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SILVER ASK 00.00 $ 1.20

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Metal Market Report March 2018 - Week 2 Edition

March 2018 - Week 2

Tariffs Could Spark Trade Wars and Make Gold a Winner

On March 1, President Trump announced 25% tariffs on imported steel and 10% tariffs on imported aluminum. Earlier that day, the London gold fix was $1,307.75, gold’s low point for 2018.  Even though the President later announced exceptions for some allies, tariffs tend to raise the cost of both imported and domestic products and they tend to instigate reprisals by our trade partners. A round of competing tariffs could lead to a trade war, which has historically been bad for the global economy but good for gold.  

Goldman Sachs, which recently turned bullish on gold, said a trade war could actually help gold.  One potential outcome of a trade conflict, they said, is that other nations would start dumping U.S. Treasuries, which could boost gold demand. In a research report, Goldman Sachs said, “If materialized, a reduction in U.S. Treasury holdings may boost the demand for gold, supporting our bullish view on gold prices.”

TD Securities, a leading Canadian investment bank, said last week that these new tariffs could make gold a “winner” in relative terms (as compared to other commodities), writing that “these policies look to be negative for aluminum, steel, base metals, crude oil, and PGMs [platinum group metals] due to the negative impact on demand. Gold would likely be the winner in relative, if not in absolute terms.”

Canada’s TD Securities Likes Silver Better Than Gold

Even though TD securities likes gold, it has long favored silver as “the precious metal to buy in 2018.” In its 2018 Global Outlook, TDS advised investors to go long silver with a price target of $20 an ounce, a 20% increase from here.  “With equities in record territory and pricing in both low rates and earnings perfection, there will be a growing constituency who believe that there is more downside than upside risk. This historically has meant that investors beef up gold and precious metals exposure as a hedge.”

Since silver is trailing gold so far this year, TD Securities updated their view last week, writing: “Given our uncertainty that the Fed hikes four times and the likelihood real rates will remain low, we expect precious metals will perform well moving forwardgoing long silver looks to be an attractive bet.”

The First “Shariah-compliant” Gold Contract Launches March 29

The Dubai Gold & Commodities Exchange (DGCX) has announced that it will launch the first-ever Shariah compliant spot gold contract on March 29. This could open a vast new market for gold among those who follow the strict rules regarding personal finances in Muslim-controlled nations, mostly in the Middle East.  Some recently revised interpretation of the Shariah law permits Muslim investors to purchase gold when it meets specific criteria, which will be fulfilled in this new Dubai gold contract.

Les Male, CEO of DGCX, said “There is already a tremendous amount of interest to hedge and invest in this product given the recent trends in global geopolitics and increased volatility in gold. This contract is designed to meet the requirements of the varied trading needs of our customer base within the UAE, Saudi Arabia and the [Gulf Coast Countries] region…Gold remains a good hedge against inflation as well as any financial uncertainties and is therefore a preferred asset within any prudent investment portfolio.”


There is a sense of excitement whenever sunken treasure is discovered. In March 1992, Life Magazine called the SS Central America “The Greatest Treasure Ever Found.” Back in September of 1857, major New York banks, business and individuals were eagerly awaiting the arrival of the SS Central America with a large shipment of California Gold Rush bullion, ingots, nuggets, gold dust and San Francisco Mint gold coins.

When news came through the telegraph wires that the ship had sunk off the coast of North Carolina, the country went into a panic. It was a time when the country relied on gold to back its banking transactions. Banks closed, businesses went bankrupt and the financial Panic of 1857 deepened – all because the much-awaited Ship of Gold had disappeared with tons of needed gold on board.

This is the gripping story of the ill-fated sailing in 1857, beginning with one ship’s journey from San Francisco to the isthmus of Panama. Then the gold was unloaded and transported over a 30-mile jungle railroad route to the Atlantic side, to be reloaded into the SS Central America – a 280-foot side-wheeler that had made the Panama to New York run many times. This time, though, the crew had to fight a Category 2 hurricane for three days before abandoning ship. While most women and children were saved, 425 of the 578 on board died. The captain of the SS Central America, former Naval officer William Lewis Herndon, is remembered as a great leader and hero, going down with the ship.

It is hard to describe the feeling of seeing this gold for the first time. When treasure hunters first spotted this gold with their long-distance cameras sitting in a mound of glistening gold over a mile below the ocean’s surface, they called it a “Garden of Gold.”   Some initial gold was recovered and quickly sold in 2000, but many of us were wondering if we would ever lay eyes on more of this treasure again. Now, finally, more of the ship’s treasure was recovered in 2014 and is available to the public from us.  This includes some of the gold coins, gold dust and silver coins recovered.

As the famous actor James Earl Jones says, owning money is like “holding history in your hands.”  Holding 1850s gold from the California Gold Rush and America’s most famous sunken treasure is like holding a little time capsule of America’s numismatic history in your hands. This time, you and your family can be a part of that history by calling to rescue your piece of the SS Central America treasure before it is quickly gone again.


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