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Gold Lower on Profit Taking and a Stronger Dollar

Commentary for Friday, Jan 23, 2015 ( www.golddealer.com) – Gold on the Comex closed down $8.10 at $1292.80 on a round of expected profit taking and a stronger dollar.

The Dollar Index is reacting to the European Union quantitative easing program put in place Thursday. So the euro moves lower and the dollar continues strong – the Dollar Index low on the day was 94.11 and its high was a whopping 95.50. As of this writing it has settled somewhat around 94.88 but remains on a tear and is responsible for some of the weakness in gold this morning. I also think the reaction to the latest financial move by the European Union yesterday was disappointing – the markets look tired and it was easy to anticipate profit taking in gold, especially on the short term.

Like I hinted at yesterday – be careful what you ask for - if you are a gold enthusiast. The gold market reacted in the classic fashion – bought the rumor and sold the fact. So it remains to be seen how long it will take the new European quantitative easing program to push prices higher.

It's too soon to guess – but we may be in another "wait and see" mode especially because there are so many changes now being made with the international monetary picture. All of these are not necessarily dangerous but with this many moving parts the results are not obvious.

Still the European Central Bank will buy a lot of bonds - 60 billion euros worth every month until Sept 2016 – a very aggressive program. And the Germans are not happy – they are actually making money so anything the ECB does out of the ordinary makes them very nervous – especially because when this road show got started this kind of quantitative easing was not allowed.

There is also another seasoning in this financial stew which continues to simmer on the backburner. Over the weekend there will be an election in Greece and the opposition Syriza party is holding a 6 point lead. Their success is likely to cause even more weakness in the Euro.

And finally with the dollar so strong there is concern about our still lethargic growth rate – most think this all will keep the Federal Reserve from raising interest rates anytime soon – which supports gold.

Still gold was up $16.00 on the week but considering all the financial fireworks I would have expected more action.

Silver closed down $0.06 at $18.28. Still the recently higher pop in the price of silver was a "cooler". If you are so inclined consider the popular $1000 face 90% silver bag. Silver bullion in the form of 1964 or older silver coins is selling at $1.70 over spot – delivered. The competition ranges from $2.10 to $3.00 over spot.

Platinum closed down $17.00 at $1267.00 and palladium was up $1.00 at $774.00. Yesterday I mentioned that the Canadian Mint was the only world mint producing a 1 ounce platinum bullion coin. The US and Perth Mint have ceased production. Today the Canadians sold out of platinum bullion coins – they will continue to produce but it will take a few weeks.

It was not too long ago that Ukraine fighting pushed the price of gold higher by more than $50.00 on several occasions. Do you not find it interesting that the press has completely ignored this AP post and there is also no mention of safe-haven buying because of this escalation? This kind of non-action leads to my conclusion that gold is tired.

This from Associated Press - NATO: Fighting In Eastern Ukraine Fiercer Than Ever - Fighting in eastern Ukraine is fiercer than ever in some locations, NATO's top commander in Europe said Thursday — adding that the weapons systems seen now in the region have in the past heralded a fresh incursion by Russian troops.

"Violence has intensified and changed character in Ukraine," U.S. Air Force Gen. Philip Breedlove told a news conference at NATO headquarters. He said the fighting has re-escalated to levels seen before the Sept. 5 Minsk cease-fire agreement "and in some cases beyond."

Questioned by reporters, Breedlove, the alliance's chief commander in Europe, said he couldn't confirm Ukrainian authorities' statements that 9,000 Russian troops had entered the country.

"(But) what we do see is that the Russian-backed forces have renewed capability now to bring pressure on the Ukrainian forces, and have in several places moved the line of contact to the west," he added.

What's more, said Breedlove, NATO intelligence has begun to detect "the signatures of air defense systems and electronic warfare systems that have accompanied past Russian troop movements into Ukraine."

He declined to specify which systems, and whether they include the Buk mobile surface-to-air missile battery blamed for shooting down a Malaysian jetliner on July 17, killing all 298 people aboard. But on two prior occasions, Breedlove said, deployment of such weaponry was accompanied by a border crossing by Russian troops.

"We see the same types of equipment, etc. in eastern Ukraine now," he said.

Breedlove spoke after defense chiefs from NATO's 28 nations met to help the alliance meet its wide-ranging agenda for 2015.

Without disclosing many details, Breedlove said a decision was made taken to restore direct contacts between NATO and the chief of the Russian general staff, Gen. Valery Gerasimov, ties that were broken off after Russia's annexation of Crimea last March.

Chicago Mercantile Exchange reports for the last 5 trading days – so we are looking at the trading volume numbers for the February Gold contract: Wednesday 1/14 (178,496) - Thursday 1/15 (189,258) – Friday 1/16 (184,200) – Tuesday 1/20 (181669) and Wednesday 1/21 (176,363). On the higher end of the range but coming off somewhat meaning volume numbers are decreasing.

Precious Metal Closes & Dollar Strength – Jan 20 - 23

Gold - Silver - G/S Ratio - Dollar

Mon (Closed)

Tues $1294.20 $17.94 72.14 93.05

Wed $1293.70 $18.17 71.20 92.74

Thurs $1300.70 $18.34 70.92 94.31

Fri $1292.80 $18.28 70.72 94.81

Platinum - Palladium - Rhodium - Oil

Mon (Closed)

Tues $1287.00 $774.00 $1180.00 46.48

Wed $1277.00 $768.00 $1180.00 47.03

Thurs $1284.00 $773.00 $1180.00 47.28

Fri $1267.00 $774.00 $1180.00 45.54

Our Patented Employee Survey – Gold's Direction Next Week?

