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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 29 2018

moneymetals

Greg Weldon Forecast: Dollar to Get Whacked, Catalyzing Gold & Silver Rally

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

Greg weldon

Mike Gleason: It is my privilege now to welcome in Greg Weldon, CEO and president of Weldon Financial. Greg has over three decades of market research and trading experience, specializing in the metals and commodity markets, and his close connection with the metals led him to author a book back in 2006, titled Gold Trading Boot Camp, where he accurately predicted the implosion of the U.S. credit market and urged people to buy gold when it was only $550 an ounce.

He is a regular presenter at financial conferences throughout the country and is a highly sought-after guest on many popular financial shows, and it's always great to have him on the Money Metals Podcast. Greg, good to talk to you again and welcome back.

Greg Weldon: Thanks, Mike. My pleasure.

Mike Gleason: Well, Greg, let's start by getting your update on what impact trade policy and tariffs may be having on the U.S. economy. We last spoke in July. Tariffs were just beginning to actually take hold. Since then, the President has imposed additional tariffs. Anecdotally, we have seen some effect. We've recently ordered some steel storage lockers for our client storage vaults and the price was increased 10% based on the higher cost of imported steel. There are also wholesale price increases coming on one line of the preparedness products we offer on our SurvivalGoods.com website. We can assume lots of businesses are experiencing the same sort of thing. Do you think tariffs are now having a significant effect? Is any of the recent weakness in the equities markets attributable to trade policy, do you think?

Greg Weldon: Yes, no, and yes. First of all, in the sense of is tariffs having an effect, absolutely. But maybe not in the way you think and not in the way you couched the question. What I find really interesting is the Fed just published a really comprehensive survey last week in which they asked businesses, manufacturing firms, I should quantify, but this is where we're talking about in terms of trade ... Manufacturing firms in terms of the impact of tax cuts versus the impact of tariffs. And the results were fascinating, because the impact of tax cuts was dramatically positive, as you might suspect. But what you might not have suspected was the impact of tariffs, which were there a degree of percentage of firms which had negative impact from tariffs? Yes. I don't remember the exact numbers, but it was somewhere less than 20%.

At the same time, there was roughly something like 13% of firms that said that tariffs actually helped their businesses in terms of generating high revenue and to whatever degree there would be benefits to certain businesses, so offsetting and mitigating the negatives of the 20%, the 13%. So the net-net negative was not as big as you might think and was overwhelmed by the positives still from the tax cuts. We know that to be true as it relates to labor, stock buybacks, and even wages.

I think from the U.S. economic slowdown perspective not a big deal, and that's what Trump's counting on. But the bigger picture, absolutely an impact, because it's affected China so much, and China was already slowing. So the GDP numbers that came out, and you know that we look at most things from a mathematical perspective, and one of the knocks on China is the slowdown in retail sales, the slowdown in money growth, the slowdown in GDP growth, the slowdown in industrial production and FDI.

But the nominal numbers are so high in trillions of renminbi that of course you're going to have a percentage slowdown, because you came from such a low base. So something like retail sales, you've gone from a 15% year-over-year rate to 9, and everyone's up in arms because the consumer in China's slowing. No, it's a record number every month. It's just a lower percentage gain because the nominal numbers are so huge now.

But right here, the third quarter numbers, were different. There was real weakness, and it's kind of even ahead of tariffs, which are going to cause more problems for China. We already see inflation on the rise. We see commodity prices in renminbi breaking out here, big thing that nobody's really talking about too much. And the renminbi's about to take out 7, probably going to 7-1/4. So yes, major impact, but it's on China.

Then you see the flow through to how this affects the U.S. and how this affects other global markets, and this coming at a time when you have a lot of other things going on: The Fed, what's happening with emerging markets, how emerging markets, specifically Turkey, might flow into Spain, and how Europe is vulnerable. So, there's a lot more than just tariffs going on. Yes, there's a major impact, but it's not on the U.S. economy. It's in the market vis-a-vis what's happening in China as a result.

Full podcast: https://goo.gl/rKxkuN

October 01 2018

moneymetals

Italy Borrows Too Much, The US Borrows More

Last week’s rally in the U.S. dollar was driven largely by weakness in the euro.

