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Rare Gold Coins Win in a Paper Gold Market

There is a great lesson in the value of rare gold coins to be learned from the latest report from the Wall Street Journal. The Journal’s Tatyana Shumsky writes of a significant trading event that is spurring wonder on the part of investors, analysts, and speculators.

There has always been rumor in the gold market of manipulation, which to some extent has been corroborated by official government policy. We do have the President’s Working Group, which was initiated during the Reagan administration in order to avert large-scale negative market events. However, there has long been speculation on the Street that major investment banks have a heavier hand in the market dynamics than they are willing to admit.

The latest report from the Wall Street journal lends credence to that point of view as well as marking a new era in the gold market. The article, titled “Gold Market Shakes Off $1.24 Billion ‘Fat Finger’,” should be the testament to the value of gold coins, and particularly rare gold coins, that it is. “The CME Group Inc.’s Comex division recorded an unusually large transaction of 7,500 gold futures during one minute of trading at 8:31 a.m. EDT,” writes Shumsky.

The paper gold market has always been a bit of a gamble. Traders in that market must contend with a fractional reserve dynamic as well as the latest controversy in rehypothecation, which allows investment houses and banks to essentially commingle funds. The latest report of such an incredible volume of trade in a single minute of the market is a signal that there is a lot going on in the paper gold market.

The best way to distance your investments and your value from this dynamic is to invest in physical coins. An additional line of support comes in the form of rare and numismatic coins. One of the points of value in numismatic coins is that they have a historical value as well as a physical value that lends authentication. They cannot rehypothecate or commingle rare gold coins as easily as paper contracts or even gold bullion. In the current market, this makes an investment in rare gold coins one of the most fundamentally safe investments we have right now.

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