Friday, March 16, 2007


"Sentiment On The Greenback Sours"

Reuters reports on the US dollar. "The dollar fell to a three-month low on Friday, hurt by concerns that crisis in the U.S. subprime mortgage market could curb growth in the world's biggest economy. The U.S. currency pared some losses after factory output exceeded expectations."

"Late on Friday, the euro traded up 0.6 percent against the dollar at $1.3311. Against the yen, the dollar traded down 0.6 percent at 116.74 yen."

"Sentiment on the greenback, which fell broadly, had soured overnight, with investors suspecting the crisis in the U.S. market for subprime mortgages, extended to borrowers with risky credit, could seep into other markets and parts of the economy, particularly after former Federal Reserve chief Alan Greenspan warned of such a risk on Thursday."

From MarketWatch. "Gold futures climbed Friday to close at their highest level in more than a week, boosted by a weaker U.S. dollar and uncertainty surrounding the outlook of the U.S. economy."

"'With stable equity markets, gold is able to concentrate on the declining dollar spurred by inflationary data,' said Peter Spina, a chief investment strategist at"

"And 'despite a truckload of new gold bears and many gold bulls openly licking their wounds, gold has once again shown its internal strength by consolidating its overbought condition and now resuming its climb to $700+,' said Peter Grandich, editor of the Grandich Letter."

"Gold for April delivery rose $6.80 to close at $653.90 an ounce on the New York Mercantile Exchange. It climbed as high as $656.50 earlier, a level not seen since last Friday, though it hasn't closed at a level this high since March 8. Gold's benchmark contract finished $1.90 above the week-ago closing level."

"'Gold finds itself once again pushing the $655-$660 resistance,' said Spina. 'A break above should bring in additional momentum and extend its rally.'"

"But 'with the subprime debacle resonating in the background, the threat of another market sell-off does remain a concern for the metals, which have become vulnerable on such strong selling pressures -- a rush for liquidity,' he said. For now, 'stable equity markets do allow gold to return its focus on the fundamentals and we see this today with the U.S. dollar back testing important technical support levels,' he said."

"'The terminally ill U.S. dollar and the mounting economic and political woes in the U.S. are only added reasons to expect $700 faster than most could imagine,' said Grandich."

"And 'it is encouraging to see gold reacting once again to a decline in the U.S. currency,' said Jon Nadler, an analyst at Kitco Bullion Dealers. 'Whether such a reaction becomes as reliable as it previously was remains to be seen.'"

Ok, can you give me an idea of what physical gold to buy? I have some Krugerrands and Maple Leafs I bought 20 years ago but I want to buy some more. I like those Australian Lunar coins. Would those be stupid to buy or what?

Also can you give me a few good dealers you know of?

If you are trying to protect a somewhat large portion of savings, I'd recommend buying bars. You can get a 32 oz bar (about the size of a standard wallet) and convert about 21K.

I really don't see how folks think storage is a problem. You can convert 100K into gold and it would be about 1/2 the size of a laptop.

Goldmoney is one option. You can purchase from them at about 2% above spot. You have to pay for shipping, or you can pay them to store it for you for about $1.50 a month. They'll buy it back at spot at anytime. Once you take delivery, someone else will not be buying it back for spot. At some point, you'll probably be wanting to sell.

Kitco is another, but I've never used it.
When it comes to bullion coins, I prefer whichever is cheaper, as long as the condition is good. Probably Krugs. I don't understand bigger premiums for a Maple Leaf, for example.

Personally I always use a local dealer (within 1 hours drive). I call my short list on interesting price movement days to get an idea of how they are pricing things. It isn't hard to figure out who has the best deals.

The reason I go local is I like to know who to sell to. Many people use dealers that won't buy, and I stay away from those. I do the same call around for sell prices, on the same day as the buy prices. That way I know their total markup, basically.

I have seen some good prices on mail/internet purchases in bulk, but I have never used one myself.

People here have been reporting premiums for 1 ounce gold coins of around $15-25 over spot.
From what I can tell, gold is gold, 24k or 21k or 16k - the highest purity is what I look for. Maples are 24k and the new US buffalos are 24k. Some Krugerrands are said to be dirty, dunno if it is true- at the same time some people (older?) place a higher resale value to them than Maple Leafs etc...

Australian Lunar - in Austrailia it would be more resaleable than in the US.

The catch to owning personal sized gold, "...Once you take delivery, someone else will not be buying it back for spot. At some point, you'll probably be wanting to sell." Silver too. Zinc requires at minimum one ton to resale, unless you find the right auction (skip the markup 10 - 30 percent, on the buyers end anyway) in my area they have special auctions on Sunday mornings, every so often, mostly in Spring and Summer, there are two this weekend.

Jewelry seems iffy to me. Women dont seem to like coins and dealers dont seem to like jewelry.

Great input, thanks.

'Once you take delivery, someone else will not be buying it back for spot.'

Right now, today, I can do that in Flagstaff. But you make a great point. I can remember in the 80's, when prices were swinging, the purchase price was $50 over spot, and the buy was $50 under.
I have a friend who buys from CNI in Los Angeles but was a bit frustrated during the last dip with slow delivery (2 weeks paid with cashier's check).

I like to buy cash and carry at a dealer in Phoenix-CMI on north Central Ave. although they're a bit more expensive ($8 per Eagle) than CNI.

I've also heard good things about Ampex. Google em.

I hold a substantial portion of my assets in physical - eagles, pre65 silver bags and 100oz silver bars. I like trading GLD only within my IRA's (especially Roth) since the gain on GLD is treated as collectible and taxed at 28%. The war on gold continues to make it an unattractive investment for many, but I physical as insurance and would go that route instead of paper holdings or custodial accounts. I do believe, if you don't hold it you don't own it.
Should be Apmex
Right they call it 'junk silver' in the bags. It is a reasonable price and stores well.
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