Category: all posts

Where to buy gold

A quick guideline for choosing the right gold company

by Michael J. Kosares
Author, The ABCs of Gold Investing: How To Protect and Build Your Wealth With Gold, and founder of USAGOLD

Updated Q3-2017

It is surprising how many prospective investors simply dive into gold and silver investing without much in the way of a consumer inquiry. That lack of simple due diligence has ended up costing a good many investors thousands of dollars, and sometimes even hundreds of thousands, before the damage is detected. Below you will find some brief but valuable guidelines to help you choose the right gold and silver company. It might be the most important decision you will make on the road to becoming a gold and silver owner.

Choose a company that has a solid track record

Ten years in the business is good; fifteen years or more is even better. Avoid the newcomers, the flashy discounters and the complicated online coin shops. These outlets are designed more for collectors and dabblers – or buyers out to make a quick, online purchase – than serious investors looking to hedge their portfolios.

Choose a company with a solid track record and longevity. It is the mark of a well-run business committed to its clientele.

Choose a company with strong credentials and a reputable history

A simple background check can go a long way in helping you circumvent a company with a history of problems and poor customer service. A quick visit to the Better Business Bureau’s online website can do wonders and save you a major headache down the road.

The BBB provides consumers with a company’s basic rating, verified online reviews and a list of complaints. (If a company does not have a BBB rating, treat it as a red flag.) Pay special attention to the complaints and how they were handled even if the company has managed to maintain a high rating.

A good many precious metals’ businesses that have gone bankrupt, or found themselves in legal difficulties in recent years, showed signs of something being wrong long before-hand in their rating and complaint record. Oftentimes, the BBB will post a warning about such businesses.

BBB reviews are another good source of consumer information. Make sure that the reviews are verified and noted as such by the BBB itself. Too often businesses stack their review section with reviews that have not been vetted officially by the BBB.

Choose a company with strong BBB credentials. Now more than ever, reputation matters.

Choose a company willing to spend time with you and answer your questions

The company that is abrupt at the outset is the company likely to give you short shrift in the future when you have a question or concern that needs to be addressed. Be especially wary of companies that use aggressive sales tactics. Seek out and develop a relationship with a company that handles your inquiry in a friendly, professional manner.

Choose a company willing to work with you. It will provide helpful guidance now and peace of mind in the future.

Choose a company willing to accomodate your timing

Even if you think that you might want to make a purchase at some point in the future, but for whatever reason are not ready now, it would be best to vet candidates ahead of time. By doing the spadework, you will know where to call when the time comes. It is also advisable to do some advance planning with respect to the specific items you might want to add to your portfolio.

Choose a company willing to be patient with your timing needs. It will be there for you when you need it. Hurried decisions made in the heat of a media-driven gold and silver frenzy can lead to mistakes. (Of course, the ideal is to follow the old rule: The best time to buy gold and silver is when everything is quiet.)

Choose a client-oriented company geared to helping investors

Many online companies are happy to take your order (no matter what it is) and then It’s good luck trying to make contact and get information when you need it – particularly when it comes time to sell or track a late delivery. Mostly interested in quick turnover, customer-oriented companies are order-takers rather than experienced, professional advisors. Client-oriented companies, and there are still a few around, tend to take more of an interest in developing a relationship that will serve both parties over the medium to long run.

Choose a company that takes an interest in you as a long-term client rather than a one-time customer. There is a great deal of difference between the two particularly if your goal is to become a successful gold and silver owner.

Choose a company that will not divert you from your objectives

Most investors come into the gold and silver market looking for a way to preserve their assets from potential financial or economic threats. Not every gold company, however, has asset preservation as its top priority.

Some tout leveraged accounts or high-end numismatics, for example, or graded and over-priced contemporary bullion coins, off brand bullion bars and jewelry items (to name a few of the wrong turns often taken by first-time investors), none of which serve the safe-haven aspirations of most gold and silver owners.

Choose a company that thinks like you do. Keep it simple. Buy well-known and established physical coins and bullion with a broad international market. Stick with highly liquid items and take delivery. It will enhance your chances at success.

Choose a company whose website you have explored

Before you even contact a gold company, it would serve your best interest to determine the real nature of its business. You can learn much by browsing a website and determining whether or not the company might be a good fit.

Choose a company with a well-run, agreeable website but don’t forget the rest of the due diligence outlined above.

Final Word

Choose the right company and it will help you stay the course on protecting your assets from economic uncertainties. Choose the wrong company and you can suddenly find yourself with more than you bargained for. Don’t jump in. Choose wisely. Choose carefully.

Posted in all posts |

The Daily Market Report: Gold Retreats From Above $1300

USAGOLD/Peter Grant/08-18-17

Gold probed briefly above $1300 in early New York trading, establishing new highs for the year, but these gains could not be sustained. The yellow metal is presently trading modestly lower on the day.

The retreat may have been simple profit taking ahead of the weekend, but the media is reporting a relief rally in risk assets on the apparent ousting of White House chief strategist Steve Bannon. While Bannon was perhaps one of the more divisive members of President Trump’s inner circle, I don’t quite understand why this is a risk-on event.

Nonetheless, stocks have rebounded and bonds and the yen have retreated along with gold. I suspect however that the departure of Mr. Bannon will do little to mitigate the ongoing drama in Washington; just as the ousting of Flynn, Spicer, Priebus, Scaramucci et al only amplified the political uncertainty.

That rising political uncertainty has been a driving force behind gold in recent months, which also magnifies to some degree the geopolitical uncertainty. Constant turnover within the President’s inner circle does nothing to clarify, nor improve the likelihood that his domestic agenda, trade and foreign policy will be advanced. That reality would seem to mark this dip in gold as yet another buying opportunity.

Earlier today, as gold was setting new highs, Zerohedge tweeted the following:

This is no surprise to our reader, nor those of the Zerohedge blog. However, I suspect it would come as a shock to many that only get their financial news from CNBC for example. Those investors that are still heavily allocated to shares, despite the frothiness of that market, are playing with fire. They could have diversified their portfolio with some gold this year and not paid any price in terms of performance to have that insurance.

