August 15, 2017

Could a North Korean Missile Launch Send Gold Soaring Later This Year?


Gold hit a 6-week high of $1,274 last week (and silver reached $16.84) but both metals corrected on Friday when the dollar staged a surprise recovery. The proximate cause was the U.S. dollar rally after a positive jobs report came out on Friday morning. Gold traded at $1,268 at 8:30 am, right before the jobs report came out. Gold fell to $1,254 by 10:00 am before rebounding. The U.S. Dollar Index rose over 1% on Friday at the same time gold fell by 1%. The dollar has declined all year long, and there is a chance the dollar recovery will limit gold’s rise this year, but some unexpected international event could send gold soaring quickly – no matter what the dollar does – and such a moment may be brewing in North Korea.
On July 27, after the death of the 22-year-old American student Otto Warmbier due to torture by the North Korean government, the U.S. government announced a ban of all U.S. citizens traveling to North Korea, citing “mounting concerns over the serious risk of arrest and long-term detention.” That reason was a credible cover for keeping all American citizens out of harm’s way during any potential attack on the renegade North Koreans over their nuclear missile testing and capability of sending atomic bombs as far as the U.S. mainland. Earlier this year, President Trump thought he had gained some cooperation from the Chinese in limiting trade with North Korea and solving the problem locally, but China has since increased its trade with North Korea, a country whose only bordering nations are China and South Korea.
The U.S. travel ban will come into effect August 26. It was published in the Federal Register July 27 with a 30-day lead time. But right after the U.S. recalled U.S. tourists, North Korean dictator Kim Jong Un launched another ICBM test in a way which seemed to virtually dare the U.S. to intervene to stop them from further nuclear missile testing. Since China has shown no interest in disciplining its neighbor, a prudent U.S. military response would be either a military blockade of sea-born trade, or a pre-emptive strike. Such a move could send gold sharply higher, even if the U.S. dollar rallies as a “safe haven.” Sharply higher gold prices have been the primary reason for past rare coin bull markets where prices rise 100% to 1000% in only a few years. When gold rises sharply new customers contact coin dealers in droves and many new customers eventually end up buying rare coins.

July 25, 2017

The Art Behind the Liberty Head $10.00 of 1838

While other denominations of gold coins were struck with minimal breaks in production, the ten dollar gold piece was deemed not necessary or convenient for 34 years between 1804 and 1838. Its relevancy to the channels of commerce was revived by two mint provisions of the mint act that was passed in January 1837. The first changed the legal fineness of all gold coins from the awkward standard of .9167 gold and .0833 copper to .900 gold and .100 copper. The second section of the mint act (actually Section 10) provided a reduction in the weight of these coins: ‘ … the weight of the eagle shall be two hundred and fifty eight grains …’ The previous weight for ten dollar gold pieces had been 270 grains. This 12-grain reduction was enough to make it unprofitable to melt U.S. gold coins, thus ensuring these pieces would actually circulate.Benjamin_west_omnia_vincit_amor_1809.jpg

Christian Gobrecht was Assistant Engraver at the mint at that time. It fell to him to redesign the new gold coins, and his designs from 1838 were minimally altered until major changes occurred in 1907 and 1908. Gobrecht apparently copied the head of Venus in Benjamin West’s painting Omnia Vincit Amor. According to Breen, he slightly changed the headdress ‘but with the same triple-beaded cord on her bun, and the same coronet (here inscribed LIBERTY).’ Only 7,200 business strikes were produced in 1838 (plus four proofs), and high grade survivors are rarely encountered.


June 12, 2017

Bullion Rise Outpaces Coin Prices

Gold is up. Silver is up. I don’t think it comes as any surprise, but common date, common condition silver and gold coins continue to follow the spot prices of their respective metals higher.


Scarce to rare coins continue with what I would term a mixed market. The market for more desirable material is mixed in that while some coins have declined in value recently, there are some coins that have appreciated noticeably. The challenge is to determine which have the upside potential since no pattern is emerging.

