Gold prices shed more than 2 percent on Wednesday as the dollar gained ground against the euro, prompting bullion investors to liquidate long positions amid weak buying sentiment, traders said.

Spot gold sank to an intraday low of $897.10 an ounce and was at $905.50/906.70 by New York’s last quote at 2:15 p.m. EDT (1815 GMT), well below levels of $920.65/922.05 late in New York trade on Tuesday.

People were unwinding their long positions on gold, after the metal’s recent rally, said analyst Daniel Hynes of Merrill Lynch:

“We’ve seen net long positions on the COMEX decrease recently and I think we’re seeing a continuation of that movement out of gold just at the moment,” he said.

The U.S. active gold contract for June delivery settled down $16.20, or 1.8 percent, at $909 an ounce.

Gold held in New York-listed StreetTRACKS Gold Shares, the world’s largest gold-backed exchange-traded fund, fell to 623.41 tonnes on Tuesday from 641.82 tonnes the previous day.

The metal hit a three-week high of $952.60 last week, but attempts to stay above $950 were met by profit-taking. Dealers noted some physical demand, but it was not enough to trigger another rally toward last month’s record $1,030.80.

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By David McEwen for NZCity

Conditions still favour gold. Gold prices rose over recent weeks as record oil prices and continued weakness in the dollar encouraged investors to buy into bullion. With crude prices touching an all time record, gold’s role as a hedge against rising inflation has seen the precious metal move higher.

Prices are also taking support from the US dollar’s ongoing slump, with investors using gold as an alternative to the most common form of currency reserves.

US commentator, Adrian Ash says you can link the historic surge in gold prices starting mid-August 2007 to many apparently disparate things. Pick the right link, and you might be able to tell whether it’s worth you buying or holding gold today.

One such link, he says, is the price of money, as decided by the US Federal Reserve. “Gold’s stellar 58% gain in the seven months starting 18th August began with the Fed’s first change to US interest rates in 18 months. Last August’s 0.25% cut to the Fed’s “discount rate” – the interest rate it charges commercial banks to borrow short-term funds – was the Fed’s first interest-rate cut since July 2003. By the end of March 2008, it became a 3% cut to the bank’s key Fed Funds target.”

And gold’s initial jump turned into a pole vault. The real cost of borrowing US dollars – or rather, the real returns paid to anyone saving money today – clearly impacts the demand for investment gold. You can measure this real rate of interest quite simply, says Ash. “Just subtract the rate of Consumer Price inflation (CPI) from the Fed Funds interest rate, then compare this changing value to the price of gold, and you’ll see that when the real returns paid to cash sink below zero, investors and savers tend to pay more – or demand more – for gold.”

That’s what investors and savers did in the 1970s. It’s what they then did not do again until real US interest rates sank towards and below zero during the first six years of this decade. Why choose gold when real interest rates sink? Because if central bankers, driven by a fear of “deflation” in asset prices and consumer spending, try to stop the public hoarding cash, then people will seek out reliable stores of value instead, led by hard assets. (more…)

NGC has discovered that 2008-W Uncirculated Silver Eagles have been struck with two different reverse types. Many are aware that Silver Eagles issued in 2008 show numerous subtle modifications to their design. NGC has now confirmed that 2008-W Uncirculated Silver Eagles were also struck using reverse dies of the pre-modification style, or reverse type of 2007.

The two reverse styles are very easy to distinguish from one another. As NGC previously reported, the most obvious identification diagnostic is the U of UNITED on the coin’s reverse. On the Reverse of 2008, the U has a spur on the right side of the letter. The Reverse of 2007, has simply a bowl-shaped U, without spur or downstroke. A number of other diagnostics are evident and are illustrated below.

NGC is designating 2008-W Silver Eagles with reverse style of 2007 as REVERSE OF 2007. Coins of the newly modified style, or Reverse of 2008, are encapsulated without designation. “This is a significant hub variety,” comments Rick Montgomery, NGC President. “It has very clear diagnostics, and appears on one of the most widely collected of all US coins. We’re also very proud to be the first to present this information to the numismatic community and to attribute the variety as part of the NGC certification process.”

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Greg McCoach is an entrepreneur, who has successfully started and run several businesses the past 22 years. For the last 7 of these years he has been involved with the precious metals industry as a bullion dealer, investor, and newsletter writer.

Mr. McCoach’s years of business experience and extensive personal contacts in the mining industry provide unique insights that have generated an impressive track record for The Mining Speculator since its inception in 2001. He also spreads his vast knowledge of the precious metals markets in a weekly column for Gold World.

Greg is also the President of AmeriGold, a gold bullion dealer.

TGR: Going to gold, what would you recommend our readers buy?

MCCOACH: I think people have to decide for themselves if they want to own the physical gold or paper representations of the metal, and they clearly need to understand what the differences are so they can make an intelligent decision for themselves. The paper representation would be gold ETFs or the Central Fund of Canada Ltd. (CEF AMEX). The mining stocks would also be paper representations. They don t represent physical gold themselves they represent a stock.

I own AmeriGold.com. I set that up back in 1999 so that my clients could have a safe and reliable place for trading buying and selling physical gold and silver, platinum and palladium with very low transaction costs. AmeriGold has done very well, particularly in the last six to eight months, when we ve had a ton of people who suddenly want to own the physical metals.

I like owning the physical metals it s just my opinion. Some people don t like it because it gets messy dealing with the physical metals you have to store it somewhere. You incur storage charges if you re putting it in a private safe or vault or depository or if you try to keep it in a safe deposit box of course, you ve got to pay for that. For myself, I just get a good fireproof safe, bolt it in from the inside into a concrete floor, and store it myself. Buy your physical metals.

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By John Christopher Fine for The Epoch Times

Ocean Lady rolled easily with light swells created by passing traffic in the Miami River as it was being fitted out at the Jones Boatyard.

The former University of Delaware research vessel had crisp lines and new yellow and green paint. The crew was making final preparations to leave after months of planning and installation of customized treasure-detecting equipment.

The vessel was loaded with electronics and search gear. It would leave on a journey of discovery and adventure—next port of call Puerto Plata in the Dominican Republic.

“Our first objective is to find a mystery ship on the Navidad Bank,” said veteran treasure hunter Burt Webber.

“There was testimony in 1688 that a galleon was seen there. Captain Swinsteed and his men on an English ship said they could look down and see cannons and what appeared to be silver bars but they were not equipped to recover anything. That will be our first survey.

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