After a brief lull, gold is fast regaining its popularity as the choicest investment option, especially in the trying times. The metal proved to be the best alternative to the volatile paper currency at the time of economic downturns. During the global recession of 2008, gold surged to record highs as the investors the world over began converting their cash holdings into the yellow metal. As the world economy seemed to be returning to normalcy, the commodity witnessed price correction, more significantly from December 2009 onwards. However, with the progress of the Fiscal Year 2010, the news of the Euro Zone Crisis started pouring in and acting as a major damper to the already shaky market sentiments. The fears of a second round of troubles gave a fresh boost to the gold demand in all forms, including coins.
The European sovereign debt crisis has made gold bullion particularly sought-after in Europe. The South African gold coin Krugerrand is currently enjoying higher valuation of the Canadian bullion, Gold Maple leaf. Meanwhile, the premium on the British bullion, Gold Sovereign is accelerating by the day. However, rooting to the concerns over the Euro Zone crisis, the rest of the world economy has made global investors wary of the foreign exchange rates moving against their home currencies. The sharp rise in the demand for the United States Gold Eagles is a proof of the sagging market view. The US bullion deliveries in the month of May 2010 shot up to double on a year-on-year basis. The US is also plagued by its own slow recovery and rising national debt, which has touched the unprecedented levels. The figure is estimated to be over $13 trillion!
The exact implication of the Greece-led instability is still a matter of debate, with conflicting news and opinions coming up often. Though the gold prices remain high, the uncertainty is making the investors wary of offloading their bullion inventories. However, in an interesting development, a member of the United States House of Representatives Anthony David Weiner from New York has accused Goldline Inc. of artificially promoting the demand for the American Eagles. In a statement from his office, the company is defined as “aggressive sales tactics, conservative spokespeople and rhetoric to sell over-priced gold coins to unsuspecting consumers.” It is hard to ascertain the proportion of the total coin demand so created and what comes out of the political roe over the issue. Meanwhile, the demand for BU and Mint State 20 cents is also picking up, such that much of the earlier price correction has already been covered.
Tuesday, June 29, 2010
Wednesday, June 23, 2010
Staggering Price for the 1794 Silver Dollar
The silver dollar was one of the earliest species to be issued from the United States Mint. Though, the Mint came into existence in 1792, red tape and cumbersome legal requirements deterred the official casting in precious metals until 1794. Unconfirmed accounts suggest that total 1,578 coins were struck in the year 1794. The entire lot was minted using a single pair of dies in one day, on October 15, 1794. Consequently, the strikes gradually became less prominent, resulting in the outright rejection of a large number of silver dollars. It is believed that today only 120 to 130 coins are available in acceptable net mintage. Therefore, the 1794 silver dollar is treated as a rare issue.
The Congress mandated that the design for the silver dollar was to feature ‘Liberty’ and commissioned the task to engraver Robert Scot. The obverse of the coin portrays the side view of the face of a young woman with freely flowing hair. This hairstyle is particularly symbolic of ‘freedom.’ The word ‘LIBERTY’ is engraved at the top along the circumference with fifteen stars representing the states. The lower portion contains the year of issue. The reverse side shows a bald eagle with outspread wings, encircled by laurel branches on either side. The eagle is depicted sitting on a rock and looking towards its left. The country’s name is engraved along the circumference.
The then Director of the US Mint, David Rittenhouse distributed some of the pieces as mementos to some VIPs, put some into the common circulation, while retained some of them. The uncirculated silver dollars are very few in number and are available in mint state grade, commanding very high valuations. On May 20, 2010, one such coin was sold under a private treaty sale at a stunning price of $7.85 million. This constitutes the highest value transaction in precious metal coins in the world and surpasses a previous record of $7.59 for a 1933 American Double Eagle (gold). The President of the Rare Coins Wholesalers, Steven L. Contursi sold it to Cardinal Collection Educational Foundation, California, after holding it for last seven years.
Many analysts and experts believe that this particular piece is the first silver dollar ever struck. However, concrete evidence to this effect is not available. The dollar retains its pristine shape, making it more significant than its other counterparts do. The visible file marks were created to make the metal content precise to the face value. Martin Loges of Sunnyvale Foundation, California stated, “Of all the rarities I have seen or heard of, there is no doubt in my mind that this is the single most important of all, the very first silver dollar. This is the coin that has it all.”
