Gold and silver futures were sharply down the U.S. trading session Monday while President Joe Biden confirmed Federal Reserve Chairman Jerome Powell for his second term. The precious metals prices were under a huge pressure and selling pressure accelerated overnight.
December gold was last down nearly USD 41.10 at USD 1,810.4 and December Comex Silver was last down USD 0.421 at USD 24.36 per ounce.
Someone argued that another term for Powell was just an excuse for bullions future traders taking profits after recent good price gains. Some analysts believe bullion markets are likely to continue to be supported by the inflation trade and to be sought out as a hedge against rising and even problematic price inflation.
Gold price is getting back above USD 1,800 per troy ounce. Investors expect it will continue to move higher because it is unlikely the Federal Reserve will be able to fet the inflation under control.
The growth thread of inflation and stagflation are pushing more investors reevaluate their safe-haven hedge and rearrange their investment profolio.
The inflation the year is very different from the last few years. The current inflation is not being driven by consumer demand. Prices go up because of major supply-chain around the world especially the second largest economy, China.
There is nothing the Federal Reserve can do to fix the supply chain as the inflation is on the long side of the track. With gold prices back over USD 1,800 per troy ounce, the market will see bullish momentum very soon.
The American Eagle Gold Coin is an officeal gold bullion coins of United States starting from 1986. It was produced by United States Mint. The composition of the gold coins included 91.67% gold, 3% silver and 5.33% Copper. Therefore, the fineness of this gold coin is just 22K.
The obverse of the gold coin depicts the figure of Lady Liberty. And the reverse design features a male eagle carrying an olive branch flying above a female eagle and her baby.
Let me tell you something special about American Eagle Gold Coins.
For the Eagle minted in 1986-1991, they are dated with Roman Numerals. And starting from 1992, US mint changed to use Arabic numerals for dating Gold American Eagle Coins.
Here is the gold coin in 1990 with dated with Roman Numerals “MCMXC”.
And starting mid 2021, the reserve design of American Eagle Gold Coin changes again! It features a side profile of a Bald ealge.
The new design is stunning!
As the the new design is launching in mid of 2021, the collectors around the world will definitely collect the old designs of American Eagle Gold Coins especially the old design dated year 2021 and the those dated with Roman Numerals.
I am sorry that I didn’t update my stories with my boss for this week as I was super busy. The world are debating and concerning the situation in Afghanistian in these few days. And Biden adminstration is busy about blaming everyone but himself for the chaotic withdrawal from there.
“Before the militory withdrawal from Afghanistian, people are concerning about when will the US government withdraw. After the chaotic withdrawal from there, people are concerning about how did the US government withdraw.” My boss rolls his mobile and says.
“Yup, but Mr. Biden has already expained that there is never a good time to withdraw US forces. And people agree to withdraw US troops from there at the very begining.” I say.
“The main concern is Democracy will be a problem sometime.” He explains.
“May I ask why?” I confuse.
“Decision making is too slow. Sometime we need to do it fast.” he emphasises. “Reacting time is the key especially during wars. You cannot wait!” he stresses.
“No mather how powerful of your armaments, no mather how advanced of your militory technology, if you don’t act fast, you loss.” He affirms.
“So much of our lives is given over to the consideration.” He suppresses his sadness when he sees the images from the social media.
“Maybe this is one of the problems about work from home.” I say.
Senate Democats just passed a USD 3.5 trillion plan early Wednesday. The bill will spend on the establishment of a Civilian Climate Corps, adds new dental, cision and hearing benefits to medicare coverage and investment in affordable housing.
Even though the GOP (Republican National Committee) voted against, the bill has passed without a Republican vote. Biden Adminstration previously said the US government will have tax increases on corporations and wealthy individuals to pay for the USD 3.5 trilliion plan.
There are many conerens about the 3.5 trillion plan will cause inflation. President Joe Biden hit back against information concern on Wednesday and would like to downplayed concerns about price hikes. and cited that his plans for the American economy are working. The President Joe Biden said that the consumner price inflation slowed in July. But his adminstration will also outline a number of resolutions to lower the consumer costs.
