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    Gold Moves Lower on Technical Selling

    Last updated 22 hours ago

    Commentary for Thursday, Oct 30, 2014 (www.golddealer.com) – Gold closed down $26.20 today at $1198.50. An expected drop created yesterday in the aftermarket as the Federal Reserve announced the end of its current quantitative easing program.

    This weakness in gold is accentuated by a stronger dollar – now trading over 86.00 on the Dollar Index and encouraged by Gross Domestic Product numbers released today showing a strong plus 3.5% for this 3rd US quarter. All of this as inflation remains subdued and oil trends lower.

    The good news for those who want to own gold bullion is that all the bad news is now out in the open. Personally I am glad QE is over – it takes a big negative away from the gold market. And if the Federal Reserve ever decides to tap the program again it would be a huge positive for gold. So at this time no downside and plenty of potential upside.

    As far as short term numbers – gold is under pressure but pressure we have seen at least three times going back to the summer 2013. From the technical viewpoint the bears own the road – for now.

    From the physical demand viewpoint I think the jury is still out. There are the regular suspects – India and China – but judging from our across the counter sales I would say the American consumer is still on the sidelines. Typical really in a weak market – but don’t underestimate the ability of the American consumer to reinvent this market overnight. There is a ton of money floating around – real estate looks like its cooling off and so does the stock market. And it’s not that anyone has given up on gold bullion – the market is just so jittery the public is just looking for traction. Create some upward numbers at these depressed levels and the American demand will return – perhaps not with a bang but in enough number to make the market interesting.

    In the meantime gold’s next big support level is $1180.00. This number has held up many times throughout 2013 and 2014 – that’s the positive news – the negative side of the tale is while gold bounced higher on several occasions those bounces have been smaller and smaller.

    Silver closed down $0.83 at $16.38. For silver this is a big move down so the bears rule. Where silver will see some traction is difficult to figure. Today’s close is the lowest close of the year and the lowest point we have seen since its peak. The day to day sales across the counter are steady – small to mid-size and no whales.

    But this steady one-way grind adds up and while the public is usually not happy when prices move lower – the real silver bullion buyer seems eager to increase positions. If you are a long term investor this market offers opportunity.

    Platinum closed down $23.00 at $1245.00 and palladium was off $20.00 at $780.00.    

    This from Paul Gilkes (Coin World) - United States, India leading worldwide silver investment over past two months - Demand for silver American Eagle bullion coins continues to drive world market for products containing the precious metal.

    Physical investment in silver over the past two months has increased worldwide, primarily bolstered by demand from the two largest markets, the United States and India, according to Valcambi Suisse.

    The demand for American Eagle 1-ounce silver bullion coins in September reached 4.14 million coins, with 4,365,000 recorded in October through noon Oct. 29 with additional sales expected.

    October's sales of American Eagle silver bullion coins by the U.S. Mint are already the third highest monthly total for calendar year 2014. March leads the way with 5,354,000 coins followed by January with 4,775,000. The calendar year 2014 total tallies 36,616,000 silver American Eagle bulllion coins.

    Festival buying - According to Valcambi Suisse, weaker silver prices are encouraging bargain hunting. In India, specifically, festival buying for Dusshera and Diwali has also driven demand. "In spite of this apparent support, the silver price has, so far, failed to regain much of the ground it lost to gold last month (when the gold:silver ratio briefly exceeded 72:1, having started the year at around 62:1)," according to Valcambi Suisse. "Looking ahead, the recent strength of physical investment seems unlikely to be maintained in the coming months."

    This from Bloombert Businessweek (Peter Coy) – The Hawaiian Tropic Effect: Why the Fed’s Quantitative Easing Isn’t Over - But quantitative easing is the gift that keeps on giving. Even after the purchases end, its effects will persist. How could that be? The Fed will still own all those bonds it bought, and according to the agency itself, it’s the level of its holdings that affects the bond market, not the rate of addition to those holdings. Having reduced the supply of bonds available on the market, the Fed has raised their price. Yields (i.e. market interest rates) go down when prices go up. So the effect of quantitative easing is to lower interest rates for things Americans actually care about, such as 30-year fixed-rate mortgages.

