Skip to Content

Blog Archives

Recent Posts by merriongold

16/10/2020 – This Week in Gold

Price Movements

Gold started the week at $1,930 an ounce, and dipped slightly on Monday. On Tuesday afternoon gold fell sharply, losing 1.5% in a matter of hours as the dollar strengthened. The price stabilised below the $1,900 mark, before a sharp rebound on Wednesday saw the price briefly touch $1,912, which analysts linked to US Presidential election uncertainty, a weaker greenback and increasing COVID19 cases. After dipping below $1,900 on Thursday, growing concern regarding further lockdowns in Europe saw an increase in the gold price later in the week, when the price settled at $1,901.

Silver suffered a 3.5% loss during this week, eventually settling at $24.27 per ounce. The Silver:Gold price ratio increased to around 78:1 this week, higher than in recent weeks but significantly lower than the all time high of 121:1 reached in March this year.

Goldman Sachs Identify Opportunity for Silver in Solar Power

Goldman Sachs analyst Mikhail Sprogis identified a possible global surge in the demand for solar power as a major catalyst in a future bull run for silver. Sprogis believes silver will benefit substantially from a global shift towards renewable energy. This would inevitably lead to a global surge in the demand for solar energy. According to Sprogis, 18% of industrial demand and 10% of the overall demand for silver is accounted for by solar investments. This would stand to prove that a future energy shift to solar would consequently be hugely beneficial for the silver market.

US Presidential Election Uncertainty

This week JP Morgan predicted that the general uncertainty and volatility that will surrounding a win for either Trump or Biden should be beneficial for gold. However, analysts at JP Morgan have alluded to how a ‘blue wave’ for Biden and the democrats would send gold surging to new heights again this year. They have predicted a 2-5% increase in the yellow metal as a result of lower yields and a weaker US dollar on the back of fresh stimulus measures. Corporate worries surrounding higher taxes and further regulation could also add to a rush to gold. These measures could be reflected negatively on the global market as investors react, inevitably sending gold higher.

0 0 Continue Reading →

The Canadian Maple Leaf – Merrion Gold Guide to Coins

Background

The Canadian Maple Leaf is produced by the Royal Canadian Mint and issued by the Government of Canada. First minted in 1979, the Canadian Government tasked Walter Ott with designing a coin after seeing the success enjoyed by the South African’s government issuing 1 ounce Krugerrands. The Maple Leaf became popular around the world soon afterwards, especially as economic restrictions on the South African apartheid regime made purchasing Krugerrands difficult for many investors in Europe and North America. The coins are considered legal tender in Canada, with a face value of 50 Canadian Dollars.

History of the Maple Leaf

As a 24 carat coin, the Maple Leaf has always been popular with investors, and today is one of the world’s most popular gold bullion coin. The Royal Canadian Mint began minting the coin at 0.9999 purity in 1982 and the coins have remained at this level of fineness to this day. In 2019, the coin marked its 40th anniversary with a special edition of the coin, having sold nearly 30 million ounces in those 40 years.

In 2007 the Royal Candian Mint produced a 100kg version of the coin, with 0.99999 fineness and a nominal value of $1,000,000.

A 1KG Canadian Maple Leaf

Design

The obverse of the coin depicts an image of Queen Elizabeth II of Canada, the first coin to show the queen without a crown. The coin draws its name from the image found on the reverse side of the coin, this portrays an intricate design of the national symbol of Canada, the Canadian Maple Leaf. 

The most popularly traded version of the coin comes in the weight of 1 troy ounce; however, the coin is also sold in smaller denominations of 1/25, 1/20, 1/10, 1/4 and 1/2 oz. 

0 0 Continue Reading →

09/10/2020 – This Week in Gold

Gold gains as concerns over U.S. stimulus talks ease

Gold climbed 1% higher on Monday due to increased optimism around a U.S. stimulus bill and a weaker US dollar. This brief rally was halted on Tuesday as gold fell 2% when the US president put a hold on all stimulus package negotiations until after the election.  

However, gold’s appeal as a hedge against inflation was soon restored as fears over further stimulus began to fade on Wednesday.

Uncertainty surrounding the U.S. presidential election caused gold to steady around the $1890 mark on Thursday.

Gold headed for a second straight overall weekly gain as it rose over 1% on Friday. This was mainly due to a weaker greenback, renewed stimulus negotiations and the subsequent possible increase in inflation that would follow such measures.