Of course it's not really patented but we do have some fun along the way. This is what the GoldDealer.com employees think – 5 believe gold will be higher next week – 3 think gold will be lower and 4 believe it will be unchanged.

Our Patented Customer Survey – Gold's Direction Next Week?

Like the employees our customers were given three choices – up – down – unchanged. We limited the survey to a random sampling of 100 transactions – unscientific but worth considering because these people took action: 59 people thought the price of gold would increase next week – 28 believe the price of gold will decrease next week and 13 think prices will remain the same.

This from Associated Press - Recent moves by central banks, at a glance - It's been an action-packed couple of weeks for some of the world's central banks.

On Thursday, the European Central Bank unveiled its latest plan to support Europe's stagnating economy: It pledged to start spending 60 billion euros on government and private bonds every month. The news helped lift stock prices and drove the value of the euro to new lows.

The ECB's announcement followed surprise moves by the Swiss National Bank last week and the Bank of Canada on Wednesday. Here are steps that major central banks around the world have taken recently to try to support their economies:

EUROPEAN CENTRAL BANK - Interest rates: The European Central Bank kept its benchmark rate unchanged at 0.05 percent Thursday. Other policies: Later in the day, the ECB launched its most aggressive effort to date to revive the region's ailing economy — a 19-month program to buy 1.1 trillion euros in government and private bonds starting in March. It acted after months of excessively low inflation in the eurozone that has discouraged borrowing and spending and kept the economy at risk of recession. By pumping new money into the eurozone's banking system, the ECB's bond purchases should make loans cheaper and easier to get so companies can invest, expand and hire. The size of the program exceeded investors' expectations, and the value of the euro fell on anticipation that the new money from the ECB would drive down the currency's value.

DENMARK CENTRAL BANK - Interest rates: Shortly after the ECB's announcement, Denmark's central bank announced its second rate cut in three days to try to discourage euro-fleeing investors from buying its currency, the krone. It lowered its deposit rate further into negative territory to minus 0.35 percent from minus 0.2 percent. On Monday, it had lowered the rate to minus 0.2 percent from minus .05 percent. Because Denmark pegs its currency to the euro, Danish officials have had to respond when the ECB's actions threaten to destabilize that peg.

Other policies: The Danish central bank has intervened in currency markets in recent months to try to control the value of the krone.

SWISS NATIONAL BANK - Interest rates: Switzerland sent financial markets into turmoil last week when it slashed rates and abandoned efforts to cap the franc's value against the euro. It cut the rate on commercial bank deposits to a shockingly low minus 0.75 percent in order to ward off investors from the Swiss franc.

Other policies: Since 2011, the Swiss National Bank has had a program to keep its franc from appreciating too much against other currencies — most importantly the euro. The bank had set a limit of 1.20 francs to the euro to keep its rise in check. But it became untenable for the SNB to keep up its program as the euro weakened. So the SNB decided on Jan. 15 to allow the market to re-price the franc. In doing so, it triggered a massive re-pricing that drove the currency to gain more than 20 percent against the euro.

FEDERAL RESERVE - Interest rates: In contrast to their counterparts in other big economies of the world, the Federal Reserve is moving closer to raising rates from record lows. But it will be "patient" in deciding when to do so, the central bank said after its last meeting in December. Fed Chair Janet Yellen said the strength of U.S. economic data and the level of inflation, not a calendar date, will dictate when it raises rates. The Federal Open Market Committee meets next week.

BANK OF CANADA - Interest rates: Canada's central bank surprised investors this week when it cut its key interest rate to 0.75 percent from 1 percent. Many economists had been expecting the Bank of Canada to keep rates steady until later this year or early 2016. The central bank said Wednesday's decision was driven by the "recent sharp drop in oil prices, which will be negative for growth and underlying inflation in Canada."

CENTRAL BANK OF BRAZIL - Interest rates: Brazil's central bank on Wednesday hiked its benchmark interest to 12.25 percent to control high inflation. The central bank's inflation target is 4.5 percent, with an upper limit of 6.5 percent. But consumer prices over the past year have been stuck above that ceiling.

PEOPLE'S BANK OF CHINA - Interest rates: Chinese authorities have been cautious in tweaking monetary policy. The People's Bank of China lowered its benchmark rates in November for the first time in more than two years. The bank cut the rate on a one-year loan by commercial banks by 0.4 percentage point to 5.6 percent. The rate paid on a one-year savings was lowered by 0.25 point to 2.75 percent.

But the People's Bank of China may be pressured to do more as the world's No. 2 economy decelerates. Data released Tuesday showed that the Chinese economy grew 7.4 percent in 2014, its weakest performance in nearly a quarter-century. And its growth is forecast to slow even more over the next two years. Though China continues to grow at more than twice the pace of the overall world, its growth rate marks a sharp drop from the sizzling double-digit expansion of previous years.

The walk-in cash trade was average at best and the phones were sleepy.

The GoldDealer.com Unscientific Activity Scale is a " 3" for Friday. The CNI Activity Scale takes into consideration volume and the hedge book: (Monday – closed) (Tuesday – 5) (Wednesday – 3) (Thursday – 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 busy and see a low number – or be 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. If the numbers are generally increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.

When buying or selling you will receive an email confirmation. This includes a PDF File to confirm your invoice or purchase order and includes forms of payment and bank wire instructions. When doing business please check to see if your current email has been entered into the new system and check to see if your computer will accept our email (no spam).