    Imagine that the Federal Reserve wants to increase the price of suntan lotion. There are 10 bottles of Hawaiian Tropic for sale at the cabana. The Fed buys one per hour until it owns nine. Each time it acquires one, the price for the remaining bottles rises because people who don’t want to get sunburned are competing for the dwindling supply. Now that just one bottle is left, the Fed stops buying. Would you expect the price of the last bottle to fall suddenly? No—there’s still lots of demand and constricted supply. Same with bonds. The price of bonds should stay high—and yields stay low—as long as the Fed hangs onto its huge inventory.

    To mix metaphors, ending QE isn’t putting on the brakes. It’s just easing off the accelerator. The Fed’s bond holdings will naturally shrink as bonds come due; as new debt comes onto the market, the Fed’s portfolio will have less impact. For now, the Fed will continue to reinvest the proceeds back into other bonds. It says it won’t allow the portfolio to start shrinking until after it starts raising the short-term interest rate it controls, the federal funds rate. That’s likely to happen sometime in 2015, most economists expect.

    This from David Stockman (Contra Corner) - Good Riddance To QE - It Was Just Plain Financial Fraud - QE has finally come to an end, but public comprehension of the immense fraud it embodied has not even started. In round terms, this official counterfeiting spree amounted to $3.5 trillion— reflecting the difference between the Fed’s approximate $900 billion balance sheet when its “extraordinary policies” incepted at the time of the Lehman crisis and its $4.4 trillion of footings today. That’s a lot of something for nothing. It’s a grotesque amount of fraud.

    The scam embedded in this monumental balance sheet expansion involved nothing so arcane as the circuitous manner by which new central bank reserves supplied to the banking system impact the private credit creation process. As is now evident, new credits issued by the Fed can result in the expansion of private credit to the extent that the money multiplier is operating or simply generate excess reserves which cycle back to the New York Fed if, as in the present instance, it is not.

    But the fact that the new reserves generated during QE have cycled back to the Fed does not mitigate the fraud. The latter consists of the very act of buying these trillions of treasuries and GSE securities in the first place with fiat credits manufactured by the central bank. When the Fed does QE, its open market desk buys treasury notes and, in exchange, it simply deposits in dealer bank accounts new credits made out of thin air. As it happened, about $3.5 trillion of such fiat credits were conjured from nothing during the last 72 months.

    All of these bonds had permitted Washington to command the use of real economic resources. That is, to consume goods and services it obtained directly in the form of payrolls, contractor services, military tanks and ammo etc; and, indirectly, in the form of the basket of goods and services typically acquired by recipients of government transfer payments. Stated differently, the goods and services purchased via monetizing $3.5 trillion of government debt embodied a prior act of production and supply. But the central bank exchanged them for an act of nothing.

    Contrast this monetization process with honest funding of government debt in the private market. In the latter event, the public treasury taps savings from producers and income earners and re-allocates it to government purchases rather than private investments. This has the inherent effect of pushing up interest rates and, on the margin, squeezing out private investment. It is a zero sum game in which savings retained from existing production are reallocated.

    To be sure, the economic effect is invariably lower investment, productivity and growth down the line, but the process is at least honest. When the public debt is financed from savings, government purchase of goods and services are funded with the fruits of prior production. There is no exchange of something for nothing; there is no financial fraud.

    And it is the fraudulent finance of public deficits which is the real evil of QE because the ill effects go far beyond the standard saw that there is nothing wrong with central bank monetization of the public debt unless is causes visible inflation of consumer prices. In fact, however, it does cause enormous inflation, but of financial asset values, not the CPI.

    Despite the spurious implication to the contrary, central banks have not repealed the law of supply and demand in the financial markets. Accordingly, their massive purchases of the public debt create an artificial bid and, therefore, false price. Moreover, government debt functions as the “risk free” benchmark for pricing all other fixed income assets such as home mortgages, corporate debt and junk bonds; and also numerous classes of real assets which are typically heavily leveraged such as commercial real estate and leased aircraft.