The Congress mandated that the design for the silver dollar was to feature ‘Liberty’ and commissioned the task to engraver Robert Scot. The obverse of the coin portrays the side view of the face of a young woman with freely flowing hair. This hairstyle is particularly symbolic of ‘freedom.’ The word ‘LIBERTY’ is engraved at the top along the circumference with fifteen stars representing the states. The lower portion contains the year of issue. The reverse side shows a bald eagle with outspread wings, encircled by laurel branches on either side. The eagle is depicted sitting on a rock and looking towards its left. The country’s name is engraved along the circumference.
The then Director of the US Mint, David Rittenhouse distributed some of the pieces as mementos to some VIPs, put some into the common circulation, while retained some of them. The uncirculated silver dollars are very few in number and are available in mint state grade, commanding very high valuations. On May 20, 2010, one such coin was sold under a private treaty sale at a stunning price of $7.85 million. This constitutes the highest value transaction in precious metal coins in the world and surpasses a previous record of $7.59 for a 1933 American Double Eagle (gold). The President of the Rare Coins Wholesalers, Steven L. Contursi sold it to Cardinal Collection Educational Foundation, California, after holding it for last seven years.
Many analysts and experts believe that this particular piece is the first silver dollar ever struck. However, concrete evidence to this effect is not available. The dollar retains its pristine shape, making it more significant than its other counterparts do. The visible file marks were created to make the metal content precise to the face value. Martin Loges of Sunnyvale Foundation, California stated, “Of all the rarities I have seen or heard of, there is no doubt in my mind that this is the single most important of all, the very first silver dollar. This is the coin that has it all.”
Monday, June 21, 2010
Greece’s Rating Downgrade and the Impact on Gold Prices
The preliminary news of a brewing economic trouble in the Euro Zone began pouring in with the start of FY 2010. The problem that began with Greece, gripped Spain and Portugal as well, jeopardizing the future of Euro, one of the best paper currency alternatives to the US Dollar. The sovereign debt of these nations reached to alarming levels, much higher than their GDPs. The next blow came as Greece requested an EU/IMF sponsored bailout package in April 2010, followed by a credit rating downgrade by Standard & Poor. The debt rating of Greece was reduced to BB+ (non-investment grade) on April 27, 2010.
The industry watchers remain divided on the exact impact of the crisis, yet everyone agrees that any sovereign credit default is likely to destabilize an already slow world economy. As the bailout package is being formulated, another leading agency, Moody’s Investor Service pegged Greece’s rating to Ba1 (junk), down four notches on June 14, 2010. While this has instigated a lot of furor with the European Union expressing a ‘surprise’ over the move, the investors and speculators seem to have taken a different beat. A key fact in the case is that the national debt of the United States has also reached at historic levels, crossing $13 trillion. As a tumbling Euro has lost much of its attraction as an alternative to a weakening Dollar, the traditional preferred commodity gold has regained its sheen.
Much on the similar lines as during the global meltdown of 2008, the investors at various levels have started switching to the yellow metal, as an effective hedge against any further destabilization in the world economy. Apart from the panic-driven consumer demand, the market for speculative positions is also heating up. There is a large section of experts, who have faith in the EU/IMF rescue package for Greece. However, an equally sizable number, including the credit rating agencies, believes that there is a strong probability of administrative issues and implementation risks inherent in the program. Last week has been a witness of the wavering market sentiments, where gold touched the record price of $1,251.20 before reaching $1,214.
Moody’s latest action reflected in the gold spot that hovered around $1,226.95 on Monday. The August delivery futures jumped approximately $5 to reach $1,299.10. ScotiaMocatta of Scotiabank Group expects that after consolidating around the current levels, gold is expected to reach new highs in the coming days. Meanwhile, another leading agency Fitch has clarified that it is not contemplating a rating downgrade for the ailing country, in the near future.
The industry watchers remain divided on the exact impact of the crisis, yet everyone agrees that any sovereign credit default is likely to destabilize an already slow world economy. As the bailout package is being formulated, another leading agency, Moody’s Investor Service pegged Greece’s rating to Ba1 (junk), down four notches on June 14, 2010. While this has instigated a lot of furor with the European Union expressing a ‘surprise’ over the move, the investors and speculators seem to have taken a different beat. A key fact in the case is that the national debt of the United States has also reached at historic levels, crossing $13 trillion. As a tumbling Euro has lost much of its attraction as an alternative to a weakening Dollar, the traditional preferred commodity gold has regained its sheen.
Much on the similar lines as during the global meltdown of 2008, the investors at various levels have started switching to the yellow metal, as an effective hedge against any further destabilization in the world economy. Apart from the panic-driven consumer demand, the market for speculative positions is also heating up. There is a large section of experts, who have faith in the EU/IMF rescue package for Greece. However, an equally sizable number, including the credit rating agencies, believes that there is a strong probability of administrative issues and implementation risks inherent in the program. Last week has been a witness of the wavering market sentiments, where gold touched the record price of $1,251.20 before reaching $1,214.
