Blog > News that Matters > Gold prices close below $800 — and a bad deal on the Krügerrand 2008
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Gold prices close below $800 — and a bad deal on the Krügerrand 2008

Today's Financial News - Posted August 15, 2008

Gold prices closed the week at $792 — just in time to make the recent Krügerrand 2008 promotion a really bad deal!

by J. Christoph Amberger

Baltimore — (TFN): Gold futures crashed and burned on Friday, closing below $800 an ounce for the first time in 2008. Gold for December delivery closed at $792.10 an ounce, down $22.40 in a single day, or 2.8% for the session. But that’s not the worst: It touched a low of $784.

Kitco.com’s Jon Nadler put the extent of the rout quite concisely: “This week’s sheer massacre in values will represent the largest such decline in 25 years for the yellow metal.” Goldman Sachs slashed its forecast on gold prices to $745 an ounce for their 3-month gold outlook (down from $890) and to $740 from $810 on a 12-month basis.

Silver futures dropped 9.9% for the day and lost 16.4% for the week.

Ironically, the mailman jut dropped off my copy of the German Taipan. Eclosed was a flier promoting the “Krügerrand 2008″, in its official coinage from the South African Mint. It’s a tempting offer: Gold, they state, is “die sicherste Wertanlage der Welt” — the most secure value investment in the world. And 1/10 of an ounce costs just 98 euros. (Only three coins per household, please!)

Now let’s do the math: 98 euros multiplied by today’s exchange rate of $1.47 add up to $144 per coin. That’s $1,440 per ounce. Or $656 more for every ounce of gold than you could have bought at today’s low.

No wonder there’s a limit of 3 coins per household!

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Posted by J. Christoph Amberger · Filed Under News that Matters 

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