Monday, July 30, 2012

Are the Olympic Medals real Gold?

The last Olympic gold medal that was actually made from gold was awarded in 1912. So, if Olympic gold medals aren't gold, then what are they? The specific composition and design of Olympic medals is determined by the host city's organizing committee. However, certain standards must be maintained:
  • Gold and silver medals are 92.5% silver.
  • Gold medals must be plated with at least 6 grams of gold.
  • All Olympic medals must be at least 3 mm thick and at least 60 mm in diameter.
Bronze medals are bronze, an alloy of copper and usually tin. It's worth noting that gold, silver, and bronze medals have not always been awarded. At the 1896 Olympic Games, the winners were awarded silver medals, whiile the runners-up got bronze medals. The winners at the 1900 Olympics received trophies or cups instead of medals. The custom of awarding gold, silver, and bronze medals started at the 1904 Olympics. After the 1912 Olympics the gold medals have been gilded silver rather than real gold.
Although the Olympic gold medal is more silver than gold, there are gold medals that are really gold, such as the Congressional Gold Medal and Nobel Prize Medal. Before 1980 the Nobel Prize Medal was made from 23 carat gold. Newer Nobel Prize medals are 18 carat green gold plated with 24 carat gold.

Enjoy the Olympics and let us help you with all of your precious metals needs.  801.889.7200 or online at valleygoldminesaltlake.com

Monday, July 16, 2012

Has Gold Peaked? An expert opinion

Is the gold price too high? Has gold peaked?

"I have been interested in gold, but the price is too high. What if it has reached the peak?" The gold price may actually be low compared to where it's going to be in 2012, 2015 or 2020 and beyond. There are several reasons why the gold price was undervalued in the past decades: debt was under control, so there was no need to print money (unlike today, when governments need to produce fresh money to pay back what they had borrowed). While money printing and borrowing were happening in a controlled manner, the inflation was contained. The financial markets were fairly stable and funds yielded attractive profits. Thus, safe heaven investments, such as gold, were unsought.
In addition, the Western central banks were selling large portions of their gold reserves in the expectation of a long-lasting economic boom. These sell-offs lead by the Bank of England, the International Monetary Fund and the European central banks peaked around 2000 and caused a further depression of the gold price.
But apart from the comparison to the prosperous 1990s, there is little evidence that the current gold price is too high. The purchasing power of one ounce of gold in terms of food, housing or other commodities is in line with historical records from decades and centuries ago. It suggests that gold is not expensive from the long-term perspective. Rather, the gold price is likely to keep rising due to the expected problems of the next 10 to 20 years: inflation from excessive money printing, turbulent markets caused by unstable (inflating) prices, new oil price shocks and government budgets affected by retiring Baby Boomers, and so on. 

Friday, July 6, 2012

$10,000 an ounce for Gold.....

BELIEVE IT OR NOT, there is a plausible path to a $10,000 an ounce Gold Price And it doesn't require a breakdown in civil society.

Speculators see central bankers as modern-day superheroes, able to push markets around with a single phrase. In the minds of most investors, Ben Bernanke, Mario Draghi and Masaaki Shirakawa might as well be wearing tights, masks and capes. These superhero central bankers continuously swoop down into the financial markets to defend them from downticks...and to insure that they always deliver capital gains.
The reality, of course, is that these superheroes are frauds. They have no superpowers...other than the power of mass delusion. The powers of Mario Draghi and the other central bankers in Europe are waning. Excess debt is like kryptonite: Each new wave of printing has less impact on markets. As the popular phrase goes: "This is a solvency problem, not a liquidity problem."
In other words, new money supply cannot restore health to sick loans and government bonds. The only way to restore solvency to the system is to deflate the economy or slash the amount of debt in the system through mass bankruptcy.
Or is there another way? Is there a "reset button" that central bankers can push (with the approval of political leaders) that would restore balance to the system?
We know central bankers would never want to deflate the economy or crash the value of debt, which would destroy the banking system. So how about inflating the money supply to dilute the value of debt? All in one fell swoop?
Right now, central bankers are diluting the value of debt very slowly by pushing interest rates below the rate of inflation. Some call this "financial repression." It's an unspoken policy that has many negative consequences. What is an alternative, since all attempts to "fix" the current system with more borrowing and printing are failing?
How about the classical gold standard, which stands out as the least flawed of all the systems we've tried. Each nation could choose to peg its local currency to gold at a price that allows for enough growth in bank reserves to greatly reduce the burden of public- and private-sector debts.
Re-pegging a currency like the US Dollar to gold at the current price (about $1,550) has its pitfalls. Most notably, it would not deleverage an overleveraged banking system. But re-pegging the Dollar to something like $10,000 an ounce might do the trick.
Hedge fund managers Lee Quaintance and Paul Brodsky from QB Asset Management wrote a fascinating outline on the potential reintroduction of gold into the monetary system, while simultaneously implementing what one might consider a debt jubilee. QB explains the mechanics of how it could work in the US:
Using the US as an example, the Fed would purchase Treasury's gold at a large and specified premium to its current spot valuation. The higher the price, the more base money would be created and the more public debt would be extinguished. An eight-to-10-fold increase in the Gold Price via this mechanism would fully reserve all existing US Dollar-denominated bank deposits (a full deleveraging of the banking system)."
Below is what the remonetization of gold would look like in chart form. The yellow line would rapidly approach the blue line. And the blue line will keep rising as we see further growth in the money supply. QB's "Shadow Gold Price" divides the US monetary base by official US gold holdings. Policymakers, who always feel the need to manage something, would appreciate that this is the same formula used during the Bretton Woods regime to peg the Dollar at $35 per ounce. In other words, the Shadow Gold Price is the theoretical price of gold after the Fed inflated the supply of Dollars to a level that would cover systemic bank liabilities and then re-pegged the Dollar to gold. Behold the path to $10,000 gold:

