Rare American Coins and Investing in Them Sensibly

Here is a good, short video reminding investors to diversify your investments, so that no single event will undermine you. Successful investing is a process where you potentially benefit from future events. Putting everything into one asset is often a losing proposition.

I have to remind myself there’s more to life than just rare American coins.

Form a plan that includes a variety of assets and check out the sources below for your gold and silver purchases.

If you are interested in investing in silver or gold products, check out GoldSilver.com, SilverandGoldExchange.com, or AmagiMetals.com.                               

If you are interested in buying gold or silver bullion at the lowest price, check out BullionVault.

If you are interested in learning more about rare American coin, or foreign coin collecting and investing see NumisMaster from Krause Publications.

If you would like to buy interesting modern, or old rare gold and silver coins take a look at either NewYorkMint or GovMint.

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Rare American Coins and Discovering Silver Dollar Mint Errors

Discovering mint errors can be a rewarding endeavor. Mint errors add to the rarity of a silver dollar coin and help your understanding of the minting process in general.

This article is geared to the reader who already has an understanding of how US silver dollars were minted. Here are some links to other posts on this site explaining the coin minting process:

Private minting and a tour of the San Francisco Mint

Vintage US and Canadian Mint videos

Rare American coin mint errors are quite rare because the US mint has good quality control during all stages of the coining process.

This is only a brief overview of mint errors, since the topic can be really involved.

There are 3 categories of mint errors:

  1. Planchet errors: problems with forming the silver blank
  2. Die errors: various abnormalities with the dies which transfer to the planchet
  3. Striking errors: anomalies which occur during the striking process
rare american coins

Clipped Planchet Error

Planchet Errors:
The most common planchet error, but still rare is the “clipped” planchet. This happens when the planchet strip fails to advance properly and the next planchet overlaps the preceding one. This forms a planchet that looks like it has a piece clipped out of it.

Die Errors:
Die errors are often called varieties among experts in the field. There are more areas for mistakes in the formation of the coining die, than anywhere else in the production of a finished silver dollar.

All dies are annealed (heated) twice during their production process. If this annealing process isn’t carried out exactly right, the dies will be substandard. They will either break early or show the effects of the improper annealing with wavy areas in the coin.

rare american coins

Clashed Die Error

Die clashing happens when the top and bottom dies strike each other because of no planchet being in the striking chamber. Each die transfers parts of its design to the other die. Therefore, all coins struck with these dies will exhibit the clash marks.

 

 

rare american coins

Doubled Die Error

The most common die error is the “double die” error. Double dies errors are produced in two ways. First is when there’s a shift during the hubbing process of making the die. The second is when there is an entirely different hub used for the second die striking with the hub and the hubs aren’t exactly the same.

All dies need to be struck twice to fully transfer the impression to the die. The die is annealed before each impression with the hub, so it doesn’t get brittle. If the hubs are registered perfectly for the second hubbing, they impart a clean sharp image to the die.

If the second hubbing isn’t perfectly aligned, the design will appear slightly off from the first and look doubled. This is known as a doubled die error.

rare american coins

1900 O/CC Mint Mark

 The next most common die error isn’t really an error so much as an act of economy by the mint. They often repunched mint marks when sending dies to another mint for use. The Philadelphia Mint would punch a second mintmark over an existing mintmark and reuse the die.

The mint also did this with dates. They would punch a new date number over an old one to change a date without changing the die. These are the only intentional “errors” made by the mint.

Die cracks or breaks happen from overuse of the die. The planchet material forced into the crack or break shows up on the coin surface. If a piece of the die falls out, the coin will have a “blob” of extra metal filling the area where the die broke away. This is sometimes referred to as a “cud”.

Striking Errors:
Striking errors are quite rare. Some examples are planchets not seated in the striking chamber perfectly, so part of the design appears to be missing. Double strikes that are unintentional happen when the coin isn’t removed after the first strike.

There are also several types of striking errors that occur when the bottom die gets stuck while rising to pop the coin out of the press. These include broad strikes, partial collar strikes and indent strikes.

