Correction takes prices down just a little

This article was originally printed in the latest issue of Numismatic News.
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Gold is down about 1.5 percent in a week and silver 1 percent. Platinum basically is unchanged. While not usually mentioned here, platinum’s little brother palladium is roaring along at well over $600 an ounce. If the talk about the U.S. Mint producing palladium coins comes to fruition we will cover it along with the other metals.

Currently I would feel much more comfortable if it was a deeper correction that would wipe out some of the weaker more fickle speculators. This is not that I am mean; it is just that straight up does not create a strong long-term base, which is very much preferable.

A recent e-mail asked “why do the gold type prices jump around so much and not follow bullion’s lead?” The simple answer to the complex question is there are often orders for a quantity of, say, 100 $2.50 Indians in MS-62, or 50-MS-61s, 100 MS-62s and 50 MS-63s. The order would be from a major telemarketer, promo house, or an investment firm or similar entity. It could even be a single wealthy individual who decided to buy. After a few phone calls the major traders will get cleaned out. Bids will rise to replenish inventory or complete the order. This would happen regardless of the gold price. However a weaker gold price will usually make it easier to fill the order.

Type coins have been quiet except for continued interest in EF and AU Trade dollars. Large type gold has followed bullion down slightly while the little Indians have been very active in circulated to low-end BU coins and MS-63 and above are softer.

Happy Collecting!

E-mail harrymkrause@optonline.net.