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Posts Tagged ‘Gold Bullion Value’

The Gold Bullion at the End of the Irish Rainbow

Thursday, March 22nd, 2012

While several optimistic economic reports have bolstered US markets for the past few weeks, there are signs of fraying at the edges in the recovery. Ireland, one of the first countries to contract in the EU and one of the first to be forcefully bailed out, as a mechanism to restart growth, is now showing signs of what is being called a “re-contraction.” The Irish economy is contracting again, despite all the measures taken to boost it up.

This is important news while the price of gold bullion is correcting in the US markets and some economists are even erroneously wondering if there is the beginning of a bear market. If you need clear indications to see that the price of gold bullion will resume its upward bull market trend immediately following the current correction, then the Irish contraction is the best for you to look at.

While we see and hear news coming out of Greece and Germany regarding the lagging lack of economy and bailouts there, the news from Ireland has been very quiet for some time and many market-watchers, workers, and investors may have forgotten that there are trouble points in other European Union countries besides Germany.

For many US investors, there has been fair sailing for about four weeks now, with stocks in the financial sector at eight-month highs. This is partially why the current correction in gold bullion has been so under-reported and so protracted at 13 percent off recent highs. However, the fundamentals of an optimistic market are lacking if you simply look at the news on the horizon. The European Union is not all better and will begin producing negative sentiment in American markets again. It’s a matter of time.

If you consider objectively where the biggest growth in any market has been, you have to acknowledge precious metals, specifically gold, as one of the top performers. Whether Ben Bernanke’s Federal Reserve intended to benefit the gold market with its market stimulus is beside the point. That has been the effect. There is no recovery in housing, but there has been a surge in gold.

The so-called “safe-haven buying” that may have been lacking in recent weeks will resume again the gold market and gold bullion will again be valued more highly as a fundamentally sound investment in a beleaguered market.

Not Even Central Banks Could Cover-Up Gold Bullion

Monday, March 5th, 2012

A true upholder of gold bullion is one who sits back and waits because he understands that the time will come…

What comes around, goes around. My, oh my, how the tables have been turned on central bankers. Their latest scheme on capitalism is simply not working as they presumed it would. Their astonishing, yet distorted at times, three century execution with supremacy and prosperity was finally brought to an end by the economic crisis of the last few years. The manner by which they preyed upon others in an attempt to enhance their wealth is at its final stage because those accountable can no longer reimburse what they are bound to. No one can change the hard reality that the ones under the obligation have no money and, consequently, their creditors will soon follow in destitution.

The allowances that were conceded to central bankers created monsters who cultivated credit and debt gambled on a leveraged basis of paper money partially sustained by gold which then permitted the West to amass political power and wealth to a cosmic degree across all continents. But, alas, it culminated with the US dollar’s loss of its vital link to gold in 1971 when the toll of preserving a say in all military goings on across the world became more important than the ability of the United States to settle in gold what it was indebted for. Just by looking at the frail condition of the euro we are almost certain that the end is very near. Remember that the euro was initiated in an unsuccessful European effort to contend with the US dollar which was ever more tremulous.

It took only 9 years for gold to catapult from $35 per ounce to $850 subsequent to the US discontinuing the gold convertibility of the US dollar in 1971. This increment of approximately 2,500% in value overshadowed a much smaller rise of 1,400% of the Dow from 777 in 1983 to 11,722 in January 2000. Bankers began getting edgy with the intensifying gold price and were determined to put the lid on it. They saw the truth about their fiat paper money, a truth they could not bear anyone else to recognize.

So began a journey of 40 years to desperately try and cover up the precious metal’s influence on their worthless paper. But not the way one would think. They were too sneaky for that. Their efforts were not really in shrouding real market demand and the gold price, but rather in a more deceptive and fraudulent manner. They overcame gold’s true price by furnishing markets with gold bullion owned by the nations they allegedly worked so hard for. Then came Frank AJ Veneroso who, with his intellectual mindset, uncovered a very important piece of the puzzle. Since the beginning of the 1980s, the majority of gold marketed consisted of central bank gold sales and loans. Veneroso‘s conjecture is that in 1990, 21.5% of gold sold that year surfaced from central bank vaults. The sales had expanded to over 1/3 (34.6%) of all gold sold by 2000.

This is why between 1980 and 2001 the price of gold went down. There were thousands of tons of central bank gold entering the market. Interestingly, the price of gold started going up in 2001 despite all the gold that was fraudulently dumped. The story doesn’t end here, it merely begins. The point is that gold bullion will stand tall in the face of these monsters. Go long.

Once Again It Is Gold Bullion That Everyone Runs To…Including Central Banks

Friday, February 10th, 2012

The unique characteristics that gold bullion is blessed with are precisely what everyone is after. Everyday it is being referred to within the economic as well as global scene. The gold price is something that everyone wants to know at all times. That price depends upon developments in the impact of supply and demand as is the case in most commodities. Despite this, gold is peculiar because gold production is relatively constant and improbable to alter much in the near future and because the supply and demand is especially liquid at times it is very susceptible and subject to speedy revisions. Typically, the demand for gold comes from investors and buyers of gold jewelry. Investors normally want gold as a store of value when economic stress is at its highest. Central banks are also holders of gold bullion.

