Interest rates and its effect on Gold and precious metals

Published here: http://goldsilverworlds.com/gold-silver-insights/interest-rates-and-its-effect-on-gold-and-precious-metals/

An interest rate is the amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets. The assets borrowed could include cash, consumer goods, and large assets such as a vehicle or building.

In terms of borrowed money, the interest rate is typically applied to the principal, which is the amount of money lent. The interest rate is the cost of debt for the borrower and the rate of return for the lender.

So in other words, interest rates are the prices for holding or loaning money. Banks give out interest rates for saving money which attracts depositors. Banks also receive interest rates for each loan they give out with the deposited money.

Interest rates and Inflation

Lower interest rates mean a higher demand for loans from businesses and individuals. Each loan increases the money supply system and according to the quantity theory of money, (supply and demand), The growth of the money supply will mean an increase in inflation. So this means that lower interest rates will highen inflation and inversely, higher interest rates will equal to lower inflation.

As previously discussed, Interest rates have an effect on inflation and subsequently, this also affects gold and precious metals.

Gold and Precious metals

A precious metal is a term used for the classification of rare metals that have high economic value.  The value of these metals is driven by various factors like rarity and industrial uses. The most popular precious metals with investors are gold, platinum, and silver. Precious metals tend to do well when inflation rates are above interest rates, making it a store of value against loss of value in paper currencies. So as interest rates rise to combat inflation, Precious metals will also be affected as this means the prices of gold and other precious metals could fall.

As an investment, precious metals are sought after to diversify portfolios and as a store of value, particularly as a hedge against inflation and during times of financial uncertainty. The single most popular precious metal for investment purposes is gold, followed by silver but when interest rates rise and go beyond inflation rates, Gold and other precious metals will most likely drop in prices.

Conclusion

The rise of interest rates is more likely the attempt of the federal reserve to regulate inflation and thus affect cash holdings and investments of investors and businesses alike. But these changes will fight the rise of inflation and therefore, help consumers and investors in different aspects of business and spending plus assist them through higher savings interest rates. On the downside, higher interest rates mean higher prime rates, credit card rates and increase in the U.S. national debt and lower gold and precious metal prices.

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Sound Money Needed Now More Than Ever

Published here: http://goldsilverworlds.com/gold-silver-experts/sound-money-needed-now-more-than-ever/

By Clint Siegner, Money Metals Exchange

The sound money movement reemerged on the national political scene a decade ago. In 2008, the financial crisis brought in a fresh wave of U.S. gold and silver investors.

Ron Paul and the Tea Party advocated for limiting government and ending the Federal Reserve system. Sound money advocates made real inroads in recruiting Americans to their cause based on evidence that the nation is headed for bankruptcy.

The implications of the most recent financial crisis went way beyond budget and finance.

Many Americans grasped the more significant lesson. The perpetual expansion of government spending lay behind the corresponding decline in personal liberty for them, their children, and their children’s children.

Dishonest money is a dream for politicians and bankers, but it is a nightmare for citizens. Charts showing the final abandonment of the remnants of the gold standard in 1971 and the exponential rise in government debt helped people make the connection between dishonest, unlimited fiat money and unlimited government.

Here is one example from the Daily Caller…

The trend shown on this chart has not changed or improved. The red bar on the right-hand side of the current chart now stands more than twice as high with total government debt north of $21 trillion.

There is no credible effort in Washington to limit spending. It is safe to say U.S. deficits and the corresponding borrowing will continue to rise exponentially. It will continue until confidence finally collapses; either in the nation’s ability to repay, or in the dollar, or both.

The nation needs sound money more desperately now than ever.

Unfortunately, the debt chart above isn’t the only chart that tells a damning story. Below is a chart from TF Metals Report which shows the regular beatings given to silver in recent months. The picture for gold looks similar.

This is what a controlled market looks like!