We always appreciate you keeping us up to date when moving or changing your email.

We believe our four flat screens downstairs with live independent pricing (BullionDesk.com) are unique in the United States. The walk-in cash trade can see in an instant the current prices of all bullion products and a daily graph illustrates the range of the markets on any given day.

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.

In addition to our freshly ground coffee we have added cold bottled water, cokes and Snapple. We also provide 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 – we appreciate your business. 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.

Gold Higher on EU Stimulus

Commentary for Thursday, Jan 22, 2015 ( www.golddealer.com) – Gold closed up $7.00 at $1300.70 as the European Union finally pulled the trigger on their plan to lower the price of the euro by printing more fiat paper money.

European Central Bank President Mario Draghi has been talking about this strategic monetary change for 2 ½ years but the actual path taken to help a struggling European Union was hidden behind everything from strict austerity to the printing press using a US type bond buying program.

The ECB will purchase 60 billion euros in bonds every month until September 2016. This will add liquidity to stimulate the varied economies and the quantitative easing will supposedly stimulate growth - classic Keynesianism theory that the government has your back. And of course opposite to the conservative Monetarist approach which considers the growth of the money supply.

However you want to describe this move – it was considered aggressive by most. Everyone knew the ECB was going to do something today and most speculated as to the size of the monetary jolt. The high end of the range was considered $1 trillion - this amounts to 840 billion euros.

This is much closer to the US reordering of the financial system when during the 2008 financial crisis it added $3 trillion to its balance sheet. The market response today was of course a falling euro (1.137) the lowest in 11 years.

We will have to wait and see but I don't see how the US is going to raise interest rates considering the falling euro and still unstable oil.

I was surprised however that gold did not move much higher. Eventually all fiat currency creation will push the price of gold higher but as we have seen with our own currency this cause and effect response is not reliable on the shorter term.

Still gold's rather lethargic response might be indicative of a market looking for a profit taking pull back considering recent gains.

The lowest premium government produced 1 ounce gold coin today is the popular Australian Kangaroo.

Silver closed up $0.17 at $18.34 still cheap relative to old highs but considerably off its recent lows. The lowest premium silver bullion product today would be the Johnson Mattney 100 oz silver bar at $0.75 over spot delivered.

Platinum closed up $7.00 at $1284.00 and palladium was up $5.00 at $773.00. Like I mentioned yesterday platinum is now trading under the price of gold and the only bullion 1 ounce coin produced by a world government is the Canadian Platinum Maple Leaf – other popular world mint coins have stopped production for the time being.

So with higher prices for gold across the board and activity moving higher in the Exchange Traded Funds why aren't the phones ringing off the hook on physical activity? The reason is simple – the higher activity just happened and now the precious metals are facing the dreaded Wall of Worry.

Actually this happens all the time in stocks but because the metals have generally traded lower over the longer term it has been awhile since anyone has considered this cautionary tale.

The proverbial Wall of Worry is created when prices rise dramatically on the short term and investors wonder if the price rise is the beginning of a bigger picture which will lead to more profits or some sort of short-term price trap which will cost them money. In other words they "worry" over the possibility of adding to their holdings.

If the market can climb over that Wall of Worry it is a true turnaround and worthy of additional money from the investor. If it can't – well, you know the answer.

But my point today is that gold has its usual advocates – real bullion dealers who believe the precious metals are cheap. And those who hang around - fake bullion dealers who use any excuse to sell overpriced junk described as the newest and latest thing.

Those that believe the Swiss Franc uncoupling from the euro opened the door and was a watershed event for gold. Those that believe that European Union and quantitative easing are the latest savior for those really interested in gold bullion.

Today you have a real mixed bag in the gold market – you will encounter everybody from legitimate dealers to quick money hustlers who sound and look good but are dangerous.

So for the short term ignore all the real or imagined stories and consider that Wall of Worry. If gold climbs over we are off to the races – if it does not especially now that we have crossed over the important $1300.00 mark – well you know that story too.

If you are interested in gold commentary there is a wealth of in-depth information on the net. Most casual readers are not that interested but the source for what the Chinese are doing is Koos Jansen (BullionStar.com – Singapore).

His latest Chinese Lunar Year Gold Buying at Full Steam: 61t Withdrawn from SGE Vaults in 1 Week – "As I mentioned last week , January is the time of the year for the Chinese to buy golden gifts for their love ones. And that is exactly what they are currently doing en masse, according to the latest data from the Shanghai Gold Exchange (SGE)."

But here is where the internet shines – in the process of reading Jansen I ran into something totally different – too bad I don't read Dutch.

Guilty Gold by Roel Janssen - Nearly half of the gold looted by the Nazis from the Dutch central bank during the Second World War remains to this day in Switzerland, a reminder of the Alpine nation's controversial role as a financial conduit for Hitler's regime. About 61,000kg of Dutch war gold, currently value at about €2bn, is believed to be still in Swiss possession.

During the Nazi occupation of the Netherlands, 145,650kg of monetary gold and gold coins that Dutch citizens were forced to hand over to the central bank were transported to the Reichsbank in Berlin. After the war, the Tripartite Gold Commission (TGC), set up in 1946 by the US, France and the UK to return gold stolen by Germany, handed back about 71,820kg of gold to the Netherlands – less than half of the total. In 1998, the TGC made its final share-out and was dissolved.

Looting of Dutch gold - The story of the looting of Dutch gold and how it ended up in Switzerland is told in my 'faction' thriller Fout Goud (Guilty Gold). The book, which is currently only published in Dutch, combines historical facts with a fictional plot.

