Amazing. With my forecasting record of the past two years, readers still want me to continue to do this. OK, then, here goes.
I have been miserably wrong about the price of precious metals for two years running, but that seems to be the area of greatest interest, so I will start with them.
Gold is still levitating, but not quite as high as it was at the beginning of 2010. I still do not buy the conspiracy theories. Inflation of the money supply cannot justify a fourfold increase in the price of gold since 2001.
1. I say threefold, tops, and that would put gold back around $750-$800. So to be precise, I pick $800 for year end 2010. If you love reading the stories about the dollar’s more than 95 percent fall since 1913, that would still put gold at $445.85, up from $20.67
2. Silver usually follows gold and that would put it at $13.
Will these two forecasts be a third strike or will the third time be the charm?
3. The dollar will strenthen this year against its main international rival, the euro. I will put its value at $1.17, the same value it had when it was started by the European Union in 1999.
Drops in the price of bullion will discourage buyers.
4. The Mint will catch up with silver and gold bullion coin demand this year and end rationing supply.
5, The end of bullion rationing will allow the Mint to bring back proof gold and silver American Eagles, limiting the gap in the set to one year.
6. Coin demand is still falling. The Mint will get through the entire year without striking either dimes or nickels. If they don’t strike either, do I get extra points?
7. The Disabled Veterans commemorative silver dollar will sell out in a month. Maximum mintage is 350,000. This compares to the 500,000-coin sellout of the Lincoln commemorative last year.
8. The Boy Scout dollar will sell out event faster as hobbyists remember their younger days fondly despite a woman being in the design. Mintage here is also limited to 350,000.
9. The Treasury secretary will not be given the power to choose the composition of circulating coins. Congress will not delegate its Constitutionally mandated authority to the executive branch.
10. Sales of the new five-ounce silver copies of the America the Beautiful quarters will not exactly set the world on fire – unless the Mint decides it can limit issuance to some ridiculously low number, thereby inciting the eBay posse to saddle up and run prices up.
There they are. Is it brave or pig-headed to be negative on gold again? I know, I know. I read the other side of the issue, but sooner or later the noncollectors who paid excessive premiums for essentially “common” U.S.” gold coins for their Individual Retirement Accounts will discover as big a hole in their accounts as that caused by the fall of the stock market in 2008-2009.
Remember the caveats: I am a collector newspaper editor and my views are shaped by my hobby experience and are not investment advice.