Gold Will Rise in '09 By David L. Ganz, Numismatic News
December 22, 2008
the future is what newsletter writers, pundits and seers do
for a living. For the past 43 years, I had the best part-time
job, ever: writing this "Under the Glass" column
dedicated to covering the entire numismatic field. Last year,
I did a "Seer" column with a number of predictions
about the coin market and some other things of interest to
In looking through my clips, the first reference I can find
to this line of work is an article that I wrote on these pages
in May 1971, entitled "The unmasking of a seer."
It was never a regular feature of this column, though I did
it from time to time, but starting around 1980, I regularly
did a feature once each year for the other periodical magazine.
Historically, I've spent a lot of time in the "Seer
business" when it comes to market analysis. I've always,
for example, predicted the price of gold, silver, platinum
with varied degrees of success. The same is also true of my
famous predictions for 1881-S silver dollars in MS-65 condition,
something I view as a bellwether of the marketplace as a whole.
Less accurate is my plea for Indian Head cents to be given
their fair recognition and representative pricing. (Okay,
finding a 1906 Indian Head cent in pocket change in 1960 changed
my life - and yours).
As my own life has changed and evolved, I became an elected
official serving first as mayor of my community (fourth-largest
in New Jersey's largest county, Bergen) for seven years, and
subsequently during the past six years as a county commissioner
or supervisor known as a Freeholder.
My interest in politics went from local concerns to national
predictions and some very close calls on presidential races
in this century (mostly accurate but finally off by only a
couple of electoral votes).
So, for the 28th consecutive year, I've brought out the Ganz
Crystal Ball to offer you a window to the future. For the
next couple of minutes, you can check out my scorecard in
the seer business from last year - a respectable .650 average
- compare it with some whoppers from years past, and see what
I believe the future holds.
When I quote my seer record - it usually is 50 percent or
better - I am reminded that great players like Ty Cobb (.367
lifetime batting average) couldn't master his craft six times
or more in 10 chances. May being a seer isn't so bad after
As many readers know, in real life I am a lawyer, so take
a lawyer's cautionary note: everything that I write should
be viewed with a grain of salt. My track record in predicting
precious metal prices is pretty dismal - though not this year
- zoo monkeys tossing darts might do as well. But on some
compelling hobby and other issues, my overall track record
borders on the semi-skilled. Recently it has been better than
in years past.
No one has suggested I give up my day job as a lawyer and
local political figure (except for the local voters who voted
for the other guy in the 2005 mayor contest). (I didn't predict
it, but I was re-elected this past November as a Freeholder,
obtaining a record 171,000 votes).
This seer business is actually tough and takes a lot of research,
twice. The first is the datum necessary to read the tea leaves
of the future; the other is checking on what happened in the
past. Both are time consuming, but also a lot of fun. I hope
you enjoy the Swami's musings as much as the seer enjoys writing
In gearing up for this year's article, I drew on a 2006 visit
Kathy and I made to the Oracle at Delphi. That journey was
incredible and took us around 120 miles North of Athens -
three hours by tour bus. I can almost imagine the soft glow
of the Oracle. Sit back now and let's predict 2009:
1. Gold. Spot as of this writing is $802. My belief is that
the compelling market realities will cause a shift of more
than 17 percent in the next 12 months (by December 2009);
that is, gold will rise above $938.
All of the traditional rules seem to be broken, but gold
is an asset of last resort and in tough economic times like
these, is traditional storehouse of value should be a winner.
2. Silver. Silver is now $10.16, or half of what it was (more
or less) in March. Silver has industrial and commercial uses,
and my guess is that this inexpensive metal has a run up of
at least 25 percent during the year. So that there is no misunderstanding,
that means that silver will exceed $12.70 during the year.
My real target is higher, but I can afford to play it safe.
That means I can tell you I really think that silver will
go above $15 an ounce, but who can argue with someone who
says a 25 percent return on investment is what's being predicted
at a minimum.
3. Platinum. Today, spot price for platinum is $827; it has
fallen $1,400 in the course of just a couple of months. Since
one of the major industrial uses of platinum is for catalytic
converters for automobiles - a pollution impediment - I look
at the debacle concerning Ford, Chrysler and GM and say platinum
is going to stay depressed but will move $50 an ounce to $877
or more this coming year.
As a percentage, this is a little more than 6 percent - but
look at other vehicles for return and see how it compares.
Platinum isn't a bad bet.
