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Chinese Coins, Gold, & Inflation


Chinese coin prices if we are to believe the latest late November numbers continue to accelerate.  Meaanwhile, the price of gold has stalled.  Gold could be consolidating, but various technical indicators are showing a loss of strength.  Sentiment is aslo getting very bullish on gold which is a contra-indicator.  Inflation in Asia is going up at an uncomfortable rate causing Chinese authorities to apply some braking mechanisms to the economy.  Now back to Chinese coins.  The cross currents are numerable.  Supply continues to be constrained but dealers cointinue to offer coins at higher and higher prices.  Most of the coins I sell are going to Chinese buyers or Chinese-American buyers who are flipping them to China for a quick profit.  I continue to sell into this strength but also buy coins of lesser value hoping for them to appreciate in the future.  My inventory is large enough that if prices continue to go up I will profit handsomely.  If coin prices go down I will have taken a lot of profit off the table.  This is a very tricky market, with not only cross currrents but sharks in the water.

Good short summary of a tricky market by a smart analyst and trader, and something to be thankful today! Thanks.

Do you have a list of coins you're selling?

KonaJim congrats if your inventory is full. Here in Europe I get the sensation that it is less every day. In my understanding inventory is key for the dealer. If there's nothing left to trade...

We had a very reputable dealer in Germany, fluent in Chinese, dealing with Chinese coins for almost 30 years; he switched to bullions by the end of 2008 because it was to difficult to get sufficent number of coins. The other German China dealer, a native Chinese, is more or less sold out. A large Austrian dealer for worldwide coins, had an inventory of about 500 coins, when I first visited the shop in 2007. If you flip through her 27 pages of commemorative coins now, you will find about 50 silver coins 90 % of them Olympics. If you go through 10 pages of Lunar coins, you will find none; just a list for the rabbit to come. Xu Hong has reduced the e*b*a*y shop by 60 % with a total of 3 gold commemorative coins before 2000.

Regarding the rabbit dealers here are telling us that none of rectancuar coins, gold and silver, were distributed to Europe. We are waiting for the officla numbers for the other coins of the Rabbit but I would not be surprised that orders will exceed supply by 5 or even 10 with some of them. Some of thos, of course will be resold immediateldy by the fast-flippers, but at least what ever I will get hold of for a reasonable price will stay with me for quite long period.

If that continues, we could run out of "market" for coins older than 2000 by the end of 2011. Especially, if inflation and politics drive more people into precious metals in China. We have an intersting year to come and at the end of that we will have the dragon.

greetz anwir


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