Utah Makes It Easier To Pay In Gold And Silver
Huffington Post
Utah is making it easier for people to pay for things with gold and silver.
Gary Herbert, Utah's Republican governor, signed into law in late March a bill that will make it easier to pay taxes and do businessin gold and silver, according to Herbert's website and the Salt Lake Tribune. Utah's House passed the bill by a 60-8 margin, according to the Salt Lake Tribune.
Retailers still will not be forced to accept gold and silver, according to the bill. Instead, Utah made it acceptable to use it as an alternative currency for willing buyers and sellers. As a result, many gold bugs may find it hard to use gold and silver on a daily basis.
"This is just designed to be an alternative currency," said Utah Rep. Brad Galvez, who sponsored the bill, in March, according to the Salt Lake Tribune. "It is not designed to replace the Federal Reserve by any means."
Utah's House also passed a bill in March that would have made it even easier to do commerce in gold and silver, by a 50-23 margin. Herbert does not appear to have signed the bill, since his website and the Salt Lake Tribune have not reported it.
Utah has been moving toward using gold and silver as a currency for more than a year. Herbert signed a bill into law in March of 2011 that made government-issued gold and silver coins legal tender for transactions and eliminated state capital gains taxes on their exchange, according to CNN Money. In doing so, it became the first state in the country to recognize gold and silver as a currency, according to the Associated Press.
Thirteen states -- including Colorado, Minnesota, North Carolina, and Tennessee -- are considering making gold and silver legal tender, according to the Salt Lake Tribune and CNN Money. Former Georgia state Rep. Bobby Franklin introduced the "Constitutional Tender Act" in 2010, which would have required Georgians to pay their state taxes in gold and silver.
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Precious Metals To Edge Higher On US Economic Data
Forex Pros
Spot gold prices erased most of its earlier losses and ended slightly lower on Tuesday. Revival in the global markets due to favorable economic data from the eurozone and weakness in the US Dollar Index supported upside in the yellow metal prices.
Additionally, positive forecast for global economic growth from the IMF also helped gold to trim most of its losses in the evening session. The yellow metal touched an intra-day low of $1634.44/oz and closed at $1649.29/oz yesterday.
On the MCX, Gold June contract dropped around 0.3 percent due to appreciation in Rupee on Tuesday, touching an intra-day low of Rs.28,351/10 gms and closed its trading session at Rs. 28,482/10 gms yesterday.
Silver
Silver traded higher by 0.7 percent on the international markets on Tuesday, on the back of weakness in the US Dollar Index coupled with upbeat sentiments in the markets.
The white metal touched an intra-day high of $ 31.88/oz and closed at $31.68/oz yesterday. On the MCX, Silver May contract gained around 0.2 percent and touched an intra-day high of Rs56,291/kg.
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Gold May Advance as Euro-Area’s Debt Crisis Spurs Demand
Bloomberg
Gold futures advanced from a one- week low as the dollar declined, increasing demand for the metal as an alternative investment.
The greenback fell for the second straight day against a basket of currencies as European debt concerns eased and the International Monetary Fund increased its forecasts for economic growth. The Standard & Poor’s GSCI Spot Index of 24 commodities rose as much as 0.9 percent.
“The dollar’s weakness is supporting all commodities, including gold,” Sterling Smith, a market analyst at Country Hedging inSt. Paul, Minnesota, said in a telephone interview.
Gold futures for June delivery rose 0.1 percent to settle at $1,651.10 an ounce at 2:11 p.m. on the Comex in New York. Earlier, the price dropped to $1,635.20, the lowest since April 10. The precious metal has advanced 5.4 percent this year.
Silver futures for May delivery jumped 1 percent to $31.674 an ounce on the Comex. Prices have climbed 13 percent this year.
On the New York Mercantile Exchange, platinum futures for July delivery climbed 0.6 percent to $1,584.70 an ounce. Palladium futures for June delivery increased 1.7 percent to $661.95 an ounce.
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Gold Ends Modestly Higher After Two-Day Loss
MarketWatch
Gold futures ended higher on Tuesday, capping a choppy trading day and breaking a two-session losing run as U.S. oil and equities traded higher and as concerns about the euro zone faded.
Gold for June delivery advanced $1.40, or 0.1%, to $1,651.10 an ounce on the Comex division of the New York Mercantile Exchange. Prices lost some steam as floor-trading settlement approached.
Other metals ended higher as well, with palladium leading the way, up 1.7%.
Gold had shaken off a weak start of floor trading, but struggled to make some real headway despite the rallies for stocks and gains above 1% for oil futures.
