As we’re off work celebrating the Labor Day holiday, gold is anything but, as it’s rapidly approaching $1,900 an ounce. Â In fact, at the time of this posting, its up $15.30 for the day, and currently stands at $1,899.50 an ounce. Â While the intraday gold trading price recently eclipsed $1,900 an ounce, it has yet to close at this level, creating an opportunity for a new all-time high today.
You may be wondering what has caused this recent surge in demand, and in particular an extremely active gold coin market? The reasons are many, but we’ll highlight just a few of them below:
1. Â Budget Deficits
The United States is currently running an annual budget deficit in the range of $1.4 trillion – $1.6 trillion. Â Unfortunately forecasted budget deficits are anticipated to be in excess of $1 trillion a year for as far as the eye can see, resulting in some uneasiness with respect to our ability to effectively manage our budget.
2. Â U.S. Debt Levels
We recently bumped up against the mandated debt ceiling in the United States, and if you were following the issue in the media, you’ll know that there was a question as to if Congress was going to raise the debt ceiling before we technically defaulted on our debt. While it was highly unlikely that we were going to truly default, outside of a technical default, the issue still caused a good deal of concern among the American people. Â As it stands, our current debt level is 100% of our annual GDP, making us one of only a handful of nations with such a high level of debt.
3. Â Federal Reserve Policies
The Federal Reserve, which sets the monetary policy in the United States, has recently stated that they intend to keep interest rates at extremely low levels for at least the next two years. Â Additionally, there’s also the possibility that they could proceed with additional quantitative easing to reduce long term interest rates and to help stimulate economic activity. Â With recent economic data showing a slowdown in growth, coupled with poor jobs reports, QE3 is almost inevitable.
4. Â The U.S. Dollar
In light of the above, the U.S. dollar has been depreciating relative to other currencies. Â As a result, other asset classes are the recipients of a flight to quality and safety, such as gold, silver, and platinum. Â Precious metals are just about the only investment that aren’t at the same time a liability of someone else. Â Also, while inflation has been relatively tame, there’s some concern that the loose monetary policies of the Federal Reserve may result in future inflation. Â Hard assets, such as gold, silver, and platinum, oftentimes in the form of coins, bars, and rounds, are sought after investments in times of inflation or anticipated inflation.
5. Â European Sovereign Debt
As sovereign debt issues in Europe continue to spread, including concerns that the Euro may eventually breakup, more and more people are loosing faith in currencies in general. Of particular concern are the recent downgrades of the sovereign debt of Ireland, Greece, and Portugal to junk status. Â While bailouts and loans have helped to temporarily stabilize these economies, the long term viability of these economies to support themselves remains in question.
In summary, while there are a number of issues and factors that have come into play with respect to rising silver and gold prices, we hope that the above commentary will help to give you a better idea as to some of the primary factors affecting the precious metals market.
Whether you’re looking to hedge your bets against the above concerns by buying gold and silver coins, or want to take advantage of the higher prices by selling your coins at a substantial profit, Atlanta Gold and Coin Buyers should be your coin dealer of choice. Â We offer among the most competitive rates in the industry for gold and silver coins, and sell at some of the lowest premiums, making us the logical choice regardless of your intentions. Give us a call today at 404-236-9744 and see for yourself why we’re becoming the coin dealer of choice for more and more people!