The Reichsbank sold about 80% of the gold it stole from occupied countries to Switzerland to obtain convertible Swiss francs to pay for imports needed by Germany's war machine. Smaller amounts were sold to Sweden, Spain, Portugal and Turkey.

In December 1946, Switzerland and the US, acting on behalf of the TGC, signed the Washington Agreement. The Swiss, who denied any wrongdoing by buying gold from Germany during the war, agreed to hand over 52,000kg of gold to the commission for the 'economic recovery of Europe'. The Agreement gave Switzerland a waiver for any future claims on gold it had bought from Nazi Germany.

A few years later it became clear that Switzerland had bought at least 336,300kg of gold from Germany during the war. Of the Dutch gold that was transported to Berlin, about 122,000kg ended up in Switzerland.

When the Dutch demanded their gold back, the Swiss refused to discuss the claim, citing the Washington Agreement. Despite arduous diplomatic and legal efforts in the 1950s and 60s the Swiss were adamant: returning any more gold was out of the question.

When the TGC was dissolved at a conference in London, the Netherlands stated that it maintained its claim against Switzerland. Two years later, the Dutch government endorsed the conclusions of a national war-gold commission that further efforts to recover the gold were futile.

Neither Parliament nor Dutch society was told about the decision silently to shelve claims on the stolen war gold that remained in Swiss vaults.

In 1996, publications in the UK stirred up the question of Jewish gold and dormant Jewish bank accounts in Switzerland. In the end, Swiss banks were forced to repay $1.25bn to Jewish victims. The Swiss government added $500m to the settlement, though it denied any wrongdoing. The value of the Jewish gold was much smaller than the stolen monetary gold.

In my fictional retelling of the looted Dutch gold, the main protagonist inherits 15 gold coins from his grandmother. He decides to find out what happened to the gold during the war.

His search takes him to underground shelters and bunkers in Berlin and to the salt mine in Merkers, where the American Third Army discovered the remains of the Reichsbank's gold reserves in the final weeks of the war. The story ends with a spectacular attempt to recover a gold bar in Switzerland.

Fout Goud (Guilty Gold) was published in Dutch on February 20, 2014, and launched at the Dutch central bank, De Nederlandsche Bank.

This from Ambrose Evans-Pritchard (The Telegraph) - Central bank prophet fears QE warfare Pushing World Financial System out of Control

The economic prophet who foresaw the Lehman crisis with uncanny accuracy is even more worried about the world's financial system going into 2015. Beggar-thy-neighbor devaluations are spreading to every region. All the major central banks are stoking asset bubbles deliberately to put off the day of reckoning. This time emerging markets have been drawn into the quagmire as well, corrupted by the leakage from quantitative easing (QE) in the West.

"We are in a world that is dangerously unanchored," said William White, the Swiss-based chairman of the OECD's Review Committee. "We're seeing true currency wars and everybody is doing it, and I have no idea where this is going to end."

Mr White is a former chief economist to the Bank for International Settlements – the bank of central banks – and currently an advisor to German Chancellor Angela Merkel.

He said the global elastic has been stretched even further than it was in 2008 on the eve of the Great Recession. The excesses have reached almost every corner of the globe, and combined public/private debt is 20pc of GDP higher today. "We are holding a tiger by the tail," he said.He warned that QE in Europe is doomed to failure at this late stage and may instead draw the region into deeper difficulties. "Sovereign bond yields haven't been so low since the 'Black Plague': how much more bang can you get for your buck?" he told The Telegraph before the World Economic Forum in Davos.

"QE is not going to help at all. Europe has far greater reliance than the US on small and medium-sized companies (SMEs) and they get their money from banks, not from the bond market," he said.

"Even after the stress tests the banks are still in 'hunkering down mode'. They are not lending to small firms for a variety of reasons. The interest rate differential is still going up," he said.

The warnings come just as the European Central Bank prepares a blitz of bond purchases at a crucial meeting on Thursday. Most ECB-watchers expect QE of around €500bn now that the eurozone is already in deflation. Even the Bundesbank is struggling to come with fresh reasons to oppose it.

The psychological potency of this largesse will depend on whether the ECB opts for shock-and-awe concentration or trickles out the stimulus slowly. It also depends on the exact mechanism used to conduct QE, a loose term at best.

ECB president Mario Draghi hopes that bond purchases will push money out into the broader economy through a "wealth effect", but critics fear this will be worse than useless if it leads to an asset bubble without gaining traction on the real economy. Classic moneratists say the ECB may end up spinning its wheels should it merely try to expand the money base.

Mr White said QE is a disguised form of competitive devaluation. "The Japanese are now doing it as well but nobody can complain because the US started it," he said.

"There is a significant risk that this is going to end badly because the Bank of Japan is funding 40pc of all government spending. This could end in high inflation, perhaps even hyperinflation.

"The emerging markets got on the bandwagon by resisting upward pressure on their currencies and building up enormous foreign exchange reserves. The wrinkle this time is that corporations in these countries – especially in Asia and Latin America – have borrowed $6 trillion in US dollars, often through offshore centers. That is going to create a huge currency mismatch problem as US rates rise and the dollar goes back up."

Mr White's warnings are ominous. He acquired great authority in his long years at the BIS arguing that global central banks were falling into a trap by holding real rates too low in the 1990s, effectively stealing growth from the future through "intertemporal" effects.

He argues that this created a treacherous dynamic. The authorities kept having to push rates lower with the trough of each cycle, building up ever greater imbalances, in an ineluctable descent to the "zero bound", where monetary levers stop working properly.

