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    Gold Continues to Worry About Interest Rate Hike

    Last updated 1 hour 39 minutes ago

    Commentary for Tuesday, Sept 16, 2014 (www.golddealer.com) – Gold closed up a tepid $1.60 today at $1235.20 watching carefully for any interest rate hints which might come from the two day Federal Open Market Committee (FOMC) being held Tuesday and Wednesday.

    The backdrop for this important powwow today saw Industrial Production down 0.01% and the Producer Price Index (PPI) unchanged so most believe the Fed will stay the course. All this inside scoop will be released tomorrow so sit tight and let’s see what happens – but remember even with all this hoopla about negative news – gold has only fluctuated about 13% this year.  

    Silver closed up $0.10 at $18.65 and we are seeing little in the way of big physical action across the counter but silver ETF holdings moved to the highest point of the year – just under 20 million ounces so someone is taking advantage of cheaper silver prices.

    Platinum closed up $3.00 at $1368.00 and palladium closed up $7.00 at $844.00.  

    So what’s up for gold on the short term? Most believe the Federal Reserve will begin rising interest rates around mid-2015 – a pretty good bet in my mind. If this is not the case and the possibility of higher rates is hinted at by the Federal Open Market Committee this week gold will continue to trend lower. News from the meeting will probably be released after the market close Wednesday.

    For some reason there is a great deal of talk about higher interest rates but I would not be surprised to see Fed Chair Yellen stand pat – she has in the past with no trouble. This is especially true with inflation subdued and job creation still underwater. It would figure that the Fed will continue to cut quantitative easing as most believe they have gotten all that is possible out of this fiscal manipulation.

    But raising interest rates is a horse of a different color – even this morning’s CNBC commentary pointed to a just released survey which claims the majority of CEO’s are disappointed in the ability of the economy to gain traction.   

    You should expect continued lowering of the quantitative easing program – this will punish gold – until the program is finished. And good riddance – perhaps after this boogie man is off the table the gold market can regain perspective.   

    In either case the technical picture for gold remains negative and the general mood remains neutral to negative. We are looking at 8 month lows and there may be another test of the $1200.00 support level.

    Our across the counter talk has also been lackluster - especially because gold does not seem to be interested in geopolitical events for the present. This too will change and there is something particularly unsettling about ISIS and the new Islamic State.

    The absence of physical buying from both India and China was discouraging but news this morning about increased Chinese gold premiums may indicate this tide is turning. I am surprised this change did not happen sooner considering the discounts from highs and the natural affinity both countries have for gold bullion. Chinese investors expect more stimulus for the Bank of China and the buying season is fast approaching in India.

    For now the dollar at 14 month highs is a tough act to follow and while some believe the stock market is vastly overvalued I would not want to stand in front of this double threat.

    On the shorter term we may settle for a defensive gold market, still trying to find traction and supported by returning physical demand. Gold is cheap - but investors tend to “wait” when there is price confusion. In the physical market we have seen a few large gold bullion buyers add to their position. These players are however long-term buyers from us and may be averaging their positions – taking advantage of lower prices. This is traditionally a smart play but does take a bit of sand and the belief that gold will win the race against fiat currency.

    We have seen virtually no big “new money” moving into gold bullion which figures – but we see the smaller to mid-size buyers coming back into the market - and like I have mentioned in the past we have seen virtually no large sellers which is encouraging.

    I would say we have not entered into an exhaustion or give up phase in gold bullion. And as the summer draws to a close we could see traditional buying return. But without some rise in prices this market still looks tired.

    Yesterday’s small jump in prices was just short-covering going into the FOMC meeting and so the bears remain in charge.

    If you are looking for a wild card consider the talked about overbought position in stocks. If this turns out to be true and the DOW weakens it could be a positive catalyst.

    If you are a new player to the gold bullion market the $1200.00 range is as good a place as any to get started. Especially as the market mood is negative – but I would consider making a number of smaller buys through Thanksgiving.

    One of the great things about this market is that all the commentary about the end of the world and the collapse of the dollar has evaporated. I have always said this argument for owning gold is misplaced – there are better reasons to own gold bullion for the longer term.   