Italy was back in the headlines. The Italian government committed to borrowing even more money and, to the surprise of nobody with sense, the odds of default on Italian debt leapt higher.

Italian bonds are getting clobbered, and renewed concerns over the potential for a default now weigh heavily on the euro. Populists rose to power in recent Italian elections, promising to reduce austerity and increase government spending to stimulate the moribund economy.

Last week they delivered, passing a budget with large increases in a number of programs. The deficit there is expected to rise from 0.8% of gross domestic product to 2.4%, triple what was planned before.

The Italian government has already borrowed well in excess of the nation’s gross domestic product. The debt to GDP ratio is currently 132%. Those who own Italian bonds are right to be nervous.

When will the holders of U.S. Treasury debt begin wising up? Investors seem to think default is only possible elsewhere. European nations such as Italy, Greece, and Spain have been cycling in and out of financial turmoil for years now. So far, none of this has troubled the U.S. bond market.

The people who are worried about a jump in deficit spending in Italy ought to have a look at U.S. deficits when compared to federal spending...

Recent federal deficits as pct spending us from fy 2007 to fy 2017

The 2018 deficit is forecast to be 20% of overall spending. Currently one in five dollars spent in Washington has been borrowed. There has not been a year below 10% since before the 2008 financial crisis. And deficits are back on the rise, since bottoming in 2015.

The U.S. debt to GDP ratio currently rests at 104% and it is growing quickly. The trillion dollar deficit projected for next year will push that ratio to near 109%. When we get a major recession like the one plaguing Italy, GDP will be falling and our politicians will be pouring on the stimulus spending. The ratio will explode higher.

Check it out here: https://goo.gl/1YYQqX

September 26 2018

moneymetals

Gold/Silver Ratio Back at Extremes

gold-silver-ratio-at-extremes-social.jpg

The gold/silver ratio, calculated by simply dividing the gold price by the silver price, may be signaling the end of the bear market in metals is drawing near. That could be good news for gold investors and great news for those who hold silver.

First, let's take a look at a long-term chart of the ratio:

Gold/Silver ratio (1975-2018)

The 1980 low in the ratio coincided with the blow off top in the silver price at $50/oz. Both metals fell sharply after that peak, and silver underperformed gold for the majority of the next 11 years.

The gold/silver ratio peaked in 1991 when it spiked to almost 100. Gold was priced near $400/oz and silver near $4. Since that peak, the ratio has spent the majority of its time bouncing between about 40 on the low end and 70 on the upper end of the range.

Read more: 

https://www.moneymetals.com/news/2018/09/24/gold-silver-ratios-at-extremes-001623

September 24 2018

moneymetals

The Least Known (and Best Performing) Precious Metal

palladium-good-investment-social.jpgGold and silver have risen substantially off the price bottom put in just 2-½ years ago, but the gains have yet to attract much notice. Gold has gained roughly 28% and silver is up 20%.

Meanwhile, another metal has more than doubled since bottoming. This performance should have been more than enough to catch the attention of metals investors, if only they were watching. The metal is palladium and, for those who haven’t paid much attention, it is time for a brief update.

Palladium is one of the platinum group metals (PGMs) and it has a lot in common with its higher profile brother.

Like platinum, palladium is a lustrous, silver-white metal. It has many of the same applications. The largest application is in automobile catalytic converters, but there are also uses in jewelry, dentistry, surgical instruments, and electronics.

Palladium also shares platinum’s troubled supply chain.

The top producers are Russia and South Africa. The latter nation has fallen deeper into turmoil in recent months.

Mines there have dealt with unreliable electricity and labor strife for years. Operators are now at great risk of the having mine properties seized by government officials.

PGMs represent a good way for bullion investors to diversify and gain exposure to different market fundamentals.

Diversification can reduce the volatility in any investment and can produce better results – particularly in weaker markets. Just consider the relative outperformance of palladium versus gold and silver over the past 30 months.

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


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 01 2018

moneymetals

Top Gold Miners Production Declined 15% While Costs Escalate

Even though the gold price increased in 2018, the top gold miners production declined while costs continue to escalate. Output at three of the top gold miners in the world fell in the first half of 2018 compared to the same period last year. With rising costs due to higher energy prices, on top of decreasing production, the top gold miners free cash flow declined precipitously in 2018.

