Insignia Consultants
Tue, 12/28/2021 – 03:45
The Daily Mail/Alex Brummer/12-21-2021
“Who owns the gold in the vaults is a closely guarded secret but the Bank is known to have in safe-keeping the reserves of as many as 30 emerging market and advanced nations.”
USAGOLD note: This article offers an introduction to the Bank of England’s role as custodian and logistics manager for the physical gold held by nation-states and other major players in the market.
The post Today’s top gold news & opinion first appeared on Today’s top gold news and opinion.
Daily Wealth/Dan Ferris/12-20-2021
“It’s important to compare commodities to stocks and see where we stand in the cycle…You see, learning to read commodity market cycles can be a very lucrative proposition – and it can offer excellent diversification during times of poor equity returns.”
USAGOLD note: Ferris points to two distinct eras in commodity values (See chart below) and says we are now approaching a “turning point” in the current cycle – one that will usher in a decade of higher commodity prices. Of course, gold and silver are two key players in the commodities complex that also enjoy a high degree of investor interest as long-term stores of value.
Chart courtesy of TradingView.com
The post Today’s top gold news & opinion first appeared on Today’s top gold news and opinion.
We get lots of questions from the public about precious metals.
Some people are curious about the basics. Others are skeptical about the case for owning gold and silver. Still others are longtime customers who have highly specialized inquiries.
Here we will answer a few of the most common, most broadly relevant questions we get…
ANSWER: Not necessarily. Trying to wait out the Fed could prove to be a huge mistake.
Consider that the gold market reached its last major bottom in December 2015 at around $1,050 an ounce. That coincided with the onset of a rate-raising campaign.
Previously, a third round of Quantitative Easing was announced in September 2012.
Many analysts assumed that QE3 would provide an immediate boost to gold and silver prices. Instead, the metals markets declined for several months following the Fed’s announcement.
The lesson is that precious metals markets don’t move in lockstep with Fed easing or tightening. Gold and silver prices show virtually no correlation to nominal interest rates.
What matters is real interest rates – meaning, interest rates relative to inflation rates. Real rates are near their most deeply negative levels ever, thanks to the recent inflation spike. And real rates can remain negative throughout a Fed tapering and hiking campaign.
ANSWER: We encourage folks to focus on the lower premium items so virtually all their investment goes into acquiring the metal itself.
Most importantly, that means avoiding so-called “rare,” graded, or proof coins which generally carry high premiums, unrecoverable upon a later sale.
You will almost certainly be better off if you stick with bullion coins, bars, and rounds where the cost is mostly determined by the spot price. Within that group, bars and rounds almost always offer the best value.
ANSWER: Shortages are a symptom of central planning gone awry.
In a properly functioning market economy, price signals cause supply to respond quickly to fluctuations in demand. Those crucial price signals have been distorted by massive interventions into the economy by the government and Federal Reserve.
The Fed is artificially suppressing interest rates. That has the effect of artificially stimulating asset market speculation as well as consumer demand – and exacerbating inflation.
If investor psychology shifts toward inflation protection and hunkering down financially, the physical bullion market could see demand overwhelm supply.
Shortages of retail gold and silver products would mean premium spikes and possibly a surge in spot prices as well.
Over the past couple years, the dysfunctional U.S. Mint – a government bureaucracy – has consistently failed to produce adequate quantities of its gold and silver American Eagle coins. Demand continues to strain available inventories, making privately minted bars and rounds a better value than ever.
The good news is that those who hold hard-to-get precious metals will be in the driver’s seat. They can choose to sell whenever they believe prices, including potential buyback premiums over spot, are high enough.
If government-induced inflation and supply disruptions continue to get worse, chances are today’s bullion prices will look low compared to where they’re headed.
