Of all the gold coins that are available, my favorite is the .9999 fine gold American Buffalo.
Authorized by Congress through the Presidential Coin Act of 2005, the gold American Buffalo was first minted in 2006.
Unlike previous American gold coinage, which has traditionally been 22-karat (or .9167 fine), the American Buffalo is unique in that it represents the United States’ first large-scale circulation of a .9999 (or four-nines) fine gold coin in the Mint’s history. It has a face value of $50 on the reverse side and by law must be minted with US gold.
Since they are pure gold, which is soft and prone to scuffs and nicks, they are shipped in a protective plastic sheets of 20. One of our staff took delivery of 70 Buffalos at our office today. Our office manager and Andy’s assistant had never seen the actual coin before. People always react the same way, the first time they see and handle one of these works of art. They fall in love, at first sight.
If the design looks familiar, it should, because this is a re-do of our older silver Buffalo Nickel, which was minted from 1913 to 1938. As a kid, one of these coins would buy me a candy bar or a street car ride or even get me into a Saturday matinee at the Homewood Theater where I could watch Roy Rogers or Gene Autry best the bad guys – and never ever kiss the girls. Well, a nickel is not what it used to be – and neither are today’s movies, which have lost their charm and innocence.
Whenever the US Mint starts to fall behind in its deliveries, they cut off sales of the Buffalo and direct all of their effort to mint the Gold Eagles. When that happens, the “premium” rises on the Buffalos compared to other gold bullion coins.
My daily blog is primarily focused on the economy, the dollar and precious metals, but our business is to sell and buy gold and silver, so from time-to-time, I will pass on general information on gold and silver coins.
Is the damage over? How low will gold fall?
Based on the typical “Options Expiry” raids, gold usually stabilizes right after the one or two day raid. In this case, the bullion banks (aka, Bill Murphy’s “Gold Cartel”) have been unable to force gold below its 200 day moving average (in red). If gold holds up here or moves back above $1,180 then the pull back is done.
Rick Ackerman is usually pretty spot-on with his price objectives. Here is what he has to say about where gold will settle in.
Looking for a Turn in Gold from $1140
Has Gold’s price action been getting you down lately? Take heart, since relief could come as early as today or tomorrow in the form of a Hidden Pivot support at exactly $1140.10. For the last two weeks, that’s been our downside target for the correction begun five weeks ago from around $1266, although it didn’t begin to emerge with clarity until the August Comex contract plunged from $1208 right after the July 4th holiday weekend. At yesterday’s lows, the correction so far had knocked 8% off the price of gold relative to the all-time high recorded on June 21. Even though we’d been expecting this weakness, we told subscribers at the outset that we didn’t foresee anything more serious developing.
Although we avoid chiseling such predictions in stone, we’ve advised cautious bottom-fishing near $1140, using a tight stop-loss of $2 or less. Our confidence is high that there will be a tradable bounce from the target, although a decisive breach would be the equivalent of the groundhog seeing his shadow – i.e., six more weeks (or so) of winter. Please note that we’ve identified a secondary target at 1155.00 that may have been fulfilled by yesterday’s 1156.90 low. However, our gut feeling is that this Hidden Pivot support will fail, sending the August contract down to the more important one at 1140.10.
I received the following Email from reader Poul M. Question:I don’t think my silver will be too heavy or bulky when the price is 100. or more. Do you? I also have a question. Where can I see the 200 day moving average in relation to gold and silver? Thanks for your news letter.
My reply: Sure it will – it will be just as heavy at $100 as it is at $17. It will, however, be worth much more. If you try and purchase six-figures of silver NOW it is heavy and bulky. At $100 an ounce it will be 80% less so. I guess you have to buy it now and suffer with the weight and bulk – and then smile all the way to the bank when it hits $100 and I honestly expect that it will.