While many analysts focus on the company’s profits or net income, I like to pay attention to its free cash flow. Free cash flow is nothing more than subtracting capital expenditures from the company’s cash from operations. Because the gold mining industry is very capital intensive, the company’s free cash flow is a better indicator of financial health rather than the net income.

As mentioned, all of the top three gold miners suffered production declines in the first half (1H) of 2018 versus the same period last year. The biggest loser was Barrick, whose production declined over 20% by falling to 2.1 million oz in 1H 2018 compared to 2.7 Moz in the previous year. Goldcorp’s production fell 10%, while Newmont’s output dropped by nearly 9%:

Top miners gold production 1h 2017 vs 1h 2018

Altogether, the top three gold mining companies’ production fell 15% or approximately 1 Moz in the first six months of 2018 versus last year. Even though Goldcorp isn’t the third largest gold miner in the world, the company has already posted its second-quarter results. AngloGold is the third largest gold miner, but it won’t publish its financial statements until August 20th. Also, Kinross is likely ranked number four ahead of Goldcorp, but the company posts its production figures in “gold equivalent ounces.” If a company has to publish its gold or silver production in “equivalent ounces,” then the analysis is a bit flawed in my opinion.

Regardless, these top three gold miners all experienced declines in production which impacted their financial balance sheets. To get a better idea of the true cost of production and the health of the gold mining industry, I have come up with an “Adjusted Earnings Breakeven” price as well as a “Free Cash Flow” breakeven price.

July 31 2018

moneymetals

GOP Congressman Investigates Undisclosed Gold Market Intervention by China and the Exchange Stabilization Fund


Rep. Alex Mooney (R-WV) Calls Out Fed & Treasury for Dodging Questions on Gold Activities

Washington, DC (July 31, 2018) – A member of the U.S. House Financial Services Committee is calling out the Federal Reserve and the U.S. Treasury for dodging questions about their activities involving America’s gold reserves.

In a letter dated July 27, Representative Alex Mooney (R-WV) wrote to Jerome Powell, Chairman of the Federal Reserve, and Steven Mnuchin, Secretary of the U.S. Treasury, after receiving perfunctory responses to his April 24th letter, noting “a few questions were either not addressed at all or not fully addressed.”

In particular, the Fed and Treasury would not articulate any U.S. policy toward gold and refused to comment on historical U.S. State Department documents pointing to a U.S. policy of “driving gold out of the world financial system in favor of the Federal Reserve Note or Special Drawing Rights issued by the International Monetary Fund.”

In his follow-up letter, Rep. Mooney provided evidence of involvement by the Exchange Stabilization Fund in the gold market and called attention to “the recent correlation of the gold price with the price of the Chinese yuan and the valuation of the IMF’s Special Drawing Rights.”

Check out the full press release


July 26 2018

moneymetals

The Swamp vs. Alternative Currencies

In Federal Reserve chair Jerome Powell’s testimony before Congress last week, he reiterated his intent to continue the central bank’s gradual rate-hiking campaign.

Among those who are "not thrilled" about the prospect of higher interest rates: the President of the United States.

Trump Tweeted:

"....The United States should not be penalized because we are doing so well. Tightening now hurts all that we have done. The U.S. should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates - Really?"

Trump seems surprised that the Fed careerist he promoted to be chairman isn’t embracing Trump’s economic priorities. But nobody drawn from the fiat money swamp should be expected to act contrary to what’s in the institutional interests of the central bank – and the banking elite more broadly.

Swamp creature Powell couldn’t even bring himself to express support for Trump’s pro-growth tax and regulatory reforms during last week’s testimony. He nervously evaded a simple question from a Republican Congressman about whether tax cuts and deregulation have boosted business confidence. Even when pressed, he wouldn’t answer it.

Powell apparently didn’t want to say something that might offend Democrats. The Fed is “independent,” after all, and non-partisan. It has to keep up appearances before Congress.

But when it came to the question of cryptocurrencies, the government’s top banker felt free to go on at length about why he doesn’t like them.


