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(Kitco News) – Analysts are blaming much of the recent decline in gold on so-called long liquidation by shorter-term speculators in the futures market, with some saying this may be exaggerating the move.
Otherwise, some also say, the most recent data suggest longer-term investor interest has held up, as reflected by exchange-traded-product holdings, and the news flow was not bearish enough to account for the nearly $120-an ounce decline since last week’s high. As of 11:15 a.m. EST, April gold was trading at $1,674.10 an ounce, down $29.80 for the day and down 6.6% from the four-month high of $1,792.70 hit one week ago.
“One thing that has bothered me…is the fact that the Commitments of Traders reports have shown a huge increase in hedge-fund, large-spec longs in gold and other markets, crude as well,” said Bill O’Neill, one of the principals with LOGIC Advisors. “That’s a bit of a danger sign. It’s been building up week after week. It leaves it vulnerable, if the market starts to back down, to some heavy liquidation.”
Meanwhile, a “risk-off mentality” is occurring in a broad range of markets Tuesday, he said. Most commodities and equities are lower, while the euro and most other currencies have weakened against the U.S. dollar.
“So there is no new buying of any significance coming into the market,” O’Neill said. “When you combine that with the fact we have this very substantial spec long position, it will cause the market to make very jerky types of moves and move very, very sharply. Nothing has really changed as far as the basic fundamental factors that have been driving gold higher…Money flow can be very dominant.”
Commerzbank, in a daily research note, said much of the recent weakness is the result of market participants “with a short-term horizon selling long positions on the futures market.”
Open-interest data would seem to confirm this. Data on the CME Group Web site shows that the number of open futures positions at the end of the business day declined by 7% to 444,415 contracts as of Monday from 479,044 on Feb. 28, the day before the downward correction began.
The most recent COT data from the Commodity Futures Trading Commission showed that large speculators’ net length (total longs minus total shorts) had climbed to the highest level since Sept. 6, as of the Feb. 28 reporting deadline for the most recent report. The large non-commercial accounts (often referred to as the funds) stood net long by 221,542 lots for futures and options combined, which was up 63% since Jan. 3.
Veteran traders closely monitor the data. Whenever it becomes heavily extended in either direction for any commodity, this is often seen as a sign that much of the potential buying or selling in futures markets may have already occurred, leaving the market vulnerable to a correction whenever some type of catalyst occurs.
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Dear Friend of GATA and Gold (and Silver):
Interviewed today by King World News, Sprott Asset Management's John Embry discusses another smash in the gold and silver paper markets by their "manipulators," the bullion banks:
Market analyst and gold mining entrepreneur Jim Sinclair writes that today's action in gold is an "intervention" functioning as "window dressing" camouflage for more "quantitative easing" by central banks:
And MarketWatch quotes Richard Hastings of Global Hunter Securities as saying today's comments by Federal Reserve Chairman Ben Bernanke may have been "designed to take out some of the inflation in the industrial and commodity side of the markets right now, since the Fed does not want inflation to creep up and threaten its ultra-low rate policy at this time":
That is, more market manipulation by the Federal Reserve, market manipulation being, as GATA has been noting for many years, central banking's reason for being:
"And so we have come to an era of daily market interventions by central banks -- so much so that the main purpose of central banking now is to prevent ordinary markets from happening at all." (http://www.gata.org/node/6242)
Well, at least this manipulation and intervention are being acknowledged in public more often now. But don't ask GATA when they'll end or when foreign central banks and sovereign wealth funds will pull the plug on the operation by dumping U.S. government bonds and buying gold and commodities all at once. That portfolio rebalancing has been happening gradually for a long time, the plug will be pulled only when those foreign central banks and sovereign wealth funds consider themselves fully hedged, and they won't be tipping us off the night before.
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Could history repeat itself? That is a question uppermost in the minds of many Americans as they warily watch gasoline prices at the pump rise week after week.
After all, a spike in gasoline prices early last year helped nearly knock the economy back into recession.
The answer, economists say, is that this time is different: the recovery is in far better shape to absorb the blow.
"This is the dark cloud in an otherwise brightening domestic economic picture. It's something we need to watch right now, but not panic about yet," said Jerry Webman, chief economist at OppenheimerFunds in New York.
