Monday, March 9, 2009

Today in Gold: Monday, March 9

Each weekday, Cash4Gold will troll through the web's gold banter and post some of the bigger or more interesting stories. Following is a run-down of today's features:

"Ex-Steeler Brenden Stai recovers AFC title ring"
Author: Robert Dvorcha
Website: Pittsburgh Post-Gazette

Main Points: Former Pittsburgh Steelers guard Brenden Stai thought his AFC Championship ring was gone. He earned the ring as a rookie on that Super Bowl XXX Steelers team, and last saw it in 2000 shortly after being traded to the Jacksonville Jaguars.

The ring, valued at about $3,000, was being used by a criminal looking to impersonate the NFL player, and has since been on a police stolen properties list.

Amazingly, that ring showed up at Cash4Gold, and thanks to an alert screener it is now headed back to Stai. The screener alerted a supervisor, who then contacted local police.

"We handle two million individual pieces a week, but this shows you the level of security we use," said Jeff Aronson, Cash4Gold CEO. "I can only imagine the thrill of being a rookie and getting a ring only to have it stolen from you. It had to have been gut wrenching."

Authorities are currently investigating the person who sent the ring to Cash4Gold, but this is yet another happy ending to a potentially devious act.

"To be able to return it to him thrills me," Aronson said. "He's getting his ring back. He's getting those memories back."

Analysis: Cash4Gold takes unprecedented steps to insure a secure transaction. Armed guards, security cameras, a secure vault, and constant documentation of contents are just a few examples of the on-site security. Additionally, Florida residents who send in jewelry are required to provide a thumb print before payment is submitted -- a security step that no competitor takes.

"Gold may hit $2,000 if dollar falls: Schroders"
Author: Joseph Chaney
Website: Reuters

Main Points: According to Christopher Wyke of Schroders, government spending could drive metals prices up during the current year. In fact, if the dollar falls you can expect gold to reach $2,000 an ounce.

"If you saw the dollar resume its fall and maybe toward the end of this year you started seeing people worried about the inflationary consequences of U.S. government policies, then gold prices could move up very sharply," Wyke said.

"In the next 12 months, if that were to happen and the dollar were to fall, a gold price of $2,000 an ounce is quite likely."

Analysis: This is also the same expert who last year predicted that gold could rise to $5,000 an ounce, so he has tempered his enthusiasm for the metal. Regardless, he's bullish on gold for the current year.

"Gold Falls, Halts 2-Day Rally as Demand Wanes; Silver Declines"
Author: By Pham-Duy Nguyen
Website: Bloomberg

Main Points: After a two day rally, gold futures for April delivery fell $24.70 to $918 on the New York Mercantile Exchange's Comex division. This follows a rather volatile few weeks that started with surpassing $1,000 per ounce before falling for eight straight sessions.

While the price of gold does benefit from a weak dollar, a low demand for jewelry during tough economic times also weighs in the opposite direction on gold.

Analysis:
This encapsulates the question mark behind the future price of gold. While history says that inflation, deflation, and a weak dollar all help drive up the cost of gold, we are also in lightly chartered waters when it comes to the economy. It is important to consider the importance of the retail buyer when considering the path of the price of gold.

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