Under his guidance, the BIS annual reports over the three years before the Lehman crisis were a rising crescendo of alarm calls at a time when other global watchdogs were asleep. His legendary report in June 2008 openly discussed whether the world was on the cusp of events that might prove as dangerous and intractable as the Great Depression, as indeed it was.

Mr White said central banks have been put in an invidious position, compelled to respond to a deep economic disorder that is beyond their power. The latest victim is the Swiss National Bank, which was effectively crushed last week by greater global forces as it tried to repel safe-haven flows into the franc. The SNB was damned whatever it tried to do. "The only choice they had was to take a blow to the left cheek, or to the right cheek," he said.

He deplores the rush to QE as an "unthinking fashion". Those who argue that the US and the UK are growing faster than Europe because they carried out QE early are confusing "correlation with causality". The Anglo-Saxon pioneers have yet to pay the price. "It ain't over until the fat lady sings. There are serious side-effects building up and we don't know what will happen when they try to reverse what they have done."

The painful irony is that central banks may have brought about exactly what they most feared by trying to keep growth buoyant at all costs, he argues, and not allowing productivity gains to drive down prices gently as occurred in episodes of the 19th century. "They have created so much debt that they may have turned a good deflation into a bad deflation after all."

The walk-in cash trade was busy most of the day with a good mix of buying and selling. The phones were mostly buyers and steady until the afternoon when everything stopped.

The GoldDealer.com Unscientific Activity Scale is a " 4" for Thursday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Friday – 2) (Monday – closed) (Tuesday – 5) (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 busy and see a low number – or be 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. If the numbers are generally increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.

When buying or selling you will receive an email confirmation. This includes a PDF File to confirm your invoice or purchase order and includes forms of payment and bank wire instructions. When doing business please check to see if your current email has been entered into the new system and check to see if your computer will accept our email (no spam).

T hanks for keeping us up to date if you have moved or changed your email.

We believe our four flat screens downstairs with live independent pricing (BullionDesk.com) are unique in the United States. The walk-in cash trade can see in an instant the current prices of all bullion products and a daily graph illustrates the range of the markets on any given day.

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.

In addition to our freshly ground coffee we have added cold bottled water, cokes and Snapple. We also provide 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 – we appreciate your business. 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.

Identifying Real Gold

You may be able to discover a treasure at yard sales and flea markets if you know how to tell real gold from fake. You can also look for a stamp or other marking on the gold that will indicate a carat value. Any green or black spots on the gold are an indication of a fake. Pay attention to edges and clasps when examining the surfaces of gold, as this is often where the discoloration appears on fake gold. Watch this video for more tips on identifying real gold.

If you want to have confidence in gold you purchase, contact California Numismatic Investments. We are one of America's largest precious metal dealers. We've been helping investors navigate the world of gold bullion since 1982. Contact us online or call us toll-free at (888) 880-7101 to find out how our gold dealers can help add value to your investment portfolio.

Gold Treads Water - Still Looking at Europe for Direction

Commentary for Wed, Jan 21, 2015 ( www.golddealer.com) – Gold finally closed down virtually unchanged – off $0.50 at $1293.70. But the action was telling because in early trading it saw follow through momentum from yesterday's big move to the upside. At one time gold reached $1307.00 before profit taking set in and the market lost its mojo.

The profit taking part of this market was expected. Around the 26 th of December gold began the push to higher ground which eventually placed the bulls in charge on the short term.

And within three weeks gold had broken out – above its falling tops line so technically things were improving very fast. This latest run above $1300.00 was prompted by the usual suspects: possible Greece default, Swiss Franc capitulation relative to the euro and more importantly the European Union claiming to define their quantitative easing plan.

This places about $125.00 profit on the long side of the board – finally - after being beat over the head from the short trade (Feb through Nov of 2014). I'm actually surprised we have not seen more profit taking but a dire Europe and the Swiss capitulation did get everyone's attention.

This short term price wobble was created when 2 ECB members discussed plans to buy bonds in March. The European Central Bank would purchase some 50 billion euros worth of bonds per month until the end of 2016. This is the first concrete plan discussed that would begin monetary stimulus in Europe and the plan might be officially announced on Thursday.

I would be careful about making assumptions relating to this announcement. Gold may have rallied on the rumor and could easily sell off on the fact given the strength of the dollar. Most recent commentary has called the expected ECB quantitative easing to be a boon for gold but consider what happened to gold after our own balance sheet was inflated by 4 trillion dollars.

At this point I'm still suspicious – there is plenty of gold moving into China and India but this is a much larger plan. Both these countries like cheaper gold and have infinite patience.

I do like the gold bottom for now – a weaker euro will support additional safe haven buying in Europe. And it's encouraging to note that all the Exchange Traded Numbers moved higher relative to the numbers we posted last week.

Silver closed up $0.23 at $18.17 so continued strength should lead to some profit taking.

Platinum closed down $10.00 at $1277.00 and palladium was also off $10.00 at $768.00. Note that the price of platinum is now $16.00 below the price of gold. It's important to note that the Canadian Mint is the only one producing a platinum bullion coin. The US Mint (US Platinum Eagle) and the Perth Mint (Australian Platinum Platypus) have stopped production.

This update from Reuters - Financial markets have been nervous about Thursday's ECB meeting, at which the bank is widely expected to unveil a quantitative easing programme, and a Greek election on Sunday, which polls suggest anti-bailout party Syriza will win.