“Gold is kind of piggybacking on the overall market,” albeit much more mutedly, according to Adam Klopfenstein, a market strategist at Archer Financial in Chicago. Traders are particularly keen on watching upcoming earnings and any news about the euro zone, he said.
The yellow metal closed at its lowest level in a week on Monday after investors sought out the U.S. dollar as a haven against euro-zone debt concerns.
Gold searched for direction as investors weighed the news from Europe, but sensed that concerns remained.
A successful bond auction in Spain and data showing German investor confidence rising for the fifth month in a row added to hopes the euro zone is on the mend.
Investors will keep their eyes trained on Europe, however, with “growing fears Spain may take advantage of the bailout fund” and the first round of French presidential elections this weekend, analysts at Commerzbank wrote in a note to clients. “In the medium to long term, gold should be able to assert its status as a store of value and recommence its upswing.”
U.S. stocks traded near session highs, with tech stocks powering gains. The rising tide lifted gold and oil futures, as well as other commodities. The rally centered around the improved demand at the Spanish bond auction.
Also Tuesday, U.S. investors parsed out data on U.S. housing starts, showing the start of home construction at a slower pace in March, but promising numbers of construction permits. Another report showed U.S. industrial production unchanged.
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Experts Forecast Jump in Gold Prices
NuWire Investor
Economic volatility stemming from two financial crises that caused global shockwaves helped to drive record gold prices in 2011, but now many factors cooling the commodity’s growth. Economists are forecasting a stronger U.S. dollar bolstered by a stabilizing economy, which always forces gold prices down, while a drop in Indian demand has also dented prices. Investment experts believe that the slide is only temporary, however, and that now is a good chance to pick up gold before it reaches a projected $2,000 an ounce. Despite the downward pressure, some believe that spiking oil prices, Federal stimulus measures and uncertainty in the Eurozone will help drive gold gains in 2012. For more on this, read the following article from Money Morning.
Gold prices this week picked up again but are still far from last year's record $1,920.30 an ounce, reached in September.
The most-active June contract settled on the Comex Friday at $1,660.20 an ounce, for a gain of 1.8%, or $30.10, since the April 5 market close.
Given the economic volatility in 2011, last year was a banner year for gold prices. Fears of global market turmoil helped push the yellow metal to record highs.
While the long-term bullish outlook for gold remains, short-term pressures have halted its steady climb.
"Gold has found more support recently, but it doesn't have all of the catalysts in place to be driven substantially higher yet," Suki Cooper, an analyst at Barclays Capital, told Reuters.
Here's why this dip isn't the start of a bearish gold year, but a chance to stock up before gold prices thrive and head to $2,000 an ounce.
The Fed, India, and Gold Prices
On April 4, the U.S. Federal Reserve released the minutes from its March 13 meeting that focused on predictions for a stabilizing U.S. economy and low inflation. The Fed's forecast cooled talk of more monetary stimulus, and sent gold prices down about 2% last week.
The Fed expects U.S. economic growth to progress at a steady pace throughout the quarter. With moderate expansion rather than rapid growth or deflation, there's no need to curb borrowing, and interest rates will stay near zero.
This bodes well for the U.S. dollar, which usually puts downward pressure on gold.
It's no secret that a weakened dollar sends investors running to the real value of hard commodities. A stronger dollar does the inverse: it causes the big investors to be less cautious with regard to investments in liquid capital, creating a dip in gold prices.
Lagging Indian imports also have contributed to lower gold prices at the beginning of this quarter.
India is the world's leading consumer of gold. Last year alone, according to the World Gold Council, gold imports rose in that nation 1.1% to a record high of 969 tons. But this year imports have fallen, down 55% in the first quarter.
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Bullish and Bearish Developments in Gold
GoldSeek
Earlier Thomson Reuters GFMS, the world's foremost research firm focusing on precious metals, launched its Gold Survey 2012.
For those weighing up the pros and cons of making a gold investment this year there were both bullish and bearish signals.
Here are some highlights that caught BullionVault's eyes (and ears) at this week's launch presentation:
Bullish Signals
1. Gold investment demand is expected to set a new record in 2012
GFMS expects gold investment demand to be the main driver of gold prices this year, as it was in 2011. Furthermore, the consultancy expects investment demand for gold to set a fresh all-time high of close to 2000 tonnes in gold bullion terms.
A key driver of gold investment, says GFMS, is likely to be ongoing loose monetary policies adopted by the world's central banks.
