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Dollar is burning and Japan is spraying it with paper
By Jim Buchta
Minneapolis Star Tribune
Saturday, June 1, 2002
Gold has its glitter again.
On Friday, as gold prices rose to their
highest level in more than two years, coin
and precious metals dealers said their phones
won't stop ringing.
quot;The world has changed,quot; said George Cooper
of Centennial Precious Metals, a Denver-based
company with dozens of customers in the Twin
quot;I get calls from New York City, and they
wouldn't have talked to me two years ago to
save my life. They believed in Wall Street,
and now they're basically running scared.
Greed feeds the stock market, fear feeds the
Gold prices have been rising steadily in part
because of a lack of confidence in the stock
market, fears of terrorism, unrest in the
Middle East and uncertainty over the standoff
between nuclear rivals India and Pakistan.
Jim Cook, president of Investment Rarities, a
Bloomington-based precious metals company
that specializes in gold bullion, said
investors are looking for other places to
stash their cash.
During the past two weeks, he said, gold
sales at his store are up about 500 percent.
People are buying bullion in addition to
Krugerrands, Canadian Maple Leafs, and other
In futures trading Friday, gold for August
delivery rose as much as $3.50, or 1.1
percent, to $330.20 an ounce on the Comex
division of the New York Mercantile Exchange.
The contract closed up 80 cents at $327.50.
Gold futures rose 5.9 percent last month.
Bill Himmelwright of Premium Quality Coin in
downtown Minneapolis said that not only is he
seeing a 30 to 40 percent increase in the
number of customers in his store, people are
buying more. The average customer is spending
$4,000 to $6,000, compared with $500 to $800
in the past.
quot;This is just a really solid steady market,quot;
he said. quot;It doesn't seem to be correcting
down like it normally does; it's been a
steady progression upward.quot;
Gold prices tend to rise when the value of
the dollar falls, and recent drops in the
dollar have given American investors the
jitters. Foreign buyers benefit, though, when
the value of the dollar decreases because the
strength of currencies like the yen and the
euro make it easier to buy more gold.
Jeff Abrams of Twin Cities Gold and Silver
Exchange in St. Louis Park is skeptical of
all the gold hype -- traffic in his store has
been consistent with what it was even before
the run-up in prices, he said.
He noted that gold prices have been volatile
in the past -- they can fall as quickly as
they go up -- and cautioned that many gold
and coin dealers aren't licensed investment
professionals qualified to give advice about
whether gold investments are appropriate for
J.P. Morgan on Thursday raised its forecast
for average gold prices this year and next by
about 5 percent, citing declining supplies as
mines age. Gold will average $305 an ounce
this year, up from a previous prediction of
$290, the bank said. Next year's average will
be $325 an ounce, up from $310, the bank
Cooper, who normally can all but close up
shop in the summer but is now thinking about
hiring sales help, is much more optimistic.
He thinks that by year's end the price of
gold will go up at least a $100 an ounce or
quot;I can hear the fear in their voice that all
is not well,quot; he said. quot;It's nervous buying,
driven by fear. People are looking for safety
and security, and that's what gold provides.quot;
RECOMMENDED INTERNET SITES
FOR DAILY MONITORING OF GOLD
AND PRECIOUS METALS
NEWS AND ANALYSIS
COIN AND PRECIOUS METALS DEALERS
WHO HAVE SUPPORTED GATA
AND BEEN RECOMMENDED
BY OUR MEMBERS
Centennial Precious Metals
3033 East 1st Ave.
Denver, Colorado 80206
Michael Kosares, Proprietor
US (800) 869-5115
European Union 00-800-2760-2760
Investment Rarities Inc.
7850 Metro Parkway
Minneapolis, Minnesota 55425
Greg Westgaard, Sales Manager
1-800-328-1860, Ext. 8889
Miles Franklin Ltd.
3601 Park Center Building
St. Louis Park, Minn. 55416
1-800-822-8080 / 952-929-1129
Contacts: David Schectman,
Andy Schectman, and Bob Sichel
Resource Consultants Inc.
6139 South Rural Road
Tempe, Arizona 85283-2929
Pat Gorman, Proprietor
Swiss America Trading Corp.
15018 North Tatum Blvd.
Phoenix, Arizona 85032
Dr. Fred I. Goldstein, Senior Broker
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