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May 08 2019

moneymetals

Russia & China Intend to Drain the West of Its Gold

Precious metals markets got hit this week as the Federal Reserve threw cold water on the idea of interest rate cuts.

Fed policy makers met on Wednesday and left their benchmark rate unchanged as expected. The Fed’s statement noted that price inflation excluding food and energy has declined over the past 12 months and is officially running below 2%. This, even as oil and gasoline prices have trended sharply higher this year.

Fed chairman Jerome Powell described the below-target official inflation number as “transitory.” He indicated he expects inflation to return to target at 2% without more central bank stimulus.

Powell’s comments disappointed investors who were hoping for a rate cut later this year. Equity markets joined metals markets in selling off.

For the week, gold prices are down 0.3% and currently come in at $1,283 an ounce. Silver is posting a weekly decline of 1.0% as spot prices trade at $14.98. Although they are bouncing back a little bit here today both gold and silver are at risk of closing out the week below some significant support levels, which could bode poorly for the near term outlook.

Platinum’s recent run higher got dealt a huge setback this week, with prices dropping $30 an ounce or 3.3% to now trade at $872 per ounce. And finally, palladium is also getting hit hard, down 4.3% since last Friday to trade at $1,372 as of this Friday morning recording.

Market volatility around FOMC meetings is to be expected. Unfortunately, traders still key heavily off the policies and pronouncements of central planners. To what extent central planners intervene directly in markets has long been a concern of sound money advocates.

The Gold Anti-Trust Action Committee, also known as GATA, has assembled massive amounts of circumstantial evidence of manipulation in the precious metals markets. Sometimes the evidence is clear cut – as when traders at major banks are found guilty of cheating the system. In other cases, there are dots yet to be connected.

The Federal Reserve is notoriously secretive, and the Treasury Department is also tight lipped about how and when it intervenes in markets. Those of us who think it’s important to shed light on these activities have very few allies in Congress.

One is Representative Alex Mooney, a Republican of West Virginia. Chris Powell of GATA recently appeared on USA Watchdog to give an update on some of Representative Mooney’s efforts.

Continue reading: https://bit.ly/2VPVOrr

March 27 2019

moneymetals

The Staggering Amount Of Gold & Silver Investment Since The 2008 Financial Crisis

silver-gold-investment-since-2008-social.jpg

While the demand for precious metals is certainly off its highs from prior years, investors would be quite surprised by the astonishing amount of physical gold and silver investment since the 2008 financial crisis. Only by comparing the gold and silver investment demand to the prior decade, can we truly understand how the precious metals market has changed, and probably forever.

Now, before I get into the information, I wanted to say a few things about precious metals sentiment and the disillusionment, and at times, the outright disgust, by a percentage of former gold and silver investors. I am not going to name any names, but rather focus on the inability of these individuals to CONNECT THE DOTS in regards to the disintegrating Global Financial Ponzi Scheme.

And… for those few who still believe in the “Crypto Miracle,” to overtake 2,000+ years of gold and silver as money, you have my sympathies. I am not going to get into any details, but just to say… don’t count on High-Tech to solve our problems in the future. High-tech only creates more problems. So, if you believe high-tech is going to solve problems, then you don’t understand the historical record on the “Collapse of Complex Societies.”

Regardless, I believe part of the reason the “once” precious metals bugs, have now become quite frustrated, is that they have been taken in by the Mainstream Financial Koolaide. And why shouldn’t they? Stocks and real estate prices have been going up and up, until recently, for the past seven years while the metals peaked, declined, and have been virtually flat.

Yes, it’s frustrating to see the value of precious metals underperform the market while everything else seems to be heading toward the moon. But, that in itself should give anyone with a decent amount of intellectual know-how the ability to sniff out that… SOMETHING JUST AIN’T RIGHT. For some odd reason, all the negative aspects of the economy, the massive debt, derivatives, and leverage are all but forgotten when all we do is focus on the highly inflated stock, bond, and real estate asset values.

Unfortunately, the inability to see how the debt, derivatives, and leverage have created the biggest Global Ponzi Scheme in history will create the largest financial collapse ever witnessed, causing most investors to go bankrupt. It’s only a matter of time, and time is running out.

So, when I write about gold and silver, I am not doing so because I want to see a 1,000+% gains in the metals (that wouldn’t bother me either), but because there really isn’t much else worth owning as “Liquid Investments” when the Phat Financial Lady finally sings. Thus, I don’t focus on price targets or timelines, because that’s a fool’s game (one I was guilty of doing several years ago… no longer).

