Gold sits near $900, ready to rise

This past week gold has again tested the $890 to $900 base level and held. My guess is that the market is shaking out the weak holders before it moves higher in reaction to the various stimulus packages.

It is obvious that at some point the fears of deflation will be overcome by the massive creation of paper money. This should also be obvious because of the sustained high premiums for common date U.S. gold. One interesting factor is the marketing companies that often advertise gold bullion at or near the spot price. This is a loss leader for them since there is no regular supply at that level, but they use it as a hook and most often try a bait and switch tactic where you are told there is a supply delay, but we have some very nice numismatic gold at a slightly higher level ... and the story goes on. It is greatly responsible for the dramatic premiums we see on U.S. half Eagles, Eagles and double Eagles.

The new 2009 Ultra High Relief is now out but in limited quantity and trading in the $1,500 to $1,600 range wholesale, which is a nice premium. The current Mint policy of one per household is obviously fueling the large premium over issue price. Is this a marketing ploy or just a fair way to distribute them, I wonder?