Why Invest in Gold Coins?
February 7, 2010 – Gold prices finished a brutal week on the market today at $1,065.90, down almost $40 per ounce from its earlier highs. While the prevailing news has been about the strength of the US dollar, some people might ask why they should consider investing in gold coins. In spite of recent performance by the dollar, gold coins and other investments such as gold futures, ETFs, certified gold coins and the like are well positioned for potential gains as the dollar’s weakness become front page news again.
The US Dollar Index, a measurement of the relative strength of the US dollar against six foreign currencies, rose to 80.309 today on continued optimism over fiscal weakness in several European countries. A two-month ride has the dollar trading near its 52-week high of 80.375, in spite of any substantial support for its rise. This lack of support provides a strong reason why an investor should consider buying gold coins now.
Gold prices are down more than $150 per ounce from the all-time high set in November 2009, which amounts to a drop of about 12%. Sell-offs and technical trading have figured heavily into this activity, but support for gold prices remains high. Since gold is in a stable position and the dollar isn’t, a reversal is a strong possibility.
Gold coins present an excellent strategy for capitalizing on any upcoming rally. Gold bullion offers a very good short-term option because it is highly liquid and closely follows the gold spot price. Certified gold coins offer a long-term solution because the strength of their profitability is based on rarity and quality of the coins, as well as their gold content.
With analysts still predicting a rally by gold, now is a good time to consider adding bullion and certified coins to a financial portfolio. The underlying weakness of the dollar won’t still hidden for long and gold coins will be a likely beneficiary of the switch.
Stewart Lawson
Senior Staff Writer - Gold-Coin.com
