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In 2016, The Tooth Fairy Index Rose By Almost 20 Percent

In 2016, the Tooth Fairy Index Rose by almost 20 Percent
Based on the “Tooth Fairy” index, inflation appears to be heating up again, which should prove positive for gold and silver. The Tooth Fairy index is a remarkably accurate inflation gauge that was originally conceived and sponsored by Delta Dental. According to the index, the average parental payment for a tooth under the pillow in 2015 was $3.91 and rose to $4.66 in 2016 for a 19.2 percent year-over-year gain. Payouts for a child’s first tooth, typically higher that the average, are also up almost 10 percent to $5.72.

The Tooth Fairy index is not a random survey of local parents. It’s actually a scientific poll that includes 1,588 parents of children ages 6-12. Conducted during the week of Jan. 24-31 each year, the resulting margin for error is just plus-minus 2.5 percent.

This poll also indicates a general rise among families of disposable income. Regionally, payments of Tooth Fairy index were highest out West at $5.96 ($6.89 for first teeth), followed by the Northeast ($5.08 and $6.31), the South at $4.57 ($4.88) and finally the Midwest $4.04 ($5.70).
Inflation is Rising Elsewhere in the Economy as Well
After lying relatively dormant for the past five years, inflation is finally returning, and that’s a good sign for gold and silver, which are historic hedges against rising inflation. In the United Kingdom, commodities fund manager James Luke of Schroeders said gold and silver, hedges against inflation, are “under-owned” since the quantitative easing – and the associated printing of money – by central banks around the world portends higher inflation in the future.

As more of the world’s population moves into the middle class and can begin to see the value […]

Russia Back Into Gold In a Big Way

After taking a breather from gold-buying in December, the Central Bank of the Russian Federation jumped back into the gold market with both feet in January.

The Russian media outlet Sputnik cited a report from Vesti.ru this week that in January Russia expanded is gold reserves by 37 tonnes, equivalent to more than one million troy ounces. That contributed to a growth of 4% in Russia’s overall foreign exchange reserves to $393.6 billion.

Russia bought no gold in December, taking a pause from an aggressive buying pace that saw the central bank acquire 31 tonnes in November and 48 tonnes in October, the largest one-month purchase since 1998.

For all of last year, Russia bought about 200 tonnes of gold (6.4 million troy ounces). The year before, the bank added 206 tonnes.

Anton Navoi, deputy head of the central bank’s department of statistics, revealed at a Thomson Reuters conference in September that gold comprises 16% of Russia’s foreign currency reserves. He said Russia has no specific target goal for the gold content of its reserves.

“The bank is buying gold because it’s advantageous. Our country is third in the world in terms of gold production, and we have the opportunity to buy it in our national currency, in contrast to other countries that don’t have such an opportunity,” Navoi explained.

The Russian bank ranks as the sixth largest holder of gold in the world and the third largest producer of gold behind China and Australia.

Central banks have been net purchases of gold ever since the 2008 financial crisis, adding more than 2,800 tonnes to their vaults. Last year, central bank purchases totaled 383.6 tonnes of gold. About 80% of that total was bought by Russia, China, and Kazakhstan.

Gold Up 9% YTD, Breaks Through $1,250 Resistance

In a shortened trading week, gold climbed smartly higher to $1,260 and better, breaking through a significant resistance level at $1,250. The yellow metal hit a headwind on Friday, slipping back below $1,260, but still gained 1.5% in euros and dollars for the week.

For the year, gold is up 9% even in the face of record-high equities and a strong US dollar. In euros, gold has done slightly better, up 9.4% for the year. In pound sterling, gold has gained 6.4%.

Irish bullion broker GoldCore commented, “Geo-political worries and political concerns in the EU continue which is leading a flight to safety bid in gold futures market and gold exchange traded funds (ETFs) and demand for safe haven gold bullion.”

GoldCore also noted the threat of currency wars and the impact on gold. “The dollar looks vulnerable due to the uncertainty about US President Donald Trump and the new U.S. administration’s policies. Overnight Trump attacked China and accused the Chinese of being ‘grand champions’ of currency manipulation. This alone is quite bullish for gold. It does not create confidence about trade relations between the world’s two biggest economies and it suggests that we may be about to embark on the next phase of the global currency wars.”

New debt crises in Greece, Italy, and Portugal could also boost safe haven demand for gold, said GoldCore.

Silver Price Predictions for 2017 from HSBC

UK giant HSBC has lowered its average annual price prediction for silver in 2017. While HSBC had expected to see silver average around $19.25 per ounce, it has lowered the bar a little to $18.75. The reduction is only a temporary measure however, and HSBC expects the price to climb to $19.25 in 2018 and rise higher in 2019, to $19.50.