Portfolios with a gold component tend to perform better over time anyway. It’s never too late to start building a hedge.

Posted in all posts, Daily Market Report, Gold News, Gold Views |

Gold moving higher in Asia

Looks to be motivated by weaker Asian stock markets and dollar strength particularly against the Indian rupee and Japanese yen.

We will be tracking throughout the day.

At this posting:

Gold trading moderately higher at $1293, up $4.75 overnight.

Silver trading steady at $17.13, up  7¢.

Encouraging gold turnaround from lows during today’s U.S. trading session.

Posted in all posts |

Donald Trump isn’t the only factor behind 2017 gold rally

MarketWatch/Myra P. Saefong/08-17-17

Gold’s getting ready for a breakout above $1,300 an ounce and it’s not just because of investor jitters tied to President Donald Trump.

“The Trump presidency is one element contributing to the generally nervous atmosphere as far as geopolitics are concerned—an important element, but not the whole picture,” said George Milling-Stanley, head of gold investment strategy at State Street Global Advisors.

…“Other important elements include Russian President “Vladimir Putin’s territorial ambitions, the increasing belligerence of North Korea, the deteriorating relationship with Iran, significant differences of opinion with many traditional allies of the U.S., the fact that American troops are at risk in Afghanistan and Iraq, the intractable problems of the Middle East—including but not limited to ISIS and al Qaeda, Syria, and the worsening situation between Israelis and Palestinians,” he said.

Posted in all posts, Gold News, Gold Views |

Historical inevitability and gold and silver ownership

In the end, it’s the times that need to be hedged.

by Michael J. Kosares, USAGOLD

The Wall Street Journal’s editorial writer, Daniel Henninger, registers some very important observations in the wake of the troubling events in Charlottesville. Charlottesville, he attempts to point out, is symptomatic of something much deeper ingrained in the American psyche. “Some may say,” writes Henninger, “the Charlottesville riot was the lunatic fringe of the right and left, with no particular relevance to what falls in between. But I think Charlottesville may be a prototype of a politics that is drifting away from traditional norms of behavior and purpose.”  Aptly, the editorial is titled, “The Politics of Pointlessness.”

Any thoughtful individual who has witnessed the chaos in Washington would say that something has gone fundamentally wrong with our system of governance and it began way before Donald Trump entered the White House.  Through all of this I keep coming back to the seminal book published in 1997 by William Strauss and Neil Howe titled The Fourth Turning.  In that book the authors predicted much of what has happened in America over the past twenty years.

Fourth turnings are a time of crisis that can last 20-23 years

The fourth turning is a time of crisis – an overturning of the existing social and economic order. The start date of the current fourth turning, according to Neil Howe, is 2008.  Since turnings typically last 20-23 years, it will end sometime between 2028 and 2031.  So a lot of water will run under the bridge before it’s all over.

I listened to a compelling, recent interview of Neil Howe at the MacroVoices website – a thorough review of the ideas in the book and a lengthy look at what might be next. (The full interview transcript is linked below.)  To elaborate on my short description immediately above, here is Mr. Howe’s own description  of a fourth turning along with a few other important quotes from that interview:

 –– “The fourth turning is the final season of history, if you will, the final generation. And that is the period of crisis. That is the period when we tear down institutions that we’ve built, everything that’s dysfunctional. And we sort of rebuild things from scratch again. And it usually follows a period where—it’s bound up in a period where there’s complete disgust, complete distrust with what we have.”

–– “And I would say these are strong parallels that we see between the decade we’ve been living through and the 1930s. Because it isn’t just what happens to/in the economy. I mean, you consider so many ways in which this last decade has recapitulated the 1930s, starting off with a financial crisis, worries about deflation, worries about declining fertility rates, and currency wars, and beggar thy neighbor policies, and radical attempts by monetary and ultimately fiscal policy to remedy the situation.”

–– “I think we can be too mesmerized by the fact that the last fourth turning we had started with the Great Depression and ended with World War II. I think there are more possibilities. We could be defeated on a fourth turning. We could completely unravel on a fourth turning, giving the amazing popularity of these dystopian or alternative history drama shows on HBO and Netflix today really spelling out those scenarios.”

–– “And then the crisis, when all of these problems begin to coalesce into one huge problem. It’s when the Great Recession met all of these—the rise of fascism both in Asia and in Europe, and everything came together, currency wars, everything became part of a huge problem. Which, by the resolution, you see—and this is what happens at every fourth turning. All the little problems come together into a giant problem. And the giant problem gets completely solved.”

–– “So in politics we see volatility is incredibly high. If there were a political index—there is a political index, there’s a political uncertainty index which actually you can go on FRED and look at it, which is amazingly high levels compared to where it was for the last 20 or 30 years. There is a political index, but it’s very high right now as opposed to the market index which is very low. So, if you’re doing valuation divided by some measure of volatility, which is kind of your basic complacency index, that’s at record high levels now in markets. But you’d have to say complacency is at record low levels in our political and civic life. We’re totally nervous. We even, I think, to some extent, fear that we’ve lost any kind of public square, the ability to even have a public discourse on every issue. I think that that is a real problem.

[End quotes]

Historical inevitability and portfolio preparation: Gold and silver ownership

There is a certain amount of inevitability in Howe’s analysis that a good many will have a hard time accepting, but I am among the group that believes that we are carried on great waves of history whether we like or not.  That is why cycle theory has always appealed to me since my early days in the investment business.  I chose to become a gold and silver broker (back in 1973) because I have always believed that there are good and bad times economically, and when the bad times roll around, that is when you want to be sure that you have made preparation, and most advisedly well ahead of the trouble. Markets cycle.  Politics cycles.  Economies cycle.  Nature, by the way, cycles.  And when you really put on your thinking cap, that tells you why everything else cycles.

Gold and silver, unequivocally, remain the best choice to preserve capital during the secular downslopes – in times like these.  Whenever you watch what’s going on out there and you can’t seem to figure out why people are behaving the way they are, just remember that we are in the grips of a fourth turning and this is the way it is going to go and, as Howe points, it could get considerably worse.

