Keep track of the most recent gold news, assets insights and rare interviews with precious metals experts with Kinesis. Timeless tips and educational articles on trading and investing your physical gold and gold-backed digital currencies. Learn how to secure the lowest prices and the safest gold bullion storage and where the best investment opportunities reside. Everything that matters for your gold in one place.
Tight spreads enhance liquidity for gold and silver bullion traders and investors. The Kinesis Exchange currently offers some of the tightest spreads available in the entire precious metals industry. The root cause of this phenomenon is minting, a process unique to the Kinesis monetary system. Widespread minting activity is tightening spreads on the Kinesis Exchange, enhancing liquidy in the process. But, how exactly does that work? What is minting? First of all, we need to explain minting. Minting is the profitable process of creating your own Kinesis gold bullion and silver bullion-based digital currencies, KAU and KAG. A minter effectively becomes their own central bank, bringing new KAU and KAG into the Kinesis monetary system. When users mint KAU and KAG, they purchase the underlying physical bars of allocated gold and silver bullion. The newly purchased bullion sits in insured and independently audited world-class vaulting facilities, with no storage fees, ever. All storage fees are eliminated by a share of global transaction fees charged across the Kinesis system, and the robust infrastructure of Kinesis’ bullion vaulting network, covering all major trading hubs globally. How is minting profitable? All minted Kinesis gold and silver bullion-based digital currencies, which are then transacted through the Kinesis system, earn the minter a monthly yield of physical gold bullion and silver bullion paid into their Kinesis account - for life. We call this the Minters Yield. The Minters Yield is calculated from a proportionate 5% share of global transaction fees, across the entire Kinesis network. Kinesis minters have the ability to recycle their currency through the minting process, again and again. In this way, a minter can access the Minters Yields on the same capital, as many times as they choose to mint. How does minting tighten spreads and increase liquidity? 1) The minting process results in a lot of Kinesis users hoping to offload their freshly minted KAU and KAG on the Kinesis Exchange and activate the Minters Yield on that currency, as quickly as possible. 2) In hope of securing a prompt trade, Kinesis minters offer gold or silver bullion with a personal limit order book, with tight bid-ask spreads. 3) In turn, other Kinesis users and minters on the Kinesis Exchange tighten the spreads offered to remain competitive, which enhances and builds more liquidity. Minting is a process native to the Kinesis monetary system, and resultantly, its favourable impact on spreads and liquidity is only accessible on the Kinesis Exchange. Strong liquidity only leads to greater liquidity, delivering a trading ecosystem that benefits traders and investors alike. A recent, full redesign of the Kinesis Exchange’s interface has made accessing its superior pricing an all-round smoother experience, supported with new, intuitive chart functionality. With the Minters Yield serving as a powerful incentive to encourage minting activity, the future for the attractive spreads and liquidity on the Kinesis Exchange looks very bright indeed.
Andrew Maguire and Chris Powell discuss how this shock withdrawal will affect the gold & silver bullion markets. Talking Gold is a fortnightly round-up of the recent action in the gold and silver markets from precious metals expert, Andrew Maguire. This week features Chris Powell, the Secretary and Treasurer of the Gold Anti-Trust Action Committee (GATA), discussing the Scotiabank’s withdrawal from the LBMA. Word from behind closed doors at the Scotiabank, reveals the key market maker is set to withdraw completely from the London Bullion Market Association (LBMA), and close its doors permanently by the end of the year. The major Canadian financial institution had previously announced a winding down of some bullion banking provision, assuring the industry that the bank’s role as a key market maker would remain unaffected. Scotiabank’s u-turn and sharp exit from the bullion banking space could have far-reaching implications across the gold and silver markets. Suspicions of Scotiabank’s hushed departure first arose when associate LMBA member, Bullion Management Group, BMG, declared the financial institution would no longer act as their custodian. The Canadian bank’s unexplained withdrawal from the risk-free and profitable income of custodianship sounded the first alarm among industry experts. For a detailed discussion on the wholesale physical silver bullion shortage with GATA chairman and co-founder, Bill Murphy, watch the week before last’s Talking Gold with Andrew Maguire here. What are the reasons behind Scotiabank’s closure? Termination notices sent out to Scotiabank employees first detailed the bank’s impending closure, the cause of which still remains unclear. According to industry experts, the imminent shutdown bears all the hallmarks of a forced regulatory decision, leading on from the market rigging lawsuit filed against the bank in March. The US court filing showed that Scotiabank provided 800,000 pages of evidence for regulators probing the metals trading of investment bank, JPMorgan. Does Scotiabank have the physical bullion to back its paper positions? Upon exiting the market, Scotiabank will be made to square up all gold and silver paper market positions, but questions linger whether they have the required physical gold bullion and silver bullion - or any whatsoever, as the case may be. With an industry source attesting that they conducted an audit of Scotiabank’s all but empty bullion vaults, the situation looks far from promising. In which case, the financial institution will have no choice but to square off its naked unbacked, unallocated gold and silver positions. Implications across the industry The fall of Scotiabank could have widespread ramifications for other key bullion banks across the gold and silver markets. As the Canadian bank has been leasing gold from other major bullion banks, all industry players will likely feel the sting of its closure. In Scotiabank’s absence, only two of the six major market-making banks remain standing. As another of the major market makers fades into obscurity, the task of agents for central banks and the Bank of International Settlements (BIS) grows ever more difficult. Andrew Maguire’s parting thoughts: The trigger for a massive spike higher in gold and silver prices is the wholesale exit of these 1st and 2nd tier bullion banks trading CME Futures. Next Episode: Andrew Maguire talks gold and silver with an industry expert who audited the non-existent gold and silver bullion of Scotiabank firsthand. Don’t miss out: Subscribe to the Kinesis Youtube channel here.
