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What's gold trying to tell us?

Gold has been ratcheting higher this year. Yesterday it was $1,367 a troy ounce.

It is doing this despite the fact that demand for gold American Eagles is not robust. In the opening days of March, demand for the one-ounce coin has almost stopped. Only 3,000 have been sold.

If gold had been acting like an inflation hedge, the price increases of recent weeks have had some logic behind them. Oil was up. Other commodities were up. Inflation warnings were flashing. Coin buyers, though, weren't doing as much buying compared to last year.

Oil suddenly has come back down below $100 a barrel and copper has now taken a header, dropping below $3 a pound. Most of last year it traded in a range of $3.20 to $3.40.

Copper is taken as a proxy for the health of the Chinese economy. Demand there is half or more of world copper demand. Stockpiles there are used as collateral for loans.

The sudden sharp decline in copper is not something that would signal inflation. The alternative is deflation. It is plausible if China stops growing and its huge demand for the world’s raw materials stops growing with it.

But deflation would be hugely unsettling.

China’s gold buyers might stop buying, especially if their incomes shrivel.

On the other hand, the rest of the world’s savvy investors know that an unsettled economic environment is just the thing to push gold higher. That’s what happened after the financial crash in 2008.

So far though, coin buyers are not acting as if this might be the case. What they do in the coming weeks is well worth watching.

Buzz blogger Dave Harper is winner of the 2013 Numismatic Literary Guild Award for Best Blog and is editor of the weekly newspaper "Numismatic News."