However, there is one more concern about his 3.5 trillion plan. There is no one can gurantee the US government will have substantial tax incomes from coporations and wealthy people to cover this plan. Tax incomes may get affected by the pandemic.
The change of design for American Eagle gold coin triggers me to study the history or development of the American gold coins. And there is a fascinated story about the Amercian gold coins development in 1933 – The most famous gold coin – The 1933 Double Eagle Gold Coin.
I believe that most people will remember that in 1930s, US was in the bank crisis. In 1933, in order to end the 1930s general bank crisis, US president Franklin D. Roosevelt issued an important executive order – Executive Order 6102.
This Executive order 6102 was about:
All persons are required to deliver all gold coins and all gold bullion products which owned by them to Federal Reserve Bank.
The 1933 Double Eagle: America’s last gold coin struck for circulation and the last gold coin that can be legally owned by an individual.
However, a number of 1933 Double Eagle Gold Coins were stolen or rescured before melting and those stolen coins found their way into the hands of collectors before later being recovered. Some of the 1933 Double Eagle Gold Coins were acquired by King Farouk of Egypt who was a professional collector of many things.
In 2002, one of the 1933 Double eagle was sold to an anonymous bidder at a Stacks Bowers action in New York for USD 6.6 million.
In 2021, the coins was sold for more than USD 18 million.
If one day, you discover this 1933 Double Eagle Gold Coin, remember its story behind this gold coin.
The famous author of RICH DAD POOR DAD as well as a famous investor indicated the importance of buying silver bullion. In his opinion, silver is the most undervalued, lowest risk, and best investment of all assets classes. He said that he would invest in silver U.S. Eagles today, not tomorrow. However, he would stop accumulating silver when silver spot get over USD 40 per troy ounce.
Robert Kiyosaki believe that globel pensions collapase will be one of the biggest threats that we will see the next 10 years. He does not think the governments and central banks will know a clear perspective to respond to this massive multi-trillion-USD global crisis.
He suggested that “If you have no gold or Silver, start accumulating today, and do not worry about price.” “I believe that when the panic hits, gold and silver will disappear from markets as prices climb.” He also pointed out.
Physical bullion products like gold and silver are very traditional investment tools and people use it for long long time. Let wait and see whether the wisdom and experience of older people will win the monetary games.
The Federal Reserve left interest rate and monetery policy unchanged. This indicates that the US is incomplete economic recovery until now.
Some economic experts believe that Federal Reserve will be wrong on inflation being temporary. From my point of view, it is quite difficult to predict inflation at this moment. Fears about the highly contagious Delta variant of Covid-19 leading to another round of economic slowdown. However, rising infection cases will cause more supply chain interruptions leading to more inflation.
Meanwhile, some leading companies expressed that they are passing rising costs along to consumers which point out that some inflation will stick around.
As there are industry raw material inflation and higher transportation costs, implementing additional prices increases become necessary.
Another concern is that it is stagflation instead of transitory inflation. That toxic combination of slowing growth and rising prices is a real risk and a dangerous signal of stagflation.
Theoretically, stagflation will trigger bullish markets for commodity and bullions. If there is rising inflation, investors will look at hard assets including bullion markets, like Gold, Silver, Platinum.
Do you believe that bullions prices are starting to rise again?
When stock markets plunged around the world, buying bullions will be one of the ways to preserve your wealth.
Do you know that the bullions like gold and silver have a significately increase in the past two year? Bullions investments have not been in the spotlight before the pandemic, However, they are rising enormously during the pandemic till now.
Bullions will surely become one of safe heavens during the volatility of the stock markets. Furthermore, some analysts believe that once pandemic is over, ecomony activities will rebounce in the speed that we cannot imagine. They believe there will be a strong demand on Silver, Platinum and Palladium.
No matter you believe or not, buying bullions is a good way to diversify our investment portfolios. Remember the rule that do not put all your eggs in one basket.
Do you share the same idea with me? Let me know your thought.