We pay fair prices for your unwanted gold, silver, platinum and fine jewellery

29-April-2015 Everyday Sydney Gold and Silver Prices

Gold Price $1514/oz, $48.68/g
Silver Price $20.71/oz, $0.67/g

Call us 02 9231 2535 or go to Sydney Gold Traders to find out more live gold and silver price

We pay fair prices for your unwanted gold, silver, platinum and fine jewellery

28-April-2015 Everyday Sydney Gold and Silver Prices

Gold Price $1525/oz, $49.03/g
Silver Price $20.79/oz, $0.67/g

Call us 02 9231 2535 or go to Sydney Gold Traders to find out more live gold and silver price

We pay fair prices for your unwanted gold, silver, platinum and fine jewellery

27-April-2015 Everyday Sydney Gold and Silver Prices

Gold Price $1507/oz, $48.45/g
Silver Price 20.14$/oz, 0.65$/g

Call us 02 9231 2535 or go to Sydney Gold Traders to find out more live gold and silver price

Gold prices rose on Tuesday as investors grew concerned about Greece’s ability to pay its creditors and the country’s future in the eurozone.

Gold for June delivery, the most actively traded contract, was recently up 0.2 per cent at $US1,195.50 a troy ounce on the Comex division of the New York Mercantile Exchange.

On Monday, Greece’s government issued a decree requiring public bodies such as state-owned companies and public pension funds to transfer their cash reserves to the central bank as the country’s cash reserves continue to dry up. Eurozone finance ministers are due to meet in Riga, Latvia, on Friday. However, a deal is unlikely to be agreed before the Eurogroup meeting on May 11, a day before Greece must pay €780 million ($US838 million) due to the International Monetary Fund.

“We continue to expect an escalation of the crisis in Greece to be one of several factors (including a recovery in demand from households in China and India) that lifts the gold price to $US1,400 per ounce by the end of the year,” analysts at Capital Economics said in a note to clients.

Some investors buy gold in times of economic or political uncertainty, believing the metal will outperform other assets during turbulent periods.

Gains in the precious metal were muted by a stronger dollar. Gold, which is priced in the US currency, becomes more expensive to foreign buyers when the buck rises. The Wall Street Journal Dollar Index, which gauges the dollar against 16 currencies, was recently up 0.3 per cent at 87.44.

In a financial world of contradictions, chaos, and confusion, perhaps a “gold-centric” perspective will provide clarity.

The media is filled with comments from notable “gold-bashers” such as Benjamin Bernanke, Warren Buffett, and Bill Gates. Their criticisms of gold (in my opinion) boil down to:

Gold has no real value – you can’t eat it or do much with it except make jewelry. It is a barbarous relic etc.
Gold makes no sense. Why dig it from the ground, refine it, and then lock it in a vault where it sits producing nothing?
Gold prices are volatile.
Gold is an unsafe investment.
Gold pays no interest.
101 more criticisms of the oldest money in the world.
However, if the “gold bashers” were correct then why are the following true?

“Wealthy Hindu temples such as this one are repositories for much of the $1 Trillion US worth of privately help gold in India – about 22,000 tons, according to an estimate from the World Gold Council.” The temples have accumulated 1 $Trillion worth of gold, but “gold bashers” claim it has no real value. I think gold has value.
“Prime Minister (India) Narendra Modi’s government is looking to monetize India’s vast hidden wealth…The gold, officials said, would be melted down and sold to jewelers.” If gold has no real value, but jewelers want it, and the government wants to monetize (sell) it and convert real gold to fiat currency to support the government, then the “logic” escapes me.
“El Salvador’s central bank sold about 80% of its gold reserves last month to diversify risk and take advantage of the metal’s appreciation, a central bank official said on Friday.” Really? Gold in dollar terms is down 40% and the central bank wants to take advantage of the metal’s appreciation. They sold gold and converted it to fiat currency to diversify risk. I doubt it. They need the cash and the gold is valuable or there would have been no buyer.
Greece and their financial troubles: “… upset that Greece’s lenders will have the right to seize the gold reserves in the Bank of Greece under the terms of the new deal.” In summary, print euros, lend them to Greece, take Greece’s gold upon default, and the result is the euros are spent, Greece’s gold is gone, and the lenders possess real gold, not digital euros. What a simple and brilliant plan to convert paper into gold! If gold is so useless why demand Greece’s gold?
We can find many other examples of the real value of gold and the global recognition of such. Ask yourself:

What happened to Libya’s gold after the bombing and NATO invasion?
What happened to Iraq’s gold after the US invasion?
What happened to the Ukraine gold after the revolution in 2014?
What happened to Kuwait’s gold after Iraq invaded in 1990?
Why has China purchased many thousands of tons of gold in the past 5 years?
Why has Russia substantially increased their gold reserves?
If gold has so little value and use, why was Fort Knox built?
Can Gold Save The World from the Credit Bubble?

It has been reported that global debt is about $200 Trillion. Central banks supposedly hold about 30,000 tons of gold. If the total debt were backed by central bank gold at 40%, that would price gold about $80,000 per ounce.

In the US, the official gold reserve, which has not been audited in about 60 years, is about 8,200 tons. Official national debt is about $18 Trillion. If the official gold backed the debt at 100%, the price of gold would be about $70,000 per ounce.

