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Dollar up, gold down; why?

Thursday, September 18th, 2014

The U.S. Dollar Index closed last Friday at 84.25. For the ninth consecutive week, the Dollar Index has finished higher than the quote from the end of the previous week. This is the longest string of consecutive weekly increases since the first quarter of 1997.

The U.S. dollar reached its highest level in six years against the Japanese yen.

This is the highest the index has been over the past couple of years except for two days in May 2013.

In reaction, the price of gold fell to a multi-month low and silver dropped to its lowest levels since May 2010.

There are several reasons why the dollar is temporarily strong. The economies across Europe are proving to be weaker than the politicians were pretending, which had encouraged some investors to abandon the euro and replace it with the dollar. The military actions and economic sanctions involving the Ukraine and Russia are also putting more pressure on Europe than the United States. American politicians are still talking about the economic news in the United States being positive rather than negative as several reports (a horrible jobs report for August, mortgage applications are declining precipitously, the percentage of home sales being settled for cash is dropping sharply, a growing number of people qualifying for food stamps, the Federal Reserve’s continuing inflation of the money supply at far higher levels than it is admitting, and so forth) are indicating. This is quieting potential clamor from the public as we enter the final few weeks before elections.

However, behind the scenes, various regulatory changes are coming that are all likely to hurt American financial markets.  As they impact the value of other kinds of assets, there will be fallout for the values of gold and silver.

On Aug. 28, the CME Group, which owns the COMEX, NYMEX, GLOBEX and other commodity and financial exchanges in New York and the Chicago Board of Trade and the Chicago Mercantile Exchange in Chicago, announced a change to its Rule 575, which became effective Sept. 15.

– See more at: http://www.numismaticnews.net/article/dollar-up-gold-down-why?et_mid=692339&rid=246216569#sthash.Dig5y3l7.dpuf

Read more

Historic gold agreements

Tuesday, June 17th, 2014

1944 – Establishment of the IMF

The first international agreement on gold came with the signing of the International Monetary Fund’s articles of agreement in July 1944.

The IMF was created in order to rebuild the global monetary system after the Second World War, and its articles laid down that all member countries should establish ‘par values’ for their currencies in terms of gold, or in terms of the US dollar which was itself pegged to gold. One dollar was valued at 0.888671 gram of fine gold, or US$35 an ounce.

The agreement confirmed the price of gold as established by President Roosevelt in 1933, and gold became the foundation of the first international monetary system established by international agreement. It was the ‘glue’ that held the system of exchange rates together.

To give the new IMF usable resources to enable it to start lending, members were also required to pay 25 per cent of their subscription to the Fund in gold. Members had to buy and sell gold at the fixed price, plus or minus a margin set by the IMF. Gold was the ultimate reserve asset.

This requirement and the growth of membership resulted in IMF holdings of gold rising to 153 million ounces by 1975, at the time worth US$21 billion.

1960s – Central banks try to stabilise gold prices

In 1961, a ‘gentlemen’s agreement’ among central banks – known as ‘The Gold Pool’ – was established to hold the price of gold close to the then official price of US$35 an ounce.

The previous year, the price had risen to US$40 per ounce following panic buying of gold during the US presidential race and a speculative attack on the dollar. According to the Bank of England, “this state of affairs threatened the whole structure of exchange relationships in the western world”. The bank, with the support of the US authorities, sold gold on a substantial scale to bring the price down “to more appropriate levels”.

In October 1961, following a further speculative flurry, the central banks of Western Europe agreed to cooperate with the New York Federal Reserve Bank to stabilise the market.

A period of coordinated gold purchases followed the change of market conditions. However, the Cuba missile crisis of July 1962 triggered record demands for gold on the London market, which was again met by official selling. The objective throughout was to “avoid unnecessary and disturbing fluctuations in the price of gold in the free market”.

The Bank of England’s conclusion on this experiment was that “the knowledge that the central banks were working together in the gold, as well as in the exchange markets, has helped to maintain public confidence in the existing international monetary structure”.

The central banks abolished The Gold Pool in 1968, agreeing that they would no longer supply gold to the market but transact only among themselves at the official price. This established a two-tier system – one for private transactions, where the price fluctuated according to supply and demand, and the other for official transactions.

This agreement lasted until November 1973, when the price of gold was allowed to move freely, following the suspension of dollar convertibility into gold—the end of the gold standard—in August 1971.

1978 – The IMF attempts to write gold out of the system

In the late 1970s, the United States led an attempt to remove gold from the international monetary system. The Second Amendment of the International Monetary Fund’s articles was intended to achieve this aim by barring members from fixing their exchange rates to gold and removing the obligation on members to conduct transactions in gold at the officially mandated price.

The amendment followed the failure of previous attempts to establish a new international monetary system, including the inability of European countries to force the United States to either settle its deficit in gold, or else devalue the dollar against gold.

Not only did the United States refuse to keep gold in the system, it then led a crusade against gold—while being careful to keep a very large strategic stock of gold in its own reserves, sealed off from the outside world.

Symbolising the plan to drive gold out of the system, the IMF was instructed to dispose of 50 million ounces of its gold stock of 153 million ounces. It achieved this partly by sales to the market and partly by giving some gold to members.