This path would weaken the economy-sapping effects of debt created since President Nixon closed the gold window. It would transform a debt-based currency into an asset-backed currency. No longer would one ask the unpleasant question "What backs the Dollar?" and come away with even more questions (and a headache). Right now, the Dollar is backed by Treasuries held on the Fed's balance sheet, which are in turn backed by Dollars, which are in turn backed by faith in fiat money — i.e., nothing!
QB's monetization scenario would impose losses on certain parties as the reset button is hit, but unlike most of the policy prescriptions we've seen lately, it seems to solve more problems than it creates. Most notably, politicians could argue that this reset would involve "migration of value, in real terms, from leveraged assets to unleveraged goods, services and assets." Wage earners would be winners relative to asset owners, because "stable to higher nominal asset prices would require even higher nominal wage and consumable pricing looking forward."
This scenario argues for holding some shares in producers of physical commodities (especially gold miners), even if it feels like we're in a deflationary environment. A gold standard, after a one-time debt monetization, would make for a more-balanced, efficient global economy less prone to violent booms and busts.
As an added bonus: Central bankers would no longer be viewed as superheroes! Just meager servants, pegging the money supply to gold and letting the free market determine the price of money. After all, when in history has central planning worked better over time than the free market?
We can hope the central bankers of the world stumble their way to a solution like that proposed by QB Asset Management before they inflict even more damage to the foundation of the global economy. Unfortunately, conditions may have to get much worse in financial markets, banking systems and economies before such "outside the box" ideas are considered. A defensive portfolio with exposure to gold and other real assets seems like the right mix in today's environment.

Give us a call for all of your precious metals needs at 801.889.7200 or online at valleygoldminesaltlake.com

Thursday, June 28, 2012

China is buying up more Gold..


