Category Archives: Gold

Gold Prices Surge — Break Key Price Resistance Level

Overnight trading in Asia saw gold prices spike to a three and a half month high, mainly due to drifting expectations of when the United States would raise interest rates. Gold prices were even able to briefly break a key resistance barrier.

The price of gold rose above $1,174 at one point, breaking through August’s high watermark of $1,170 per troy ounce. Many alalysts view this as a critical test for gold prices, as traders often choose to bail out of rallies at such technical benchmarks. These price benchmarks, therefore, tend to act as a ceiling on upwards price swings. Breaking clear of such thresholds usually indicates a stronger price surge to come.

Gold Bullion Coins

Future Interest Rate Hikes in US Driving Price Surge

As a purely financial investment, gold is a non-yielding asset and benefits from low interest rates. Most of the recent demand investment demand for gold is wrapped around the notion that the Fed is unlikely to raise interest rates in the near-term. Worse than expected retail sales figures from the United States have caused the dollar to fall to a 3 1/2 week low. This sign of decreasing consumer demand, coupled with a Fed Beige Book report showing tightening labor markets in the US, is pushing the the gains in the precious metals markets.

 

Gold Prices Sink Awaiting Fed’s Decision

gold-pricesGold prices continued their weeks-long slide, with many traders awaiting the decision of the US Federal Reserve regarding a potential interest rate hike. The biggest question for traders is “does the Fed view the current labor and inflation dynamic as having met their conditions for a hike in rate?” said Erik Gebhard, a co-founder of Altavest Worldwide Trading.

The two-day policy meeting of the Fed concludes this Thursday, with most traders reluctant to make significant bets on gold before learning the result. Consequentially, trading volumes have been low this week. If interest rates are lifted, even slightly, the appeal for gold as an investment vehicle will decline, as gold does not bear interest.

Of course, for investors who are looking to purchase gold as a long-term investment, the news could be welcome, allowing them to purchase physical gold at a cheaper price.

New Bulk Discounted Bullion Products

CBMint is proud to be the industry leader in offering cheaper silver and gold bullion prices than any of our competitors. We always strive to be the best online bullion dealer, and to that end we are rewarding our customers by offering strong discounts when the buy bullion in bulk, specifically gold and silver rounds and coins. Here are the types of bulk discounts CBMint is offering:

Buying Gold Coins in Bulk

Buy Discounted Gold Coins Online from CBMintCBmint is offering both mint tubes and monster boxes of gold coins, both of which have a large discount over buying gold coins individually. Purchasing American Gold Eagles and Canadian Gold Maple Leafs is cheaper when done in bulk. Though the price of gold is, naturally, far higher than that of silver, volume investors who purchase substantial amounts of gold over the year may instead benefit from buying tubes or monster boxes of gold coins, thereby earning the volume discount that applies.

Buying Silver Coins in Bulk

Large discounts apply when buying silver coins in bulk, as well. Sovereign mints generally package silver coins in hard plastic mint tubes of 20 or 25 units — these we sell direct to our customers, at a discount. Also available are Monster Boxes of silver coins, usually containing 500 units. Commonly purchased are Monster Boxes of Silver Eagles and Silver Maple Leafs. Customers who buy Monster Boxes of silver coins from CBMint receive an even steeper discount.

Buying Silver Rounds in Bulk

Not to be left behind, private mints also usually ship their new silver rounds in mint tubes and monster boxes. Again, we apply steep discounts to bulk purchases of silver rounds, allowing investors to save a significant sum of money when buying silver rounds online in bulk. Both silver round mint tubes and monster boxes have bulk discounted pricing.

In the future, to maintain the CBMint reputation of being the best place to buy silver and gold online, we plan to negotiate further with various mints, in order to obtain more bulk pricing options. We look forward to adding even more products into our discounted categories, allowing you, our valued customers, to buy gold and silver as cheaply as possible!

 

China Backing Loans with Gold Bullion that Didn’t Exist?

#(1)CHINA-BEIJING-GOLD BAR-ANIMAL SIGN (CN)

The ongoing investigation into missing aluminum and copper stocks in the Chinese port city of Qingdao has already involved over twelve Chinese Banks, as well as such banks as HSBC, Citigroup, and Standard Bank. Recent estimations of the loans that now may be at risk exceed $2 billion, but the latest report on the missing metals has turned up something even more problematic — missing gold.

The National Audit Office in China recently found over $15 billion in fraudulent loans that were backed by physical gold stocks that simply did not exist. Banks were using fake cross-border currency swap loans that were backed by gold bullion, in order to take advantage of the spread in interest-rates outside and inside China. Liu Xu, a Beijing-based analyst for Capital Futures commented that this report is the “first official confirmation of what many people have suspected for a long time — that gold is widely used in Chinese commodity financing deals.”

The gold trade is more regulated than the trade of many other commodities, such as copper and aluminum, so the banks involved are most likely Chinese banks. The copper market already reeled with the news of the missing copper in Qingdao, so this latest news involving missing gold stocks could encourage a short-term sell-off by investors with gold assets. Additionally, this new report is likely to discourage western banks from lending against commodities in China. Due to the lack of transparency in the commodity markets in China, the effects could be large.

