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Dealers say still time to buy gold


It?s a law of physics ? what goes up must come down. But when it comes to gold, the drop may be short lived.


Gold broke the long awaited $1,000 an ounce mark on March 14, but within a few days it was back down under a grand.

Now what?

?There is still time to act,? said Kirk Kelly of The Coin Depot, Greenville, S.C. ?I think metals will go higher.?

What we?re seeing now is a correction in the market, he said.

?Gold is picking up a correction,? he said. ?It?s gone down after going up, up, up, up. That?s natural. The correction we saw is about 10 percent, which is typical in commodities.?

It?s just the way the market works, said Paul Sims of Paul Sims Inc., Richmond, Va.

?Typically a bull market, a market that is advancing, goes up four or five days, goes down a lot one day, goes up two, three or four days, and then goes down a lot the next day.

?But it?s always still trending up.?

There?s just no such thing as going up in a straight line, Sims said.
?Not any where, any way, any time.?

A bullish market will be up more days than it?s down, while a bearish market will be down more days than it?s up.

And right now Sims is seeing more up days than down.

In today?s dollars, gold would have to reach $2,000 an ounce to match its peak value in 1980, Sims said. But will gold ever achieve that now?

?I don?t know, but it sure appears to be acting like a market that wants to try it,? Sims said.

Even with gold today under $1,000 an ounce, Sims sees more positive than negative in the market.

?If somebody had told you 45 days ago that gold would be $946 you?d say, ?Wow, that high?? ? Sims said.

In fact, a part of Sims, doesn?t really want to see gold get too high.
?What?s good for gold could be bad for a lot of other things,? Sims said. Those high gold prices may be a result of failing banks, high oil prices and an unstable economy.

?As long as there is major uncertainty in the world economy then the markets will be very active and my best guess tends to be that they will be trending higher than lower,? Sims said.

People are still doing a lot of buying, Kelly said. Among the most popular precious metals he?s selling are gold Eagles and Krugerrands and silver Eagles and 100-ounce bars.

?If people don?t own as much gold and silver as they think they should, I would consider adding to my position,? Kelly said.

Sims said he?s more inclined to buy gold than silver because historically, gold?s value is 56 times that of silver.

?When it goes below that it means silver tends to be overpriced or gold is underpriced,? he said. ?Right now gold is at 53 times silver, so it?s close.?
But people need to be comfortable with their choices, he said.

His advice?

?Make sure you own some gold,? Sims said. ?Make sure you own some silver. Don?t buy more than you can afford, but definitely don?t have none.?