    And in the shorter term – I would once again plug David Stockman’s book - (Amazon) The Great Deformation is a searing look at Washington’s craven response to the recent myriad of financial crises and fiscal cliffs. It counters conventional wisdom with an eighty-year revisionist history of how the American state especially the Federal Reserve has fallen prey to the politics of crony capitalism and the ideologies of fiscal stimulus, monetary central planning, and financial bailouts. These forces have left the public sector teetering on the edge of political dysfunction and fiscal collapse and have caused America’s private enterprise foundation to morph into a speculative casino that swindles the masses and enriches the few.

    Defying right- and left-wing boxes, David Stockman provides a catalogue of corrupters and defenders of sound money, fiscal rectitude, and free markets. The former includes Franklin Roosevelt, who fathered crony capitalism; Richard Nixon, who destroyed national financial discipline and the Bretton Woods gold-backed dollar; Fed chairmen Greenspan and Bernanke, who fostered our present scourge of bubble finance and addiction to debt and speculation; George W. Bush, who repudiated fiscal rectitude and ballooned the warfare state via senseless wars; and Barack Obama, who revived failed Keynesian “borrow and spend” policies that have driven the national debt to perilous heights. By contrast, the book also traces a parade of statesmen who championed balanced budgets and financial market discipline including Carter Glass, Harry Truman, Dwight Eisenhower, Bill Simon, Paul Volcker, Bill Clinton, and Sheila Bair.

    Stockman’s analysis skewers Keynesian spenders and GOP tax-cutters alike, showing how they converged to bloat the welfare state, perpetuate the military-industrial complex, and deplete the revenue base even as the Fed’s massive money printing allowed politicians to enjoy deficits without tears.” But these policies have also fueled new financial bubbles and favored Wall Street with cheap money and rigged stock and bond markets, while crushing Main Street savers and punishing family budgets with soaring food and energy costs. The Great Deformation explains how we got here and why these warped, crony capitalist policies are an epochal threat to free market prosperity and American political democracy.

    Normally comments in this newsletter are confined to the precious metals market but this article by Steve Roach (Coin World) may prove interesting to the general public because the rare cent in question might still be in circulation and possibly in your change. As a rule there is really nothing left in circulation which might prove valuable to collectors but there are modern exceptions. When the price of copper was moving higher the cost of a real copper cent might have exceeded its face value. This rather minor point bothered the US Mint in the 1970’s so they considered making the Lincoln cent in aluminum. In 1974 the US Mint produced almost 9 million copper Lincoln cents – and a handful of 1974-D aluminum experimental trials.

    The Treasury handed out the experimental examples to members of Congress for a peek at the possible new penny. Then things went a little wacky – the Mint asked for the coins back and our representatives said – well – they looked and then passed the aluminum coins on to the next interested person. At any rate – not all the examples were retrieved – and today we have the mystery of the famous 1974-D aluminum cent – a coin you could run into at the grocery counter. But do me a favor – since this is rather inside information to the general public – should you find one of these rarities contact me (RSchwary@aol.com) and let me outline the possible legal scenarios along with my good friend and numismatic attorney Armen Vartien. 

    Legal Case Continues for 1974D Aluminum Cent as Mint, Private Citizens contend for Ownership Rights - Cent is subject of ongoing litigation 

    Two California men continue their fight to prove that a 1974-D Lincoln aluminum cent in their possession is legal to own. The cent was set to highlight Heritage Auctions’ April 2014 Central States Numismatic Society auction but was withdrawn at the request of the U.S. Mint.

    Randall Lawrence and Michael McConnell initially filed a lawsuit in a San Diego federal court on March 14 asking the court to affirm that an example of the experimental cent that the two men owned is not government property and can be legally owned. 

    The Mint filed a response on June 3 seeking that the court dismiss the complaint, which was granted on July 23 when a judge ruled that the two men failed to prove that they legally owned the cent. The court allowed Lawrence and McConnell to file a motion for leave to amend the complaint, which they filed on Aug. 21 with a proposed amended complaint attached. 

    The Mint’s position has been consistent: because Congress never issued an aluminum cent as legal tender, any example remains property of the federal government regardless of how long it has been in private hands. The court initially granted the Mint’s motion to dismiss, specifically noting that the initial filings did not allege “facts surrounding the circumstances under which Plaintiff Lawrence’s father obtained the Aluminum Cent.” 