    In short, massive monetization of the public debt results in the systematic repression of the “cap rate” on which the entire financial system functions. And when the cap rate gets artificially pushed down to sub-economic levels the result is systematic over-valuation of all financial assets, and the excessive accumulation of debt to finance non-value added financial engineering schemes such as stock buybacks and the overwhelming share of M&A transactions.

    Needless to say, the false prices which result from massive monetization do not stay within the canyons of Wall Street or even the corporate business sector. In effect, they ride the Amtrak to Washington where they also deceive politicians about the true cost of carrying the public debt. At the present time, the weighted average cost of the $13 trillion in publicly held federal debt is at least 200 basis points below a market clearing economic level—–meaning that debt service costs are understated by upwards of $300 billion annually.

    At the end of the day, the fraud of massive monetization makes the rich richer because it drastically inflates the value of financial assets—–roughly 80% of which is held by the top 5% of households; and it makes the state more bloated and profligate because its enables the politicians to spend without imposing the pain of taxation or the crowding out effects which result from honest borrowing out of society’s savings pool.

    In the more wholesome times before 1914, the Federal government didn’t borrow at all. During the half-century between the battle of Gettysburg and the eve of World War I, the public debt did not rise in nominal terms, and amounted to just $1.5 billion or 4% of GDP at the time of the Fed’s creation.  Even then, the Fed was established as only a “banker’s bank” which could not own a dime of public debt, but instead existed for the narrow mission of liquefying the banking market by means of discounting solid commercial paper on receivables and inventory for ready cash.

    The modern form of monetization arose in the service of financing war bonds, not managing the business cycle, levitating the GDP or boosting the labor market toward the artifice of “full employment”. These latter purposes reflect a century of “mission creep” and the triumph of the statist assumption that governments can actually tame the business cycle and elevate the trend rate of economic growth.

    But history refutes that conceit. In the early post-war period, central bank interventions mainly caused short term bouts of unsustainable credit growth and an inflationary spiral which eventually had to be cured by monetary stringency and recession. In the process of repetition over several decades culminating in the 2008 crisis, the household and business leverage ratios were steadily ratcheted upwards until the reached peak sustainable debt.

    Now the credit channel of monetary policy transmission is broken and done. The Fed’s most recent massive monetization and “stimulus” has therefore simply inflated financial asset values—-meaning that the Fed has become a serial bubble machine.

    There is a better way, and it contrasts sharply with the systematic fraud of QE. That alternative is called the free market, and at the heart of the latter is interest rates which are “discovered” by the market, not pegged and administered by the central bank. Stated differently, the free market requires that all debt and other forms of investment be funded out of society’s pool of honest savings—-that is, income that is retained out of production already made.

    Under that regime there is no fraudulent bid for public debt and other existing assets based on something for nothing. Markets clear where they will, and interest rates are the mechanism by which the supply of honest savings and the demand for investment capital, including working capital, are balanced out.

    Needless to say, free market interest rates are the bane of Wall Street speculators and Washington spenders alike. They can spike to sudden and dramatic heights when demand for funds to finance government deficits or financial speculation out-run the voluntary pool of savings generated by society. So doing, they bring financial bubbles and fiscal profligacy up short.

    In stopping QE after a massive spree of monetization, the Fed is actually taking a tiny step toward liberating the interest rate and re-establishing honest finance. But don’t bother to inform our monetary politburo. As soon as the current massive financial bubble begins to burst, it will doubtless invent some new excuse to resume central bank balance sheet expansion and therefore fraudulent finance.

    But this time may be different. Perhaps even the central banks have reached the limits of credibility—- that is, their own equivalent of peak debt.

    “I think QE is quite effective,” Boston Fed President Eric Rosengren said in a recent interview with The Wall Street Journal, describing the approach as an option for dealing with an adverse shock to the economy.

    The walk-in cash trade was very crowded today – the downstairs was filled from time to time. There were some cash sellers but as usual most of the public was buying. The phones were very busy to moderate all day. 