Frustration occurs when something doesn’t happen when or how we expect. Which means, it’s best to focus on the critical information, make one’s investment decisions, and let the system unfold in its due time.

The 2008 Financial Crisis Was A Game-Changer For Gold & Silver Investment

Because we focus on day-to-day news, we tend to overlook longer-term trends. While short-term information is important, it doesn’t override longer-term fundamental trends. Well, yes… maybe in some cases, but if we take the collapse of the Ancient Roman as an example, it cannot be attributed to just the events that occurred over the last few years of the empire, but instead, the centuries it took for its Falling EROI – Energy Returned On Investment, to destroy it from within.

Today, we are in the same predicament as the Ancient Roman Empire. However, the overwhelming majority of people don’t see it because they are only focused on short-term results and information. Thus, to truly understand the future, we have to look back in the past. And, if we do this with gold and silver investment, we will see a very interesting trend.

According to some of the best industry sources, the World Gold Council and World Silver Surveys, investors purchased 16,200 metric tons (mt) of gold and 57,800 mt of silver from 2009-2018:

Total physical gold & silver investment (2009-2018)

That turns out to be 520 million oz of gold and a nearly 2 billion oz of silver. Now, these figures only represent the physical bar and coin demand, including central bank net purchases. I did not include ETF’s or similar products. First, there is no way of knowing if the gold or silver is over-subscribed in these precious metals ETF’s or secondly, if all the metal that is listed, is contained in the vaults. So, the figures are likely much higher, especially for silver.

Continue reading: https://goo.gl/mpmhTe

March 25 2019

moneymetals

What Do Airline Crashes and the Precious Metals Markets Have in Common?

Boeing and the Federal Aviation Administration worked closely together to hustle a new passenger jet through the safety certification process. The combined efforts to save time and cost, coupled with little sense of accountability, resulted in a tragic safety flaw.

Boeing airplanes

Now hundreds of passengers are dead, albeit in other countries. The public is finding the enormous trust placed in the manufacturer and the agency tasked with monitoring safety was badly misplaced.

The regulator tasked with safety appeared more interested in protecting Boeing’s monopoly and bottom line.

Here is an excerpt from an article last week in the Seattle Times:

Federal Aviation Administration managers pushed its engineers to delegate wide responsibility for assessing the safety of the 737 MAX to Boeing itself. But safety engineers familiar with the documents shared details that show the analysis included crucial flaws.

The FBI announced it will join a criminal investigation into the process for certifying the 737 MAX.

Precious metals investors will find many elements of the Boeing story familiar.

Gold and silver bugs have already learned just how dangerous it is to trust corrupt and captured federal regulators. Now that lesson is being taught to Americans at large.

By the time all the details of this sordid tale have been published, more Americans will wonder who federal regulators really work for.

Gold and silver investors who have been similarly betrayed by the regulators. Regulatory malfeasance and corruption is a theme the precious metals markets and airline industry have in common.

Concerns over regulatory capture and a track record of failure were largely ignored. Editors at Bloomberg outlined some of the history of the FAA in a March 21st editorial. Suffice it to say the recent crashes aren’t the only examples of the agency putting the needs of airlines and plane manufacturers ahead of public safety.

Continue reading: https://goo.gl/8LMy2W

March 22 2019

moneymetals

Federal Reserve Cries Uncle as Rates Fall, Commodities Strengthen

Well now, without further delay, let’s get right to this week’s exclusive interview.

David smith

Mike Gleason: It is my privilege now to welcome back David Smith, Senior Analyst at The Morgan Report and regular contributor to MoneyMetals.com. David, it's been too long. How are you my friend?

David Smith: It's been a while and I'm happy to be back, Mike.

Mike Gleason: Well, David, for metals investors who got started after the 2008 financial crisis, it has not been an easy ride, as we both know. Prices rose sharply between 2008 and 2011, driven by the crisis and the Fed's response to it, 0% interest rates and massive amounts of money creation. Then the metals markets began to flounder. Some of the safe haven demand for metals dried up as the equity markets recovered and fear dissipated. Price rigging and suppression in the futures markets has progressed from conspiracy theory to conspiracy fact. Metals prices are not being set in free or fair markets, so it is not easy for some investors to hang in there. But the reasons to own metal are still there, bigger than ever.

