Congress has ten legislative days to draft a budget. If there is an agreement, we will only have to wait until December for things to become interesting again, according to Treasury Secretary Jack Lew. Continue reading
United Coin and Precious Metals 950 Silverado Street La Jolla, CA 92037
Polish authorities are having to defend the area believed to house a Nazi Gold train as treasure hunters try to gain access to the Nazi gold train in southwestern Poland.
In the wooded hills around the city of Walbrzych, something of a gold rush has taken foot. Authorities are on the lookout for people combing the area with metal detectors. The military plans to examine the area with earth-penetrating equipment. Continue reading
The rout in global equity markets has only managed to underpin gold, as resistance at $1,170 to $1,172 has kept a lid on the market. Even news that Belarus has added to reserves has done little to encourage fresh length as this is just the fourth day of a short-covering rally.
It seems no one is ready to add risk before Labor Day and the mentality of “throwing the baby out with the bath water” may keep some gold bugs sidelined, but I still believe the global uncertainty will support any selloff. If we break $1,172, I would think that one-month $1,200 calls are worth a cheap bet. It will be interesting to see if China adds more gold to its reserves prior to the IMF meeting in November. Russian gold holdings will be interesting as its economy continues to sink as energy and mining export prices plummet.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks with serious upside potential in the next 12-months. Learn more.
Industrial commodities are getting clobbered with the continued downcast emerging-market growth picture. The Brent crude price under $45 is the lowest since pre-financial crisis. The damage that this will do to OPEC members’ economies will most likely force an emergency meeting. The damage that it is having on the U.S. high-yield market will more than offset the money consumers are saving at the pump.
The base-metals wipeout will weigh on any new production plans and countries like Peru, Chile, Colombia and Australia will feel the pain. BHP will unveil its spending cuts this week and may curtail certain non-core operations altogether. The copper price seems to be all about China, but as long as the U.S. homebuilding sector remains intact, the copper price should get some support. As I have been saying for the last 10% decline, supply rationalization had better come and it better come soon.
Gold has failed to rally in the face of China’s stock market crisis as investors, scorched by a brutal end to the market’s 12-year bull run, chose cash and bonds for safety over bullion while they seek clarity on the timing of a U.S. rate increase.
While at first glance, the failure of a “safe-haven” asset to respond may seem odd, this behaviour is by no means unusual.
As a broad rule, bullion tends to benefit from stock market weakness as an alternative asset, but previous equity crashes show the initial price response can be to fall.
“In 2008, when Lehman Brothers collapsed, we saw a two-week decline in gold prices, despite having a perfect storm for gold,” LBBW analyst Thorsten Proettel said.
As investors worldwide scrambled for low-risk assets on Monday, benchmark U.S. Treasury yields fell to four-month lows, while the euro and yen climbed. Gold failed to hold its ground.
“You have to think of gold as a range of different things — as a commodity, as a financial asset, and as a form of insurance or safe haven,” said Mitsui Precious Metals analyst David Jollie.
“We’re in a market where commodities have generally come under pressure, particularly those with exposure to China; as a financial asset, there’s a temptation to take some money out of that to cover losses elsewhere. There has been some positivity surrounding gold as insurance, but that can’t outweigh everything else.”
Where the current crisis in stocks differs from those seen in 2008 and 2011 is in the perception of the U.S. economy’s health. Both earlier drops were fuelled largely or in part by a concerns over U.S. growth.
This time around, the U.S. economy is considered to be more robust than in previous crises, with the Federal Reserve still expected in many quarters to press ahead with its first rate rise in nearly a decade.
That is worrisome for gold, which has benefited from ultra low interest rates in recent years. These cut the opportunity cost of holding non-yielding gold, while weighing on the dollar.
There is scope for gold prices to rise again once the market perceives more clarity on the pace of rate rises. If these are, as many expect, gradual and small, gold may see fresh interest as fears of stronger measures wane.
But for now, investors remain wary of moving back into the metal. Gold backed exchange-traded funds have seen some inflows this week, but the holdings of the largest have risen only 2 percent since hitting seven-year lows earlier this month.
“The ETFs have seen only minor inflows, so there is no rush yet into gold,” Julius Baer analyst Carsten Menke said. “For that to happen, we would need much more of a systemic financial market crisis.”
“There are clearly some really severe problems in China that could affect the whole globaleconomy, so the picture for gold has improved somewhat, but not to the extent that we need to reconsider our longer-term stance.”
