In the global business section of The New York Times a few days ago, there appeared a story about a thirty-eight-year-old executive from Spain who abruptly removed all his funds from  Spanish banks, packed his bags, and with his family in tow, expatriated to Cambridge, England.  Many in Spain who can are now doing the same thing. 

Published in From The CEO

Another round of quantitative easing was announced earlier today, and with that news gold prices jumped again. It seems as though the yellow metal can’t be stopped right now. As speculated, the Federal Open Market Committee finally decided it was time to roll out more easing measures.

In order to improve the struggling labor market, the Federal Reserve said it will buy $40 billion of mortgage-backed securities in an open-ended program and continue with its “Operation Twist,” where it swaps out short-dated securities for longer-term securities, as well as reinvesting the proceeds of maturing securities. In addition, the Fed extended its outlook for where it will hold interest rate to mid-2015, saying it will keep its ultra-loose monetary policy. This outlook is called forward guidance. Could this also mean we may see the current interest rates stay this low for quite some time? It does look that way.

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December gold futures on the Comex division of the New York Mercantile Exchange were $1,761.70 an ounce right after the announcement. That was around a $44 dollar bump in a matter of minutes, as gold was trading at around $1,727.40 about five minutes prior to the announcement by the Federal Reserve’s monetary-policy setting arm.

The Feds held out as long as they could. I didn’t think they would announce this type of stimulus unless they thought it absolutely necessary. It seemed as though they were hoping the economy would recover more quickly. While the U.S. economy is recovering, it is doing so at a snails pace. The Feds had waited as long as they could, stating they were worried that without stimulus, “economic growth might not be strong enough to generate sustained improvement in labor market conditions. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook.”

Right now is the time to be in gold. If you aren’t, then hop aboard. Those of you who were able to purchase the yellow metal a couple of months ago when it was low are now reaping the benefits. Many investors agree that the $1,800 per ounce price mark may be achievable by the end of November.

"There's been a lot of money made in gold recently. People will take their profits on the move. There will be a pullback at some point. It's always hard to say exactly when that happens, but it will happen,” said Frank Lesh, a broker and futures analyst with FuturePath Trading.

Published in United States Economy

Gold rose yet again today as the German bailout news was announced. They yellow metal added over $5 to its price and much of that had to do with Germanys Federal Constitutional Court ruling that favored a European Stability bailout fund. Gold has had a great few weeks, and prices continue to go up as news from around the world hits the wire.

Gold for December delivery was up by $5.30 to come in at $1,740.20 an ounce at the Comex division of the New York Mercantile Exchange. Gold price traded as high as $1,749.50 and as low as $1,734 an ounce, while the spot price of gold was up by $4. These are the times where all of those gold bargain hunters are making their money back, as the price of the yellow metal continues to be strong.

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Several pieces of news have helped fuel the gold price fire. As we all know, almost anything positive that comes out of the euro zone will act as an igniter for the price of gold. Today’s news was no different, as the most recent ruling by a German judge in favor of a European Stability bailout fund was met with plenty of trading and a nice price spike for the yellow metal.

"Certainly the German decision has helped underpin risk sentiment," said James Moore, an analyst at FastMarkets.com. "The moves that we've seen today are in reaction to the German news and the fact that German politicians are not going to stand in the way of the ESM in providing stability to the eurozone."

Silver prices were also up, and platinum continues its current surge as well. There were a couple of stipulations to the latest bailout ruling. The most important being that the country's liability on the fund should not rise beyond 190 billion euros without the parliament's approval. This was met with little opposition, as most considered this a pretty fair trade off in order to get the bailout fund passed and get it in play.

With the yellow metal continuing to thrive over the last few weeks, markets will now wait for Fed Chair Ben Bernanke to announce the central bank's monetary policy moving forward. This, along with any news of a possible stimulus fate for the U.S. will both be waited upon by investors.

Gold is performing very well right now, and we will see if the yellow metal can continue to prosper over the next few months.

Published in Gold Investing

As we know, the United States has always been high on gold, and always kept a nice stockpile. That being said, India has always been the biggest consumer of the yellow metal (at least for quite some time), but the fact of the matter is that over the last couple of years other countries have started to really work their stockpiles of gold.

The latest country to hit a record stockpile is Japan, and while the overall world’s economy remains slow to recover, Japan is doing the smart thing and gathering as much gold as it can for the future.

