The time for investment in gold coins may be in 2012

February 1, 2012 – The time for investment in gold coins may be in 2012 as we have seen the spot price surge 4.3 percent last week after the announcement of the Federal Reserve’s Federal Open Markets Committee that it will keep interest rates low through 2014. This after the New Year’s rally in the gold market had already signaled the end of the correction that began in September, the US Mint broke records for bullion sales, and the breach of the 200 day moving average in gold indicated a major upward trend that will be occurring in the coming weeks. Now, in addition to the news out of US markets, it is being reported by Xinhua that first week sales of gold in the Chinese New Year are up 49.7 percent.

Gold just had its best week in three months, essentially since the all-time nominal high was achieved in late August-early September at $1,923 an ounce. Since that time, we have experienced two corrections, or temporary and dramatic shifts downward in price. In September the price of gold dipped below $1,700 and at the depth of the correction in December the spot price was in the $1,500 range. These represent significant moves downward of 20 percent or more, which shocked a lot of people out of the market. But the market fundamentals always indicated a long-term bull market which we are now seeing manifest.

The buying trends in Asia are particularly pertinent to understanding the forecast for the price of gold because China and India are the top two consumers of gold on the planet. It was recently reported that imports to China in tonnage began a dramatic increase beginning in the September timeframe. Before then, imports to the mainland had remained relatively steady at 20 tons a month. Then, in November, that number increased to 102 tons. This is an incredible increase as world gold mine output, not counting China, is less than 200 tons a month.

The impact of this figure on gold coin prices is imminent and signals that investment in gold coins will perform very well in the coming months, based solely on the staggering volume of Chinese demand. This week, after the Chinese lunar New Year celebrations, the official press agency of the government, Xinhua, reported on the massive 49.7 percent increase in gold-buying over the week-long Chinese holiday. The Chinese market remains a mystery to many, but the sheer size and volume of the market combined with sales indicate that gold coin investment in America will be bolstered and supported by the massive increase in consumption in Asian markets.

Kevin Johnson

Senior Staff Writer –

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