Author: Sirhc

Opinion: Gold is a foolish place to put your money right now if you check the facts

Sirhc

Gold slumps when its inflation-adjusted price is as high as it is now

Gold today is nearly as overvalued as it’s ever been over the past five decades. That’s the conclusion reached by just-released research from Campbell Harvey, a finance professor at Duke University; Claude Erb, a former commodities portfolio manager at TCW Group, and Tadas Viskanta, founder and editor of the investment blog AbnormalReturns.com.

Their research couldn’t be more timely. In the wake of gold GC00, 0.01% breaking above the $2,000 level, enthusiasm for the yellow metal has reached a fever pitch. Earlier this week, for example, MarketWatch reported that a fund manager forecasted that gold could double to to $4,000 an ounce.

Before I discuss this new research, let me emphasize that its conclusion has nothing to do with the extreme bullishness that has prevailed for several weeks now among short-term gold timers. That’s a bearish omen, as I noted three weeks ago, and gold’s price nevertheless has continued to jump ever higher into all-time high territory.

This new research focuses instead on gold’s fundamental value, in much the same way that Wall Street analysts calculate a stock’s fair value. The fundamental justification for a higher gold price that is most often mentioned is inflation. This rationale is repeated so frequently, in fact, that few of us stop to subject it to historical scrutiny. If we did, we would find that it enjoys little statistical support.

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The Origins of the Dollar’s Value

Sirhc

08/07/2020 Frank Shostak/Mises Wire/Mises Institute

Why does the dollar bill in one’s pocket have value? The value of money is established, according to some experts, because the government in power says so. For some commentators the value of money is on account of social convention. What this implies is that money has value because it is accepted. And why is it accepted? …because it is accepted! Obviously this is not a good explanation of why money has value.

The Difference between Money and Other Goods

Let us try another approach. Demand for a good arises from its perceived benefit. For instance, people demand food because of the nourishment it offers them. Likewise, people demand money not for direct use in consumption, but in order to exchange it for other goods and services. Money is not useful in itself, but because it has an exchange value—it is exchangeable in terms of other goods and services. Money is demanded, because it offers the benefit of its purchasing power, i.e., its price.

Consequently, for something to be accepted as money it must have a preexisting purchasing power, a price. So how does a thing that the government proclaims will become the medium of exchange acquire such purchasing power, a price?

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1934-S Walking Liberty Half Dollar NGC MS67

Sirhc

Tied for Highest Graded

After several years of low mintages and intermittent production, Walking Liberty half dollar production increased dramatically in 1934, and production remained stable until the series ended in 1947. Production at the three mints averaged 2.8 million coins per issue from 1916 to 1933, and 10.6 million from 1934 to 1947. That is one of the reasons that some collectors only seek the latter issues, the so-called “short set” of Walking Liberty half dollars. This one is somewhat lighter in brighter in hand, as compared to our images. The NGC population is just 9 (two of which are NGC Star-designated examples) with none higher.

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Gold Will Beat U.S. Stocks in Turbulent Market, Strategists Say

Sirhc

Gregor Stuart Hunter, Bloomberg News

A worker lifts a gold ingot from a cooling bath at the Uralelectromed Copper Refinery, operated by Ural Mining and Metallurgical Co. (UMMC), in Verkhnyaya Pyshma, Russia, on Thursday, July 30, 2020. Gold surged to a fresh record Friday fueled by a weaker dollar and low interest rates. Silver headed for its best month since 1979. Photographer: Andrey Rudakov/Bloomberg

(Bloomberg) — Gold and U.S. stocks could part ways during a fresh round of market turbulence, ending a three-month period in which their returns were almost yoked.

Renewed deterioration of the global economy and more lockdowns to prevent Covid-19 from spreading should hit equities but leave gold standing, according to Societe Generale.

“While the correlation between gold and equities has turned unambiguously positive since the March lows in risk assets, another serious bout of risk aversion could cause the performances of equities and gold to diverge,” SocGen strategists including Jitesh Kumar wrote in a note dated Aug. 4, echoing comments from other strategists.

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How China & Russia’s De-Dollarization Could Boost Record Gold Rally

Sirhc

China and Russia are ditching the U.S. dollar at a faster pace. In the process, they are fueling the record rally in gold.

  • In U.S. dollar terms, the price of gold has hit a new record high at $2,055.
  • Strategists and politicians fear that the U.S. dollar is at risk due to various macro factors.
  • Russia and China’s acceleration of the “de-dollarization” process puts more pressure on the dollar.

China and Russia are ditching the U.S. dollar at a faster rate. In the process, they are indirectly fueling the record gold rally.

Since July 1, the price of gold has increased from $1,454 to $2,055 at the most recent peak–a gain of 41.3%.

