Gold Coin Investments

November 01, 2010 – A shift in strategy among big investors might be the best news ever for holders of gold coins. The continued strong performance of gold coin investments amid the crises and instabilities in global markets strongly indicates that long held tenets of economics are coming into question.

Early last century soft currency became the foundation of economic structure as fiat money replaced gold and silver standards around the globe. Globalization has introduced an entirely new economic environment, however, and the instability that has created in world currencies has rippled down through all forms of traditional investments. In light of the persistent weak performance and dismal future prospects of stocks and bonds managers of major funds are starting to rethink their gold positions.

A $330 million gold fund established by Shayne McGuire for the Texas Teacher Retirement Fund last year is up 25% and strongly contributed to the fund’s overall performance. McGuire expects the benefits of stronger gold positions to quickly prove themselves as an effective hedge against faltering currencies and inflation, inducing pension fund managers and other big investors to follow suit.

McGuire predicts that 1% of global investment in stocks and bonds will be diverted into gold, pushing the price to $10,000. That is probably overoptimistic, but the trend is in that direction. Even the more conservative John Paulson, a notable hedge-fund manager, believes gold will reach $4,000 in the next few years.

What does that mean for individual investors in gold coins? Whenever a huge fund increases its gold holdings by a small fraction it represents a significant increase in the demand for gold, exactly as ETFs have been doing for the past several years. Combined those would trigger unprecedented escalation of the market and create historic opportunity for gold coin investments.

Kevin Johnson

Senior Staff Writer –

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