The obligations and commitments of central banks are not as translucent as we would like. We know they were created to administer a nation’s currency which is accomplished by manipulating the money reserve within their country which, in turn, will weigh upon interest rates. The gold standard is no longer in effect, but they can distort reality as they wish like when they apply quantitative easing to the economy. We believe one thing when in reality something else is occurring. They keep their gold stocks as a sort of security and favor exchanging currencies with other nations. They produce their own money…literally, and utilize it as a safeguard option. Against what? They know…but prefer to hush the truth. There are many actions central banks could take with their gold reserves.

The control that central banks exert over monetary policy influences the price of gold. I mean, we know that gold does not pay interest or dividend. If they perform unconstrained monetary policy, the consequence will be economic growth even though inflation anxieties may rise, whereas rigid monetary policy can make economic growth sluggish. It is supposed then that the feat taken by central banks can stimulate investors towards or away from gold speculation, provoking prices to go up or down. It is because of this that gold is still regarded as a currency in many alliances which is why several analysts advocate that gold may just be the most vital currency we will ever have.

Amongst the top keepers of gold deposits in the world are Ben Bernanke and the Federal Reserve and the European Central Bank (ECB) which works beside the International Monetary Fund (IMF) minding the catastrophic European debt problems. The Deutsche Bundesbank (DB), Germany’s central bank is recognized as the most important and powerful member of the European System of Central Banks, along with France, Switzerland, and Italy. In total, central banks hold a supply of reserves in excess of 30,000 metric tons of the gold on the planet, or about 20-25% of above ground gold stock. All this signifies that when they make a move with their gold, they affect the gold market around the world.

Of all of these, the IMF has been the only noteworthy gold seller in the past ten years. Back in 2009-2010 the IMF did sell some of its stock. As reported by their website, they let go a total of a little over 400 metric tons, and that supply was managed conscientiously to steer clear of precipitating breakdowns to the gold market’s operation. Nobody was shocked when the Reserve Bank of India purchased over half of the total amount of that sale. Quite a number of Asian central banks have conveyed comparable desires to be in the disposition of augmenting their gold stockpiles. Sales by any European central banks will consequently not be expected to lower gold prices, but rather provide other central banks with the prospect of obtaining more gold for their central banks. This desire to acquire gold by Asian banks reminds us of when the United States was the net buyer in the 1930s and 1940s.

The Eurozone as a whole is on the brink of collapse due to the debt predicament of a few nations. Unfortunately, not even selling gold could help them. They hold a lot of gold but it wouldn’t make a difference in comparison to the debt amount. What they need to do is stop printing money as a means of solving their problem. Inflation should soon be out of control across the Atlantic.

Just as when the Euro was initiated and backed by gold, this would be the only way a nation removed from the Eurozone could commence the start of a new currency; they would have to back it with gold. This would mean they would have to sell some of their gold. And, we all know that a restructuring of the Eurozone is underway.

All this gold talk is occurring without the implementation of the gold standard which puts us in retrospect of the strength and importance it had (and still does) within our developed society. It’s very clear that gold bullion has preserved a vital function amid central banks. Now we must wait and see what they do with it.

My Gold Bullion Is Important To Me, Too

Wednesday, February 8th, 2012

Yeah! Gold Bullion has leaped more than 3 percent. In December, though, many investors speculated that the bull market was over after prices dropped 10 percent. Thanks to Fed Chairman Bernanke, the bulls are back! This is all due to the Federal Reserve sealing gold’s fate with interest rates that will remain at very shallow levels for another two years, at least. According to UBS, “if investors needed a (further) reason why they should be long gold now, they got it yesterday…a more accommodative policy is a very good foundation for gold to build on the next move higher.” For us, two more years of near-zero, short-term interest rates means negative real interest rates are here for quite some time, and a move like this is powerful within the gold market.

It is not only the United States which has made this critical move within the economy. Brazil has slashed its benchmark interest rate a few times and, in December, China downgraded its reserve rate for banks. As reported by ISI Group, 78 “easing moves” have been revealed world-wide in just the past five months as countries look to fuel economic movement. Money supply has been the central defense of central bankers which has produced a ton of liquidity in the global system. In December, global money supply ascended 8 percent year-over-year, or about $4 trillion (ISI). China underwent a record boost a few weeks ago in the three-month change M-2 money supply subsequent to China’s reserve rate cut. Both of these movements, negative real interest rates and growing global money supply, stimulate the Fear Trade for the precious yellow metal. The consequence for fiat money is that almost everyone under the sun turns to gold as the ultimate form of security.