Ironically, this exercise had the effect of spreading gold much more widely through the international community than ever before, and gave many countries a new interest in the gold market. Few countries showed any inclination to sell the gold handed to them, and in the vast majority of cases it continues to sit on their books.

Ext.: World Gold Council.

IN CASE OF CURRENCY DEVALUATION

Friday, March 21st, 2014

What is best : Savings Accounts or Gold/Silver ?

There was a very interesting article published in The Economist on Feb 12th 2013 and more recently on Feb 22nd 2014, what could one hope in case of currency devaluation ?

We all try to save a bit of money each month but, while still in crisis, most people find it hard to make ends meet. So, what would happen if the little money you try to save each month is really worth half of its value ?

We wish to point out the consequences of such currency devaluation :

Many people have savings account which can actually generate a 2% interest rate per year. So imagine if you were to invest 100€ per month, you would have saved 1200€ + 2% (24€ interest/year) = 1224€.  If the currency was devalued by 20%, your saving capacity would go down by 20% due to inflation. Whatever you would have saved in your saving account would be worth less as well. Whereas if you had saved in gold and silver, these tangible assets would have kept their values and would be worth even more … So, before we face a currency devaluation, let’s diversify our wealth.

How can we ? Investing in gold, silver and also investment diamonds is recommended. By splitting an investment, we can avoid the worst.

Lingold Savings Plan allows to save from very little … but it can be worth a lot should our currency be devalued. So, do not postpone your investment plan any longer. Start today


When the Bank of Canada decides to sell its gold coins in order to balance the books … or pay the public debt

Thursday, February 6th, 2014

According to the Globe and Mail, The Bank of Canada would have decided to melt down more than 200.000 gold coins from the years 1912 to 1914. Some collectors have been curious to find out what had happened to the $5 and $10 gold coins that Ottawa had pulled out of circulation. Finally, the Bank of Canada informed that they would be offering 30.000 of the bank’s 246.000 coins for sale to collectors.

This sale is just one of the recent moves of the federal government which has decided to unload public assets as it moves to balance the books by 2015, so they say ….

Just like many other foreign governments, they have decided to sell public assets at low prices so to pay off their debts. We are talking about public assets such as foreign embassies, port lands, gold or silver coins, paintings and so on … For example, the $10 dollar coins were sold for either $1,000 or $1,750 each, depending on their quality and premium. This sale created a kind of gold rush among the collectors.

Some buyers are very proud to hold gold coins that had been sitting at the Bank of Canada in Ottawa for several decades and were officially recorded as part of Canada’s gold holdings in the Exchange Fund Account of foreign currency.

On the other side, some collectors are quite unhappy about this public sale since it drove down the value of their collections.

So far the federal government has not published the official figure of the coins sold although the sale is closed at the present time. Needless to say that the Canadian government can expect to make some profit from the coin sales. The Canadian government will consider other options for the remaining gold coins either melting them down or plan any resale …

Let’s not forget the main explanation provided in a private agreement between the Department of Finance, the Royal Canadian Mint and the Bank of Canada  which objective was to improve the liquidity of the government’s assets, provide a piece of Canadian history to coin collectors and to “extract value from coin sales for the government and taxpayers.


Alternative Currencies are not new

Monday, January 27th, 2014

Around the world there are numerous examples of local currencies which have been introduced to promote local business, local produce, customer loyalty and awareness to trade issues and climate control. They all tend to be run in parallel to the national currency but are based on creating a thriving local, fully functioning economy incentivised by promotions and discounts. In recent years they have been launched in the UK as part of the Transitions Towns initiative and these include the Totnes Pound, The Brixton Pound, The Stroud Pound and the Lewes Pound. Lewes had previously introduced its own currency in 1789 which lasted until 1895. These pounds are obtained by exchanging pounds sterling for equivalent face value “local” pounds. Various denominations have evolved such as the 5, 10 and 21 Lewes pounds issued in 2009. There have also been schemes in the US such as the BerksShares in Massachusetts which are bought for 95 cents yet are worth $1. These are available in 1, 5, 10, 20 and 50 denominations. Similarly there have been examples in Canada with the Toronto Dollar, the Calgary Dollar and also in Australia with the Baroon Dollar. Most of these initiatives have been launched since 2006 or later and may well be a local solution in the fightback against the worldwide economic problems. They are viewed as trustworthy currency with real value to the local economy and in certain cases well-meaning because of the positive impact they have on local services and prosperity. Although these models function locally they do demonstrate a widening appeal for taking control of currency and introducing stability to the functioning of an economy.
Are National Economies really functioning?
If they are then for who are they functioning- surely not the majority? What’s happened to the Utopia of Globalisation? One has to ask where we are heading with the daily drivel of mixed messages to suit the media’s demand for sound bites and politician’s short term ambitions for themselves far outweighing the long term requirements of the National interest (daily or decades of proof – take your pick!).
What can be said of today’s global currencies which are currently being prostituted by their governments in a global exchange war to meet their “protectionism” objectives by stealth. Who is controlling their value and to what end?
The “trust” in these currencies is gradually being eroded to the point that Central Banks and the big “clever” money of investors are seeking sanctuary in what may be the only true trustworthy currency – physical gold.
This is fine for the multi-billionaires of this world like George Soros who can afford vaults of the stuff but what about the smaller investor.
Is it time to think that Gold may well become the only currency we can truly rely on? It may also be time to consider exactly what is a trustworthy currency for the future and will it be issued by central banks? There is definite interest in creating a currency of confidence at a time when traditional currencies lose appeal on a daily basis in the unpredictability of an unstable economy and the ever fluctuating foreign exchanges around the world.
This theme is even more current if one observes the trend in the US where Gold is being adopted in Utah and possibly other states as a more reliable store of value and wealth. The website for the Utah Gold and Silver Depository, set up as the means of this remonetization, states:
“On March 25, 2011 history was made when Utah Governor Gary Herbert signed into law Utah HB317 [The Utah Sound Money Act] thereby monetizing precious metals in the form of Gold and Silver American Eagles and United States numismatics (rare coins dated 1792 to 1964) in the state of Utah. The Utah Gold & Silver Depository was founded on the belief that every citizen of the global community has the fundamental right to legally create, preserve and store wealth. To meet the global demand for safe, secure transactions and storage, UGSD has developed a number of depository account options from which a customer can choose and tailor to best meet that customer’s needs and goals.”
The idea is that citizens who wish to monetize their gold and silver will lodge it in an account with the Depository which will then issue them with electronic money in the form of a debit card, which stores the dollar equivalent which is debited against the gold and silver which backs it. The beauty of the Utah scheme is that the “gold debit card” is so clearly linked to the actual gold and silver, the value of which is constantly audited: the card represents the actual gold, which is also personally yours. The technology cannot trump the value or manipulate it. The gold backed debit card is analogous to the old promise printed on, say, Bank of England notes, whereby the possessor of the note was entitled to redeem the face value of the note in gold specie if he produced the note at the bank.
So, this example shows that it is desirable and possible, using modern technologies, to monetize gold making it an alternative to the so called real currencies. A Currency of Confidence with ongoing real lasting and meaningful value. A dream or reality? We shall see… when the austerity measures around Europe are judged, deficits reduced or not and belief in the status quo currency and its current custodians is ultimately maintained or evaporated.