Maduro’s Venezuelan Government Wins Appeal Over Gold

Since 2013, the Venezuelan statesman Nicolás Maduro has been in conflict with the Bank of England over his attempts to access gold stored in the bank. He had planned to use the gold to create stimulus in Venezuela amid the COVID-19 pandemic.

The state bank of Venuzuela (BCV) began pressing charges against the BoE earlier this year. The UK’s central bank refused to hand over the bullion as they failed to recognise Maduro as Venezuela’s legitimate leader following a controversial election in 2018.

The initial high court judgement backed the stance of the BoE. However, following an appeal from Mr. Maduro’s legal team, judge Stephen Males favoured with the BCV.

He went on to state that the UK’s recognition of Maduro’s opposition Guaido as the legitimate leader of the South American country was “ambiguous” and “unequivocal. The trial will return to the High Court to decide who the legitimate leader is.

What next for Silver?

David H. Smith, a Money Metals contributor and senior analyst at the Morgan Report gave an insight to his positive outlook on the future price of silver.

Smith alludes to how the supply of silver has been on a constant and significant decline over the last number of years. This drop in production has been met with a surge in demand as is made evident by the recent shortage in silver coins. He sees the resistance level for silver at $30 but has predicted that if the precious metal could exceed this level the silver market could be in for a significant bull run

0 0 Continue Reading →

The Krugerrand – Merrion Gold Guide to Coins

Background

The Krugerrand is the world’s most popular gold coin. First minted in 1967 in the Republic of South Africa, the coin was initially designed to appeal to both investors and collectors as a means of promoting South African gold in the international markets. The coins are still produced only in South Africa (by the Rand Refinery and the South African Mint), where they are considered legal tender.

History of the Krugerrand

The South African Krugerrand was the first modern government-issued gold bullion coin, and grew to dominate the global gold coin market. The Krugerrand’s position as the world’s best known gold coin was strengthened when it featured in the Hollywood film Lethal Weapon 2, which starred Mel Gibson.

The popularity of the Krugerrand suffered later in the 1970s and 1980s as sanctions against South Africa’s apartheid governments made buying Krugerrands in certain Western countries difficult, and in some cases illegal. The decision by the USA to ban the import of Krugerrands in 1985 resulted in a sharp drop in demand. 

Almost all sanctions ended in 1991 after the South African government took steps toward ending its apartheid policy. The Krugerrand has regained its place as the most widely owned bullion coin in the world, with over 50 million ounces in circulation today.

Design

The Krugerrand draws its name from the design on the obverse of the coin, which features the face of the last president of the South African Republic, Paul Kruger. The reverse depicts the national symbol of South Africa, the elegant and nimble Springbok.

The Krugerrand is 22 carat gold, as it is made up of 91.67% pure gold, with the remaining 8.33% comprising of copper. As such, while there is 1 ounce (31.1g) of gold in a Krugerrand, the overall weight of the coin is 34g.

To inquire about Krugerrands, or any other gold, please contact a member of our trading team at info@merriongold.ie or on 01 254 7901.

0 0 Continue Reading →

02/10/2020 – This Week in Gold

Gold Price Movements This Week

Gold opened the week at $1,862 per ounce,  more than 10% lower than the record high of $2,069 reached in August. After an initial dip on Monday, gold rose to challenge the $1,900 barrier on what proved to be a volatile Wednesday. On Thursday the price reached $1,910 before falling back to $1,892, a trend which was reversed with a sharp spike following the announcement of President Trump’s positive test for COVID-19. On Friday afternoon gold was trading at $1,907, nearly 2.5% higher than the beginning of the week.

Trump COVID Diagnosis

Markets tumbled after Donald Trump confirmed on Twitter that he had tested positive for COVID-19. Further uncertainty now surrounds November’s election, adding to existing concerns regarding postal ballots and the possibility of a disputed result. The first presidential debate on Tuesday offered no clear winner, and the remaining debates are now in jeopardy following the requirement for Trump to quarantine. UBS cited these factors when recommending that investors seek safe haven assets in order to protect themselves against the possibility of continuing stock market volatility.

While gold enjoyed an initial spike after the news emerged, equities and other commodities suffered, with oil futures in New York falling by more than 5%. While markets responded with cautious optimism to US job figures released on Friday afternoon, these announcements were overshadowed by the headlines arising from Trump’s COVID diagnosis. The CBOE Volatility Index (VIX) rose 10% in the hours after the announcement, although later fell back after the positive jobs statistics were released.