Since 2007, central banks are on a buying spree since the Fed cut interest rates by 25 basis points, according to Adrian Ash from Bullionvault. This was a major change for gold. Central banks’ gold reserves have historically been much higher, averaging around 35,000 tons. They commenced ridding themselves of the precious metal in the 1990s with reserves being at their most shallow in 30 years simultaneous to when the Fed slashed rates. At this moment, though, Adrian states that gold stock is now at its highest in six years with the existing gold reserves a little less than 31,000 tons. Since 2005, Russia has been steadily adding to the country’s reserve and, in December, bought roughly 10 tons. Kazakhstan acquired 3.1 tons and Mongolia obtained 1.2 tons. UBS affirms “although reported volumes are not very large, it is still an extension of the official sector accumulation trend.”

According to Adrian, not all central banks are new buyers because the West, with all its debt, has sold gold stock, whereas emerging markets enlarged their gold reserves 25 percent by weight since 2008. If we look at reserves as a percent of all the gold mined, we note that it has also lessened, with “a far greater tonnage of gold … finding its way into private ownership,” says Adrian. The percentage of reserves since 1979 to total gold has descended much quicker as individuals increasingly regarded gold as a financial asset.

A good case in point is China’s Gold Accumulation Plan. It is a shared intention between the Industrial & Commercial Bank of China (ICBC) and the World Gold Council (WGC) which permits Chinese citizens to purchase the metal a little at a time as a way to fortify their gold holdings. According to the WGC, in September the program had created 2 million accounts during its first few months in action and the amount is expanding as we speak. A whole new class of people in China benefit from these programs, yet these account for only a small percent for the gold demand in their region which is driven by the Love Trade, which is the strong cultural affinity the East has with the precious yellow metal.

The key drivers for ascending gold prices have been increasing incomes together with government policies that support growth. The Year of the Dragon has stimulated an increase in traditional gift buying of gold dragon pendants and coins. According to the Beijing Municipal Commission of Commerce, sales of precious metals leaped nearly 50 percent from the same time in 2011. Gold bullion is obviously very important to the Chinese dragon…as it is to me.

Gold Bullion Value

Monday, December 28th, 2009

Physical gold bullion value lies in its’ liquidity and purity, as it could prove to be virtually priceless in the event of an emergency, or some malfunction in our nation’s banking system. Gold spot prices are currently hovering at just above $1100 per ounce levels, registering at $1001.90, as of around 11:15 EST, which means that gold bullion value has already begun to once again appreciate. Gold bullion’s absence of numismatic value keeps its’ prices slightly above the current gold spot price, which inversely reflects the current value of our nation’s dollar. Fewer and fewer investors have very much faith in our nation’s dollar as it stands (on borrowed, and overprinted money), and bullion items like 1-ounce, modern American Eagle bullion coins are rapidly growing in popularity.

It’s true that gold bullion value is slightly more costly for coins than for bullion bars, but coins like 22-karat American Eagles provide infinitely more aesthetic enjoyment than simplistically minted, 1-ounce, and 10-ounce bullion bars. If investors insist on buying bullion bars, it is recommended that they purchase reputable bullion bar brand names like Engelhard, Johnson Matthey, Credit Suisse, or PAMP Suisse, for purity and liquidity. Gold bullion value can also be used to protect wealth during tumultuous, long-term economic slumps, as U.S. government-approved, gold-backed IRA contributions. Rare coins aren’t permitted for IRA storage, and American Eagles are the only acceptable 22-karat bullion coins. Government-approved items like the aforementioned bullion bars can also be used, as well as 24-karat bullion coins like American Buffalos, Chinese Pandas, Austrian Philharmonics, Canadian Maple Leafs, and Australian Kangaroos, Koalas, and Lunar coins. Investors are encouraged to complete their research, and then to contact one of our friendly specialists, who offer institutional discounts on 22, and 24-karat bullion bars and coins to household investors like you.

Danny Burns

Gold Bullion Value

Friday, August 14th, 2009

Today, household bullion investors have the option of purchasing gold bullion in any of its’ three forms. The most modern form that gold bullion can take is the electronic form, which is known as ETF’s, or Exchange Traded Funds. These are bullion shares that can be purchased on the Internet, and are represented by certificates that the investors hold, rather than the bullion itself. Traditional investors view ETF’s as speculative, as well as impractical, since there’s no guarantee that investors will be able to use their gold bullion value in the event of a systematic crisis. What’s more, ETF gold bullion value depreciates by a small percentage each year, as a little bullion is sold off annually, to cover “management and storage costs”.

Traditional investors prefer the financial independence that physical ownership of their bullion provides, because in a circumstance like the aforementioned breakdown, or some other financial emergency, gold bullion value could prove to be priceless. Physical bullion takes the form of bars and coins. Both forms are considerably more affordable than rare coins, because bars and coins possess no numismatic value. Because of this, bullion prices usually hover a bit above the current gold spot price. Bullion coins, although possessing no numismatic value, can sometimes appreciate their gold bullion value over time, because coins like Chinese Pandas and Australian Lunar coins are minted in limited numbers, and can become valued collectors items. Investors are encouraged to complete their research, and then to contact one of our friendly specialists, who offer bullion bars and coins below retail prices.

Danny Burns

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