    The GoldDealer.com Unscientific Activity Scale is a “5” for Thursday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Friday – 3) (Monday – 2) (Tuesday – 4) (Wednesday – 3). The scale (1 through 10) is a reliable way to understand our volume numbers. The Activity Scale is weighted and is not necessarily real time – meaning we could be very busy and see a low number – or be very slow and see a high number. This is true because of the way our computer runs what we call the “book”. Our “activity” is better understood from a wider point of view – perhaps a week or two. If the numbers are generally increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.  

    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.

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

    Thanks for reading - your friends at GoldDealer.com. Enjoy your evening and we appreciate your business.

    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.

     

    Making the Silver Maple Leaf One-Ounce Coin

    Last updated 1 day 2 hours ago

    The Royal Canadian Mint is one of a handful of sovereign nation institutes that mints widely accepted coins made from precious metals. To learn about one of the mint’s most popular bullion vehicles, the Silver Maple Leaf one-ounce coin, check out this captivating video clip.

    Sponsored by the RCM, this brief video walks the viewer through the process of minting this globally accepted coin. With of fineness of 0.9999 percent silver, the Silver Maple Leaf is one of the purest silver bullion coins in existence.

    Would you like to add a one-ounce Silver Maple Leaf coin to your coin collection or precious metal investment portfolio? For current pricing information on this and other globally recognized gold and silver bullion coins, call California Numismatic Investments at (888) 612-2679. You can also contact us online if you have questions about investing in silver.

     

    Gold Weakens as the Federal Reserve Ends Quantitative Easing

    Last updated 1 day 21 hours ago

    Commentary for Wednesday, Oct 29, 2014 (www.golddealer.com) – Gold was off $4.90 on the close at $1224.30 but soon after news from the FOMC pushed prices lower in the aftermarket – and as of this writing gold is trading around $1213.00.

    The end of quantitative easing was pretty much expected to punish gold so a weak closing was already in the cards. But the result of turning off this now famous government money punch bowl was a bit surprising – the dollar surged. The Dollar Index traded around 85.40 most of the day and when the news was announced moved to something over 86.00. This was a “wow” because while some believed the dollar would surge I thought it would remain muted considering we are already at the upper end of recent strength and some believe the US economy is still working out problems.

    At any rate the resultant stronger dollar also helped push gold lower in the aftermarket.

    So what about all this quantitative easing anyway? The quantitative easing we are talking about is QE3 which pumped 1.66 trillion dollars into the US economy in the hopes of creating enough liquidity to forestall a financial collapse after Wall Street got shaky in 2008. It was preceded by QE2 which came at a cost of 0.6 trillion dollars – which was preceded by QE1 which was 1.5 trillion dollars. This by the way is enough money to buy the 12 largest US companies which include Apple, Microsoft, Exxon, Google, Berkshire, Wells Fargo, GE and Walmart.

    Of course the end of this current round of QE does not exclude further rounds of quantitative easing if the Federal Reserve feels our economy is stalling once again.

    There is also another facet of this government funding thing you might want to keep in mind. If a commentary suggests that quantitative easing is here for the foreseeable future most readers discount this notion as too gold positive.

    In other words only diehard gold bullion players might suggest this tactic – perhaps in a desperate attempt to offer some reason why gold must eventually rise in value.

    But actually there is something to the notion that the world is now committed to further dilution of the world’s paper money supply. Look at interest rates – they are near zero and have been for some time which takes away a major tool in the governmental fight for liquidity.

    So perhaps the ending of quantitative easing might be a pipe dream – just something to think about while you’re watching Europe melt.

    Silver closed up $0.03 at $17.21.

    Platinum closed up $3.00 at $1268.00 and palladium was also higher by $7.00 at $800.00.

