HOW TO TRADE TODAY’S GOLD MARKET

One of the axioms of gold investing is “gold investors never lose, but gold traders eventually lose.”

Gold is not so much an investment as much as it is an asset in its own right. Gold has been described as the ultimate form of real money. As such it is the world’s truest safe haven, store of value and trusted medium of exchange.

In other words, gold’s main role for individuals involved the return of their money rather than a return on their money.

today's gold marketAll that having been said, there are certainly opportunities for handsome investment profits in the gold market. Some of these opportunities involve trading strategies and others involve classic “buy and hold” strategies using timing to select proper times to buy and sell gold holdings.

One of the most effective methods of capitalizing on the profit opportunities available in the gold market is to buy rare gold coins. Rare gold coins offer all of the intrinsic security of gold due to their high gold content, plus added profit potential due to their inherent scarcity.

A Double Eagle minted in the early 1900s contains nearly a full ounce of pure American gold mined in the American countryside, just like the modern bullion coins of today.

The difference is that the last Double Eagle left the coin presses over three quarters of a century ago. No one has minted a single Double Eagle since then and the supply of those coins has been dwindling due to the Gold Confiscation of 1933 and subsequent meltings, as well as attrition and wear through use over the decades.

The number of surviving Double Eagles from all dates and in all grades is thought to number in the hundreds of thousands. By contrast, each year, tens of millions of modern bullion coins, such as the American Eagle and Canadian Maple Leaf leave modern high-speed coins presses.

The relative scarcity of historic Double Eagle gold pieces gives individuals great profit opportunities. These coins tend to rise further than gold bullion during gold bull markets because of their scarcity, yet, they have also exhibited the ability to increase in value even when the price of gold has been falling. This means that not only can Double Eagles be considered “bullion with muscle,” but they also provide an attractive gold hedge against falling gold prices.

For people new to gold, Double Eagles offer an excellent diversification vehicle for a gold portfolio. For individuals who already own bullion bars or coins, they should consider trading a portion of these holdings for Double Eagles to achieve added diversification and enhance the profit potential of their gold portfolio.
This can often be done as a like-kind exchange without tax ramifications (consult your tax adviser) and your ITM Trading representative can brief you as to the optimal timing and selection of Double Eagles for your personal goals and circumstances.

In addition to the profit benefits already mentioned above, trading into Double Eagles also provides these other added benefits:

  • Privacy: As rare coins, Double Eagles provide privacy benefits that not all gold can match.
  • Gold confiscation protection: The federal government retains the authority to confiscate privately owned gold by federal law, but collectible coins are exempt from confiscation provisions. Double Eagles are collectible coins and thus provide a more secure way of owning gold.

Of course, at times, the market for rare gold coins can appreciate while the price of gold is falling. Sometimes, during such circumstances, it makes sense to take your profits in rare coins and take advantage of low gold prices. Your ITM Trading representative can provide you with the research to make informed decisions about these strategies.