"A corollary of all this monetary largesse," says GFMS's global head of metals analytics Philip Klapwijk, "is fears about resurgent inflation, and that becomes all the more likely if oil prices motor higher should tensions get any worse between Iran and the US."
2. Physical gold investment demand continued to be strong last year
Investment demand for physical gold saw "an excellent performance" last year, Klapwijk told the audience at the London launch of 'Gold Survey 2012'.
Europe, China, Thailand and the Indian subcontinent all saw growth in physical gold bar investment (investors in North America, as Klapwijk pointed out, tend to prefer gold coins to gold bars).
On a global level, combined demand for coins and bars was 1543 tonnes – a 30% gain on 2010, and a new all-time record. Indeed, the majority of gold investment in 2011 took the form of physical investment, GFMS says.
The significance of this is that investments in physical gold tend to represents "stickier" investments than other forms of getting exposure to the metal (for example buying gold futures) – meaning it would probably take more for such investors to exit the positions they've built.
That said, there is obviously a limit to most investors' stickiness. A lot will depend on whether, as GFMS expects, the economic environment will continue to be supportive of gold investment, with negative real interest rates and fears of inflation prevailing in most parts of the world.
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China Buying Gold?
MarketWatch
Gold’s rebound puzzles the bugs — but they’ll take it anyway.
It helps to have luck — or something! Michael Gayed’s brave column yesterday, “Was that the bottom in gold?, published just after gold closed with an impressive $16.80 rise in the CME June gold contract, was not followed by an immediate reversal. June gold closed today down only 40 cents, so the gains were held.
In contrast, my own recent cheerful chat about gold was followed by a horrible $57.90 drop in gold the next day.
Of course, I was just reporting what the investment letters say — but I felt bad anyway.
In fact, the important gold-positive news I noted — that the strike by the jewelers in India, the world’s biggest gold importer, appeared to be ending — turned out to be wrong. The strike went on for another week. But it did finally end this past Saturday, after an extraordinary 21 days.
Observers in a position to know, like bullion dealer UBS, say that, while working through the disruptions caused by this unprecedented stoppage will take some time, they have seen demand from India returning.
Since India is in effect the default buyer on a gold downswing, this means critical underpinning is back in place.
But gold bugs were extremely puzzled by Tuesday’s gain. I cannot recollect a move which drew so many frank statements of ignorance from the sources I regularly check.
Of course, that does not influence the chartists. They don’t care why prices move: movement itself impresses them. Bullion dealer ScotiaMocatta’s Technical Commentary on Wednesday noted:
“Gold closed slightly lower today… at 1658. The ability for gold to hold the 1656 level (the 50% retracement of the December to February up-move) and to close above the short-term bearish trend channel, is encouraging for bulls. Gold also clearly rejected the move down below the 61.8% Fibonacci retracement of the same uptrend…”
One hypothesis widely discussed, particularly on the hard-core gold conspiracy site LeMetropoleCafe, is that there is heavy buying by the Chinese, particularly China’s Central bank.
Managing Expectations: Why Gold Should Thrive
GoldSeek
It was a challenging week for gold investors. Although the yellow metal has been on a spectacular 11-year bull run, recent strength in the economy has some thinking gold’s heyday is over.
As I often say, investing, like life, is about managing expectations—even throughout gold’s decade-long rise, price action over the short term can go both ways. It helps to look at what happens after short-term drops. For example, looking at the past decade of one-day 5 percent declines in gold, you can see that this event is pretty rare. In 2006, gold dropped more than 5 percent in a day only two times. In 2008, there were three such events. Another one occurred at the end of this February.
The 1.7 percent drop experienced over the past month shouldn’t surprise gold investors given the seasonal pattern for gold. Whereas gold rises nearly 2 percent in both January and February, over the past 11 years, it’s been a non-event for gold to correct in March.
In addition, it’s a good reminder that bullion has historically been less volatile than the stock market: the 12-month rolling volatility over the past 10 years for gold was 13 percent. For the S&P 500 Index, the 12-month rolling volatility over the same period was 19 percent.
This March, there seemed to be one main driver eight thousand miles away negatively affecting gold prices. I often say that government policy is a precursor to change, and fiscal policy strongly affected the Love Trade in India last month. To trim its current account deficit, India’s finance minister proposed doubling the customs tax on the precious metal. It was soon reported that jewelers closed shops in protest.
As a result, gold imports into the world’s largest gold market fell 55 percent.
It’s not the customs tax that has the gold shops boycotting, says UBS Investment Research firm. Jewelers’ “prime gripe is with the new 1 percent excise duty on unbranded jewelry” leading to a greater recording of gold transactions, which means more regulation and red tape. What’s so egregious to jewelers is the excise tax will be retroactive so those shop owners holding old gold stocks will have to pay duty on those as well, says UBS.