    The proposed amended complaint goes into further detail as to how the men came into possession of the cent, and how Lawrence’s father, Harry Edmond Lawrence, acquired the coin through his service as a Mint employee for approximately 20 years. 

    The filing states that before Harry Lawrence’s retirement as assistant superintendent at the Denver Mint in 1980, the Denver Mint commemorated his service in 1979 by “(a) giving him a clock engraved with his name and dates of service and with the ‘hours’ represented by specimens of each of the last 90%-silver coins minted in Denver in 1964, and (b) allowing him to keep certain error coins struck in Denver which he had accumulated, and one specimen of the 1974-D aluminum cent.” The amended complaint further adds that upon Harry Lawrence’s death he gave his son the clock, the error coins and the 1974-D aluminum cent, along with his other personal property. In 2013 Randall Lawrence conveyed an interest in the cent to McConnell, a coin dealer. 

    Denver aluminum cents? - More than 1 million 1974 aluminum cents were struck at the Philadelphia Mint, although nearly all were destroyed. In response to the Mint’s position that the Denver Mint aluminum cents were unauthorized, the two men contend, “Regardless of the Mint’s lack of records, the Denver Mint could not have made aluminum cents without a specific order to do so, evidenced by the special delivery of aluminum planchets from Philadelphia.” 

    The walk-in cash business today was just average and so were the phones. Nothing special as most consider the possible outcomes from the Federal Open Market Committee meeting today and tomorrow.  

    The GoldDealer.com Unscientific Activity Scale is a “4” for Tuesday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Wednesday – 5) (last Thursday – 5) (last Friday – 7) (Monday – 6). The scale (1 through 10) is a reliable way to understand our volume numbers.

    Email confirmation using a PDF File when buying or selling is functional. It also includes the various forms of payment and includes bank wire instructions. And you can now see your actual invoice or purchase order on your computer screen.

    When you buy or sell please check to see if we have your current email on file and that your computer will accept our email (no spam).

    About shipping information – when buying or selling your rep will walk you through your current mailing information. Thanks for keeping us up to date if you have moved.

    Our four flat screens downstairs with live independent pricing (BullionDesk.com) are a big hit with the cash trade. Live pricing moves all the buy/sell product prices on a real time basis. Yes - you can visit the store with cash and walk away with your product. Or you can bring product to the store and walk away with cash. When buying from us remember if you exceed $10,000 in cash (the real green kind) a Federal Form is necessary.

    In addition to our freshly ground organic coffee offered visitors throughout the day we have added cold bottled water, cokes and Snapple. We have also added fresh fruit in a transparent attempt to disguise our regular junk food habits – which seem to grow when things get this quiet. And it does not help that the world famous Randy’s Donuts is just down the street. 

    Like us on Facebook and follow us on Twitter @CNI_golddealer.

    Thanks for reading from your friends at GoldDealer.com and enjoy your evening.

    Disclaimer – The content in this newsletter and on the GoldDealer.com website is provided for informational purposes only and our employees are not registered financial advisers. The precious metals and rare coin market is random and highly volatile so it may not be suitable for some individuals. We suggest before deciding on a course of action that you talk with an independent financial professional. While due care has been exercised in development and dissemination of our web site, the Almost Famous Gold Newsletter, or other promotional material, there is no guarantee of correctness so this corporation and its employees shall be held harmless in all cases. GoldDealer.com (California Numismatic Investments, Inc.) and its employees do not render legal, tax, or investment advice.

    History's Most Expensive Penny

    Last updated 5 hours 59 minutes ago

    What’s a penny worth to you? If you’re one of the millions of Americans who have called for the discontinuation of the penny, it’s not even worth the copper it’s made from. But before you throw all of your pennies in the trash, check to see if any of them are the 1943 copper-alloy one cent coin—otherwise known as the most valuable penny in the world. Just 40 of these rare coins are known to exist. The first 1943 copper penny was sold in 1958 for more than $40,000, and another one went for a whopping $82,500 in 1996. But those sales pale in comparison to a recent transaction in which a New Jersey coin dealer sold his 1943 penny for $1.7 million.

