Monday, April 30, 2012

Interesting Gold Price Forecast for 2012

The gold price climbed $11.90, or 0.7%, to $1,654.89 per ounce on Friday as the commodities complex rebounded from yesterday’s losses.  The price of gold hovered near unchanged at $1,645 in overnight trading, but turned higher amid U.S. dollar weakness this morning.  Silver advanced alongside the gold price, by $0.31, or 1.0%, to $31.78 per ounce.  U.S. equity markets opened near unchanged this morning, with the S&P 500 down 0.1% at 1,391.52.

On Thursday the gold price continued its recent bout of weakness by falling $7.23, or 0.4%, to $1,642.99 per ounce.  The price of gold tumbled to $1,627.32 earlier in the day, but pared its losses as the U.S. dollar retreated from its intra-day high.  With the decline, the gold price reached its lowest level since January 13 and its year-to-date gain was reduced to 5.1%.

Silver fared considerably worse than the price of gold yesterday, as it dropped 2.2% to $31.47 per ounce.  Gold’s sister precious metal hit an intra-day low of $31.10 – its worst level in nine weeks – before also recouping a portion of its loss.  Nonetheless, silver remains higher by 13.5% in 2012 – making it one of the best performing commodities this year.

Gold shares came under further selling pressure in conjunction with the gold price on Thursday, with the Market Vectors Gold Miners ETF (GDX) sliding 2.0% to $48.75 per share.  In doing so, the GDX fell to its lowest closing level since August 11, 2010 and stretched its year-to-date loss to 5.2%.  Notable gold stocks moving lower included AngolGold Ashanti (AU), Eldorado Gold (EGO), and Royal Gold (RGLD).  AU slipped by 1.9% to $37.15, EGO by 1.8% to $12.88, and RGLD by 1.2% to $63.20 per share.

While the aforementioned companies posted noteworthy losses, the GDX’s worst performer on Thursday was Randgold Resources (GOLD).  Shares of GOLD plummeted $12.80, or 12.4%, to $90.60 per share after a military coup emerged and took control of the government in Mali – where Randgold has its Loulo and Morila gold mines.  Although the Company announced that its operations in Mali were “running normally,” investors chose to shoot first and ask questions later.
Yesterday’s gold price sell-off occurred in the midst of widespread liquidation in financial markets.  The primary catalyst for the decline was the latest data on Chinese manufacturing activity, which came in below economists’ estimates.  China’s preliminary Purchasing Managers’ Index (PMI) for March dropped to 48.1 and marked its fifth consecutive month below the key 50 level that separates expansion from contraction.

Following the disappointing Chinese data, the price of gold moved lower alongside commodities and stocks.  Copper futures retreated 1.9% to $3.77 per pound and crude oil sunk 1.6% to $105.51 per barrel.  The Dow Jones Industrial Average slipped 0.6% to 13,046.14 while the S&P 500 Index fell 0.7% to 1,392.78.

Despite the recent gold price weakness, one noteworthy and long-time gold bull reiterated his positive stance on the yellow metal.  Philip Klapwijk, Global Head of metals analytics at Thomson Reuters GRMS – the world’s leading metals consultancy firm – urged investors to use the recent sell-off to accumulate positions in gold.

Although the price of gold could dip below $1,600 in the short-term, Klapwijk asserted, he sees it rebounding to $2,000 per ounce either in late 2012 or early 2013.  Klapwijk based his bullish gold price view on expectations that real interest rates will remain negative for the foreseeable future and that the Federal Reserve and/or European Central Bank could launch new rounds of quantitative easing.

Let us know if you have gold to sell at or 801.889.7200

Thursday, April 26, 2012

How will the Gold Market Perfom in 2012? Should I sell my gold now?

 How will the Gold Market Perfom in 2012?

In 2011 investors saw gold perform outstandingly in the quiet season in July, August. $2,000 looked a certainty before the end of the year, but then unusual forces pummelled the gold price and all other global financial markets. Shades of the credit crunch hit the markets under the title of the Eurozone debt crisis. This had been going on for the last two years, but it entered a very dangerous stage in the final quarter of 2011.
Investors have been used to prices falling for fundamental or technical analysis reasons, but the phenomenon that we first saw in 2007/8 reared its ugly head again -Investor Meltdown as we called it.