Extract from the English adaptation of the French book : L’or, Un Placement qui (R)Assure (2011) written by Jean-François Faure,President and founder of AuCoffre.com.

Buying gold coins as a safe haven

Wednesday, January 8th, 2014

Gold coins struck for liberty

Gold is an asset able to provide real freedom of action. It has had an inherent value for over 6000 years and is still going strong. It provides the reassurance to your savings and wealth that allow you to sleep easy at night – real freedom. This concept of freedom should increase with the value of our assets but today it is so often used as just a lure of clever marketing that distorts the truth about your savings and investments without the reassurance.

The culprits? Banks, once again. Indeed, our bankers have long forgotten the fundamentals of their activity and prefer to sell us complex financial products or random diversifications like mobile phone contracts. Many contracts tie us to them day after day. They have forgotten that they were to be the guarantors of our freedom by means of the values and valuables that we entrusted to them and included the right for our investments to remain our property.

We became completely dependant on these same banks: obligatory bank accounts to cash our wages, money blocked on accounts which pay hardly more than inflation (and sometimes less), credit, risky investments, etc. With gold coins it is quite the reverse.

Gold coins as an investment

Gold coins as an investment

Today in France, as in many other countries, their holding, their transport, their purchase and their sale are free. But that was not always the case. During the Second World War, Germans prohibited the French from having more than 6 g of gold, not even a 20F Napoleon coin. To deprive the French of their gold, was also to deprive them of their freedom. Very happy were those who could rely on their treasure being locked up in vaults

in Switzerland, able to convert it into cash on the local market and return to France with the revenue of the resale. Those who could not travel abroad could obviously buy or sell some in France, but they were exposed to the risks, including theft, blackmail and denunciation. Feeling confident with this assessment, many sought to shelter their treasure in Switzerland but not having anticipated the war, they subsequently had to take enormous risks in order to

smuggle their coins across the border by using secret compartments in their walking sticks that would be stacked full of Napoleon gold coins.

Another example: between 1933 and 1975, the possession of gold was prohibited in the USA. That did not prevent Americans from being among the largest hoarders of gold currency. The Swiss vaults were then filled with Eagles, Double Eagles and Sovereigns which reappeared at the end of the prohibition on gold or which were directly converted into cash in Europe.

During the Cold War, the Americans were right and gave their pilots (or their spies) gold coins so that they could have the possibility to buy their freedom in certain countries. Proof that even the king dollar would be insufficient in some cases. In the eyes of the Vietcong soldiers for example, it was just a vulgar piece of green paper bearing the marks of an enemy culture.

A gold coin, even struck by the American administration, remains above all gold with universally recognized and accepted values.

Contrary to bank notes, gold does not preach politics or try to impose any lifestyle. Gold does not have a nationality, it is neutral, and does not preach a doctrinaire approach. Gold coins are thus the last obstacle against attacks on our freedom and they will always be recognized at their rightful value. This is not the case with the fiduciary currencies in the form of banknotes, coins, and today of electronic currencies, which are sometimes so difficult to get accepted from one country to another.

Geographical locations

Gold coins are not in demand in the same way in all countries. Thus, in China or in the USA, Napoleon gold coins are not so well known and investors prefer to buy local coins or Krugerrands and Sovereigns which have an international appeal. In France it would be the reverse: in a period of crisis, the Napoleon national coin will tend to see its price shoot up beyond the value of the metal content whilst coins from other countries will maintain a steady premium.