    Do you have a rare coin collection? Would you like to diversify your investment portfolio with precious jewelry and rare coins? If you answered yes to either question, contact California Numismatic Investments. We are one of America’s largest precious metals and rare coin dealers. Visit our website to learn how we can help you buy or sell precious metal and/or rare coins, or call us toll-free at (888) 612-2679 to speak with one of our dealers

    Gold Holds Steady Waiting for this Week's FOMC Meeting

    Last updated 1 day ago

    Commentary for Monday, Sept 15, 2014 (www.golddealer.com) – Gold closed up $3.70 at $1233.60 as the market remains dicey – the big question being what will Yellen have to say on Wednesday? To raise rates or not to raise in light of a better than expected US recovery versus a still floundering EU drowning in debt. If it appears the US will be raising rates (doubtful) the bears will be wearing party hats. 

    The good news is that lower gold has finally attracted some over the counter buying – especially with the cash walk in trade. This metric has been showing some life of late even as the paper market was pushed lower by a poor technical picture. And there may still be life in the China/India gold trade – which has been sleeping of late but now is showing typical signs of life even though the Chinese numbers look a bit anemic.

    The dollar remains strong and oil cheap holding a club over gold’s head but the world remains a mess on the nightly news as gold continues to get bad press. I was wondering out loud this morning - What else will prove a store of value in a world upside down? I know you have heard that one before but over my first cup of coffee the headlines were discouraging – Ukraine Sees The Worst Fighting Since Ceasefire Began – Iran Rejects A Global Strategy Against Islamic State Militants – Britain’s Prime Minister Heads To Scotland To Warn Against Independence – US Launches Programs To Counter Extremists. Really! How can gold not have a future as Europe slips back into a debt swamp and the amount of fiat currency worldwide reaches another record high.

    And don’t discount that Scottish independence vote – what happens to their share of the English gold reserves if the “yeas” win? Just another problem which will help support gold.

    Silver was up $0.01 at $18.55 and even though we are well under the magic $19.00 level the physical market seems slow.

    Platinum was down $6.00 at $1365.00 and palladium was up $2.00 at $837.00.  

    Gold near 8-month low on fears of hawkish Fed, weak physical buying - SINGAPORE, Sept 15 (Reuters) - Gold edged higher on Monday as Asian equities tumbled but the metal continued to struggle near an eight-month low due to weak physical demand and fears the Federal Reserve may signal an early interest rate increase at this week's policy meeting.

    The Fed meeting may be pivotal as it debates a potential overhaul of its guidance on interest rates and seeks to nail down a plan for quitting its extraordinarily easy monetary policy.

    Investors will parse the U.S. central bank's words closely for any clues on the timing of the first U.S. rate rise in more than eight years. An announcement is expected on Wednesday at the end of the two-day meeting.

    Any increase in interest rates would hurt non-interest-bearing gold and boost the dollar. "The (Fed) meeting this week will dictate price action for the precious metals," said Samuel Laughlin, a metals dealer at MKS Group. 

    "Market consensus is for a June 2015 rate increase. However, any Fed comment hinting at an earlier rise would put further downward pressure on the metals."

    Spot gold fell to $1,225.30 an ounce, its lowest since January, early on Monday before climbing 0.4 percent on balance to $1,232.75 by 0627 GMT. Last week, gold fell 3 percent as the dollar index posted its ninth straight weekly gain.

    Traders said the small gain could be due to safe-haven bids after Asian stocks fell to a five-week low due to a batch of weak data out of China.

    Unwinding of some short positions, which have built up significantly in the past few weeks, could also be a factor in providing some support on Monday. But investor sentiment towards gold remains weak, with hedge funds and money managers cutting bullish futures and option bets in gold to their lowest in nearly three months, according to data from the Commodity Futures Trading Commission on Friday.

    Dollar strength and weak physical demand are also weighing on bullion. Asia - the top gold-consuming region - has not shown too much interest in buying the metal at lower prices as buyers expect further declines.

    "There is still very little interest from China," said ANZ analyst Victor Thianpiriya. China is the biggest buyer of gold and robust buying in the country could lend support to global gold prices.

    Thianpiriya said the sluggish demand was not, however, isolated to China.