Adding to worries, the IMF on Tuesday cut its forecast for global growth in 2015 to 3.5 percent from 3.8 percent, and called on governments and central banks to pursue accommodative

monetary policies and reforms.

Gold gained despite stronger equities and the dollar, and a weaker yen, another safe-haven asset.

Improving investor confidence was seen in the holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund. The fund saw holdings jump 1.55 percent to 742.24 tonnes on Tuesday.

For Wednesday's trading cues, investors will be watching news from Japan, where the central bank is set to make a statement after a two-day rate review. The Bank of Japan is under growing pressure to increase its already massive stimulus programme as slumping oil prices drag inflation away from its 2-percent target.

In other industry news, Zimbabwe's gold mining firms are making losses due to weak bullion prices and could collapse unless the government reduces royalties for producers, the Chamber of Mines said. Striking South African miners at Northam Platinum's biggest mine agreed to return to work, ending a week-long work stoppage, the National Union of Mineworkers said on Tuesday.

This is our usual ETF Wednesday information - Gold Exchange Traded Funds: Total as of 1-14-15 was 51,456,351. That number this week (1-21-15) was 52,748,150 ounces so over the last week we gained 1,291,799 ounces of gold.

The all-time record high for all gold ETF's was 85,112,855 ounces in 2013. The record high for Gold ETF's in 2015 is 52,748,150 and the record low for 2015 is 51,440,553.

All Silver Exchange Traded Funds: Total as of 1-14-15 was 618,588,033. That number this week (1-21-15) was 623,259,897 ounces so over the last week we gained 4,671,864 ounces of silver.

All Platinum Exchange Traded Funds: Total as of 1-14-15 was 2,620,944 ounces. That number this week (1-21-15) was 2,626,983 ounces so over the last week we gained 6,039 ounces of platinum.

All Palladium Exchange Traded Funds: Total as of 1-14-15 was 3,042,215 ounces. That number this week (1-21-15) was 3,043,495 ounces so over the last week we gained 1,280 ounces of palladium.

This from Sharps Pixley (David Smith) - China's Undisclosed Gold Reserves: A Dagger Pointed at the Heart of the Dollar - China has a 4-way global gold supply domination strategy. And it's starting to corner the market.

First, China buys physical gold in world markets, fabricates it where necessary into "good delivery" bars – in Switzerland or the Middle East – then ships the bullion, transparently through Hong Kong or Shanghai (or quietly through Beijing and other ports of entry).

Second, it keeps virtually all domestically mined gold "in house."

Third, China partners with or buys high grade, in-situ gold (and silver) projects around the globe. One of the most well-known recent actions has involved negotiations to partner with Barrick Gold on its massive cost-overrun-plagued Pascua Lama project, which straddles the Chilean-Argentine border.

Most recently, China's largest gold producer, Zinjin Mining Group, made a strategic investment in Pretium Resources' high-grade Brucejack gold Project in northwestern British Columbia to the tune of $80 million. This latter investment will facilitate eventual construction of a 2,700 tonne-per-day underground mine.

Fourth, and virtually impossible to quantify with a reasonable level of accuracy, are China's efforts to purchase "off the books" gold production from what are known as informa or artisanal gold miners in Africa and South America. This gold, which will never show up on an import manifest, nevertheless adds one more acquisition stream to the literal river of bullion flowing directly into the coffers of China's golden hoard.

U.S. intelligence advisor Jim Rickards, author of The Death of Money, recounts an episode told to him by a friend who is a senior officer of a high-security transporter of physical metals who had brought gold into China at the head of an armored column, guarded by heavily-armed troops.

One of these days, at a time of its choosing, China may reveal just how much gold it does hold, alongside a possible decision to enable a newly gold-backed currency, the Yuan, to make its debut on the world's financial stage. Such an event would have profound implications for the primacy of the U.S. dollar, as well as America's ability to continue running printing press deficits, long financed by Chinese purchases of U.S. debt instruments, to the tune of several trillion dollars.

When this event takes place, it will become evident to the world's financial players that, as Rickards so poignantly remarks, China's true gold reserves will have become "a dagger pointed at the heart of the dollar."

Most Westerners fail to appreciate the methodology by which China has traditionally pursued – and often successfully achieved – its geopolitical ends.

Have you ever wondered how billionaires continue to get RICHER, while the rest of the world is struggling? "I study billionaires for a living. To be more specific, I study how these investors generate such huge and consistent profits in the stock markets -- year-in and year-out."

China is "surrounding" the global gold supply, analogized by this "seki" from the game known as "Go." China's strategies are oriented from the perspective of many years or even decades, unlike Western governments, who often judge success or failure based upon quarterly or annual progress reports. They are not likely to be concerned if the Pascua Lama project is not in production 10 years from now. They know that the gold – and silver is in the ground, so it's just a question of when – not if – they can acquire a substantial amount, adding it to their continually-growing stash.

Some Westerners are familiar with a Japanese board game of strategy called "Go." Few know that this game actually originated in China more than 2,500 years ago. Though the two player game has fairly simple rules, the number of possible games is several times that of chess. The objective is to outmaneuver the opponent, surrounding the largest area of the board with one's own stones.

China Is "Surrounding" the Global Gold Supply - In the figure above, a situation known as "seki" or "mutual life" has taken place. The player with the black stones – labeled here as the Chinese currency, the Yuan, has positioned in such a way that if its opponent moves first – in this case, the U.S. dollar, he will be captured.

