According to USAGOLD analyst Peter Grant, Gold Coins and gold prices in general surged a whopping 122 per cent within a span of three years. The irony of it all is those gold coins still remain as an amazingly under owned asset with Americans. Investing in gold reserves such as gold coins and bullion, is a less common practice among Americans, with only one per cent of them putting in their money towards physical gold, as per Grant.

Recession and Gold Coins

Price of gold has bounced around the $1600 mark in June 2012 even as gold trading is minimal due to the ongoing Euro Zone crisis. Data published by Fed’s survey of Consumer Finances points out that the recession took away almost 39 per cent of a standard American citizen’s net worth. This is because a larger part of an average American household’s wealth was incorporated in stocks and real estate. As per Peter Grant, the devastating effect of the recession could have been notably alleviated if American middle class families had invested even a small portion of about 10-30% of net assets towards gold. Sadly, it seems this time around as well, it remains the scenario in a highly volatile Euro Zone market.

With reports of Europe meltdown closing in, investors are in a tight spot to trade stocks in such an unstable market. However, prices of gold coins rose even after reports of Spain bail out made headlines. After Spain’s need for capital injections to bail out its dwindling economy, investors are now looking at Greece elections. A change in the Greek government may entail the country’s exit from the European Union. Another important event to look forward to is the U.S. Federal Reserve’s new policy meeting to be held next week. This could throw some light on what stance the US central bank maintains with respect to monetary easing.

It is clear that as compared to bonds, gold holdings are quite small. Global bonds market amount to 14,000 US Dollars per capita. In contrast, spot gold is less than 1,180 US Dollars per capita. This suggests that investment portfolios of American families are vastly skewed. Improperly allocated funds pose a threat in an unstable financial environment where middle class bears the brunt of almost everything.

Currently, the market is in a slumber as investors wait for more insights on the future of Europe. Gold has seen some scrap selling and light buying from Asia. But in the near future, gold prices may continue to be highly volatile owing to developments in the Euro zone crisis.

Even as Europe stands on the verge of a total meltdown and an imminent disintegration of European Union, other economies follow suit. Ripples of financial turmoil slowly progress to other nations such as USA, China and Japan. Gold has been considered to attract investors who play it safe. In the past few weeks too, investors were drawn to gold following the ebb and flow in the Euro zone crisis. According to analyst Hou Xingiang, gold’s position is set to strengthen after this fluctuation subsides at the end of this term. With clouds of uncertainty mounting once again over the horizon, investors could use some reevaluation of their financial asset portfolios so that history does not repeat itself this time around.