Will gold climb with tapering?

In yesterday’s Social Gold Mine we featured a couple of tweets regarding India’s ongoing currency wars; the rupee vs. gold. Despite the rupee sitting at an all-time low against the dollar, for the time being it is officially winning the war. Thanks to the weak currency the price of gold bullion is at a record high and August’s gold imports fell by 90% from the previous year.

Now that tensions over Syria appear to have calmed, gold appears almost entirely focused on the FOMC meetingnext week and the subsequent decision. Consensus remains that the Sept. 17-18 meeting will result in an announcement that the Fed will reduce the $85billion monthly purchases by around $10-$15 billion.

Goldman Sachs, not really known for their record gold price predictions, said this morning that gold’s drop will extend into 2014 when the Fed tapers asset purchases. The bank’s economists expect tapering to be the catalyst to push gold lower, “gold prices will decline into 2014 on the back of an acceleration in U.S. activity and a less accommodative monetary-policy stance.”

Goldman Sachs joins a host of other major institutions including SocGen, Citigroup and ABN Amro all of whom have predicted lower gold prices for 2014.

BofA Merrill Lynch Global Research said yesterday that gold is likely to rise even if the Fed does embark on tapering, but only if it is less than expected.

Platinum price

The same group also mentioned platinum yesterday, which they expect to perform well in light of ‘tighter monetary policy’ and improvement in developing markets. Despite this, they have reduced their 2013 platinum price target, by 6%, to $1,575 an ounce. Predictions for 2014 and 2015 are $1,850 and $1,900 respectively.

Whilst India looks likely to lose it shine in the gold market, China is no doubt set to buy even more given their industrial output data released yesterday. August’s industrial output for the country rose by 10.4%, 0.5% higher than expected. Retail sales were up 13.4%.

COMEX default

Is Comex facing a default risk? Inventories have fallen by 36% so far this year, from 11.059 million ounces to 7.034 million. Whilst a default can never be ruled out, we draw your attention to our earlier research that shows the delivery ratios were exceptionally low at present. Having said this, as many are pointing out this does not mean that the Comex is not open to being cornered by a sovereign nation or even a group of wealthy individuals.

Gold’s Superman

Here in the West we are all aware of Warren Buffet’s views on gold. But when it comes to Asia’ own Warren Buffet, Li Ka-shing, it’s a different story.  Also known as ‘Superman’ (much cooler than the ‘Sage of Omaha’), he is the wealthiest Chinese person of descent in the world. And he is buying gold having just invested in CEF Holdings, a joint venture that will acquire gold mining companies and other gold-related assets.

Gold: When western supply meets Asian demand - Issue 3 of 5

TGR: What do patterns in the market trends tell you?

BL: This year the gold market has experienced a number of head fakes, where we thought we had a bottom, then it dropped to a lower plateau, then dropped again. I think the June 28 bottom will hold. The fundamental evidence argues for an extremely tight situation in the gold market, which will keep the prices from dropping to an even lower plateau.

A lot of evidence, from stochastics to moving averages, is delivering very strong buy signals. There is anecdotal technical evidence like the negative GOFO rate and backwardation in the near-term futures. All this added together points to higher gold prices and a more sustained rally.

Yet, in the broader market, sentiment is still not very positive for gold. We're still climbing a wall of worry in regard to sentiment, yet, for those willing to look, an increasing amount of evidence is pointing toward higher prices. This is really the perfect situation.

TGR: Your newsletter reports on a host of companies. Can you tell us about some junior plays with leverage to the gold price, starting with those that have assets in safer jurisdictions like Canada and the U.S.?

BL: Safer jurisdiction is an important point. In this market, there are so many undervalued companies out there that there is no reason to take on sovereign risk if you don't have to. As we start this rebound, it's important to look for undervalued juniors that have proven resources or are in production. You can get them at bargain level prices, and they will be the first to respond.

I expect Brigus Gold Corp. (BRD:NYSE.MKT; BRD:TSX) to surprise a lot of people. The company spent a lot of money to upgrade its facilities and prepare for a higher production rate. Its capital expenses will therefore drop considerably going forward, while it benefits from the higher production rate.

TGR: Brigus just recently increased its guidance by 5,000 ounces (5 Koz) through the end of 2013.

BL: And the exploration potential in the Grey Fox deposit gives it a good growth profile.

TGR: Brigus' new estimate for Grey Fox, issued in July, is up to 736 Koz. How big could Grey Fox get?

