The political unrest in the Middle East is driving global investors to safe havens and that has created a rare opportunity for gold coin investments.

February 25, 2011 – The political unrest in the Middle East is driving global investors to safe havens and that has created a rare opportunity for gold coin investments.

On the heels of last Friday’s 32-month high, the stock market had “the largest single-day correction since mid-August of last year,” says Telis Demos in Financial Times. The price of gold responded but only moderately as gold-phobic investors are seeking safe haven in currencies and relegating gold to the role of a hedge. The dollar’s rise in step with gold strongly indicates rapidly rising risk aversion, but investors are showing more interest in the Swiss franc and concerns about the dollar caused a shard drop in US treasuries.

“The one thing the Fed can’t stop is a geopolitical sell-off,” said Kenneth Polcari, managing director at ICAP. It won’t take long for investors to realize that the dollar’s risk is too great to consider it a safe haven and begrudgingly they will have to turn to gold. For the very near term, however, their fear that gold is near its ceiling will continue to hold them back.

In truth, the gold price is much closer to the floor than to the ceiling. Using its figures for true inflation Shadowstats.com puts the peak for gold around five times current prices, assuming gold continues its long-term trend. In the aftermath of the dollar’s demise, however, it is far more likely that the trend will shift upward even more.

Retail investors know the dollar is in trouble because their cash can’t buy what it used to. But still the overwhelming propaganda warning about the dangers of gold has kept investment in the metal disproportionately low. But those who see the fallacy in the warnings have an exceptional opportunity to invest in gold coins before the market’s floodgates open.

Kevin Johnson

Senior Staff Writer – GoldCoin.net