GFMS still expects fresh gold peak in H2 09

An inflation-driven surge in gold investment around the world will likely boost the yellow metal to new highs in the second half of this year, GFMS chairperson Philip Klapwijk writes in the latest issue of the consultancy's quarterly newsletter.

Investment demand, and especially so-called 'western' elements, like exchange-traded funds, futures and the over-the-counter market, is expected to remain the driving force behind gold price movements over the rest of 2009.

“Given increasing fears over the long-term inflation threat in western countries, we expect world investment to see a massive increase this year, particularly from its implied net investment and official coins components,” Klapwijk commented.

GFMS calculates world investment as the sum of implied net (dis)investment, official coins, bar hoarding, and medals and imitation coins.

In its May quarterly three-year gold forecast, GFMS predicted that world investment this year would actually exceed 1 500 t, or some $47-billion, which would carry the gold price to new peaks by the end of the year.

Growth in investment demand has been the primary driver of the rally that has taken gold from around $250/oz in early 2001 to peaks above or close to the $1 000/oz level in 2008 and 2009

Increased demand has been mainly driven by booming investor interest in gold.

This is “a result of the general decline in the US dollar since 2002; rising commodity prices (at least until mid-2008); concerns over the security of bank deposits following the near meltdown of global financial markets; more recently, the drop in short term interest rates to levels close to zero in the major advanced economies and growing concerns at the potential longer term inflationary consequences of unprecedented monetary and fiscal policy easing,” Klapwijk says.

He suggests that the 'western' investment tends to be what drives gold prices, either higher or lower, while demand in the rest of the world – bar hoarding, medals and coins - generally tends to support a floor – “although as has been seen over 2001-2009 - to date, a floor that is at successively higher price levels”.

In April, GFMS said it expected to see gold prices set new records this year, possibly rising as high as $1 100, on investment demand.

Gold set a three-month high of $989,80/oz earlier this month, but has been weighed down in the last couple of weeks by a stronger US dollar.
Source: miningweekly.com

Coin trail leads to church thief

A thief who robbed a church during a baptism was caught after police followed a trail of dropped coins straight to him, a court has heard.

Andrew Brown stole the collection money while the congregation were singing at Rattray Parish Church, Blairgowrie.

He made off with nearly £300 in cash and cheques on 11 January.

Brown, 24, was jailed for four months after Perth Sheriff Court heard he had already spent some of the money on drugs by the time police arrived.

Brown, from Ashgrove Gardens, Blairgowrie, admitted stealing £296.40 from the church's vestry. Only £180 was recovered by the police.

'Felt sorry'

Church-goers realised there had been a robbery when coins were found on the vestry floor.

Brown envelopes containing loose change were found discarded a short distance away from the church.

The trail of coins and envelopes led police to a nearby park, where they found Brown who immediately admitted what he had done.

He told them he had used the money to buy valium and heroin from a Big Issue seller in Perth.

He had also spent some of the cash on food and his bus fares to and from Blairgowrie.

Solicitor David Holmes said: "He pled guilty straight away because he felt sorry for what he had done.

"He still continues to feel sorry for what he has done and would wish the opportunity to make recompense."

Source: news.bbc.co.uk

1856-O Gold $20 Doubles its Prior Record

On May 29, at the Long Beach Coin, Stamp and Collectible Expo, Heritage auctioned the finest known 1856-O double eagle for $1,437,500. No other New Orleans Mint coin has ever been publicly auctioned for more than $1 million. It is the only 1856-O gold $20 that is known for sure to grade above -60 and it seems to be the only one that is a "special striking."

The previous record for an 1856-O was set in October 2008, when an Numismatic Guaranty Corp. graded AU-58 coin was auctioned for $576,150.

This result is the second highest auction price for any Liberty Head double eagle. In 2006, Heritage sold an 1861 Philadelphia Mint, Liberty Head with the Paquet reverse, for $1,610,000.

This same 1856-O, then NGC certified Specimen-63, was previously auctioned in June 2005, for $542,800. The "Specimen" designation refers to coins that are neither proofs nor business strikes, but are specially made and have certain characteristics that are different from those of corresponding business strikes. Usually, Specimen strikes are intended to be better looking than business strikes.

Not long before this May 2009 auction, this coin was submitted to the Professional Coin Grading Service and it "crossed over" to a PCGS holder also with a "SP-63" certification. Additionally, it was given a sticker of approval by the CAC.

Jeff Garrett and I viewed the coin together in Long Beach, at which time he remarked that it is "obviously special" and "beautifully struck." Garrett is a very experienced dealer and the co-author of two widely recognized books, including an "Encyclopedia of U.S. Gold Coins."

He emphasizes that "the surfaces [are] deeply mirrored and completely different from other double eagles of the era." Interestingly, Garrett likened the mirror surfaces on this Specimen 1856-O to those on the pattern 1849 double eagle and especially to those on the Smithsonian's 1854-S double eagle. The late researcher Walter Breen raved about the Smithsonian's 1854-S double eagle, which he strongly regarded as a proof.

While I do not believe that this 1856-O screams "Specimen," I agree that it is a true Specimen striking. I am not as impressed by the mirrors as Garrett and others. There are many 19th century, prooflike gold coins with fully reflective surfaces. Very few of them are true specimen strikings. In my view, the crisp, exceptionally even strike and the ways in which the devices meet the fields place this coin in a category above any other New Orleans Mint double eagle. A magnifying glass is needed to verify its "Specimen" status.

Not everyone is impressed by specimen designations. Bob Green declares that "most of the $20 Liberty double eagle collectors" that he has "worked with had no interest in ever owning this coin as it is likely to be a special striking and not a business strike meant for commerce at a time in our history." Green, of Park Avenue Numismatics, is a specialist in the Liberty double eagle series.

Green "was very surprised that this coin sold for $1,437,500. [He] would not have bid more than $1 million." Garrett, in contrast, remarks that "the coin was a bargain in relation to the cost of circulation strike 1856-O double eagles and the unique status of the coin elevates it to iconic status."

In my view, the price realized was a little high, given current market conditions. A circulated 1856-O could probably be purchased, at some point over the next 18 months, for less than $475,000. This 1856-O is a coin of such importance, however, that it is very difficult to put a price tag on it. Plus, it is really cool.
Source: numismaster.com