Gold and Silver Post Strong Gains in First Quarter 2017

Dexter 1804 Draped Bust silver dollar

Gold rose 8.3 percent in the first quarter 2017, continuing the strong performance that led to a 8.6 percent gain for all of 2016.  According to a recent CNBC article, Gold prices have increased in 8 of the last 10 first quarters.  Silver rose 14.2 percent in the first quarter 2017, following a 16 percent gain in 2016, their best annual performance since 2010.

Compared to other major asset classes, gold and silver were big winners in the first quarter, trouncing the major equities indexes during the first three months of the year as the S&P 500 rose 5.4 percent and the Dow Jones Industrial Average notched a 4.5 percent gain from January 1 to March 31, 2017.

Some of the factors contributing to the recent performance of gold and silver include increased demand for the physical metal from China (ahead of the Lunar New Year) and India (ahead of Diwali), volatility in other asset classes because of uncertainty about the impact of Brexit talks, as the UK took further steps to leave the European Union, uncertainty about upcoming French elections and wariness about the viability of U.S. President Donald Trump’s ambitious economic policies following the failure to achieve consensus within the Republican-controlled Congress about healthcare reform.

Although a rise in interest rates often puts short-term pressure on precious metals prices, there is a strong sentiment among experts that any increase in interest rates will be slow and incremental, as economists take a wait and see approach to analyze the impact of each successive rate increase on the overall economy.

For precious metals investors and coin collectors, there was much to celebrate this week.  In addition to the strong quarterly performance of gold and silver, last week Stack’s Bowers Galleries and Sotheby’s presented Part V of their auction program of the D. Brent Pogue Collection of early United States coinage.  The Dexter 1804 Draped Bust silver dollar, graded Proof 65 by PCGS and one of only 8 specimens in existence, realized $3,290,000 at auction, part of a record breaking series of sales taking place over the past two years that netted a total of almost $106.7 million.

The mainstream media covered the Stack’s Bowers auction with great interest, sparking widespread curiosity about highly collectible silver and gold coins for sale.