Ideally, one would want to buy coins that are less in demand in a certain country and sell them to a market with a high demand for that particular coin.

This is possible today using systems like LinGOLD.com, AuCOFFRE.com and LingORO.com which unite French, Spanish and English speaking gold investors around the world, providing opportunities for a Chinese Member to buy Pandas from a UK Member for example.

Extract from the English adaptation of the French book : L’or, Un Placement qui (R)Assure (2011) written by Jean-François Faure,President and founder of AuCoffre.com.

The gold buyer is a contrarian

Monday, January 6th, 2014
contrarian-etfs

Contrarian mind, are you ???

A contrarian is a person who buys or sells his position against the opinion of the market and which is wary of the majority opinion while intervening in the contrary direction. The most famous contrarian is none other than Warren Buffet… the richest man on the planet. One of his best pieces of advice is not to follow the herd. His secrecy lies in a sentence typical of a contrarian: “The average is what everyone else is doing; if you want your shares to perform above the average, you must do something else”.

Among the politically incorrect followers of gold, one finds visionaries like William Bonner, historian and specialist in the US economy, who warns his compatriots living on credit:

“Imagine a shopkeeper whose biggest customer was having a hard time paying his bills. The shopkeeper extends credit, hoping the man will get his finances in order. But the more credit he gives him, the worse the man’s finances are. It would be very nice if that could work out. But it rarely does. Instead, it eventually blows up. The customer has to stop buying and the shopkeeper has to stop lending. There’s going to be hell to pay, in other words.”

“What should an investor do to protect himself,” our friend asked.

“Buy gold.”

“Gold? What a strange idea. I haven’t heard anyone mention gold in many years. It seems so out-of-date. I didn’t think anyone bought gold anymore.”

“That’s why you should buy it.”

And that is the person who is currently buying gold.**Extract from the book by William Bonner Empire of Debt : The Rise of an epic financial crisis(published by John Wiley & Sons, 2005).

To put an end to the generally accepted idea according to which gold savings is the act of nostalgic older men, one only needs to go onto some specialized forums to realise that this type of saver is not only younger than the average but that he or she also has a very informed view on the global economic system. From his profile one would say above all that he or she is a careful saver with a different vision of value in the future. This new generation of gold investors is logical, practical and in search of a different type of security than that offered with traditional investment or savings instruments. They have witnessed the demise of their parents “trusted” plans and they are not keen to

repeat the mistake. They may share the perfectly normal aspiration to save for their future but they are looking for security, reliability and protection of the

purchasing power stored up in their savings.

Given the current high street offerings with returns on investment equivalent to a net loss due to the effects of inflation, it is no surprise that savers and investors are turning to something tangible and an asset they can own.


Gold, an alternative Currency of Confidence?


Where would we turn to if the known currencies of the world suddenly devalued and became worthless in real terms?

Throughout history there have been instances when all faith has been lost in the official currency usually because it has become worthless and therefore all confidence has been lost. However, people have always looked for an alternative to maintain commerce and everyday survival. This has sometimes taken the form of bartering but it is limited by the difficulty of assigning recognisable value to a wide range of goods and services. There has to be some common denominator and unit value that is commonly recognised and therefore allows the cycle of trade to turn.

During the French revolution the state coffers were completely empty and so the emerging Constitutional Assembly created a system based on “assignats” which gained their value through selling off the assets of the church. These “assignats” would be guaranteed by the state and the objective was to reconstruct a functioning economy. However, they became greatly over subscribed to the tune of 47 billion causing inflation, zero rates of interest and

ultimately ended in collapse.

Extract from the English adaptation of the French book : L’or, Un Placement qui (R)Assure (2011) written by Jean-François Faure, President and founder of AuCoffre.com.

Gold Trends Analysis

Tuesday, December 24th, 2013

Gold Medium Term and Resistance Line
Long Term Trend ~ Neutral since 4/12/13 @ 1501 ~ Moving averages 1560 – 1561
Medium Term Trend ~ Bearish since 4/5/13 @ 1575 ~ Moving averages 1321 – 1370

From a medium term perspective, as long as price is below the UPPER RED LINE near and below the moving averages, the overall medium term trend is still down. We need a close above the moving averages in order to neutralize the downtrend and take it out of bearish mode. The moving averages have now come down to 1321-1370 as we enter this week.

The potential for the year end to be another low cycle has not been eliminated.   We’ve got to get above the averages and the red line in order to become more favorable towards the medium term.  Last week we lost the 1220-1222 area and came within 8 dollars of our target (1180) if broken.

If you look at the end of 2008 you see that the green channel line was broken right at the crash low.

If the lines do break the June lows on the downside the next support is the dotted line near 1100 and then the 1000-1040 area where the white line crosses.   The key for gold is for price to get back above 1370 on a weekly basis for the medium term trend to get out of this bearish mode.  Support is getting thin as we’re at the weekly trend lines.  The June lows can still be taken out if those lines give way but there is a weekly support at 1172 on a Friday close basis that would be the next point to watch for support before the line near 1000 on the chart comes into play.