Coins are a hobby, but they are also an emotional commodity and they are acting accordingly.

Gold hit a seven-week high as this is being written. Silver continues to resist the $18 per ounce level, but remained stronger than it has been since late April.

The performance of gold and silver continues to be tied tightly to the market for common date, common condition 20th century silver circulation strike coins.

Proof and mint sets are flat line. Commemoratives, be they the classic series or the modern issues, are likewise remaining horizontal in value.

Interest in half cents and large cents as well as small cents remains strong, but only the scarcest of the scarce are appreciating. I know I’m repeating myself, but I interpret the current coin market as a buying opportunity. If you are a collector with a reasonable time horizon, there are opportunities presenting themselves that probably will not come again for many years.

Prices of desirable coins tend to rise with collector incomes, but these movements come in fits and starts. Act to buy now before the next leg higher.

June 8, 2017

Collectors get Buying Opportunity


If you are an investor, right now you might feel like you should run for the hills. If you are a collector, you should be preparing to buy. The price of gold and silver continue to sink, taking the value of all but the scarce to rare coins with it.
Gold is way below the $1,300 per ounce benchmark, while silver is threatening to go below $16. The scarce to rare coins appear to be trading horizontally for the most part. However, there are dips in values appearing without any particular pattern for specific dates as well. To sum up this current activity, this is a serious buying opportunity! As with any buying opportunity, the challenge is to find the coins. Many sources that normally might be selling will become more hesitant at the increasingly depressed prices.
There is an old saying that you should buy low and sell high. You’d think that would prompt people to buy now. Instead I am receiving reports of selling that is exceeding demand. One seller, as an example, recently dumped six Julia Tyler First Spouse $10 half-ounce gold coins each grading Professional Coin Grading Service MS-70. The sudden increase in supply caused a price decline.
If you seek top-of-the-line condition or date and mintmark rarity, expect to still pay premium prices for these premium value coins, but otherwise as a collector, the best thing to say is: “Have at it.”

April 3, 2017

A US silver dollar from 1804 sold for $3.3 million at auction

(Reuters) – An 1804 U.S. silver dollar sold for $3.3 million in one of a series of auctions that brought in a record total of more than $100 million for a renowned private coin collection, organizers said on Saturday.

The silver dollar, one of only eight of its kind, was snapped up at auction on Friday in Baltimore. It was one of more than 200 coins sold at the event.


The auction series, beginning in 2015, generated a total of nearly $107 million in sales, according to Stack’s Bowers Galleries, which conducted the auctions along with Sotheby’s.

The collection belonged to Dallas real estate developer Mack Pogue and his son Brent, who had collected coins since the 1970s. Coin dealers Kevin Lipton of California and John Albanese of New Jersey jointly bought the prized silver dollar, Donn Pearlman, a spokesman for the two men, said in an email.

“In coins, everybody’s heard of the 1804 dollar, it’s what I call the ultimate trophy coin,” said Q. David Bowers, co-founder of Stack’s Bowers Galleries.

The coin is emblazoned with the bust of a woman with flowing hair who represents liberty. Minted by the U.S. government, it was intended as a gift for foreign heads of state.

Brent Pogue began collecting coins in 1974 when he was a teenager and later brought his father into the enterprise.

The first coin the younger Pogue bought was at an auction of the trove that belonged to railroad scion T. Harrison Garrett. In a fitting finale of the Pogue Collection auctions, the last sale was held at the Garrett family’s former mansion at Johns Hopkins University, Bowers said by phone.

Mack and Brent Pogue’s collection consisted of more than 650 pieces. The father and son sold them because “the thrill of the chase” of being collectors had passed and they wanted to move on, Bowers said.

Even before Friday’s sale, the Pogue auctions had already surpassed the value of what had been the record-setting sale of the collection amassed by late dealer and collector John J. Ford.

