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Metals market quiets down in new year

Could it be that simple? By that I mean government-stimulated liquidation and portfolio window-dressing.

On Jan. 1 Japanese bullion dealers were required to start reporting bullion sales in excess of 2,500 yen, or about US $3,000, to the government. The fear of this new rule and threat of a new tax were enough to cause widespread liquidation by the public.
Japanese bullion dealers were reportedly swamped. The window-dressing issue results from portfolio managers taking year-end profits from their best asset class (precious metals) to cover or dress up the poor performance of the rest of the investment portfolio.

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Since last writing gold has gained 2 percent, silver over 3 percent and platinum only 1 percent. It became apparent to me was as soon as the new year arrived the selling pressure in the precious metals seemed to subside and the market has a more normal sense to it.

U.S. gold type coins have not shown much strength and continue to have some erosion in premium. Even a few issues in MS-67 have declined, namely the Liberty quarter eagle and the $20 Saint. I would consider this a buying opportunity. Another item that seems awfully cheap is the $20 Liberty in MS-64 and -65.

In the non-gold type arena, things are quiet and steady with flying eagle cents taking off in MS-62 and -63, and 3-cent silvers needed by the bucket in G-VG for promos. Interestingly, there is also strong investor demand at the far end of the spectrum for 3-cent silvers in proof grades.

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One Response to Metals market quiets down in new year

  1. rv6672 says:

    Gold and high grade silver coins, plus bullion will have their ups and downs. But, for the long term the future looks promising. As long as the US and World governments keep printing money and acquiring more debt, the rise in these products will be assured. After gagging on this liquidity, the rise of more inflation will come into play and increase the value of coins and bullion. If you can hold on as I have, it will come to be a reality.

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