When the gold price drops contrary to all logic it is the perfect time to buy gold coins.

March 22, 2011 – When the gold price drops contrary to all logic it is the perfect time to buy gold coins. This is one of those exceptional occasions when investor emotions take over and panic drives the markets in unexpected ways.

A disaster of the magnitude of that in Japan striking the world’s third largest economy is bound to have severe global implications, especially when that economy has been struggling for more than a decade. But the ensuing investor panic creates opportunities because “it’s a money game, it doesn’t have to be logical economically," said Stephen Platt, analyst at Archer Financial Services in a Dow Jones newswire.

As would be expected, equities have tumbled, but despite the fact that Japan’s near-term energy needs will create a strong surge in demand, oil futures have slid along with the broad selloff of commodities. The dollar has fallen to a record low against the Swiss franc, an ever more popular safe haven, but it has also dipped against the yen while rising against the euro and the English pound. Treasuries are up, even though repatriation of Japanese investment money threatens to withdraw the second largest buyer from the market. Even gold is being abandoned in the frenzy.

That’s what happens when investors lose their collective minds, but it will be a short-lived event. The Fed’s anticipated withdrawal from the Treasury market, which already has created considerable concern, might well coincide with Japan’s, and that “could result in ongoing weakness in the U.S. bond market, higher yields, a weaker dollar and, overall, a more-difficult funding environment for the heavily indebted U.S. government,” says Javier E. David in a Dow Jones newswire.

While other currencies may offer safe haven, their underlying economies are far too small to support the demand. By default, gold will once again be called on to serve as safe harbor, immensely benefitting investors who buy gold coins today.

Kevin Johnson

Senior Staff Writer – GoldCoin.net