Moody’s latest action reflected in the gold spot that hovered around $1,226.95 on Monday. The August delivery futures jumped approximately $5 to reach $1,299.10. ScotiaMocatta of Scotiabank Group expects that after consolidating around the current levels, gold is expected to reach new highs in the coming days. Meanwhile, another leading agency Fitch has clarified that it is not contemplating a rating downgrade for the ailing country, in the near future.
Friday, June 18, 2010
The Advancing Gold Futures
The significance of gold as a measuring standard of wealth and a viable investment option has been recognized since ancient times. Even after the dissolution of the Gold Standard worldwide, the yellow metal remains the most important asset for the various Central Banks across the globe. In such times, the demand surges in every quarter from national treasuries to retail investors. The recent global recession reestablished the authority of gold coins for hedging, investment, and even for speculative purposes.
The gold futures got a fresh impetus on June 15, 2010, amidst the growing concerns about the state of global economy. The August-delivery gold futures increased by 0.8% to reach $1,234.40 on the New York Mercantile Exchange, after hovering around $1,220 for a couple of days. Amidst concerns over the rising sovereign debt levels and weakening US Dollar, gold is increasingly seen as an effective alternative. The Dollar Index (DXY) was down by 0.7% to 85.93, while Euro ended approximately 1% higher than the Dollar. The Dollar Index measures the price of the US Dollar, relative to six major currencies of the world. The Greece-led economic crisis that came into picture in the first quarter of 2010 sent warning signals in the already ailing world economy. The impact of these events in the Euro Zone could not be assessed completely until date. As more and more grim news and analysis began pouring in, the fears of a double dip grew stronger.
The volatile situation in the European Union, in general, and the downgrading of Greece’s credit rating by Moody’s Investor Service on Tuesday, are the other major factors currently driving the gold prices. The credit rating agency slashed the ratings to non-investment grade, pointing out the inherent risks of IMF-sponsored proposed bailout packages for Greece. The Chicago-based Future Path Trading’s futures analyst, Frank Lesh stated that it is still uncertain whether the European Union is out of ‘danger’ and on the path of recovery. Nevertheless, the popular sentiments remain highly skewed in favor of gold. According to analyst Stephen Platt from Archer Financial Services in Chicago, following the past week’s price fluctuations, the commodity appears to be consolidating. Ever since the debt crisis became apparent, the commodity has become pricier by 12%. For the first time in almost four decades, since the gold futures were introduced on the New York Mercantile Exchange, the bullion touched $1,245.60.
The gold futures got a fresh impetus on June 15, 2010, amidst the growing concerns about the state of global economy. The August-delivery gold futures increased by 0.8% to reach $1,234.40 on the New York Mercantile Exchange, after hovering around $1,220 for a couple of days. Amidst concerns over the rising sovereign debt levels and weakening US Dollar, gold is increasingly seen as an effective alternative. The Dollar Index (DXY) was down by 0.7% to 85.93, while Euro ended approximately 1% higher than the Dollar. The Dollar Index measures the price of the US Dollar, relative to six major currencies of the world. The Greece-led economic crisis that came into picture in the first quarter of 2010 sent warning signals in the already ailing world economy. The impact of these events in the Euro Zone could not be assessed completely until date. As more and more grim news and analysis began pouring in, the fears of a double dip grew stronger.
The volatile situation in the European Union, in general, and the downgrading of Greece’s credit rating by Moody’s Investor Service on Tuesday, are the other major factors currently driving the gold prices. The credit rating agency slashed the ratings to non-investment grade, pointing out the inherent risks of IMF-sponsored proposed bailout packages for Greece. The Chicago-based Future Path Trading’s futures analyst, Frank Lesh stated that it is still uncertain whether the European Union is out of ‘danger’ and on the path of recovery. Nevertheless, the popular sentiments remain highly skewed in favor of gold. According to analyst Stephen Platt from Archer Financial Services in Chicago, following the past week’s price fluctuations, the commodity appears to be consolidating. Ever since the debt crisis became apparent, the commodity has become pricier by 12%. For the first time in almost four decades, since the gold futures were introduced on the New York Mercantile Exchange, the bullion touched $1,245.60.
Sunday, June 6, 2010
American Eagle Gold Coins Well Know Bullion Coins
American Eagle Gold Coins are well known bullion coins. These are minted in USA and as per the rules the gold is 100% American for it to be considered legal. These were launched when South African gold was banned due to protest against apartheid.
