I attended an investment conference this weekend, and during the precious metals part of the discourse the keynote speaker asked the audience a question. He asked, “What is the single most important factor driving gold prices?” Having been in the precious metals industry for decades, I knew the answer immediately. My hand shot up, and I whispered the answer to those around me, some of whom looked at me as if I was either a genius or insane. After some coaxing, I noticed a few others cautiously raise their arms as well. The vast majority of the audience, however, looked clueless.

The speaker then took out his wallet, removed a crisp one dollar bill from within and held it up for everyone to see. “The value of the dollar,” he said, “decides gold prices more than any other single factor. A strong dollar means weak gold prices, and vice versa.” I was vindicated in front of my peers, but the initial response of the group stuck with me. How could gold’s inverse relation to the dollar not be more commonly known?

When I was growing up in a little town in South Carolina, there wasn’t much to do in terms of recreation besides catching lightning bugs and going to the local school’s playground. The see-saw, or teeter-totter (depending on where you grew up) was a staple on many playgrounds, and it serves as a simplified example of the relationship between gold and the dollar.

When the dollar loses value due to overprinting, it requires more dollars to purchase the same amount of gold. Thus, lower dollar = higher gold. Granted, this is a simplification of sorts, but one that is surprisingly accurate in terms of technicalities. So, if you think the dollar has hit rock bottom and will soon rebound, avoid gold. If you think that U.S. monetary policy is too loose and could result in the dollar losing more purchasing power, gold could be your new best friend.

The Sheldon Scale of coin grading was developed by Dr. William Sheldon, an American born in Rhone Island in 1898. He was a psychologist and numismatist. His coin collections were copper coins which were large cents. These coins became models for a system of grading which he decided to develop.

The system he developed is now in use today, particularly by the Professional Coin Grading Service (PCGS) and the Numismatic Guaranty Corporation (NGC).It uses a scale of 1-70 The numbers 1-59 are used for grading gold coins that had been circulated and the numbers 60-70 for gold coins classified as uncirculated.

Before the advent of the Sheldon scale coin grading consisted merely of three descriptions which were broad imprecise: 1) Good: Details visible but surface worn out; 2) Fine: Details less worn out and a bit of mint luster visible; and 3) Uncirculated: Details sharp, luster approaching state of the coin at mint.

The system developed by Sheldon eliminated the guesswork. The lowest grade is Poor-1 or P-1, for a coin that is badly damaged or worn out, the type barely discernable. The highest grade is AU-59 (Choice About Uncirculated), virtually uncirculated except for minor wear marks on high points. .

In between are grades like G-8 (Very Good) for a coin with full rim and clearly discernible devices but coin significantly worn. VF-20 (Very Fine) for a coin with clearly readable but lightly worn legends. XF-40 (Extremely Fine) for a coin whose legends are sharp, devices are clear with slight wear.AU-55 (Good About Uncirculated) for a coin with sharp legends that show only a hint of wear on the high points.

For the uncirculated coins the grades from MS-60 to MS-70 (Mint State coins), as well as the proof designations, are all based primarily on eye appeal, quality of luster and/or toning, and the presence or absence of contact marks, hairlines, etc.

Franklin Gold

Will gold ever run to $2000 or beyond as was the expectation in 2009? We’re into the fourth month of 2010 but gold has not so far behaved the way it was predicted.

As early as February 2009, months before gold posted its record breaking price of $1104 in December, one respected industry leader fearlessly predicted that gold prices would quadruple in 2010 to $3500 from the then current price of $994. Also early in 2009, another industry leader made a more optimistic prediction — $5,000 per ounce by 2010. Many more had expressed optimism for gold in various, though in much sober, degrees in 2010.

The two-week advance of gold prices that accentuated the end of the first quarter of 2010 was accepted by some as a positive sign “…reflecting the general commodities tone, which is bullish.”

But many were of the opposite sentiment. True, the end of the first quarter ended higher but prices were still in the vicinity of the decade-ending number of $1100. They recalled that prices even dipped to a low $1073.85 in January, an indication of gold’s uneasy footing.

“I’m not bullish about these prices,” reacted an industry leader. “Gold is still trading within a narrow range and prices have been propped up by investor interest, not fundamentals…”

Will gold ever runs as predicted? Could it be that it is too early to make a judgment on gold? The year 2010 is an extension of the 2000-2009 bull run and could be just a brief respite before the run is resumed. It will be recalled that the bull run of the 1970s started slowly from $34.94, reached $50 only two years later before it finally settled at $594.92 in December 1980.
Franklin Gold

Precious metal saw a decline across the board today in the New York session of trading.

Gold fell as much as $14.96 to $1092.44 by 10:00am in on Monday, where gold found its footing and started to rally for most of the rest of trading day. In the end gold cut its losses to 0.7% and closed just above support at $1102.