(Reporting by Alex Dobuzinskis in Los Angeles; Editing by Tom Brown)

Read the original article on Reuters. Copyright 2017. Follow Reuters.

February 23, 2017

The Best Time to Buy Gold and Silver in 2017 is…

Can’t decide if you should buy gold now or wait?

We all want the best price we can get on our gold and silver purchases. It’s only natural, and any good consumer will consider the timing of their buying decisions. It’s a question almost every investor asks: am I getting a good price now, or will I get a better price in the future?
Well, history has an empirical answer for you.

I looked at the historical data to see if I could identify the best time of year to buy. I suspected January would be best, but what I found was interesting.

We calculated the average gain and loss for every day of the year since 1975 (when it was legal to buy gold again in the US) and put it in a chart. Here’s what it looks like.
You can see that on average, there’s a nice surge the first couple months of the year. The price then cools down through the spring and summer, and takes off again in the fall.goldchart1

So, the lowest price of the year—and thus the best time to buy—is the second week of January. It’s also good in mid-March and early April. The second week of July is probably the “last train out” before gold takes off in fall.

What’s also interesting is that the gold price, on average, does not historically revisit its prior year low. The low of the year is indeed in January—but it’s the low of that year, not the prior year.

So your best bet is to buy gold at these low points during the year, and also to not wait for the following year.

Obviously there were years where the gold price did fall. But there were also years it soared. Smoothing out all those surges and corrections and manias and selloffs, investors are, on average, better off buying the prior year than waiting for a downturn the following year. Prices are indeed seasonally weaker in the summer, but they still don’t touch the prior year’s price. Meaning, you are likely to pay more even then than during an upswing in the current year.

The conclusion is simple:

• On average, you’ll likely get the best price on gold in early January, mid-March, early April, and early July. You’ll also want to buy this year and not wait for next year.

We ran the same data for silver and here’s what we found.
It’s easy to see silver’s higher volatility. And that its annual low is clearly in early January. About the only other good time to buy, on average, is when it dips in June, though you’ll likely pay a higher price then than January.

What also sticks out is that historically, silver doesn’t come close to touching the prior year’s price.silver-chart2

As with gold, there were certainly years where the silver price fell below where it started. But the historical data says that on average, it rises more often in the following year than it falls.

You are thus better off buying silver now than waiting for a dip the following year. If you wait, history says you will likely pay a higher price.

The conclusion here is obvious. While there are always corrections along the way…

• On average, you will likely get your best price on silver in early January, and in June. And like gold, you want to buy this year rather than waiting till next year.

Of course, any correction is a buying opportunity if you don’t have enough bullion to offset an economic or monetary crisis. In that type of environment—and one we think is inevitable—physical gold and silver are one of the few assets that will prevail.

Mike and I and everyone else at GoldSilver continue to buy our gold and silver regularly. We’re not waiting. We’ll buy more if it falls, but the point is, we’re prepared for the future now.

I hope you are, too. If not, I encourage you to buy physical gold and physical silver for you and your family on any dip. And now you know when those dips are likely to occur.

February 1, 2017

Not chump change: rare coins could outperform as investments this year


Coins typically have a higher correlation with inflation than other asset classes. Coin collecting isn’t just for nerds anymore.

With inflation expected to rise this year, and a concurrently strengthening U.S. dollar seen eating into any gains that might be made by pure gold, investors may want to consider a niche asset class as a protection against market turbulence: rare coins.

While such a strategy may seem akin to putting your money in baseball cards, coins have long been used as an investment, and one that could be particularly beneficial in the current economic climate.

“Rare coins deliver a higher annual return than gold, and they provide an excellent hedge against inflation,” said David Beahm, chief executive officer of Blanchard and Company, a rare coin and precious metal investment firm. “We believe that with President Trump and some of the policies he’s set forth, that we should see inflation, possibly double-digit inflation, in the very near future.”