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As stated above, Japan is just the latest country to do this. While India has been the biggest consumer of gold for a long time, China is the country that has actually been buying gold up at an incredible pace over the last year and a half. So much so that they are poised to past India as the country with the biggest amount of gold stockpile. After stating it wanted to become a major player in the precious metals market, China went ahead and backed that statement up by purchasing as much gold as possible over the last year and a half, and they continue to do so. Despite their poor credit rating, China has an almost unlimited supply of cash, and they used this towards buying of the yellow metal.

It seems as now that Japan has decided to follow suit, hitting a new record of total gold reserves at $40.56 billion at the end of August while total reserves improved marginally to $1.2732 trillion. This according to the latest data released by country's Finance ministry.

In my opinion China and Japan have been doing the smart thing, and now you are seeing why. With gold prices steadily climbing back up, both of these countries have substantially increased their net worth and overall country portfolio by buying gold over the last year and a half while the price was lower.

Foreign reserves of Japan rose slightly to $1.2732 trillion at the end of August from $1.2728 trillion at end-July according to country's Finance ministry. This was a second straight rise as higher gold prices and the appreciation of the euro offset lower prices of U.S. Treasury notes. In other words, all the gold that Japan has been gathering up is now starting to pay huge dividends.

Published in Gold Investing

Gold hit the $1,7000 per ounce price mark for the first time in six months after news came down that European Central Bank President Mario Draghi detailed a plan to buy bonds from struggling euro-zone countries. This would help boost the euro zone sector and make many investors much more comfortable with the overall outlook of things.

Gold for December delivery GCZ2 +0.71% rose by $11.60, or 0.7%, to come in at $1,705.60 an ounce on the Comex division of the New York Mercantile Exchange. That was gold’s highest settlement since March, which is right near the six-month window. Most people didn’t think gold would raise this high in 2012, especially after the last 6 months. However, the last few weeks have been very good for gold, and the yellow metal has really been on a nice rise.

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The euro zone has been a sore spot for investors for much too long now. With continual delays in getting things done, these euro zone areas have caused the rest of the world’s economies to toil in and out of positive gains over the last year or so. Spain is just the latest problem, while Greece’s unwillingness to settle on any sort of debt resolution until just a couple of months ago was a sore spot for many.

With the ECB’s announcement, the yellow metal market was able to push its way past the $1,700 per ounce price mark to day. It was even able to stay able the number after the release of positive private-sector jobs data out of the U.S. cut down on expectations of more economic stimulus. While many investors will continue to hold out for the next stimulus, others have moved on and are doing their trading and investing based on a plan of slow recovery without a stimulus, which is the best thing for everyone in my opinion.

The ECB would launch an “outright monetary transaction,” program in the secondary market. The bank would decide when to start, continue or suspend bond buys.

Draghi said the program would enable the central bank “to address severe distortions in government bond markets which originate from, in particular, unfounded fears on the part of investors of the reversibility of the euro.”

We will see how this plays out in the long run but for now investors are excited about the prospect.

Published in Gold Investing
Thursday, 16 August 2012

Paper gold ain’t as good as gold

In today’s international market of pirating videos, phones, computers and other brand name goods, we’ve become somewhat accustomed to the reality that it’s going to happen. And there’s a whole plethora of knockoffs out there, some legal and some not. And, quite often, the knockoff actually performs as well as, or even better than, the original.

Published in Gold Investing
Wednesday, 05 September 2012

The Fall Move Up In Gold Begins

It could have been a fluke.  After all, we’ve seen it happen before.  Even precious metals experts had begun despairing.  Market pundits were announcing that gold was experiencing its last, valiant hurrah! Last week we saw gold move up over $30.00 in a single trading day.  Then we heard the warnings from the usual suspects.  This is a momentary spike.  This is fool’s gold.  This is the time to be careful, not foolhardy. 

Gold’s days are numbered. 

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But leave it to Fed Chairman Ben Bernanke to put the world back on track.  Once he announced(albeit vaguely) last Friday that an additional monetary stimulus round willremain in the cards, gold kissed the $1,700 per ounce mark. We will of course know more about a possible third round of monetary easing when the FED FOMC meets on September 12.  For now though, Gold is in a good position to move to the $2,000 per ounce level by January, 2013.

