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October 27, 2009

October 27, 2009 – Gold and silver prices fell 0.25% and 0.8% respectively this morning, but a report from Bank of America’s (B of A) investment division may have helped spot prices for these two metals rebound around 11am EST. Gold for October delivery is presently valued at $1341.80 per ounce, and silver’s Comodities Exchange (COMEX) value is $16.83. Silver has gained 52% within the last 365 days, and some B of A economists believe that silver could rise to $20 per ounce next year. Although gold is projected to return 12-18% next year to accompany the 42% gain that it has posted in for the last 365 days, some investors simply prefer gold’s more affordable alternative. “The steady increase of investment in silver was heavily influenced by increases in gold prices during the past few months. Given that silver is cheaper than gold, market participants can substitute into the less expensive alternative,” according to the B of A report.

Many of our nation’s investors view gold and silver as safe-haven assets, which means that investors can obtain protection and financial security with these precious metals during times of economic instability. Inflation could mean higher prices for consumers, so investors who foresee short-term inflationary periods usually buy gold and silver bullion. Investors who fear a long-term stagflationary cycle, and the collapse of our dollar, are encouraged to invest in certified gold and silver coins. The $20 Saint Gaudens and the Morgan Silver Dollar were minted by the United States prior to 1933, and investors buy these coins to counter stagflationary effects. Rather than purchasing raw coins, investors buy coins that have been certified as “Mint State” by the Professional Coin Grading Service (PCGS). Certified gold and silver coins have historically provided investors with accelerated price fluctuations, including a 3:1 ratio on the MS64 saint Gaudens during the last six months. These coins also offer financial privacy, because certified, pre-1933 US coins are government non-confiscatable. These coins have outpaced the growth of their bullion counterparts, and their non-confiscatability by our federal government is especially attractive for today’s investors. 

Shannon King

Senior Staff Writer – GoldSilver.org

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