HSBC also noted that a resurgence in uncertainty on the part of investors, at least when it comes to geopolitical concerns, could boost the price of silver in 2017. That has prompted the bank to predict an overall range of $16 to $21.50 for silver through the course of the next year.

These predictions put forth by HSBC are based on “solid fundamentals” according to the firm, stating that they expect supply to decrease, while demand in the industrial and jewelry markets should increase. Their predictions take into account the current strength of gold as well as the potential for a tighter Fed policy in the New Year.

HSBC is also expecting a correction in the U.S. dollar against the Euro, which should support silver prices.

By |January 4th, 2017|Uncategorized|0 Comments

Gold Coins Selling Briskly in Late 2016

Gold futures lost almost 8% in November 2016, bringing them to a 10-month low this year. A bad month for gold though generated an exceptional month for gold coins. US Mint sales of gold bullion also rose again for the fourth month in a row. Experts associate this rise with lower prices attracting bargain hunters and risk takers expecting prices to go up in 2017. American Gold Eagle coins also had their best sale figures since July 2015.

American Eagle gold coins jumped by 147,500 ounces in the month of November, showing advances of more than 27% from October figures of 116,000 ounces and just over 52% from the 97,000 ounces delivered in November of the previous year. Sales this year include 956,000 ounces, bringing the total up 19.4% higher than the 801,000 ounces sold during all months of 2015, excluding December.

American Buffalo gold coins jumped 29,500 ounces in December, up 3.5% from the 28,500 ounces moved last November. Still, sales declined just over 22% from the 38,000 ounces moved in November of 2015. Sales from January to November include 207,000 ounces, putting those 5.5% lower than the 219,000 ounces sold last year in the same period of time.

By |December 29th, 2016|Uncategorized|0 Comments

Gold May Average $1,350 in 2017 According to UBS

Gold prices may not be as high as in the past, but Swiss Bank UBS looks for gold to average just about $1,350 in 2017, noting that gold may be down, but not out.

In fact, a research report coming from Swiss Bank UBS notes that gold will be a fragile commodity in the beginning quarter of 2017. Gold might even fall to around $1,150 at this point.

A statement from UBS clarifies its position on expected gold pricing at the end of 2016 and in 2017. Given that the market is already down and positions have been adjusted accordingly, UBS believes that any further downsides to owning gold are likely to be well contained, and that buyers shouldn’t expect much further decline.

In fact, UBS believes that gold is looking like an attractive proposition for buyers at these levels because too much further weakness isn’t likely. As prices go up, buyers who get in at this point will be making considerable gains on their investment.

Just three months ago, gold was forecast at $1,300. While that might appear a bit ambitious at this point, UBS believes that gold will make its way back to that mark in the very near future. That’s why they’re saying gold may be down, but buyers shouldn’t put it down for the count yet. This thinking is mostly based on an analysis of real interest rates that take into account the yield on traditional 10-year note government bonds once inflation is removed from the equation.

UBS also believes that a scenario which shows a compression in real interest rate yields could be positive for gold buyers. If the opposite happens, UBS is still concerned that a rise in real yields could negatively impact […]

By |December 27th, 2016|Uncategorized|0 Comments

The Affordable Care Act and Its Effect on the Economy

Texas is the third-largest market for the Affordable Care Act (ACA), known informally as Obamacare. More than 1.3 million Texans are enrolled in the Affordable Care Act, a number slightly higher than a year ago.

While the rate of uninsured Texans has fallen steadily because of the ACA, dropping to 17. 1 percent in 2015 according to the Texas Tribune, our state still has the largest number of uninsured citizens. Some 4.6 million residents lack health care insurance.
Success?
Though many studies, such as The Commonwealth Fund’s recent report, have found that the Affordable Care Act has had an overall positive impact on the economy, small business owners often find themselves between a rock and a hard place.

As often happens with legislation, details that help a law work day-to-day are often left to the states, leaving business owners to struggle.
ACA Effects
Universal Coin and Bullion’s Mike Fuljenz has seen some of the effects of the ACA firsthand, noting that he knows someone who lost their cancer doctor and who was forced to switch jobs because it wasn’t covered under the Obamacare system.

The affordability of the health care offered by different insurance carriers has been questionable, too. Mandated to provide adequate insurance instead of selling substandard policies at cheaper rates, these companies are hiking rates in response to market demand and other factors.

Fuljenz’s ability to provide insurance for his employees has been affected by the ACA, explaining that costs for providing healthcare for his employees have gone up by 15-20% during each year of Obamacare. He explains that in order to absorb that cost, he has had to raise the deductibles for his employees.