Gold Trends Analysis

Gold Trends Analysis

Ext : http://www.goldtrends.net

The Australian Nugget 1 ounce

Monday, December 16th, 2013

The Australian Gold Nugget is a popular series of Gold bullion coins issued by the Perth Mint. They
have legal tender status in Australia and are one of the few legal tender bullion coins to change
their design every year, the most notable other being the Chinese Panda.

Details

Australian Nugget 1 ounce

Australian Nugget 1 ounce

Australia issued its first Gold Nugget coins in 1986. From 1986 to 1988, the reverse of  these coins featured images of various Australian Gold nuggets, hence the name. From 1989, the design changed to feature different Kangaroos, a more world-recognised symbol of Australia. The coins are sometimes referred to as Kangaroos but the name

Nugget seems to have stuck. The coins up to 1 Toz change design each year. Each year, a Proof edition is issued and that design becomes the bullion coin design for the following year.

The coins have a unique market niche for two reasons; a “two-tone” frosted design effect and individual hard plastic encapsulation of each coin. Provided they remain as they came from the mint, the quality is maintained and thus premium.

The initial sizes offered were 1/20 Toz, 1/10 Toz, 1/4 Toz, 1/2 Toz and 1 Toz. In 1991, the 2 Toz, 10 Toz and 1 Kg sizes were added. These were created with the intention of using economies of scale to keep premiums low. The face values of the two larger coins were lowered in 1992 in order to bring them more in line with the smaller sizes.

In October 2011, the Perth Mint created a one tonne Gold coin to break the record for the biggest and most valuable, previously held by the Royal Canadian Mint. It is approximately 80 cms diameter and 12 cms thick. The face value is A$1 million but at the time of minting, the Gold price made it worth over A$53 million.

As mentioned, the reverse of the coin features in the early years a Gold nugget and thereafter a Kangaroo. It states the year of the coin, the weight and Gold fineness.

There is also a mintmark ‘P’ which signifies the Perth Mint.

The obverse features a profile view of Queen Elizabeth II designed by Ian Rank-Broadley. The portrait is surrounded by her name, the denomination of the coin and the word AUSTRALIA.

The Australian Gold Nugget coins should not be mistaken for the Australian Lunar Gold Bullion coins. Both coins are minted by Perth Mint and have 999.9‰ fineness but Lunar coins use different animals from the Chinese calendar instead of the Kangaroo.

Investment Advice

There are various grading systems in use around the world. However, the British system is as follows:

All Nugget coins are issued as pure Gold finewness, 999.9‰ and in theory have a low premium just above the value of the Gold.

However, their intrinsic beauty makes them very collectable and they attract good premiums.

As with any coin, the best quality grades will attract the best premiums. The three early years in particular will be those with the highest premium. Although the coins

were issued in Proof form, many were unpacked and have thus been damaged and are at lower gradings. The mintage figures for all sizes of Nuggets are in general quite low, thus every coin will have numismatic premium value also. All round, the Nugget is both a collectable and investable product.

Specs

Tax Free Savings

Wednesday, December 11th, 2013

A Tax Free Savings Account in physical gold that you own

UK Taxpayers have a unique opportunity to save in pure gold, a real tangible asset, without paying VAT or Capital Gains Tax. Start from just 1 gram a month.

Gold Britannia and Sovereign investment quality coins offer a unique advantage to investors because they offer between 18% -28% additional benefits over other investments. Why? … because they are completely exempt from Capital Gains Tax. Furthermore, they are exempt from VAT.

Britannia 1 ounce_averse

Britannia 1 ounce averse

Gold Britannia 1 ounce coin

Britannia 1 ounce obverse

Britannia 1 ounce obverse

A beautifully struck gold bullion coin that has UK legal tender status and a face value of £100 – although its actual value is many times greater. The Gold Britannia coin was originally alloyed with Copper, but from 1990 the decision was made to alloy with Silver. This is why the earlier Gold Britannia’s have the deep Gold colour, as opposed to the lighter yellow gold colour of the Britannia since 1990. The latest 2013 coins have no alloy and are pure gold and 999.9°/oo fineness.

Sovereign Elizabeth II_averse

Sovereign Elizabeth II averse

British Gold Sovereign coin

Sovereign Elizabeth II obverse

Sovereign Elizabeth II obverse

The full British Sovereign is one of the most recognised gold coins in the world, with UK legal tender status and it can attract a healthy premium as it is always in demand, at home and abroad. Their legendary reputation comes from their use in a pilot’s survival kit by many air forces, being sewn into their jackets and used to negotiate their safe passage home if downed during a mission. The attraction was the integrity of their British origin which provided the utmost trust to their owners.

Capital Gains Tax (CGT)

Coins which are legal tender in the UK are exempt from CGT. The Britannia and Sovereign investment coins fall into this category. The UK Customs authority has issued a notice to accountants and financial advisors numbered CG12602 which deals with exemptions and in particular currency in sterling. It refers to:
– TCGA92/S21 (1)(b) which states “Currency in sterling is not an asset for capital gains purposes”. >Learn more
– Further notice from HMRC is given in CG78308 which states “Sovereigns minted in 1837 and later years and Britannia Gold coins are currency but, like all sterling currency, are exempt because of TCGA92/S21 (1)(b) >Learn more Value Added Tax (VAT)
Coins which are of investment quality do not attract VAT. Investment quality is defined as coins which contain a minimum of 900 one thousandths Gold. (900.000 ‰). Rather than being a specifically British rule, it is in fact from the European Union. See notice number 2011/C 351/07. The notice refers to all coins from various countries which would fulfill the investment quality criteria. >Learn more


Confidence in physical gold

Tuesday, December 10th, 2013

According to kingworldnews.com and also confirmed on jsmineset.com, the Shanghai Stock Exchange would have delivered more gold than Fort Knox in the States. Needless to say the strong impact that would have on the gold price in the forthcoming future.
Some people even expect tapering to happen again or at least at some point.

