Metals market quiets down in new year
On Jan. 1 Japanese bullion dealers were required to start reporting bullion sales in excess of 2,500 yen, or about US $3,000, to the government. The fear of this new rule and threat of a new tax were enough to cause widespread liquidation by the public. Japanese bullion dealers were reportedly swamped
Could it be that simple? By that I mean government-stimulated liquidation and portfolio window-dressing.
On Jan. 1 Japanese bullion dealers were required to start reporting bullion sales in excess of 2,500 yen, or about US $3,000, to the government. The fear of this new rule and threat of a new tax were enough to cause widespread liquidation by the public.
Japanese bullion dealers were reportedly swamped. The window-dressing issue results from portfolio managers taking year-end profits from their best asset class (precious metals) to cover or dress up the poor performance of the rest of the investment portfolio.
Since last writing gold has gained 2 percent, silver over 3 percent and platinum only 1 percent. It became apparent to me was as soon as the new year arrived the selling pressure in the precious metals seemed to subside and the market has a more normal sense to it.
U.S. gold type coins have not shown much strength and continue to have some erosion in premium. Even a few issues in MS-67 have declined, namely the Liberty quarter eagle and the $20 Saint. I would consider this a buying opportunity. Another item that seems awfully cheap is the $20 Liberty in MS-64 and -65.
In the non-gold type arena, things are quiet and steady with flying eagle cents taking off in MS-62 and -63, and 3-cent silvers needed by the bucket in G-VG for promos. Interestingly, there is also strong investor demand at the far end of the spectrum for 3-cent silvers in proof grades.
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