BL: It's hard to tell, but grade is just as important as size. Its grades are so exceptional that, if Brigus were a junior, it would be the exploration story of the year. The widths are good, too. Grey Fox should generate fairly high-margin production given the richness of the mineralization. It will be significant to the company's growth profile because of its size, and significant to its earnings profile because of the high grades.

TGR: How about some other names?

BL: A number of exploration stories in the U.S. and Canada are undervalued. Gold Standard Ventures Corp. (GSV:TSX.V; GSV:NYSE) had great exploration success in 2011 and 2012 in Nevada, then was forgotten by the market in the downturn. It has a great geological staff. I think it has narrowed down on the trend and the mineralization. The company is selling at prediscovery price levels, which I find very attractive.

TGR: Gold Standard Ventures recently raised $5 million ($5M) to continue exploring the Railroad project in Nevada. How important was that?

BL: Its ability to raise money validated its project and its upside. Any experienced, knowledgeable hand in Nevada exploration will tell you that Gold Standard Ventures is as close to a sure thing as you can find in Nevada. It's the wise guys' play in Nevada exploration.

Comstock Metals Ltd. (CSL:TSX.V) has a project in the Yukon that could be an analogue to the Underworld Resources Inc. discovery at Golden Saddle—the discovery that sparked the new Yukon gold rush. Recent results were mixed, but did nothing to extinguish the upside potential because it has a number of targets on the project. The question is whether the grades will be high enough over the current widths to justify development in the Yukon. I think it has a really good shot at it.

Gold: When western supply meets Asian demand - Issue 2 of 5

TGR: Could you expand on why you believe China will soon be "driving the bus" for the global gold market?

BL: The Shanghai Gold Exchange (SGE), putatively a futures exchange, is actually a physical delivery mechanism for the Chinese market. Most of the gold traded on the SGE is actually delivered to end-users. As of the end of June, SGE reported nearly 1,100 tons of gold have been traded so far this year. That equates to all of the metal that had been traded on the SGE in 2012, which itself was a record year.

Put another way, at this rate of consumption, demand on the SGE this year will equal the entire newly mined global output projected for 2013. In effect, all of the new gold supply in the world is being consumed by a single exchange in a single nation.

China will soon exceed India as the largest source of gold demand in the world. There are demographic factors behind this: a deep cultural affinity for gold, a growing population and a rapidly growing middle class. The per-capita use for gold in China is still relatively low but has a lot of upside. As incomes grow in China, gold demand will grow on a per-capita basis even as the population grows. The potential for growth in the demand for gold is almost exponential.

TGR: Who in China is buying gold?

BL: The assumption is that the People's Bank of China is buying gold to build up the nation's gold reserves. China also has become the world's largest gold producer, yet none of the gold it produces ever gets exported.

There is tremendous upside potential in central bank buying of gold in China, in that China holds a huge amount of U.S. dollars in its foreign currency reserves. If it were to increase its gold reserves to the average level of most developed nations, it would quickly absorb all of the available metal in the global gold market.

TGR: Would the gold price be on an even stronger upward trajectory if India hadn't taken measures to curb gold buying?

BL: Yes, Indian demand would have been much stronger if its central bank hadn't increased the tariff in phases to 10%. Just as importantly, it imposed an 80/20 rule, which requires that 20% of all of the gold imported into India must be subsequently exported as finished goods. Those rules, imposed without explanation of how to follow them, effectively shut down Indian gold imports from the end of July through the end of August.

TGR: You recently wrote "Gold has bottomed. The market is set up for a large sharp rally when and if a short covering stampede is sparked." What could those sparks be?

BL: One appears to be the situation in Syria, although we don't know how that will develop.

A more important and fundamental driver for a short-covering rally would be the flow of economic data in the U.S., where economic growth had been showing signs recently of slowing. That slowdown, if it were confirmed, would eliminate any justification for tapering off the Federal Reserve's QE program. A growing consensus that QE will be here for a while will be the driver that gets the shorts to abandon their bearish gold positions.

TGR: How does all this translate to gold equities?

BL: The majors had a fairly good rebound and were outperforming gold until the Syria situation erupted. That touched off broader equity market selloffs, and the gold stocks were victimized.

Interest is just starting to filter down to the junior resource stocks. I'm not as negative on that subsector as some of my compatriots. Greed is the most powerful motivator in the investment markets, and greed will draw investors to the juniors like iron filings to a magnet if we see a sustained upward trend in gold and silver.

Hyperinflation in America: When a Loaf of Bread is $3 Billion

Too few understand just how disruptive hyperinflation in America would be.

Truth is, it would be a nightmare.

