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Gold boost welcome end to week

The roller-coaster ride continues for gold.

My morning check of the Kitco website showed the metal vaulting $28.80 to $1,239.20 an ounce.

In the month of May, gold declined from nearly $1,300 to barely above $1,200 in expectation that the Federal Reserve would raise interest rates.

Conventional economic wisdom says raising interest rates make it more costly to invest in gold and might create rosier prospects in other forms of investment.

My old college economic professors would be pleased that I still remember their lectures.

For the Fed to raise rates, the economy must be growing strongly enough that an interest rate rise does not push it right back into recession, because rising rates also tend to discourage consumers from buying and businesses from investing.

This morning, the monthly unemployment rate data show that the economy just might not be growing.

Only 38,000 new jobs were added, the lowest increase in years.

Clearly the gold market action this morning means expectations are for rates to not to be raised for a while.

Gold American Eagle owners are likely to be pleased.

One-ounce Eagle sales by the U.S. Mint in May dropped from April levels but were still double March levels.

The May figure was 64,500. April was 93,500 and March was 29,000.

None of this is numismatic, I know, but our field is deeply influenced by the cash flow generated by the bullion coin market.

There is also the psychological impact.

Who isn’t pleased when the value of what he or she owns is rising?

Most collectors have at least a little bit of gold and even more silver, which is rising with it.

Today gold is rising. Feeling optimistic about this boost is not a bad way to end the week.

Buzz blogger Dave Harper has twice won the Numismatic Literary Guild Award for Best Blog and is editor of the weekly newspaper “Numismatic News.”

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