Shanghai stock exchange
Shanghai Stock Exchange

The dollar is being printed on such a large scale that it leads to a complete devaluation of the US currency. That may be a satisfaction to the American to have more bank notes printed out but on the other side this does not help other countries like China who is presently sitting with some $3.7 trillion of foreign exchange reserves – other countries are actually in a pretty similar case with lesser quantities but still the concern remains …

Kingworldnews visited the Shanghai Stock Exchange in 2009 and said that they had delivered some 8655 tons of gold since 2009. The Chinese bought something like 1.700 tons of gold in the first eight months of this year. It means that gold is actually feeding the Chinese’ foreign exchange reserves. We know that the renminbi is already the second largest currency used in global trade … How long before the dollar becomes fully obsolete ?

Let’s have a closer look at the dollar :

Well, one should be scared when looking at that 14 year perspective published on jsmineset.com

a 14 year perspective for the de-dollarization

a 14 year perspective for the de-dollarization

In our article published on Nov 19th 2013 – China remains the world’s largest gold consumer in Q3’13 – we were actually talking about the lack of confidence in the global financial market and systems altogether. As Jim Sinclair was saying ‘Credibility speaks to Confidence and Confidence speaks to Gold’.

Soon we may have part of our savings confiscated. How trustworthy are the banks? 

Investing in physical gold has never been so important. Making it affordable to everybody is our main concern and feasible thanks to our LSP.

For further information with regards to the confiscation in the USA, please read our article The Great Confiscation : Gold ownership was illegal in the USA from 1933 to 1975.

The Krugerrand 1 once

Monday, December 9th, 2013

The Krugerrand is probably the original Gold bullion coin. It was introduced in 1967 as a vehicle for private ownership of Gold whilst also being circulated as currency, hence being minted in a durable alloy. From 1980, further sizes were introduced. See specification table overleaf.

Details

pict krugerrand 1 ONCE The history of the Krugerrand begins with the South African Chamber of Mines which had the inspired idea to market South African Gold by producing a one Troy ounce bullion coin to be sold at a very low premium over the intrinsic Gold value. It was intended to be circulated as currency, hence it was minted in a more durable alloy and contained 2.826g copper to resist scratching and thus giving the coin its golden hue. At the time of launch, the Krugerrand was the only accessible Gold investment opportunity for the everyday buyer and this thought came through from the inception. It was the fi rst coin to contain exactly 1 Troy ounce of Gold.
Despite the coin’s legal tender status, economic sanctions against South Africa made the
Krugerrand an illegal import in many Western countries during the 1970s and 1980s. These sanctions ended when South Africa abandoned apartheid in 1994 and the Krugerrand once again regained its status as one of the worlds’ leading bullion coins.
In 1967, only the one ounce coin was available. From 1980, the fractions were available, namely, one half ounce, one quarter ounce and one tenth ounce. The name is derived from a combination of Paul Kruger, a well-known Boer leader and later President of the Republic and the Rand, the monetary unit of South Africa. The obverse side features the Otto Schultz image of Kruger along with the name of the country “South Africa” in the two languages, English and Afrikaans. The reverse side, designed by Coert Steynberg features the image of a Springbok Antelope, one of the national symbols of South Africa.
By 1980, the
Krugerrand accounted for 90% of the Gold investment coin market. For example, it is estimated that between 1974 and 1985, some 22 million coins were imported into the United States alone. Although it is not a beautiful coin, many millions have been sold since its introduction due to the policy of selling with a very low premium. The success of the Krugerrand led to many other Gold-producing nations minting their own bullion coins, such as the Canadian Maple Leaf in 1979, the Australian Nugget in 1981, the Chinese Panda in 1982, the US Eagle in 1987 and the British Britannia in 1987.
The
Krugerrand is interesting in that the government of South Africa has classed the coin as legal tender although it has no face value. It therefore fulfills VAT-free criteria for investment coins.

Investment Advice

There are various grading systems in use around the world. However, the British system is as follows:

investment advice krug
Essentially, the bulk of
Krugerrands are produced in a non-proof form although the South African Mint produces limited edition Proof quality Krugerrands as collector’s items. These coins in particular attract a healthy premium and are priced well above the value of the bullion alone. However, non-Proof coins also have a premium above the value of the bullion.
The Proof and non-Proof coins can be distinguished by the reeding, that is, the number of serration on the edge of the coin. Proof coins have 220, non-Proof have 180.

key facts krugerrand

Krugerrands are made of an alloy of Gold and Copper – this effect also being known as Crown Gold as it has long been used for the British Sovereign coins. Due to the popularity of the Krugerrand, there are also many fakes in existence and the investor should be wary. Copper alloy gives a much more orange appearance than silver alloy. Likewise copper is very durable and coins should be in good condition always.
The best marker of authenticity is the weight and this should be checked carefully using the table below since the Gold weight and total weight are known. Check also the reeding.

