On Friday, October 16, 2009, a reporter from the Reno Gazette-Journal newspaper called to interview Southgate Coins’ owner Rusty Goe about the recent rise in the price of gold bullion. Rusty talked to the reporter for one and a half hours. The reporter summarized Rusty’s comments in a few concise sentences.
Following, is a portion of the Reno Gazette-Journal’s article about the effects of the spike in gold prices in Nevada, titled “Nevadans caught up in gold rush, gold risk”:
With gold prices at a historic high, Nevadans are buying, selling, avoiding or mining more of the precious metal than ever before.
It’s a complicated, and risky, business.
The price of gold has settled at above $1,000 an ounce, causing some investors to buy coins or bullion in the belief that coming inflation, a sagging economy and the weakening dollar will force the metal’s price to even greater heights. Others are selling their gold, betting that the price has peaked and the shining bubble will burst.
At Southgate Coins on South Virginia Street [in Reno, Nevada], both the folks who think gold is an umbrella against a falling sky and those who want to sell their hard metal at a peak price are daily visitors, according to shop owners Rusty and Marie Goe.
“It’s a wash,” Rusty Goe said. “It’s like we have two doors, one for the people cashing out and the other for people wanting to buy.”
Goe noted that the recent rapid upswing in the price of gold followed (false) rumors that oil would be taken off the dollar standard.
"The price shot up in the last two weeks on a rumor that had no basis in fact,” he said. “Gold is at an all-time high, but not really.”
He noted that gold’s previous all-time high, in January of 1980, was $875, an amount that shrank to $850 at the market’s closing. Although the metal has tripled in price since 2003 and doubled since 2005, gold took 28 years to recapture that 1980 record price.
“And if you look at the nominal rate of inflation since the $875 price, gold would have to be at least $2,500 an ounce to match its value in 1980,” he said. “If you factor in inflation it hasn’t actually reached an all-time high, but the recent run-up has gotten everybody excited.”
He sells gold coins and bullion for a 3 percent commission over market price, plus 7.7 percent sales tax. He said much of the gold-buying today is fueled by fear of economic collapse and predictions of the ruin of the dollar.
The commissions on gold sales “aren’t enough to pay the rent,” he said. His main business is dealing in collectable coins—many from the Carson City Mint—which sell thousands of dollars above their intrinsic values.
His advice on gold: “Don’t follow the herd and buy at peak levels; hold off until the euphoria subsides.”
To view full article contents, please click the following link: Nevadans caught up in gold rush, gold risk.
For more information on Rusty Goe, Southgate Coins, or the rising price of gold bullion in Nevada, please write to Southgate Coins, 5032 S. Virginia Street, Reno, NV 89502, email at mariesgate@sbcglobal.net, or call at the number below.