NEW YORK – Gold rose more than $7 Thursday, to $506.30 an ounce, the highest closing price in 22 years, on renewed purchases by investors seeking an alternative investment to stocks, bonds and currencies.

Gold may average $520 an ounce next year, UBS AG said, raising its estimate from $455. Demand for gold coins and bars and bullion-backed shares rose 56 percent in the third quarter from a year earlier, the World Gold Council said.

“We expect the gold price to be supported by a combination of fundamental supply and demand factors together with further growth in investment demand,” UBS said in a report.

Gold for February delivery rose $7.60, or 1.5 percent, to the highest closing price since Feb. 18, 1983, on the Comex division of the New York Mercantile Exchange. Gold has gained 16 percent this year as it heads for its fifth straight annual increase.

“There’s a long-term move up here, and investors are buying on dips,” said Marty McNeill, a trader at R.F. Lafferty & Co. in New York.

Global gold output had its biggest annual decline last year since the 1940s, according to London-based research group GFMS Ltd. Newmont Mining Corp., the biggest gold producer, and AngloGold Ashanti Ltd., the second largest, reported declines in third-quarter output.

Gold sold in dollars has gained in all major currencies this year, paced by a 35 percent rise in Japanese yen and a 33 percent gain in euros. Gold sold in euros rose Thursday even after the European Central Bank raised its benchmark rate to 2.25 percent from a six-decade low of 2 percent, the first increase since 2000.

Other metals have rallied this year. Copper has surged 38 percent, palladium by 45 percent, and zinc is up 42 percent.

“Gold is undervalued” compared with other metals, said John Licata, an independent analyst in New York. “I’ve had $510 circled on my chart as a key level that, if breached, could signify the explosive gold market has monster legs.”

(via Chicago Tribune)

SAN FRANCISCO - A Sacramento atheist who has spent four years trying to ban the Pledge of Allegiance from being recited in public schools is now challenging the motto printed on U.S. currency because it refers to God.

Michael Newdow seeks to remove “In God We Trust” from U.S. coins and dollar bills, claiming in a federal lawsuit filed Thursday that the motto is an unconstitutional endorsement of religion.

Newdow, a Sacramento doctor and lawyer who is an avowed atheist, used a similar argument when he challenged the Pledge of Allegiance in public schools because it contains the words “under God.”

He took his pledge fight to the U.S. Supreme Court, which in 2004 said he lacked standing to bring the case because he didn’t have custody of the daughter he sued on behalf of.

An identical lawsuit later brought by Newdow on behalf of parents with children in three Sacramento-area school districts is pending with the 9th Circuit Court of Appeals, after a Sacramento federal judge sided with Newdow in September. The judge stayed enforcement of the decision pending appeal, which is expected to reach the Supreme Court.

Congress first authorized a reference to God on a two-piece cent in 1864. The action followed a request by the director of the U.S. Mint, who wrote there should be a “distinct and unequivocal national recognition of the divine sovereignty” on the nation’s coins.

In 1955, the year after Congress inserted the words “under God” in the Pledge of Allegiance, Congress required all currency to carry the motto “In God We Trust.”

“The placement of ‘In God We Trust’ on the coins and currency was clearly done for religious purposes and to have religious effects,” Newdow wrote in the 162-page lawsuit he filed against Congress.

Newdow’s latest lawsuit came five days after the U.S. Supreme Court rejected, without comment, a challenge to an inscription of “In God We Trust” on a North Carolina county government building.

In doing so, the justices upheld the Richmond, Va.-based 4th U.S. Circuit Court of Appeals, which ruled that “In God We Trust” appears on the nation’s coins and is a national motto.

“In this situation, the reasonable observer must be deemed aware of the patriotic uses, both historical and present, of the phrase ‘In God We Trust,’” the appeals panel ruled in upholding the inscription’s display.

The case is Newdow v. Congress, 05-02329.

(via Mercury News)

SAN FRANCISCO – San Francisco’s Old Mint will be honored next year when special coins are issued to celebrate the historic landmark’s role in the city’s recovery from the 1906 earthquake, House Democratic Leader Nancy Pelosi’s office this week.

Pelosi’s bill, the San Francisco Old Mint Commemorative Coin Act, passed in the U.S. House of Representatives. The bill authorizes the issuance of commemorative coins in 2006, marking the 100th anniversary of the great earthquake and fire of 1906, according to Pelosi’s office.