The last striking type error is during instances where grease, wood fibers, fragments, chips or slivers get in the striking path and become part of the finished coin.

Collecting error or variety rare American coins becomes its own specialty, similar to collecting toned coins. A great deal of study is required to properly identify mint errors from doctoring.

Leroy C. Van Allen and A. George Mallis pioneered the field of Morgan and Peace silver dollar varieties. Van Allen and Mallis assigned numbers to the deviations they observed in their study for silver dollar varieties. VAM is the popular designation for deviations from the standards.

If you are interested in investing in silver or gold products, check out GoldSilver.com, SilverandGoldExchange.com, or AmagiMetals.com.                              

If you are interested in buying gold or silver bullion at the lowest price, check out BullionVault. 

If you are interested in learning more about rare American coin, or foreign coin collecting and investing see NumisMaster from Krause Publications.

If you would like to buy interesting modern, or old rare gold and silver coins take a look at either NewYorkMint or GovMint.

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Rare American Coins and How to Determine If They Are Mint State

A few years ago, I sent a dozen of what I considered gem coins to NGC to be graded and prove my suspicions. To my dismay, all but two came back AU 58. The two that returned in MS condition were several points lower than I thought. After bashing the graders, I set out to learn MS grading better.

The lower grades of the Sheldon scale are fairly straight forward and coins fall into them predictably. It doesn’t take a lot of experience to hit the 1 to 58 grades exactly. And if you aren’t quite correct, their values don’t usually change that much from one grade to another.

The single most important decision to make in grading rare American coins is determining when the coin crosses the line from circulated to uncirculated.

The 11 MS grades from 60 to 70 are much more precise and difficult to master. As well, their values often change enormously from one grade to another. It is far more important to master the mint state grades than the lower grades.

rare american coins

Note friction marks at the high points

Mastery will take years of experience to accomplish. This article is only to demonstrate how to separate mint state from almost/about uncirculated silver dollar type coins.

The very slightest circulation wear will immediately throw the rare American coin into the circulated category. AU coins can and often do exhibit lots of mint luster and more detail than their uncirculated counterparts.

Unfortunately, mint luster and detail aren’t the only qualifications for mint state. Well struck AU coins can exhibit better luster and detail than weakly struck uncirculated coins. They can have fewer handling marks on them as well.

This article will use Morgan silver dollars as examples of what to look for in mint state silver coins. Other silver dollar issues will have slight variations from the examples given here. 

Morgan silver dollars varied widely in strike during their time of minting, from pathetically weak, to strong and sharp. The strike of a coin usually has to do with the amount of force or pressure on the planchet from the dies. However, die wear will show a loss of detail that appears as a weak strike.

When looking at an MS example of silver coin, notice that it has what almost appears to be a very thin skin layer resulting from the minting process. This is where luster and brilliance reside. Luster gives a silver dollar a rich, frosty appearance. 

As you tilt and rotate a mint state rare American coin, you will notice every part of the coin surface has this finish. Even the slightest removal or disruption of the luster over the coin’s surface qualifies the coin as Almost Uncirculated.

rare american coins

More friction marks on the high parts

Now, look at surface preservation for signs of mishandling at the mint. Morgans tend to have lots of bag marks, but occasionally shovel marks or coin counter pits as well.

These marks are taken into consideration for their MS placement, but not in determining whether or not they make the Mint State cut. A weak strike will have little detail in the high areas, but still exhibit full mint luster across them, and over the entire coin surface.

Silver coins that are well struck, but not MS would show breaks in the luster over the higher areas which aren’t a result of handling at the mint. They are the result of very light circulation type wear, and therefore are no longer mint state.

High points on Morgan silver dollars aren’t where you’d expect them to be. The first surfaces to show on Morgan dollars are:

Obverse: Liberty’s face-from just below the eye down to the bottom of the chin, at the lower part of the neck, and at the folds at the back of her cap.

Reverse: On the eagle where the head meets the neck and upper chest feathers.

rare american coins

Note circulation wear on high points.