If you have an abiding interest in the kind of analysis you are now reading, you might appreciate our monthly newsletter compiled and written by Michael J. Kosares, the author of the popular investor guideline,  The ABCs of Gold Investing: How to Protect and Build Your Wealth with Gold (Third Edition).  You can sign-up for it here.  Always timely.  Written for gold and silver owners or for those thinking about it.  Your interest is welcome.

My concern is getting across the bridge between the great crisis that may still be ahead of us and the resolution that comes at the end of fourth turning.  That is why I own gold personally and why I think every thinking, well-established individual financially should own it as well.  The name of the game is to protect wealth and not leave your life work on the table when the crisis hits with full force.  A diversification of about 10%-30%, in my view, will get the job done. How high you go within that range depends upon on how strongly you feel about what is going on.

Why I put so much stock in the book, The Fourth Turning

You may wonder why I put so much stock in Strauss and Howe’s The Fourth Turning.  Besides making a great deal of sense as a view of how we as human beings move through history from one generation to the next, the authors presciently predicted the 2008 financial crisis eleven years before it happened.

From The Fourth Turning:

“The next Fourth Turning is due to begin shortly after the new millennium, midway through the Oh-Oh decade. Around the year 2005, a sudden spark will catalyze a Crisis mood. Remnants of the old social order will disintegrate. Political and economic trust will implode. Real hardship will beset the land, with severe distress that could involve questions of class, race, nation, and empire.”

Talk about hitting the nail on the head.  The last two sentences tell it all as we now live through the experience.  I have always said that the gold and silver owner can afford to sit back and watch the show with a certain amount of detachment and comfort knowing you have done your best to protect your assets.  Gold certainly worked for its owners during the first stage of the fourth turning when gold went from roughly $700 per ounce to nearly $2000 at its peak before working back to current price levels. Silver did equally well going from roughly $16.50 to over $50 at its peak.

They are likely to work in the next stage of the cycle as well.  As we watch the social, economic and political implosion unfolding around us, you begin to wonder whether or not it has come time for the great middle of America to kick back a bit and take a more detached approach to the problems, and that is what Daniel Henninger is driving at in his editorial.

Neil Howe in his interview mentions a “political uncertainty” chart available at FRED in the quote section above.  I think he may have been talking about this chart, but even if it isn’t, it tells the same story.  As you can see, economic uncertainty has been running at a high level since the year 2000 and in direct correlation to gold’s secular bull market. Since 2008, for good reasons, the uncertainty has been running at consistently high levels and on a hair trigger. The current lull might simply be the calm before the next storm which, in my opinion, is already visible on the horizon.

I will end by returning to Daniel Henninger’s thoughtful editorial this morning and recommend that you read it in full along with Neil Howe’s interview.  Howe’s interview transcript and Henninger’s editorial are both linked immediately below.  Unfortunately, Henninger’s full article is not published in the clear, but Fox posted the beginning with a link to the full article.  Here is the thought with which he ends the piece.  It’s a good one.

“Amid the torrent, an odd paradox emerges:  People are consuming more content and detail about politics than ever, and more people than ever are saying, ‘I have no idea what is going on.’ Someone is at fault here, and it is not the absorbers of the information.  Charlottesville is being pounded into the national psyche this week as paroxysm of white nationalism.  On current course, the flight from politics is going to look like rational behavior.”

Neil Howe interview (Courtesy of MacroVoices/Audio version can be accessed at the MV link.)
Daniel Henninger editorial (Wall Street Journal, 8/17/17)
Posted in all posts |

My take on the Fed minutes. . . . .

In this highly political environment, some think of the Fed as an oasis of collegiality, where the best interest of the economy is guarded with praetorian care – an institution that rises above the fray.  Not so.  The Fed is just as political as the rest of Washington D.C. and that is evident in the minutes.  There’s a split at the Fed and it looks to be enough of a split to paralyze monetary policy.  That divide is just as political as the splits in Congress that paralyze the Trump agenda.  Talk about gridlock. We now have gridlock at the Fed and that’s why gold and silver have reacted so convincingly.

Gold up almost $9 at $1282

Silver up 42¢ at $17.10

We might be in the first stages of a breakout rally.


Posted in all posts |

One man’s opinion. . .

Only about $15 dollars in gold’s run-up over the past roughly month and a half has had to do with North Korea.  There are much more elemental forces at work:

– Increasingly difficult sailing for the Trump administration’s pro-business, pro-growth agenda with multiple parties to blame

– The Fed’s inability to move forward on its desire to raise, or should I say normalize, interest rates

– The over-valuation in the stock market which, in turn, has inspired professional money to diversify with gold being one of the avenues

– The possibility that there is more than enough rancor in Washington to cause a serious problem when extending the debt ceiling comes up for a vote.  Repercussions would follow any delay. . . . . .

This is not to say that the situation with respect to North Korea is anything but dangerous and having an effect on gold prices.  However, it is superimposed over a market that is also reflecting fundamental economic concerns.


Posted in all posts |

The Fed Has 6,200 Tons of Gold in a Manhattan Basement — Or Does it?

Wall Street Journal/Kathy Burne/8-10-2017

“Eighty feet below the streets of lower Manhattan, a Federal Reserve vault protected by armed guards contains about 6,200 tons of gold.

Or doesn’t.

The Fed tells visitors its basement vault holds the world’s biggest official gold stash and values it at $240 billion to $260 billion. But ‘no one at all can be sure the gold is really there except Fed employees with access,’ said Ronan Manly, a precious-metals analyst at gold dealer BullionStar in Singapore. If it is all there, he said, the central bank has ‘never in its history provided any proof.'”

MK note:  I was very surprised to see this article on the front page of this morning’s Wall Street Journal.  It raises some interesting questions begging answers. . . . . . . .

Posted in all posts |

Sanctions will destroy the dollar

Real Norman/8-8-2017

“The United States is increasingly using sanctions as a form of warfare. When we can’t attack militarily we use sanctions. In many cases the result is the same as bombing supply lines only without the bombs. It’s a form of soft warfare that targets a country’s economy and its ability to transact business and safeguard its financial wealth in today’s dollar-based economy.

Do you know what the result of these sanctions will be? The dollar will get crushed.”

