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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Sully- who wrote (52558)	6/3/2002 5:22:04 PM
From: Jim Willie CB	Read Replies (1) \| Respond to of 65232

Gold Dealers report sharp rise in buyer interest by Jim Buchta, Minneapolis Star Tribune Saturday, June 1, 2002 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. "The world has changed," said George Cooper of Centennial Precious Metals, a Denver-based company with dozens of customers in the Twin Cities. "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 market." 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 gold coins. 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. "This is just a really solid steady market," he said. "It doesn't seem to be correcting down like it normally does; it's been a steady progression upward." 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 specific investors. 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 estimated. 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 more. "I can hear the fear in their voice that all is not well," he said. "It's nervous buying, driven by fear. People are looking for safety and security, and that's what gold provides." -end-