Investor Meltdown

This has nothing to do with investments, prices, or fundamentals; it has to do with Investor's themselves and their ability to hold onto their positions in the face of market volatility, shortage of liquidity, excessive leverage of investor's positions and the interaction of these factors.
Developed world markets have advanced to extremely sophisticated levels focused on maximizing returns for the smallest amount of money. Option costs can be below 5% of the value of the underlying investment value. Margins can be as low as 15% in the futures markets. Both these instruments allow 100% gains on moves of only 10%. Banks would lend up to 100% against selective investments for further purchases. These instruments inherently demanded price movements that warranted such gearing. If the investments moved in the opposite direction by those amounts then losses could be 100% too. Where a bank loaned money, the fall had to be 50% or so before the entire invested amount was lost. But that hasn't happened since 2007, until now.
So a system of protective stop losses was developed where broker's computers were programmed to trigger a sale (or purchase) of the investment if a certain price was reached. When prices went against the investment, investors 'walked away' from their options. When prices fell, exchanges demanded a topping up of investment money to keep the margin at 10%. Where prices fell 50% -or even before that--banks required the loan be called in. When this happened a forced sale often resulted.
When prices fell, a combination of these factors triggered price declines that did not reflect what happened to the investments. Where such actions forced investors to close positions, prices fell further. When this happened, investors often turned to investments such as gold where profits still sat and sold them to save themselves from predatory creditors. As each factor hit, one after the other, investors found themselves to be involuntary sellers as their financial capabilities shrank.
As the Eurozone crisis got worse and the banks were threatened, liquidity dried up alongside shrinking asset values and rising interest rates (not central bank rates but interbank rates) -market falls were seen in most markets triggering Investor Meltdown. Gold and silver did not escape, but they didn't suffer like other markets. In fact, the falls in total were restricted to around 15% in the gold market. This may increase as gold has the potential to fall further to $1,400 or stay at current levels. Where it goes is not a matter of market fundamentals or technical analysis but the vulnerability investors still have to falling markets. Have they de-leveraged to the point where forced selling is unlikely to damage markets further or have they succeeded in covering themselves? This is what will decide just how far future market falls will be. This will decide the future of all developed world financial markets in 2012.
In short, developed world assets, including its stock of money, shrank heavily and took the value of investments down too.

Financial Market Potential

While we agree with Mr Ben Bernanke and his colleagues that quantitative easing should repair this shrinkage of money, how much to inject and ensuring it goes into the right holes is beyond the capabilities of central banks. They need the full cooperation of the banking system to ensure that new money flows down to the right places to consumer and small businesses and the housing market. This has not happened -somewhat defeating the theory of Q.E. With the shrinkage hitting all but the emerging world, the exercise has to involve all the developed world's banks doing the same. Instead, they're contributing to the problem.
The result is seen with a glance across most world markets. We see a potential for volatility that we've never seen before. From 1945 until 2010 the U.S./Britain and the rest of the developed world were the masters of markets, giving them a level of global financial control that defied basic common sense. It's the loss of control of the entire financial world that will create volatility and uncertainty in most markets going forward. The conflicting aims of the developed versus developing world are creating divisions that we cannot see being repaired in the future. There's now a battle for control of the world's wealth between West and East unfolding. It looks like the East will eventually win.
The health of national economies will again dictate the value of its currencies. In the days of yesteryear, a county's Balance of Payments was the dictator of its currency's exchange rate. This changed when the U.S. linked the oil price to the dollar and issued its currency worldwide -all in the face of persistent trade deficits. With pressure to reinvest in the world's largest and most liquid markets, the States balanced the Balance of Payments of the U.S, which allowed the number of dollars to grow to the point where it stood as the only completely liquid and sole, reserve currency (despite its issue being bloated well beyond the needs of the U.S. financial system).
Today we're at a point where such over-issuance has led to debt levels that are completely excessive throughout the developed world. The shrinkage of asset values has not only hurt values, but it has also hurt confidence and trust. If there were to be an increase of interest rates in the developed world as a result of this loss of trust and confidence, not only banks but governments would see confidence in their currencies and creditworthiness collapse. More Q.E. -whether it is through the back door in Dollar Euro swaps or QE3--makes little difference except to postpone the fateful day.
With interest rates close to zero, we should be seeing financial markets in the developed world roaring ahead. Instead they're marking time and have done for the last two years. The potential for equity bull markets is there, but few believe in it. The focus is now on staving off more deflation and hoping the banking system holds together. The Fed has reassured markets that there'll be no interest rate hikes until 2013, at the earliest. Many feel that markets will be safe until then, but then what? The feeling is not one of future, growth or even hope, but can we survive without a major bank/government crisis? For instance, it's more and more likely that Greece will leave the Eurozone in 2012/13 because it will remain a deadweight in the Eurozone, for the foreseeable future.
Market hopes are limited to survival hopes...

