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Metal Market Report January 2022 - Week 2 Edition

January 2022 - Week 2 Edition

Gold Demand in India Set a New Record High in 2021

We haven’t talked about demand in India for a while, since it has been depressed, but India just reported spending a record $55.7 billion on gold imports in 2021. That is more than double the 2020 totals and is a record high, breaking the previous $53.9 billion high from 2011. India imported 1,050 metric tons of gold last year (nearly 34 million Troy ounces), the most volume in a decade, according to data from Reuters.

Part of this increase is due to delayed weddings and celebrations from the COVID-19 epidemic in 2020 but a larger part of it is the rising wealth and middle-class income in India, with more millions able to afford gold, even at the higher average price in 2021 than in 2020 or the previous record high year in 2011.

Gold Price Yearly Average Rose for Sixth Straight Year

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.



Many Rare Gold Coin Prices Are Rising

I just returned from a conference of professional numismatists in Florida, where we talked about numerous issues affecting our industry.

One of the topics included the danger of the new pop-up ads on Facebook, which is a less-regulated medium than most magazines or television outlets. As a result, Facebook has more ads for counterfeits than in the past. Some counterfeiters either take the money and run or put genuine coins on the top and bottom of 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. Our office is in Beaumont, Texas and our area code is 409. Make sure you are communicating with us and not someone spoofing. You should also know that we have an advanced IT system with numerous employees, which helps determine the identity of your account and identifying hackers.

Be sure to deal only with recognized and respectable dealers. I was recognized at the Florida conference along with three other dealers for helping to shut down several counterfeiters. Our company has been in the forefront of stopping thefts and counterfeits, and I have personally assisted the Attorney General of Texas in writing consumer alerts on how to avoid counterfeit coins and theft. For that and other reasons, I was honored as the 2021 American Numismatic Association Dealer of the Year.

In other news about our industry, the NCBA, which I serve on the executive board, has secured full or partial sales tax exemption for coin transactions in 39 states and are working hard toward sales tax-free status in many other states. We are currently close to gaining sales tax-exempt status in three or four more states. In the meantime, customers can legally avoid sales taxes by altering their shipment or purchase options. For instance, you can stop by our offices to buy coins without paying sales taxes, or you can have coins shipped to a depository in a sales tax-free state where you store the coins.

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 consult daily price guides. 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 being raised at the start of this New Year. I advise customers to find a “trusted dealer who has the experience, reputation and expertise” in rare coins as their source for “current pricing in a consistently hot or cold market.”

These meetings are important for us to share ways in which we can serve your needs better each year.

Lastly, I am currently working on a new updated fifth edition of my Type II Double Eagle book. My Type Three Double Eagle book won the overall “Book of the Year” from the Numismatic Literary Guild in 2015. This new book should be available by this summer. It is an update of the original books I released between 1996 and 2008.


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