The Gold price in Europe also declined to €812 an ounce.

The precious metal Silver followed a similar pattern and ended $0.313 off its midmorning low of $16.597 with a loss of 0.5%.

Platinum lost $11.50 to $1598, and copper remained at about $3.38.

Gold Mining and silver equities fell over 2% at the open, but they then rallied back to about unchanged by early afternoon and ended mixed.

Treasuries rose a bit ahead of this week’s $118 billion worth of note auctions that begin tomorrow with $44 billion in 2-year notes.

The Dow, Nasdaq, and S&P followed select health care companies higher after Sunday night’s House approval of the health care bill.

There were no major US economic reports today. Tuesday at 10:00 EST brings Existing Home Sales for February (expected at 4,990,000) and the FHFA Home Price Index for January, expected down 0.9%. This report is not considered of high importance in regards to its affect on the Precious metals commodities.

Wednesday does bring about the US durable goods release, however; and this could start to show signs of where the US Currency and thus precious metals will trend.

Franklin Gold

Retirement investors have increased the demand for precious metals in U.S. Individual Retirement Accounts. This new surge of growth stems from many of the reasons other investors have been turning to precious metals – a hedge against inflation, dollar weakness and credit-market worries. Since precious metals have no liabilities or debt like stocks, bonds, or U.S. dollars, investors looking for risk aversion could benefit from a precious metal IRA.

Gold and other precious metals have often provided stability in difficult economic climates, and are often used as a hedge to protect other investment positions. Diversifying your portfolio seems to be the prudent trend recently; having a precious metal IRA or including this type of investment in an IRA can help to protect your retirement savings. Historically precious metals, particularly gold, often retain their value when stocks decline—and may even appreciate. When opening an IRA for precious metals, you can roll over cash from other IRAs and then use it to purchase bars or investment coins. You can also do this with funds from a 401(k) account, although in some cases you will only be able to do this if you leave the employer where you have the account.

Most individuals saving for retirement qualify for a precious metal 401k, or IRA; however, very few know this option exists. Transferring you r 401k or IRA is relatively simple, and precious metals. Org can assist you every step of the way. Before you decide to make precious metals a part of an IRA, make sure you know the risks and the IRS rules governing this type of investment. If you have questions simply contact one of our friendly precious-metals IRA experts for assistance.

Franklin Gold

Between platinum, palladium, gold, and silver, gold’ precious metal values move in an inverse accordance with dollar values, since gold is the precious metal that officially backs the perceived value all of the world’s fiat (printed) currency. Gold’s inverse correlation with dollar values is presently being demonstrated, with our dollar registering 80.02 on the Index, over an overextended euro that must contend with the combined economic problems of Greece, Italy, and Spain. Meanwhile our government has done precious little to bolster the strength of our U.S. currency, other than maintain their insipid pledge to maintain interest rates at near zero levels, and hope for yet another freshly printed stimulus package from our U.S. Treasury.

During times like this, when economic uncertainty threatens the very future of our nation’s currency, precious metals values carry much greater emphasis, as currency-based commodities like oil, sugar, cotton, flour, and gold, all appreciate in value. Meanwhile, the value of printed currency is forced to adjust through multiple interest rate hikes, and ever-rising consumer prices.

Gold generally claims the abundance of the attention on precious metal values, as the wealth of entire nations is often times reflected in their gold holdings. Nations like the United States, Russia, South Africa, Australia, China, and Tanzania have their own gold recourses to draw from, but nations like India have no domestic gold production, and therefore must acquire their bullion through the IMF, which is the International Monetary Fund.

Prospective buyers with unanswered questions about precious metals investing are encouraged to contact one of our friendly specialists, who offer institutional discounts on bullion, and certified rare gold coin to household investors like you.

Franklin Gold

Individuals who are wondering if precious metal hedges are effective for preserving wealth throughout prolonged inflationary cycles, should research gold spot prices throughout the 1970s. While inflation eroded the dollar’s purchasing power by more than sixty percent, certain types of gold investments increased by nearly 1000% during the 1970s. Bullion prices hover just above the current gold spot price, but rare gold coin investments are subject to much more dramatic appreciation during inflationary cycles, as investors gravitate to commodities like gold and silver, and dollar-based assets generally lose their value.

Most analysts believe that our economy will most likely become worse before it gets better, as our Federal Reserve continues to drag it’s collective feet on committing to any sort of feasible recovery plan. Anxious U.S. consumers eagerly await word of inevitable interest rate hikes, and the subsequent inflation that typically follows, and more and more investors are coming to terms with the fact that the economy is a critical state of disrepair. Precious metal hedges make a great deal of sense to multitudes of pragmatic investors, because they can be held for both long-term financial protection, as well as for short-term liquidations that may be needed in the event of a cash flow crisis.