    This from FXEmpire - This is going to be one crazy week for the markets. Tuesday and Wednesday are the FOMC meetings with a decision and speech by Janet Yellen on Wednesday afternoon. No changes are expected in the current Federal Reserve plans but there is expected to be a change in the tone of Ms. Yellen’s presentation, as future interest rate increases are key. Although Ms. Yellen will not give any specifics, traders believe her words and a move from a dovish stance to a more hawkish position will signal plans to raise interest rates sooner than later. The US dollar and gold are expected to sit tight ahead of the announcements but could see a great deal of volatility on Wednesday afternoon.  Gold fell Friday, settling at $1,231.50 on the Comex, down 2.8% on the week. Silver rose Friday, settling at $18.599 an ounce, down 2.8% on the week. Robin Bhar, head of metals research at Societe Generale, said there was a shift in expectations of Fed rate hikes this week, spurred by a paper published by the San Francisco Fed, which suggested market expectations of rate hikes were more dovish than FOMC projections. That added to the recent dollar strength, which also weighed on gold, he said. The dollar index rose to its highest level since July 2013 this week. The US dollar is currently trading at 84.42.

    Within hours of Ms. Yellens speech, traders will turn their attention to two strange one time market events on Thursday. In Scotland traders will eye the vote for Scottish independence and in the US the launch of the Alibaba IPO. Which one will gain the most market attention is hard to say at the moment. The highly anticipated IPO of e-commerce giant Alibaba on September 18-19 is expected to raise more than $20 billion, a record in U.S. history. It is startling that the company that will set this record is based in China, a country that is challenging American global dominance. Fueled by the growing Chinese middle class, Alibaba dominates e-commerce in China, positioning the company at the center of the world stage and hogging the spotlight from Silicon Valley.

    This from Kyle Caldwell (The Telegraph) – September is the time to buy gold, history suggests – “For those who like to follow investment trends there is a new one that is growing in popularity – buying gold in September.

    Over the past 20 years, the gold price tends to shine in September. On average bullion has delivered returns of over 3pc, which is by far the best performing month for the precious metal.

    Fans say there is a good reason for the trend - September marks the start of India’s gold gifting season. During September a huge amount of gold jewellery is bought by Indians as gifts for family members during the Diwali festival.

    India is the second biggest buyer of gold, behind China, so when India buys in droves the gold price is usually given a short-term boost. As traders know gold tends to perform well in September they are happy to continue buying when the gold price goes up, which drives bullion higher.

    According to Nick Moore, a commodity strategist at BlackRock, Indian gold buying has become a seasonal trend for the gold price. “The surge in Indian buying, during the festival period and also for the Indian Wedding season which starts at the end of September, has translated into making September the best month of the year for gold price gains,” Mr Moore said.”

    I was never much of a believer in seasonal buying or selling but have made an exception with the Diwali festival. Still the government of India holds to the gold import tax (10%) which the new Prime Minister Narendra Modi promised to eliminate. 

    So what will happen to gold demand for the festival? Of course the smuggling trade will fill in for as long as it takes for Modi to lower the import tariff on gold.

    But there is a new development which might prove more interesting. We have already talked about the interest the Russians and Chinese have in developing a new world currency to offset or even replace the dollar. In the past this idea was considered only a pipe dream – but today is it possible to challenge the dollar hegemony?

    The reality is more political than economic but interesting - and even a small challenge might offer super mojo in supporting the price of gold, especially if that fight came from the Chinese sector.

    The theory goes something like this – the Chinese want a hedge against all those dollars they have accumulated and so the Bank of China regularly increases its gold holdings. Now consider that the Chinese government is suspicious of everyone including the US and so their pretense after the Cold War is just that – dig deep enough into this political conundrum and you will see world domination – if not militarily then financially.

    The renminbi is the official currency of the People’s Republic of China and the yuan is its basic unit of exchange. The reason the dollar works as the world’s trading currency is because our government and its value are stable.

    There is no reason to believe however that this constant will always remain. The euro replaced a basket of long standing currencies in a consolidation move driven by a new economic reality.

    The idea that the yuan will be used as a unit of exchange is already being tested between the Russians and the Chinese. And further supporting this political reality is the notion that the Russians want to play hardball when it comes to sanctions. And equally important the Chinese would love to have a currency offset relative to their dollar position – something beside gold. Why? For political reasons but there is a wider question in that dollar dependency places many world powers under the yoke of what they see as American imperialism. Whether you buy the argument or not there are many changing dynamics in the political world today – the Cold War is dead and the currency status quo might well be in for a challenge - something to think about when you consider gold and open that cute fortune cookie for dessert. 