For one thing, December gold futures surpassed $1,700 per ounce for the first time in over five months.  For another, on Friday the yellow metal bounced off the 200-day moving average of $1,642.68 per ounce.  While the ordinary investor should not be obsessive about technical indicators, you should be aware that these are very positive signs.

Meanwhile, data suggesting a continued flimsy economy continues to buttress the gold price.  The institute for Supply Management announced its manufacturing index declined from its respective June and July readings of 49.7 and 49.8 to 49.6 in August.  Reuters had anticipated an August reading of 50.  These readings haven’t been this low since July of 2009.  Also, according to US Department of Commerce figures, construction spending again defied Reuters expectations, and made a notable decline in July.

Keep in mind too that, although the US traditionally leads the pack, monetary easing from other countries has a strong effect on the price of gold.  The head of the European Central Bank, Mario Draghi is scheduled to make his own announcement tomorrow about whether ECB will kick in additional liquidity.  Expectations abound that, since he had made a previous announcement that ECB will do what it takes to support weaker Eurozone members, Draghi will offer no surprises to the contrary tomorrow.  This kind of easy money announcement from Europe will be bullish for gold.

By the end of this week, we will also be presented with revised employment figures from The Bureau of Labor Statistics.  While consumer spending has accelerated to some degree, the rate of unemployment in the United States has been dismal.  And there is little reason to expect a turnaround when the figures for August are announced.  Keep in mind the Fed has a dual mandate:  price stability and full employment.  While many (particularly conservatives) feel that the latter goal is inappropriate and too difficult for The Fed to handle, the central bank will look closely at US employment figures to arrive at a decision for initiating a third stimulus round.

It is this decision that will be the key influence on the price of gold in the weeks and months to come.  And it should be this decision as well that should persuade you to add gold to your portfolio.

Published in From The CEO

Don’t look now, but after sales figures for July for the gold and silver American Eagles were released many people wondered if the coins were loosing their grip as the most popular coins around. The answer to that…. NO!. August sales figures were just released an it turns out that that gold and silver American Eagle coins are still as popular as ever.

While numbers are still down overall from the same time a year ago, August 2012 sales of the coins showed a 4.5 percent surge in gold, and a 12.6 percent surge in silver. This was a nice turnaround from the numbers that posted for July sales of the coin, as those numbers were way down across the board.

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August sales of American Eagle silver coins tallied to 2,870,000, or 26.0% higher than July’s 2,278,000. Although down 22.0% from the same time a year ago, last month was the second best August in the Eagle’s 26-year history.August sales of American Eagle gold coins advanced 39,000 ounces, up 27.9% from the 30,500 ounces that were sold in July, but also down 65.2% from a year ago. As you can see, numbers are starting to pick up, but are still way down from a year ago when gold and silver American Eagles were selling at a much faster rate.

The America the Beautiful series also continues to perform well, as noted below in the numbers update for this series of coins.

American the Beautiful Sales

  • 2012-P El Yunque National Forest 5 oz. Silver Bullion Coins — up 3,500 to 16,700
  • 2012-P Chaco Culture National Historical Park 5 oz. Silver Bullion Coins — up 9,600 to 17,000
  • 2012-P Acadia National Park 5 oz. Silver Bullion Coins — up 5,200 to 15,100
  • 2011-P Olympic National Park 5 oz. Silver Bullion Coins — up 400 to 85,900
  • 2011-P Vicksburg National Military Park 5 oz. Silver Bullion Coins — up 400 to 39,500
  • 2011-P Chickasaw National Recreation Area 5 oz. Silver Bullion Coins — up 300 to 29,700

As you can see, while these coins are not setting any sales records, their popularity is very much in tact and they continue to sale at a nice pace. Coin buying and collecting is still a major outlet for many investors, as they view it as a way to buy something tangible and a way to strengthen their portfolios and keep their money safe.

Published in Investment Grade Coins
Tuesday, 04 September 2012

Gold Up Again, $1,700 Within Reach

Gold rose again today to enter its highest level in almost six months. The yellow metal continues to garner boosts, as prospect of further liquidity injections from the U.S. Federal Reserve also helped keep the dollar under pressure.

Published in Gold Investing

Gold continues to be more in demand as ever, and with Central Banks in Europe moving toward more monetary easing for the region, gold may be poised to hit the $1,700 per ounce price mark very soon.

Published in Gold Investing