U.S. gas prices have jumped 8.8 percent since the start of this year, according to the Energy Information Agency, topping an average of $3.65 a gallon in the week through Monday. This is a record for this time of the year when prices are usually on the low side because of slow seasonal demand.
Early last year, a combination of strong gasoline prices in the wake of the so-called Arab spring uprisings and disruptions to motor vehicle production after a devastating earthquake in Japan put the brakes on U.S. growth.
Although gasoline prices are 41 cents higher than they were at this time last year, there are no supply-chain problems disrupting factory production and winter this year has been unseasonably warm, giving the economy a mild stimulus.
"Fortunately the U.S. economy is on an upswing, not strong but on the way up. It's in a better shape to deal with the oil prices," said Sung Won Sohn, an economics professor at California State University Channel Island. "We don't have the Japanese tsunami to worry about, business and consumer confidence have improved, and the job market is growing nicely."
CRUDE PRICES NEAR 9-MONTH HIGHS
Recent data ranging from employment to manufacturing have been solid, leading economists to temper their expectations of a sharp slowdown in U.S. economic growth in the current quarter.
The brightening outlook has helped support oil prices, although the main driver appears to be fear that a confrontation between Western nations and Iran could end up disrupting oil supplies. U.S. crude prices hit a more than nine-month high at $106.72 a barrel during trading on Wednesday.
Iran, the world's fifth-largest oil exporter, has threatened to close the Strait of Hormuz, the main Gulf oil shipping lane, in response to sanctions aimed at getting Tehran to abandon its nuclear program. Western nations say the program is aimed at developing weapons; Tehran says it's peaceful.
Although U.S. gasoline prices have jumped, economists take comfort in the fact that the pace of the increase has not been as rapid as it was in 2011. Gasoline prices peaked at about $4.02 a gallon in May last year, not far from the all-time high of $4.16 a gallon reached in July 2008.
The rise in gasoline prices poses a threat to both inflation and growth. It acts as a tax on households, which are already strained by weak income growth, and will likely pull spending away from non-energy goods and services.
So far, the pinch has been tempered by falling prices for natural gas. Natural gas prices dropped 2.9 percent in January, their fourth straight monthly decline.
"Roughly one-third of the gasoline spike has been offset by lower natural gas prices," said Joseph LaVorgna, chief economist at Deutsche Bank in New York. Other economists say the impact could be even greater.
Still, a sustained increase could complicate the task of the Federal Reserve. Officials who may want to come to the economy's aid with more stimulus could think twice if there is upward inflation pressure.
"If we get caught in an environment of steadily rising gasoline prices, that will put them in a bind," said Anthony Karydakis, chief economist at Commerzbank in New York.
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Gold rose to a three-month high on Thursday and headed for its biggest one-week rally in a month as Europe's bailout deal with Greece lifted the euro, while platinum hit a five-month peak as a damaging strike in major producer South Africa ground on.
A stronger euro, coupled with growing concern over the impact on inflation from oil trading above $120 a barrel helped spur a bid for gold ahead of an options expiry later in the day.
Spot gold was at $1,775.35 an ounce at 1500 GMT, against $1,775.79 late on Wednesday. It earlier rallied to a high of $1,784.46 an ounce, its strongest since November 15, but failed to maintain traction above $1,780 an ounce.
"(We had) technical buying yesterday with a lack of follow-through today despite support from weaker dollar," said Saxo Bank vice president Ole Hansen.
"I wouldn't be surprised to find that the market wants to check the conviction of those recent initiated longs here."
The euro rose to a 10-week high against the dollar and its strongest level since November versus the yen on Thursday after better-than-expected German data eased concerns about the euro zone's economic outlook.
German business sentiment rose for a fourth month running in February, raising hopes that Europe's largest economy is improving and will avoid recession despite the problems facing indebted euro zone countries.
Gains in crude oil prices also helped gold. Brent oil powered to a nine-month high above $124 per barrel on Thursday due to heightened tension between Iran and the West.
"The fact that we have Iran in the background is certainly helping through higher oil prices, which are a negative for most other industrial commodities. But for gold, it's positive as it boosts inflation-hedging and boosts its safe-haven attributes," Nikos Kavalis, a strategist at RBS, said.
Most-active U.S. gold futures are set for a 3.1 percent gain so far this week, which would be their largest weekly rally since late January. For February, the gold price has gained 2.2 percent in dollar terms but more than 7 percent in yen, reflecting the decline of the Japanese currency.