The American Eagle Gold Coins are 22 carat gold, i.e. 91.67% pure gold. They are made in 1/10 oz, ¼ oz, ½ oz and 1 oz denominations which are also the weight of the coin i.e. its gold content. Gold has baser metal like copper and silver alloy content. They differ from Kruggerands in their yellow color, which is due to the alloy. Kruggerands are deep orange.
This coin was designed by Augustus Saint Gaudens, the world famous designer. It has the Lady of Liberty holding her torch on one side, the other has a male eagle flying above a female eagle and a baby eagle. It is rich in symbolism. The male eagle represents the power and might of USA, and the male eagle also carries an olive branch that represents USA’s commitment to peace. All of the coins bear the same design. The gold content varies as per the denomination.
Another great advantage is that American Eagle Gold Coins are recognized globally. They are, in fact, the most popular gold coins in the world. Hollywood has done its bit in making people from countries all over the world familiar with both its intrinsic value as well as its artistic value. This adds to their appeal as a collector’s item. People display pride in owning an American Eagle Gold Coin.
Moreover, U.S. Mint guarantees their gold content and their weight.
The American Eagle Gold Coins are 22 carat gold, i.e. 91.67% pure gold. They are made in 1/10 oz, ¼ oz, ½ oz and 1 oz denominations which are also the weight of the coin i.e. its gold content. Gold has baser metal like copper and silver alloy content. They differ from Kruggerands in their yellow color, which is due to the alloy. Kruggerands are deep orange.
This coin was designed by Augustus Saint Gaudens, the world famous designer. It has the Lady of Liberty holding her torch on one side, the other has a male eagle flying above a female eagle and a baby eagle. It is rich in symbolism. The male eagle represents the power and might of USA, and the male eagle also carries an olive branch that represents USA’s commitment to peace. All of the coins bear the same design. The gold content varies as per the denomination.
Another great advantage is that American Eagle Gold Coins are recognized globally. They are, in fact, the most popular gold coins in the world. Hollywood has done its bit in making people from countries all over the world familiar with both its intrinsic value as well as its artistic value. This adds to their appeal as a collector’s item. People display pride in owning an American Eagle Gold Coin.
Moreover, U.S. Mint guarantees their gold content and their weight.
Thursday, June 3, 2010
Euro Debt Risks Fuel Demand for Gold
On May 27th according to Bloomber investors bought precious metals over concerns of Europe debt crisis sending gold near a one week high. The euro declined as gold bullion rose to $1,212.25 an ounce by 8:10 a.m. in Sydney. June delivery gold is up 3% for the week ending May 28th.
On May 26th platinum rose 0.3% to $1,520.50 an ounce while palladium rose another 0.7% to $442 an ounce.
Silver also increase 0.2% to $18.10 an ounce achieving a total of 2.3% over the last three days.
On May 26th platinum rose 0.3% to $1,520.50 an ounce while palladium rose another 0.7% to $442 an ounce.
Silver also increase 0.2% to $18.10 an ounce achieving a total of 2.3% over the last three days.
Low Interest Rates May Allow Gold and Silver to Rise
With the Federal reserve most likely not changing the current fiscal policy, gold and silver prices may rise due to low interest rates allowing investors to buy precious metals as a hedge against inflation, according to Dave Rusate, GE Capital's managing director of foreign exchange and commodities.
"If the government doesn't raise interest rates, that allows hedge funds and other speculators who try to protect themselves from inflation to buy" (gold and silver), says Rusate.
For the ninth straight year gold futures have risen and are up already 11 percent this year. A new record was achieved in May 14 when gold hit $1,249.70 an ounce. Silver is also up on the year at around 25% in the last 12 months.
Rusate also states that platinum may have a nice jump in the next month as South Africa the world's largest platinum producer slows down production due to the World Cup. South Africa is the host country for the World Cup and electricity flowing to mining companies may be directed toward the event.
"If the government doesn't raise interest rates, that allows hedge funds and other speculators who try to protect themselves from inflation to buy" (gold and silver), says Rusate.
For the ninth straight year gold futures have risen and are up already 11 percent this year. A new record was achieved in May 14 when gold hit $1,249.70 an ounce. Silver is also up on the year at around 25% in the last 12 months.
Rusate also states that platinum may have a nice jump in the next month as South Africa the world's largest platinum producer slows down production due to the World Cup. South Africa is the host country for the World Cup and electricity flowing to mining companies may be directed toward the event.
Subscribe to:
Posts (Atom)