In an episode of hyperinflation, money loses value so rapidly that people spend it as quickly as possible, which only feeds the cycle of pushing prices higher and higher at a faster and faster rate.

Imagine prices at the food store and gas pump not just going up a few cents at a time, but doubling in a matter of months, weeks, or even days.

And now some economists and market experts think many of the ingredients for hyperinflation are brewing in America.

Why the U.S. Dollar is Rising – And Why It's Still Doomed

Many have wondered - and rightly so - why the U.S. dollar is rising even though the U.S.Federal Reserve has done just about everything possible to debase the currency over the past five years.

Over the past two years, the U.S. Dollar index, which measures the dollar against a basket of major world currencies, is up by more than 12.6%.

Part of the answer is that most of the world's other central banks have pursued easy money policies similar to the Fed's. In the so-called "currency wars," the U.S. dollar has one major built-in advantage.

7 Reasons to Be Bullish on Gold!

What's going on with gold prices?

With the price of the yellow metal near two-year lows through much of 2013, some investors wonder whether the price decline will continue.

Is this a bear market for gold or will it rebound?

A new report from analysts at Incrementum AG in Liechtenstein says there are good reasons to be bullish on gold, which was trading Wednesday at about $1,252 an ounce.

In fact, the report, titled "In Gold We Trust 2013," set a 12-month target for gold prices at $1,480 and a long-range target at $2,230.

"Even though the consensus is convinced that the gold bull market has ended, we remain firmly of the opinion that the fundamental argument in favor of gold remains intact," the 53-page report stated.

The report said there are no precedents for the current climate of central bank intervention and noted there have been more than 500 interest rate cuts worldwide since 2008.

That makes the need for gold as "monetary insurance" that much more important and will, in turn, push gold prices upward.

"Never before have such enormous monetary policy experiments taken place on a global basis," the report said. "If ever there was a need for monetary insurance, it is today."

The report spells out seven reasons to be bullish on gold:

Calaveras Coin Inventory One of The Largest In Northern California

Our inventory, one of the larger to be found anywhere, spans the collecting spectrum from collectible circulated cents to mint state U.S. gold coins.

   We also have hundreds and hundreds of PCGS and NGC certified coins with new treasures arriving daily. A nationally recognized dealer of all US gold, silver, nickel and copper coinage, great collections have been conceived and or completed by Calaveras Coins.  It's our goal to make your numismatic experience a most enjoyable one.

Stocked With All Supplies Needed For Coin Collecting

    If you have coins to sell bring them in for a free evaluation. Don't wait, Calaveras Coin & Pawn pays cash on the spot for your coins. Coins must be seen in person in order for us to provide a cash offer (condition is everything.) We also offer official appraisals for a modest fee. Visit our store for details.

Is Now The Time To Buy Gold & Silver?

Wondering if now's the time to buy gold and silver? Wonder no more. Let me explain.

As a collector of both precious metals, like many, I planned on loading up in the wake of recent price declines. But guess what? Calaveras Coin & Pawn like many other dealers had sold out.

Thanks to the selloff, a buying frenzy for bullion has crashed websites, jammed phone lines and depleted inventory.

"Our website was overloaded for the first time ever Friday and Monday. Every phone line was lit up. We have been doing large volume," Scott May, Precious Metals Sales Manager.

You see, with gold on track to log its fourth weekly decline and silver headed for the worst week in about 19 months, bargain hunting abounded.

As recently as last year, investors like me were paying more than $1,700 per ounce for gold and $35 per ounce for silver.

Bargain Hunting: Gold and Silver Coins

Amid the biggest gold and silver price declines since 1980, physical bullion sales are surging.

In April, the U.S. Mint has sold 153,000 ounces of American Eagle gold coins, more than double March's tally and up sevenfold from a year ago.

Over the first six business days in April, the Mint sold 1.645 million ounces of silver, taking the 2013 total to a whopping 15.868 million ounces. With demand for Silver Eagles so robust, the Mint rationed sales to primary dealers. May called the situation "a perfect storm" for frenzied buying. 

Sales also spiked in China, India and Australia. In Switzerland, "physical demand is extraordinary," Bernard Sin, head of currency and metal trading at bullion refiner MKS SA in Geneva, told Bloomberg.

If you want to get in on the bargain hunting for the precious metals, Money Morning Capital Wave Strategist Shah Gilani says your timing could hardly be better.

"I think this is a bottom, and the way I trade, I love it at these levels," said Gilani. "this 20% fall is a signal for me to jump in with both feet! Any further than that, and I'd be concerned, but this is basically a half-off sale."