​Continue reading here.​

July 05 2018

moneymetals

Trump’s Trade Wars Could Spark Global Flight to Gold

President Donald Trump’s “America First” trade policies are upending decades of global arrangements and entanglements. Globalists are aghast that the leader of the free world is openly confrontational toward NAFTA, NATO, the European Union, United Nations, and World Trade Organization.

In rebuffing the global community by pursuing unilateral tariffs and vowing to win trade wars against both rivals and putative allies alike, Trump is playing a high stakes game. Trump’s trade wars could test the U.S. dollar’s status as world reserve currency.

According to economist Brad Schiller, “Nations are willing to accept U.S. dollars in exchange for their goods because they trust that the dollar will retain its value… The long history of U.S. dollar stability gives the U.S. this unique trade advantage — a key reason we can import more goods than we export year after year.”

Schiller, like many conventionally trained economists, seems to believe that our ever-growing trade deficit benefits us. In the near term, we do get to consume more things. But countries that are sending us stuff in exchange for our dollars are effectively accumulating claims on our future.

China holds title to an enormous hoard of U.S. dollar IOUs. U.S. taxpayers now owe China more than $1.2 trillion. China ran a $366 billion trade surplus in 2017 alone.

President Trump has moved to impose tens of billions of dollars in tariffs on China and other trading partners including Canada, Mexico, and the European Union. They have responded with retaliatory tariffs affecting everything from wheat crops to Harley-Davidsons.

United states tariffs

Winning trade wars may not be as easy as Trump had thought.

Dying U.S. Senator John McCain, a longtime Trump detractor and globalist, is among those who are actively rooting against the U.S. administration and consoling foreign countries.

“To our allies: bipartisan majorities of Americans remain pro-free trade, pro-globalization & supportive of alliances based on 70 years of shared values. Americans stand with you, even if our president doesn’t,” McCain ranted on Twitter.

It's not clear the failed former presidential candidate speaks for “bipartisan majorities of Americans” as he boasts. Nor is it clear that these foreign alliances reflect our “shared values.”





June 29 2018

moneymetals

Frank Holmes: Tariff War Akin to Raising Taxes, Recession Looms

Mike Gleason: It is my privilege now to welcome in Frank Holmes, CEO and Chief Investment Officer at U.S. Global Investors. Mr. Holmes has received various honors over the years, including being named America's Best Fund Manager for 2016 by the Mining Journal. He is also the co-author of the book, The Goldwatcher: Demystifying Gold Investing and is a regular guest on CNBC, Bloomberg, Fox Business, as well as right here on the Money Metals podcast.

Frank, welcome back and thanks for joining us again. How are you today?

Frank Holmes: I'm great, and it's great to be chatting with you about this languishing gold market.

Mike Gleason: Yeah, we certainly have a lot to talk about. Never a dull moment here in these markets. To start out here, Frank, when we had you on back in March, we talked about the steel and aluminum tariffs Trump imposed. Things have escalated since then. The president is talking about tariffs on European automobiles and another $2 billion on imports from China. We're very curious about what impact this trade policy might have on the dollar and, by extension, precious metal. So far, at least, the dollar has been strengthening, but we aren't sure how seriously the markets are taking the possibility of a trade war becoming a currency war. If that happens, the U.S. certainly seems vulnerable. We have by far the most to lose given the dollar's status as a global reserve currency. What do you make of the recent strength in the dollar, and where do you think things may be headed if we wind up in a full-blown trade war?

Frank Holmes: Well, first, what I'd like to say is I wrote a piece said, "President Trump, you can't suck and blow a balloon at the same time." It was a just amazing feat to get corporate taxes down, and that was really the catalyst that launched the stock market, that fulfilled and provided visibility for the next several years of robust economic growth. When I talk to all the macroeconomists, all the macro analysts who are pointing out that immediately Walmart increased salaries as a consumer company, and a manufacturing company started spending more money on factory upgrades. 10 years since they've really spent a lot of money on durable goods. And that was really important for the metals as a whole.

But with this whole tariff war, well, that's basically raising taxes. Tariffs are always an indirect tax on an industry or sector of the economy, and it's defeating. And this week, the Fed chair was saying that, Powell, that he's getting feedback that exports are starting to be canceled because of the tariff battle right now. So I think the combination of the stronger dollar along with the tariff battle is only going to set us up for a recession faster than we thought, unless he can tune back what he's been talking about.

