Gold is down 3 percent, silver down 5 percent and platinum down 4 percent. The world’s stock markets continue a slow crash with the Dow Jones Industrial Average down 11 out of 12 days. The metals have followed those markets because of deflationary fears and the need to raise cash because of the ongoing European crisis. At the American Numismatic Association Denver show premiums firmed on Mint State $20 gold, moving up some $50 while bullion still sagged. Bid sheets from major market makers all show more positive premiums with lower bullion. The final positive sign is that retail buyers are back and telemarketers have become much more active.
The Fed has started hinting at a QE3. Is this a bottom for the bullion items and should you buy? Well, while there is a lot to be worried about on the downside, there is still more to worry about on the other side: inflation. I remember in 1980 how often the market would trick you into believing it was over as in the past several weeks and then turn on a dime like a roaring bull. My advice: keep some liquidity and put the rest in your home and hard assets like nice coins and bullion.
The silver dollar market also supports the above to some degree. Generic circulated coins are down less then melt value thereby increasing premiums. In the better date issues the 1886-O in MS-64 has gained 10 percent and 1886-S, 1891-S and 1922-D 5 percent in gem.
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