The bankers and central planners hated the lesson Americans got following the 2008 financial crisis. They are using the markets to condition people to respond differently. Buy stocks, buy bonds — any conventional “paper” securities. And, for the love of Pete, keep borrowing.

For gold and silver investors, the conditioning is delivered in the form of a regular bludgeoning each time the metals start to show strength.

Any who still question whether markets are manipulated, simply aren’t paying attention. Or they rely upon CNBC for all of their investment news. The topic has been covered extensively on alternative news sites, including by Money Metals.

Crooked and relentlessly painful markets, combined with optimism surrounding Donald Trump, is a potent combination.

Yes, there was some grumbling when Trump signed the latest budget and expansion of government.

However, many fewer Americans feel the sense of alarm that prevailed when the Federal government was running trillion-dollar deficits under Obama. Others may be alarmed, but they question whether gold and silver will work as honest money given the price never seems to reflect the reality of the nation’s finances.

Too many Americans are effectively tuned out when it comes to the message of sound money and limited government. That is tragic. Few will be ready and a whole lot more will be caught by surprise when the inevitable reckoning finally arrives.

Clint Siegner is a Director at Money Metals Exchange, the national precious metals company named 2015 “Dealer of the Year” in the United States by an independent global ratings group. A graduate of Linfield College in Oregon, Siegner 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.

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Effects of Inflation on Gold and Precious Metals

Published here: http://goldsilverworlds.com/gold-silver-insights/effects-of-inflation-on-gold-and-precious-metals/

Inflation is characterized as a general increase in prices and fall in the purchasing value of money. But the question we want to answer is “How does this affect gold and precious metals?” We’ll get there in a moment.

When the price levels rise, each unit of currency will buy you less goods and services, therefore, Inflation reduces the purchasing power per unit of money. This can affect the economy in various ways, like increase the opportunity cost of holding money, reduce the burden of private and public debt, change in the prices and demand for Gold and precious metals and so many more.

Inflation and interest rates also have a direct relationship to one another as the smallest change on either side can have an adverse effect on each other and the economy. Inflation can be directed by many factors like rise in oil prices, rise of interest rates, rising commodities ..etc.

Gold and Precious metals

Inflation also has a direct effect on gold. When inflation rises, gold rallies. As we have mentioned earlier, inflation is the increase in prices of goods caused by the increases in the money supply, so analogous relationship can be seen between gold and money supply. Gold and other commodities that are priced internationally in US dollars automatically cost more because you’ll need more of the newly-devalued dollars to purchase the same amount of gold. With the steady increase of prices in the market due to inflation there could be a stronger demand for gold and other precious metals.

Gold as an inflation hedge

An inflation hedge is an investment that maintains or increases its value over time. Hence, an inflation hedge should provide protection against the depreciation of the currency. When you invest in Gold, this becomes a Hedge against rising inflation and the fall of the U.S. Dollar. Historically Gold has served as a Hedge from these two major problems, with the rising Inflation gold typically appreciates and when investors find out their money is losing its value, they would rather choose to put in on a hard asset that will maintain its value, by which Gold has been a prime example.

Conclusion

Inflation has a great impact on the prices in the market and the economy and with the steady rise of prices, investors are already looking for a hedge to maintain the value of their money. Gold has always been considered as a hedge against inflation and other economic uncertainty, so it’s a good bet to invest in gold as inflation soars higher along with other precious metals like silver and platinum.

 

 

 

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Michael Pento: Inflation to Skyrocket When Fed Reverts to New QE & Interest Rate Cuts

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Silver Price: This Industrial Metal Is All Set to Make a Monster Move

Published here: https://www.profitconfidential.com/silver/silver-price-industrial-metal-set-to-make-monster-move/

Expect a Violent Move in Silver Prices
This is a special report, in which I am not going to outline any specific company, as I usually do. Instead, I am going to focus my interests directly on the price of silver.

The reason why I am focusing on the silver price is that I have reason to believe that a very large and violent move is on the horizon.