MK note:  Mike Norman has an interesting take on the impact of sanctions.  He says the dollar eventually will lose its global reserve status because of sanctions.  “There is simply too much risk,” he says, “for the rest of the world to have the global financial system resting on dollars when at any moment, all or a portion of that system can be shut down by a bunch of hotheads in Congress or, a president who tweets.

Posted in all posts |

Dimon sides with bears, says sovereign bonds are too pricey

Bloomberg/Jennifer Surrane/8-8-2017

“Jamie Dimon is siding with the bond-market bears.  ‘I do think that bond prices are high,’ the chief executive officer of JPMorgan Chase & Co. said Tuesday in an interview on CNBC. “I’m not going to call it a bubble, but I wouldn’t personally be buying 10-year sovereign debt anywhere around the world.’”

MK note:  Dimon echoes comments made by Alan Greenspan last week.  Greenspan was a bit less diplomatic about it.  He called bonds a bubble and added their correction would bring down the DJIA as well.  Note the reference to “10-year sovereign debt anywhere in the world” meant no doubt to include U.S. Treasuries.

Posted in all posts |

Opinion: Let this be your final warning on U.S. stocks’ overvaluation

Marketwatch/Brett Arends/8-4-2017

“Critics sometimes like to argue that the reading of late has been distorted because it includes the abysmal corporate earnings during the 2008-2009 crash. So I decided to exclude those, and just compare stock prices to the average of the past five years, rather than 10, to see how that affected the measure.

And, yes, it does. But it only cuts the reading from 31 to 25.5.

For reference, it’s only reached a level of about 25 on five previous occasions: 1901, 1928-9, 1966, 1996-2002 and 2003-2007. Each one ended with a crash.”

MK note:  Diversify.  . . . . It wasn’t that long ago that we were receiving inquiries from clients who had established a 10% to 30% portfolio position in the early 2000s between $270 and $600 per ounce. They wanted to know what I would recommend now that gold constituted 50% of their portfolios, and in some notable cases as much as 70% of their portfolios.  Gold was trading then near the $2000 per ounce level.  At the time, when we did not know if things were going to be worse or better, most opted to simply leave things as they were.  The common refrain was ‘I didn’t buy it to speculate. I bought it to protect what I have.’ And, at the time (2009-2013) that is precisely what gold was doing for them.

Posted in all posts |

London just shook up the ranking of biggest gold stockpiles

Bloomberg/Eddie Van Der Walt/8-4-2017

“The London Bullion Market Association this week lifted the veil on how much gold is stored in vaults in the city, which instantly joined a list of the world’s biggest hoards. The estimated 596,000 bars weigh 7,449 tons — only the U.S. government and Indian households are thought to account for more. Most London gold is stored in the Bank of England, with the rest in private vaults, including those operated by HSBC Holdings Plc and JPMorgan Chase & Co.”

MK note:  Bloomberg, for some reason, overlooks China’s citizenry and private sector in this analysis, another very large reservoir of physical gold.  If you are going to include India’s households, you might as well include China’s as well – a holding that would surpass the U.S. government’s and make a run at India’s prodigious holdings.  Koos Jansen, the China gold specialist, recently put that figure at 16,000 metric tonnes.  Bloomberg puts Indian household at between 20,000 and 25,000 metric tonnes.

Posted in all posts |

Be prepared for historic gold and silver run

LawrieOnGold/David Smith/8-5-2017

“The Bigger the Base, the Greater the Upside Case. This saying among technical analysts/chartists helps define where we are today in the precious metals – and where we’ll soon be headed.

It means that when prices ‘base’ in a relatively narrow sideways range for an extended period, they will at some point break out. Before the action gets underway, bears and bulls alike will get ‘sandpapered’ as they take positions, trying to guess whether or not the price is getting ready to decline further or move upward into a new bull phase.”

MK note:  In an argument that looks similar to Clive Maund’s as highlighted in the August edition of News & Views, tech-analyst Smith believes an upside breakout is in the offing for both gold and silver.

News & Views free subscription sign-up.

Posted in all posts |

The Daily Market Report: Gold Continues to Trend Higher Ahead of Weekend

USAGOLD/Peter Grant/07-28-17

Gold heads into the weekend on a firm footing, setting new 6-week highs in the wake of this morning’s data. The dollar is back under pressure, erasing most of yesterday’s corrective bounce, which continues to provide a tailwind for the yellow metal.

While advance Q2 GDP met expectations of +2.6%, Q1 was revised lower to 1.2%. ECI missed expectations and there was “a big fall in annual inflation rates across the board,” Commerzbank analyst Carsten Fritsch told Reuters this morning.

The Fed essentially conceded this week that there will be no rate hike in September and that is fully priced into Fed funds futures, which presently show 0% chance of a hike. However, the latest data is going to start chipping away at December rate hike and balance sheet normalization expectations. That probability has already eroded to some degree, from about a 50/50 proposition to 43.7%.

Core PCE — the Fed’s favored measure of inflation — slowed to 0.9% in Q2, versus 1.8% in Q1. Clearly the Fed can no longer dismiss slowing inflation as being “transitory.”

The closely watched by the Fed core PCE q/q rose 0.9% in 2Q after rising 1.8% prior quarter, suggesting lower for longer will persist indefinitely. — ZeroHedge

Monthly PCE for June comes out on Tuesday next week. Expectations remain for further evidence of weak inflation.

Minneapolis Fed dove and dissenter Neil Kashkari will speak later today. It will be interesting to hear what he has to say about inflation and policy normalization prospects for the rest of the year.

It appears the GOP is throwing in the towel on healthcare reform. This was the center piece of their entire agenda since the ACA was signed into law in 2010, suggesting the majority party is severely fractured. This has rather ominous implications for the broader Trump economic agenda. With a debt ceiling debate queued up for after the August recess, we may be in for some real fireworks.

Bottom line, political and economic uncertainty prevails. With gold still below the highs for the year, now is a great time to be building your edge ahead of cyclically strong fall months.

Posted in all posts, Daily Market Report, Gold News, Gold Views |

Gold could see substantial upside in this run. . . . .

