October 7, 2009 – Wednesday’s gold bullion market saw surprisingly little activity, especially when compared to yesterday’s active market. Gold bullion for October delivery stood at $1044.10 at 4pm EST, which is a 0.12% increase for the trading day. Yesterday, the gold spot price reached an all-time historic high of $1044, and today’s buying prices reached as high as $1049.50 on www.Kitco.com and www.GoldPrice.net. Some investors who want a long-term stake in gold have opted to shy away from purchasing gold bullion, because some economists believe that it may simply track the inflation of our dollar over the course of time.
Rob Arnott is a money manager and Chairman of Research Affiliates, whose strategies are used to manage over $40 billion. Arnott believes that inflationary pressures on the US dollar could top 5% over the next few years, and he says that investors should consider using a quarter to a third of their portfolio for inflation protection. However, he does not consider gold bullion to be “a sensible core holding,” because if gold bullion prices simply track the dollar’s inflation over the next few years, bullion investors ultimately lose money after taxes are paid. Long-term gold and silver investors tend to do better with investment-grade coins that have been certified by the Professional Coin Grading Service(PCGS) or the Numismatic Guaranty Corporation(NGC).
PCGS and NGC certified coins have outperformed gold bullion during the last six quarters, but they are only recommended for safety-oriented investors because they usually carry a much higher premium than gold bullion. Certified gold coins like the Saint Gaudens and the Lady Liberty not only carry the numismatic worth of an antique, US coin, but their inherent gold content is also projected to rise in value over the next few years. Contact a reputable gold dealer with an A+, Zero Complaint rating with the Better Business Bureau at www.BBB.org.