    This from Allen Sykora (Kitco) - SocGen: Yes Vote In Switzerland Would ‘Significantly’ Increase Central-Bank Purchases - If a Swiss referendum passes, net central-bank gold purchases likely would increase substantially from recent years, says Societe Generale. Switzerland will vote on a referendum on Nov. 30 that would do several things, including a requirement that the central bank hold 20% of its official reserves in gold. The central bank has held 1,040 metric tons since 2008, SocGen says. “At the end of 2013, gold made up 7.4% of the Swiss National Bank's official reserves, which was the lowest level of gold's share of official reserves since the IMF (International Monetary Fund) began collecting data in 1948,” SocGen notes. Should the referendum pass, the price will determine how much gold the SNB has to buy. At $1,000 an ounce, and assuming other official reserves remained flat from end-of-2013 levels, the central bank would buy a little more than 2,800 metric tons. At $1,500 gold, the central bank would buy just over 1,500 tons, SocGen continues. Sales would likely occur over a multi-year period. Since 2010, global central banks have been net buyers of between 77 and 500 tons annually. “If the SNB were to begin a multi-year gold-buying program, net purchases could increase significantly from levels seen in the past few years,” SocGen says. “To provide some context, if the SNB were to buy 500 metric tons of gold per annum for three years, this would amount to 12% of total supply and 10% of total physical demand in 2013.”

    For more than 30 years I have suggested gold bullion is a good place to park about 10% of your net worth regardless of gold’s relative price. This position comes from my inability to completely trust the government. I do trust Uncle Sam enough to be a good citizen, pay taxes, attend church and do military service.

    But I feel more comfortable with something less ethereal than fiat paper money – so gold bullion, in my hand works. My cornerstone belief which supports this small paranoia is that no nation, even one as great as America can sustain a system which is based on too much debt.

    The more consumers borrow the deeper the whole and the larger the potential damage - if the system goes off the tracks. Will it blow up – probably not but it might and so a fail-safe system is needed for some of my extra cash.

    The idea that debt was a problem not a solution was instilled in me as a lad - my mother was an accountant and after World War II - well, you know the story. Debt in our house was avoided in all cases except the small 2 bedroom house we lived in under the flight path.

    The following is a partial look at the commentary Chis Matthews recently wrote for Fortune - The Case for a Global Recession in 2015 - Economist David Levy argues instability in emerging markets will sink the U.S. economy before the end of next year.

    Four years after the end of the Great Recession, it looks as if the U.S. economy might finally be poised for breakout growth.

    Monthly job growth in 2014 is, on average, faster than at any point since the financial crisis. Overall economic growth appears to be picking up too, with real GDP growing by more than 4% in the second quarter of this year, and many economists predicting higher overall growth compared to last year.

    But news outside the U.S. isn’t so bright. European economies are still battling depression-era levels of unemployment and the threat of deflation. And emerging economies, like China, are having trouble maintaining the kind of growth they have become accustomed to in recent years. The most recent readings out of China have the world’s second-largest economy growing at roughly 7.5% per year, down from the 10% growth it averaged for two decades before its economy began to slow in 2012. And this pattern holds for other emerging economies like Brazil and Russia.

    Optimists hope that an accelerating U.S. economy will have what it takes to drag the rest of the world out of the doldrums, as it has done during so many past recoveries. But David Levy, economist and chairman of the Jerome Levy Forecasting Center, argues that the problems of the rest of the world will end up taking the U.S. down, rather than the other way around.

    Levy is calling for a 65% chance that there will be a global recession by the end of 2015, based on the simple fact that emerging markets have continued to invest in an export infrastructure to sell goods to the West that it no longer has the wherewithal to buy.

    Levy is an intellectual descendant of the economist Hyman Minsky, a heterodox thinker who spent many years working at the Jerome Levy Economic Institute and whose theories were largely ignored by economists up until the latest financial crisis. Once the crisis struck, however, Minsky’s ideas seemed to make a lot more sense. He argued that capitalist economies slowly and naturally become unstable over time, as banks and private businesses take on more and more debt, until the system finally snaps under the weight of these obligations. After surveying the wreckage caused by an over-leveraged banking system, which had gorged itself on debt backed by overvalued real estate, the economics world has begun to pay much closer to attention to Minsky and his views on financial instability.