Cooperman Enters Gold

Billionaire investor Leon Cooperman, currently CEO of Omega Investors, this week revealed that he had bought gold for the first time in his career. Cooperman cited the huge increase in government debt as the prime factor in his decision, which follows fellow billionaire Warren Buffett’s decision to buy mining stocks earlier this year.

Brexit Negotiations

Meanwhile, it was announced that Boris Johnson will intervene in the Brexit negotiations for the first time since June. As the deadline for a deal approaches, both sides have spoken of their desire to make a deal, although large firms continue to relocate assets and offices away from London to protect against a ‘No Deal’ scenario.

0 0 Continue Reading →

25/09/2020 – This Week in Gold

Price Movements Summary

Gold opened on Monday at $1,953 per ounce. The price suffered a drop of nearly 3% on Monday alone, and finished the week nearly 5% down at $1,862. As equities fell for a fourth consecutive week, gold followed the markets down due to heavy selling to meet margin calls in the early days of the week. A brief rally on Friday failed to regain much of the ground lost earlier in the week.

Election Uncertainty

Analysts at Citibank highlighted uncertainty over the US Presidential election as a possible factor in leading to higher gold prices. As President Trump refused to rule out challenging an election loss, the fear of extended legal action afterwards was raised and caused jitters in financial markets. In Citibank’s quarterly commodities outlook analysts increased their forecast for bullion futures, implying a rise of more than $200 from its current level. Citi analysts also  mentioned Trump’s plan to move quickly to replace the late Justice Ruth Bader Ginsburg on the U.S. Supreme Court as heightening the complexity of the race. 

The election could be a major catalyst for volatility in the fourth quarter, which Citi analysts identified as “one reason why we expect gold prices to hit fresh records before year-end.”

Strong Dollar Hurts Gold

Despite subdued US yields, the dollar continued to trade higher, putting extra pressure on the gold price. The greenback was buoyed by stronger than expected US mortgage applications. The dollar continued to benefit from a safe-haven bid, which was not the case for gold this week. Despite this trend for the week gone by, there has been a significant increase in gold prospects among hedge funds and private investors as the Fed announced they are promising to hold interest rates to near zero until 2023.

In an article in which he was highly critical of the Federal Reserve’s inflationary bias, John Pender of the Financial Times wrote that “this boils down to choosing between governmental paper promises and real assets such as property, commodities and gold. It is, in the time-honoured phrase, a no-brainer.”

0 0 Continue Reading →

This Week in Gold – 11/09/2020

Gold Price Movements Summary

The dollar increased strength on Monday, causing gold to ease but was restricted from falling too far by the uncertainty of possible developments by central banks. On Monday at 1pm, Spot gold was down 0.3% to $1,926.49.

This was followed by a sharp rebound in the price of gold on Tuesday and Wednesday, buoyed by increased investments from hedge funds. According to the most recent trader’s report, gold futures and options saw an increase of 11k contracts in their long positions by managed money

Once again, the precious yellow metal thrived on the suffering of the dollar on Thursday. Gold pushed higher following optimistic comments from the ECB over new stimulus measures to be introduced.

Gold price set to push above $2000 as GBP falls

Amid the economic fallout from the coronavirus pandemic and emergency Brexit talks, the sterling is continuing to weaken. Thus, causing the price of gold to edge above resistance levels and could break above $2000 an ounce.

ECB President Christine Lagarde

There were also reports earlier this week, that a number of senior British legal advisers quit as a result of plans to scrap important aspects of the Brexit withdrawal agreement. This points to further weakness in the GBP/USD ratio.

However, further weakness cannot be ruled out as the post Brexit relationship between the UK and the EU next year becomes an increasingly dominant theme for Sterling traders

Martin Essex, analyst and editor at DailyFX, part of IG Group.

0 Continue Reading →

This Week in Gold

04.09.2020

Gold Price Movements Summary

Gold started the week at $1,964/oz, and rose to reach $1,992 on Tuesday as the dollar weakened. A sell off of the dollar was triggered by the Fed’s new monetary policy strategy which is likely to increase inflation and keep interest rates lower for longer.

The U.S. Department of Labor released their weekly jobless claims report showing that the initial jobless claims fell by 130,000 to a seasonally adjusted 881,000. Gold futures on the COMEX division of the New York Mercantile Exchange fell on Thursday on these better employment figures.

However, a report released by the U.S. Department of Commerce on Thursday gave Gold some support and was prevented the precious metal from falling too far. The report showed an increase in the U.S. trade deficit of 18.9% to 63.6 billion U.S. dollars in July.