When the bill was first proposed, it allowed for 100,000 $5 gold coins and 500,000 $1 silver coins to be minted and issued. Proceeds from the sale of the coins are slated to go toward the restoration of the 135-year-old building on the corner of Fifth and Mission streets in San Francisco.

The Old Mint, known as the “Granite Lady,” is the oldest stone structure in San Francisco, according to Pelosi’s office.

Designed by Alfred Mullet, the building was constructed in 1869 in the Greek Revival style. The Old Mint is a designated National Historic Landmark and is also listed in the National Register of Historic Places.

In October, Mayor Gavin Newsom presided over the groundbreaking for the new museum complex that will be built at the Old Mint. The site will include San Francisco’s first city history museum and a coin and Gold Rush museum, said Pelosi’s office.

The bill, H.R. 1953, received bipartisan support from Reps. Barney Frank, D-Mass. and Michael Oxley, R-Ohio, according to Pelosi’s office.

Sens. Dianne Feinstein and Barbara Boxer introduced the bill into the U.S. Senate, where it needs to pass before President Bush signs it into law, Pelosi’s office reported.

(via ktvu.com)

Randy Wright, a civics teacher at a middle school in Virgina, is concerned that people don’t know about our constitution. With the help of his students, he has been trying to pass the Liberty Bill Act, which would place a condensed version of the Constitution on the back of the $1 bill.

It’s a lengthy process but the students benefit by getting a firsthand look at what happens in the government and who knows, he may just do it. I think it’s a great idea.

You can find out more about the effort at their web site, libertydollarbill.org.

Here’s a mockup of what the proposed bill might look like.

Update: The State Quarter boards are no longer available from PNG

The Professional Numismatists Guild (www.PNGdealers.com) has produced two new quarter boards to house coins dated 2005 - 2008 issued by the United States Mint under its overwhelmingly popular 50 State Quarters Program. The coin holders are a joint educational project between the United States Mint (www.USMint.gov), the 33,000-member American Numismatic Association (www.money.org) and PNG.

“Since they were first produced in 1999 for the start of the United States Mint’s ten-year 50 State Quarters Program, more than 600,000 quarter boards have been distributed to children and adults,” said Robert Brueggeman, PNG Executive Director. “These latest boards are available free from participating PNG member-dealers, or can be obtained directly from PNG headquarters for $1 to cover the cost of sending up to five boards.”

One side of each board has 20 die-cut holes for holding a collection of commemorative state quarters for a two-year period, 2005 - 2006 and 2007-2008, the final four years of the scheduled state commemorative coin series. Five states are honored each year with coins produced at the United States Mint facilities in Philadelphia and Denver - two different mint marks for each state’s coin for a total of ten coins to collect from circulation each year.

“The 50 State Quarters’ Program is having a profound, positive impact on the coin collecting hobby. Millions of Americans now collect them,” said Jeff Garrett, PNG President.

“The PNG is proud to be a part of the quarter board project. It has been especially helpful in attracting young people to the hobby. We also look forward to participating in other ventures that promote coin collecting. The future of collecting will be stronger because of this and other projects.”

The 10 states on the latest two quarter boards are: (2005) California, Minnesota, Oregon, Kansas and West Virginia; (2006) Nevada, Nebraska, Colorado, North Dakota and South Dakota; (2007) Montana, Washington, Idaho, Wyoming and Utah; and (2008) Oklahoma, New Mexico, Arizona, Alaska and Hawaii. The other side of the 2005 - 2006 quarter board has color illustrations of a dozen United States commemorative half dollars. Labeled “American History Illustrated,” the coins depicted range from the 1892 Columbian Exposition commemorative coin to the 1954 Booker T. Washington commemorative coin.

The back side of the 2007 - 2008 QuarterboardTM has a 50 State QuartersTMProgram trivia test with 21 questions written and supplied by the Mint. There also is information about the Mint’s H.I.P. Pocket ChangeTM web site, www.USMint.gov/kids, that is “dedicated to promoting lifelong pleasure in coins and coin collecting” with games, informational features and interactive animated cartoons for children. Neither the United States Mint, nor the other numismatic organizations sponsoring this educational project, endorses any individual provider of goods or services. To obtain from one to five PNG QuarterboardsTM directly from PNG, send $1 to cover shipping costs to: Robert Brueggeman, PNG Executive Director, 3950 Concordia Lane, Fallbrook, CA 92028. Phone: (760) 728-1300. E-mail: [email protected]. Web: www.PNGdealers.com.

“50 State Quarters” is a registered trademark of the United States Mint.