    Indeed, Minsky and his ideas have captured the attention of big-name figures like hedge fund titan Ray Dalio and economist and Financial Times columnist Martin Wolf, who began his latest book with a quote from Minsky arguing that economists ought to formulate theories in which depressions are a naturally occurring state for capitalist economies. These thinkers have been drawn to the Minskian notion that, over the long run, capitalist economies will inevitably suffer from the kind of trouble we’ve been in recently because capitalist systems encourage the growth of debt.

    We hear a lot of people warning about the dangers of debt, specifically the government variety. But for Minksy and his followers, its private sector debt that is the problem. Here’s how economist Paul Krugman has described the Minskian concept of debt:

    He argued that conventional views of financial crisis were too narrowly focused on the specific issue of bank runs. In Minsky’s vision, excessive leverage—too much reliance on borrowed money—creates a risk of crisis whoever the borrower. Banks, which in effect borrow money short-term from their depositors but invest in assets that can’t easily be converted to cash, may be especially vulnerable. But business and household debt also expose the economy to the possibility of a self-reinforcing downward spiral.”

    Here is our usual Wednesday report on the movement of all physical Exchange Traded Funds

    Gold Exchange Traded Funds: Total ounces as of 10-15-2014 was 53,303,728. That number this week (10-29-14) was 53,085,658 ounces so over the last week we dropped 218,070 ounces of gold.

    It might also be interesting to note that in 2013 the record high for all gold ETF’s was 85,112,855 ounces. In 2014 the record low was 53,085,658 ounces.

    All Silver Exchange Traded Funds: Total as of 10-15-14 was 634,737,852. That number this week (10-29-14) was 633,910,050 ounces so over the last week we dropped 827,802 ounces of silver. 

    All Platinum Exchange Traded Funds: Total as of 10-15-14 was 2,723,381 ounces. That number this week (10-29-14) was 2,710,205 ounces so over the last week we dropped 13,176 ounces of platinum.

    All Palladium Exchange Traded Funds: Total as of 10-15-14 was 2,954,221 ounces. That number this week (10-29-14) was 2,994,198 ounces so over the last week we gained 39,977 ounces of palladium. 

    The walk-in cash trade was slow today and so were the phones. By the way we had a hiccup in our email server so mailing notifications were held up a day or two – the tech boys claim it’s all better now – how did we ever get along without computers? 

    The GoldDealer.com Unscientific Activity Scale is a “3” for Wednesday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Thursday – 3) (last Friday – 3) (Monday – 2) (Tuesday – 4). The scale (1 through 10) is a reliable way to understand our volume numbers. The Activity Scale is weighted and is not necessarily real time – meaning we could be very busy and see a low number – or be very slow and see a high number. This is true because of the way our computer runs what we call the “book”. Our “activity” is better understood from a wider point of view – perhaps a week or two. If the numbers are generally increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.  

    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.

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

    Thanks for reading - your friends at GoldDealer.com. Enjoy your evening and we appreciate your business.

    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.

    Gold Very Quiet Awaiting FOMC Comments

    Last updated 2 days 21 hours ago

    Commentary for Tuesday, Oct 28, 2014 (www.golddealer.com) – Gold closed up $0.10 at $1229.20 awaiting the results of the in-process meeting of the Deep Thinkers in Washington. The Federal Open Market Committee will release information concerning its quantitative easing program after the stock market closes tomorrow.

    Quantitative Easing as it stands right now amounts to a $15 billion dollar a month bond buying program so the glory days of $85 billion a month are gone – so it’s not that removing the last $15 billion is any big deal fiscally – but it might be big psychologically.

    Is the government really going to eliminate a program which might have saved our economic bacon since the financial collapse of 2008? I appreciate there are many who believe this rapid increase in the money supply was wrong headed but the fact remains the entire house of cards did not collapse.

    There is no doubt that the elimination of this Federal largess will pressure gold but it appears we are at or close to a bottom around $1200.00 – a bottom which might be supported by real physical demand from China, India, and central banks of the world.