4. Next Mint director. My vote goes to Reed Hawn, the Texas
collector and political activist. Ed Moy, current director,
has a five-year statutory term, but it is likely that he will
depart in the spring. It won't even take the president's request;
it will happen on a much lower level.
Many other directors with long term Senate appointments have
had to interrupt their tenure to move on. Among them, William
Brett (1954-1961), who left when JFK took office; Eva B. Adams,
director 1961-1969, who left shortly after Nixon took office
(and the Philadelphia Mint opened); and Mary Brooks, who succeeded
her (1969-1977), who departed as Jimmy Carter took office.
Then came Stella Hackel Sims (1977-1981), who departed as
Ronald Reagan entered, and Jay Johnson, appointed by President
Clinton in May 2000 and departed mid-2001 as George Bush nominated
his Mint heads.
5. End of the cent. The economy, stupid! The powers that
be are going to look at saving a few bucks and in the end
are going to decide that in these economic times, symbols
do matter, and the cent will be safe, again, for a little
while at least.
6. Mint will produce less. A large number of cents and other
denominations aren't in circulation. About $10.5 billion,
or $93.75 per household, is sitting idle, according to Coinstar,
which hosts coin-counting kiosks in grocery stores, banks
and other locations.
Bet those coins continue to get turned in at record rates;
that inevitably means that the Mint will be producing fewer
7. ANA politics. Presidential contest this year is between
Clifford Mishler and Patty Finner, both of Iola, Wisconsin.
It's a small town - I lived there once (1973-74) and this
is one instance where there may be some real campaigning (perhaps
at the new Crystal Café). My prediction of the end
result: Mishler, in a close race.
8. Coin market. It will hold its own against the national
economic trend and change upward by more than 5 percent. Compare
that to the Dow, Standard and Poors or even farmland.
9. 1881-S bellwether silver dollar. Priced now on Dennis
Baker's NumisMedia MS-65 at $185, the price will go over $200
in 2009. That's a modest 8 percent. In 2006 it was valued
at $152. It's simply time.
Well, that's it for this year. See how these predictions
work out by checking out these pages same time next year.
How the Seer did with predictions
1. Political predictions. First, California will retain the
traditional winner-takes-all electoral block. The Democrats
will take the White House in a close (state-by-state votes
for electoral vote) contest, widespread popular vote. No Supreme
Court challenge this time. My guess is 391-157.
California kept it, Dems won, vote was 365 to 173. Three
2. Gold is on the way to $1,000 an ounce and will reach it
in November, 2007 and December, 2008, a 13 month window. But
once $800 an ounce was breached, my crystal ball says a run
on $1,000 is likely. As this is written (Thanksgiving, 2007)
gold's price is $803 an ounce. That's a 24 percent increase.
Watch for it.
Gold briefly topped $1,000 on March 17. Bingo. 1 point.
3. Silver, now at $14.66, will rise to $16 or more in the
next 13 months.
Silver did hit $16 and then some, topping out at $21 on March
17th. I am starting to look like I have a real crystal ball.
4. Watch for platinum to rise to over $1,600 an ounce in
the next 13 months.
Platinum went to over $2,300 an ounce on March 4 and stayed
above $1,000 until early September. It was a nice ride.
5. Congress is going to try and give up on - or abdicate
- its constitutional responsibilities in setting weight, size
and composition of the nation's coinage - but will retain
rights to name the coin and define its design. Oddly, it will
pit Ds versus Rs - with the Democrats willing to sign rights
over to the Mint, in evident violation of Article I, Section
8 of the federal constitution - which gives Congress non-relegable
power over the nation's coin and currency.
They tried but the bill, H.R. 5512, made it in early May
in the House, but could not pass the Senate. Half a point.
6. Watch for hearings and a vote on elimination of the cent
and the nickel - on the faulty logic that it costs more than
a cent to produce the 1-cent coin and nearly a dime to produce
a nickel, when overhead is added in.
Woulda, shoulda, coulda, mighta, nope. The Mint will back
a compositional change - they've expected it for a while -
but the Seer notes that they also favor giving administrative
authority to make the change.
7. Law suits and administrative hearings are likely to occur
over the use of the word "Mint" in 2008, now that
regulations have been issued to clarify that in the U.S. Mint's
view, no one but they or another lawful government facility
can use the word "Mint" in advertising.
The Mint has trademark status on the phrase "U.S. Mint"
and a host of other product names including "U.S. Mint
Proof Set", "UNcirculated set", and so forth.
Watch for (1) the law suit an (2) the suit to cancel the trademarks
on the basis that they are longstanding generic names that
have lapsed with common usage.