After remaining in a narrow range for most of 2015, the Dow Jones fell more than 1,000 points on Monday.
“If things don’t settle down in China, we could have another ugly open tomorrow and you wouldn’t want to be caught holding positions you bought this morning,” said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin. The Dow Jones closed at 15,871, down nearly 4%.
“Emotions got the best of investors,” Philip Blancato, chief executive at Ladenberg Thalmann Asset Management in New York, told Reuters.
“The conjecture that the Chinese economy can propel the U.S. economy into recession is ridiculous, when it’s twice the size of the Chinese economy and is consumer-based.
China’s economy is declining as has been suspected by many for some time to come. The state media called today black Monday as the Shanghai Composite closed 8.5% in the red, experiencing its worst day since 2007.
The Dow Jones Index in the US fell 1,000 points. This is the largest drop ever on the Dow, which had never lost more than 800 points in a single day.
London’s FTSE 100 declined for the 10th day in a row and is now at its lowest levels since the beginning of 2013. More than 40 billion pounds has been wiped from its books.
“Markets are panicking. Things are starting look like the Asian financial crisis in the late 1990s. Speculators are selling assets that seem the most vulnerable,” Takako Masai, head of research at Shinsei Bank in Tokyo, told Reuters.
“The equity markets are dealing with the prospect of a weaker yuan amplifying the negative impact from a sluggish Chinese economy,” Eiji Kinouchi, chief technical analyst at Japanese investment bank Daiwa Securities, told reporters.
The People’s Bank of China devalued the yuan on August 11 in order to promote “market liberalization” according to Beijing. China devalued its currency the next two days as well. This did not stem volatility, as many believe it was meant to.
The movements we’ve seen have been so fast and so large,” Peter Costa, the president of the trading firm Empire Executions, said on CNBC. “You’re talking about 75, 100-point moves in two minutes. It’s been extremely fast, and it’s happened very, very quickly.”
“Fear has taken over,” Adam Sarhan, CEO of the investment company Sarhan Capital, told CNBC. “The market topped out last week.”
People are moving to get out of the stock market. “What’s a company that’s doing business with China actually worth right now?” JJ Kinahan, TD Ameritrade’s chief strategist, informed The Associated Press. “When you’re not sure, you tend to sell.”
Donald Trump has taken the opportunity to promote his republican presidential campaign, blaming the US’s close ties to China for the decline in the stock market today.
Gold is down approximately 0.6% on the day, with silver down 50 cents to $14.75. That gold is down is counter-intuitive considering its appeal as a safehaven, while silver generally takes a major dump amid such tall economic volatility.
China devalued its currency last night in a sign that the country’s economic outlook is dim. The action by China could delay the timing of the Federal Reserve’s expected US interest rate hike which would have an effect on the stock market and gold and silver markets domestically.
The Fed might look first and foremost at domestic economic data instead of trying to conjecture what is going on in China, however, which would mean no major changes to their economic policy. The one time depreciation on Tuesday of 2 percent reverses that currency’s plight of two years. Stock market turbulence in recent months
The move in China marks the biggest one-day fall since a massive devaluation in 1994.
“I think it’s screaming that China is in trouble. … The Chinese leadership is really starting to run scared,” said Schlossberg, managing director of foreign exchange strategy at BK Asset Management.
The stock market in China has been soft. The Shanghai composite increased 80% in 12 months, but plunged 23% since June 12. Wall Street anticipated a rough Tuesday morning with the US stock market Monday broke a seven-session losing streak.
The Chinese central bank said it was striving to make the state-controlled exchange rate more market-oriented. The yuan strengthened alongside the dollar.
The bank said it was carrying out reforms and that meant, starting Tuesday, its daily fix would take into account supply and demand. Washington has asked this of Beijing numerous times.
The bank said it had to devalue because the yuan has been rising despite that market forces show it should have fallen. The yuan has increased because it is tied to the US dollar which has increased in price.
Currencies of other developed countries have decreased in value. This has hurt Chinese exporters by making goods more expensive abroad.
US policymakers will have to consider what China’s move means for them. A weaker yuan makes Chinese exports more competitive. Tuesday’s 2 percent decline with every bit of relief from price pressure helping Chinese exporters. China has recently wanted its price to rise. Its domestic and international goals mean a stronger yuan is best. A main reason for China’s move is likely a strong dollar.
The move is undoubtedly good for gold and silver prices and in the next one to three years it is likely we will see the major effects of this market move by the government in China.