    Like all government decisions the economic fallout is difficult to figure. Will Yellan end the program – most say yes but consider that real estate looks like it is softening (Shiller Index today) and there are plenty who believe the stock market is in for further correction. Durable goods orders today were down 1.3% and Europe looks rough – perhaps indicating a larger global slowdown.

    Still Consumer Confidence announce today is at it highest level since October of 2007. So from an American perspective things are getting better.

    If I had to guess a reasonable range for gold within the next few months I would say something between $1180.00 and $1250.00 makes sense.

    If you want to study gold ETF holding for more clues consider this from FXEmpire – Gold ETF’s Tumble to the Lowest in 5 Years – “Gold remains flat as traders prepare for the two day Federal Reserve meeting beginning later today. Most analysts do not believe any surprises are in store but there is always the possibility. Investors are hoping that the decision and statement released just after the conclusion of the meeting on Wednesday will have some language changes taking a more hawkish stance giving clues on the timing of an interest rate increase in early 2015. Gold is trading at 1227.80 easing down a few dollars after ending the week at $1230.00.

    The dollar dropped before the Federal Open Market Committee led by Chair Janet Yellan will debate when to start raising interest rates. Futures traders have pushed back their bets on the timing of rate increases, with the odds of it going up by December 2015 at 66 percent, from 85 percent by October next year as recently as last month. The Fed indicated in the September meeting that it planned to end its quantitative-easing programs this month. It has held its key interest rate at zero to 0.25 percent since 2008.

    Gold prices dropped as holdings in exchange-traded products backed by the metal dropped to the lowest in more than five years. On Monday gold futures drifted lower for the fifth straight session in anticipation of an end to the US Federal Reserve’s economic stimulus program, slipping back from a six-week high reached a week ago. Most large investors and retail buyers have been selling into the rally and the latest weekly data show holdings of exchange traded funds backed by physical gold falling to the lowest in over five years.”

    Silver closed up $0.07 at $17.18. I was a bit disappointed in silver sales across the counter yesterday so I checked computer numbers for US Silver Eagles and 1 oz Silver Rounds. Actually our sales in these two areas are about twice their normal rate so while the phone may not be ringing as much - the amount of dollars spent per order is moving higher.

    Platinum was higher by $11.00 at $1265.00 and palladium was up $7.00 at $793.00. 

    This from Tom Jennemann (FastMarkets) - Finalists make final pitch for gold fix; system to go live in early 2015 - The London Bullion Market Association (LBMA) aims to select a third-party technology provider that will be tasked with developing and administering a new gold price mechanism by November, it said on Monday.

    “The solution provider will then develop the daily gold price mechanism with the assistance of the LBMA. This is with a view to undertaking testing in December ahead of the solution going live early in the first quarter of 2015,” LBMA said in a release.

    The twice-daily gold fix, which has been in operation since September 12, 1919, has recently come under close regulatory and media scrutiny. While there have not been any findings of wrongdoing, it's believed that having an outside operator is a critical step in modernizing the image of the benchmark process, while also providing enhanced transparency and compliance with legislation.

    In September, the London Gold Market Fixing Ltd (LGMFL) and LBMA opened up a Request for Proposal (RFP) process to companies that were interested assuming responsibility for the administration of the London Gold Fixing.

    During an LBMA seminar held on Friday, broker Autilla Ltd (Sapient); the CME Group with Thomson Reuters; the Intercontinental Exchange (ICE); the London Metal Exchange (LME) and Electronic Broking Services (EBS), a wholesale electronic trading platform owned by ICAP, each presented their vision for the new pricing system.

    The event was attended by LMBA members and bullion market participants such as banks, investment funds, traders, refiners, mining companies, hedge funds, trade associations and end users. Both the Bank of England and the Financial Conduct Authority attended the seminar as observers.

    Each presentation was followed by a question and answer style session, which provided the opportunity for those in attendance or participating to quiz the finalists, LBMA said.

    This from Neils Christensen (Kitco) - Switzerland Gold Referendum A Healthy Conversation – Ron Paul - Although it is unlikely Switzerland’s gold referendum will pass, one U.S. politician said the country is embarking on a “healthy conversation” regarding the role of its national bank.

