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Gold Plummet Nears $800
August 15, 2008

Gold Decline Nears $800 An Once

Another day of gold sell-offs has brought this precious metal down to about $805, quickly nearing the $800 level. Silver is also on the slide with a spot price of about $14.15 as of this posting.

Consumer price data may be leading many to look for the Fed to raise interest rates to stem inflation. With the dollar already strengthening, this would be a likely move for the Fed, but one which would lead to less desire for gold as an inflation hedge. You can really see this effect taking charge in gold futures.

As a coin collector, I would not mind a slackening in the investment end of the precious metals market. This outrageous bull market for precious metals we have been experiencing will at some level begin to really deter collectors. With gold this high, the downside risk for a collector becomes a serious factor and for the bullion accumulator a rise as fast and steep as the market experienced last winter should be a huge warning sign.

We all tend to collect what we enjoy or appreciate, in terms of atristry and culture, but I always consider potential downside in evaluating purchase price. It's not wise to get carried away with the tide of a rising trend.

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About the Author
Tom Michael has been Krause Publications primary market analyst on more than 80 world and United States coin catalogs produced over the last 20 years. He came to KP in 1987 with a bachelor of arts degree in history, a master of arts degree in economics and a history of coin collecting stretching back to the 1960s. He began collecting world coins as a child by asking friends and relatives to bring coins back from overseas trips, visiting flea markets and having his mother watch for foreign coins in her register at the local grocery store. Today he works with a dedicated base of over 200 contributors to provide accurate market values for the five-volume Standard Catalog of World Coins series, as well as many specialty catalogs, including Coins & Currency of the Middle East and the fifth edition of Unusual World Coins.

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