From Birch Gold Group
This week, Your News to Know rounds up the latest top stories involving gold and the overall economy. Stories include: Gold is immune to the effects of the coronavirus, the Fed is once again driving a flurry of gains in the gold market, and the Royal Mint of Britain issues various unique gold coins and bars ahead of new James Bond movie premiere.
Goldman: Gold is one asset that won’t suffer the ill effects of the coronavirus
After two successive upgrades to their gold price forecast, Goldman Sachs has released yet another note that is highly supportive of the metal moving forward. In the note, Goldman’s head of global commodities research, Jeff Currie, said that gold is immune to the coronavirus in both figurative and literal senses.
Currie has little doubt that the astounding amount of uncertainty that’s currently gripping the markets is bound to continue as the coronavirus spreads and begins to take its toll on the global economy. In this environment, gold may be one of, if not the only asset that investors can truly rely on regardless of how the crisis progresses.
In the note, Currie highlighted the fact that gold was up roughly 5% since the start of the year at the time of publication, a stark contrast to the S&P 500’s decline of more than 8%.
Along with acknowledging that gold is the safest bet investors can make in this ever-changing climate, Currie also shared a peculiar, yet important take regarding the metal’s physical properties. Should concerns over the coronavirus escalate to a point where paper currencies are seen as transmitters of the disease, Currie noted that gold stands to benefit even more by providing a safe medium of transfer.
The Fed’s emergency rate cut has placed gold back on track towards $1,700
Although gold’s outperformance over the past nine months can be attributed to numerous factors, the dovish turn by central banks around the world in the second half of 2019 could be singled out as the most potent driver. The Federal Reserve’s three rate cuts, along with much of the same from other central banks, helped push gold to levels last seen in 2013.
Now, as the coronavirus crisis unfolds further, central banks seem to have once again positioned themselves to be the primary drivers of gold prices. Despite a rising interest in havens, gold recently came under a sharp selloff as coronavirus-related panic gripped the markets.
The metal’s losses were all but erased last Tuesday, when the Federal Reserve announced that it will perform a non-scheduled benchmark rate cut for the first time since 2008. Furthermore, the central bank sliced its interest rate by 50 points, as opposed to the standard 25-basis-point cut.
It didn’t take long for investors to take notice and begin pouring into the gold market once again, as the metal rose by 3.2% on the same day. The latest rate cut has also harmed the already-concerning 10-year Treasury and further eroded haven prospects for investors.
With the Bank of England and the Bank of Canada both being rumored to follow up with rate cuts of their own, gold prices look ready to meet numerous forecasts by passing $1,700 in the near future. The metal has continued to climb in the wake of the emergency cut, currently sitting around $1,660 which marks its highest levels of the year.
Britain’s Royal Mint issues its largest-ever gold coin in preparation for the James Bond movie premiere
As London prepares for the first screening of the newest Bond movie later this month, Britain’s Royal Mint decided to commemorate the event in a unique fashion. Last Monday, the mint unveiled numerous Bond-related precious metals memorabilia, helmed by the largest and most valuable coin issued in the mint’s 1,100 years of operation.
The coin in question stands out due to its sheer size and unique design, sporting a diameter of 185 millimeters and weighing in at an astounding seven kilograms. Christian Davies and Matt Dent shared their road to achieving the best possible design given the coin’s dimensions and content, ultimately settling for an unmistakable obverse that features the Aston Martin DB5, Bond’s vehicle of choice, accompanied by the iconic BMT 216A license plates.
The mint unveiled several other unique “No Time To Die” coins and bars, including gold coins weighing between five ounces to 2 kilograms. The mint will also issue gold and silver bars engraved with the titles of all of the 25 James Bond movies, with No Time To Die being the latest on the list.
While the mint didn’t provide a price tag for the seven-kilo coin, it placed the recommended retail value for the 2-kilo piece at £129,990 ($170,000). Due to the seven-kilo coin’s uniqueness and near-quadruple weight, one can safely surmise that it stands out as one of the most valuable pieces issued by any sovereign mint going back decades.
