I talk with clients every day about gold and silver prices.  Most everyone I talk to comes to the conversation with some information, whether it be checking the financial markets for the ‘SPOT’ price of silver or gold, checking price guides online or in trade publications, or simply looking up information on their items on eBay.  All of these are useful indicators (and there are others), but none of them taken separate and apart should be relied on exclusively.  Today’s topic is a preliminary introduction to the 3 information sources mentioned, and their usefulness and limitations as a price tool.

1. SPOT PRICE  Much like the old stock tickers, this gives anyone with a phone or other device instant access to both the ‘bid’ and the ‘ask’ price, up to the last transaction.  You’ll find it on my home page https://www.thegoldbugexchange.com/  and just about anywhere else someone is involved in the precious metals business.  The problem with this is that none of us ‘small investors’ buy or sell at that price.  Those numbers represent contracts by banks and governments to buy and sell large lots of bullion at some point forward.  They are futures contracts, sometimes nothing more than options that continue to be traded.  While I do watch the spot price and can sometimes amuse myself watching the hourly spikes when POTUS tweets something particularly provocative, it doesn’t have much to do with the price at which I’ll buy or sell a tube of silver eagles on any particular day.  What is useful for me is looking at trends.  As a dealer, I’m looking at 60 day and 6 month trends.  For most of my clients, a longer view would be more appropriate.
2. PRICE GUIDES  These are available online in a host of places http://www.coinweek.com/coin-prices/coin-price-guides/  Everyone in the business uses them, and in the hands of an experienced numismatist an invaluable tool.  Even so, no dealer doing his due diligence relies solely on guides, as they tend to represent highest prices paid for a particular coin in a particular grade.  Myself, I look at auction prices (NOT EBAY) to get a sense of what higher quality numismatics are actually fetching.  Recently it’s been running 70 to 80% of the price guide prices.  In the hands of the inexperienced, price guides have very limited value.  In order to make use of a coin price guide, you’ve got to have some ability to grade coins.  Absent that, a guide will at least give a novice the ability to recognize key dates in a particular coin series.
3. eBay  Saving the best for last.  I use eBay.  Occasionally I sell coins there.  It gives anyone instant access to a world wide market.  It’s saved me from over paying more times than I can count, when price guides and trade publications have given pie in the sky values for items for which there simply is no demand.  The fundamental problem with eBay as a determiner of value is that most people do not use it correctly.   Most research their item by finding it on eBay and then browsing the current auctions.  That only tells the ASKING price for an item, and with the whole world seemingly selling on eBay, a lot of people ask a lot.  It has no relationship to the actual market or demand for an item.  That is not to say the information is not there, because it is.  Anyone with an eBay account can do an advanced search on either ‘completed’ or ‘sold’ listings.  I use it all the time, and its default sort is by most recent going back.  It’s a great tool if it is used correctly.

I’ll be back next week with something new.  Please feel free to contact me directly or comment on these articles if there is something you’d like to see discussed.

Happy Hunting,

Gene