Trump has proposed massive corporate tax cuts and fiscal stimulus, both of which are expected to stoke inflation this year. That could increase the appeal of gold, which has traditionally been viewed as an inflation hedge.

Invest-able coins are defined as ones minted between the late 1700s and 1933, when gold ceased to be an ingredient in their construction. Prices are determined both by their scarcity and their condition, and they’re scored on a scale of zero to 70, with Blanchard focusing on the ones graded above 50.

Between 1979 and 2014, the most recent year for which data is available, coins with a minimum score of 65 posted an average annual return of 11.9%, according to a study by Penn State University. That’s near the average annual return of 13% posted by equities SPX, -0.09% and more than twice the 5.5% average annual gain of gold bullion GCZ7, -0.27% Coins with a lower score, between 63 and 65, had an average annual return of 10.1%.

Coins posted a higher correlation with inflation than other asset classes, according to the study, with the relationship about twice as strong as for gold. The correlation between coins and inflation is 0.58 (perfect correlation would be 1.0). It’s 0.27 for gold bullion and 0.15 for stocks. The higher the correlation, the better it works as a hedge.

“The rarity factor builds on the actual value of the gold, increasing it’s value,” Beahm said.

He added that the more common rare coins, such as Morgan dollars, could be had for as little as $20, while the scarcest ones, including Brasher Doubloons, the first gold coin minted for the U.S., have sold for more than $7 million.

“There’s a wide range, so this is really for everyone,” he said.

December 14, 2016

Trump’s Election Boosted the Sales of Many High-Priced Coins


While gold bullion has declined since the November election, demand for extremely rare coins has risen. There’s a growing sense of optimism among entrepreneurs and collectors I talk with that business and income will generally improve during Trump’s presidency. This seems to be manifesting itself in a surge of high-end numismatic sales that is atypical for December. Shortly after the election, for instance, one major Texas dealer sold all eight $50 gold pieces he had in stock. A California dealer also told me there has been a resurgence in demand for coins priced at over $100,000. Perhaps this new demand is based on the fact that high-end customers believe that business will be better and high-end collectibles will soar in price.

We’re also awaiting the official Donald Trump presidential inaugural medal, expected to be available before his January 20 inauguration. The sale of official inaugural medals began in 1901 for the second inauguration of President William McKinley. There is an active collectors’ market for presidential memorabilia that many coin dealers and collectors now offer. Private mints compete for the contract to produce the official inaugural medal. The winner of the contract can strike and sell medals in different sizes, metallic versions and set combinations approved by the Inaugural Committee or a subcommittee.

The New “Sharia Standard on Gold” Was Launched Last Week

The Sharia Standard on Gold – a new platform for the use of modern gold financial products that will meet the requirements of Islamic law – was released last Monday. Before then, the 1.6 billion members of the Islamic faith were uncertain about how to invest in gold in accordance with the laws of their faith. This new Standard carries the potential of opening up the gold market to over one billion new customers.

Basically, the Sharia Standard requires that approved gold investments must be backed by actual physical gold. This means that gold “futures” contracts are out, but gold-backed exchange-traded funds (ETFs) are acceptable. To meet the Sharia Standard, gold investments must also include the proper calculation of Zakah – the Islamic requirement to contribute to charity. Beyond that, the Sharia Gold Standard allows Islamic investors to invest in vaulted gold, gold savings plans, gold certificates, physical gold ETFs and gold-mining shares within certain parameters. The World Gold Council estimates that this new market for gold products could add hundreds or more metric tons of new demand from the Muslim world each year.

Metals Move in Opposite Directions

Gold declined $10 last week, but silver kept inching upward. Silver has now more than doubled gold’s gain for the year so far. The metals moved in opposite directions in the London market, where gold fell from $1,173 to $1,163 last week, while silver rose from $16.35 to $16.95. Meanwhile, the U.S. stock market seems to be euphoric over the Trump victory and the business-friendly corporate leaders who have recently been named to his cabinet and key advisor posts. Also, the expectation of an interest rate increase by the Federal Reserve this week has added to Wall Street’s list of reasons to sell gold and buy stocks.