When it comes to precious metals investment, it’s essential to make sure you are investing in allocated physical gold and silver bullion. Otherwise, all counterparty risk falls squarely on the investor, with potentially disastrous financial consequences. What’s the difference between unallocated and allocated gold? Allocated gold bullion or silver bullion is fully purchased and owned by the investor, stored in their name in a third party vault or bank. Unallocated gold or silver, however, is only credited to the investor, with the bank or dealer remaining the owner of the gold or silver. Unallocated gold In the case of unallocated gold and silver, rather than actually selling the precious metals to the investor, the bank owes the investor the gold or silver bullion, with the financial institution holding legal title of the precious metals stored in their vaults. On first glance, the low-cost, convenient storage a bank provides may seem like an attractive proposition to a new investor. However, unallocated precious metals comes with significant counterparty risk, as the financial institution includes the unallocated gold within its liquid reserve. If a bank runs into any financial trouble, such as a liquidity crisis or bank failure, they hold legal right to sell your unallocated gold or silver to pay their debts. To make things worse, bullion investments are not covered by state-underwritten deposit protection, so government bailouts will not cover your investment. In other words, your investment provides protection for the banks, with absolutely no protection given to you in return. Allocated gold Allocated physical gold bullion and silver bullion, on the other hand, is legally owned by the investor. In the event of financial insolvency, the investor can rest assured they will be able to access their physical gold and silver. Traditionally, the only downsides of allocated gold bullion and silver bullion were the expensive storage costs and often higher prices, compared to the typically free storage of unallocated gold. In some cases, banks charge as much as 1.5% annually for allocated gold or silver bullion storage. Kinesis fully allocated gold and silver Kinesis has eliminated storage fees from allocated physical gold and silver bullion storage. All storage costs are covered by a share of transaction fees charged across the Kinesis network, and Kinesis’ robust bullion vaulting network spanning eight countries. How expensive is unallocated gold? Today, the vast majority of trades conducted every day are made with unallocated gold or silver, such as Gold ETFs and Silver ETFs. Gold or Silver ETFs, or an exchange-traded fund, are trusts that own physical gold or silver and sell shares that track and reflect the price of gold or silver. However, the investor does not own the precious metals and at no point can they redeem the physical gold or silver bullion. The price of unallocated gold and silver, known as the “spot price”, is commonly quoted by gold and silver dealers. As allocated gold and silver bullion is expensive to store, the “spot price” is typically lower than the price of allocated gold and silver bullion. For expert insight into the gold and silver markets from precious metals expert Andrew Maguire have a watch of episode 13 of Kinesis’ fortnightly Youtube show Talking Gold here. The price of Kinesis gold and silver digital currencies In a historic moment in precious metals investment, Kinesis is offering allocated gold and silver bullion, with chargeless storage, at a price competitive with the “spot price” for unallocated metals. In recent weeks, the price of Kinesis’ gold bullion and silver bullion has regularly dropped lower than the “spot price”. See the spreads on our gold (KAU) and silver (KAG) on the Kinesis Exchange here How can allocated gold bullion be cheaper than unallocated gold? Kinesis’ low prices for allocated physical gold and silver bullion are a result of a process called minting. Minting allows Kinesis users to create their own Kinesis gold and silver bullion based digital currencies, KAU and KAG. Minting drives down the price of gold and silver bullion in the Kinesis Exchange, through reducing the cost of liquidity and tightening spreads. Find out more about minting with Kinesis here. We recently successfully passed our first of many bi-annual audits, which reassures Kinesis users that every last gram of physical gold and silver, behind Kinesis digital currencies, is stored safely within the Kinesis bullion vaulting system. Read up on the results of our latest audit here. In the past, investors accepted the risk of unallocated gold and silver investment, due to the cheaper price and absence of storage fees. In an industry first, Kinesis offers allocated physical gold bullion and silver bullion investment at a price competitive with unallocated gold or silver, with no counterparty risk and no storage costs. A low-cost, allocated physical gold and silver bullion storage solution, with accessibility and value never before seen in the precious metals investment space.