But I think to understand capital markets, the flows of funds, that historically when the two-year government bond, which is the bond that relates to all the short-term currency fluctuations, they compare 90 days and two-year government yields to the inflationary rate of their country, and then they look at all the countries and compare them to net positive return. And right now, the U.S. dollar is strong because the two-year government bond is above the dividend yield of the S&P 500. Well, as soon as that happened, immediately, pension fund institutions stopped buying stocks because they can turn around and get a guaranteed yield for the next two years with no risk on a dividend yield that's higher than what the S&P's forecasted to deliver in the future of two years and giving now.

So that creates this VIX explosion. And then we have this sort of fear that rates are going to continue to rise with the CPI number because inflation is rising, and that's put a dent in the price of gold and made the dollar strong. But a strong dollar at this stage, along with tariffs, is the worst thing for economic growth and prosperity. And Trump's ego is big enough and rational that he wants growth and he wants economic growth, so I think we're going to see in the second half, we've had a peak in rates, and we'll see rates come off. And I think then you'll see this move in the price of gold.

Mike Gleason: Setting aside any ramifications for the dollar, do you think the U.S. can win a trade war? I mean, the president certainly seems confident. On the one hand, we agree with an observation you made when we spoke last, China has stolen a lot of intellectual property, and it would be nice if we could do something about that. But on the other hand, tariffs are bound to raise prices for Americans. It's a tax, like you said, and there are plenty of examples of trade restrictions and that sort of central planning leading to all sorts of unintended consequences. So how do you rate the president's chances for success here, Frank?

​Read/Listen to the entire article here. ​


June 13 2018

moneymetals

Some Probing Questions from Customers Like You...

Client communications are a priority for us. If someone calls, we have live people answering the phone and ready to provide service. If you need support by email or by live chat, we respond promptly. This is, of course, good business as it makes for happy customers!

Q & a

However, it is great for another reason. A big part of what we do is provide timely and useful articles and podcasts you can use to stay current on developments which impact the metals markets and your investments. It helps us immensely to know what our clients are thinking about and what questions they have.

Here are a few good questions we’ve seen recently, along with our responses…

Question: What is the best buy currently – bars or sovereign coins?

Answer: Whether it is sovereign coins or bars that represent the “best buy” will depend on what is important to you. In terms of silver, bars (and 1-ounce silver rounds) offer the lowest overall cost per ounce. If “best buy” means “lowest price,” these are the way to go. You can’t go wrong buying the maximum number of ounces for the least amount of money, provided you are getting a quality product made by reputable mints and refiners.

2017 american silver eagle

Premiums on Silver Eagles
are very low by historical standards.
Shop here.

On the other hand, coin premiums are at cycle lows and there is a floor of sorts beneath them. Sovereign mints, unlike private mints and refiners, are not responding to weaker sales by reducing minting charges. Based on our experience, we do not expect them to change course. That likely means coin premiums aren’t headed much lower than they are right now.

People who prefer buying official, legal-tender coins for their recognizability and popularity should consider grabbing some now.

Customers who want to speculate on coin premiums, might also want to exploit today’s conditions.

In recent years, we’ve seen premiums on the silver American Eagle at more than twice the current level. Chances are that will happen again the next time demand spikes, giving returns on those items an extra boost.

Source: (
https://www.moneymetals.com/news/2018/06/13/gold-bars-or-sovereign-coins-001551
​)​

June 12 2018

moneymetals

The Dangers of Investing Based on Phony Government Statistics

President Donald Trump recently took to Twitter to boast, “The U.S. has an increased economic value of more than 7 Trillion Dollars since the Election. May be the best economy in the history of our country. Record Jobs numbers. Nice!”

“We ran out of words to describe how good the jobs numbers are,” reported Neil Irwin of the New York Times, amplified in a Trump retweet.

Increase

If you believe the headline numbers, joblessness is at a generational low with the economy booming.

Trillions in nominal value added to the stock market since Trump’s election. GDP up over 3% in the second quarter. 223,000 jobs added in May. Unemployment at an 18-year low of 3.8%.