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1869 Seated Liberty Dollar NGC PR66

Sirhc

Scintillating, Silvery and Seated

Notwithstanding the reported mintage of 423,700 1869 Seated Liberty dollars for circulation and 600 proofs, the issue is especially elusive in high grade in either format, especially so in the higher Mint State grades. Apparently most of those coins were either melted at some point or exported to the Orient, which in the end amounts to virtually the same fate. The NGC population is just 11 with 5 higher. Much lighter, brighter and more appealing looking in hand.

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Gold Price Surges Over $2,000/oz For The First Time In History

Sirhc

Gold Breaks $2,000/oz and Surges to $2,042/oz – New All Time Record Nominal Highs

◆ Gold surged past the important $2,000/oz level to a new record high today due to concerns about the outlook for stocks, bonds and other assets in an increasingly vulnerable U.S. and global economy.

◆ Gold has surged to new record highs in all major currencies today including new record highs in British pounds at £1,554/oz and in euros at €1,720/oz due to concerns about the outlook both for assets and currencies such as the euro, pound and all fiat currencies.

◆ The price of gold surged over $2,042/oz, supported by the mounting virus and economic lockdown fallout and record deficit spending by governments and central bank currency creation to buy bonds and others assets in the debt laden financial system.

◆ The explosion and destruction in Beirut highlighted the risk of war in a very unstable Middle East and a scramble for safe haven assets as some 2,700 tonnes of ammonium nitrate exploded in Beirut, reducing parts of the Lebanese capital to rubble.

◆ Gold has reached new record nominal highs due to a combination of financial, economic, monetary and geopolitical risks and many analysts are forecasting further gains in the coming months with the $3,000 per ounce level being call for by many analysts including GoldCore.

◆ There are increasing concerns about the value of the dollar and other currencies due to currency creation on a scale not seen since Weimar Germany. This comes at a time when savers are not getting any yield on their bank deposits and are increasingly facing negative rates on depreciating currencies.

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PRECIOUS-Gold bursts through $2,000/oz barrier to new record

Sirhc

* Gold needs a period of consolidation -technical analysts

* Silver rises to more than 7-year high

By Eileen Soreng

Aug 5 (Reuters) – Gold soared to a record high on Wednesday as a weakening dollar, falling returns on U.S. bonds and a break above historic resistance at $2,000 an ounce added momentum to buying by investors seeking a safe store of value.

As the COVID-19 pandemic has roiled markets, gold has gained nearly 35% this year and is one of 2020’s best performing assets.

Investors fear economic stimulus unleashed in response to the pandemic will trigger inflation, devaluing other assets, and keeping bond yields historically low, which enhances the appeal of non-yielding gold.

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1869-S Liberty Double Eagle NGC MS62

Sirhc

Rare “69-S”, but not DDO Cent

The 1869-S twenty dollar is plentiful in Extremely Fine and About Uncirculated grades. However, Mint State examples are scarce through MS62 and rare any finer, most being in the MS60 to MS61 range, the finest condition collectors are likely to encounter of this issue. The NGC population is 17 with 8 higher, three of the latter being MS62+ examples.

Offered at $18,400 delivered

We do business the old fashioned way, we speak with you. Give us a call for price indications and to lock trades.

(800) 257.3253
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Private, Portable, Divisible Wealth Storage

Price is based on payment via ACH, Bank Wire Transfer or Personal Check.
Major Credit Cards Accepted, add 3.5%
Offer subject to availability.

Silver Just Had Its Best Month In 40 Years: Here Are July’s Best And Worst Performing Assets

Sirhc

by Tyler DurdenMon, 08/03/2020 – 13:22

When looking at the torrid market performance in July, Deutsche Bank’s Jim Reid notes that silver (+35%) had its best month since December 1979 while the dollar the worst for a decade. US equities had a good month in spite of rising virus caseloads due to a strong earnings season relative to expectations, especially in tech towards the end of the month. YTD Silver, Gold and the NASDAQ have been the three best performers while at the bottom of the leaderboard Brent, WTI and European Banks are all down at least 30%.

Below we present some of the key highlights from Deutsche Bank’s July 2020 performance review

While July proved to be another decent month for risk assets, it was the performance of two other assets in particular which caught the eye. The first was Silver, which had its strongest month since December 1979. The second was the weakness in the USD, which ended with the USD spot index dropping by the most in a single month since September 2010.

Indeed the impact of the latter was fully felt when looking at returns in USD terms, with 36 of the 38 assets in DB’s sample finishing with a positive total return. In local currency terms, that number dropped to a still-impressive 30 assets. As markets move into August, typically a more subdued month for volumes but perceived to be a weaker month for risk, the focus remains on the reopening of economies on the one hand and signs of rising cases in certain countries on the other.

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