November 30, 2016

Gold Climbs; Still A ‘Must Have’ For Trump Presidency

for Barrons

Gold gained on Monday after two days of losses, although the metal is still struggling to shake off multi-month lows.


Gold for November delivery gained $12.40 per troy ounce, or 1.05% to $1190.60. Silver for November delivery gained 11.40 cents per troy ounce, or 0.69% to $16.5780.

As for ETFs, the SPDR Gold Trust (GLD), the iShares Silver Trust (SLV), the VanEck Vectors Gold Miners ETF (GDX), and the Direxion Daily Gold Miners Index Bull 3X Shares (NUGT) were all higher at recent check; the Direxion Daily Gold Miners Index Bear 3X (DUST) was falling.

While gold initially rallied when the election results were tallied, investors’ fears were soon allied, with the metal tumbling in the days after Donald Trump was declared the winner.

However Tocqueville’s John Hathaway argues that it’s too soon to abandon gold, despite its recent gyrations, which he believes will soon smooth out into a steadier rise. He argues that since 2000, gold has been the best asset class to be in, winning out over both equities and bonds by a wide margin, and it’s gained when both Democrats and Republicans controlled the White House.

He believes that gold can continue to climb during an “uber-populist/pragmatist” administration, if that’s what lies ahead, as the real catalyst for gold since the start of the millennium has been radical monetary policy: Unlike elections, this appears to be immune to politics and instead draws support from “an unshakeable bipartisan consensus to avoid the economic and political pain that would be required to undo nearly five decades of bad public policy.”

More detail from his note, in which he argues the metal is a ‘must-have’ hedge:

For us, there seem to be too many unknowns to discard the protection afforded by gold. While the markets appear to be saying “good riddance” to the past eight years, that does not translate into certitude that there are magical solutions. If interest rates continue to climb (and bond-market losses continue to mount), and if inflation begins to rise, especially as public spending expands, we may be only one or two Tweets from completely unsettling the markets. Trump is a pragmatist who may or may not turn out to be everything the markets are fantasizing.

November 22, 2016

Future for gold, oil and industrial commodities under President-elect Trump

U.S. Global Investors’ Frank Holmes talks about key commodities

Volatility in commodities has been high in the wake of Donald Trump’s presidential election victory, but as the initial shock wears off, a more clear picture of what his presidency means for gold, oil and industrial commodities has emerged.


Already, Trump’s proposed plan to improve the U.S. infrastructure has helped to fuel expectations of higher demand for industrial commodities, such as copper, which has seen prices rise nearly 4% since election day on Nov. 8.

“We’re way behind in infrastructure updates and refurbishing,” Frank Holmes, chief executive and chief investment officer at U.S. Global Investors told MarketWatch in a recent interview. “A lot of money could go into upgrading our infrastructure and industrial [commodities] will benefit from that.”

But Trump’s call for hefty tariffs on Chinese imports and his threat to place trade sanctions on China for its currency policy could lead to “massive inflation in America,” which could boost gold demand but hurt oil consumption, said Holmes, who’s a well-known fund manager and a natural-resources and emerging-markets expert. The San Antonio-based boutique investment firm had $946 million in assets under management as of Sept. 30.

Trump has been “very critical of international trade deals, threatening to pull out of Nafta (the North American Free Trade Agreement) and levy huge tariffs on Chinese-made goods,” said Holmes. “This could lead to another inflationary period…and could trigger another recession, all of which would be constructive for the price of gold.”


Gold prices were generally expected to climb if Trump won the election because of the amount of uncertainty surrounding his policies and impact on the economy, but prices have instead fallen by more than 5% since the outcome of the election.