    The walk-in cash business today was hot and we even attracted a whale! The national phones were generally busy most of the day and we did see a few sellers but mostly buyers. I think we are seeing the last of the summer doldrums – not that gold will move dramatically higher on the short term - especially with a weak euro – but investors are asking questions - there is an uptick in interest – perhaps even a bit of buzz. 

    The GoldDealer.com Unscientific Activity Scale is a “6” for Monday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Tuesday – 4) (last Wednesday – 5) (last Thursday – 5) (last Friday – 7). The scale (1 through 10) is a reliable way to understand our volume numbers.

    Email confirmation using a PDF File when buying or selling is functional. It also includes the various forms of payment and includes bank wire instructions. And you can now see your actual invoice or purchase order on your computer screen.

    When you buy or sell please check to see if we have your current email on file and that your computer will accept our email (no spam).

    About shipping information – when buying or selling your rep will walk you through your current mailing information. Thanks for keeping us up to date if you have moved.

    Our four flat screens downstairs with live independent pricing (BullionDesk.com) are a big hit with the cash trade. Live pricing moves all the buy/sell product prices on a real time basis. Yes - you can visit the store with cash and walk away with your product. Or you can bring product to the store and walk away with cash. When buying from us remember if you exceed $10,000 in cash (the real green kind) a Federal Form is necessary.

    In addition to our freshly ground organic coffee offered visitors throughout the day we have added cold bottled water, cokes and Snapple. We have also added fresh fruit in a transparent attempt to disguise our regular junk food habits – which seem to grow when things get this quiet. And it does not help that the world famous Randy’s Donuts is just down the street. 

    Like us on Facebook and follow us on Twitter @CNI_golddealer.

    Thanks for reading from your friends at GoldDealer.com and enjoy your evening.

    Disclaimer – The content in this newsletter and on the GoldDealer.com website is provided for informational purposes only and our employees are not registered financial advisers. The precious metals and rare coin market is random and highly volatile so it may not be suitable for some individuals. We suggest before deciding on a course of action that you talk with an independent financial professional. While due care has been exercised in development and dissemination of our web site, the Almost Famous Gold Newsletter, or other promotional material, there is no guarantee of correctness so this corporation and its employees shall be held harmless in all cases. GoldDealer.com (California Numismatic Investments, Inc.) and its employees do not render legal, tax, or investment advice.

     

    Ed Hodson at GoldDealer is Very Professional.

    Last updated 1 day 5 hours ago

    • on GoldDealer.com
    • Ed helped me today, I purchased some gold bullion, what a fine shop you have! It was the first time for me in your shop, it is freeway close, parking is super easy, security is there too.

      What I was most impressed about was the professionalism of the service I received in particular by Ed Hodson, not only did Ed help me... More

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    Gold Moves Lower for the 5th Straight Day

    Last updated 4 days ago

    Commentary for Friday, Sept 12, 2014 (www.golddealer.com) – Gold closed down $7.50 today at $1229.90 so my feeling that we would eventually test the longer term $1200.00 number has been accurate. Unfortunately this is the 5th day in a row gold has moved lower. If you consider the Jan 2, 2014 low close for gold of $1225.00 we are now looking at 8 month lows.

    The big Trifecta plus 1 - pushing gold lower is apparent: an amazing run in the dollar to the upside reacting to a continued weaker euro – the price of oil continues to weaken – and the improving US economy suggests the Federal Reserve quantitative easing program will soon end.

    The plus 1 is also dangerous – bearish momentum players.  

    And physical demand for gold has also been weaker than expected. Some believe that buying from China and India will move higher as we move away from summer – but it appears the 10% gold import tax now charged by the government of India will remain in place.

    Still the activity level at GoldDealer.com continues higher (7) so the public seems to like cheaper prices. The relative order size has been moving lower meaning there are no whales at the present and there are still no large sellers.

    Silver closed up $0.01 at $18.54. Still pretty quiet but we are seeing some tire kicking.

    Platinum was unchanged at $1371.00 and palladium was up $2.00 at $835.00.  

