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Gold Drops Further
September 11, 2008

Gold in Free Fall

Like an elevator with snapped cables, gold continued it's fast, steady decline this morning, dropping below $750 and ounce. As of this posting gold is down to about $740, silver down to $10.45, platinum is at about $1135 and palladium is down to about $225. Check The Bullion Desk for current prices.

Bloggers are reaching out to all avenues to try and explain the drops. I've read about dropping car sales effecting the price of platinum, dropping oil prices bouying the U.S. Dollar, the evaporation of inflation fears and much more. In essence, through these and many other valid factors have effect, I would have to consider this a reasonable correction to some seriously over-infalted spot prices for precious metals.

How does this effect the coin market? Well, for dealers, I would expect that initially they will have to deal with a decrease in demand for bullion issues and one ounce and larger commemoratives. Over time, if precious metals stay this low or continue to drop, they will have to lower prices and move these coins along. The larger their stock of these items, the quicker they will have to react to maintain cash flow for a healthy business. For dealers who did not amass quantities of gold and silver coins, it will most likely be business as usual and if they have a wise clientele, perhaps better than usual.

For U.S. coin dealers who had been selling much of their best material to European dealers, a strengthening dollar and declining silver and gold should bring them opportunities to buy some of that good stuff back. So U.S. collectors, many of whom have been buying overseas and paying the higher prices and shipping costs, will want to keep in touch with their favorite U.S. dealers and perhaps provide a want list.

Clearly it's a good time to buy coins.

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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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