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Dickson Buchanan Jr.
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Dickson Buchanan Jr. is the Director of International Development and a Senior Precious Metals Broker at SchiffGold, as well as the Managing Director of SchiffOro. He holds an MA in Economics from King Juan Carlos University and regularly contributes commentary and analysis on gold, financial... More
My company:
SchiffGold, LLC
My blog:
Peter Schiff Gold Blog
  • June 2014 Metals Market Update - A Volatile Start To Summer 0 comments
    Aug 5, 2014 1:23 PM | about stocks: GLD, SLV

    Wow, what a week for precious metals and what a month of worthy stories to report on.

    First, let's talk about the dollar price of Gold and Silver. Yesterday the price of gold and silver rose sharply. Gold gained 4% on the dollar and silver, 5%.

    (click to enlarge)While reasons for the drastic move are varied, here is what we are seeing. Earlier in the week we had renewed unrest in Ukraine following a gas pipe explosion. Then, in the most recent FOMC minutes Yellen and the FED took a more dovish long stance promising low interest rates are here to stay for the foreseeable future. This is a bit of a turnaround from a couple months when she hinted at the possibility of a rate increase as early as 16 months out.

    Keep in mind that this comes on the heels of Mario Draghi's announcement earlier this month to charge a negative interest rate, -.10% on overnight deposits. This measure effectively punishes banks if they do not decide to lend out their funds as Draghi and the ECB hope they will. I just published a commentary on what effect this ultimately will have.

    Additionally, the Fed continued the tapering of its bond purchasing program by another $10bb. As if that was not enough, tack on more US military involvement in IRAQ as Obama approves sending boots on the ground. That costs something right? Yeah, you can just put that on the 17 trillion dollar debt tab that the Federal Government is racking up.

    Another important story worth mentioning this week is the state of Oklahoma's decision to make gold and silver legal tender again. The most important part of this bill is that it removes costly taxes that keep gold and silver coin from circulating as money. The following quote sums it up.

    "This is a no-brainer. You wouldn't tax a currency. You don't tax the cash in your pocket… When you buy real estate or buy any investment, there is no tax on the purchase of it, and that's what this is. It's a nonsensical tax, I'm glad we were able to get rid of it."

    We cannot underscore how crucial this is. These useless laws keep gold and silver out of the arena to compete for the market's money. Needless to say the more stories like this that pop up the more hope there is for the US to return to a sound and honest money.

    Stocks: GLD, SLV
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