A further near-term boost to gold could come from the expiry of March options in New York later.
Wednesday's rally brought some hefty strikes into the money, with most open interest at $1,750 and $1,800 calls, which guarantee the holder the right, but not the obligation, to buy the metal at this price up to expiry.
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Have you ever had any doubts about gold? Does it sometimes feel like it should be performing better? Are you concerned about its volatility? Do you worry about how it might perform in the future? Have you ever wondered about its true purchasing power? Maybe you're nervous about a big drop in price again? I decided to go directly to the source to address these concerns: Gold himself. He put his arm around me and asked me to tell you a few things…
I hear that you've had some worries about me. I understand. Your world is a very uncertain place right now. And when it comes to money, it looks as though your leaders don't understand some basic monetary principles, making things even more unsettling.
But I want you to know that the problems you're experiencing are actually nothing new. I've seen these monetary, fiscal, and economic difficulties many times before. And I can tell you this: you're safe with me. That's a bold proclamation, but I've provided monetary protection numerous times throughout history – too many to count, in fact. I've served all kinds of people over the centuries, from kings and counts to serfs and servants.
To put your mind at ease, let's review my core characteristics, along with some history, to show how I can protect you against the monetary danger that's likely to worsen in your near future. We'll also take a look at your peculiar set of circumstances to see how I can be of service. By the time we're done, I think you'll feel much better about my ability to help your portfolio withstand whatever is thrown its way.
Let's start with the basics. I have some characteristics that no other matter on Earth has…
I cannot be:
- Printed (ask a miner how long it takes to find me and dig me up)
- Counterfeited (you can try, but a scale will catch it every time)
- Inflated (I can't be reproduced)
I cannot be destroyed by;
- Fire (it takes heat at least 1945.4° F. to melt me)
- Water (I don't rust or tarnish)
- Time (my coins remain recognizable after a thousand years)
I don't need:
- Feeding (like cattle)
- Fertilizer (like corn)
- Maintenance (like printing presses)
I have no:
- Time limit (most metal is still in existence)
- Counterparty risk (remember MF Global?)
- Shelf life (I never expire)
As a metal, I am uniquely:
- Malleable (I spread without cracking)
- Ductile (I stretch without breaking)
- Beautiful (just ask an Indian bride)
As money, I am:
- Liquid (easily convertible to cash)
- Portable (you can conveniently hold $50,000 in one hand)
- Divisible (you can use me in tiny fractions)
- Consistent (I am the same in any quantity, at any place)
- Private (no one has to know you own me)
I am internationally accepted, last for thousands of years, and probably most important, you can't make any more of me.
"Gold Is Money"
You've heard that statement before – but do you know what it really means? Money is a medium of exchange and a store of value. Almost anything can be used as money, but obviously some things work better than others. It's hard to exchange things people don't want and other things don't store value well. Over thousands of years, I have emerged as the best form of money (along with silver).
The paper dollars in your wallet are technically a currency, not real money. In other words, they are a government substitute for money. The man you call Aristotle best defined the primary reasons why I'm considered money: a good form of money must be durable, divisible, consistent, convenient, and have value in and of itself.
- It must be durable because you can't have your money disintegrating in your pocket or bank. That's why you don't use wheat; it can rot or be eaten by insects.
- It must be divisible, which is why you don't use diamonds or artwork; they can't be split into pieces without destroying the value of the whole.
- The lack of consistency is why you can't use real estate. One piece is always different from another piece.
- It must be convenient, which is why you don't use other metals like lead. The coins would have to be too big to handle easily to be of sufficient value.
- It must have value in and of itself. This is why you shouldn't use paper as money.
- And one more thing: I can't be created out of thin air. Not even the kings and emperors who clipped and diluted gold coins used paper as money. Aristotle didn't include this in his list, but it's vital.
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The lightness of the correction in gold is very bullish for the metal as well as its ETF vehicles, and as this drought ends, the next big leg up may soon begin.
The two-week pullback in gold futures from the early February highs was very mild, as it also was in the most popular gold ETFs.
With less than a 3% correction from the highs, last week’s close suggested that the correction might be over. Tuesday’s strong opening and the close above the recent swing high supports this view.
The weekly and daily chart formations have indicated for several months that the drop from the early September highs was just a pause in the uptrend. Thesecontinuation patterns are one of my favorite formations to trade.
