A golden opportunity: Coin collecting hobby becomes a new career for Wenatchee man
Saturday, December 1, 2012
Like many children of his generation, Norman Arnold of Wenatchee started collecting coins at an early age.
“I’d buy silver dimes from Paul and Marge James at J&C Coins when it was located on Rock Island Road,” Norm said.
By the time he was 15, Norm had accumulated an impressive coin collection. But it was lacking in one thing.
“I really wanted to get an ounce of gold,” he said. “I was working cherries that summer for around $3 an hour. My paycheck for two weeks’ work was $280.”
When all his friends were buying Levi’s jeans and guns and playing pinball, Norm took his money to J&C Coins and bought a 1-ounce Krugerrand, a gold coin minted in South Africa.
It was 1983, and the price of gold at the time was $280 an ounce.
Twenty-five years later, this coin collector with an appreciation for gold turned his childhood hobby into a career.
In 1989, the Jameses moved J&C Coins to downtown Wenatchee, at 1509 N. Wenatchee Ave. Norm, a former Safeway meat cutter and longtime customer of the Jameses, purchased the business in 2008, renaming it Norm’s Coin Shop (normscoinshop.com.)
When Norm bought the coin shop in 2008, gold was valued at about $800 an ounce. Today the value of gold and silver has reached record levels, and the precious metals market thrives as it continues to attract attention from investors worldwide. In the past three years, gold and silver prices have especially skyrocketed. Silver is valued at about $30 an ounce and gold at about $1,700 an ounce.
Because of the rise in the value of gold and silver, collecting coins as a hobby has dropped off 75 to 80 percent in the past two decades, Norm said. That’s because the coins are more valuable for their silver and gold content than they are for their collectability, he explained.
“Today, it’s all about investing in gold and silver,” Norm said. “People want to buy gold and silver as an investment, and that’s the main focus of my business.”
Norm works with several bullion brokers, and when he gets a large order from a customer who wants, for example, $100,000 worth of silver or gold, he calls a broker (the “big boys,” he calls them) and places the order. Five to 10 business days later, the customer can come in and pick up the product.
“Customers can choose their flavor — South African Krugerrand coins, Canadian Maple Leaf coins, or American Buffalo coins — and get it in the form they want,” Norm said. “Coins are popular, but customers can also get bars.”
The poor economy has actually been good for businesses like Norm’s Coin Shop. Norm sees his business as an avenue for customers who may be in a financial bind to bring in gold and silver items for market-value prices, and to walk away with cash. Norm buys gold and silver in whatever form — gold dust and nuggets, coins, silverware, jewelry, bullion and even gold teeth.
“Most people have no idea they can bring in old dental gold or class rings and get a good chunk of money for them,” said Laura Turner of Wenatchee. “Norm really knows his stuff when it comes to running a coin shop and he will go out of his way to make sure the customer is properly educated on their treasures. And he pays top dollar.”
Norm insists Norm’s Coin Shop is not a pawn shop, but he’s quick to compare his store to television’s popular show “Pawn Stars.”
“This job is absolutely phenomenal,” Norm said. “I never know what could walk through the door. From gold miners bringing in nuggets they mined from up by Blewett Pass, to a power of attorney trying to settle an estate, or an investor cashing in silver bars — every day has the potential to be quite interesting. And like the TV show, we usually get a little back-and-forth haggling going on, too.”
Also like on “Pawn Stars,” counterfeiting sometimes rears its ugly head. Although usually associated with paper currency, counterfeiting is also a problem in the global precious metals market.
“The precious metals market is worldwide, and this scenario has actually happened,” Norm said. “Professional thieves take a certified 400-ounce gold bar, flip it over and hollow out the center. They remove around 300 ounces of gold, and fill it with tungsten. Tungsten looks like gold, is as dense as gold and weighs and feels just like gold. It can even pass some tests. But it’s worth much less.”
At today’s prices, 300 ounces of gold is worth around $510,000. That’s per bar. Multiply that by hundreds of bars, and it’s easy to see why thieves go to the trouble.
The exterior top and sides of each bar are still pure gold, so a simple scratch test on the exterior will pass. Drilling through the bar is the least expensive method to test the integrity of the gold bars.
As with any business dealing in precious metals, security at Norm’s Coin Shop is important to Arnold. It’s no Fort Knox, but it’s impressive.
“I don’t want to reveal specifics, but suffice it to say we have several layers of state-of-the-art security in our building,” Norm said.
And that doesn’t even consider the Zeus factor.
Zeus is a 200-pound Rottweiler, and he can be quiet as a mouse until he’s needed. He makes his home there at Norm’s Coin Shop. To Norm, Zeus is worth his weight in gold.
In spite of the potential troubles in the gold and silver market, Norm considers the future to be bright.
“The market for precious metals is driven by world and national politics,” he said. “With the re-election of President Obama, professional precious metal market analysts predict the price of silver and gold to continue to rise.”