As you can see, Gold’s 200 day MA (above) rests at 1145.69 and silver’s at 17.50. Da Boyz are doing a better job of hammering silver than they are with gold, but that is usually the case, courtesy of JPMorgan. Today, they managed to muscle silver below its 200 day MA. Technically speaking, this is not a good sign for silver and unless gold moves up fast, to give silver a bit of an up-draft, it could fall further.
Recently, I had a conversation with a friend who is of the opinion that we will not experience a double-dip recession. I disagree, and so does John Williams
Here are highlights from John Williams’s latest release at Shadowstats.
U.S. Economy Slows Anew. With a weakening labor market, softer consumer confidence, softening housing activity and retail sales, and an intensifying trade deficit, the early stages of a renewed economic decline – what likely will be popularized as a “double-dip” recession – have begun to unfold. Accordingly, most business reporting in the months ahead will tend to show patterns of accelerating contraction. A detailed economic review will be included the Commentary on Friday (July 30th), following the “advance” estimate of second-quarter GDP and annual GDP revisions.
Meaningless Home Sales Numbers Serve as Fodder for Irrational Stock Market. The monthly new home sales data simply cannot be taken at face value. The numbers are of such poor quality and of such minimal statistical significance that one has to wonder why the Census Bureau even bothers to report them. Census might consider holding back the data six months, or so, until the regular and volatile revisions stabilize. The only value for the June new home sales numbers was in the realm of Wall Street hypesters trying to support irrationally high stock prices for a couple of hours.
Due for release on August 6, I expect nonfarm payrolls to show an outright monthly contraction, ex-census workers, with the unemployment rate jumping more than expected.
While investors are drinking the Obama Administration’s Kool-Aid and popping champagne corks over the slew of optimistic earnings reports and guidance, the economy continues to quietly deteriorate. This morning we were treated to another disappointment: durable goods. Add to that the ongoing weakness in real estate and sub-par retail sales and it’s hard to understand the unbridled optimism that has suddenly gripped the markets.
Not that economic statistics are a good barometer of future market prices. Like earnings, they are backward looking and generally have ZEROpredictive value. Markets typically turn well before the economy and corporate earnings. So, what’s my beef?
Russell reverses himself
Yesterday, Richard Russell reversed his position and wrote that a Dow Theory Bear Sell Signal is no longer in place. Many people I talk to mis-understand Russell. They think that he waffles back and forth. It is the market that waffles back and forth, not Russell. He reports what is happening and there are certain clearly defined criteria as to what constitutes a Dow Theory Bull or Bear Sell Signal. This is a big event – and one that you should be aware of since I reported on Russell’s Dow Theory Bear Sell Signal a short while ago. The market has been “rescued” at least for the time being.
Russell wrote the following:
The world has been turned upside down. I guess that’s what you might think if you read yesterday’s site. But no, it’s the same old world. The difference is that on Wall Street we received a Dow Theory bull signal yesterday. This occurred when both the Industrial and Transport Averages broke out to close decisively and simultaneously above their June highs.
I’ll admit it — I really didn’t expect it. But the stock market doesn’t arrange itself to live up to Richard Russell’s expectations. The stock market is a law unto its self. The stock market owes me or anyone else nothing. The FACT is that the situation has changed. In breaking out above their June highs, the Averages are saying that the market trend has reversed from down to up. Argue with that at your own risk.
I explained what I personally intend to do about yesterday’s action. But each investor’s position is different. In view of my financial position and my age, I don’t feel any urge to play the upside of this market, this despite the Dow Theory bullish signal. That fact is that at this stage of my life, risk vs. reward plays a very large part in my actions.
However, this does not apply to the great majority of my subscribers. If you are bold and willing to speculate and take risks, I outlined a plan you might follow. It’s simple — buy a quantity of DIAs that you feel comfortable with, place a mental stop loss under your purchase price (maybe 8% under) and get in on the fun.
That in a nutshell, is my stance on this market. I might add that after yesterday’s surge in the stock averages, it would not be surprising to see the market back off today. This could be the proverbial “step backwards to give it the energy to surge higher again.”