On the surface, this all paints a beautiful picture for the economy and stock market. But dig a little deeper, and the numbers aren’t quite as bright they appear. All that glitters is not gold.

Headline Unemployment Number Is Fake News

Donald Trump himself put his finger on one of the main flaws with the unemployment number back when he was a private citizen.

“Unemployment rate only dropped because more people are out of labor force & have stopped looking for work. Not a real recovery, phony numbers,” he posted on September 7th, 2012.

The headline unemployment number isn’t any less phony in 2018. Though it has improved under Trump’s presidency – in large part because of his pro-growth tax cuts and deregulation – the statistic is still derived from a dubious formula.

Back in 2012, Trump rightly pointed to the large numbers of workers who had dropped out of the labor force but weren’t counted among the ranks of the unemployed.

You can find the article here:(https://www.moneymetals.com/news/2018/06/11/the-dangers-of-investing-based-on-phony-governments-statistics-001550)

June 11 2018

moneymetals

Why are Gold/Silver Premiums SO Darn Low Right Now?

The bullion markets have undergone a shift in recent months. Prices may be range-bound, but there has been a transition from a seller’s market to a buyer’s market. Our goal, as always, is to keep our readers and clients apprised of developments and answer your questions.

Question: Why don’t spot prices for gold and silver respond to bullish news events or fundamentals in the physical market?

Answer: Physical supply and demand don’t necessarily impact the “spot” prices for gold and silver set in the futures markets on a day-to-day basis.

Take a hypothetical situation where some geopolitical event has investors running for safety. Lots of people decide to buy gold. Unfortunately, many of these investors will foolishly turn to gold futures.

As demand spikes in the futures markets, the bullion banks stand ready to meet the new demand with freshly printed digital contracts. This new supply of gold derivatives is scooped up by eager buyers even though not a single physical bar is added to any inventory. Their digital receipt which purports to represent gold is, in fact, almost completely unbacked.

The geopolitical event may drive plenty of demand, but the impact on price will be muted, and perhaps eliminated entirely.

Question: I noticed that premiums have fallen significantly compared to two years ago. Why has this occurred?

Extremely low prices

Answer: When demand for coins, rounds, and bars outstrips the physical inventory held by dealers, premiums will start rising as dealers bid aggressively for inventory.

This dynamic drove premiums sharply higher a number of times between 2008 and 2016. This part is telling; the futures markets can, and often do, signal the exact opposite of what is happening in the bullion markets where supply and demand are actually balanced through price. Between 2011 and 2015, spot prices were in decline, but that was a period of unprecedented demand for physical coins, rounds, and bars.

Today, this dynamic is working in reverse. Retail bullion investors in the U.S. (but not worldwide) have been more inclined to sell.

They seem optimistic that President Donald Trump and his policies will solve many problems. Some are frustrated by the returns in the metals markets and seek better performance elsewhere. Dealers are buying lots more inventory from the retail public than they did a couple years back, and this glut in supply has caused premiums to fall as a result.

We view this period of relatively low spot prices AND extraordinarily low premiums on physical gold and silver items as the best sort of environment to buy, not sell. But for those wishing to sell, Money Metals also offers the best prices.

Article Source: 
(https://www.moneymetals.com/news/2018/06/11/why-are-gold-silver-premiums-so-low-001549)

June 05 2018

moneymetals

How Savvy Investors Do (and Don’t) Hedge against Inflation

Inflation is a corrosive force that gradually – and sometimes rapidly – eats away at the nominal value of savings and investments.

It is perhaps the biggest threat looming on the horizon for millions of retirees who have been steered into assets marketed as “conservative” – such as dollar-denominated money market accounts, bonds, and annuities.

Inflation silently robbing you of purchasing power since 1913

According to the Aegon Retirement Readiness Survey 2018, an alarmingly large proportion of the population doesn’t understand basic financial concepts such as inflation.

Consider this question from the survey: “Imagine that the interest rate on your savings account was 1 percent per year and inflation was 2 percent per year. After 1 year, how much would you be able to buy with the money in this account?”

The question is actually even easier to answer than it first appears. To get it right you only have to select among a list of possible choices that includes “less than today,” “more than today,” and “the same as today.”