The current bear market in gold and silver miners is the worst Sprott Chairman Rick Rule has seen since the 1980s, and he believes the recovery with be “dramatic” changing with it the sentiment of the gold market.
Sentiment all around the precious metals industry is very low. Can it go lower? That is the question on people’s minds. But this is likely not to be the case, at least much not further, and people from all over the industry are agreeing with this sentiment. This has changed in recent weeks with gold now hitting a three week high and demand increasing for gold in La Jolla, California at my shop.
“A recovery is inevitable,” Rick Rule said.
“The mining sector cuts are not just skin deep, they are to the bone,” he said. Miners can’t afford to produce if metals prices go any lower, so if they drop from here, it means the world doesn’t want a supply of these metals, according to Robert.
Drama in the precious metals scene is on the rise, as well, with countries from all over the world demanding their gold from the US. Peter Boehringer founded PBVV Vermögensberatung in Munich in 2003 and sits on the board for the German Society for Precious Metals. In this video he explains what is going on with gold in Germany.
Prior to 2003, he worked for ten years in various positions at international companies, including Booz & Co Inc., Technology Holding GmbH, 3i plc and the European Telecom Holding AG. Peter Boehringer has a degree in business administration and computer scientience (European Business School).
Demand is strong in India as well for gold. The recent downturn in prices has increased buying not only in India, but also in China.
Volume is big in the precious metals markets as. The Silver Institute anticipates more buying demand for silver in the coming months. More silver demand is expected.
What is Tesla’s battery uses silver? The implications would be huge. Moreover, producers are not mining gold because there is very little reason to. This will have an impact on supply once people begin chasing the gold and silver price.
At United Coin & Precious Metals we have seen this time-and-time again, and we have also seen an increase for demand in the La Jolla area in recent months. If you want to learn more, feel free to call us at 858-412-6462 to discuss with one of our precious metals consultants today.
click for full image
The Kennedy half dollar, first minted in 1964, is a fifty-cent coin currently issued by the United States Mint. Intended as a memorial to the assassinated President John F. Kennedy, it was authorized by Congress just over a month after his death. Use of existing works by Mint sculptors Gilroy Roberts and Frank Gasparro allowed dies to be prepared quickly, and striking of the new coins began in January 1964.
The silver coins vanished from circulation upon their release in March 1964 due to collectors, hoarders, and those interested in a memento of the late president. Although the Mint greatly increased production, the denomination was seldom seen in circulation. Continued rises in the price of silver increased the hoarding—many early Kennedy half dollars have been melted for their silver. Starting with 1965-dated pieces, the percentage of fine silver was reduced from 90% to 40% (silver clad), but even with this change the coin saw little circulation.
In 1971, silver was eliminated entirely from the coins. A special design for the reverse of the half dollar was issued for the United States Bicentennial and was struck in 1975 and 1976. In addition to business strikes, special collector coins were struck for the Bicentennial in silver clad; silver proof sets in which the dime, quarter and half dollar were struck in 90% silver were first minted in 1992. In 2014 a special edition of the Kennedy half dollar was also struck in 99.99% gold.
Even though ample supplies of circulating half dollars are now available, their circulation is extremely limited. Since 2002, Kennedy half dollars have only been struck to satisfy the demand from collectors, and are available at a premium through the Mint.Welcome to EditPad.org – your online plain text editor. Enter or paste your text here. To download and save it, click on the button below.
At La Jolla Coin & Precious Metals, it is not only gold bullion, silver bullion, pre-1933 gold coins you can purchase for the best prices in San Diego, but also currency.
United Coin & Precious Metals has had numerous currency deals walk through the front door in recent months, with beautiful notes coming into play. Buying currency can be a great way to hedge some the risk of liquid metals prices.
For instance, in stock currency, UCPM has PCGS graded 1,000 notes, which feature Grover Cleveland, in premium grades. We also have many silver certificates, still bundled in their original packaging.
Graded by PMG, we have $1 notes from 1899 in CU condition. These are great historical documents for you to see. Please come into our store and see them for yourself.
In metals news, the prices have been soft despite many pundits for seeing softening market prices in terms of paper.
Compared with metals, currency has been very stable over time, much more like the numismatic coin collection. If you have any old notes at home, passed down through the generations, UCPM would love to take a look at them to tell you what they are worth.
There are many different types of currency out there. Like silver certificates, National currency, colonial currency, confederate currency, Legal tender notes and Federal Reserve Notes.
