Gold prices dropped below $1,600 an ounce today, nearly wiping out the gains for 2012. Political uncertainty in Greece and Spanish banks prompted investors to sell their bullion for the third straight day. Fear due to a change in the French Presidency, the state of the Spanish banks, and gridlock in Greece all contributed to the 3 percent drop in precious metals. Optimism in gold unhinged following the turmoil in Europe. Many investors are questioning whether they are going to be seeing a large enough euro bail out that precious metal prices will rise again.
The Federal Reserve is the Key
Since we released our Collapse of Gold Report in November, gold has dropped from over $1,800 an ounce to under $1,600 an ounce. Chairman Ben Bernake has given no indication that the central banks will start a Q3. Recent improvements in the U.S. economy could indicate that the Fed’s next step will be to raise interest rates, which will cause gold prices to drastically decline.
Although gold has been known as a way to protect wealth in times of economic uncertainty, Frank Tang of Reuters said this year gold is “in tandem with riskier assets such as equities and crude oil”.
Other Ways to Invest in Tangible Assets
If you are considering selling your gold, there are other options available that do not play the precious metals market. Within the investment realm of tangible assets, there is one asset that has outperformed gold and stocks for the last 40 years: rare coins. Although many people have preconceived notions of rare coins, the investment potential is unique. Unlike many investments, rare coins are not tied to the precious metals market or the dollar. Consequently, the prices do not fluctuate like the price of gold or silver.
Rare coins allow you to privatize your investment portfolio since no 1099b or social security number is required. Due to the finite supply, the price of these can never go to zero and the market is driven by collectors/investors. A new set of programs were developed that allow people to invest in this tangible asset with the help of industry experts. The two programs, known as the Numismatic Asset Protection Account (NAPA) and Numismatic Trading Account (NTA), utilize one of the industry’s largest inventories of rare coins. With the close guidance of numismatic expert, Steve Contursi, these accounts are achieving 10-15% profits.