Nov 2020

gold coins and collectables

As the year hurtles towards an end, one can almost hear a collective sigh of relief. 2020 will be etched in memory as a massively challenging period. Without recapping the endless commentary on masks, remote schooling, Zoom calls and lockdown restrictions, there is no denying that the “black swan” virus has unsettled just about everything. Those fortunate enough to be getting a break this festive season might be reflecting on 2020 from beach, berg or bush, eyeing the new year and hoping for a different looking future.

The effect of Covid19 continues to influence the daily machinations of global financial markets and it is anyone’s guess when some semblance of normality will return. The pandemic has created tough economic conditions and has highlighted the benefits of holding a diversified investment portfolio.

Despite precious metals setting all-time price records in 2020, gold exceeding the $2,000 mark (per ounce) and silver surpassing the $27-per-ounce threshold, prices have been on a slight downward trajectory of late. Are gold and silver poised to break out in 2021 as inflation concerns take centre stage and what are the compelling reasons to add a little sparkle to your portfolio?

Rael Demby, CEO of The South African Gold Coin Exchange & The Scoin Shop says “for most, wealth preservation is a focus. We are seeing a huge interest in gold bullion, silver and numismatics. People are buying gold and silver as a hedge against elevated risk in the financial markets. Buyers of physical precious metals are motivated by the fact that gold and silver offer a safe store of value, are a currency hedge, combat inflationary concerns and are moveable”.

Along with gold, silver is a tangible asset and can offer security in a time of uncertainty.

Of the four precious metals - gold, platinum, palladium and silver - silver is usually relegated to last place. So where does that leave silver since it doesn’t carry the same gravitas as gold? Silver is more attainable for the average investor and is a way into holding some precious metals. Investors can buy silver at 1/70th the price of gold (per ounce). Demby adds “Physical silver is a store of value, just like gold and owning some physical silver provides you with another tangible and accessible asset.”

Another positive for the silver market is that industrial demand is growing. Silver is used in nearly every major industry, from electronics and medical applications to batteries and solar panels. Some commentators are bold enough to say “silver is the new oil.” Silver demand would get an assist from a Biden administration pushing oil alternative technologies. With manufacturing already accounting for more than half of all silver demand and industrial uses continuing to expand, demand should remain robust. Demby expands that silver is real money. “Silver may not be part of our currency, but it is still money. Silver, along with gold, is the ultimate form of money because you can’t just print more of it whenever you want to.”

The Scoin Shop has seen a surge in the buying of physical silver over the last couple of months with purchasers particularly interested in collectable and unique silver coins like the D-DAY 75th Anniversary 1 Kilogram Silver Coin. This massive 1kg Silver coin comes from the Canadian Mint and has a limited mintage of only 400 pieces worldwide, making it a desirable addition for any coin enthusiast. “We have seen a sudden interest in demand for pieces like Mint of Norway’s Silver Proof 1kg Robben Island Medallion too. Since 1972 we have cultivated exclusive relationships with many of the finest mints from all over the world. These associations mean we can offer our clients exclusive silver coins which are in global demand right now. We have a wide variety of silver collectables and bullion, and we are constantly looking for more”. The South African Gold Coin Exchange and The Scoin Shops have sourced silver collectables from The Perth Mint, Mint of Paris, and the innovative Swiss Mint. Add up all the reasons and silver might be the buying opportunity of the decade, especially if you are a keen coin collector and are looking to add something special to your numismatic collection.

The Krugerrand is well-established as the global standard for collectable and investment gold coins. Since the first batch was issued in 1967, over 60 million ounces of Krugerrand coins have been sold globally – by far the most of any other bullion coin in regards to volume. It is the most extensively collected and traded bullion coin in the world and the combined aesthetic appeal, history and design, make it difficult to find a more appealing gold coin investment.

Many other countries have taken their cue from South Africa and have produced their own equivalents. For example, the Canadian Maple Leaf; the American Eagle; Gold Panda of China and the British Gold Britannia. All of these examples are based on the South African Krugerrand. The launch of the gold bullion Krugerrand created a new marketplace and made gold ownership more accessible. The idea behind the coin was to create something that would appeal to collectors and investors as well as serve as legal tender bullion.

Demonstrating how incremental gold accumulation should be part of a portfolio, Demby adds that “the unsettled time of the pandemic has seen existing clients trading coins and realising profits as well as upgrading collections with more exclusive numismatics. We can’t ignore that many people are battling. Having a nest-egg of Krugerrands has been a life-line for savvy savers, and demonstrates the necessity of saving. We are also seeing new clients dipping into gold - some starting with 1/10th Krugerrands; others buying substantial amounts.”

The festive season traditionally ends with new year resolutions being made and the slate of the old year being wiped out. Along with toasting seemingly positive developments on the vaccine front, glasses can also be raised to physical gold and silver investments which have added a bit of sparkle to an otherwise difficult year. And for those still looking for the perfect stocking-filler that 1/10th Krugerrand is a great holiday bauble which will keep on giving.