Higher metals prices bring boom to area coin dealers

With gold and silver prices at 26-year highs, northern Nevada coin dealers are doing brisk business.

Rusty Goe, owner of Southgate Coins in Reno, says he's fielding dozens of inquiries a day from people wanting to know how much their gold and silver coins are worth or how much they can buy. Customers run the gamut.

"We've got wage earners who save for a couple of months and come in and say, 'I've got $200, how much gold can I buy?'" he says. "And we've got people in the six-figure range. I just got a call Friday from a guy who wanted to buy $100,000 in gold."

At the close of last Wednesday, gold was $642 an ounce and silver was $12.92 per ounce. That's still a far cry from the 1980 peak when gold hit $850 and silver was about $42 an ounce, but it's a significant hike from several years ago, Goe says.

The higher prices are bringing both buyers and sellers into the market, although coin dealers say buyers outnumber the customers wanting to cash in.

"They figure if they buy now, they're going to ride the train on the way up," says Larry Demangate, owner of Sierra Coin in Reno.

Kathleen Danforth, owner of Reno Coin Co., says business started picking up at her shop about a month ago when the silver price rose above $10 an ounce. She says most buyers at her business are spending between a few hundred dollars and $1,000 on smaller silver pieces, such as one-ounce rounds and 10-ounce bars.

But the price spike isn't the only thing luring investors.

Demangate says the eroding strength of the dollar, the federal government deficit, skyrocketing oil prices and the uncertain world political situation have many people wanting to diversify their holdings. "Gold is an insurance policy," he says.

Southgate Coins has people on waiting lists for one-ounce gold bullion coins and bags ($1,000 face value) of "junk silver" coins. The most popular gold coins are American Eagles, Goe says, which feature the image of an American eagle feeding her young. Meanwhile, many people who have been out of the market request Kruggerands because those were the predominant one-ounce gold coin years ago. South Africa began producing them in 1967. Other countries followed with their own one-ounce gold coins, including China, the United States, Austria and Australia.

Junk silver coins are American coins circulated before 1965 containing 90 percent silver. At last Wednesday's silver price, a bag of junk silver with $1,000 face value 715 ounces was worth $9,237.80.

Investors also buy one-ounce silver rounds, which are produced by independent mining companies, silver American Eagles, as well as 5-, 10- and 100-ounce bars.

Meanwhile, the collector market is jingling right along, too. The buzz about high gold and silver prices creates interest in rare coins, causing those prices to go up, too, Goe says.