Specs

specs krugerrand
All investment coins sold by LinGOLD.com are EF quality or above.

For further information: +44 (0)203 318 5612
info@lingold.com


The Panda 1 ounce

Wednesday, December 4th, 2013

The Chinese Gold Panda is a popular series of Gold bullion coins issued by the People’s Republic
of China in Proof-like, brilliant uncirculated quality. They are issued in a range of sizes between
1/20 Oz and 1 Oz with larger 2 and 5 Oz coins being additionally issued in some years.

Details
panda 1 onceChina issued its first Gold coins bearing the Panda design in 1982. These were limited
to sizes of 1/10 Troy ounce along with 1/4 Toz, 1/2 Toz and 1 Toz. From 1983, the 1/20 Toz size was added and additionally a 2 Toz and 5 Toz coin is sometimes issued.
These strikingly beautiful coins are always issued in Proof-like brilliant uncirculated quality and prove very popular.
A different design was issued each year until the 2000. When the 2001 edition was announced, so too was a freeze of the design and thus the 2002 Panda is identical to the 2001. Collectors spoke up on behalf of the annual change and China responded by reversing their policy so that from 2003 onwards, the designs again change each year.
However, on the reverse side, it always features the endangered Giant Panda. It also features the size, Gold fi newness and monetary value.
The main design on the obverse of the coin has hardly changed, save for minor detail changes in the image. It features Beijing’s famous Temple of Heaven (Tien Tien) in the centre with Chinese characters on the top saying “Zhonghua Renmin Gongheguo” meaning People’s Republic of China and at

the bottom the year of issue. If it is a commerative issue, the theme will also be marked here.
There was an adjustment of the face values of the coins in 2000/2001 – please see
the table overleaf for details.
The Chinese mints usually do not employ mintmarks. In certain years, there have
been minor variations in items like the size of the date, the style of the temple and
so on. These allow the numismatist to identify the originating mint. In some years,
but not all, other marks and Proof marks (signifi ed by a ‘P’) have been added. The
four mints involved in the production of the Panda are Beijing, Shanghai, Shengyang
and Shenzhen.

Investment Advice

INVESTMENT ADVICE

All Panda coins are issued as pure Gold fineness, 999.9‰ and in theory have a low premium just above the value of the Gold.
However, their intrinsic beauty makes them very collectable and they attract good premiums.
As with any coin, the best quality grades will attract the best premiums. The early years in particular will be those with the highest premium. Although the coins were issued in Proof form, many were unpacked and have thus been damaged and are at lower gradings. The mintage figures should be carefully examined – the number originally minted is quoted but it has been found that production continues for various years, hence the total mintage may be quite a bit higher some years after.

SPECS

SPECS

KEY FACTS

All investment coins sold by LinGOLD.com

are EF quality or above.

For further information: +44 (0)203 318 5612
info@lingold.com

The Maple Leaf 1 once

Sunday, December 1st, 2013

The Canadian Gold Maple Leaf is one of the oldest bullion coins alongside the Krugerrand. It is a classically beautiful coin, internationally recognised and provides investors with a secure, quality addition to a portfolio.

Details

The Royal Canadian Mint introduced the Maple Leaf in 1979. Along with the Krugerrand, it has been in continuous production ever since. It came about because of the Krugerrand – at the time, there was an economic boycott of South Africa so Krugerrands were not widely available – and thus the Maple Leaf fi lled a gap in the market. It contains virtually no base metals at all and uses Gold exclusively mined in Canada.

MAPLE LEAF 1 ONCE GOLD COIN

The earliest years between 1979 and 1981 had a Gold fineness of 999.0‰ but 1982 onwards is 999.9‰. For those same fi rst years, only a 1 Toz coin was produced. Between 1982 and 1985, the 1/4 Toz and 1/10 Toz sizes were added. Then in 1986 the 1/2 Toz was added and in 1993 a 1/20 Toz coin joined the group. It has remained thus to date except 1994 when a 1/15 Toz coin was produced for that year only. That year, a Platinum 1/15 Toz coin was also produced, possibly for jewellery, but both the Gold and Platinum 1/15 Toz coins were not a success and were dropped. The Maple Leaf is also available in Silver and Palladium.

Each coin features the image of Queen Elizabeth II by Ian Rank-Broadley on the obverse side. It also has the denomination and year of issue. On the reverse is an image of Canada’s national symbol, the maple leaf along with the word CANADA and the Gold fi neness in both English and French. Every coin is guaranteed to contain the stated amount in Troy ounces of fi ne Gold. The coins are identical in design except for the obvious items such as weight.

All Maple Leaf coins are legal tender in Canada although are categorised as “non-circulating bullion coins”. Their Gold fi neness easily puts them into the general category of being VAT-exempt.

On 3rd May 2007, the Royal Canadian Mint unveiled a 100 Kg Gold Maple Leaf with a face value of C$ 1 million although the Gold content makes it worth much more. The coin was produced as a promotional product to give the mint a higher international profi le. However, several interested buyers came forward so the mint announced it would manufacture to order. There are believed to be five confirmed orders and/or deliveries. It held the record for the largest coin until 2011 when an Australian coin superseded it.