Change is Coming

A major change in the developed world has been caused by the emergence of Asia; as in the last few years the power and control held tightly in the developed world has begun to shift to the east. Asia has undercut the developed world in a host of manufactured products, intellectual costs, and generally drawing off a great deal of wealth and growth that is undermining the developed world. They are outgrowing, out-developing and outnumbering the developed world and can survive on a tenth of the income of what the developed world is used to. This is unlikely to change even with a revaluation of 20, 30, or 50% of the Chinese Yuan.
So developed is the West that it has become excessively dependent on whatever confidence its markets, banks, and currencies can muster. In 2007 - 2011, that confidence was badly dented. Because the reasons are so fundamental, don't expect to see this confidence grow again unless there's a resurgence of growth in the developed world -such as their finances are repaired, asset values recovered completely. Unfortunately, this would mean demise in the emerging world, and an ebb-and-tide of power, wealth, and control flowing back into the developed world.
We've searched everywhere but cannot find any sign of such change. We must adjust our view to a pragmatic one and look forward through the factors that are going to define the future world.
As Europe (and soon the U.S.) has to face the harsh realities of unsustainable debt levels and a decline in economic power, the developed world needs accept that there'll be a shift to Asian currencies. The developed world will have to accept declining standards of living and shrinkage of markets -unless they incorporate Asian markets. The process will continue to be painful, but unavoidable, as China in particular grows in global, economic dominance. Such changes will mean that the developed world structures and financial instruments will also lose power, influence, and value.
The strains these changes will engender can only succeed without market collapses, if the world uses non-national internationally trusted assets to maintain values as the changes occur. Precious metals will be part of that story. It's unavoidable. Without the dominance of the developed world central banks, the ability to manipulate values and prices will be gone.
China for sure will not allow its fortunes to be controlled by the U.S. or Europe. And it likes gold and wants it citizens to own it!
Right now, we're seeing precious metal and other financial markets churning much as one would expect at the changing of the tides. The churning is a mixture of asset value shrinkage and steady emerging world and central banks turmoil that is not price driven! However, when the new tide takes over, expect gold and silver to flow with it. Despite the possibility of further falls, we feel that the further downside risks do not warrant exiting from the precious metal markets as the upside potential is so potentially remarkable. Its osmotic drift back into the global monetary system we feel, validates our hopes, promising a golden future. We feel that the current setback is not a selling opportunity. With present and future changes in process, we also see a more-than-likely scene where gold continues to outperform other markets. But more is in store for gold that we need to understand.

Please contact us at or 801.889.7200.

Monday, April 23, 2012

Should you buy Gold as an Investment or Not?

Here is a very interesting take on what Gold may due in the next few years based on the opinion of a well known bouillon analyst.

You might not know who Harvey Organ is, but you should probably know what he’s saying.
Organ, a well-known bouillon analyst who has testifies before the U.S. Commodities Trading Futures Commission, says China is getting its hands on physical gold and silver in droves, and you would be wise to do the same.
“The problem now is that the physical is now gone. Where is going? It’s gone from West to East,” Organ states.