    Precious Metal Closes for this week – Sept 8 through Sept 12 – 2014

                Gold                Silver              Platinum         Palladium

    Mon    $1252.70         $18.89             $1398.00         $886.00

    Tues    $1246.80         $18.84             $1387.00         $860.00

    Wed    $1243.50         $18.85             $1382.00         $848.00

    Thurs  $1237.50         $18.53             $1371.00         $833.00

    Fri       $1229.90         $18.54             $1371.00         $835.00

    Our Patented Employee and Customer Survey - Gold's Direction Next Week?

    OK - it's really not patented but because we are just old coin dealers with absolutely no pretense - we needed something that sounds more mysterious. 

    This is what the GoldDealer.com employees think – 4 believe gold will be higher next week – 7 think gold will be lower and 2 believe it will be unchanged.

    Consider a survey on what customers think about the gold market next week.

    Like the employees the public were given three choices – up – down – unchanged. We limited the survey to a random sampling of 100 customers – unscientific yes but worth considering because these people actually took action: 35 people thought the price of gold will increase next week – 55 believe the price of gold will decrease next week - 10 think prices will remain in the same range.

    There appears to be a random problem with some emails sent to Ask an Expert. The techs are working this out but in the meantime if you have emailed GoldDealer.com with a question and did not receive an answer please consider resending. This technical glitch will soon be fixed and I apologize for any inconvenience.

    I want to restate yesterday’s short term look at gold – slightly modified relative to physical sellers. Gold has been bearish for a month now moving generally downward from $1310.00 to the present close of $1229.90.

    A wider view is now necessary especially because the dysfunction between the European Union and the United States looks like it will be with us for some time – as we wind down quantitative easing while they wind up the same misplaced flooding of their fiat currency.  If this continues there will be no race to the bottom in relative currency value – the euro will continue to tank as the dollar becomes the default choice relative to a safe place to hide.

    All the other factors which should support gold – the expansion of the ISIS contagion – our own issues with creeping inflation - and unstable Middle East – Russia/Ukraine – the possible implosion within minor EU countries because their massive unresolved debt problems – even the probability that physical demand should soon catch traction because gold is now trading at a significant discount – all of these will dance to the US dollar/euro contango.

    Like I said yesterday - intuitively you would have to believe that the dollar would not hold such sway – especially because our recovery is far from guaranteed especially when it comes to the job renewal.

    But in the trading business it is best not to get in front of a moving train and the Dollar Index is trading at yearly highs above 84.00!

    And now we must consider the possibility of even lower crude oil! As they say, when it rains it pours – the possibility of oil moving below $94.00 a barrel was remote not long ago. We must now consider the possibility that oil might see $85.00 barrel. Amazing – and this is not a good trend for gold.

    So what should newcomers do when considering gold bullion? Stand aside for now and decide another cup of coffee is a better idea. What difference does it make if you don’t catch the exact bottom? This shakeout continues and time is always on the side of the patient trader.

    If you are a long term – well established player adding to these lower levels is a good idea because buying more often in smaller quantities is the only defense you have in a negative market.

    To get a better idea of pricing look at the one year gold chart: We have moved from $1350.00 down to $1200.00 – then reversed direction moving again to $1350.00 and once again down to the $1250.00.

    We are now testing the lower levels of this $150.00 range – I had hoped we would hold the $1240.00 recent support but this is not in the cards so consider a test of the $1200.00 (Dec – 2013) level.

    In the last 2 years gold has tested this support twice – recovered and moved higher.

    This would represent a 37% pullback from the summer of 2011 gold peak of $1880.00 and while no one is claiming gold is approaching the “give up” phase there is no doubt bargain hunters will see long term value. Finally let me also point out an important physical fundamental. We have seen no significant sellers at these lower levels.

    American credit-card debt hits a post-recession high (MarketWatch) - Quentin Fottrell – “U.S. consumers may be relying too heavily on their plastic. Americans added $28.2 billion to their credit cards in the second quarter of 2014, the largest amount in the last six years and nearly 200% more than in the second quarter of 2009, when the economy emerged from the depths of the Great Recession, according to new research from personal finance website CardHub.com. After paying off $32.5 billion owed during the first quarter of 2014, consumers ran up roughly 86% more debt during the following quarter.

