United Coin and Precious Metals 950 Silverado Street La Jolla, CA 92037

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 →

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.

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.

Nathaniel Popper’s Digital Gold talks about gold as if it is Bitcoin. Many bitcoiners say that Bitcoin is like digital gold. But there is osmething these bitcoiners are missing. Bitcoin is not digital gold. It is a nice analogy, but really what it comes dangerously close to is a marketing device meant to mislead people into thinking Bitcoin is something that it is not.

Bitcoin is comprised of code and manmade programmed mathematics govern how many bitcoins there ever will be, but when it comes to gold and silver, God and nature have decided how much gold and silver there will be.

Bitcoin is not tangible like gold is tangible. Many people argue that bitcoin is tangible, that I can hold it on my computer, but considering everything the world has learned about the NSA, it is painfully clear that, in this respect, Bitcoin does not stand up to the test like gold does. I can hold gold, like cash, and transact with it not online. This is something gold does not do.

Bitcoin is five years old. Gold is thousands of years old and has been money forever. This fact alone makes these two assets fundamentally different. It is here you start seeing the manipulative ways of bitcoiners.

What is gold? Here is Wikipedia’s definition:

Gold is a chemical element with symbol Au (from Latin: aurum) and atomic number 79. In its purest form, it is a bright, slightly reddish yellow, dense, soft, malleable and ductile metal. Chemically, gold is a transition metal and a group 11 element. It is one of the least reactive chemical elements, and is solid under standard conditions. The metal therefore occurs often in free elemental (native) form, as nuggets or grains, in rocks, in veins and in alluvial deposits. It occurs in a solid solution series with the native element silver (as electrum) and also naturally alloyed with copper and palladium. Less commonly, it occurs in minerals as gold compounds, often with tellurium (gold tellurides).

Wikipedia’s definition of Bitcoin:

Bitcoin is an online payment system invented by Satoshi Nakamoto,who published the invention in 2008 and released it as open-source software in 2009.The system is peer-to-peer; users can transact directly without needing an intermediary.  Transactions are verified by network nodes and recorded in a public distributed ledger called the block chain. The ledger uses its own unit of account, also called bitcoin.  The system works without a central repository or single administrator, which has led the US Treasury to categorize it as a decentralized virtual currency. 

The only thing tangible here is the palpable difference between gold and silver! And THAT is a good thing.

Bitcoiners should embrace how Bitcoin is different from gold, instead of reducing themselves to gimmicky marketing tactics like calling Bitcoin digital gold. There can be truly be no digital gold.

Gold is not the only commodity falling  and its “largely thanks to dollar strength,” according to Tyler Richey, an analyst for the 7:00’s Report.

“Gold broke out last week as investors interpreted mostly soft economic data as reason for the [Federal Reserve] to delay “rate liftoff” to the end of 2015 or even out to 2016,” he said. “However, after … [the] strong housing starts number, and with multiple other reports due out later this week with optimistic results expected, the uptrend in gold is being tested.”  Continue reading →

Gold prices saw their highest level in three months as doubts about Greece’s ability to pay its debts spurred investors. But that’s not the only reason why the gold price has been volatile. Read to the bottom to learn more…

“We have limited time now, limited time and still a very important job to be done,” Pierre Moscovici, the European Union economics commissioner, told reporters at a briefing.

This is leading to a higher gold price.

“What you’re seeing now is gold driving higher on the uncertainty of what’s next, and what happens when they get to the next cliff,” saidBob Haberkorn, a senior commodities broker with RJO Futures in Chicago.

“There’s a lot of strength in gold based on Greece,” he said.

Then there’s the algos, which affect markets in many ways.

“The algos use similar sorts of momentum-driven models — it can all be liquidity in the same way, particularly around economic data releases or when gold prices are at well-identified technical levels,” one gold market participant says.

“Real money funds investment people just aren’t playing the gold market, central banks, the whole lot of them aren’t trading the gold market the way they used to,” David Govett, head of precious metals at trader Marex Spectron, says.

They are investing less, leaving more room for algos to take over and wreak havoc.

“A lot of the trading centres around the fixing and the futures market. London has already seen that massive decline in trading liquidity and volumes,” Ross Norman, head of broker Sharps Pixley, says, referring to the twice daily gold auction used to set a price. “The fix has more prominence than ever given the spot rate has less of a role.”

Chinese demand will likely change this.

“We will undoubtedly have a Chinese fixing price before the end of the year and we will see a rapid development of a Chinese gold options market — they’ve got a very deep liquid lending market and so the idea that liquidity is moving east is correct,” one market participant says. “They do need to take stock of where the London market is going and what role it’s got to play going forward.”

Do you have any questions on the price of gold? Contact United Coin & Precious Metals today, or stop on by our La Jolla shop, for your one stop shop for precious metals in San Diego County.