I believe this is only a temporary sell-off for India. As I often discuss in my presentations, traditional festivals and holidays drive gold demand in India because of their strong history with gold. With their love for the yellow metal, Indians hold the belief that gold “will perpetually rise,” although there are certain buyers that wait for a “psychologically important $1,600 level,” keeping in mind the strength of the rupee, says UBS.
While the seasonal Love Trade period for gold generally falls between August and February, an important holiday is coming up which has historically driven higher sales of gold. Akshaya Tritiya festival occurs on April 24 this year. This is an important occasion for Hindus, celebrated annually in late April or early May, depending on the Hindu calendar. Buying and wearing of gold jewelry is important on this day, as UBS says it’s one of the two “biggest gold buying events” in the Hindu calendar. The second event isDhanteras, which occurs during the peak seasonality period for the yellow metal.
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Gold May Advance for a Third Day on Stimulus Speculation
Bloomberg
Gold climbed to a one-week high in New York, as concern that Europe’s debt sovereign debt woes are deepening spurred demand for a haven investment.
Spanish and Italian bond yields surged, fueling fears that the crisis may be worsening. Stocks slid, extending the longest slump for the Standard & Poor’s 500 Index since November and the Standard & Poor’s GSCI Spot Index of 24 raw materials declined as much as 1.5 percent.
“People are now looking at gold as a flight-to-quality investment rather than a classic commodity in this fear environment,” Adam Klopfenstein, a market strategist at Archer Financial Services Inc., based in Chicago, said in a telephone interview.
Gold futures for June delivery rose 1 percent to settle at $1,660.70 an ounce at 1:42 p.m. on the Comex in New York, the biggest jump since March 30. Earlier, prices touched $1,664.80, the highest since April 3.
Bullion also rose as purchases increased in India, the world’s biggest importer, after jewelers ended a 21-day strike, Klopfenstein said.
Open interest for gold futures contracts fell to 401,018 on April 5, the lowest since Sept. 1, 2009.
Silver futures for May delivery advanced 0.5 percent to $31.679 an ounce on the Comex, gaining for the second time in three sessions.
On the New York Mercantile Exchange, platinum futures for July delivery fell 1.5 percent to $1,593.70 an ounce, retreating for the first time in three sessions. Palladium futures for June delivery declined 1.1 percent to $636.85 an ounce on the Nymex.
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Gold at Week High on Housing Data, Weaker Dollar
MarketWatch
Gold futures advanced Tuesday, erasing some of their recent losses as concerns about the euro zone eased, weak housing data added more pressure to the dollar, and most other commodities traded higher.
Gold for June delivery added $11.20, or 0.7%, to settle at $1,643.80 an ounce on the Comex division of the New York Mercantile Exchange. That was the highest for a most-active gold contract in a week.
That comes on the heels of a loss of 0.6% on Monday and a weekly decline of 1%.
The metal garnered support from a weakened dollar following news U.S. home prices dropped sharply in February, hitting the worst level in nearly a decade.
A lower dollar is a plus for gold and other dollar-denominated commodities as it makes them cheaper for holders of other currencies.
The day’s macroeconomic reports “showed an incredibly weak housing market,” hitting the dollar and benefiting gold, said James Cordier, a portfolio manager with Optionsellers.com in Florida.
It also served to stoke hopes of some economic stimulus could be forthcoming, he said.
Also Tuesday, Commerce Department data showed sales of new U.S. homes falling 7.1% in March, though the drop was due to a revision higher for February.
A gauge of consumer confidence declined for a second month. The Conference Board reported its index at 69.2 in April, down from a revised reading of 69.5 in March.
The dollar index, which compares the U.S. unit to a basket of six currencies, recently traded at 79.217, from 79.406 in late North American trading Monday.
Despite the day’s gains for gold and most commodities, there was still plenty to keep investors worried. India’s jewelry demand and interest in physical gold in one of the world’s top buyers “is very slack in spite of the (Hindu festival) Akshaya Tritiya festival this week, which is a concern,” analysts at VTB Capital in London said in a note to clients.
“We still expect volatility to gain ahead of Wednesday’s (Federal Open Market Committee) April meeting, with market participants seeking further insight into the Fed’s monetary policy outlook which will ultimately influence rate expectations and the dollar trade,” they added.
The Federal Reserve is scheduled to make its rate announcement on Wednesday, followed by a news conference by Fed Chairman Ben Bernanke.
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