Obviously, if inflation is running at 2% a year, then a 1% yield on your savings is neither growing nor preserving your purchasing power. The correct answer is “less than today.”

That may be obvious to you. But it’s not to everyone.

Among U.S. respondents, only 55% answered the inflation question correctly!

A score of “55” is equivalent to an “F” – as a nation, we are outright failing to grasp the basic concept of how inflation negatively affects savings.

Widespread public ignorance about inflation works, perversely, to the advantage of governments, central banks, commercial banks, and peddlers of fee-laden, inflation-lagging financial products such as fixed annuities.

Investors who are savvy about the inflation threat know that conventional annuities, bonds, and savings accounts are all vulnerable to losing value in real terms.

But those seeking protection from inflation can still run into trouble by venturing into flawed "inflation hedges."

Think twice before sinking money into the following assets…



May 31 2018

moneymetals

ALERT! Copper May Be the Metal for the Era of Trump – Up 50% since January 2016


  • The Metal for the Era of Trump – You Can’t Build Infrastructure Without Copper!
  • You Can Still Buy Copper at Near Absolute Melt Value – Almost ZERO Over Spot
  • PLUS Gleaming 1 oz. Copper Rounds – Any Design, a Buck Apiece
2018 - copper prices chart

(MoneyMetals.com) Did you know that copper is up 50 percent since January 2016?

Copper is essential in the modern economy. Electronics, automobiles, and utilities among other things can’t function without it. Optimism surrounding the President’s $1 trillion dollar infrastructure spending proposal and his efforts to support U.S. manufacturing is driving copper prices higher.

Donald Trump’s pro-business plans are very bullish for copper. This rally may just be getting started and savvy investors are taking notice.

  • The spot price of copper is up 50% since January 2016.
  • The copper contained $1,000 face value of pre-1983 U.S. Lincoln pennies is now worth about $2,200.
  • Yet you can still buy these appreciating 95% pure copper U.S. legal tender coins at – or very near – absolute melt value.

Bag of pennies

Pre-1983 pennies at just
2.85% over Copper Spot Price

Precious metals investors – and dealers – tend to overlook copper. We think that’s a mistake; Money Metals is actually stocking up on copper pennies and rounds to meet the demands of our savvy customers.

Copper in the form of 95% pure pre-1983 pennies is one of the few legal tender metals where the price you pay is nearly identical to the spot market price...

  • 34 pounds of pre-1983 pennies: today’s price from Money Metals, $101.66
  • Melt value: 34 pounds x .95 purity x $3.06 per pound spot price = $98.84
  • Percent over melt: 2.85% … virtually untouchable for legal tender metal!

It’s been 35 years since the federal government dealt the third and final blow to precious metals content in US coinage – an essential part of its long-term strategy to devalue the nation’s currency –

A stash of 95 percent copper pennies can come in handy in the event you need metals to barter and trade. Copper fills an important gap, being suitable for smaller transactions where gold and even silver may not be practical options.

Copper is the only metal that’s actually cheapest in coin form. The minting costs of pennies were paid off decades ago; unlike with gold and silver, there’s no premium to get official, trusted and legal tender coins. The coins are actually available at a huge discount relative to other forms of copper bullion!

Money Metals has pre-1983 95% copper pennies sold by weight in 34 pound bags (approx 4,925 pennies per bag). Stock up on these legal tender coins while we still have them at less than two percent above melt value. Order securely at MoneyMetals.com


Check out the full article (source

May 21 2018

moneymetals

Federal Reserve Note Dances Upon Its Own Grave

Practically nobody enters the foreign exchange markets looking to buy and hold. Currency trading is generally a short-term game, and there isn’t much regard for analysis of the longer-term fundamentals.

That much is evident given the ongoing rally in the Federal Reserve Note dollar, despite its outlook being downright grim.

Depreciating dollar

Nobody should be fooled by recent outperformance relative to the currencies of other insolvent nations.

The greenback is in the worst shape of its life.

Sound money advocates are already well versed as to why the dollar has been losing purchasing power ever since the Federal Reserve took control of its fortunes more than a century ago. They understand the implications of perpetually rising federal deficits and debt.