So, now might be a good time to review some of them. You talk a lot about precious metals role as insurance. Would you mind going over how metals act as a form of insurance for our listeners, David, as we start out today?

David Smith: Well, there's several iterations of the insurance piece. As David Morgan of The Morgan Report always talks about, you buy the physical first and you buy that for insurance first and profits second. But if you look back, and a lot of people would not even believe this until they saw the chart. But gold held since 2000, has doubled the appreciation of the stock market, the overall stock market.

So, in spite of the big plans that we've seen, that we saw from $1,900 down to about $1,050 and then the move in 2016, we had, which gave most of it back and gold ended up for the whole process from that point, down about 45%. Silver down about 70% from 2011. In spite of that, the metals are still using their role as insurance of helping you diversify, of helping contradict other price changes in investments you may have and then, providing liquidity for you. So they, historically, have done that very well, that role of insurance and they continue to do so.

Mike Gleason: You talk about metals as a source of liquidity. What do you mean by that?

David Smith: It means that if you need money, if you have some kind of an expense you need to deal with right away, you can sell the gold right now at any gold operation, any salesmanship. Whether it's a jewelry store or an operation like Money Metals and you can get your money for that to pay that expense.

You can't do that with property. You can't do it with real estate, in general and collectibles and things like that. So, it gives you a real good opportunity. I always like to tell people from time to time, when you buy gold and silver, you don't think of it as buying something like a car or a fishing rod or a camera or something like this. You're exchanging one form, of which I would argue is inferior money, fiat money that's not backed by anything… you're exchanging that for a form of historic sound, honest money. You're not making a purchase per se. You're making an acquisition of a greater ability to have a financial element that can do really well for you and offer diversity.

Check out the full podcast/article here: https://goo.gl/p7Srnw

moneymetals

What Soaring Palladium Prices Mean for Silver

A once-rare property crime is now trending higher around the world. Thieves are stealing precious metals from automobiles.

These opportunistic criminals don’t bother rummaging through glove compartments in the hope of finding stashed jewelry or gold coins. Instead, they go for the certain score of exposed catalytic converters.

A car’s catalytic converter is attached to its exhaust system and converts toxic emissions into less harmful byproducts. It contains corrosion-resistant noble metals – typically platinum, palladium, and/ or rhodium – in relatively small quantities.

Those relatively small quantities are valuable, especially in the case of palladium. “Soaring palladium prices are inspiring an unusual band of criminals: catalytic converter thieves,” reported the Wall Street Journal.

In March, palladium prices spiked to a record $1,600/oz. They appear poised to set more records this spring.

Fears of a chronic supply deficit are prompting not only thefts, but also panic buying of palladium by industrial users and abnormalities in futures and leasing markets, including backwardation and double digit lease rates.

Since early 2016, the palladium spot price has more than tripled – from just under $500/oz. to over $1,500/oz. Despite the huge move, demand for palladium continues to outstrip supply. The move may be far from finished.

However, long-term investors who are focused on finding value – who aim to buy low when markets are depressed and out of favor – likely won’t find palladium attractive at these lofty levels.

But they may find palladium’s recent tripling encouraging for the prospects of other metals that have been beaten down and overlooked by most investors.


Continue reading: https://goo.gl/VKMn4C


March 08 2019

moneymetals

Practical Prepping for Financial SHTF Scenarios

practical-prepping-for-financial-shtf-social.jpg

Preppers – the sort of people who build bunkers, stockpile supplies, and bear arms – aim to survive “SHTF” scenarios.

When war breaks out, when the power grid goes down, when the banks fail, when the U.S. dollar collapses, when social unrest spreads, when the stuff hits the fan… will you be prepared?

DoomsDay clock

Risks are rising.

The Bulletin of the Atomic Scientists maintains a “Doomsday Clock.” For 2019, it “sets the Doomsday Clock at two minutes to midnight—the closest it has ever been to apocalypse.”

The Atomic Scientists are issuing “a stark warning to leaders and citizens around the world. The current international security situation—what we call the ‘new abnormal’—has extended over two years now.

It’s a state as worrisome as the most dangerous times of the Cold War…”

If you don’t have an underground fallout shelter in your backyard… don’t worry. The likelihood of your neighborhood being the target of a nuclear attack is slim.

However, other SHTF scenarios are far more likely impact you or your finances at some point in the future. It could be something specific like an identity thief draining your investment accounts. Or it could be something systemic like a currency crisis.