Chinese companies alone are estimated to have taken out over $150 billion in commodity-backed loans in the last few years. Should the available credit start to diminish, the effects on China’s economy, and on the value of the yuan could be severe. Unfortunately, we are still missing answers to many of the most important questions, including the total amount of money that was lent against Chinese commodity stocks, or how deep the investigation shall go. Due to the nature of global finance, however, the problem of China’s missing metals simply won’t go away.

An Afternoon With Dr. Ron Paul

Ron Paul at NY Metals & Minerals Conference
“Protecting liberty and protecting your financial assets are one and the same.”

We had a chance to attend the NY Metals & Minerals Investment Conference recently at the Marriott Marquis in Times Square. The esteemed Dr. Ron Paul gave a keynote to this audience of mainly investors and executives about some topics very close to his heart.

He began the talk by recalling a conversation with the Federal Reserve then-governor Ben Bernanke.

Dr. Paul: Is gold money?
Bernanke No…
Dr. Paul: Then why do central banks hold so much of it?
Bernanke … (blank stare)

Incredulous? So is Dr. Paul, it seems. This is the type of dodging he expects from a central banker. Ron Paul has long argued that we should get rid of the Fed. When Bretton Woods broke down in 1971 (effectively terminating the US dollar’s convertibility to gold), the price of gold skyrocketed shortly thereafter. Since then, there has been a relentless expansion of the money supply in the US. In fact, it’s followed an almost perfect exponential curve!

Source: Federal Reserve
Source: Federal Reserve

Furthermore, Dr. Paul believes that the Fed’s wholehearted embrace of Keynesian Economics has set us on a path of unchecked spending that lined the pockets of the legislators and companies that directly benefit from the Military-Industrial Complex, but has bankrupted our country in the process.

“Our country went bankrupt and they haven’t admitted it”

As Dr. Paul says, people continue to take our dollars, but that will end, and probably soon. The CPI shows no inflation, but that metric masks a difficult truth that nobody seems ready to face.

He is also gravely concerned with the erosion of civil liberties over the past several years. In fact, it was his #1 concern when he left congress. Dr. Paul believes that protecting liberty and protecting your financial assets are one and the same. Ron Paul pushed for an audit of Fort Knox, but was never able to get it through congress. He strongly suspects that all the gold they say is there is not. He points to a case in which the Germans asked for their gold back and didn’t get it. And even if the gold is physically there, what’s to say it hasn’t been pledged to fund the government’s historic budget deficits we saw in the wake of the 2008 financial crisis?

When wrapping up this hour-long talk, Dr. Paul left the audience with one final thought:

“You should be buying the gold and holding the gold. It’s meant to be in the hands of the people.”

Gold Starts 2014 With a Bang, Surprising Many

Gold is off to a surprisingly strong start to 2014, to the dismay of many gold bears. After the precious metal had its first losing year in more than a decade in 2013, it is up more than 9% this year as of March 25th to $1,313.50.

Gold performed exceptionally poorly in in 2013, losing 27% of its value in a single year, as investors flooded into the stock market in droves, pushing the S&P 500 Index past its all-time high. But many are betting on gold’s continued rise in 2014 as stocks are looking increasingly expensive.

Some observers have suggested that the crisis in Ukraine has prompted speculative buying of gold bullion, but data from Google Trends suggests a weak correlation. Trading volumes in gold-backed ETFs has also been steady since the beginning of the year.

The more likely scenario is that gold is returning to growth after a particularly tough year. Strong consumer demand in emerging markets may also be playing a role. Demand for gold coins and gold bars has increased by 35% and 37% in India and China, respectively in the 12 months to September 2013, according to a CBMint analysis of data produced by the World Gold Council.

Conventional wisdom suggests that gold investments tend to do best when the stock market is falling. But even as stocks continue to break records for all-time highs, gold bullion remains resilient. If you compare gold to stocks over longer periods, the illustrious metal begins to look even more attractive.

Consider the value of $1 invested in Gold Bullion and another dollar invested in the stock market, each at the end of the year 2000.

Value of $1.00 Invested in:Gold BullionS&P 500
2000$1.00$1.00
2001$1.01$0.88
2002$1.27$0.69
2003$1.52$0.89
2004$1.59$0.98
2005$1.87$1.03
2006$2.30$1.19
2007$3.04$1.25
2008$3.17$0.79
2009$3.96$1.00
2010$5.12$1.15
2011$5.58$1.17
2012$6.04$1.36
2013$4.39$1.80
2014$4.79$1.83

Source: Kitco, Yahoo! Finance

Had you held a physical gold bullion investment since 2000, $4.79 today for every dollar invested at the turn of the millenium. The same $1 invested in the S&P 500 in the year 2000 would only be worth $1.83 today, and that’s assuming you reinvested all the dividends!

In summary, gold has proven to be a winning investment while its owners have endured substantially less gut-wrenching volatility, compared to owners of stocks over the past 15 years. In addition, much of this stellar performance occurred against a backdrop of historically low inflation. If inflation were to pick up again, as many smart people believe it will, this could spark yet another long bull run for gold.