He continues:
A lot of people don’t know that China used to refine close to 80% of the world’s supplies of silver, because it’s very toxic. Up until probably ’85, the Chinese handled 80% of the world’s refining of silver. Now they’re down to 40%, but that’s still a major part of China’s industry. They are keeping every single silver ounce they refine, and gold. They are keeping it for themselves; their reserves are rising (though they don’t tell exactly). Two years ago they went up to 1,054 tons and I can assure you it’s probably triple that now. These guys are not stopping. Just like they are not stopping in oil. They know what the game is and they are slowly taking all their U.S. dollars that are on their shelf and converting them to gold, oil, copper – anything that’s real.
According to Organ, the price of gold could soon skyrocket as China continues to buy up physical product.
“And I’m going to tell you: you are going to go to sleep on Thursday night and gold may be $1,670. And then you wake up the next day and it’s going to be a banking holiday. And gold will be $3,000 bid, no offer,” he says.
Not surprisingly, he concludes: “You can’t have anything paper, because you got nothing. You’ve got to have a physical coin or a bar. [If all you have is a] piece of paper — that’s all it is!  It will just blow up in smoke!
“So just go buy your physical and be thankful that you are getting it at a cheaper price today.”

If you need any help with your precious metal needs, please contact us at Valley Goldmine Salt Lake.  801.889.7200.

Wednesday, April 18, 2012

We are Buying Gold in Utah, running a special promo!

Have some gold you want to sell?  Wonder what that old jewelry is worth?  Have some sterling silver flatware?  At Valley Goldmine Salt Lake we are going to give you an extra 15% over the next 2 months for your items.  All you have to do is let us know that you saw this post for an extra 15% on your items.  We will also give you an extra 15% on your gold and  your friends gold if you book a gold party in either April or May.  We are Utah's premier gold buying company.

Give us a call at 801.889.7200, or check us out on the web at:

Thursday, April 12, 2012

What determines Gold Buy and Sell Price?

Here is a piece that gives us an indication of how the gold price is factored.

Gold traders are bearish for the first time this year after the Federal Reserve signaled it may refrain from more monetary stimulus and jewelers in India, the world’s biggest bullion market, shut to protest a new tax.
Fifteen of 29 analysts surveyed by Bloomberg expect prices to decline next week and five were neutral, the highest proportion since Dec. 30. Imports by India may have plunged as much as 81 percent in March and could drop 40 percent in the second quarter, the Bombay Bullion Association said April 2. Indian jewelers, who sell more gold than Australian and U.S. mines produce in a year, were closed today for a 20th day.
Slumping Indian demand comes as prices already erased more than half of this year’s gains on mounting concern the Fed won’t buy more debt. Gold rose about 70 percent as the central bank bought $2.3 trillion of debt in two rounds of quantitative easing ending in June 2011. Policy makers indicated they won’t increase monetary accommodation unless the economy falters, according to minutes of their March 13 meeting released April 3.
“Reduced prospects for quantitative easing, if you read that as a strengthening U.S. economy, then it’s bad for gold,” said Carole Ferguson, an analyst at Fairfax IS in London. “Gold has lost some of its safe-haven shine this year. The Indian jewelry market is still very important. If strikes are a longer- term thing it’s more of a worry.”

Expanding Payrolls

Gold had risen as much as 14 percent to $1,792.70 an ounce by Feb. 28 on the Comex in New York. It traded at $1,631.90 by 11:07 a.m. today, for an annual gain of 4.2 percent. That compares with a 6.6 percent jump in the Standard & Poor’s GSCI gauge of 24 raw materials and a 9.7 percent increase in the MSCI All-Country World Index of equities. Treasuries lost 1.4 percent, a Bank of America Corp. index (MXWD) shows.
A Labor Department report tomorrow may show employment rose by more than 200,000 workers for a fourth consecutive month, according to a Bloomberg survey of economists. U.S. growth will accelerate to 2.2 percent this quarter and 2.5 percent in the following three months, compared with 2 percent in the first quarter, according to the median of 73 economist estimates compiled by Bloomberg.
While the Fed is sticking to a plan to hold the benchmark interest rate near zero at least through late 2014, federal fund futures on the Chicago Board of Trade show an 11 percent chance it will raise borrowing costs by the end of this year. The odds for an increase were 4.5 percent two months ago. Gold generally earns holders returns only through price gains. The metal will trade at $1,550 within a month, Edel Tully, an analyst at UBS AG in London, said in a report yesterday.

