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On the Trail of Gold
June 04, 2008

As I drove the mile to work this morning, I noticed that the price of gasoline at the two stations I pass at the center of town were posting a price for regular unleaded of $3.949. That is down three cents from the peak price.

We did not reach $4 a gallon here. Is this just a pause on the way to more painful heights, or is the fact that Americans are driving less and buying smaller cars at last starting to have an impact?

I don't know. It would be nice to think so.

But what I do know is to continue to keep an eagle eye on the price of gold. I have been reading recently that gold is following oil. I don't think so. I think it is the reverse. Oil follows gold.

This certainly was the case in 1980. Gold peaked a year ahead of oil and its decline was followed by oil to a remarkably similar degree.

If, hypothetically, there is something in this observation, we won't really know for sure for quite a while yet. Gold's current peak of about $1,033 occurred in the middle of March, some two and a half months ago.

Is that it? Certainly gold's fall off the 1980 peak was far sharper than the current decline. It went from $850 Jan. 21 to $463 on March 27. So far the smart money is simply calling gold's present decline a correction in a larger uptrend. I will watch the experts argue it out for sure, but my undivided attention will be on the actual price of the precious metal.

It can foretell a lot.

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About the Author
David C. Harper has been a coin collector since 1963. He joined the Krause Publications editorial staff in 1978 and is currently editor of Numismatic News and World Coin News. He also edits two books annually, North American Coins & Prices and Coin Digest. He is the author of the Class of '63 column that runs each week in Numismatic News. His first bylined numismatic article appeared in the June 1971 issue of Coins Magazine and his various Krause Publications assignments included a stint as editor of the magazine 1980-1983. Harper received a bachelor of science degree from the University of Wisconsin-Oshkosh in 1977. He had a double major of journalism and economics.

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