Investors who have completed their research are encouraged to contact one of our friendly specialists, who can answer your precious metal investment questions, as well as offer you institutional discounts on gold and silver bullion, and certified rare gold coin.

Franklin Gold

Precious metals prices turned in quite impressive performances last year, with silver gaining 36% and gold up 24%. Although silver and platinum are both far behind their historical highs, gold surpassed its’ record 2008 high of $1033 per ounce in mid-December of last year, going as high as $1226 before falling due to the weakening of overseas currencies and some profit taking.

Gold went as low as $1062 last month, and over the last few days gold has been evasive about which side of $1100 it can gain the most support. Gold is still on most economists’ “watch-lists” right now because the majority of mainstream projections place gold between $1350 and $1600 by the end of the year, which would be a demonstrative shattering of the current $1226 record.

The dollar is expected to lose 9-14% of its’ value this year, and the inverse relationship that many commodities have with the dollar applies to gold as well. Precious metals like gold and silver also benefit from a declining US dollar, although it doesn’t appear likely that silver or platinum could surpass their respective historic highs in 2010.

Platinum climbed to over $2200 in 2008, before the automotive industry took a dive and eliminated the need for many platinum-infused carburetors. Abundance of production silver, and profit taking have repressed silver prices as of late, and these two identical looking white metals are presently valued at $1509 and $16.18 per ounce, respectively.

While recent forecasts confirm prior predictions of higher prices across the board for gold, silver, and platinum, it looks like record-breaking precious metals prices could be limited to gold in 2010, as silver is $40 below its’ historical high, and platinum is over $600 beneath its’ record-high mark. If you wish to buy or sell precious metals, or if you simply need more information on a particular topic, our customer service experts will be glad to assist you.

Franklin Gold

A significant precious metal transaction qualifies as such, by being large enough to affect the financial profile of a nation’s central bank, and which requires the facilitation of the IMF (International Monetary Fund). Global anticipation is mounting over which nation’s respective central bank will purchase 191.3 tons of bullion that the Fund intends to sell, and the most recent rumors about China’s pending purchase have been proven to be unfounded. Many consider India to be a far more likely candidate for the bullion buy, but India just raised her gold import tariff, and has also allowed her rhodium (which is used in polishing jewelry) reserves to decrease from 10 percent, to just 2 percent.

Even though neither India, nor China has actually purchased the available IMF bullion, mere rumors of such significant precious metal transactions have been enough to influence the gold spot price dramatically. Just since Thursday, the spot price reached depths of below $1090 per troy-ounce levels, and since then, flimsy rumors have managed to help propel the spot price to renewed heights of near $1120 per ounce levels.

Our U.S. dollar continues to compete with the euro for superiority, but even though the greenback is at around 80 on the Index, this in no way reflects as a legitimate indication that our nation’s economy is recovering. Unemployment levels are still around ten percent, yet the media’s attention has been redirected toward Greece’s outstanding debt these past few days.

Trend savvy investors who seek long-term financial safety are encouraged to contact one of our friendly specialists, who can answer your questions about your own physical gold purchase, and offer you institutional discounts on bullion, and certified rare gold coin.

Franklin Gold

February’s precious metal market has both risen above, and dipped below $1100 per troy-ounce levels, continuing a tradition of volatile February gold prices that has become customary in recent years. After shooting radically to $1226 in mid-December of last year, many reasoned that gold was overbought and began to downplay the value of futures contracts. Still others thought gold spot prices would be around $1050 by the end of February, and some market analysts speculated that silver would fall below $15 per ounce by March 1. Gold, silver, and platinum all struggled during January and into the beginning of February, as profit-taking pulled gold to $1062, silver to $15.50 and platinum to sub-$1500 levels.

Gold has been quietly been climbing the charts over the past two weeks, ultimately reaching $1122 late last week. The market experienced a pullback this week after the Federal Reserve revealed plans to hold interest rates at zero, although most economists believe that Fed Chairman Ben Bernanke will have no choice but to boost interest rates soon, due to the growing threat of inflation.

February’s precious metal market has shown some negative movement in response to the news that the International Monetary Fund (IMF) is looking to gradually unload another 200 tons of gold onto the open market. The last time the IMF did this the gold was already earmarked for India’s central bank, without private investors getting a chance to bid. The way the IMF gold sale plays out should also have a bearing on the precious metal market as a whole, and whether the sale occurs in February, March, or December, you could expect to see volatile silver and platinum prices that same day, as was the case during India’s large buy last year.

Precious metals are traditional hedges against devaluing currency, and our US dollar definitely fits that description. If you want protection from the collapse of the dollar then give our advisors a call to inquire about setting up a hedge for physical delivery, as well as for qualified retirement accounts.

Jonathan Monroe