Scott May, senior Manager of Precious Metals for Calaveras Coin & Pawn, an Angel Camp, California, firm where customers buy, sell, store and take delivery of precious metals, shared that the selloff and declines in gold and silver prices came as a result of technical moves such as stops and margin calls.

"But the physical market is different and demand here remains strong," May said. "Product has become non-existent. There are four-to five-week delays and premiums are going up. There's simply not enough supply to fill demand."

Vigorous physical demand isn't reflected in spot prices, May explained. The good news however is that Calaveras Coin & Pawn has stock piled a collection of gold and silver and is ready for local public demand. So either call at (209)736-COIN or stop buy M-S 10am to 5pm (Closed Sundays) to discuss your precious metals needs.

Coin Room Expands to the Coin Vault - Angels Camp

 After the recent move to the new location Calaveras Coin and Collectibles changed its name to Calaveras Coin & Pawn and expanded its retail space for both venues.  With huge displays and a dedicated coin room aptly nicknamed the "Coin Vault" we have a large inventory than ever of rarely seen coins.

Case Packed With Recently Released Items From The Vaults

"Coin Vault" Coins, Bullion, Bars, Round & Nuggets Open For Business

  Larger Coin Collection Than Ever Before!

 We buy, sell and trade coins every day.  Whether you are a novice collector or a pro we have something for everyone.  Looking for a gift, need supplies, missing that certain coin from your collection?  Visit Calaveras Coin & Pawn today!  We also deal in junk silver (for calamity mentality when the (fiat) US dollar falls apart.  We buy and sell precious metals including American Gold and Silver Eagles, Gold Buffalos, Maple Leafs, Krugerrands and many more.  We can help you with your investment portfolio.  We have bars, bullion, rounds... you name it.  Just remember "The only just currency is a tangible one!"

Precious Metals Manager Scot May mans the "Coin Vault."

  

Why Should You Buy Gold? (Must See Pic!)

• Money Is Worth So Much Less Today Then In The Past!
• Nearly and Endless Supply of Paper No Value. 
• Gold has a value because of its rarity and the effort needed to discover and refine it to a pure form.
• Gold is a currency that has been used for thousands of years.
• No paper currency has survived more than a couple hundred years.

What's Happening to the U.S. Dollar? (VIDEO)

Delivery of Gold and Silver - How? When?

Finally, when buying silver or gold coins, you should always take physical delivery.  Do not let third parties hold your precious metals on a permanent basis. Your property is best held by you.  Be sure you know and understand exactly what you are buying, and you will do just fine.  Calaveras Coin & Pawn encourages you to stop in for a no cost, no obligation chat to talk about your needs and hopefully your gold or silver purchase.

Numismatic Gold Coin, Bars or Bullion

Bullion Coins and Bars

Individuals can select from a broad array of gold bullion coins issued by governments around the globe. Examples are the Gold American Buffalo, the Gold American Eagle, the Canadian Gold Maple Leaf, the Austrian Philharmonic, the South African Krugerrand and several others.

The current market value of a bullion coin is determined by the value of its gold content, plus a premium that varies between coins, dealers and market conditions. These bullion coins are most commonly available in 1/20, 1/10, 1/4, 1/2 and 1 ounce sizes. One should be aware that the premium tends to be higher for smaller sizes.

Gold bars are also available in a wide assortment of weights and sizes, ranging from as small as one gram to 400 troy ounces (the size of the internationally traded London Good Delivery bar). For individuals looking to take physical delivery of their gold, the 400-ounce bars lack the convenience, portability and practicality of coins and smaller bars. Gold bars are manufactured by literally dozens of internationally recognized refiners around the world.

Rare Gold Coins: The Best Way to Own Gold

Rare gold coins are considered by many to be the best way to own gold because they offer many important advantages in addition to the intrinsic value of gold, here are the three most popular:

1. Rare gold coins offer the advantage of increased profit potential over gold bullion coins and bars due to their quality and scarcity (numismatic/collectors value). Whereas literally millions of new gold bullion coins and bars are minted and manufactured each year, no one is making any new rare coins! The most common rare gold coins have surviving populations in the thousands, as opposed to the tens of millions of gold bullion coins which exist on the market.
2. Rare gold coins also offer enhanced protection against government restrictions on private gold ownership. In 1933, the President put forth an executive order to confiscate privately owned gold and outlaw the private ownership of gold. However, the order specifically exempts numismatic rare coins from confiscation.
3. Many who value their privacy also acquire US rare coins due to their status as a collectable that results in a completely private transaction.
4. Free Investment Guides with more details are available at our store located at 1283 S Main St. in downtown Angels Camp, CA 95222

Value of The Dollar Today?