Full article: https://goo.gl/yTzojx

March 07 2019

moneymetals

Insane Stock Market Rally Due To Massive Global Monetary Liquidity

If you’re puzzled by the magnitude of the stock market correction since late December, you can thank the central banks for the rally. Yes, that’s correct… after the Dow Jones suffered the worst Christmas Eve trading day ever, the massive central bank monetary liquidity helped push the index up 20% from its low over the next two months.

Dow jones (daily chart) - february 28th, 2019

Of course, the markets were due for a reversal as nothing goes down in a straight line, but to see the sort of buying in the face of negative economic news and lack-luster earnings means that the inevitable CRASH will be even bigger when it finally arrives.

Now, according to the article, Back To Fundamentals, Daniel Lacalle stated the following in regards to the markets:

In 2018 we saw the first drop in global liquidity in more than a decade, and that generated significant losses in financial markets. Since the end of December stock markets have rebounded strongly because the data, although poor, is not as bad as feared, and mainly because the Federal Reserve changed its tone on the number of rate hikes, the ECB announced that it would be much more accommodative and the Central Bank of China introduced the largest injection of liquidity in five years.

In fact, between December 26 and February 15 we have seen the largest injection of liquidity in the markets of the last two years, bringing the global money supply to record levels.

The two key points stated above were that a drop in global liquidity in 2018 generated significant losses in the financial markets and the largest injection of global liquidity from December 26 to February 15th brought the money supply to a record level and pushed global stock markets back higher. 

Continue reading: https://goo.gl/oApVJ9

March 01 2019

moneymetals

SILVER EAGLE SALES DOUBLED IN FEBRUARY: U.S. Mint Temporarily Suspends Authorized Purchases

silver-eagle-sales-doubled-in-feb-social.jpg

Sales of Silver Eagles continue to be strong as demand for the official coins surged in February. Moreover, as the Authorized purchases of Silver Eagles jumped by 775,000 oz this past Thursday, the U.S. Mint issued a temporary suspension of sales until inventories can be restocked. This is a very positive sign as total Silver Eagle sales last year fell to low of 15.7 million, down more than 50%, compared to the 37.7 million set in 2016.

According to the U.S. Mint’s most recent update, Silver Eagle sales as of February 21st were 2,057,500 versus the 942,500 during the same month in 2018. Not only are Silver Eagle sales this month more than double last year, but they also surpassed Feb 2017’s figure by 842,000 oz:

U.S. mint silver eagle sales february 2018 vs 2019

Furthermore, Silver Eagle sales JAN-FEB 2019 are 6,075,000 compared to 4,177,500 sold during the same period last year. Thus, sales of Silver Eagles are up 45% versus the first two months in 2018:

U.S. mint silver eagle sales january and february 2018 vs 2019

I believe demand for Silver Eagles will remain strong this year, but it will take another financial and economic crisis to push the annual purchases back up to the 35-40+ million range. And, I believe we may likely see that type of demand in the next few years as the global financial system starts to unwind due to the massive amount of unsustainable debt.

Interestingly, the Silver to Gold Eagle sales ratio this year is nearly 80/1 compared to the 70/1 during the same period in 2018.

Continue to the full article: https://goo.gl/Lhy88m

February 27 2019

moneymetals

Fed Must Face Reality: No Return to Normalcy for Monetary Policy

More than a decade after the 2008 financial crisis, U.S. monetary policy continues to operate in crisis management mode.

Despite a long, drawn out rate-hiking campaign – now paused – the Federal Reserve has yet to bring its benchmark interest rate up to normal levels historically.

It has yet to unwind the vast majority of the nearly $4 trillion in emergency asset purchases added to its balance sheet.

The Fed outlined its “normalization” policies back in September 2014.

The two main components of normalization are gradual increases in the federal funds rate toward neutral and gradual reductions in securities held on the central bank’s balance sheet.

Even with the benefit of an unusually prolonged period of favorable economic conditions, progress toward normalization has been slow and fleeting.

Expect Continually Low Interest Rates, Ongoing Stimulus

Full normalization – a return to pre-2008 monetary conditions as is the Fed’s stated goal, may never come.

It may not be possible to withdraw much more stimulus from mortgage and equity markets without collapsing them. It may not be possible to unload U.S. Treasury securities without causing a funding crisis for the government.

The governmental, corporate, and consumer sectors of the economy are ALL addicted to debt growth fostered by artificially low interest rates.