The Pittman Act of 1918 resulted in the melting of more than 270 million Morgan silver dollars. This bullion was then sold overseas.
The US Mint had to buy bullion from US mining companies for more than the market price. The Act was designed to help silver miners in the western states…
International trade during the time was conducted in gold, and the Allies thus needed steel, food, and supplies for the largest armies the world had seen.
Since international trade back then was conducted in gold, and the Allies needed steel, food, and supplies to build and maintain the largest armies the world had seen (to that point), they pulled their gold coins out of circulation. The rising price of gold meant that the gold content exceeded the face value of the remaining coins anyway, which led to their hoarding.
Since there was no gold available, Britain was using silver certificates to pay for goods and services from its colony of India, which was a major contributor to the war effort. Germany started spreading the rumor that the government did not have the silver to back the paper certificates it was using for purchases of war goods (which actually was true.) Emotions ran high, and the independence movement, which had quieted down during the war, hit a fever pitch. The UK was looking at the very real possibility of needing to sue for peace with Germany, as it would take most of the Royal Army to put down a revolution in India.
The only place of Earth that England could get its hands on enough above-ground silver in time to avert disaster was the United States. The U.S. also used paper silver certificates as money, which the public much preferred to big old clunky silver dollars. However, every dollar in silver certificates was backed by silver dollars in Treasury vaults, and could be redeemed at will. The American government, of course, did not want to see their side lose the war, and also saw a chance to use the situation to their advantage.
Since the U.S. had no planes or tanks of its own, it had needed to buy them from the British and French. This meant the U.S. was on the hook to its erstwhile allies for a considerable sum. America wanted to hold on to at least some of its gold reserves for the post-war period, and the European powers were desperate for fresh American soldiers in the massive war of attrition that had decimated the armies of both sides. Thus, the Americans (who had silver up to their ears) figured that Britain and France would be happy to take silver instead of gold as settlement for the debts.
When the India crisis hit Britain and they appealed to America for help, all the pieces seemed to fall in place. Except one.
The U.S. government planed to melt up to 350 million existing silver dollars into bullion, and sell it to Britain, to prevent collapse of India’s (and thereby Britain’s) economy. The silver mining interests in the American West and their politicians were terrified that Eastern interests would use the opportunity to eliminate the silver dollar, reducing the government’s demand for silver. In order to placate them and win support for measure, Congress promised to buy silver from Western silver miners after the war at the same $1/oz it charged Britain, and re-mint replacements for every silver dollar melted down.
All in all, it went pretty well (except for silver dollar coin collectors!) Britain was able to honor its silver certificates, preventing a banking collapse and revolution in India. The U.S. paid off some $200 million of its war debt from the sale of the silver. And the American silver industry was able to use the government to short sell three years of post-war silver output at much higher wartime prices, while selling wartime output to Britain.
The U.S. Mint was able to recoup some of the seigniorage lost from melting down the 270 million silver dollars by using 8.59 million ounces to mint much-needed dimes, quarters, and halves. These lesser coins had less silver content per face value, meaning increased seigniorage. As replacement silver dollars (the new Peace Dollars) were made, they were used to buy wartime Federal Reserve Notes (which were not backed be silver) and retire them.
Scholars note that the Pittman Act needs to be seen as an emergency war-time measure, rather than a monetary measure. By those standards, it was a rousing success, since it basically saved the war for the Allies, and didn’t lose the government any money.
One of our favorite coins is the Mexican Silver Libertad, because it is recognizable and beautiful. Mexico has a long history with silver. I was doing some reading recently when someone suggested I read an article about silver tourism in Mexico. I am not sure if this is actually a thing, but it definitely piqued my interest.
The article came from a travel website, but gave a good summary of the history and importance of Taxco, Mexico, and silver. As the author wrote:
“Taxco, Mexico is a major silver town in Mexico, where silver has been both mined and crafted into jewelry, silverware and other items, for centuries. It is this history of silver that has made Taxco a tourist destination, even as the only major mining operation winds down operations. The city is considered one of Mexico’s ““Pueblos Mágicos” (Magical Towns) thanks to the quality of the silverwork, the colonial constructions and the surrounding scenery.An American actually made the city’s silver history popular again in the 1920s, who created silver design workshops and exported items to the United States.”
At United Coin & Precious Metals, we have a good stock of the Silver Libertad, as well as some other coins from Mexico. I myself am actually thinking of making the trek to see this epicenter of silver.