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Your Last Chance to Buy Cheap Gold

By Tom Dyson, publisher, The Palm Beach Letter
Tuesday, January 8, 2008

Yesterday, I spoke to my coin dealer, Van Simmons, to get an update on gold coin prices...

"I'm absolutely amazed," said Van. "It's staggering what's going on in the coin market right now..."

Spot gold prices yesterday hit their highest prices in history... $870 an ounce. Gold investors are euphoric. They've waited 28 years for this moment.

Van Simmons sells mint-condition vintage gold coins. The U.S. government minted these gold coins pre-1933. A professional coin-grading service has examined them, graded them, and encased them in tamper-proof casing. These are beautiful coins.

In theory, these vintage gold coins are "leveraged" to the spot gold price. You know how gold only has to double for some small gold mining stocks to go up thousands of percent? Well, it's the same for these gold coins. They are in such short supply, when gold goes up 10%, they tend to go up much faster in price... at least, that's what used to happen:

In the 1987-1989 gold coin bull market, gold rose 66%, but the PCGS 3000 Index of rare gold coins went up 665%. In the 1976-1980 bull market, gold rose 725%, while the rare coin index soared 1,195%.

Here's the reason Van Simmons is so flabbergasted: Even though gold has risen 228% in the last six years and is shooting through the roof right now, gold coin prices are sedate.

In fact, right now, gold coin prices are the lowest they've ever been relative to the spot price of gold. Take a look at this table. It shows prices of benchmark vintage gold coins in mint condition over the last 18 months. As you can see, these popular gold coin issues are all cheaper today than they were 18 months ago... and most of them are only trading slightly above their lows of December 2006.

Vintage Gold Coin Bargains (MS-65 Grades)
COIN
May-06
Dec-06
Dec-07
$2 1/2 Liberties
$4,250
$2,650
$2,625
$2 1/2 Indians
$7,950
$4,950
$5,240
$10 Liberties
$7,750
$5,450
$7,320
$10 Indians
$8,950
$5,650
$7,320
$20 Liberties
$5,950
$4,450
$5,930
$20 Saint Gaudens
$1,895
$1,395
$1,500
Spot Gold Price
$676
$629
   $825

These rare gold coins represent the last opportunity to buy gold at ground floor prices. Gold bullion has tripled. But vintage gold coins are still near their all-time lows.

I think gold is in a bull market and will eventually rise to $2,000 an ounce... maybe more. Several years ago, I set up a gold futures account to bet on this bull market. The problem was, I couldn't sit still. Every time gold went up $20 an ounce, I wanted to sell. And every time it fell $20 an ounce, I couldn't sleep.

Gold coins fixed this problem. I buy them whenever I can and simply stash them in a safety deposit box at my local bank. I don't even notice the weekly moves in the gold market. This way I know I'll be able to keep my position for the entire duration of the bull market and not feel tempted to sell every other week.

In sum, vintage gold coins are the last cheap investment in gold. I expect to make thousands of percent returns on my investment as the gold bull market unfolds... and still be able to sleep at night. However, you must act fast. Van tells me prices are finally beginning to move upward and for the first time in years, he's having trouble finding the gold coins he wants...

Good investing,

Tom

P.S. If you'd like to buy gold coins, I suggest you give Van Simmons a call. You can reach Van Simmons to inquire about gold coins by clicking here.

Market Notes


THE SAFEST WAY TO PROFIT IN AGRICULTURE


During a late session on the Chicago Board of Trade last week, soybeans reached a 34-year high... continuing the most profitable commodity trend in the world right now. Corn and wheat are generating similar gains.

While soybeans, corn, and wheat tend to go through volatile booms and busts, our favorite agricultural asset increases in value with the consistency of the setting sun. Better yet, most folks don't realize this asset beats stocks, bonds, real estate, and commodities as the top-performing asset of the past 45 years. We're talking, of course, about timber.

If we sound like a broken record when discussing timber, it's because a timber investment behaves like one. Trees don't get into stock-option scandals, and they don't issue subprime loans. They're simply boring investments that play the same safe, cash-producing "song" for decades. As our chart of timber giant Rayonier shows, while most American land investments are struggling, timber continues its quiet trip to the upper right corner of its chart.



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