Many might be wondering what a commodity has to do with technology. The answer is that silver is not only a precious metal, but it is also an industrial metal.

Silver is consumed in the development and creation of many technologies. These range from automotive applications to smartphones to solar panels, to name a.

The post Silver Price: This Industrial Metal Is All Set to Make a Monster Move appeared first on Profit Confidential.

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The Overall Top 5 Gold Mining Companies

Published here: http://goldsilverworlds.com/gold-silver-general/the-overall-top-5-gold-mining-companies/

There are different methods by which gold mining companies are ranked. One is by their annual production, by their cash cost per ounce, that is, how much money it costs them to mine the gold. Since gold prices are the same everywhere, companies with lower costs per ounce make more profit. The most common method lists by market capitalization which considers the total value of capital holdings by that company. Also considered when comparing companies is their market capitalization per ounce of gold equivalent which takes the market value and total reserves and resources for each company as well as the price of gold into consideration. The figures for each company can be used to determine the value the stock market gives to each company’s reserves on an ounce to ounce basis. Here we present to you the top 5 mining companies.

According to the World Gold Council primary gold production hit another record in 2017 after nine years of growth in output, although at a much slower pace. Global gold production totalled roughly 105m troy ounces in 2017. The output is up 525 tonnes or nearly 17m ounces since the start of the decade.

1. Barrick Gold – 5.32 MOZ ( Million Ounces)

Barrick Gold Corporation is the largest gold mining company in the world, with its headquarters in Toronto, Ontario, Canada. The company has mining operations in Argentina, Australia, Canada, Chile, the Dominican Republic, Papua New Guinea, Peru, Saudi Arabia, the United States and Zambia. Barrick is the gold mining leader, both in terms of size and low operating costs. Company guidance calls for all-in sustaining costs (AISC) of just $765 to $815 per ounce for 2018. Barrick’s output could slide by more than 10% this year. Barrick’s gold production peaked at 7.7m ounces in 2010 and 2011.

2. Newmont – 5.27 MOZ

One of the world’s largest gold producers with assets or operations on five continents, Newmont is an industry leader in safety & sustainability. Newmont Mining Corporation is based in Greenwood Village, Colorado, USA and is a mining company that traces its roots to the diversified holding company William Boyce Thompson established in 1916. Incorporated in 1921, it has active gold mines in Nevada, Indonesia, and Peru. Holdings include Santa Fe Gold, Battle Mountain Gold, Normandy Mining, Franco-Nevada Corp and Fronteer Gold. Newmont also has many joint venture relationships and is the second largest mining company next to Barrick Gold.

3. AngloGold Ashanti – 3.76 MOZ

AngloGold Ashanti Limited is a global gold mining company. It was formed in 2004 by the merger of AngloGold and the Ashanti Goldfields Corporation. This Gold company is now a global gold producer with 21 operations on four continents. The company is listed on the New York, Johannesburg, Accra, London and Australian stock exchanges, as well as the Paris and Brussels bourses. As at 1 March 2018, AngloGold Ashanti has 14 mines and 3 projects in ten countries.

4. Kinross Gold – 2.67 MOZ

Kinross Gold overtaking Canadian peer Goldcorp to take the fourth spot as the Vancouver company experiences another year of double digit percentage declines in output. Kinross Gold Corporation is a Canadian-based gold and silver mining company founded in 1993 and headquartered in Toronto, Canada. It currently operates 9 active gold mines and sits pretty as the fourth largest Gold mining company.

5. Goldcorp – 2.57 MOZ

Goldcorp Inc. is a gold production company headquartered in Vancouver, British Columbia, Canada. The company currently has four mines in Canada, two mines in Mexico, and four in Central and South America. Goldcorp, once the world’s most valuable listed gold miner during, is in a rebuilding phase with a stated goal of producing 3–4m ounces per year by 2021. Gold corps ranks as the 5th largest Gold mining company next to Kinross Gold.

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