Are the Gulf Arab states buying up all the physical gold they can? Why did gold and the other precious metals have a sharp price decrease after the Dec. 8 and 9 blowoff high? The Dubai gold market was hyperactive in December. That is not a definitive ?yes? to the question, but it is enough evidence to stay alert to the possibility.
In the Dec. 27, 2005, issue of this newspaper, using the spot prices of the Dec. 8 and 9 period, I wrote: ?Not since January 1980 ?. have we witnessed what I believe is one ?blowoff upward? phase of this bull market.?
It turned out my analysis was ?spot on? because by the time readers were actually seeing what had been written, the decline that always follows a blowoff was setting in. As this is written, Dec. 23, gold had dipped under the $500 mark, platinum under the $1,000 level and silver the $9 area.
So, what happens next? The precious metals are in for a short-term lateral price rebuilding phase, which means astute collectors will use this downside in the bull market to acquire gold, silver, platinum and palladium coins.
The bull market recovery has already begun ? New York spot gold was $503.40, London?s p.m. fix was at $503.60 and February gold futures were $505.20.
New York spot silver stood at $8.54 and March silver futures recorded $8.645; spot platinum was $954, but January platinum futures reached $965.30; spot palladium was at $252 and March palladium futures were $257.55.
I personally do not recommend the new palladium Maple Leaf coins, however ? the premium over melt is too steep and even the ads are weird, hyping palladium ?at historic lows? the same day at $284 a troy ounce the metal was at an historic high.
My number one recommendation remains the same as always: Pre-1934 U.S. gold coins have numismatic stature as well as bullion content.
For the latest prices, check the bullion figures at the top of the right-hand column on Page 4.