Falling interest rates

The Fed wants to wean everyone off easy money. The problem is, everyone is behaving as if easy money will never end.

Central bankers can’t act normally when private and public debt levels are abnormally high and projected to go much higher. The Fed wants to keep hiking rates to discourage, in former Fed chairman Alan Greenspan’s words, “irrational exuberance.”

But going one hike too far or too fast risks triggering a deleveraging event that brings about another financial crisis.

At its most recent policy meeting, the Federal Open Market Committee (FOMC) vowed to be “patient.” Minutes released last Wednesday show the Fed citing “a variety of considerations that supported a patient approach to monetary policy at this juncture as an appropriate step in managing various risks and uncertainties in the outlook.”

Cutting through the dense Fedspeak, policymakers essentially said they put their rate hiking campaign on hold due to risks in the economy.

Left unstated were possible policy concessions made to Wall Street and Washington.

Perhaps Fed officials got spooked by the sharp stock market correction in late December. Perhaps they succumbed to political pressure from the Trump administration’s “Plunge Protection Team.”

Continue reading: https://goo.gl/7JaqAY

February 26 2019

moneymetals

Supply Problems Worsen in Minted Silver


supply-problems-minted-silver-social.jpg

Sales of the Silver American Eagles are off to stronger start this year, and the U.S. Mint has once again been caught flat-footed. Dealers received the following statement from the Mint last Thursday:

This is to inform you that we have temporarily sold out of our inventories of 2019-dated American Eagle Silver Bullion Coins. In addition, all remaining 2018-dated inventories have been sold too.

The West Point Mint is busy producing additional 2019-dated American Eagle Silver Bullion Coins. We hope to be able to re-launch the 2019-dated coins in a few weeks.

Premiums for the coins moved higher immediately following the announcement, and they could move higher still if demand remains strong.

Scarce us mint silver supply

Total 2018 sales of silver Eagles slowed to the lowest level since 2007. The Mint wound up with some excess of 2018 dated coins and actually required dealers to take a chunk of ‘18s with each new order placed for 2019 coins.

More than six million 2019 coins have been sold so far, two million more than in the same period last year. This is in addition to excess 2018 coins having been cleaned out since January 1st.

The demand was not fully anticipated, and sales are now suspended for a few weeks while the poorly managed U.S. Mint plays catch up. When sales resume, dealers are expected to be on “allocation” – or limited as to the quantity of coins they may purchase.

This leaves the silver bullion market a bit vulnerable to a supply shock right now. The U.S. Mint suspension is not the only bottleneck currently.

Check out the full article here: https://goo.gl/2NxrYp

February 14 2019

moneymetals

The Battle for Venezuela’s Gold Serves as a Lesson in Counterparty Risk

venezuela-gold-counterparty-risk-social.jpg

He who controls the gold makes the rules. That old adage applies aptly to the present crisis in Venezuela.

An international battle for control of Venezuela’s gold is currently underway. At stake is the country’s political future – and with it, the global market for its immense oil reserves.

In a desperate effort to cling to power, Venezuelan strongman Nicolas Maduro has been depleting his country’s gold reserves.

The oil-rich nation once had gold reserves of over 160 tons. But in recent months, Venezuela has sold off dozens of tons of gold to allies such as Turkey, United Arab Emirates, and Russia in exchange for euros and other globally recognized currencies.

Nobody in their right mind wants to conduct international business in the Venezuelan national currency, the bolivar. Even ordinary Venezuelans have largely ditched the bolivar for cryptos and other alternatives as inflation rates in the troubled country top 1,000,000%.

Even as the Venezuelan government was busily hyperinflating its currency and ripping off its people, it still held gold in reserve in order to retain the confidence of foreign creditors including Russia and China. Ordinary Venezuelans couldn’t redeem their rapidly depreciating bolivars for gold, of course. But foreign creditors could effectively demand payment in gold through the conversion of Venezuela’s gold into their preferred currencies.

For several months, President Maduro has been trying to retrieve some $1.2 billion worth of official gold being held in Bank of England vaults.

Fearing reprisals from the United States, which has imposed far-reaching economic sanctions on Venezuela, the Bank of England stalled, gave excuses, and ultimately refused to return Venezuela’s gold.

Venezuelan flag

The Maduro government charges that its gold has been illegally confiscated, in contravention of internationally recognized norms.

Maduro’s U.S.-backed rival, Juan Guaido, is demanding that the Bank of England hand over the gold to him instead!

