AGE Gold Commentary is our regular report analyzing trends in precious metals and rare coins. We monitor domestic and international markets and extrapolate from our 30 years in metals to place current events into a hard asset perspective. View archives.
5/1/2002: Strongest gold rally in years – as predicted!
Gold bullion closed above $311 per ounce on Friday and held those gains on Monday, reaching its highest price in more than two years. Gold futures pushed to fresh 17-month highs in New York.
We’ve been telling you for more than a year that the inflated dollar and unstable stock markets would inevitably push the gold price higher, perhaps much higher, in the near future. Just as we predicted, the strongest gold rally in years is now in full swing and shows no signs of slowing down!
Safe haven demand increases
Investors around the world, and especially in Asia, are returning to gold in droves as the most attractive safe-haven for capital. The new gold rally is being driven mainly by private investors and professional money managers diversifying into gold as insurance against a weakening dollar and jittery stock markets. Fears of rising in oil prices, open warfare between Israelis and Palestinians, and a faltering U.S. economic recovery, are adding further momentum.
Just as investor demand is skyrocketing, however, the gold supply is actually decreasing. Gold producers have scaled back or reversed their hedges because low U.S. interest rates almost eliminated the forward premium earned by selling forward.
Rising demand and diminished supply means only one thing: sustained increases in the gold price!
Next stage in rally expected
We think this rally has legs. Gold’s persistence above $300 means that a key psychological barrier has been broken, and higher price levels are likely. “We’re in the second stage of a raging market for gold, and eventually silver and palladium will follow,” said James Dines, editor of The Dines Letter, an advisory service that covers mining companies.
Pravin Banker, principal of LDC Bond Watch and The Financial Network Inc. in Connecticut, said gold will continue to benefit from a growing disgust with mainstream securities and sloppy interest-rate guidance by the Federal Reserve. Banker accurately forecast Tyco’s debt woes, IBM’s accounting snafus and other red flares among blue-chip companies.
“For 6 years now, lured by the Rubin-inspired strong dollar policy, foreigners have forsaken gold for the safety of dollars,” Banker said Thursday. “Enron has revealed the ugly side of manipulation and collusion, and the risks inherent in unserviceable debt burdens, Tyco is the last straw. Asian faith is shaken. They are reverting back to their age old haven, and tempting U.S. institutions to follow in their wake, and buy gold.”
(For details and sources, see www.amergold.com/newsroom/bmu.shtml)
In the last 20 years, we’ve never been more bullish on gold than we are right now! As your reliable hard asset advisor, we recommend aggressive purchases of gold now. In today’s environment, gold presents little downside risk and huge upside potential!
Conservative recommendations for gold investors
If you get started now, or add more to your existing gold position, you’ll stand to gain the most when the market truly boils over.
Please visit our website, www.amergold.com, for more gold investment information.
Power Pair #2 - Our highest recommendation!
U.S. $10 Liberty (MS 63) and $10 Indian (MS 63) gold eagles.
New special for gold investors! These classic U.S. $10 gold eagles are fantastic portfolio builders. In 1989 they traded dealer-to-dealer for more than $5,000. Available today for as low as $1150 per pair, near their lowest prices in 20 years! They offer true scarcity, beautiful designs, and high collector demand at rock-bottom prices. Ready to pop in rising coin market! Don’t miss them. Our highest recommendation!
1-oz. U.S. Gold Eagles
No IRS reporting requirements for these bullion coins.
British Sovereign “Kings” Brilliant Uncirculated
These are the best classic European gold coin for popularity, price, and scarcity.
$20 Liberty, in MS62-64 condition and $20 Saint-Gaudens, in MS63-65
These gorgeous, historic coins offer complete financial privacy, excellent leverage to the gold price, high collector and investor demand, and are still downright cheap today. Prices are now moving up, but the big price increases are on the way. It’s not too late to buy these classic U.S. gold coins near their 20-year lows.
New offerings in classic U.S. gold coins
We’ve just returned from the major Central States coin show in Columbus, Ohio. Once again we cherry picked the national wholesale coin market for the best values in classic one of a kind U.S. gold coins. Every coin on our new price list has literally been hand selected for quality, eye appeal, and price. We focused on coins that would respond well to a rising gold price and, using our 21-years of experience, we think we succeeded. You’ll find many new $20 and $10 classic U.S. gold coins minted between 1850 and 1933 on this just posted inventory list.
Here is the link to take you there:
Let me repeat, in 20 years we’ve never been more bullish on gold than we are today! We highly recommend aggressive purchases of gold now.
American Gold Exchange
AGE Gold Commentary
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