Month: May 2020

YK Delta tribes protest Donlin Gold in letter to mining company Novagold  Alaska Public Media News

Gold nears an eight-year high  CNN

Gold down as risk appetite keener on positive vaccine study  Kitco NEWS

It’s a runaway; gold, silver and platinum breaking out  Kitco NEWS

Gold, silver prices rally in tandem with global equities  Kitco NEWS

Money managers trim bullish positioning in gold right before prices start to rise  Kitco NEWS

Nervous investors have been pouring into the gold and silver markets over the past two months.

Money Metals Exchange is proud to have helped almost 20,000 new customers with a precious metals purchase in recent weeks, many of whom came over from other dealers struggling with inventory shortages and ridiculous delivery delays.

A new wave of investors is getting the message; the Federal Reserve will never stop printing currency units and punishing savers with lower interest rates, Congress will never put deficits under control, and the government-terminated U.S. economy may not recover for years.

For most clear-eyed investors, it is time to batten down the hatches.

Lots of them are diversifying into precious metals.

Unfortunately, shady coin dealers are out in force, trying to capitalize on this situation. We can see it in the proliferation of these dealers advertising on TV and radio with their celebrity spokesmen.

If investors pick up the phone and call one of these outfits, they could get severely punished for making an otherwise good decision.

Deciding to buy some gold and silver as a safe-haven makes a ton of sense. However, plenty of people with sound intentions will call the wrong dealer and let some high-pressure salesperson convince them to buy dubious “rare,” “graded,” or “proof” coins.

Instead of betting on gold and silver bullion as a safe haven, they find themselves gambling in the highly speculative and illiquid numismatic market. The winners are usually just the dealers selling coins for 2-3 times what their precious metal content is really worth.

There is zero reason to buy numismatic coins – unless you are an experienced collector. If you are an investor or someone simply looking to preserve wealth, the price-transparent bullion market is where you want to be. Don’t let yourself get derailed, regardless of how smooth or insistent the sales pitch may be.

Here are some red flags to watch out for:

• The salesperson gives you some story about why you should avoid bullion and buy collectible coins instead.
• The salesperson claims numismatic coins have tax advantages, asserts that only bullion can be confiscated, or claims numismatic coins will outperform bullion as an investment. These are all nonsense. (You are guaranteed immediate confiscation through the high premiums on “rare” coins.)
• The salesperson calls regularly and uses pressure techniques.
• The dealer claims to have a “super hot buy” and that if you don’t grab it immediately, someone else will.
• You are told the resale value is higher than the current purchase price, as if the salesperson is really going to sell coins for a loss.
• The dealer doesn’t publish bid prices – the price they pay to buy coins from clients. The bid will often be 30% to 50% less, if they’ll buy items back at all.

The key to making a good investment in precious metals is to buy highly liquid bullion coins, rounds and bars at low premiums. And also choose a dealer you can count on to deliver quickly and reliably.

Investors who stick to these simple guidelines will be well positioned for the dual threat of inflation and economic turmoil.

They won’t start way underwater because the coins they bought were vastly overpriced. They also won’t be stuck having to find some greater fool to buy their “rare” coins when the time comes to sell – a problem which may be compounded if hard economic times reduce the number of people buying luxuries like collectible coins.

The Gold Anti-Trust Action Committee (GATA) today asked the U.S. Commodity Futures Trading Commission (CFTC) whether it has ever audited the gold reported to it by the New York Commodities Exchange as being eligible or registered for sale and delivery on the exchange.

In a letter to commission Chairman Heath P. Tarbert, Chris Powell and Harvey Organ wrote:

“Recent turmoil in the gold markets in the United States and the United Kingdom has raised questions about the integrity of certain market participants, including the New York Commodities Exchange (Comex) and the London Bullion Market Association.”

The letter asked:

“– Has your commission ever audited the gold kept in Comex-approved vaults and reported to the commission as registered or eligible for sale and delivery?

“– If such audits have been conducted, when and what did they find?

“– Who conducted these audits?

“– Were these audits ever made public? If so, when and how? May we see them?

“– Are future audits planned? If so, when and who will conduct them?”

In recent years, GATA has put similar critical questions to the CFTC without getting answers. Several of those questions have been pressed by U.S. Rep. Alex X. Mooney, R-West Virginia, but the commission has evaded his inquiries too.

Especially avoided lately by the commission are whether it is is aware of futures market trading by the U.S. government, its agents, and other governments, and whether it has jurisdiction over manipulative trading by the U.S. government.

While the commission refuses to answer whether it is aware of futures trading by governments, filings by CME Group, operator of the New York Commodities Exchange, with the CFTC and the U.S. Securities and Exchange Commission show that CME Group provides special discounts to governments and central banks for surreptitious futures trading.

GATA’s new letter to the CFTC is posted in PDF format here.

The money supply growth rate surged to an all-time high in April as the Federal Reserve created cash at an unprecedented rate through quantitative easing and other money-creating monetary policies. According to Ryan McMaken at the Mises Institute, the only time the Fed has come close to this level of money creation was in the […]

Despite Fed Chair Jerome Powell throwing cold water on the prospect of a quick economic recovery last week, there is still a lot of optimism out there. There is also an appalling lack of concern about all of the debt and money printing going on. In a recent podcast, Peter said nobody expects this to […]