Guaido is an inexperienced and until very recently obscure political figure in Venezuelan politics. Nevertheless, he has been recognized by the United States as the interim President of Venezuela – even though he hasn’t actually formed a government or removed Maduro from power.

If Guaido gets control over the country’s gold, it could be game over for Maduro. His international creditors would likely begin abandoning him.

Continue reading: https://goo.gl/AW5Xpo

February 11 2019

moneymetals

February 07 2019

moneymetals

If Financial Markets Make You Nervous, It’s Time to Own Physical Gold in Your IRA Instead

physical-gold-in-your-ira-social.jpg

If the sharp selloff in stocks late last year has you looking for other places to invest your retirement money, self-directed IRAs are worth a look. These accounts allow you to switch some of your Wall Street assets for tangible assets such as gold, silver, and real estate.

Retirement

Nervous investors are making the switch in increasing numbers. In addition to the diversification away from paper assets, it is easy to transfer funds from an existing IRA.

And the cost of maintaining the account is often well below what Wall Street charges to “manage” the funds.

Banks and brokerages successfully cultivated the idea that IRAs should contain only conventional securities – stocks, bonds, and mutual funds. The vast majority of retirement funds are invested in those assets, and financial institutions get a rake on every nickel invested. It is no accident that paper is the ONLY option in most accounts.

Annual maintenance and storage fees for $100,000 in IRA funds invested in physical gold, including the storage at Money Metals Depository, are roughly 35 basis points (.0035) for the first year and 20 basis points (.002) ongoing. The maintenance and management fees built into many ETFs and mutual funds are triple that amount.

Word is getting out about the “Self-Directed IRA” alternative. In return for assuming personal control over investments, people can buy a wider range of assets – including many options their stock brokers and financial planners either don’t mention at all or speak of dismissively.

Today, there are a number of good IRA companies offering self-directed plans, so it is worth covering how an investor might go about choosing one.

Find out more: https://goo.gl/ZBq5z5

November 08 2018

moneymetals

Rep. Alex Mooney: Bring Back Gold!

Washington has been quite the circus lately. Bret Kavanaugh’s appearance in front of the Senate Judiciary Committee prompted dozens of interruptions from Democrats and numerous protests from leftists.

During Twitter CEO Jack Dorsey’s testimony to the House Commerce Committee, journalist Laura Loomer demanded to be verified on the social media platform, and Representative Billy Long (R-MO) held an auction.

Alex Jones tried to fight Senator Marco Rubio, a has-been actress got escorted from the premise, and CNN's Oliver Darcy was on the brink of tears.

What a time it was on Capitol Hill.

But as the crazies enveloped these events, a more subdued and mundane hearing occurred at the same time.

Entitled “The Future of Money: Coins and Banknotes,” the House Subcommittee on Monetary Policy and Trade discussed cryptocurrencies, counterfeit currency, intellectual property, and the U.S. Mint’s security developments.

One distinguished GOP representative took the opportunity to home in on two issues important to libertarians, constitutionalists, and sound money advocates: the gold standard and the Federal Reserve.

Representative Alex Mooney (R-WV), who has ostensibly continued where former Representative Ron Paul (R-TX) left off, alluded to the Fed’s inflationary policies, taxing legal tender under the Constitution, and his bill that returns the nation to money backed by the yellow metal.

Continue reading... 

November 05 2018

moneymetals

A Tale of Two Metals: One WAY More Valuable Than Gold, The Other Historically Undervalued

Gold is the metal of kings, the ultimate money, an eternal store of value, an un-tarnishable embodiment of beauty. Gold is all those things. But it is not the most valuable metal you can own on a cost-per-ounce basis.

Often, platinum commands a higher price than gold. Lately, platinum has traded at an abnormally large discount to the yellow metal.

Metals investors who want to hold the most concentrated wealth in a single ounce bullion product should opt not for gold or platinum…but for a different platinum group metal called rhodium.

Rhodium is scarce and thinly traded. Frankly, it’s a little-known metal even among metals investors.

Like platinum and palladium, the primary application for rhodium is catalytic converters for cars and trucks. It is alloyed with platinum and palladium to enhance resistance to corrosion. Rhodium is also used in some types of jewelry.

Rhodium has quietly been in a raging bull market over the past couple years. Prices bottomed out in 2016 at around $600/oz. This September, they surged to over $2,400/oz and have remained there.