Gold Council

Indian consumers bought 567.4 metric tons of gold jewelry last year, according to the London-based World Gold Council. Australia and the U.S. are the world’s biggest gold producers behind China, producing a combined 515 tons, according to CRU, a research company in London. Indian jewelers closed stores to protest a 1 percent excise duty on non-branded gold ornaments. The nation remained the biggest gold market on an annual basis last year even as China overtook it in the fourth quarter.
Investors in exchange-traded products backed by gold remain bullish, holding 2,398.2 tons valued at about $125.4 billion, data compiled by Bloomberg show. That’s about 0.5 percent below the record reached March 13. Hedge funds and other speculators increased bets on higher prices in the week ended March 27, raising their net-long position by 15 percent to 130,472 futures and options, Commodity Futures Trading Commission data show.

Fewer Bonds

“Markets seem to be assuming all is OK now, but any re- emergence of problems -- Iran, Europe, U.S. economic front -- would see gold higher again,” said Adrian Day, the president of Adrian Day Asset Management in Annapolis, Maryland.
Spain sold fewer bonds than its maximum target in auctions yesterday and its borrowing costs rose, adding to concern that Europe is struggling to contain its debt crisis. Finance ministers from the 17-member euro zone agreed to a package last weekend that included 500 billion euros ($657 billion) of new bailout funds on top of 300 billion euros already committed.
Investors bought 62,500 ounces of American Eagle gold coins from the U.S. Mint last month, almost three times the amount sold in February, data on its website show. The 210,500 ounces purchased in the first quarter is still at least 22 percent less than in the first three months of the previous two years.
Spot gold’s 100-day moving average dropped below the 200- day measure for the first time in three years last week, reinforcing a bearish trend, UBS said in a report yesterday. Its 14-day relative-strength index is at 39.3, with a level of 30 indicating to some analysts that a rebound may be due.

Have some gold you want to get a price on?  Give us a call for a free estimate:

Friday, April 6, 2012

What is unique about Gold?

Ever wonder why investors and banks want to hold Gold?  Look at a few of the reasons that makes Gold a unique investment.

 Consider these characteristics:
It is rare, and its quantity is limited. The entire amount extracted from the ground in all of history amounts to 165,000 metric tons. This is equivalent to a cube 20 meters long/deep/wide.

It is difficult and expensive to find, mine, and bring to the surface. It is therefore subject to only small and slow incremental supply.

It is indestructible, homogeneous, and easily reconstituted if diluted or broken up.

It is compact, and therefore permits transportation of a high value in a relatively small space.

It is the only universally used asset that can be instantly converted to cash (even by the world's central banks) that is not someone else's liability.

And, of crucial importance, it is anonymous.

Not one of these attributes is unique to gold. What makes gold unique is that it is the only form of money which combines all of them.

 Have questions?  We can help.

Thursday, April 5, 2012

We Pay Top Dollar for Gold in Salt Lake

How much do you think we paid for this necklace?

A. $563
B. $1825
C. $1342
D. $875

We pay top dollar for gold, sterling silver and platinum.  Please call us at 801.889.7200, or check us out on the web at

Monday, April 2, 2012

Valley Goldmine Salt Lake Pays Top Dollar for Silver in Utah

Did you know we also buy silver?  We will purchase any sterling silver jewelry, silver coins, bars, and other investment grade silver.  We also are happy to buy your old sterling silver flatware sets.  A tip on how to know if what you have is sterling silver is this:  Look for a stamp that says either 925, STERLING, STER or S.S.  This is the best way to determine whether or not you have an item that is silver plated or true sterling silver.

Contact us today at Valley Goldmine Salt Lake, for all your Utah gold buying needs.