    Ron Paul, former congressman thinks Switzerland's gold referendum is a "healthy conversation".

    Former U.S. Rep. Ron Paul, who is a strong proponent of gold-backed currencies, said in an exclusive interview with Kitco News the fact a referendum on gold reserves was triggered in Switzerland demonstrates that people around the globe are starting to question the reliability of fiat currencies.

    On Nov. 30 Swiss voters will vote on three initiatives as part of the gold referendum: whether or not the Swiss National Bank should increase its gold reserves to 20%, that the central bank should stop selling its precious metals and that all its gold should be held within the country.

    “People are starting to talk about gold more and they should,” he said. “(The referendum) is one more step in the direction of proving that paper money, fiat money, money created by politicians out of thin air to subsidize big government and monetize debt is going to end.”

    Although recent polls showed some popularity for the “Save our Gold” initiative, which was first launched in 2013 by the Swiss People’s Party, Paul said there is a concerted effort by the Swiss government to oppose the initiative. He added that he is expecting as the Nov. 30 deadline looms closer to see stronger fear tactics from the Swiss government and the Swiss National Bank to convince people to vote against the initiative.

    “When our crisis hit there was panic and people were scared to death. Even conservatives who didn’t believe in bailing out the banks were frightened into it,” he said. “But if you had a clean vote and just simply ask the question: ‘should Switzerland hold its own gold … should the central bank hold a certain amount of gold in reserves.’ I think you would get an overwhelming ‘yes.’”

    However, he added that no matter what happens with the vote “it is the discussion that is the most important.”

    A lot of the attention of the Swiss gold referendum has been focused on the need for the national bank to buy about 1,500 metric tons of gold to boost its gold reserves to 20% of its total foreign reserves, if it passes. Paul said just as important, the central bank will have to hold all its gold within the country. Currently, the Swiss National Bank holds 70% of its gold and 20% is held with the Bank of England and 10% is held with the Bank of Canada.

    “That is a natural and normal healthy instinct and I think other countries ought to do it,” he said. “It’s sort of like holding gold for personal reasons… If I am holding gold for emergency reasons, I want to know where it is and I want access to it.”

    Kitco posted this updated information – “A slim majority of Swiss citizens said they would vote yes to force the Swiss National Bank to increase and hold on to their gold reserves, according to the country’s first opinion poll.

    On Tuesday, 20 Minuten, Switzerland’s biggest daily newspaper, released the results of its online survey. According to the poll, which was conducted on Oct. 15 and had more than 13,000 respondents, 45% to 39% said they would support the “Save Our Gold” initiative. However, according to media reports, the survey also showed a high number of undecided voters.”

    When this news story first came up on the radar screen – some weeks ago – it was generally conceded that the initiative had little chance of passing. It was criticized as being too restrictive for the Swiss central bank and some suggested it would make the Swiss less competitive in the fast changing world of international currency.

    If you are old enough to remember the 1970’s physical gold business there were many who opted to hold the paper Swiss Franc instead of dollars because of its rumored gold backing. As a curious side note in the history of the physical gold business here in America we used to offer paper Swiss Francs to those who – for a time were convinced the dollar would not survive.

    The Swiss vote looks like it will be close and if – by some sort of upset were to pass – would be a big win for those who use gold bullion as an insurance policy.” 

    The walk-in cash trade was steady most of the day and the phones were only average. I still think the public is waiting on the FOMC results. 

    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 – 4) (last Thursday – 3) (last Friday – 3) (Monday – 2). The scale (1 through 10) is a reliable way to understand our volume numbers. The Activity Scale is weighted and is not necessarily real time – meaning we could be very busy and see a low number – or be very slow and see a high number. This is true because of the way our computer runs what we call the “book”. Our “activity” is better understood from a wider point of view – perhaps a week or two. If the numbers are generally increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.

    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.

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

    Thanks for reading - your friends at GoldDealer.com. Enjoy your evening and we appreciate your business.

    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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