As impressive as that quadrupling is, rhodium still trades far below its all-time high from 10 years ago. From 2004 to 2008, rhodium launched from $500 to as high as $10,000/oz. At its current value of $2,425/oz, the niche metal still has lots of room to run.

Of course, the trade off associated with rhodium’s explosive price potential is that it also carries significant downside risk. This metal isn’t for the faint of heart.

Folks just getting started in precious metals investing should first build up core holdings in gold and silver. But more seasoned hard assets investors who want to add a high-risk/high-reward speculative component to their precious metals portfolio might consider rhodium.

The high-flying metal is currently available to investors in the form of one-ounce bullion bars. They come sealed and authenticated by either of the reputable mints Baird & Company or PAMP Suisse.

More options are available for the more popular catalytic metals, platinum and palladium. Bars, privately minted rounds, and even some sovereign coins are available to investors.

Continue reading: https://goo.gl/wSqPno


October 31 2018

moneymetals

WAITING FOR THE BUY SIGNAL: What’s Going On With Silver Investment

invest-in-silver-social.jpg

The Silver Market is setting up for one heck of a move higher as investors are waiting for the signal to start buying. While the silver price has shot up due recently, it still isn’t clear if this is the beginning of a longer-term uptrend. The reason for the quick spike in silver was likely due to a small short-covering rally by the Large Speculators trading on the Comex.

For the first time in a quite a while, the Large Speculators (Specs) were net short silver. For example, the Large Specs were net long by more than 100,000 contracts last year when the silver price was $18.50. However, the last COT Report showed that the Large Specs were net short silver by 17,000 contracts:

Net commercial short positions silver fell from 7,400 - 2,600

The Large Specs are shown in the Light Blue bars. Typically, the Large Specs are long, not short silver. You can see the Large Specs going short three weeks ago as their light blue bars turned down. On the other hand, the Commercials (in Red) are usually net short. However, the Commercials had the lowest net short position in years. So, to see the price of silver shoot by nearly $1.00 in a few days isn’t surprising when I have seen this setup for a few weeks.

However, it’s difficult to know if this is the start of a long uptrend in the silver price. It’s coming, but I just don’t know if this is it yet. We will know when the Silver price is making a big move when it finally gets above $20 as the broader markets crash. Now, many silver investors might be a bit frustrated because silver sentiment and investment demand dropped to a low last year.

Continue here to read the article: 
https://www.moneymetals.com/news/2018/04/23/is-it-wise-to-invest-in-silver-001460

October 09 2018

moneymetals

The Federal Reserve’s Rising Interest Rates Are A Ticking Time-bomb For U.S. Economy

One of the worst things for an over-heated and extremely leveraged economy is rising interest rates. So, with the recent 2-2.25% interest rate, big trouble is on the horizon, Also, with higher interest rates, the U.S. Treasury will have to fork out even more money to service its debt. In just a little more than two years, the U.S. Fed Funds Rate jumped by nearly 2%.

This is indeed a big change for the Federal Reserve’s “economic stimulation policy” as it kept interest rates below 0.25% since January 2009. And with extremely low-interest rates, nearly zero, it allowed the United States to more than double domestic oil production. Unfortunately, this newly created oil supply has come at a huge cost. It has created another big mess which I call the U.S. Shale Ponzi Scheme.

But, before I get into details of this article, I wanted to let my readers and followers know that the lack of articles this week was due to a freak storm that impacted our area. We had a mini-tornado or a micro-burst that touched down in our local area which caused a great deal of destruction, mostly to trees and bushes. In a little more than 10 minutes, upwards of 100 mile per hour winds uprooted, snapped and destroyed a large number of trees on our property.

Interestingly, there was only minor damage done to one home in the adjacent neighborhood. The homeowner’s wooden porch and garage tin roof were ripped off, and part of the roof is still hanging 30 feet up in one of our trees. So, I have been quite busy not only cleaning up the mess on my property, but also helping my neighbor. I will say, the good thing that came out of all this destruction is how our neighbors came out together to help out.

So, I apologize for the lack of articles this week. But, I will be posting several articles next week on the interesting changes taking place in the economy and financial system.

Okay, getting back to rising interest rates. The Federal Funds Rate is now 2-2.25%. As we can see in the chart below, it is the highest it has been in nearly a decade:

Effective federal funds rate (chart)

Furthermore, each time the Fed hiked interest rates, a recession (shown in the shaded areas) was the result. When the Fed increased the Funds Rate from 1% in May 2005 to over 5% by 2007, it assisted in the crashing of the mighty U.S. housing bubble and precipitated the investment banking meltdown in 2008.

