Why Are Gold Prices So High?

why are gold prices so high

Prices for gold are some of the highest they’ve ever been. In fact, the average price for an ounce of gold has risen nearly 600% over the past 15 years. It’s definitely a great time to think about selling your gold. But why are prices so high right now? It comes down to a combination of factors.

1.     Everyone wants gold. It’s been true throughout history. As the world’s favorite precious metal, gold has been used in opulent thrones, royal crowns, prized jewelry and even priceless paintings. Gold is the quintessential treasure — and everyone from Blackbeard to Queen Elizabeth has been mesmerized by its allure.

2.     Supply is down. Recently, South Africa — the world’s biggest exporter of gold — has reported a substantial decrease in supply. With supply down and demand rising, prices skyrocket.

3.     Demand is up. Gold works as a great hedge against inflation, which the growing economies of Asia are experiencing right now. Demand for gold is through the roof in countries such as China, which in 2012 imported more gold than the entire holdings of the European Central Bank.

4.     It’s the economy. The gold market is tied to the strength of the dollar. When inflation pushes the dollar lower, gold increases in price. Also, in times of economic uncertainty, investors turn to precious metals as a safeguard against further turbulence.

We’ve all got some unwanted gold lying around — now’s a great time to find out how much your gold jewelry or gold coins are really worth. Come see the experts at West Seattle Coins and Bellevue Rare Coins in West Seattle, Bellevue and Lynnwood. We’ll give you a free appraisal with no pressure to sell. 

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Interesting Facts About the US Mint

Many people don’t realize that the money they handle every day has so much history behind it, as does the place where the money is made. The first United States Mint opened in Philadelphia and is still the largest producing mint in the world. There are many interesting facts about this historic place.

It all started in 1799

The US Mint opened for business in 1799 as an independent agency reporting only to the President of the United States. That changed in 1873 when it became part of the United States Department of the Treasury.

But how does it make money?

The US Mint is able to produce money for less than the face value. They then sell the money for face value, which results in profit. This process is known as seigniorage.

A Hobo (Nickel) Story

The chisel slipped, injuring one of his hands. And the work of Bo Hughes, one of the best-known hobo nickel carvers, was never the same.

The Great Depression largely defined the hobo nickel phenomenon. With millions of people out of work and without prospects in their hometowns, many joined the drifter community, hoping to find work crisscrossing the continent along the railway lines. Many would pass the time carving intricate designs on coins, hoping to trade or sell their small, folk art masterpieces for food or shelter. Bo Hughes is remembered as one of the country’s most talented carvers, a pioneer in the hobo nickel community.

George Washington “Bo” Hughes was born in Mississippi just before the beginning of the twentieth century. He left his home and his 11 siblings in his early teens, entering a world of nomadic freedom riding the rails. Along the Gulf, Mobile and Ohio railroad lines, Bo met Bertram “Bert” Wiegand, a fellow drifter and the man who introduced him to the art of hobo nickel carving. Bert took Bo under his wing, and in a largely anonymous community of drifters, affectionately known as “hobos,” the two carved their way into numismatic history.

The Elusive 1933 Gold Double Eagle

The mystery that shrouds this gold US coin is something out of a mystery novel involving theft, the Secret Service and a king of Egypt. 

It All Started at the Mint
In 1933, the US minted 445,500 Gold Double Eagles. Because of the Gold Reserve Act that passed (making gold illegal tender), all of them were ordered to be destroyed/melted. Two of them were kept and given to the National Numismatic Collection for preservation. However, little did they know that 20 more survived.
A Shady Dealer
At least 20 coins were stolen (probably by a US Mint cashier) and passed to Philadelphia coin dealer Israel Switt. Several were then sold to collectors. For years they circulated before the Secret Service got wind of their existence in 1944. When Switt was questioned, he admitted to selling several coins to collectors, but did not disclose where he got them. Seven coins were seized and destroyed in that first year of the investigation. Another coin was found in 1945. However, investigators suspected that there was one more coin that they had not recovered. This remained a mystery until investigators looked into a transaction between Switt and King Farouk of Egypt. 

The Billion-Dollar Victory

The HMS Victory, a naval ship sailing back from Lisbon to England, sunk on October 4, 1744. The ships accompanying it on its return lost sight of the Victory right outside the Channel Islands when a huge storm came through. The ship was captained by Admiral Sir John Balchen with a crew of over 1,100, all of whom died. 

