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Wrapped Up In Gold
March 14, 2012

When you bought your car insurance, or your house insurance, did that dominate your thinking for months on end?

If you are like me, you probably called your agent, reviewed his recommended alterations and 10 minutes later you were good to go. Ah, the convenience of small towns.

Buyers of gold as insurance against economic catastrophe on the other hand seem to enjoy living with it day by day.

It has become something like a football game that never ends. When we are in a period of rapid price gains, the sky is the limit. When markets go down as they are today, there must be some sinister force at work countering the skills of the home team.

Yet, anyone who has a more laid-back attitude to the precious metal and perhaps other investments and doesn’t check everyday probably feels pretty good even as gold trades down by over $50 an ounce this morning.

Since the beginning of the year, gold and silver are higher. Most balances in retirement accounts are also likely to be higher if they include stocks in them.

If you follow the conventional advice to keep gold (and other precious metals) at no more than 10 percent of your portfolio, the outcome this year to date looks pretty healthy. Even comparing today’s conventional portfolio numbers to those from the stock market’s high in 2007 look good.

Going back further, if you had gold and stocks untouched since 2001, you are also probably feeling pretty good. Gold had a great run and your holdings would have swelled far beyond the 10 percent you started with. This would have more than offset any losses caused by the fairly flat performance of the stock market even if you owned some bank stocks that might have crashed and burned in the post-2007 period.

Gold, though, will never lose its allure. It just seems to demand attention from collectors. It will always be something more than just insurance to us. We cannot help but watch it.

But don’t let this fascination dominate your numismatic activity. If you collect gold as historically important and valuable coins, you have your gold insurance and a much more interesting way to spend your time with the precious metal.

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Recent Comments
On March 17, 2012 Chuck Schroeder said
This is what I want to know.

What does the "American Numismatic Association" say about this type of "Legalized Theft" ?.

Metals like gold and silver have been an essential part of trade and their use in business dates back to the ancient civilizations of Egypt and the present Iraq.  There are quite a few varieties of foreign gold coins and U.S. gold coins available in the market today.  However I feel that the best gold coins anyone can own are the $20 Liberty and the $20 Saint Gaudens. These coins are among the most affordable and readily available in the market place today. Therefore they are easy to track and are highly liquid. They also have advantages over bullion until you get ready to sell them.   Yes, it is possible to buy pure gold bullion, for as little as $421  an ounce, even as market prices continue to hover over the $1700 mark.  This little-known "jeweler's loophole" can be used to buy gold at 50 - 75 percent off spot price, allowing crooked savvy investors to more then double their money back "off the books" and away from the prying eyes of the government.  It's also called "penny weight,"  or so much per gram.  Anywhere between $12 to $36 per gram. Mostly around $16 per gram if your lucky.  There's no way to know how long this "loophole" will remain open.  They buy this pure gold bullion for scrap, so they say.  Most all coin dealers do the same to.   Gold coins are circular coins that are partially or wholly made up of gold. The use of coins in business was common in older times and its exchange gave birth to the era of coinage. However, coinage came to an end in the twentieth century after the great depression. The end of coinage put a full stop to the trade of gold coins. Nowadays coins are not only collected by history enthusiasts but also used as bullion coins. Bullion coins are those coins, which are used for investing in gold without considering their nominal value.  Nowadays, gold coins are considered as a profitable investment.  Since the value of gold always remains high, it is considered a profitable asset, until you go to sell them.

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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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