‘The price of gold could see substantial upside as the U.S. dollar index continues sliding in value, some strategists are forecasting. The greenback has declined nearly 9 percent against a basket of foreign currencies year to date as the likelihood of parts of President Donald Trump’s economic agenda getting underway has been called into question, and the prospect of further interest rate hikes from the Federal Reserve has pulled back.”

MK  note:  Nothing new here if you keep up with this page. This forecast says gold could revisit the $1300 level.


Posted in all posts |

90% of Swiss refined gold moved East. . . .

Lawrie Williams/SharpsPixley/7-27-2017

“The latest figures for gold exports from Switzerland just further emphasise that physical gold is continuing to move eastwards in a big way.  The country’s gold refineries sent 74% of their gold exports to Greater China (the Chinese mainland and Hong Kong) and India alone, while if we add in other south and east Asian nations – Malaysia, Singapore, Taiwan, Thailand and South Korea – and the Middle East – Turkey, the UAE, Lebanon and Jordan – fully 90% of Swiss gold exports that month moved to this region.”

MK note:  Real wealth – and the kind that extends beyond the transient value of currencies – continues to move West to East through the London-Zurich-Hong-Kong-Shanghai pipeline, amounting to 74% of Swiss exports.  Further, Singapore’s Bullion Star reports that the Peoples’ Bank of China is buying gold in the open market, not through the Shanghai Gold Exchange as many previously thought. Of the 2200 tonnes that the SGE reported as sold in 2013, for example, none went to the central bank, according to the SGE.  In other words, all that gold went to the Chinese people and the financial sector.   China. . .a different animal. . .the dragon in the room, and it likes low prices.

Posted in all posts |

Something Big, Bad And Ugly Is Taking Place In The U.S. Retirement Market

GoldSeek/Steve St. Angelo/07-26-17

While the highly inflated value of the U.S. Retirement Market reached a new high this year, something is seriously wrong when we look behind the scenes. Of course, Americans have no idea that the U.S. Retirement Market is only a few steps from falling off the cliff, because their eyes are focused on the shiny spinning roulette wheel called the Wall Street Stock Market.

Yes, everyone continues to place their bets, hoping and praying that they will win it big, so they can retire in style. Unfortunately, American gamblers at the casino have no idea that the HOUSE is out of money. The only thing remaining in their backroom vaults is a small stash of cash and a bunch of IOU’s and debts.

…Regretably, Americans have no idea that their monthly retirement contributions are not being saved or stored in a nice gold vault, rather they are being used to pay the lucky slobs who retired before them Now, when I say SLOBS or POOR SLOBS, I am not being derogatory. However, I am using the word as a Wall Street Banker would label those they prey upon.

PG View: The charts presented in this article are a warning to anyone who will be reliant on a 401k or pension once they retire. The time to diversify and reallocate a portion of your retirement savings to a hard asset like gold is now.

Posted in all posts |

Gold At 3-Week High Amid Assault On Greenback

Kitco News/Jim Wyckoff/07-21-17

Gold prices are moderately up and scored a three-week high in early U.S. trading Friday. The precious metals continue to catch a bid from a bleeding U.S. dollar index, which fell to a 13-month low overnight. Gold bulls have technical momentum to suggest prices will continue to trend sideways to higher in the near term. August Comex gold was last up $3.40 an ounce at $1,248.90. September Comex silver was last up $0.105 at $16.45 an ounce.

Weaker U.S. stock indexes in pre-U.S. day-session action are also a mildly supportive daily element for the safe-haven gold market.

It appears the “take away” from this week’s news events and markets’ price action is growing notions the major central banks of the world are not in a big hurry at all to tighten their monetary policies, with a major reason being very tame price inflation expectations. European Central Bank President Mario Draghi on Thursday sounded a surprisingly dovish tone on ECB money policy. The Bank of Japan on Thursday lowered its inflation expectations. And the week before, Fed Chair Janet Yellen spoke before the U.S. Congress and suggested the Fed will only very gradually raise U.S. interest rates.

Posted in all posts, Gold News, Gold Views |

Investors are pouring money into silver ETFs

Bloomberg/Eddie Van Der Walt/7-18-2017

“There’s plenty of speculation that silver is due for a recovery. In a Bloomberg survey of 13 traders and analysts, the majority were bullish.

  • 11 people said prices would rise and two predicted declines.
  • Among the seven respondents that provided estimates, the median 12-month forecast was $20 — indicating a 24 percent rally from current levels.

Assets in exchange-trade funds backed by silver have risen 6.6 percent since April 24 to 21,211 tons, according to data compiled by Bloomberg.”

MK note:  Evidently, there are a good many who know a good thing when they see it:  Silver at current price levels.  The 21,211 tonnes in ETFs is a record high – something to file under “Major developments most people don’t know about. . .”  By the way, financial institutions and funds dominate the silver and gold ETF volumes.  Private investor demand, thus far, has been strangely quiet on the silver front since prices have dropped. Mesmerized by rising stocks and the Trump effect, it would seem. . . . . .Or perhaps they’ve been waiting for a bottom.  According to silver experts referenced above, we may already be there.

For those with an interest, here is an interesting USAGOLD silver offer worth considering.  It combines a direct investment in silver with the collector in all of us.   Bulk buyers might want to take advantage of the low premiums on silver American Eagles.  As many of you already know, once the market starts rolling supply bottlenecks can develop overnight and premiums can jump considerably.   The mints have a spotty record on keeping up with public demand once the wheel turns. . . .

Posted in all posts |

Massive additional short liquidation by banks foretell a big rise in all precious metals prices

Avery Goodman/7-17-2017

“Look at what they do, not what they say. They are fleeing from long-standing downside bets they’ve rolled over, year after year, for many years. Some clueless hedge funds (the so-called ‘managed money’) are taking them over. They will pay an enormous price for doing that. Come mid to late August, for example, some of them are going to be forced to deliver real gold they don’t have. By October, some will be scrambling to source gold bars for delivery. Others will get out sooner than that, but they will pay a very heavy paper money price to do it.”