Continue reading: https://goo.gl/3Ud3qx

September 19 2018

moneymetals

Which Precious Metals Are Likely To Be Better Investments During The Next Market Crash?

The question on the minds of many investors, is which of the precious metals will be better investments during the next market crash? I should know because I receive this question in my email box quite often. So, I decided to test the price action of several metals and how each traded during a large market correction.

This article will focus on the top four precious metals, gold, silver, platinum, and palladium. Even though Rhodium and other metals are considered precious, the ones listed above take the lion’s share of the investment market. Furthermore, while platinum and palladium are purchased as investments, they have a much larger industrial component than gold or silver.

As I have mentioned many times, gold and silver disconnected from the broader markets when the Dow Jones Index fell 2,000 points in the first six weeks of 2016.

The two reasons I believe gold and silver jumped considerably as the markets sold off at the beginning of 2016 were:

  1. Gold and Silver were extremely oversold, and the Commercial hedgers’ short positions were at a low, thus very bullish
  2. Investors were extremely worried that the Dow Jones and markets were beginning a massive correction, so they moved into both gold and silver

To explain why investors were spooked in 2016, we need to look at the following chart:

Dow jones (september 14, 2018)

Typically during a major correction, the market makes several attempts at a top. In 2007, there were three tops made before the market finally came down in 2008. Then in 2015, we had three more tops and two large corrections. The reason investors’ worry turned into fear at the beginning of 2016 was that the last top did not reach the previous 18,000 level.

Full Article: https://goo.gl/asrgNh

September 17 2018

moneymetals

A Reader Asks: Should I Sell Gold and Buy Bitcoin?

Although the fervor has diminished substantially since the crypto price smash earlier this year, we do still see a degree interest in bitcoin among precious metals investors.

Question and answer

Bitcoin and metals arguably share some appeal as an “honest” alternative and as a hedge against the fiat dollar and the insolvent U.S. government which backs it.

In light of the bitcoin price falling dramatically this year, one reader asked, “Is now a good time to swap gold for bitcoin?” Below is our response.

It may be bad form to answer a question with another question, but it seems like a good way to approach this subject. So we ask; are you in the mood to gamble? If you are, it might make sense to swap some metal for bitcoin.

Cryptocurrency can potentially generate bigger returns... in exchange for bigger risk. Since there is no tangible backing to bitcoin, it could conceivably go to zero – much like shares in a defunct “dot com” company.

The two assets are far from interchangeable and will serve different purposes in your portfolio. Bitcoin has often been called “digital gold,” but that comparison is dangerously wrong. Gold is a reliable store of value with a track record thousands of years long. Bitcoin’s price has collapsed from its all-time high of nearly $20,000 to $6,000.

This is a vital difference between gold and bitcoin: gold will always retain some intrinsic value, while the price of a digital token might go all the way to zero. That is not our prediction for bitcoin. It is, however, a possibility.

A technology, which is one way to think of bitcoin, must hold its value amongst a growing number of alternatives. If it cannot, it will be replaced. That happens, even to leaders. Remember Napster and CompuServe?

Continue Reading: https://goo.gl/EHsJYV


August 21 2018

moneymetals

Spot Prices Are Falling, But Premiums Are on the Rise

Gold and silver premiums – the price dealers add to the melt value of an item to cover manufacturing and overhead – began climbing in the past two weeks.

Many clients see falling gold and silver spot prices as an opportunity to buy, but some are disappointed to find the premium for the item they want is suddenly higher, negating some of the price drop.

The challenge they face is that lots of other bargain hunters are trying to jump on the same opportunity.

Supply & demand

Premiums are very sensitive to supply and demand in the retail market for finished coins, bars, and rounds, and the reasons are pretty straightforward.

First, when prices drop, retail bullion investors stop selling and start buying. That has a profound effect on the availability of resale, or secondary market, product inventory.

The large quantities coins, bars, and rounds coming back to market in the past year or two have driven premiums to the extraordinarily low levels we saw recently. Now, supply from the secondary market is drying up fast.

Second, there are only a few mints and refiners making coins, bars, and rounds. Like any manufacturer, they gear production to market demand. Scaling up takes a bit of time, and it isn’t something most will do without first developing some confidence that the higher demand will persist.

​Continue reading: https://goo.gl/cRFcUF​

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