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Buying Mood Sweeps Markets
September 24, 2007

The gold market and the stock market seem almost giddy. A rate cut on the overnight federal funds rate of one-half of one percent Sept. 18 have sent both metals and stocks rocketing higher.

Gold has pushed through the May 11, 2006, high and returned the precious metal to a level not seen since Jan. 21, 1980, the date of its all-time high. The Dow Jones Industrial Average is nearing its all-time high, which was just over 14,000 hit on July 19 of this year.

Enthusiasm from both markets has a tendency to spill over into the coin market, but because there isn't a publicly reported average like the Dow, it is more difficult to pick up on it.

Rising gold prices tend to improve coin dealer cash flow and they attract an investor crowd into numismatics. When dealers have more money and investors are chasing specific coins, coin prices tend to rise.

The stock market part of this deal affects collectors themselves. Because so many of them are in retirement plans that benefit from stock market gains, collectors can feel more free to spend money on their coins.

About the only thing that remains to be seen is what happens to house prices. Rising home prices also make collectors feel pretty optimistic and more willing to buy coins.

The timing of the Long Beach Coin, Stamp and Collectibles Expo, which starts Sept. 27, couldn't be better. It will be an opportunity for all of the market players to assess the state of things in light of the new reality in the gold and stock markets.

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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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