The completed flag formations on both the futures and ETFs have initial upside targets well above the September 2011 highs. Therefore, the two key gold ETFs, the Spyder Gold Trust (GLD) and the iShares Gold Trust(IAU), both look attractive for new purchases, as the recommended stops make the risk very manageable.
Click to Enlarge
Chart Analysis: The weekly chart of the gold futures shows the completion of the flag formation (lines a and b) in the latter part of January.
- The tight weekly ranges and triple “dojis” made a deeper correction less likely
- Once above the 2011 highs at $1,942, the 127.2% upside target is at $2,035
- As I noted in my article on longer-term Fibonacci projections, the next “major target is $2,274”
- The weekly on-balance-volume (OBV) closed last week very strong, as it shows a bullish zig-zag formation
- The weekly OBV is leading prices higher, even though the daily OBV (not shown) is still below its WMA
- There is short-term support for the April futures at last week’s low of $1,706, with more important levels at $1,652
The daily chart of the Spyder Gold Trust (GLD) shows the completion of the flag formation, lines d and e.
- There is near-term chart resistance at $173.80, and then further levels in the $175.40 area
- The flag formation has a 127.2% Fibonacci retracement target in the $196 area
- The daily OBV confirmed the price breakout as it overcame its downtrend, line f. The OBV is still below its WMA but has turned higher
- Short-term support now sits at $170.75 to $169.50, with more important levels at $166
- GLD’s recent correction held well above the 38.2% Fibonacci retracement support at $162.40, as the recent low was $166.17
- The breakout level (line d) and stronger support in the $158-$162 area
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U.S. stocks fell, a day after the Standard & Poor’s 500 Index failed to hold at an almost four- year high, as sales of previously owned houses missed estimates and data from Europe and China spurred economic concern.
Stocks pared losses after Greece’s finance minister said yesterday’s approval of a bailout means the nation is tied to the euro area. Toll Brothers Inc. (TOL) and KB Home dropped more than 2.7 percent to pace a slump in homebuilders. Dell Inc. (DELL) sank 6.1 percent as its sales forecast missed estimates. Financial shares had the biggest decline in the S&P 500 among 10 groups, falling 1.1 percent. Gannett Co. (GCI), the owner of 82 newspapers including USA Today, surged 4.4 percent as it will boost its dividend.
The S&P 500 retreated 0.1 percent to 1,360.89 at 2:19 p.m. New Yorktime, paring an earlier loss of as much as 0.5 percent. The Dow Jones Industrial Average declined 1.25 points, or less than 0.1 percent, to 12,964.44 after the 30-stock gauge rose above 13,000 (INDU)yesterday for the first time since 2008.
“You can ride this, but you’ve got to be very careful and sit near the exit,” David Darst, the New York-based chief investment strategist at Morgan Stanley Smith Barney, said in a telephone interview. His firm has $1.6 trillion in client assets. “Most of the economies are slowing. Earnings will be slowing. The market is overbought on a short-term basis.”
Stocks fell as purchases of previously owned homes climbed to a 4.57 million annual rate, less than forecast, data from National Association of Realtors showed. European services and manufacturing output unexpectedly shrank in February. China’s manufacturing may shrink for a fourth month, according to data from HSBC Holdings Plc and Markit. Fitch Ratings lowered Greece’s credit rating and said a default is highly likely.
Equities pared losses as Greek Finance Minister Evangelos Venizelos said yesterday’s decision by euro area finance ministers to approve a second rescue package for the country bound Greece to the euro and the euro area. Greece sealed a 130 billion-euro ($170 billion) bailout package by agreeing yesterday to austerity measures while reducing its bond principal by 53.5 percent as investors swap into new securities with longer maturities and lower coupons.
The S&P 500 yesterday failed to hold above its April 2011 peak of 1,363.61 (SPX), which was the highest level since June 2008. The index has rallied 3.6 percent in February and is poised for a third straight month of gains, the longest streak in a year. The monthly gain has extended this year’s advance to 8.2 percent amid higher-than-estimated U.S. economic data and profits and expectations Europe will tame its crisis.
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Gold futures log their first gain in four sessions Wednesday, as rising tensions between Iran and Israel as well as ongoing uncertainty over Greece’s debt problems buoyed the metal’s safe-haven appeal.