These high points are the giveaway for recognizing circulation on a Morgan dollar. Uncirculated coins with full luster will roll over the high points, but wear off very quickly under circulation. The break in this luster doesn’t require magnification to see, once you know what to look for.

Mint state coins will show “friction points” at the high points of the coin’s surface, from contact during handling. These friction points look different from luster breaks.

Learn to identify uncirculated silver coins on untoned examples. Detecting mint luster is considerably more difficult when a coin is toned. Toning can make a coin appear worn when it isn’t. It can also hide surface problems on a coin, making it appear better than it really is.

It is nearly impossible for even veteran experts to accurately grade a toned coin. With toned coins, the objective becomes to assess the visible impact of wear on a coin as accurately as possible.

If you are interested in investing in silver or gold products, check out GoldSilver.com, SilverandGoldExchange.com, or AmagiMetals.com.                               

If you are interested in buying gold or silver bullion at the lowest price, check out BullionVault.

If you are interested in learning more about rare American coin, or foreign coin collecting and investing see NumisMaster from Krause Publications.

If you would like to buy interesting modern, or old rare gold and silver coins take a look at either NewYorkMint or GovMint.

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American Gold Coin Value and the Death of Money

In this video, Mike Maloney interviews Jim Rickards regarding the US current monetary policies. Jim has some astute insights on where we are with our currency devaluation and how it will lead to our demise. He makes an interesting analogy to how our monetary policy is like a person just beginning to use drugs.

Mike Maloney videos are very intellectual and fact based. 

In my opinion, American gold coin value and the coin value of silver dollars will skyrocket sometime in this decade. That gives you some time to acquire your share, whether it’s in the form of gold or silver bullion or gold and silver coins. Check out GoldSilver.com on the right side of this page.

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Rare American Coins and Their Beginnings in the US

After the US became an independent nation, we were still using coinage from European countries as our medium of exchange. Primarily, we used coins from Britain, Spain, France, Portugal and especially Mexico.

Before the establishment of a US Mint, the one ounce silver coin was the standard for the dollar of value.

Thomas Jefferson proposed a coinage system based on the dollar, which was derived from the German/Austrian thaler. Similar sized silver crown coins were also commonly circulated in Europe during this time.

The name dollar was chosen specifically so it wouldn’t be confused with the British crown. After the revolutionary war, the United States wanted nothing to do with British influence, monetary or otherwise.

rare american coin

Rare 1794 Flowing Hair Silver Dollar

In 1785, Congress approved a coinage plan, but didn’t establish a standard weight for gold and silver coins, nor did it establish a mint.

In 1789, Alexander Hamilton was named head of the Treasury. The new proposal was for a gold $10, and $1 coin. The proposal also included a $1 silver coin, and a silver dime. The cent and half cent would be copper. Hamilton suggested naming the $10 gold coin an “eagle” and the name stuck.

Finally in 1792, Congress established a new mint in Philadelphia and the following denominations for coins: gold $10, $5, $2.5, silver $1, $.50, $.25, $.10, $.05, copper cent and ½ cent. Minting began in 1793 with the striking of the lower denominational coins.

Silver coinage was struck the next year and gold coinage the following year. None of these issues exceeded 9,000 coins. By today’s standards, they are truly rare American coins.

rare american coins

Spanish 1798M 8 Reales

These new coins, particularly the gold and silver ones were close to the weight and proportions of the foreign coins already circulating in this country at the time. Until 1857, both foreign and domestic coins circulated equally as legal tender.

These coins were based on a bimetallic system. That is, the US had both a gold and silver standard. 5 silver dollars equaled 5 gold dollars.

Since the gold to silver ratio varied slightly as more gold or silver was discovered, it was difficult to keep perfect parity between the two precious metals. The more valuable metal quickly left circulation and was hoarded.

This situation happened for the next hundred years as new deposits of gold or silver were discovered. Finally, the Coinage Act of 1873 ended the dispute by putting the nation on a gold-only standard, demonetizing silver in theory. This gold standard wasn’t completely adopted until 1900, however.