Interest rates are at multi-generational lows. It has been reported that over $5 Trillion in sovereign debt “pays” negative interest. German 10 year debt pays less than 0.20% per year. Some European mortgages have negative amortization. Clearly credit, debt and currency bubbles have been created. All bubbles eventually pop, often with disastrous results.

The credit bubble has grown so large that the supposed central bank gold would have to be valued at $40,000 to $80,000 per ounce to back all the debt. Revaluing gold higher by a large factor may become necessary in the future to reestablish confidence in currencies. However a revaluation certainly will not be welcomed by central banks, governments, or most individuals. The transition to $80,000 gold, or even $10,000 gold, would be very traumatic.

But can the world increase debt forever, inflate the sovereign debt and global credit bubbles even further, and not create an equally disastrous hyperinflation or a severe deflationary depression? Something is likely to break.

Governments and central banks created the credit and currency bubbles. When fiat currencies crash in the next crisis, backing currencies with gold could “save the world” and restore confidence in fiat currencies but only after significant trauma.

Perhaps central banks will do the “right thing,” but only after they have exhausted all other alternatives. It will be a long and difficult wait.

The Federal Reserve bank and its owners, the largest banks on Wall Street, want badly to be able to charge you interest for the privilege of depositing your funds. The problem is getting you to stand for it.

Depositors already complain vigorously about zero percent returns on checking and savings accounts. If they must start actually paying the bank to hold funds on deposit, many will opt to simply withdraw the cash and stuff it under their mattress or into a safe deposit box. That simply won’t do.

The Goal Is to Force You to Deposit Cash and Charge YOU Interest

Bankers in the U.S. can learn something from the Swiss. The Swiss National Bank recently implemented negative interest rates without first solving the “problem” of how to prevent cash from fleeing the banks. Predictably, depositors started doing some math.

In one example, a sizable Swiss pension fund, calculated it would save 25,000 francs for every 10 million it held in the bank by simply withdrawing those millions and taking the bales of paper francs to be kept in a vault. The vault storage fees are less expensive than the negative interest rate.

Jumping the gun on the implementation of negative rates put the Swiss banks in an awkward situation. Like all fractional reserve lenders, they don’t have anywhere near enough cash to make good on the withdrawals that may be coming. The bank holding the pension money had little choice but to refuse the client’s demand for millions of francs – funds the client is contractually entitled to. Telling clients “sorry, you can’t make a withdrawal” never goes over too well!

Nevertheless, the Swiss National Bank is sticking to its guns. It is encouraging retail banks to be “restrictive” with regards to cash withdrawals. And it is berating actors such as the pension fund for trying to circumvent negative interest rates. Apparently no one should be questioning the wisdom behind the policy! But the bluster isn’t hiding the fact that bankers stand upon shaky legal ground. The potential for a run on the banks remains.

Insiders here look anxious to avoid a similar situation. Willem Buiter, the chief economist at CitiBank, thinks he’s got the answer to this banker’s quandary. Simply abolish cash. Or tax it punitively. He isn’t the only one supporting this radical solution. Other economists, including the prominent Harvard professor Kenneth Rogoff, also think banning cash is a grand idea.

If depositors’ response to negative interest rates is predictable, so is the reaction from central planners. Effective herding is all about limiting the escape routes for members of the herd.

Eliminating physical cash may well be a longer-term project, but it is not something the Fed can likely implement any time soon. In the meantime, there are other ways to prevent depositors from making their escape.

For starters, officials can criminalize the use of cash above certain amounts.

Banks can also implement new policies of their own. Joseph Salerno from the Mises Institute discovered JPMorgan Chase leading the way. The bank very recently began test driving new rules in Cleveland as well as other markets.The bank will no longer accept cash from customers who want to use it to make mortgage payments, pay credit card balances or to cover their automobile loan.

No Cash or Bullion Allowed in Safe Deposit Boxes

Chase also rolled out new restrictions on what can be put into safe deposit boxes. The “Updated Safe Deposit Box Lease Agreement” customers must sign states, “You agree not to store any cash or coins other than those found to have a collectible value.”

Expect other banks to follow suit shortly. The new rules go on top of decades of inflationary monetary policy, making paper currencies worth perpetually less over time. Clearly bankers are plumbing customers’ tolerance for pain.

More and more people will be looking for ways to make it stop. This is where things promise to get interesting for gold and silver investors.

Financial repression, the attempt to force citizens to accept the government shears, has long been a driver of demand for physical precious metals. This demand will accelerate as measures become more draconian. Some bank customers, perhaps even the Swiss pension fund mentioned above, will decide that bullion is a better option than sitting on bales of depreciating paper currency or paying banks to hold deposits.

Here in the U.S., the banks are central to just about all bureaucratic efforts at control. Look for droves of people to try and sidestep the banks and the dollar itself. The next decade or two is almost certain to see rapid innovation in alternative ways to store value and transact. Ways that preserve privacy and are beyond the reach of bureaucrats. As these new systems seek to gain trust and acceptance, precious metals are almost certain to play a much bigger role.

Clint Siegner is a Director at Money Metals Exchange, perhaps the nation’s fastest-growing dealer of low-premium precious metals coins, rounds, and bars. Siegner, a graduate of Linfield College in Oregon, puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals’ brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.