This Go board move offers an excellent analogy for the U.S. dollar competition with the Chinese Yuan. In order to be "dethroned," the dollar does not have to be eliminated from global currency completion. It may not be necessary for China – using chess terminology – to fully checkmate the dollar. Instead, simply relegating it to "first among equals" might be enough to effectively cripple its historic full-spectrum functionality, because at that point, the Federal Reserve would no longer have the ability to issue unlimited, un-backed, U.S. dollar-denominated debt instruments.

A Game of Stones and Silk - "Surrounding" global gold production is just one aspect of China's grand strategy for achieving political and economic dominance in Central Asia and beyond. The revitalization of modern-day trade routes, throughout direct spheres of influence, integrated with connections into Europe – once known as The Silk Road – is well underway.

Think of this term as a plural. These "roads" will see Chinese companies investing along their paths in dozens of countries, a significance that is almost impossible to overestimate.

Pepe Escobar, the roving correspondent for Asia Times/Hong Kong, describes it this way: The Yiwu-Madrid route across Eurasia represents the beginning of a set of game-changing developments. It will be an efficient logistics channel of incredible length. It will represent geopolitics with a human touch, knitting together small traders and huge markets across a vast landmass. It's already a graphic example of Eurasian integration on the go. And most of all, it's the first building block on China's 'New Silk Road,' conceivably the project of the new century and undoubtedly the greatest trade story in the world for the next decade.

Meanwhile, the systemic issues which drove gold to $1,900 and silver to almost $50 in 2011 – deficit spending, leveraged derivatives expansion, and misallocation of money due to artificially low interest rates – continue to worsen. Divining the exact timing when all these things reach a crisis point is less important (provided you are not too late!) than making sure you have "laid in" some financial protection to help keep you safe from the inevitable fallout's worst effects.

The progression of China's Go game strategy – and rising affluence among Asian nations which enables them to buy increasing amounts of gold and silver – are all positive factors supporting higher precious metals prices.

When push finally comes to shove, David Galland of Casey Research seems to have nailed it when he said, "The dollar is headed toward the sacrificial altar, with a knife made of gold. Sooner or later, the central bankers will have to throw in the towel, and just let gold run."

When that happens, the only question – other than trying to find some metal to buy – will be "How high is high?" Having enough gold and silver within arms' reach before then may be one of the best decisions you can make.

The walk-in cash trade was about average – nothing to write home about and the phones were also no big deal. So for my money the American public is still waiting on the sidelines wondering if this latest move to the upside is real or just another bull market trap.

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 – 5) (last Friday – 2) (Monday – closed) (Tuesday – 5). 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 busy and see a low number – or be 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. If the numbers are generally increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.

When buying or selling you will receive an email confirmation. This includes a PDF File to confirm your invoice or purchase order and includes forms of payment and bank wire instructions. When doing business please check to see if your current email has been entered into the new system and check to see if your computer will accept our email (no spam).

T hanks for keeping us up to date if you have moved or changed your email.

We believe our four flat screens downstairs with live independent pricing (BullionDesk.com) are unique in the United States. The walk-in cash trade can see in an instant the current prices of all bullion products and a daily graph illustrates the range of the markets on any given day.

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.

In addition to our freshly ground coffee we have added cold bottled water, cokes and Snapple. We also provide 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 – we appreciate your business 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.

Gold at Five Month High Waiting on the Next EU Move

Commentary for Tuesday, Jan 20, 2015 ( www.golddealer.com) – Gold closed up $17.30 at $1294.20 so momentum is in the bull's corner - for now – and the technical picture for gold short term is solid.

This strong finish after the US holiday on Monday is not surprising considering the tension aboard but it is surprising considering the Dollar Index closed at 93.01 and crude oil dropped $2.00 a barrel – now looking at $46.79.

The Greek debt problem and new elections seem to favor less austerity. This alone would normally move the gold needle but I think you need a great deal more than this to challenge $1300.00 gold.

It's possible that the recent move by the Swiss National Bank letting the Swiss Franc float against the euro may eventually be given credit for turning around a very negative gold market. And if "turning around" is too strong at least signally that fiat paper currency must at times be taken to the wood shed for a good paddling.

And everyone is sweating bullets over this coming Thursday's meeting of the European Union and what exactly President Draghi has up his paper printing sleeve. This holds more weight than either the Greek problem or the Swiss upset.

Silver closed up a tepid $0.20 at $17.94. The buzz has definitely left this area as investors piled on when the number moved below $16.00 and then bounced higher. This is typical but keep in mind that if gold runs we will not see a pull-back in silver and current levels are still cheap relative to old highs.

Platinum closed up $17.00 at $1287.00 and palladium was also higher by $24.00 at $778.00.

This from Bloomberg (Alessandro Speciale and Andre Tartar) - ECB May Deliver $635 Billion to Steer Euro Away From Deflation - Mario Draghi is likely to announce a 550 billion-euro ($640 billion) bond-purchase program this week and won't skimp too much on the details, economists say.

The European Central Bank president will make his biggest push yet to steer the euro area away from deflation by announcing quantitative easing on Jan. 22, according to 93 percent of respondents in a Bloomberg News survey. The median estimate of the size of the package tops the 500 billion euros in models presented to officials this month.

Draghi's goal at a press conference after the Governing Council gathers will be to convince investors he has a strategy big and bold enough to reinvigorate the moribund economy. Speculation over his plans has already sent the euro to an 11-year low, with the fund flows probably contributing to the Swiss National Bank's shock decision to end a cap on the franc.