That didn’t favor the silver interests of the day and they fought it. Silver dollars continued to be produced for circulation as the cheaper, more plentiful form of money.

rare American coins

Bland Allison Act started the 1878 Morgan silver dollar

The Bland-Allison Act of 1878 required the US government to purchase silver and produce silver dollars for circulation. By then, the intrinsic value of the silver dollar dropped to 52 cents.

Gold was once again the higher valued form of money. Treasury notes were redeemed for gold rather than silver, and drained the Treasury reserves of significantly more gold than silver.

Finally, in 1900 after lengthy debates, Congress resolved the gold/silver value dispute by legislating the gold-only standard. The US would then maintain all forms of money in parity with that standard.

During the early 1930’s all circulating gold coins were discontinued. By the mid 1930’s, silver dollar coins also stopped being minted. The US then discontinued production of all 90% silver coins in 1964.

In 1971, President Nixon announced the US would no longer exchange paper currency for gold, and removed this country from the gold standard. The US was the last major country to go off the gold standard and become a fiat currency.

At that time, we as a nation had the concern about depleting our gold reserve while on the gold standard, but inflation was fairly low in the early 1970’s. Now, we aren’t at all concerned about depleting gold reserves, and inflation is skyrocketing.

If you are interested in investing in silver or gold products, check out GoldSilver.com, SilverandGoldExchange.com, or AmagiMetals.com.                               

If you are interested in buying gold or silver bullion at the lowest price, check out BullionVault.

If you are interested in learning more about rare American coin, or foreign coin collecting and investing see NumisMaster from Krause Publications. 

If you would like to buy interesting modern, or old rare gold and silver coins take a look at either NewYorkMint or GovMint.

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American Gold Coin Value and Finding the Right Gold and Silver Dealer

Margaret Olsen is one of the authors listed in my Product Reviews section at the top of this page. She is one of the foremost experts on the gold market and gold values. I feel honored to have her contribute to Heritage Coin Gallery knowledge base. I own a printed copy of “The Gold Book” and use it on a regular basis. 

Here is Margaret Olsen 

Price should be only one consideration, but in many cases, NOT the first consideration

When we were an active retail establishment, we had many clients who purchased gold coins and bars and were always looking for the “lowest price”.  We had one client, (Mr. Knowabargain), who wanted to purchase South African one troy ounce Krugerrands.  

He asked us for the price at which he could purchase them from us and I quoted him the price.  He proudly stated that he could purchase them from a dealer, whose name I shall list as “The Bait and Steal Co.”, for at least $20 -$30 less than we quoted and he asked us to match their offering price.  

I told the client that the price the ”The Bait and Steal Co.” asked was below our cost, so there was no way that we could match that price.  I further asked, if he was dealing with a local company, if he had dealt with them before and when he was expecting delivery of the gold coins.  

He said that he had checked on the company and that while they were an out of state company, they had excellent references and they were shipping his material within two weeks of his confirmation of sale.  He bought his Krugerrands from ”The Bait and Steal Co.” and was quite pleased with himself for “saving” $20 to $30 per coin.

Three months later, I received a call from Mr. Knowabargain stating that he had still not received his Krugerrands and wondered what he should do now.  He told me that he had wired his money to them when he first spoke with me and that now he called them, but they weren’t sending his Krugerrands yet.  I did refrain from saying “I told you so” and told him to contact his attorney and speak with him.

A year later, Mr. Knowabargain called to report that he had never received his Krugerrands and that the out of state company was now under investigation and had declared bankruptcy. Of course, not all cases are quite so dramatic, but unfortunately this scenario occurs more times that the average investor realizes. 

american gold coin value

The Gold Book

Another example of price consideration was Mr.Seeabargain, who came to our place of business and asked “what we charged for Canadian one troy ounce, gold Maple Leafs”.  I quoted him the price at the time which was $400 (don’t you wish you could buy 100 of these now!).  