With global tensions spiking, thousands of Americans are moving their IRA or 401(k) into an IRA backed by physical gold. Now, thanks to a little-known IRS Tax Law, you can too. Learn how with a free info kit on gold from Birch Gold Group. It reveals how physical precious metals can protect your savings, and how to open a Gold IRA. Click here to get your free Info Kit on Gold.
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But millions of contracts of paper gold (not backed by a damn thing), are easily sold to cover margin positions, etc. when the equities collapse and money is desperately needed. Were ONLY physical metals being traded, prices would continue to rise in the face of these other collapses. Much as great, sound companies were destroyed in 1929/30, etc. because their stocks were sold to cover margin calls, paper gold (and unfortunately the real stuff in tow) is suffering a similar fate. In the end, the real stuff will come back, and dips present good buying opportunities for those who don’t own any/enough. But YES, a virus can hurt gold too (even if in a round-about way).
And the THEFT goes on. Even hard metal can be confiscated from those that have it, by those that want it. They have done it once and can do it again. Only the people can stop this tyranny. When will all the people wake up to the reality that is now staring at them. Hope is a concept and a lie to ones self it won’t be as bad as predicted. Folks best learn to do with less and take care of their personal needs without a lot of outside dependency. Hard times are coming I feel.
Most didn’t see gold back then as a means to protect one’s economic future. It was used daily as currency, mostly in gold-backed paper versus coin. They were also easily conned by one of the greatest con-men of all times – FDR. Today people will know immediately what confiscation will mean for them – life and death – and will respond accordingly.
Let us hope so. As I see it, the only currency that will be allowed will be the one that the bankers allow. Be that bitcoin, or any other form of controlled medium of exchange.
The black market and barter will most likely be the local medium of exchange with we the people. Best have some skills you can trade with.
By Dollar volume, literally 99% of the so-called Gold Market is paper futures contracts which rarely involve actual delivery. It is no more than some type of legal gambling. The Chicago Board of Trade had an exemption from gambling laws. Outside of Sprott’s PHYS in Canada I am not aware of any ETF that provides for delivery and they will only do it in increments of 400 oz. Good Delivery bars.
There was talk of a metal only exchange a few years back somewhere in Asia and supposedly everyone’s favorite villain, the Rothschild outfit actually did throw a wrench in it.
NEVER forget that the ONLY mandate of the FED is to insure the profits of the member banks, and then bail them out when they are going down the gurgle from being stupid to make sure the top guys get their bonuses.
Trump needs a sit down with Sheila Bair for sure.
https://finance.yahoo.com/news/fed-needs-to-bail-out-the-real-economy-not-big-banks-144333573.html
Gold is a commodity, nothing more. It will lose value just like every other asset except cash, which will gain in value.
This is elementary economics. The markets worldwide lost $2.5 trillion which is deflationary. As cash continues to be destroyed by deflation, (falling asset values) the need for cash increases. People have to sell assets to raise cash and this includes gold. It also includes bitcoin.
As debt delinquency and default begin to enter the economic picture, this trend will increase as defaulting debt is also cash destruction the same as falling asset values.
Come on people, this stuff is not that complicated….
https://thewealthbusiness.com/what-is-the-difference-between-currency-and-money/
Dawg, here’s some numbers 4 you…in 2014, bought $15,000 worth of Canadian Maple Leafs.
Held in a vault, not a bank.
Spot per oz. in 2014 was $1,365 Canadian.
At the close of February, 2020, spot per oz. was $2,100 or so.
So, that same 15k Canadian is now valued at 23k Canadian, if the Leafs were to be redeemed for cash.
So, even after the exchange rate, that’s not a bad ROI.
But, here’s the thing…it wasn’t an investment, so much as a tactic to preserve wealth and buying power, from the effects of a diminishing currency value.
That same 15k. . .from 2014…
Do you think, the cash would buy more, or less goods and services today, in 2020 if it would have been kept under the mattress?
Inflation is a hidden, stealth tax upon earners by the banksters.
Metals, if bought low, help offset that erosion of purchase power.
2014 to 2020 was an inflationary period.. All assets sell for more dollars as inflation lowers the value of cash. That has nothing to do with what is going to happen now that deflation is about to hit. During deflation, assets sell for less dollars, as dollars increase in value relative to assets.