The most recent decade, during which federal borrowing has begun growing exponentially, indicates we are much closer to the end of the cycle – insolvency and default – than we are to the beginning. But it isn’t the only indication that we are approaching the end-game.

The Federal Reserve Note’s hegemony in the global oil trade is starting to fall apart. Russia, China, and other BRIC nations are cutting deals to buy and sell oil using other currencies.

We can now add the EU to the list of potential defectors.

​Continue reading (source) ​

May 11 2018

moneymetals

Craig Hemke of TF Metals on Gloomy Scenarios for the Fed That Should Boost Metals

Mike Gleason: It is my privilege now to welcome in Craig Hemke of the TFMetalsReport.com. Craig runs one of the most highly respected and well-known websites in the entire industry and has been covering the precious metals for a decade now, and he puts out some of the best analysis on banking schemes, the flaws of Keynesian economics, and evidence of manipulation in the gold and silver markets.

Craig, it's been entirely too long. Thanks for joining us again, and how are you my friend?

Craig Hemke: Oh, Mike, it's always a pleasure. Thank you for having me back on. I'm a little more grayer, more wrinkles, all that kind of stuff in the last time since we've spoken, but that's what these markets will do to you, that's for sure.

Mike Gleason: Yeah, certainly do. Craig, we know that you've been covering this rally in the dollar closely over the past 3 weeks. I wanted to kind of start there. The problem is, in the short run, nobody in the markets really cares about the dollar's value relative to what it can actually buy. Traders simply care about how it's performing in foreign exchange, paired against some other national currencies, and the dollar has been strengthening against the euro and the yen. But, with that said, you definitely can't take a dollar and buy more stuff today than you could, say, 3 weeks ago. In fact, it takes more dollars to buy a barrel of crude oil than it did last month. People still figure the CPI basket of goods will cost 2 to 3% more a year from now. Some of us figure inflation has been, and will be, a lot higher than that.

In a minute, we'd like to get your take on whether the rally in the dollar is likely to persist a while longer. But before we get into where the dollar is headed, help us out here, because as we're seeing the dollar getting stronger against paper currencies, and that seems to be all anyone wants to talk about, but meanwhile, the dollar is getting weaker when you look at it compared to the stuff we actually need to buy, like crude oil, for instance, and there are other examples as well. So, explain this to us, if you can, because it appears to us that everyone is focusing on the wrong thing here, Craig.

Craig Hemke: Well, that's always the case it seems like, Mike. Actually, everybody's probably seen those charts going back to 1913, when we instituted the Federal Reserve and the value of the dollar has declined by 98%, or something like that. Really, the pain for the regular, average, everyday American began in 1971 when Nixon suspended, as they say, the convertibility of the dollar into gold. And that's when the U.S. government, the Treasury, the Fed, went off the rails, began printing currency in their effort to fund both guns and butter, if you will, in the traditional Keynesian sense. All the social programs, all the wars, everything else, all the accumulated debt, and it's at that point that, again, things began to get out of hand.

​And it is at that point, you can trace it back, to that's when the standard of living, for every American citizen, really began to decline. It's why my generation, your generation, Mike, everybody has such a much more difficult time making ends meet than, maybe, our parents had. Because not only is it food costs, it's taxes, it's education costs, it's everything that goes with it, and it's because of this incredible devaluation of the currency.

What do you mean by devaluation of the currency? Look, anybody understands, even if you didn't take Econ 101, you know supply and demand, right? And if you increase the supply of a certain item you're, by very definition, devaluing the existing supply of that item. It just makes it less valuable if there's more and more of it, by any, again, by any sense of the imagination. And so, therefore, all of this money printing, all of the trillions of dollars of TARP, and QE, and everything else, has just continued to destroy, really everybody outside of about the top 10% of income earners in the U.S., and sadly, that's a path that we continue to go down.

Mike Gleason: Yeah, certainly the wealth gap gets bigger and bigger, the more inflation we get, that's for sure.

Now, let's talk for a minute about what you're expecting from the dollar, just if we get back to how it's going to relate to other fiat currencies over the short run, and give us a guess on where the DXY index might be by years end. Has the trend lower that began a year and a half ago been broken?

​Read/Listen to the full podcast here: (source) ​
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