Rex L. Troute, The Hawk Eye, Burlington, Iowa –
KEOKUK – Since the glittery metal was first discovered, gold was the measure of wealth of kings, queens and civilizations.
In 3000 B.C., gold was made into jewelry for the initial time by the Sumer civilization between the Euphrates and Tigris rivers in southern Iraq. Because of its beauty and malleable nature, gold became the early favorite for jewelry and later as a monetary base.
In the modern era, there are many references to the yellow metal such as a gold credit card, first place is a gold medal in the Olympics, California being the Golden State, and the Seinfeld episode where character Kenny Banya said, “That’s gold, Jerry! Gold!”
Here, more than 5,000 years later, gold prices reached a fever pitch in 2011, when it hit $1,916 per troy ounce in the autumn. In recent months, it has dipped nearly $300 per troy ounce down near $1,600.
“When gold hit the $1,000 mark, people wanted to sell and buy,” said Regina Commander, owner of Midwest Coins in Keokuk with her husband, Charles Commander.
Many factors have been said to affect the price of gold and other precious metals. Poor economies and unrest in the world, such as wars, have affected the increase and decrease in the price of gold over the years.
“When the value of our dollar falls, our precious metals go up,” Commander said.
Whether its coincidence or not, the average price of gold has gone up every year since the Sept. 11, 2001, attacks on the U.S. The previous two decades, gold had fallen in price, from $615 in 1980 to $279.11 in 2000.
“I think any precious metal is a good investment,” Commander said. “Always buy low and sell high.”
The most popular gold coins are the American Gold Eagle, American Buffalo, Canadian Maple Leaf and South African Krugerrand. These coins weigh one troy ounce, which is a little more than an ounce. The coins are .999 percent gold.
“Most people trust the U.S. government,” Commander said as to why the Eagle and Buffalo are the No. 1 and No. 2 choices as gold investment.
Old gold coins, from the 1800s and early 1900s, aren’t as valuable as new gold coins. The reason why the older coins don’t bring top dollar is they are only 90 percent gold. The remaining 10 percent in an old gold coin can be a mixture of copper and nickel.
When gold and silver hit its high-water marks in price in 2011, Commander admitted the store hated to buy the two metals.
“We lost a ton of money with gold and silver,” she said, as it almost immediately dropped after hitting $1,916 per troy ounce.
She sited an example of how a world event might affect the precious metals market. When it was announced May 1, Osama bin Laden was killed, gold prices dipped $5 per ounce while silver lost 6.6 percent of its value.
“Anything can trigger it,” Commander said of the fluctuation in metal prices. “I think all of it has something to do with it.”
Midwest Coins started as a business out of the Commanders’ Keokuk home about seven and a half years ago. In the beginning, the couple strictly sold old coins through Proxibid, a host for online webcast auctions. The business sells 300 to 400 lots per week on Proxibid at a designated time and date. Typically, a lot can consist of a single coin such as a Carson City silver dollar. It can take as little as 10 seconds to sell a single lot, but the auction can last four to five hours.
Eventually, the Commanders decided to open a store three and a half years ago in the River City Mall in Keokuk. It was at that time, Midwest Coins got more into gold, and it eventually moved to 811 Main St. The store can be reached at (319) 795-2148 and www.midwestcoins.net.
Along with coins, Midwest Coins buys its share of gold and precious metal jewelry. The most consistent jewelry in terms of metal content comes from the U.S. and Italy, said Commander.
There are tests Midwest Coins can do to test whether a piece of jewelry is actually gold, copper, silver or brass. The first test is the magnet test, as precious metals won’t stick to a magnet. If a piece sticks to the magnet, it means the jewelry is most likely steel gilded with a certain metal.
The scratch test comes next, and if a scratch reveals steel underneath, it fails any kind of purity.
The last test by acid determines whether a piece of jewelry, a necklace or a ring, is just gold-filled. Pieces of different carats require different acids for the test.
Midwest Coins will buy scrap gold, which is broken jewelry. The store will buy it according to weight and carat.
Scrap gold can be melted down and turned into bullion or new jewelry.
With gold and silver prices dropping from all-time highs, Commander is surprised more people aren’t purchasing the two metals because that is the time to buy.
“Don’t rush out there and sell it because it is dropping,” warned Commander. “You really aren’t losing money on it because you still have it. I tell them to hold onto it.”
She tells customers not to get scared when the market drops, and to wait it out.
“I tell people to shop around and make sure you get the best price,” Commander said.
She warned people should not sell gold to companies who hold buying sessions at hotels. Commander said such entities are trying to buy gold as cheap as possible.
“There’s a difference between a store locally and people who come into a hotel to buy,” she said.