Fund That Beat 82% of Its Peers Sees Gold as Safe Election Play

Investors were seen to pull out of equities this week and focus their attention on gold and bonds as a turbulent US election is in sight. The Dynamic Precious Metals Fund outperformed 82% of its peers this year. Vice president and portfolio manager Robert Cohen sees gold as a “nice safe” bet heading into the U.S. election in November.

The fund achieved this success by climbing 63% this year from predominantly gold and silver investments

“Given the amount of debt in the world, the only politically acceptable way to get out of debt is to literally print your way out of it, which effectively devalues the currency and we’re going to see that continue,”– Robert Cohen

Cohen alludes to how in such a case as this, investing in gold at this stime will increase the stability of the future purchasing power of the investor.

Strengthening Silver

Heraeus released a report Tuesday, stating how it continues to see more upside future potential for silver.

Heraeus Precious Metals

Analysts at Heraeus Precious Metals have set a price target of $35 an ounce for silver by the end of the year, a gain of 21% from current prices. This would a sharp incline from last December’s price of $28.725 an ounce.

On Wednesday, Silver was hovering not far away from its upper consolidation range at $29.84. Although a lot of political and economic uncertainty has already been incorporated into this price, the analysts said that conditions could continue to deteriorate sending silver higher.

0 Continue Reading →

Gold Rallies on Weakened Dollar

Gold Price Movements Summary

Gold finished last week at $1,965/oz, up more than 1% up on the week’s opening of $1,940. After a poor start to the week that saw the spot price drop sharply to $1,911 on Wednesday, it rallied to finish the week 2.8% up from the week’s low. Further market movements are expected this week with August’s jobless figures for the US due to be released on Thursday, and non-farm payroll figures being announced on Friday.

Weakening Dollar

The week’s major movements followed Federal Reserve chairman Jerome Powell’s comments regarding his average inflation target of 2%. Investors signalled a floundering faith in the US Dollar as a safe haven as they sought safety in other currencies or assets. Bloomberg reported that investors were hoarding gold, Bitcoin and whisky as a means of hedging against inflation, a trend that was evident in the immediate aftermath of Powell’s comments. 

The global investment manager PIMCO stated that despite a strong rise in recent months they still viewed gold’s current price as attractive for investment. Mounting government debts and the poor yields available on the bond markets were cited as key factors in their thinking.

Strengthening Silver

Silver also rallied after the comments from the Fed Chairman, and on Monday the Gold to Silver Price Ratio (AU/AG) dipped below 70. This is down significantly from when it spent much of the early months of the year comfortably above 100. After a high of 120 in mid-March, the ratio is now lower than any time since early 2017.

0 Continue Reading →

This Week in Gold – 21 August

Buffett Long on Gold

Berkshire Hathaway disclosed its holding in Barrick Gold at the end of last week, revealing ownership of 21 million shares valued at $560m. Warren Buffett famously bought 3,500 tonnes of silver in 1997, but has previously been disparaging of investing in gold, which gave added significance to the move. Buffett’s move saw a sharp rise in Barrick shares, although they suffered later in the week due to events in Mali (see below). Buffett has said in the past that “Gold is a way of going long on fear”, and obviously anticipates more economic disruption amidst the continuing fallout from COVID-19.

Troy Gayeski of SkyBridge Capital

SkyBridge Capital increased their exposure to gold this week, with co-CIO Troy Gayeski warning of a “massive currency debasement” in the coming months due to the huge increase in money supply in recent months. Gayeski flagged particular concern with the US Dollar, and mentioned a range of $2,100 – $2,200 per ounce value for gold by the end of the year. At close of business on Friday it stood at $1,935.

Mali

In Mali President Keita was removed from power on Tuesday by an army-led coup, which led to the closure of the country’s borders on Wednesday. Mining stocks with exposure to Mali suffered as a result, with Barrick Gold sliding more than 2.5%. The plight of Resolute Mining (which fell by more than 10%), Cora Gold and AngloGold Ashanti showcased the risks associated with holding mining stocks or ETFs instead of physical gold. While physical gold is often used as a hedge against geopolitical uncertainty, mining companies often have exposure in politically unstable regions such as West Africa. It is still unclear as to how the coup will affect future gold mining in the country – which produced a record 46,000 kilograms last year.

0 Continue Reading →

 

Recent Comments by merriongold

    No comments by merriongold