What is the Real Purpose of the Gold Futures Market? – Podcast

Wikileaks 1974 Cable Reveals Purpose of Creation of Gold Futures Market.

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Top economic stories of the week: Wilikeaks 1974 cable confirming the intent of the creation of a gold futures market prior to the legalization of gold at the end of 1974.

  • 1933: gold ownership banned (FDR executive order 6102)
  • 1944: Bretton Woods Agreement (established US Dollar as world’s reserve currency, backed by gold)
  • 1971: Nixon closes gold window (expectation that gold demand would drop since no longer tied to monetary system- demand expected to be limited to jewelry/trinkets)
  • December 10, 1974 cable from Ronald Ian “Ron” Spier, Charge d’affairs and Deputy Chief of Mission,

    THE BELIEF THAT THE FUTURES MARKET WOULD BE OF SIGNIFI-
    CANT PROPORTION AND PHYSICAL TRADING WOULD BE MINISCULE BY
    COMPARISON
    . ALSO EXPRESSED WAS THE EXPECTATION THAT LARGE
    VOLUME FUTURES DEALING WOULD CREATE A HIGHLY VOLATILE MAR-
    KET. IN TURN, THE VOLATILE PRICE MOVEMENTS WOULD DIMINISH
    THE INITIAL DEMAND
    FOR PHYSICAL HOLDING AND MOST LIKELY
    NEGATE LONG-TERM HOARDING BY U.S. CITIZENS.

  • 1974: gold ownership made legal again in the U.S.
  • 1986: U.S. Mint produces first gold bullion coins for US citizens since 1933 (the American Gold Eagle).
  • One ounce American Gold Eagle Sales 1986 - 2016 final

    Sales of one ounce American Gold Eagle coins in 2016 were the best since 2011.

  • 2016: US. Mint sells 1,240,000 ounces of gold worth approximately $1.5 billion.

Total gold ever mined is estimated to be 170,000 tons or 6 billion ounces – worth about $7.2 trillion (at $1,200 an ounce).

Comex, LBMA gold futures trading estimated to be about $125 billion a day, or about $30 trillion annually.

notional gold trading

notional gold daily trading

First Majestic CEO to Join Silver Manipulation Class Action Law Suit

First Majestic CEO to sue

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Gold and silver.

Gold closed last week at $1150 an ounce and closed this week at $1172.20 up 1.9%

Silver closed last week at $15.88 an ounce and closed this week at $16.43 up 3.4%

The gold and silver ratio ended the week at 71.3:1

one month gold silver ratio january 6 2017

You Tube Notes to this report

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Charts of the week

COT Comex jan 6 2017

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Here are the stories we wrote, followed or commented on.

January 3, 2017

From Smaulgld.com

PRESIDENT JOHNSON’S 1965 WARNING ON SILVER 550 MILLION OUNCES OF SILVER WERE USED IN 1964 AT THE UNITED STATES MINT

KAZAKHSTAN ADDS 100,000 OUNCES OF GOLD TO RESERVES IN NOVEMBER

Swiss and Cash

Cost of producing pennies exceeds one cent

Gold

Leaves and Termites may hold key to gold prospecting

New York Restaurant Serves $2000 pizza with gold topping

Indian Commerce Minister – Lower Gold Import Duty

India Gold Smuggling Gets Creative

Silver

Hundreds scramble for silver coins found in demolished Chinese home

January 4, 2017

From Smaulgld.com

What Will Trump Do if the Stock Market Crashes

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January 5, 2016

From Smaulgld.com

PERTH MINT GOLD SALES SURGE IN FINAL FOUR MONTHS; RISE 14% IN 2016

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Gold

Spanish department store stashing gold ingots inside festive cakes

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January 6, 2016

Buy American Gold Eagle Coins

You can compare pricing and shipping charges on American Gold Eagles coins of all sizes at these web sites:

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JM Bullion
Money Metals Exchange

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US Economic Data

December Payrolls 156K, Exp. 175K

AVG HOURLY EARNINGS +0.4% VS NOV -0.1%; +2.9% Y/Y

US factory orders fall 2.4 percent in November vs estimate of 2.2 percent decrease
Kitco! Re jobs data

“US labor market is robust and continues to display strength.” “very respectable gains” with US payrolls adding 156,000 “just under” surveyed expectations

Fed Chatter

Chicago Fed President on rate hikes in 2016 “two moves is not an unreasonable expectation (data dependent) if stronger, three is not going to be implausible”

January 7, 2016

From Smaulgld.com

PERTH MINT SILVER SALES SET RECORD IN 2016

PEOPLE’S BANK OF CHINA ADDS 80 TONS OF GOLD TO RESERVES IN 2016

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Golden Eagle Coins
JM Bullion
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Buy American Gold Buffalo Coins

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JM Bullion
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