MK note:  At the link above Goodman posts the evidence of bullion bank withdrawal from the short side of the precious metals markets.  I’ve alluded to this potentiality in previous postings including one made here yesterday.  The banks are ahead of the game.  Hedge funds and the like will follow suit once it registers with them that the game has changed.  Then the fun begins. . . . .We could be in the early stages of a quantum shift in the way gold and silver (and by the way, the USD) are viewed among big money players.

Posted in all posts |

Precious metals sector update – the biggest opportunity since late 2015, and the last chance at these prices

Clive P. Maund/7-15-17

“We’ve had to wait 18 months for an opportunity as big as the one we saw late in 2015 to appear again in the Precious Metals sector. ‘Wait a minute’, I hear you say, ‘prices were generally lower back then at that low than they are now, so how can it be as big an opportunity, as leverage is reduced?’.

Here are the reasons, one technical, the other fundamental. When prices rose out of the late 2015 low, which was the Head of the Head-and-Shoulders bottom shown to advantage on the 10-year chart for GDX below, they were destined to retrace to mark out the Right Shoulder of the pattern, which is what now has most investors very negative towards the sector again. This time they don’t have to – they can now rise out of this trough and proceed to break out upside from the entire pattern to embark on a mighty bull market. The fundamental reason is this – most investors have been taken in by the specious Central Bank talk about “normalizing interest rates” and scaling back their bloated balance sheets – but they haven’t got a cat in hell’s chance of doing this – why? – because debt (and associated derivatives) has expanded to such gargantuan levels, that any attempt to bring it under control will send interest rates skyrocketing. Because of this stark reality, they are left with only one option – to inflate the debt away by monetizing it, which means inflation.

Once investors grasp the inevitability of this – and that this process will soon get underway with a vengeance, gold and silver will soar. That is what the charts that we are going to look at today are telling us, and it means that we may never see the bargains in the Precious Metals sector that are now available ever again – or at least not for a very long time.”

MK note:  Clive Maund is not a perennial bull when it comes to gold and silver so when I saw this analysis, it got my attention.  A visit to the link above will take you to the charts he references in this snippet.

Posted in all posts |

Dollar index and gold. . .When momentum shifts, the flow of hot money will determine prices

We’ve published versions of this chart in the past. It shows the inverse correlation between gold and the dollar index, but given the changing psychology in the forex markets we thought it a good time to repost it.  The future for gold in this context depends entirely upon how the central banks, and in turn the markets, perceive the future of the dollar.  Much of the strength of the dollar since November has been based upon a perception that the Trump administration would be good for business.  With the problems in Congress and the growing frustration on Wall Street (as manifested by Jamie Dimon’s remarks* late last week), that perception seems to be fading into the distance.

Once momentum shifts away from the dollar, all the huge bullish dollar algo trades and derivatives’ plays could be subject to reversal.  Thus, the references we see of late to the potential for explosive changes in financial markets including stocks, bonds, gold and silver.  The flow of hot money will determine those changes.


* “It’s almost an embarrassment be an American citizen traveling around the world and listening to the stupid shit we have to deal with in this country and at one point we have to get our act together. We won’t do what were supposed to for the average American.” –– Jamie Dimon


Posted in all posts |

Short and Sweet

“You and I can’t control whether banks are ready, but we can control whether we are ready. I am working on a number of fronts to help you. My brief time away convinced me beyond any doubt that a crisis of historic proportions is once again bearing down on us. We may have little time to prepare. We definitely have no time to waste. –– John Mauldin

Note:  Mauldin says a major financial crisis will ensue if not by “later this year, then by the end of 2018 at the latest.”  He counsels to prepare for turbulence.

We think gold may edge higher, but with little fanfare and expect the market to face headwinds.”  –– HSBC

Note:  HSBC predicts gold will average $1282 in 2017 and that the USD well decline in 2nd half.  Historically, gold rallies often begin and gain momentum quietly.

“The debt ceiling will start to dominate headlines as we move through the northern hemisphere summer.” –– Standard Bank

“During the first half of 2017, gold bullion rose 7.75% while the XAU (Philadelphia Index of Gold and Silver Stocks) rose 2.79% (including dividends). Among the notable developments of the first half were the pronounced weakness of the trade-weighted US Dollar (down 6.44%) and the continuing sluggishness of the US economy, both of which call into question the wisdom,feasibility, and credibility of the Fed’s push to tighten credit.” –– Tocqueville Gold Strategy Investor Letter

Note:  Nice synopsis. . . .

The physical precious metals bid will go infinite — that is, big players holding useless cash will buy up all the gold and silver that’s available, at pretty much any price that’s demanded.”  –– John Rubino

“The West will strive until its last breath to keep the price down, while the East will strive with its every ounce of energy to produce an honest price. The gold price will make movements to the $2500 level, then $5000 level, then $8000 level, then $12,000 level. It is inevitable, like the dawn after a long stormy night, like the rising tide.”  –– Jim Wille

Note: Not sure we agree with those price levels, but the sentiment is worth passing along.

“Silver prices have risen erratically but inevitably, along with debt and most consumer prices, for decades. As of July 2017 silver prices, compared to the national debt, are too low and will rise. The next rally in silver should be huge based on the prospects for expanded war, financial chaos, and central bank ‘printing’ that will devalue all currencies.” ––  Gary Christiansen

“Stated another way, and in far less erudite terms, the Fed owns the stock market. The institution’s credibility has in our opinion become inseparable and indistinguishable from financial-market stability. This less-than-‘candid’ institution cannot afford a major downdraft in financial-asset values. It is caught in the lie that the institution’s supposedly superior and privileged knowledge hold the key to future prosperity, economic growth, and policy normalization. The price of an honest reassessment would risk calling into question the extreme policy measures undertaken since 2008.” –– Tocqueville Gold Strategy Investor Letter

Note:  Toto, it seems, is tugging at the curtain. . . .

“It’s almost an embarrassment be an American citizen traveling around the world and listening to the stupid shit we have to deal with in this country and at one point we have to get our act together. We won’t do what were supposed to for the average American.” –– Jamie Dimon

“Our global investment strategists believe that central banks will act to pop the bubble later this year.” –– Bank of America Merrill Lynch

“More recently we’ve seen Fed Chair Janet Yellen note in June that she does not expect another crisis in our lifetime. The reality is that completely ignores how fundamentally distorted money and markets actually are.” –– Nomi Prins


Posted in all posts |

Why gold shot higher on Friday. . . .

