Gold Coin Pricing

February 24, 2010Gold coin prices dropped below $1,100 per ounce this morning on the metal’s third consecutive day of losses, losing more than $6.00 per ounce in early trading as investors nervously await Federal Reserve Chairman Ben Bernanke’s testimony before Congress later today. The Fed has been hinting about rate increases as a means of resisting the encroachment of inflation directly caused by overprinting of money for increased stimulus spending.

The tone and delivery of this testimony is likely to dictate how it is received by investors. “Depending on how the market is interpreting his speech, it should have an impact on the euro-dollar exchange rates and, therefore, on the gold price," said strategists at Commerzbank. The euro has been struggling against fiscal pressures within the European Union and the news could either strengthen the dollar or rally the euro, something which would likely create optimism for gold.

While gold coin prices have been rising over the past month, the US dollar has made gains as well. Although the US economy has not made any substantial improvements, the dollar has gained primarily at the expense of the euro. The US Dollar Index is down to 80.73 today, a drop of 0.182 that suggests currency investors also fear impending news of increasing US inflation.

Rising inflation would work to weaken the dollar and make gold more valuable. Investors should listen for indicators of inflation in Bernanke’s testimony and watch the impact on gold prices. Should his comments turn gold lower, now may be an excellent time to buy the metal. 

Kevin Johnson

Senior Staff Writer –

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