Gold went bang in the first trading session of the year, restoring confidence in the long bull market and the value inherent in gold coins.

January 4, 2012 – Gold went bang in the first trading session of the year, restoring confidence in the long bull market and the value inherent in gold coins. The technical reasons for the 2.5 percent increase will become known over the next week, but currently we can all enjoy the full recovery of last week’s losses in single session of trading. A 2.5 percent change in trading is significant in any commodity and over the comings weeks will be an omen of the good things to come in the gold market.

Yesterday’s price pop comes just one week after gold technically fulfilled the correction, falling 20 percent below its record September high of $1,923 per ounce. This dynamic had a lot of analysts and investors coming out of the woodwork to call the end of the gold bull market. It sounded ludicrous at the time to anyone who’s been with the precious metals for a few years, but it is clearly ridiculous to everyone now.

Now, with gold trading again above the psychologically important $1,600 level, we are seeing a different kind of dynamic. John Embry of $10 billion Sprott Asset Management has predicted that gold will never trade below $1,500 an ounce again. Barring major political or economic upheaval, he may be right as he has so far been correct about gold not trading below $1,000 an ounce.

The value of gold coins, especially numismatic gold coins, really shines in this kind of market because you see more stability in their added value. At times the market can seem a little volatile for some investors and numismatic pieces offer an additional level of support outside the spot price of gold and premium. It is something to keep in mind as we watch the market over the coming week to see how this current pop will work into the greater shape of things.

It is entirely possibly, probable even, that the price of gold could actually reverse the gains by week’s end or the end of next week. Of course, it is always a possibility that a further correction to a significantly lower level could unwind, but it is, right now, the most unlikely event. Also, fundamentals of the market are still intact for a long-term bull market, and even investors who do see a possible move lower recognize the price of gold will be significantly higher in the coming months than it is now.

It is advisable to purchase gold coins, specifically numismatic gold coins if possible, in the current climate to maximize your investment in gold and take advantage of the added value of numismatic gold coins.

Kevin Johnson

Senior Staff Writer – GoldCoin.net