Investment Advice

There are various grading systems in use around the world. However, the British system is as follows:

INVEST ADVICE

All Maple Leaf coins are issued as pure Gold finewness, 999.9‰ and in theory have a low premium just above the value of the Gold.

KEY FACTS 1

However, the reality is that a 5% premium should be achieved for a quantity of coins

with higher values for individual coins. As always, the smaller value coins will have higher premiums.
The coins were never really designed to be handled due to the softness of 24 carat Gold, the milled edge and clear fi eld around the image of the Queen. With some coins supplied in tubes, this makes them susceptible to handling marks and other damage. So careful examination of coins is highly recommended.

Specs

SPECS 2

The British Sovereign

Friday, November 29th, 2013

The Gold Sovereign is a highly collectable investment coin first introduced in Great Britain in 1489 at the request of King Henry VII. In 1816, there was a major reform of coins in Great Britain which resulted in The Coin Act. This laid down in law, amongst other things, the specifi cations and dimensions of Gold Sovereigns produced from 1817 onwards which have remained in place to this day. The Sovereign weighs 7.99g and is 22 carat Gold (or 916.667‰ fineness).

SOVEREIGN AVERSE AND OBVERSE

Details

The first Gold Sovereign was struck in 1489 for King Henry VII. Sovereigns continued to be issued by monarchs up until the end of the reign of Elizabeth I in 1603. As part of the coin reform of 1816/1817, the Sovereign was re-introduced. A young Italian engraver, Benedetto Pistrucci, was appointed to create the reverse design coming up with the beautiful image of St George slaying the dragon. This design saw many alterations over the years but is essentially the same. As a testament to the design, it still appears on the very latest 2013 edition. Other reverse designs have at times been used during the reigns of William IV, Victoria, George IV and Elizabeth II. The obverse of the Sovereign followed the trend established by the original and portrays an image of the reigning monarch, which remains the case up to the present.

Gold Sovereigns were withdrawn from circulation at the start of World War I in 1914 although production continued at the Royal Mint until 1917. They continued to be produced at other mints of the then British Empire but at lower quantities than before. Sovereigns which were not produced at the Royal Mint carry a mintmark showing their provenance, hence one finds coins referred to as Australian Sovereigns or South African Sovereigns. This “foreign” production stopped in 1932.

In 1957, the Royal Mint began again producing Sovereigns in order to meet world demand and to stop the booming counterfeit production which had become rife since the Royal Mint stopped producing in 1917. They were not however reintroduced into everyday circulation. Prior to 1979 only Gold bullion coins had been issued and it was this year that the fi rst Gold proof Sovereigns were issued. Between 1983 and 1999 the Royal Mint ceased producing Gold bullion Sovereigns and only minted proof Sovereigns. Gold bullion Sovereigns were re-introduced in 2000. There are several special designs but essentially, the George & Dragon design remains with the wheel turning full circle where Pistrucci’s design (which was on the Sovereign when the current monarch was crowned) has been re-introduced for the 2013 edition to mark the 60 years reign of Elizabeth II.

Investment Advice

There are various grading systems in use around the world. However, the British system is as follows :

SOVEREIGN 1

Whilst older Sovereigns were produced in much larger quantities than those produced today, it is much more diffi cult to source a good quality Sovereign from those times. Sovereigns from the reigns of George III, George IV and William IV are extremely rare in good quality and thus command high premiums. EF quality can be found but are still quite rare. For example, a UNC George IV Sovereign from 1825 made £14,950 at a sale in March 2004! Early Victorian shield Sovereigns are highly sought and therefore an EF quality coin would fetch a high premium. Indeed anything UNC or FDC from the reign of Victoria is a high premium coin.

Edward VII and George V are fairly easy to obtain in EF quality as they were produced in very large numbers. As with Victoria Sovereigns, any UNC or FDC coins would attract a high premium.

The majority of coins on the market is from the reign of Elizabeth II and has lower premiums than earlier editions. However, the quality again affects the premium and the investor should look for the highest grades. Any coin will always fetch a higher premium anyway than the price of Gold and can only become more sought after in the future. There follows a list of certain rare Sovereigns to seek out if possible – finding one of these will command an excellent premium:

SOVEREIGN 2

– 1817, the first year of the modern Sovereign

– 1838, the first Victoria Sovereign

– 1841, the rarest Victoria Sovereign

– 1917, London-minted Sovereigns, not Australian or South African

– 1989, 500th anniversary of the Sovereign edition

– Anything from George II, George III and William IV – FDC, UNC and even EF grades

Specs

SOVEREIGN 3

Detailed reading: https://goldcoin.org/numismatics/the-british-gold-sovereign-the-world’s-most-sought-after-gold-coin/4103/All investment coins sold by LinGOLD.com are EF quality or above.

For further information:   +44 (0)203 318 5612     or email : info@lingold.com

FRANCAIS ESPANOL ITALIANO CHINESE

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Thoughts
"For a mountaineer, the important things are the effort, the posture and the muscles. The rope that holds him serves no purpose when everything works but it gives him a sense of security. In the same way, all gold does is ensure confidence; it's a safe haven."