You do not have to believe that if you don’t want to, but it is fact. Inflation lowers cash value while deflation raises it.. Economics 101
Jdog, I think you have it sort of backwards but not entirely. Gold IS money. GLD or IAU is not. You can speculate or margin Gold etf’s which as you have noted are dumped to cover, but they are unbacked paper. Behind the scenes there is all kinds of arbitrage going on where entities pay enormous premiums to obtain Gold in quantity. J6P may get hosed selling his two Eagles to Billy Bob’s Coin Shop, but if he has 10,000 ounces we are in a whole different reality. Even tax law is designed to benefit large Gold holders. Read the GLD prospectus if you want to set your hair on fire. 10,000 ounce holders can trade their “baskets” of 10,000 ounces each back and forth between the Gold and GLD shares with no tax liability. If you or I sold Gold we would be liable for 25% collectible tax on any profit while these special “trusts” can do whatever they want.
Gold is not money, if you think it is take some down to your local utility or county tax office and attempt to pay your bills with it. You must sell the gold and turn its value to cash before it is actually usable, with the exception of barter.
Gold is a commodity just like every other metal. It is not currency. During times of inflation, gold like every other asset sells for more dollars as inflation erodes the buying power of cash.
In a period of deflation like we are about to see, dollars rise in value due to the fact they are being destroyed by revaluation of assets and the default of debt.
During deflation, the need for dollars rises exponentially. Why do you think gold fell in tandem with the market crash yesterday? It was because people who needed cash say to cover margin or some other immediate need had to sell something to raise that cash. Rather that take a huge loss on equities that had just been hammered they chose to sell bitcoin or gold that took less of a hit. But there was still enough selling vs buying to cause the price to drop. As the coming recession gets worse, and as people need cash, they will sell what ever assets they have to raise cash because that is what they need to pay the mortgage, keep the lights on, and keep food on the table.
THE RISE AND FALL OF FIAT CURRENCIES
https://www.dinardirham.com/the-rise-and-fall-of-fiat-currencies/
I don’t believe it is wise to hold any asset exclusively, including Gold and Silver, but I believe they have and will again pass the test of time, and the inevitability of every single fiat collapse.
It’s smart to have some Federal Reserve Debt instruments, every individual and their situation is different, and how much to hold digitally, and in your own hands is up to the individual, just as it is with PMs.
As for me, give me no debt real-estate, farmland, beans, bullets, barter, and guns…PMs in my hands, they all have their place…in your age and stage, but most importantly within your personal belief system.
However, the petro dollar is on its death bed…it may linger awhile, but soon it will R.I.P.
Today, am amazing series of things happened.
1. I heard Mennonites coming up the road shortly after first light.
2. I realized the barn builders were early and tossed a scarf around my head and a long sweater to cover my body and headed out to welcome them until my husband was up. ( Customs and Courtesies 101. Sure, it is my farm, but it is a privilege to have honest hardowrking people work for you. I do not mind observing their customs. Their work is superior to any I’ve seen. Bar none. I’ll wear a scarf.)
3. I directed them in, but yelled that my husband would be out shortly. (I handled it all on my own years ago but the Amish and Mennonites are not comfy with women giving directions. So. I. Did. Not. I suggested and they knew who paid the bills.)
4. The boss of the barn building team talked to my husband for a while then my husband came and filled me in.
They will accept silver rounds. That is good to know.
https://www.youtube.com/watch?v=0Xl-Np_V3W8
youtube delisted this video mid stream.. just minutes ago..
Posting it here just because..
Seems the folks behind the curtain don’t want the plebes knowing about the State of repo market..
Hey, Nova Scotia… just want you to know I’ve still got you down for the goat shed, but since the Mennnonites finished the extension on the barn today, you could get upgraded.
I had Mennonites here working all day and they will return tomorrow to start the installation of the ceiling inside the barn. The barn, however, is taken.
(Stucky has a three-room tree house on ten foot barn stilts and he might let you in the back room… I took some photos today, but am not messing with them. Good night, Nova Scotia.)
Sounds like great digs… hopefully some day I can check it oot….
Cheers
RiNS