Before election day, Holmes didn’t think gold was going to collapse, but he also “didn’t think it was going to take off” when the outcome was known.

It wasn’t about who won the election, as much as it was about the winner’s “economic policies that [would] drive the price of gold,” he said.

If Trump follows through on his proposal of sanctions on China, that would lead to substantial consumer inflation in the U.S., said Holmes.


Higher inflation should keep real interest rates low and that tends to support gold prices.

Still, Holmes said that gold trading is likely to be “sloppy” until the December Federal Reserve meeting, during which the central bank is expected to raise interest rates, and until the current carry trade has been unwound.

In a carry trade strategy, investors borrow money at a low interest rate and use the money to invest in an asset that’s expected to provide a higher return.

“That money, when it’s borrowed, [is] always in short-term investments, like gold and emerging-market currencies,” Holmes said.

So short term, gold will probably “be challenged.” Then, going into next year, some of Trump’s policies will likely prove

inflationary, he said. “If we get back to negative interest rates, which I think will happen, we’ll see gold rebound to $1,300” an ounce.

Crude oil

Meanwhile, Trump’s calls for U.S. energy independence is expected to lead to a climb in domestic oil production in a market that’s already oversupplied.

Still, the outlook for energy is murkier than the outlook for gold, he said.

“We know that Trump is a huge proponent of fossil fuels, having expressed deep skepticism of the efficacy of renewables on multiple occasions,” he said. “But it’s unclear at this point what policy steps he might take to bring back coal mining jobs, as he’s promised, or support oil prices.”

Trump is likely to support “fracking,” Holmes said. Hydraulic fracturing involves using a mix of water, sand, and other additives to coax oil and gas from dense rock formations.

And, with the U.S. now able to export surplus oil, these factors are “going to be a force that puts a lid on the price of oil surging above $50 a barrel for long,” said Holmes.

On Friday, West Texas Intermediate crude-oil futures  fell, but traded higher for the week, after a three straight weeks of declines.

Trump’s push toward energy independence would also be a push away from American dependence on oil from the Organization of the Petroleum Exporting Countries.

OPEC, meanwhile, likely doesn’t have the “discipline” to to follow through on its plans to cut output, said Holmes.

The 14-member group of oil producers is expected to complete a plan to target member output of 32.5 million to 33 million barrels a day at a meeting on Nov. 30.

“Do you think that they can really cut back supply and not cheat?” Holmes said. “That’s a big issue.”

If OPEC manages to cut back supplies, prices may run up to $50, but “cheating” among members may set in—and if prices runs toward $60, “technology in America will just turn on a dime,” he said, noting that the “big creator” of the oil glut is actually “American ingenuity” that has been able to find energy onshore at a much cheaper price.

All in all, Holmes sees oil capped at $50 a barrel, with the downside probably around $35—“and we’re going to fluctuate around” that range over the next year.

Industrial commodities

For the industrials sector, copper  has been an obvious standout given Trump’s plan for infrastructure improvements. Prices for the metal gained nearly 11% for the week ended Nov. 11, following the election.

Holmes also sees potential in demand for nickel and zinc, which “look very, very strong with that industrial build out. Supply is not as big as people thought and the process for turning it on takes a lot longer.”

Taking a look at the big picture for the industrials space, however, he sees opportunity in the airline industry, which he referred to as the “cheapest category in the industrials” sector, trading three to five times cash flow.

U.S. Global Investors’ U.S. Global Jets exchange-traded fund whose components include global airline operators and manufacturers, saw its market value climb roughly 8.8% in the third quarter. Delta Air Lines Inc. is the top holding.

Holmes said Boeing Co. one of the ETF’s components, and Northrop Grumman Corp.   will do well given the war on terrorism and plans to “refurbish and re-beef up our military and technology.”

All told, however, what Holmes said about Trump’s plans for the energy sector appear to hold true for just about every other sector, including industrials: “We will have to wait and see how things unfold—nothing is certain.”