Gold-investment demand in China may gain more than 10 percent this year as buyers seek a haven from Europe’s debt crisis and the prospect of weakening currencies, according to the country’s largest bullion bank.
“Investors here want to hold part of their assets in gold to hedge for the risks, especially now that the financial crisis has evolved into a sovereign crisis,” Zheng Zhiguang, general manager of the precious-metals department at Industrial and Commercial Bank of China Ltd., said in an interview in Shanghai.
China will topple India this year as the largest bullion market as rising incomes bolster demand, the World Gold Council forecasts. Photographer: Jerome Favre/Bloomberg
June 4 (Bloomberg) -- Juerg Kiener, chief investment officer at Swiss Asia Capital Ltd. in Singapore, talks about the outlook for commodity markets. Gold declined after rising the most in more than three years as some investors sold the metal to raise cash following losses in equities and other commodities. Kiener speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
May 31 (Bloomberg) -- Dominic Schnider, Singapore-based global head of commodity research at UBS AG's wealth management unit, talks about the outlook for gold prices and demand. Schnider speaks with Zeb Eckert on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
May 28 (Bloomberg) -- Norman Chan, head of investment at Calibre Asset Management Ltd. in Hong Kong, talks about global financial markets and his investment strategy. He also discusses Europe's sovereign debt crisis and China's economy. He speaks with John Dawson on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
China will topple India this year as the largest bullion market as rising incomes bolster demand, the World Gold Council forecasts. Gold may gain for a 12th year in 2012 as European policy makers strive to avoid a breakup of the euro zone and the U.S. Federal Reserve weighs more stimulus to aid the recovery. Investors in China, facing lackluster equity markets and property curbs, are looking more to the metal, Zheng said June 6.
“It’s necessary for individual, institutional or even government investors to hold gold when the value of money is decreasing at a time of possible quantitative easing or excessive money-printing practices,” said Zheng.
Investment demand in China was a record 98.6 metric tons in the first quarter, 13 percent higher the same period in 2011, according to figures from the producer-funded council. Last year, it climbed 38 percent to 258.9 tons compared with 2010, as overall demand gained 20 percent to 769.8 tons. China’s total gold demand may reach 1,000 tons this year, the WGC has said.
Debt Crisis
Gold for immediate delivery traded at $1,598.02 an ounce at 4:03 p.m. in Shanghai, 2.2 percent higher this year. The price touched $1,526.97 on May 16, the lowest level since December, as Europe’s debt crisis weakened the euro and investors favored increased dollar holdings.
While a stronger dollar may pressure bullion, “I’m optimistic on the gold prices in the long term because of the China demand,” said Zheng. “There are too many uncertainties now in the global economy, politics and the financial sector.”
ICBC represents more than 20 percent of the turnover on the Shanghai Gold Exchange, China’s largest spot market for precious metals, and more than 30 percent of the gold-leasing business in China, according to Zheng. The lender accounted for about 16 percent of nationwide bullion sales last year.
Gold imports by mainland China from Hong Kong climbed 65 percent to a record 103.6 tons in April, according to data from the Census and Statistics Department of the Hong Kong government released on June 5. The increase came even as Lao Feng Xiang Co. (900905), the mainland’s biggest gold-jewelry maker, said in May that gold-demand growth in China may stagnate this year as falling prices put off investors and an economic slowdown crimps sales.
Hurt Exports
The second-largest economy expanded 8.1 percent in the first quarter, the slowest pace in almost three years as Europe’s crisis hurt exports. Should Greece exit the euro, the expansion may slow to 6.4 percent in 2012 without stimulus, China International Capital Corp. said on May 23.
China, which on June 7 announced the first cut in borrowing costs since 2008, has curbed property investments to avoid a bubble. The Shanghai Composite Index (SHCOMP) declined 15 percent in the past year, while spot bullion gained 5.4 percent.
On a three-month basis, gold demand in China eclipsed India’s over the past two quarters, according to the World Gold Council. The increased wealth of China’s middle class is helping to drive consumption, Albert Cheng, the council’s Far East managing director, said in an interview in May.
Last Resort
Greek voters are set to go the polls for the second time in two months on June 17 in a vote that may determine whether the country stays in the 17-nation euro. Goldman Sachs Group Inc. (GS) said gold remains the so-called currency of last resort, forecasting a rally by year-end, according to a May 9 report.
Spanish Economy Minister Luis de Guindos said on June 9 that he would request as much as 100 billion euros ($126 billion) in emergency loans from the euro area to shore up the country’s banking system. That, coupled with weekend trade data from China, helped to boost stocks and commodities today.
As China allowed investors to buy and hold gold only in recent years, “there’s explosive, pent-up demand because the Chinese have an attachment to gold,” said Zheng, predicting that growth in investment demand will beat the expansion in jewelry sales. “There’s great potential for expanding China’s physical-gold investment market.” 

Call us for all of your precious metals needs at 801.889.7200 or online at valleygoldminesaltlake.com

Tuesday, June 26, 2012

Gold Party Specail in Utah

For those considering doing a gold party here in Utah, give us a call so we can go over how fun it can be.  Until August 1st, we will be paying an additional 5% to anyone who hosts a gold party with us.  That means the host will get 15% of all of the gold we purchase.  Contact us at 801.889.7200 or visit us online at valleygoldminesaltlake.com

Wednesday, June 20, 2012

Want to find some Gold in Utah? Take up this hobby.

Here is a story of someone who purchased a gold detector.  He has had some great success.

Couldn't be Happier

metal detector find - gold nuggets - usa

I've had a very good Minelab Month of May with my GPX 5000. I found 3 BIG nuggets .55oz, 1.27oz &.9oz totaling 2.72 oz and a 1902s barber Quarter in a new patch. All were found with the Commander coils. What a deadly combination.... the nuggets didn't have a chance!! I couldn't be happier!!!!


Give us a call when you find those nuggets.  We will take them off your hands for some cold hard cash!  809.889.7200 or online at valleygoldminesaltlake.com

Monday, June 18, 2012

Which evil would you prefer? Gold is being sought out by all types of people.

