If you want to invest in gold coins you can’t beat the opportunity presented by the current pullback in the gold price.

May 09, 2011 – If you want to invest in gold coins you can’t beat the opportunity presented by the current pullback in the gold price – and it won’t last very long. “The fundamental fact is that … both gold and silver are in big bull markets. Until that changes, pullbacks and corrections are buying opportunities,” says Sean Brodrick of MarketWatch.

“There is a lot more going on in the markets now than one bit of data,” a trader at a London- based trading house told the Wall Street Journal’s Rhiannon Hoyle. “There are stranded longs panicking, producers who think they have missed the boat also panicking, and a lot of nervousness around what next week will hold.”

But every day it is getting harder to avoid the cold hard truth that our economy is deteriorating. Although the new hire data for April was surprisingly high, for the first time since last November the unemployment rate rose last month, once again reaching 9%. Recent polls show that more than half of small business owners believe the economy is getting worse, not better. And Michael Pento of MarketWatch warns “The evidence of a double-dipping housing market and economy are becoming undeniable, even to those who cling perilously to the notion that government intervention has been a salve instead of a poison.”

“Intervention in free markets was destined to fail from the beginning. [QE2] hasn’t even ended yet, and this ersatz economy that is based on borrowing and printing is already starting to falter,” says Pento. With nothing else in his toolbox, Bernanke can be expected to try to keep the delusion alive with more of the same. “When the Fed, Treasury and administration finally acquiesce to allowing market forces to reconcile the imbalances … the pain will be much worse.”

Oddly enough, the sorry state of the dollar is directly linked to its rebound this week because it “reflects the fact that the U.S. economic data really deteriorated,” said Steven Englander, head of G10 strategy at Citigroup in a Dow Jones Newswire. But investors can’t divorce the dollar from the US economy forever.

The time may come when participation in the gold market is strong enough to let a bubble form. In the meantime gold coins will continue to offer solid protection as the economy goes inexorably downhill. And should a bubble form someday, gold coin investments will payoff big.

Kevin Johnson

Senior Staff Writer –

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