The MacroTourist Daily Letter/Kevin Muir/7-14-2017

“It was only a month ago Fed President Dudley was lecturing us about the dangers of overly easy financial conditions and how inflation’s sanguine performance was ‘transitory.’ And it wasn’t like he was alone. The Fed’s generally accepted second in command, Stanley Fischer, echoed similar comments.

Well, this morning about the most awkward economic news possible was released. CPI undershot, coming in at 1.6% instead of the expected 1.7%. Retail sales were abysmal, registering -0.2% instead of the forecasted 0.1% gain. And the University of Michigan sentiment numbers reflected a public who is becoming increasingly skeptical of the Fed’s rosy outlook. The actual index was 93.1 instead of the surveyed 95.0, but more importantly, expectations plummeted to 80.2 instead of 84.4.”

MK note:  More and more it is looking like the Fed is not getting the results it intended.  The dollar fell and gold rose.  More confirmation of what Pete Grant has been talking about on this page for months now.  The much discussed year-end rate hike is looking less likely this weekend, could open the door to further gold upside next week.

Posted in all posts |

The Daily Market Report: Gold Surges As Weak Data Weighs on Rate Hike Expectations and Dollar

USAGOLD/Peter Grant/07-14-17

Gold surged to new highs for the week in U.S. trading, buoyed by a weaker dollar. More soft economic data precipitated further dimming of expectations for a September rate hike from the Fed. That caused U.S. yields to fall, dragging the dollar index to new 10-month lows.

Fed funds futures show that the probability for September rate hike has fallen to 8.2%. Goldman Sachs now thinks there is only a 5% chance.

The Fed is going to have to do some furious jawboning in the weeks ahead if they want a September hike at least back on the table. However, in doing that, it becomes increasingly apparent that they are ignoring the data that they have maintained they are dependent on. The Fed’s credibility is at risk.

U.S. consumer inflation slowed to 1.6% pace in June, versus 1.9% in May. Retail sales fell 0.2%, below expectations of +0.1%. Retail sales ex-auto was -0.2%, on expectations of +0.2%. The preliminary look at July consumer confidence was a
miss as well, falling to 93.1.

While industrial production was better than expected in June, the preponderance of the data were pretty weak. That led to some negative revisions to Q2 GDP forecasts. The Atlanta Fed’s GDPNow model new sees 2.4% growth. That indicator has nearly halved since the series began back in late-April. Goldman Sachs cut their prediction to 1.9%.

With inflation and growth expectations waning, it certainly appears as if the Fed is tightening into weakness once again. If they continue to do so, a recession is the likely result…or worse.

Another financial crisis, which according to Janet Yellen just two-weeks ago was not going to happen in our lifetime, suddenly can not be ruled out. “We can never be confident that there won’t be another financial crisis,” said Yellen on Thursday.

We know that historically the Fed cuts 300 bps during recessions. At this point, that would put us deep in negative territory. I would also hazard that if the economic weakness extends much deeper into Q3, that balance sheet normalization will fall off the table as well.

Posted in all posts, Daily Market Report, Gold News, Gold Views |

“Credit Bubbles Always Burst”

JK Comment: This is a great chart from our friends at Crescat Capital, published under the title “Credit Bubbles Always Burst”. I was quite alarmed when I saw it. Pretty remarkable that we are currently seeing three credit/banking bubbles occur simultaneously in China, Australia, and Canada, and even more alarming that they are all as extreme as any bubble we’ve previously seen, including the housing bubble that precipitated the financial crisis in the United States. In fact, according to Crescat’s macro analysis, in terms of sheer size, the bubble in China is the largest credit bubble in human history… and overdue to pop. This analysis is also quite interesting when viewed in the context of the extreme market complacency that we’ve been covering in recent weeks on these pages. Ominous indeed, and makes the current swoon in gold and silver prices look like the opportunity of a lifetime. Far better to be a day, a week, even a month too early than a moment too late when it comes to protecting your wealth.

Posted in all posts |

Gold Price Outlook Increasingly Bullish

Market Oracle – 11 June 2017 – by Clive Maund

“I had thought that gold might escape its usual seasonal malaise this year, but it didn’t and went into a rather sharp downtrend and dropped again quite sharply on Friday. The good news though is that this drop has not impacted the big picture at all, which remains strongly bullish, and a bonus is that this drop has flushed out a lot of remaining weak hands, as we will see when we come to the latest COT (Commitment of Traders) charts and set the sector for a reversal soon leading to a strong uptrend.”

“Gold’s latest COT chart looks increasingly bullish, with the Large Specs at last giving up and “throwing in the towel” as shown by their long positions shrinking back quite dramatically over recent weeks, so that they are now approaching the extremely low levels seen at the December 2015 lows. This is very good news indeed for would be investors in the sector, and while there is scope for even more improvement, as would be occasioned by further losses across the sector, the scope for such improvement is now very limited. Meaning that we are either at or very close to a major bottom here…


JK Comment: A good technical piece on gold and silver prices. Exhaustion of the weak hands is a very positive development for prices, and the notion that we are approaching similar level of ‘bearishness’ last seen at the December 2015 low is quite compelling indeed. Worth adding that this is the only article I’ve seen calling for a bottom in gold on every news feed I follow. Nearly everything else is calling for further weakness, and in many cases, a dramatic further weakening in prices. Another strong contrarian indicator…

Posted in all posts |

Texas returns to the gold standard

Wealth Management/Olenka Hamilton/7-10-2017

“The Lone Star state isn’t exactly known for taking the conventional route: so when Texas announces plans to ‘repatriate’ $861 million worth of gold from a bank vault in Manhattan, it’s easy to wonder if they’re up to something.

Your suspicions will no doubt then be confirmed when you hear that this will all be housed in the first-state administered bullion depository to be opened in Austin in December 2018. Once up and running, the depository will serve as an alternative stash for gold and other precious metals in place of federally regulated banks or smaller unregulated storage facilities. The hope is for it to then expand into a larger commodities exchange, which would aim to challenge the existing commodities markets places in Chicago and New York, according to reports.