He told me that he could purchase them from “the dealer down the street” for $390 each.  I told him that he should go ahead and buy from that dealer then.  He then said that “the dealer down the street is doesn’t have any of them right now”.  

I replied that “the ones that we don’t have are $390 each, too.”  Now if you missed the meaning of this example, it is meant to describe what is known in the industry as “the shelf price” also, known as “that (coins/bars) which we have in stock”. In other words, AVAILABILITY.  

When there is a discrepancy between supply and demand, physical possession is a very important consideration and one not to be taken lightly.  When supplies are tight, there can be two different prices: an on-the-shelf price and a delayed delivery price.  

Obviously, on-the-shelf means that coins/bars are in stock and one will pay a higher price to take immediate possession of these coins/bars, rather than wait for delayed delivery.  Delayed delivery can vary from a week to three months, in some cases I’ve seen up to 6 months, depending on the market and timing. 

This is not to say that we always have had our supply available, but we know our clients, they know us. We have a level of trust so that we can handle various supply/demand situations as they occur.  

In this day and age, a level of trust and knowing with whom you are dealing cannot be emphasized enough.  I think one of the hardest things in life is to find people and companies that are reliable and trustworthy.  This should be an important part of your investment or hobby research and strategy.

Today, we are open by appointment only and deal with clients that we already know or are referrals from known clients and/or financial planners with whom we work.  

We do a lot of consultations regarding purchases and sales, appraisals for estates, insurance, claims of loss and charitable contribution.  In addition, we do a lot of consultation and testimony as an expert witness.  The expert witness cases usually involve some type of misrepresentation or fraud by a dealer/company, but we’ll save those examples for another time.

american gold coin value

Platinum Buyer’s Guide

Suffice it to say that price should be only one consideration, but in many cases, NOT necessarily the first consideration.  

Copyright Margaret Olsen, Westminster Publishing Co., 2014
Margaret@mycoinappraiser.com
http://www.TheGoldBuyersGuide.com
http://www.4preciousmetals.com

 

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American Gold Coin Value and How Gold Reacts to Mounting Geopolitical Concerns

Here is a gold market update with news and commentary for March, 2014 submitted by Dave Cooper of Upstate Coin and Gold. Upstate Coin and Gold is a family run business located in Fayetteville, NY. Dealing with them is like dealing with your best friends. I look forward to each purchase.

 american gold coin value

 Gold Reacts to Mounting Geopolitical Concerns 

March 20th, 2014 | Upstate Coin & Gold’s MarketNotes:

american gold coin value 

The current situation in Ukraine is like a return to the cold war era – a standoff between superpowers fighting for spheres of influence.  The gradual takeover of the region of Crimea by Russia is being carried out in slow and deliberate steps as each side gauges the reactions of the other.  Despite diplomats scurrying around behind the scenes, the potential for conflict is palpable.  Investors have also been active, buying gold as a hedge against any escalation in the confrontation.  This trend looks set to continue with hostilities likely to persist.

Referendum Helps Extend Russia’s Influence

The gold price jumped in trading last week to close at $1,382.00 on Friday, which was the highest in over six months.  Buying was spurred by concerns ahead of a referendum in Crimea on whether the region should secede from Ukraine and join Russia.  The outcome of the vote was hardly ever in doubt considering the large Russian military presence, prompting Western powers to brand the referendum as illegal.  The results reflected the contrived nature of the vote, with 95.5% of ballots being cast in support of leaving Ukraine for Russia while many people boycotted the referendum in protest.

Despite the obvious infringements by Russia, the US and its allies are loath to act considering the potentially devastating costs of any armed conflict between nuclear powers.  This has given Russia free rein in what it considers to be its own backyard.  Russia has thrown its military might around in neighboring countries in the past, such as its brief offensive in Georgia in 2008.  As in Crimea, Russia claimed to be defending the interests of its nationals, but this was mostly part of a policy to weaken its neighbors and retain a degree of control over the bordering countries.