    The average household’s credit-card balance now stands at $6,802, up slightly from $6,628 in the first quarter, but still down from $8,431 at the end of 2008. By the end of the year, this figure is expected to exceed $7,000, reaching levels not seen since the end of 2010. U.S. consumers will be roughly $1,300 away from the credit card debt “tipping point,” where minimum payments become unsustainable and delinquencies skyrocket, the report says.

    Experts say that consumer spending accounts for more than two-thirds of U.S. economic output, and credit-card spending in particular shows that people are feeling more confident about their job security and the economic recovery. Earlier this week, the U.S. Federal Reserve said that outstanding revolving credit, which is mostly made up by credit-card debt, increased by 7.4% in July to $880.54 billion, and has been gradually rising since falling to $840 billion in 2010.

    Americans are certainly using their credit cards more, says Ben Woolsey, president of credit-card advice website CreditCardForum.com. Following the financial crash, banks charged off lots of balances as uncollectable, reigned in credit lines and greatly curtailed new account signups due to a freeze in the credit markets, he says. “Average figures are greatly distorted by a relatively small percentage of borrowers who carry lots of debt and therefore render any conclusions more alarmist,” Woolsey says.

    But some Americans are living beyond their means: 20% of people say could not make ends meet without the use of credit and 22% say they would have to make “significant lifestyle changes” if they cut up their credit cards, according to a new poll of 1,878 credit-card users by the National Foundation for Credit Counseling. “Breaking one of the basic rules of personal finance — spending more than you make — is not likely to have a positive outcome,” says Gail Cunningham, spokeswoman for the NFCC.”

    It would seem that the governments of the world are not the only ones who rely on the “debt equation” to solve day to day problems. But only governments are in the unique position of being allowed to print their own money. It is amazing to me that most simply ignore the now more than $4 trillion dollar debt the US has amassed since roughly 2008. And now Europe is moving in that same direction and Japan has already set sail. How in the world is all this money going to be paid back?

    Inflation is the only reasonable answer. And so consider how long will this current shakeout in prices continue? Perhaps until the inflation numbers come back up on the radar screen. In the meantime buying a cheap market over a longer period of time makes sense - considering few real government spending red flags have been corrected.   

    The walk-in cash business today was moderate and so were the national phones. Considering gold was down 5 straight days - perhaps everyone is tired and looking for a quiet weekend. 

    The GoldDealer.com Unscientific Activity Scale is a “7” for Friday. The CNI Activity Scale takes into consideration volume and the hedge book: (Monday – 4) (Tuesday – 4) (Wednesday – 5) (Thursday – 5). The scale (1 through 10) is a reliable way to understand our volume numbers.

    Email confirmation using a PDF File when buying or selling is functional. It also includes the various forms of payment and includes bank wire instructions. And you can now see your actual invoice or purchase order on your computer screen.

    When you buy or sell please check to see if we have your current email on file and that your computer will accept our email (no spam).

    About shipping information – when buying or selling your rep will walk you through your current mailing information. Thanks for keeping us up to date if you have moved.

    Our four flat screens downstairs with live independent pricing (BullionDesk.com) are a big hit with the cash trade. Live pricing moves all the buy/sell product prices on a real time basis. Yes - you can visit the store with cash and walk away with your product. Or you can bring product to the store and walk away with cash. When buying from us remember if you exceed $10,000 in cash (the real green kind) a Federal Form is necessary.

    In addition to our freshly ground organic coffee offered visitors throughout the day we have added cold bottled water, cokes and Snapple. We have also added fresh fruit in a transparent attempt to disguise our regular junk food habits – which seem to grow when things get this quiet. And it does not help that the world famous Randy’s Donuts is just down the street. 

    Like us on Facebook and follow us on Twitter @CNI_golddealer.

    Thanks for reading from your friends at GoldDealer.com and enjoy your weekend.

    Disclaimer – The content in this newsletter and on the GoldDealer.com website is provided for informational purposes only and our employees are not registered financial advisers. The precious metals and rare coin market is random and highly volatile so it may not be suitable for some individuals. We suggest before deciding on a course of action that you talk with an independent financial professional. While due care has been exercised in development and dissemination of our web site, the Almost Famous Gold Newsletter, or other promotional material, there is no guarantee of correctness so this corporation and its employees shall be held harmless in all cases. GoldDealer.com (California Numismatic Investments, Inc.) and its employees do not render legal, tax, or investment advice.

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