Question: What Is the Value of a Dollar Today?

Answer: The value of the dollar today is less than it was in the past. When the dollar loses value, that's called inflation. That's because prices seem inflated as each dollar is able to buy less and less.

How much lower is today's dollar value? Well, in 1913 you could buy as much with a dollar as you can with $23.19 in 2012, nearly 100 years later. By 1920, the dollar was worth only half, or $11.48 in today's value. Deflation (the opposite of inflation) duringthe Great Depression of 1929 increased the value of the dollar to $13.43. By 1940, the dollar was worth even more -- it could buy as much as $16.40 could today.

By 1950, the dollar's value had dropped even lower than before the Depression. It was worth only $9.53. It has fallen ever since:

• 1960 = $7.76
• 1970 = $5.92
• 1980 = $2.79
• 1990 = $1.76
• 2000 = $1.33
• 2010 - $1.05.

   Is it any wonder that people are turning to gold and trusting local businesses for their gold purchases like Calaveras Coin & Pawn.  Family owned and locally run and operated for the past 25 years.  Located in downtown Angels Camp.

Gold or Silver Exchange Traded Funds (ETF)

What about gold or silver Exchange Traded Funds (ETF)?  Are ETF’s as good as physical gold or silver? ETF’s are not just as good as physical gold or silver.  There have been questions about how much precious metals they actually hold.  Nothing is as safe as holding the physical metal in your possession.  If you are going to buy gold and silver mining stocks, you must do your homework.  You must also constantly keep track of the mining company.  Again, nothing is as good as physical gold or silver.

What is Junk Silver & Why Buy It?

Then, there is “Junk” silver.  “Junk” silver is any U.S. dime, quarter or half-dollar minted on or before 1964.   1964 and earlier  dimes, quarters and half-dollars had 90% silver content.  “Junk” is sold by face value of the coin.

The most popular way to buy “Junk” silver is a 55 pound bag.  A 55 pound bag is $1,000 in face value of the coins, but that also equals 715 ounces of silver.  So, for example, a bag of dimes may have a face value of $1,000, but you pay the same as you would if you paid for 715 ounces of silver.  You always pay the spot price of silver plus a premium.  The advantage of buying “Junk” silver is you pay less premium per ounce than a 1 ounce silver coin, but you still have coins.

It is the cheapest way to buy quality silver coins officially minted by the government.

You can also buy “Junk” silver in much smaller increments.  Just remember that $1.50 in change equals about an ounce.  So, 15 dimes of “Junk” silver is an ounce and so on.  This way, you can always figure out how much you are paying per ounce when you buy “Junk” silver.  The most desirable “Junk” from best to least are half-dollars, quarters and dimes.  There are a few later years of coins after 1964 (mostly Kennedy half-dollars)  that had 40% silver, but those are extremely bulky and are the least desirable “Junk” silver coins.

Calaveras Coin & Pawn Offers Amazing Services!

COINS

We have original U.S. 19th and 20th century coins from common to key that are bought and sold everyday. Confidential, honest and extremely knowledgeable, our extensive experience and excellent friendly service makes us a “must” for those who love coins as much as we do.

PAWN

Financially Strained? Need a small or maybe big loan? Cash loans on your items of value!Fast, easy, secure and discreet. We assist you by providing the maximum loan possible for your item to help meet your short-term cash needs.

JEWELRY
We carry the exact jewelry many of the high end jewelry stores do minus the 900% markup. We believe you should never pay high retail prices for jewelry again. We have estate, new, designer and pre-owned jewelry including rings, necklaces, bracelets, earrings, charms and more.

ONLINE STORE
Come see our inventory. We have specials every month. Our goal is to offer the best price so you can buy what you want. Fine Jewelry, Pre-Owned Watches, Fine Art, Antiques Collector Items, Movies & Games, Electronics, Musical Instruments, Tools and Sporting Goods.

Sheets of Money On Sale This Week!

The United States Bureau of Engraving and Printing sells uncut sheets of $1, 2, 5, 10, 20, and $50 bills. These are available to you locally at Calaveras Coin & Pawn.

Buy Your Special Gift Now - Real Currency!

Since the uncut sheets sell for a premium over face value, cutting them up and spending them is legal but rather foolish.  Thats why we recommend using them as wallpaper!  Some people collect money, others decorate with it!

Why You Should Own Gold and Silver

First off, why should you own precious metals?  Read this:

“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the “hidden” confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”