This is an interesting article about how criminals will always find a way.  In choosing the better of two evils, selling gold is better than drugs...


A decade ago, the Colombian region of Putumayo was the main production centre for coca, the raw material for cocaine.
And the guerrillas from the Revolutionary Armed Forces of Colombia (Farc) were well placed to profit from the illegal drugs trade.
Today, there are still small fields of bright green coca cut from the virgin jungle, but the rebels have found a more lucrative, and far safer, source of income: gold.
It was here the US military aid package, known as Plan Colombia, which has amounted to some $8bn (£5bn) since 1999, was concentrated.
Since 2000, fleets of spray planes have dropped glyphosate chemicals over the coca bushes, managing to reduce, but never eradicate, drug production.
What the chemicals have done is push local farmers into the new, informal industry of gold mining.
"We estimate that the Farc here make 800m pesos ($450,000) a week from illegal gold mining," said Jhimmy Calvache, the acting mayor of Mocoa in Putumayo province.
Without massive army support, police cannot check up on the Farc's activities
Colombia has vast gold deposits, especially along the rivers that wash down from the Andes Mountains.
It was gold that drew the Spanish conquistadors here in the 16th Century, and now, with prices high for precious metal, gold fever has returned.
Mechanical diggers operate along the riverbeds and banks in Putumayo, protected by heavily armed rebels who allow no access to the sites and impose huge "taxes" on production.
In March, police sought to send in investigators to find out how much gold was being extracted.
They ran into trigger-happy guerrillas and it was decided that, without massive army support, there was no chance of making any meaningful inquiries. The operation was abandoned.
Mine operators
While the illegal exploitation of gold in Putumayo is still in its infancy, it is well developed in other parts of the country.
In the northern department of Antioquia, the Farc have established a series of extortion schemes on the gold miners, legal and illegal.
For every mechanical digger that enters their territory, the rebels charge an initial "tax" of up to $3,000 and another $2,000 per piece of heavy machinery for every month of operation.
In the gold-rich municipality of Anori in Antioquia, authorities believe there are up to 120 diggers operating, earning the local Farc unit a monthly income of at least $240,000. There are 125 municipalities in Antioquia.
"Gold is now more lucrative than coca," says Antioquia Governor Sergio Fajardo.
The guerrillas are not just extorting money but running some mining operations themselves or demanding a percentage of all production.
The advantage of gold is that it is perfectly legal to transport and sell, unlike cocaine.
Indeed, legally registered mines have become a favourite acquisition for drug traffickers as well, as they are perfect vehicles for laundering money.
The mining companies can claim any amount of gold is being extracted and then traffickers put all their money from cocaine sales through the books.
On condition of anonymity, a mine worker in Anori played the recording on his telephone of a call he said was from the Farc demanding payment.
"Don't try my patience this month," growled a low voice, "don't make me look for you, or the machines will be burnt and you may become a military objective [this is guerrilla speak for becoming a target for assassination]."
He paid, and continues paying, even during the rainy season when the rising water levels make extracting gold from the river bed almost impossible.
Recruitment drive
In Putumayo, there is clear evidence that the rebels are strengthening themselves thanks to the cash from gold.
In the remote municipality of Puerto Guzman, 400 people were called in April by the rebels to attend a political meeting, where they said they were forced to listen to Marxist doctrine.
These meetings are increasingly common.
In Piamonte, accessible only by canoe, the rebels run football tournaments for the young people, to hook them in and prepare them for recruitment.
The police station in Piamonte, a series of bunkers connected by trenches, operates as if under siege
"We had a rebel incursion last month," said Piamonte local councillor Carlos Martinez, who moved his children away for fear of Farc recruitment.
"The guerrillas came into the town, to within 30 metres of the police station. The policemen did nothing, they never left their base."
The police station is a series of bunkers connected by trenches. Resupply is done by US-supplied Blackhawk helicopters.
Their landing is covered by a helicopter gunship hovering over the town, the gunner's finger never leaving the trigger of his machine gun that is capable of firing 800 rounds a minute.
A young policeman offered a few words from the barrier to the base, refusing to come out or let me in.
"We don't get much co-operation from the local community here. We never leave the town," he said, glancing nervously at the high ground within sniper range.
Putumayo used to produce up to 100 tonnes of cocaine a year. Now it produces around 40 tonnes.
But the shortfall in Farc revenue has been more than made up with illegal mining of gold.
As Colombia's conflict enters its 49th year, the 9,000-strong rebels are looking to gold to fund new offensives against the state.
Contact us for all of your precious metals needs at 801.889.7200 or at valleygoldminesaltlake.com