“The time is limited to avoid spreading the euro-zone debt crisis from Greece to countries with a larger economic impact, such as Portugal, Spain and Italy, [and] most of the efforts have been to contain the crisis,” said Jeff Wright, a precious-metals analyst with Global Hunter Securities.
Gold for April delivery rose $10.40, or 0.6%, to settle at $1,728.10 an ounce on the Comex division of the New York Mercantile Exchange. Prices had tallied a three-session decline of more than $23 an ounce.
European Union officials may delay parts or all of the second bailout program for Greece until after expected April elections in that country, according to a Reuters report.
“The situation in Europe is causing huge global uncertainties,” said David Beahm, vice president at precious-metals retailer Blanchard & Co.
“Even if Greece’s problems are solved, there are three or four more countries that are on the verge of needing the same type of help,” he added. “The problem is no one has the money to help, therefore the [European Central Bank] is going to have to print billions of euros to fight the debt problems Europe is facing.”
At the same time, “the geopolitical issues in the Middle East, specifically between Iran and Israel, are supporting the price of gold as well,” Beahm elaborated. “Gold is acting as a safe haven for what could be a situation that gets way out of control.”
Gold’s gains Wednesday came as Asian and European markets got a lift after Gov. Zhou Xiaochuan of the People’s Bank of China voiced optimism that Europe can overcome its sovereign-debt crisis and said that China will expand investments in the euro zone.
“If events spiral out of control, even with [People’s] Bank of China intervention, I can see how the euro currency dissolves or the more stable Northern European countries allow for a controlled default by Greece, Portugal and Spain,” said Global Hunter Securities’ Wright.
“While these events would strengthen the U.S. dollar and negatively impact gold in the short run, gold will continue to appreciate over the long term,” he added.
Gold also found support in advance of U.S. inflationary data due out Thursday and Friday, according to Wright.
He expects a continuation of the trend, seen in December at the producer level, showing signs of initial inflationary pressure. The “real impact will come when inflation hits CPI; gold will turn sharply higher on signs of price inflation.”
Silver futures also advanced in Wednesday’s Comex trading, finding support from upbeat U.S. manufacturing data. March silver SI2H +0.16% tacked on 6 cents, or 0.2%, to close at $33.41 an ounce.
The Empire State manufacturing index rose to a reading of 19.5 in February, its highest since June 2010, according to the Federal Reserve Bank of New York. The size of the February gain surprised analysts.
Separately, the Federal Reserve reported that U.S. manufacturers boosted output in January, though industrial production as a whole was unchanged.
“Silver is both a precious and industrial metal, with over 60% of demand for industrial applications, [meaning] positive signals for economic growth provide a leg up for silver,” said Wright. “Also, silver has not seen the same level of attention which gold has in the past couple quarters and should not be ignored.”
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1. Saudi Arabia’s top power brokers recently claimed they would not allow oil to trade over $100. Click here now to view the oil price trading above $100 this morning.
2. The power brokers have already failed. How big their failure will become remains to be seen, but things don’t look good for the oil bears.
3. When any major market might be about to embark on a strong rally or decline there are both bullish and bearish factors in play. The market’s direction is ultimately determined by liquidity flows.
4. Click here now to view the seasonal trend for the oil price at this time of year. At www.seasonalcharts.com you can view similar charts for all the major commodity markets.
5. The bottom line is that oil could rise strongly because of a new MACD buy signal, a large head and shoulders pattern, tension between Iran and Israel/America, and because it seasonally tends to do so about now.
6. An oil price shock to the upside could cause major problems for the stock market at a time when the European financial crisis is still strongly on the “liquidity flow minds” of institutional investors.
7. Click this stock market liquidity flows chart fromwww.sentimentrader.com. The picture painted by the liquidity flows on this chart is truly frightening.
8. You can see that the commercial group of traders are piling on short positions by aggressively shorting the Dow, the Nasdaq, and the Russell indexes.
9. My concern is not that they are shorting the broad stock market, but that they are shorting with this kind of size in such a short period of time. The current short position of the commercial traders is now larger than at any point in the last ten years.
10. Do they know that something very bad is coming your way? Are they simply shorting to profit from an over-extended stock market rally that has seen the Dow rally about 2500 points without any kind of serious correction?
11. You can’t know the answer, but you can be as professional as they are with your liquidity flows. High oil prices and a falling stocks are ultimately very positive for the price of gold, but there can be a substantial adjustment period before gold begins to rise.