Interestingly, the ship was the last to be armed with 110 bronze cannons. It was also reported to be carrying more than 100,000 gold Portuguese coins. Rescue ships were sent to search for the lost Victory. Locals on the Channel Islands reported wreckage washing ashore, including part of the mast. It was assumed that the ship crashed on the nearby Casquets rocks. The Victory wasn’t found for over 250 years. And it wasn’t found where they thought it sank.

On February 1, 2009, US excavation company Odyssey Marine Exploration found 2 of the 110 brass cannons. They soon after discovered the Victory some 50 miles from the Casquets. Because a US company discovered the wreckage, it raised the question of who was entitled to the millions of dollars in gold it held. But according to the laws of marine salvage, the ship and its contents belong to the British government. 

In January 2012, it was announced that the ship would be raised from the seabed. Odyssey Marine Exploration is set to handle the recovery. If estimates are right and they find on the ship what they think is there, the ship could be carrying a billion dollars in treasure.



Coin Collecting: How to Get Started and Tips to Keep Going

Coin Collecting: How to Get Started and Tips to Keep Going

Interested in starting a coin collection but not sure where to start or what you should know? Here are some tips from the experienced staff at West Seattle Coins and Bellevue Rare Coins to help you start collecting.

First, choose a series of coins you would like to collect. Start small, with modern coins, before jumping into more rare and valuable coins. Some good options are State Quarters, Lincoln Cents, Jefferson Nickels or Roosevelt Dimes. These coins are all in circulation and can easily be found in your pocket change. This way, your investment is minimal while you test the waters and learn a bit more about the ins and outs of collecting. Coin albums are a great way to organize, store and display your collection. They contain slots for each coin you will need to complete the series, which makes it easy to keep track of your progress. 

A great reference tool for coin collectors is the Guide Book of United States Coins, commonly referred to by collectors as The Red Book. Published annually, this book is full of useful information like history and current values, as well as colorful photos. When you are ready to make the jump to foreign coins, the Standard Catalog of World Coins is a superb series of reference books filled with world coinage from the 1600s to the present. There are no rules when it comes to coin collecting — except to have fun, of course. The more coin history you learn, the more confident you will become. And when you are ready to expand your collection to include older, rarer or high-value items, we would love to help. Here are a few more tips to help broaden your collecting skills: 

  •  Learn the language: Familiarize yourself with the terms and phrases coin collectors use, such as toning, bag marks, obverse, reverse and many more.
  • Take good care of your collection: Learn the proper ways to handle and store your collection, as well as which materials are best suited to preserve value. 
  • Learn the numeric grading scale (aka the Sheldon Scale): This includes numerical grades from 0–70 and the descriptions used to grade coins. 
  • Meet other collectors: Join a coin club or go to a coin show. These are great sources of information and inspiration. 
  • Join the American Numismatic Association (ANA): They have programs and services for coin collectors of all ages. 
  • Learn about third-party coin grading services like PCGS, NGC, ANACS and what they do to “certify” a coin.

Coin collecting is a fun and fascinating hobby. We here at West Seattle Coins and Bellevue Rare Coins love seeing new faces, answering your questions and giving you a solid foundation to make smart choices when it comes to purchasing coins. But most of all, we are here to inspire new collectors with our knowledge, love and unique inventory of coins and bullion. Visit one of our coin shops in West Seattle, Bellevue or Lynnwood. We speak your language.

West Seattle Coins and Bellevue Rare Coins specializes in gold buying and dealing in rare coins. We are a family-owned business that was first established in 1979 and is now located in West Seattle, Bellevue and Lynnwood. We also buy and sell gold, silver, diamonds, currency and jewelry. Visit us first for a free appraisal.

Russia’s 40-Year-Old Diamond Secret: Popigai Astroblem

Russia’s 40-Year-Old Diamond Secret: Popigai Astroblem

Russia dominated the diamond market in the 1970s with its abundant natural resources and its partnership with De Beers, which at the time was distributing most of the world’s diamonds. Perhaps this is why Russia decided to keep its massive find secret

The discovery of a 62-mile-wide asteroid crater called the Popigai Astroblem — said to contain 10 times as many diamonds as are currently believed to be in all the world’s reserves — was kept classified. The Popigai diamonds are said to be twice as hard as ordinary diamonds and were either present in the meteorite before impact or created upon impact with an area rich in carbon. Scientists were barred from revealing the secret, and the massive find was simply left alone. Until now. 