. . .

So the Texans’ gold move is part of a rising global trend – not just a US one, and is surely being driven by uncertainties and a subsequent lack of faith in the global financial system. Quantitative easing and increased money supply have also raised the prospect of higher levels of inflation across the globe.

. . .

And in the US, a least six other US states are already at it. Tennessee, Idaho, Utah, Arizona and Virginia are all making noises about bringing their gold reserves back from the US Federal Reserve and holding it locally.”

MK note:  I was not aware that Tennessee, Idaho, Utah, Arizona and Virginia owned gold deposited at the NY Fed.  The Lone Star gold is owned by the University of Texas the purchase and repatriation of which was suggested by Kyle Bass who serves as advisor to the UT Investment Management Company. Few Texans, at least the ones we know, would be opposed to the course of action being taken.  He who owns the gold makes the rules.

Posted in all posts |

Should gold be viewed as a tactical or strategic asset?

World Gold Council/7-12-2017/Gold investor risk management and capital preservation

“There is nothing to prevent an investor from using gold as a tactical or short-term investment purely driven by price performance. However, research has consistently shown that the true value of gold is linked to a modest, strategic allocation that serves as a core part of a portfolio – a foundation. This has not been demonstrated by the World Gold Council alone (see research). Examples abound of other well respected organisations that have arrived at the same conclusion. These include New Frontier Advisors, Oxford Economics, J.P. Morgan, Mercer, and The University of Virginia Darden School of Business, among others.

Indeed, gold’s benefits should not be solely linked to its price. The key lies in gold’s ability to diversify and, thus, lower volatility; reduce losses in periods of financial turmoil, in part due to its role as a high-quality, liquid asset; and preserve purchasing power. Even under the assumption that gold’s average annual return is a modest 2%-4% over the long run – lower than its historical return and akin to the global rate of inflation (see Table 2 in the previous section) – gold’s benefits mean that holding 2%-10% in gold can greatly benefit investors seeking a well balanced, diversified portfolio. Interestingly, this range also applies to international investors’ portfolios.”

MK note:  The point made in the sentence italicized above is something we have always advised at USAGOLD.  Gold’s primary role is the preservation of assets in uncertain times, in particular uncertain times fueled by governments’ rampant issuance of unbacked paper money and official sector debt – times like the present.

It wasn’t that long ago that we were receiving inquiries from clients who had established a 10% to 30% portfolio position (our recommended acquisition levels) in the early 2000s between $270 and $600 per ounce. They wanted to know what I would recommend now that gold constituted 50% of their portfolios, and in some notable cases as much as 70% of their portfolios.  Gold was trading then near the $2000 per ounce level.  At the time, when we did not know if things were going to be worse or better, most opted to simply leave things as they were.  The common refrain, in keeping with the point made by the World Gold Council above, was “I didn’t buy it to speculate.  I bought it to protect what I have.”

As to the percentage of the portfolio gold and silver should occupy, 2% is way too low in my opinion.  Something between 10% and 30% makes the most sense for the average investor looking to truly diversify the well-documented risks in investment markets today.  How high you go within that range depends upon how you personally feel about the current state of the economy, financial markets, geopolitical risks, etc.  The price of gold should also play a role in that assessment.  Naturally, lower prices encourage increasing the weight within the portfolio . . . . . . . .

Posted in all posts |

Precious Metals Are “Best Defence” Against Bail-ins In Economic Crisis

John Adams/Daily Telegraph AustraliaGold Seek/7-6-2017

“Globally, household, corporate and sovereign debt are at unprecedented levels. They are also linked through a fully integrated global ­financial system and an array of complex financial derivatives.

Given the scale of the system, the probability of a global stock, bond and real estate crash, coupled with a wave of corporate, bank and sovereign ­defaults via rising interest rates, ­increases dramatically.

Worryingly, the monetisation of government and corporate debt, nominal or real negative interest rates, “helicopter money” (issuing freshly created money directly to citizens), bank bail-ins, capital controls and the eradication of cash through financial digitisation are all being contemplated by American and other international central bank officials.

Such measures seek to, in effect, trap citizens to keep their money in the financial system and to allocate their money into particular asset categories, thus preventing bank runs or hoarding which can occur when confidence in political, economic and ­financial systems collapse. . . .

Thus it is up to individuals to think about what they can do to mitigate their own risks. Eliminating all forms of debt, ­improving personal cash flow and maintaining cash reserves to guard against bouts of unemployment or to purchase cheap assets is best under a deflationary scenario.

Alternatively, acquiring real (or physical) goods or assets such as precious metals is the best defence to offset any loss of currency purchasing power, noting that the Governor-General has the legal power to confiscate personal gold holdings via Part IV of the Banking Act 1959.

Nevertheless, Australians must ­remain vigilant in the coming months and years ahead, conduct their own independent research and prepare themselves for a volatile unstable economy.”

MK note:  This article is directed at Australians but the message applies to Europeans and Americans as well.  No one is immune.  Extreme measures, like those mentioned above, are now acceptable courses of action among economic officials globally.  If one were to improve the strategy offered by The Daily Telepraph’s John Adams (quoted above), it would come via the ownership of historical bullion items like old British sovereigns (pictured below), Swiss Helvetias, Dutch 10 guilders and the like.  These are a worthy diversification for those with concerns about capital controls, and you do not have to pay extremely high premiums to include them in your portfolio.  In fact at the present, these items generally speaking are trading at historically low premiums.

Governments traditionally are loathe to confiscate, quarantine or slap trading restrictions on items of historical value (though obviously there are no guarantees).  Such was the case in the United States when the federal government confiscated gold bullion in 1933 but exempted gold coinage dated prior to 1933.  Along with whatever protections age and collectibility might confer, owners of this type of item will benefit from any increase in the price of the gold and open the door to potential premium appreciation as collector items, since their availability is limited.  Buy the right items and they are also very liquid globally.

Talk with one of our representatives about the possibilities if you have an interest [1-800-879-5115 Ext #100].

Posted in all posts |