Fuljenz has been a first-hand witness to how Obamacare has affected his employees along with his employees’ […]

By |December 6th, 2016|Uncategorized|0 Comments

Uplifting Experience at Mint Forum

The U.S. Mint’s Principal Deputy Director, Rhett Jeppson, invited me and over 50 public members to attend a Numismatic Forum on Oct. 13, 2016, at the Federal Reserve Bank in Philadelphia. We later toured privately the U.S. Mint, the most visited tourist attraction in Philadelphia. The purpose of the meeting was, in their words, “to gather leaders and stakeholders of the numismatic community to explore ways to stimulate and revitalize the hobby.” With the 225th anniversary of the U.S. Mint approaching next April, Mr. Jeppson saw a unique opportunity to examine and discuss the Mint’s past, present and future.

At the forum, we heard from Associate Director Jon J. Cameron on bullion and coin studies, Robert I. Goler, PhD, on his role in being the U.S. Mint curator, and Ellen Feingold, curator of the National Numismatic Collection at the Smithsonian National Museum of American History, discussing new and exciting exhibits and programs at the Smithsonian. If you are ever in Washington, D.C., I strongly encourage you to visit this illuminating exhibit, where I am honored as a major sponsor and proponent.

Along with four other numismatic associates, I was fortunate to have lunch with the director, including some valuable one-on-one time with him. Jeppson’s background in the U.S. Marine Corps is impressive, having served as a Platoon Commander, Executive Officer and Battalion Staff Officer in conflicts ranging from Operation Desert Storm in Iraq to Operation Enduring Freedom in Afghanistan. He later served as an Operations Officer responsible for exercises and operations in Southwest Asia and the Horn of Africa. After the attacks on America on Sept. 11, 2001, Jeppson was recalled to service in the U.S. Marine Corps and was later assigned as Chief of Current Operations, […]

By |November 29th, 2016|Uncategorized|0 Comments
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    A Trump Win Could Mean Much More than Chump Change in the Gold Market

A Trump Win Could Mean Much More than Chump Change in the Gold Market

Investors looking for a golden opportunity may just want to focus their sights on gold this fall. As Americans make their way into voting booths this November, gold has the potential to soar rapidly if Donald Trump wins the election.

Gold prices will likely rise steadily with a Hillary Clinton victory on November 8th as she would surely continue similar economic and fiscal policies pursued by the Obama administration. Effectively, it would be business as usual and Wall Street would be unlikely to flinch.

The latest polls show Hillary Clinton with a slight edge over Donald Trump. Most polls show her with a 2.5% lead amongst likely voters. However, her campaign has been struggling to maintain momentum and questions related to her record and background continue to weigh heavily in the minds of registered voters. It’s a heavy burden that has steadily eroded her lead over Trump in the past few months.

The presidential debates are going to go a long way towards solidifying voters’ image of both presidential candidates. Trump and Hillary are highly polarizing, and neither has the ability to energize the vast majority of independent voters who will determine the outcome of the election. If Republican “get out the vote” efforts pay off, it could lead to a November surprise simply based on the number of people they are able to get to the polls.

Unsurprisingly, recent polls have an inherent weakness. They generally ignore voters who tend to keep their opinions to themselves. In this election cycle, many voters are keeping their opinions and candidate choices close to their vests. Indeed, many are fearful of being branded as a “Reactionary Redneck” by the left, or as a “Progressive Pawn” by the right. That’s why pundits are […]

By |November 10th, 2016|Uncategorized|0 Comments
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    MARKET REPORT: BULLS ARE STILL RUNNING IN GOLD, SILVER MARKETS

MARKET REPORT: BULLS ARE STILL RUNNING IN GOLD, SILVER MARKETS

The running of the bulls in Pamplona, Spain, ended in July, but bulls in the precious metals market paid no attention to the calendar. Gold, silver and other precious metals had another strong month in July and kept climbing higher in the opening week of August.

Gold finished July at $1,350 an ounce – an increase of 27.4 percent since the beginning of the year, when the yellow metal was worth $1,060. Silver ended July at $20.34 an ounce – a stunning 47.2 percent higher than its year-opening value of $13.82. The upward trend continued unabated in the early days of August, as “dog days” turned into “bull days” for collectors and investors.

Bulls may wreak havoc in china shops, but bullishness works wonders in coin shops – especially those that handle bullion-related coins. The run-up in gold and silver has stimulated sales of all coins containing those metals – both bullion and numismatic – during 2016.

Gold coins struck at the Carson City Mint have been particularly active, with strong demand for those in grades of Extremely Fine and higher. These coins capture the essence of the Wild West and benefit, as well, from consistently low mintages.

As sales and prices of collectible gold coins – especially double eagles – have surged throughout the year, we have seen premiums over melt value shrink for common-date gold type coins in lower grades

Premiums over melt value also have narrowed for common circulated Morgan and Peace dollars and bags of “junk silver”. As of Aug. 1, with silver at roughly $20 an ounce, junk silver dimes, quarters and half dollars were bringing 15 times face value.

The United States. Mint’s offering of 10,000 proof 2016-W platinum American Eagle coins proved to […]