Gold As Safe Haven As World Becomes Riskier Place

As Russia makes steady advances in its move to control Crimea, it is clear that the superpower is taking great measures to extend its influence.  Russians are still spread throughout the old parts of the Soviet Union in what are now independent countries in Eastern Europe.  The US is in a difficult position of wanting to punish Russia to prevent further actions while wishing to avoid outright confrontation.  The Obama administration seems to be less willing to use its military capabilities overseas, as evidenced in the case of Syria.  Whether this is true or not, the mere perception of US weakness runs the risk of emboldening other countries to act more aggressively.

Furthermore, Russia is not the only hotspot on the radar.  Other countries with nuclear technology such as China, Iran, or North Korea may also see an opportunity to act out while the world is distracted by Crimea.  In this way, a shift from a unipolar world dominated by the US to a more multipolar world creates a greater potential for confrontation.  We may be entering a new state of affairs where geopolitical concerns become a global focal point. 

As a result, investors could likely react by holding safer assets such as precious metals. While tensions run high, it would not take much to spark a further surge in gold buying.  With no end in sight, this may well be the new reality of the world that we live in.

Dave Cooper
Upstate Coin & Gold
315-637-1300
dave@upstatecoins.com  
Our market commentary is the opinions of individuals on our trading desk and does not necessarily represent the overall viewpoint of, and may differ from, Upstate Coin & Gold or other employees.  While we try to provide as accurate information as possible, we do not guarantee the commentary’s completeness, accuracy to data, or its forecasts.
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Coin Value of Silver Dollars and What Type of Silver Should You Be Buying?

Are you buying the wrong type of silver?

Here’s a short video discussing the various types of silver dollars used as bullion and which ones will perform the best in different situations. One type will outperform the others, depending on the market at the time. Are you buying the wrong type of silver? Watch and find out.

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Rare American Coins and Collecting Them as an Investment

Most rare American coin collectors start their careers trying to fill in their collection as quickly as possible. There’s nothing wrong with that. It’s exciting and gives the new collector incentive to continue the pursuit. But, this isn’t the way you make money with your hobby.                                                                     

The mantra of rare American coin collecting is to buy the best you can afford. Collect better, not more. 

Not many people start this way and that’s all right. Buy the best coins you can afford and complete the series, if that’s your goal. Then UPGRADE.

rare american coins

The Elusive 1893-S Morgan Dollar

After getting an example of all the coins in the series, start upgrading the key date coins. Buy rarity before grade. Replace the best, most rare date coins with ones in the highest affordable grades.

When presented with choice of upgrading a common date coin or rare date coin, it’s always better to upgrade the rare date coin. In upgrading a series, focus on replacing the rarest coins you can afford first, and then upgrade their condition second. Buy the better grade, even if it means waiting and saving for it. 

Upgrade key dates first, and common dates later. The reason for this is because rarity will outperform common, commodity coins by a large margin. The rarer the coin is, the higher the margin. The common coins of the series are for sale everywhere for commodity driven prices and make easy fill-in replacements. 

Truly rare coins aren’t available on the market very often. Otherwise they would have commodity driven prices. Buy them when you find them and have the resources to acquire them. Finding the most acceptable key date coin for the slot can be quite involved. 

rare american coins

An uncommon American coin

Don’t mistake conditional rarity for true rarity. Conditional rarity is often a really high grade coin within a common date specimen. It is rare because of some attribute, not because the coin itself is genuinely rare.

Toned coins, really high grade of common coin, or die/mint errors and varieties all qualify as conditional rarities. Don’t buy conditional rarity for a lot of money, because it may not stay rare for long.

However, conditional rarity is better than common coins in a collection, but not as good an investment as truly rare American coins. Truly rare American Coins outperform common date coins by a huge margin. Rarity stays rare, and common, well stays common.

Duplicates will naturally come from the upgrading process. Sell the duplicates for the cash to get a better date of another key date coin. Make a plan for rotating stock in your collection and follow it.

Become attached to the outcome, which is a better grade of coin in your collection, not to any one coin itself. Watching the market for your coin replacement over several months will tell you when the right one comes along for the right price. Move only when the time is right and you will feel good about your new aquisition.