"Market expectations now are stellar," said Attilio Bertini, head of research at Credito Valtellinese SC in Sondrio, Italy. There must be "no disappointment" and "the ECB's next move should be pervasive, risk-transferring and long-lasting," he said.

Shouldn't the ECB Buy Bonds, Too? - The proportion of economists predicting QE at this week's meeting has risen from 37 percent in a survey carried out after the last monetary-policy meeting on Dec. 4. This month's survey polled 60 economists and was conducted from Jan. 9 to Jan. 16.

German Criticism - With plunging oil prices tipping the euro-area inflation rate below zero for the first time in more than five years, policy makers have been arguing in media interviews and speeches over how to react. Much of that has been in Germany, where criticism of QE is strongest.

Bundesbank president Jens Weidmann has claimed that while cheaper energy weighs on inflation in the short term, it also provides stimulus to the economy. That position was reiterated by the German central bank in its monthly bulletin today. Executive Board member Benoit Coeure says it might not be enough.

"Anything that happens to headline inflation rates has potential to feed into long-term inflation expectations and that's what we have to be wary of," Coeure said in comments published on the ECB's website last week. While no decision has been taken on QE, "for it to be efficient it would have to be big," he said.

Sovereign Bonds - About half of economists in the Bloomberg survey forecast the ECB will announce a total purchase size, and 15 percent said it'll limit itself to a monthly amount. Monthly buying could continue for a predetermined period, or until inflation is back at the ECB's goal of just under 2 percent. Consumer prices fell an annual 0.2 percent last month.

Fifty-seven percent of respondents said QE will largely focus on government bonds, with some other debt instruments included. A quarter predicted a broad mix of sovereign debt and other securities, and 14 percent said the program will exclusively purchase sovereigns.

Draghi intends to expand the ECB's balance sheet to as much as 3 trillion euros through asset purchases and loans to banks. The central bank currently has assets of 2.2 trillion euros, though that's likely to shrink in coming weeks as 200 billion euros of crisis-era loans to banks mature.

He met with German Chancellor Angela Merkel on Jan. 14 for "regular informal talks," a German government spokesman said last week, declining to comment on the topic. Spiegel magazine reported on Jan. 16 that Draghi told her the latest QE plans.

Risk Allocation - Those plans include limiting risk-sharing by having national central banks buy the debt of their own countries, Spiegel said, without stating where it got the information. Purchases would be based on the ECB's capital key, or roughly equivalent to the relative size of each economy. The key is 18 percent for Germany, 14 percent for France, 12 percent for Italy, and 9 percent for Spain. All other nations are below 5 percent and eight are under 1 percent.

Purchases would be limited to 20 percent to 25 percent of each country's debt, and Greece would be excluded because its bonds don't meet quality criteria, Spiegel said.

Frankfurter Allgemeine Sonntagszeitung reported yesterday that national central banks would be liable for at least half of any losses that may arise from buying bonds issued by their own country. The German newspaper didn't say where it got the information.

No Back Door - More than two-thirds of respondents in the Bloomberg survey said the ECB will use the capital key to set asset-buying, and 27 percent said national central banks will shoulder at least some of the risk on their own.

"To have any significant effect on periphery bond rates, which we think is considered an important implicit policy target by the ECB, the program would have to include periphery government bonds," said Christopher Matthies, an economist at Sparkasse Suedholstein in Neumuenster, Germany.

Officials have also floated ideas such as the ECB buying debt only above a certain rating threshold or only making purchases up to a certain amount, leaving national central banks to decide if they want to go further.

Dutch central-bank Governor Klaas Knot told Spiegel that the decision to share risk is a matter for elected politicians, not central bankers.

"We have to avoid that decisions are taken through the back door of the ECB balance sheet," he said in an interview.

Legal Opinion - That debate is colored by a European Court of Justice opinion last week on an earlier bond-buying plan, Outright Monetary Transactions. The non-binding opinion, which will be followed by a ruling in four to six months, said the ECB should have "broad discretion" when framing monetary policy, while still pointing to limits to its powers.

Ultimately, some level of risk separation might be what it takes to mute the strongest opponents of QE at this week's meeting and help Draghi show investors that the Governing Council is committed to its task.

"There's already a majority in favor of QE and even purchases of government bonds," said Kristian Toedtmann, an economist at DekaBank in Frankfurt. "But the ECB stands in a tradition of broad consensus."

The walk-in cash trade was busy today with a decent mix of buyers and sellers. The phones were just average. To be frank I expected a bigger bang than we saw - so the public while feeling better about gold may not be convinced that a break out to higher ground is in the making. You can still afford to be cautious here – but keep your eye on the number. If both gold and silver are truly oversold on this latest pullback the bounce to higher ground can happen quickly.

The GoldDealer.com Unscientific Activity Scale is a " 5" for Tuesday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Wednesday – 3) (last Thursday – 5) (last Friday – 2) (last Monday – closed). 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 busy and see a low number – or be 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. If the numbers are generally increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.

When buying or selling you will receive an email confirmation. This includes a PDF File to confirm your invoice or purchase order and includes forms of payment and bank wire instructions. When doing business please check to see if your current email has been entered into the new system and check to see if your computer will accept our email (no spam).

T hanks for keeping us up to date if you have moved or changed your email.

We believe our four flat screens downstairs with live independent pricing (BullionDesk.com) are unique in the United States. The walk in cash trade can see in an instant the current prices of all bullion products and a daily graph illustrates the range of the markets on any given day.

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.

In addition to our freshly ground coffee we have added cold bottled water, cokes and Snapple. We also provide 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 – we appreciate your business 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.

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