12. When stocks fall hard the central banks tend to print money. Then they loan that money to commercial banks. They urge the banks to lend that money to institutions to buy stocks. That action is very positive for the price of gold.
13. I also have a concern about what the commercial traders are doing in the less transparent OTC derivatives marketplace right now. Are they placing giant short-side bets there too? Are those bets fully reportable, or are they “non-reportable”?
14. Click this Dow wedge chart now. I would call that wedging action, rather than an actual wedge pattern, because of the lack of definition in the upper part of the pattern. Still, the wedge-like action is a concern.
15. HSR (horizontal support and resistance) sits at about 12,300 and at about 11,700. I have little interest in naked-shorting the Dow. There is what I term a maniacal obsession in the gold community with “getting the Dow”. Somehow, the Dow is view as a person who must be “made to pay”.
16. I have great interest in accumulating the Dow asset about every 1000 points down that it goes on sale, and the HSR at 12,300 and 11,700 make decent first entry points. Sadly, an obsession with naked-shorting the Dow could define you as a dollar bug rather than as a gold king or queen.
17. Gamblers should buy at the 12,300 area, if it happens, and investors should wait for 11,700. Operate in this crisis like Sylvester the cat, rather than like Tweety the bird. Take from the weak, in their moment of greatest weakness. The greater the price sale, the stronger the buying hands are.
18. If you have not made money in the Dow by shorting it over your lifetime, you should throw in the towel on further attempts to build dollars of wealth by shorting it again. If you are long the stock market now, you should be adding some strategic short positions into this enormous price strength.
19. The dollar will not beat the Dow in a fight to the finish. The Fed will adopt money printing as official policy long before the Dow goes off the board. The Fed will destroy those who get carried away with making dollars by shorting the Dow.
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A growing number of states are seeking shiny new currencies made of silver and gold.
Worried that the Federal Reserve and the U.S. dollar are on the brink of collapse, lawmakers from 13 states, including Minnesota, Tennessee, Iowa, South Carolina and Georgia, are seeking approval from their state governments to either issue their own alternative currency or explore it as an option. Just three years ago, only three states had similar proposals in place.
"In the event of hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System ... the State's governmental finances and private economy will be thrown into chaos," said North Carolina Republican Representative Glen Bradley in a currency bill he introduced last year.
Unlike individual communities, which are allowed to create their own currency -- as long as it is easily distinguishable from U.S. dollars -- the Constitution bans states from printing their own paper money or issuing their own currency. But it allows the states to make "gold and silver Coin a Tender in Payment of Debts."
To the state legislators who are proposing state-issued currencies, that means gold and silver are fair game, said Edwin Vieira, an alternative currency proponent and attorney specializing in Constitutional law. And since gold has grown exponentially more valuable, while the U.S. dollar continues to lose ground, the notion has become increasingly appealing to state lawmakers, he said.
The state gold rush: Utah became the first state to introduce its own alternative currency when Governor Gary Herbert signed a bill into law last March that recognized gold and silver coins issued by the U.S. Mint as an acceptable form of payment. Under the law, the coins -- which include American Gold and Silver Eagles -- are treated the same as U.S. dollars for tax purposes, eliminating capital gains taxes.
Since the face value of some U.S.-minted gold and silver coins -- like the one-ounce, $50 American Gold Eagle coin -- is so much less than the metal value (one ounce of gold is now worth more than $1,700), the new law allows the coins to be exchanged at their market value, based on weight and fineness.
Local currencies: In the U.S., we don't trust
"A Utah citizen, for example, could contract with another to sell his car for 10 one-ounce gold coins (approximately $17,000), or an independent contractor could arrange to be compensated in gold coins," said Rich Danker, a project director at the American Principles Project, a conservative public policy group in Washington, D.C.
South Carolina Republican Representative Mike Pitts proposed a currency system that would allow people to use any kind of silver or gold coin -- whether it's a Philippine Peso or a South African Krugerrand -- based on weight and fineness. Pitts said in the bill, which currently has 12 co-sponsors, that the state is facing "an economic crisis of severe magnitude."
Republican representatives from Washington State followed suit in January, introducing a bill that would also allow any gold and silver coins to be considered legal tender based on metal values. Minnesota, Iowa, Georgia, Idaho and Indiana are also considering similar proposals.
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