablum and ride it up. If it takes $5 trillion or $500 trillion out of thin air, they will bail it out. I understand, but if that isn’t inflationary, what is? The cheapening of the U.S. Dollar worldwide will have a huge impact on the country too! I’m sure a remnant few will recognize that the emperor has no clothes. Longer term, hard assets could rise into the stratosphere. Short term, if another catastrophe comes about while the world is trying to recover from COVID-19, the rise could start now! Things will never be the same.
A weird thought has come into my head recently. This is a horrible virus and I wish that a vaccine comes soon, but it just seems strange that in the U.S., Italy and Spain, that the epicenter seems to be in the countries financial leading cities. Why haven’t we heard anything about the virus in Shanghai?
I want to wish you all good health and I hope we are closing in on the end of this world menace soon.
Stay Safe,
Warren