If you are interested in investing in silver or gold products, check out GoldSilver.com.                               

If you are interested in buying gold or silver bullion at the lowest price, check out BullionVault.

If you are interested in learning more about rare American coin, or foreign coin collecting and investing see NumisMaster from Krause Publications.

If you would like to buy interesting modern, or old rare gold and silver coins take a look at either NewYorkMint or GovMint.

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American Gold Coin Value and March 2014 Gold Market Trends

Here is a gold market update for mid-March, 2014 submitted by Dave Cooper of Upstate Coin and Gold. Upstate Coin and Gold is a family run business located in Fayetteville, NY. Dealing with them is like dealing with your best friends. I look forward to each purchase.

 american gold coin value

Upbeat Jobs Data Shows Signs of Spring Thaw 

March 12th, 2014 | Upstate Coin & Gold’s MarketNotes:

rare american coins

The strength of the US economy is an important consideration for investors and policymakers. The February jobs data report released on Friday was thus a warm welcome after the disappointing employment figures of the previous months. With the rate of job creation in the US back in line with expectations, the Federal Reserve is expected to proceed as planned with the tapering of its quantitative easing program.

There had been worries about how the gold price might fare as the quantitative easing wound down. However, a few emerging favorable factors have come together to make gold one of the stellar performers so far this year.

Economic Recovery Back on Track?

The Federal Reserve uses the strength of the labor market as one key gauge for determining policy. As a result, the jobs data reports released on the first Friday of each month have drawn significant attention in recent months.

The disappointing employment data reports from December and January have cast a shadow over the US economy, with only 74,000 and 113,000 new jobs added, respectively. The cold snap over these months was no doubt partly to blame, but the figures also raised wider concerns about whether the economic recovery was faltering.

But on a positive note, the news on Friday that US companies hired 175,000 new workers in February was met with relief, buoying hope that the economy has bounced back from a weak patch. The positive data also gives the Federal Reserve the green light to go ahead with its cuts to quantitative easing. The Federal Reserve bought $85 billion in bonds each month for most of 2013 but has since trimmed its monthly purchases to $65 billion, with further reductions in the works.

Gold To Benefit From Slow Tapering

Gold as an investment would benefit from a slow pace of tapering. Yet, gold investors have largely shrugged off worries about the impact of further cuts to bond buying by the Federal Reserve. After bouncing back from a brief dip below $1,200 in December, the gold price made impressive gains to close at $1,350.40 on Thursday, near a four-month high.

Following a surge in price over the past two months, gold had been due for a period of price correction. Yet the gold price did not retreat far, closing on Friday at $1,339.50 with initial losses pared back in later trading.

More Surprises May Be Lurking

The latest jobs data may be reassuring, but the economy is likely to continue to confound experts. Despite the jump in the number of fresh employees, the unemployment rate crept upward from 6.6% to 6.7%. Along with the wobbly jobs market, there are other possible stumbling blocks for the economy, such as the slow demise of quantitative easing and the inevitability of higher interest rates. Possible conflict in Ukraine as well as in other potential hotspots is a further hurdle that could derail any progress with the economy.

The economic recovery has yet to fully heat up after the impact of the stormy winter, and it may not take much to put the economy on ice again. Amidst all this, gold has become a safe haven from uncertainty over the direction of the US economy, as well as trouble elsewhere. The long-term prospects for the precious metal are being increasingly determined by factors other than the US economy, such as consumer demand in Asia. With gold regaining its popularity with investors who shunned it en mass in 2013, the shiny metal is one of the few bright spots in uncertain times.

Dave Cooper
Upstate Coin & Gold
315-637-1300
dave@upstatecoins.com  
Our market commentary is the opinions of individuals on our trading desk and does not necessarily represent the overall viewpoint of, and may differ from, Upstate Coin & Gold or other employees.  While we try to provide as accurate information as possible, we do not guarantee the commentary’s completeness, accuracy to data, or its forecasts.

Please check out the Upstate Coin and Gold website, and if you like what you see, share it with your friends.

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