Daily Market Update 4/4/11

GOLD
Gold was up $5.70 today on active trading, closing at $1,433.10 per ounce.

Gold prices and demand continue to be supported by:

1. the civil war in Libya and threat of escalating unrest in neighboring regions
2. the aftermath of the recent Japanese earthquake and the developing nuclear crisis there
3. the continued sovereign debt problem in Europe
4. Crude Oil price rising to $108.56 a barrel in New York trading today; this is the highest level for Crude Oil since September 2008

SILVER
Silver prices increased $0.83 cents today, closing at $38.44 after reaching a new 31-year record high of $38.63 an ounce. Backwardation in the silver market has been eliminated, which means the price of the spot silver month is now trading lower than outside future months. This mean the physical shortages in the market are being filled, however the future months are now trading at a premium to the spot price.

RARE COIN REPORT
I just returned from a major coin convention in Baltimore, MD.  
The show was very active with good dealer, collector, and investor demand.
The demand centers around both low and high end numismatic coins.

On the Low End,
Silver: I saw aggressive buying of Morgan & Peace Silver dollars in grades ranging from circulated to MS66. With the spot Silver price over $37, dealers and investors believe the current price levels for Morgan & Peace Silver dollars are undervalued.
Gold: $20 Gold Liberties and Saint Gaudens are a steal in MS60 to MS66, trading at the same price levels as they did when spot gold was $200 lower. To be able to purchase a certified Brilliant Uncirculated U.S. $20 Gold Saint and Liberty at less than a 20% premium over the spot gold price is an unbelievable bargain.

On the High End,
Both Gold and Silver rarities in the $25,000 or above price range are bringing record prices in auctions or on the bourse floor. These are rare coins with very low populations, popular with collectors and investors building registry sets or high end collections.

Where are the Bargains?
They’re in the middle. Right now I’m finding the greatest value within the Gold and Silver rare coins.
In my 50 year history in the rare coin market I have seen similar anomalies and its always short lived.
I recommend high grade MS64 or higher, PCGS or NGC certified U.S. Gold and Silver Dollars in the $2,000 to $10,000 price range. I used the latest version of the CoinStats report in Baltimore to purchase some undervalued, premium quality rare coins.

Today’s Other Important News

• The World Gold Council said that India’s gold demand has grown 25% despite a 400% price rise of the rupee in the last decade.
• China, the world’s largest consumer of commodities, has been going on an acquisition binge around the world and using Canadian companies to secure long-term reserves. China has made its first-ever hostile bid for a major Canadian mining company, signaling a bold shift in strategy as it seeks to sate its appetite for resources to fuel its rapidly growing economy. A subsidiary of state-owned China Minmetals Corp is offering $6.3-billion in cash for Toronto-based copper producer Equinox Minerals Ltd. which operates a copper mine in Africa and is developing another in the Middle East.