Russia produces about ¼ of the world’s diamond output. The largest, and possibly the most well known, location was an opencast mine known as the Mirny Mine, which was over half a mile wide and half a mile deep. Perhaps the permanent closing of the Mirny Mine in 2011 prompted Russia’s declassification of their approximately 40-year-old discovery last week. Finally, the world was let in on the secret when scientists from the Novosibirsk Institute of Geology and Mineralogy in Moscow announced that a Siberian meteorite crater holding trillions of carats of industrial diamonds had been found, a discovery that could revolutionize the global market. 

One-Cent Coin Sells for $1,380,000 at Auction

florida auction one-cent coin
Image: Heritage Auctions

A Florida auction drew the most money ever for a US copper coin. The one-cent coin is from 1793, the first year the United States Mint opened in Philadelphia. What makes this coin so rare is that it was not in circulation. There was no wearing on the face, lettering or the chains (the chains on the reverse were later replaced by a wreath as the US government felt it symbolized slavery).

The buyer’s name has not been released but was reputed to be a major collector. Amazingly, this isn’t the most a US coin has been sold for. Keep reading for a list of some of the highest-priced coins in US history:


Modern-Day Legislation: Why Coin Collectors Should Care About HR 5977

HR 5977 coin collection

Coin collecting is one of the world’s oldest known hobbies (and one of our favorites!). Once thought of as an activity for the wealthy, today, coin collecting is becoming increasingly popular with millions of hobbyists worldwide. In the US, interest in coin collecting was sparked by the availability of commemorative coins in the 1930s as well as the inception of coin clubs, which provided opportunities for collectors to meet and trade. 

Due to the increasing popularity of coin collecting, Congress enacted the Hobby Protection Act in 1973. This act made it illegal to manufacture, sell, or import into the United States any imitation numismatic item that was not clearly and permanently marked “COPY” or did not have the year of manufacture. These restrictions made it much harder for people to sell fake coins. Nowadays, however, with the accessibility of Internet sales and auction sites like eBay, imitation coins have been flooding the market. It seems that the Hobby Protection Act is due for some modern-day revisions.

The Collectible Coin Protection Act of 2012 (HR 5977) was introduced on June 20, 2012, in the House of Representatives to strengthen the Hobby Protection Act and modify it to include “sale in commerce.” If enacted, this bill would make it a violation to knowingly assist or provide support to any manufacturer, importer, or seller of unmarked replicas. It would also extend the Hobby Protection Act to cover unauthorized use of registered trademarks belonging to collectible certification companies such as the Professional Coin Grading Society (PCGS) and the Numismatic Guaranty Corporation (NGC). This would essentially cover not only the imitation coins, but also the counterfeit grading service holders, which are both being manufactured at tremendous volumes and high quality around the world.    

Historic Auction at the Dallas National Money Show: Updated

This month, Dallas-based Heritage Auctions plans to auction off an extremely rare 1905 $5 bill from the First National Bank of Fairbanks, Alaska. This item is 1 of 4 national currency notes of its kind ever printed; it dates from Series 1902, has a red seal and features President Benjamin Harrison. The minimum starting bid is $120,000 — and it is expected to sell for $200,000 to $300,000.

The Alaskan bank originally gave the bill to Vice President Charles W. Fairbanks in 1905 as a memento from the city named after him. Held for decades as a treasured family heirloom, the bill’s color has slightly  muted, but it has been kept in uncirculated condition with no wear. Although some minor restoration has been performed to the back corners, it is not expected to affect the selling price of this extremely rare piece of history. 

The note has been certified by PCGS as Apparent Choice New 63 and also mentions the minor restoration on the back corners. The embossing is strong with full original paper wave and full margins. The bill also displays a bold blue serial number, a Treasury serial number and bold signatures.   


Rare Coins Discovered Again in England

Rare Coins Discovered Again in England

In October, a man with a metal detector stumbled upon a “nationally significant” haul of rare coins. This amazing find consists of 159 pure gold Roman solidus coins from the fourth century. The amateur treasure hunter — whose identity has not been revealed in order to protect his privacy — was sweeping a private field near Saint Albans, England, when he found this latest bounty of rare coins. The exact location of the find is being kept under wraps as well, so as to prevent the land being overrun with looters.

Last June, another large stash of coins that dated from the first century B.C. was discovered in England — again with a high-power metal detector. The collection of 30,000–50,000 gold and silver coins was valued at $15 million. In an earlier find last March, more than 30,000 silver coins from the third century were unearthed about 450 feet from the historic Roman Baths in England.