Area Coin Dealers Say Steady Gold Rise Could Continue
Posted on: Friday, 7 March 2008, 06:00 CST
By Chet Mullin, Omaha World-Herald, Neb.
Mar. 7--Despite a pullback Thursday, some gold and silver dealers don't believe the metals' dramatic run-up is over quite yet.
The metals have moved steadily upward this year as the dollar has mapped new lows and oil continues above $100 a barrel.
Gold futures rose as high as $995.20 an ounce in intraday trading Wednesday on the Comex division of the New York Mercantile Exchange and are up more than 15 percent since the beginning of the year.
Silver futures, meanwhile, are up more than 35 percent this year, reaching as high as $20.80 an ounce on Wednesday, the highest since 1980.
Colleen Schroeder, co-owner of DSS Coin & Bullion, 1906 S. 13th St., said: "I don't think this is the top (of the market). It may fall back a little bit to correct itself and then go up again."
She said, "I don't know what the top might be. . . . In the next few months gold will go over $1,000 and silver will hit $21-$22 an ounce.
Still, she added, "I can't guarantee anything."
She said she's seeing a mixture of buying and selling, which she called surprising.
"True investors are holding out to see where the market is going," she said, while some customers are selling jewelry.
She also is seeing silver trading, but more customers are buying than selling.
A lot of collectible coins, such as American Eagles, have lost a lot of value as collectibles, unless they have key dates, she said, so some people are selling them for the value of their metal.
Tim Ord, author of the Ord Oracle investment newsletter and a book, "The Secret Science of Price and Volume: Techniques for Spotting Market Trends, Hot Sectors, and the Best Stocks," said he expects gold to hit $1,500 by 2010.
Ord, who is based in Walton, Neb., is a market timer, using statistics for market analysis. He said he believes gold's gains will continue, spurred on by inflation, a weak dollar and higher oil prices.
"Actually, the world is getting into this market," Ord said. "Basically gold is a currency. . . . I also think terrorists are helping to boost this thing, plus China."
"China is trying to make its third-world country into a first-world country and they are driving up the price of all materials," said Ord, who gets into the gold and metals market through stocks in mining and exploration companies.
He also said the gold market hasn't reached the hype shown in the early 1980s by gold bugs and in 2000-2001 by the dot-com companies, where the sky was the limit. However, the current metals boom probably will end that way with a similar bust.
In the spot market, where folks deal in the real stuff, Jim Matney, owner of National Coin & Stamp at 2040 N. 72nd St., said he thinks the rally in gold and silver still "has legs."
Matney said: "Investors haven't backed off. Before (in the late 1970s and early 1980s) when prices would fall they would decline 10 percent to 15 percent and stay there.
"Now, if the market falls, it comes back harder in a couple of days."
Matney said he mostly buys precious metals because "the problem selling in Nebraska is you have to charge a sales tax."
He said, "If you are only making 3 percent on the sale and then have to turn around and charge another 7 percent in sales tax, you're not competitive with other areas."
There was a lot more action in the last gold run-up, Matney said. Back then, he said, he had nine people working for him in two or three locations and there would "always be 40 to 50 people waiting in line."
He said some people are selling now, though, and he had one customer who was planning to sell her Krugerrand collection to buy a new car.
At Sol's Jewelry & Loan at 2505 S. 120th St., store manager John Dineen said more people are coming in, but initially they are just getting the current prices -- "seeing what we're paying for precious metals."
He said some people who had held silver during the last crash were showing interest. "They held on for 20 years and now they are selling it to make $10 profit."
Dineen said, "Some people have been trading in gold coins and are waiting to see if gold hits $1,000."
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Source: Omaha World-Herald
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