This post is a summary of ‘Talking Gold’ - a fortnightly update from Kinesis Director and precious metals expert, Andrew Maguire, providing a detailed round-up of the recent action in the gold and silver markets - a regular feature from the Kinesis Youtube show ‘Live from the Vault’. For the full analysis into the gold and silver markets, presented in illuminating detail, have a watch of Talking Gold in Episode 13 of Kinesis’ ‘Live from the Vault’. In this week’s episode, Andrew Maguire discusses the gold and silver markets with Gold Anti-Trust Action Committee (GATA) chairman, Bill Murphy. As one of the founders of GATA, Bill Murphy has been exposing insider manipulation of the gold and silver price for more than twenty years. The pair exchange industry insights on the ongoing wholesale physical silver bullion shortage and address the implications of dwindling open interest in the Silver Futures (SI) market. For a detailed look at the impact of a breaking officially-run algorithm on the silver market, have a watch of Talking Gold’ from Episode 12 of Kinesis’ ‘Live in the Vault’. Wholesale physical silver bullion shortage Over recent weeks, multiple industry sources have reported widespread physical silver bullion shortages throughout the wholesale market. Major suppliers across European bullion markets are restricting any supply of silver bullion 1000 oz bars, including the Loco London and Loco Switzerland markets. Otherwise reliable refiners are doubling down on delays, pushing back postponements from a few weeks to several months. A reputable retail precious metals dealer stated he was struggling to source 100,000 oz of physical silver bullion, with all contacted suppliers unable to fulfil the routine order. So, with physical silver bullion in desperately short supply, why isn’t the silver price soaring? Why isn’t the price of silver rising? JP Morgan, and other major players, are using every trick in the book to control the Silver Futures (SI) market and prevent the silver price from increasing. The very same tactics these major players have repeatedly deployed to rinse the silver price, while building up long physical silver market positions. However, in the flux of the current silver market, these industry insiders are meeting uncharacteristic resistance. Huge reduction in open interest The latest numbers show open interest in the Silver Futures (SI) market is evaporating, making it increasingly difficult for insiders to employ their historical wash and rinse cycles. The total number of outstanding contracts held by market participants at the end of each day recently fell as low as 135,000, where it has typically rested at well over 200,000 over the last few years. The Federal Reserve, U.S. Treasury, Bank of International Settlements (BIS) and the major bullion banks use open interest in the paper market as the vehicle to halt any potential rallies in the price of gold and silver. What does the future hold for the silver market? The significant reduction in open interest and the widespread physical silver bullion shortage foreshadow the delivery of a physical solution. With all indicators pointing to real physical supply, it appears the industry insiders’ firm grip on the silver price is finally loosening. Andrew Maguire’s parting thought: I think a physical solution is inevitable because the physical market is drawing liquidity out of the paper markets. Andrew Maguire sits down with another special guest to evaluate the latest twists and turns in the gold and silver markets. Don’t miss out: Subscribe to the Kinesis Youtube channel
This post is a summary of ‘Talking Gold’ - a fortnightly update from Kinesis Director and precious metals expert, Andrew Maguire, providing a detailed round-up of the recent action in the gold and silver market - a regular feature from the Kinesis Youtube show ‘Live from the Vault’. For the full analysis into the gold and silver markets, presented in illuminating detail, have a watch of the full segment of Talking Gold in Episode 12 of Kinesis’ ‘Live from the Vault’. In this episode’s dive into the gold and silver markets, Andrew Maguire casts his expert eye on the impact of a breaking officially-run algorithm on the silver market, with a view ahead to the silver price beyond the upcoming Opex options expiry. A Breaking Algo in the Silver Futures Market Over the last two weeks, the officially run ES - SI algorithm - the S&P 500 correlated with silver futures contract - has been observed showing intermittent signs of breaking. However, despite the cracks appearing in such a visible algo, there seemed to be no effect on the price of silver whatsoever. An algo that captured SI to the fate of rises or falls in ES,( the S&P 500). every time ES fell SI fell with it. However, this correlation failed as the paper drivers selling SI were overrun by the strong physical drivers. So as ES fell SI would do its own thing and rise, reflecting tight physical supply. It’s important to recognise that the algorithm in question is the same directional algo that sucked in dangerous amounts of naked short bearish options bets, held by the specs. On Thursday 14th May, the captive algo finally broke, forcing very large delta hedge futures buying to offset losses. For a detailed breakdown of the major Chinese banks set to establish a Loco London over-the-counter physical gold bullion market watch Talking Gold’ from Episode 11 of Kinesis’ ‘Live in the Vault’. Momentum bets under attack On May 19th - 20th in the Silver Futures Contract (SI), the momentum bets we had observed two weeks prior at $19.95 looked to be under attack. An inspection of the pricing and the options structure reveals the naked short options bets are largely in the hands of the sucked in specs, with the house holding the long side. Historically, such bets have provided good alpha for the specs. In fact, until March these bets were largely protected by similarly structured insider capping bets, positioning the house on the same side as large investment banks, such as JPMorgan or Goldman Sachs. In the past, it suited the house to play these specs, while at the same time building a cheap strong physical position. However, recognizing a change in behaviour, industry insiders have begun unwinding remaining naked short bearish bets, and taken a long side of these spec bearish bets. What does this mean for the silver price? All clues point to a compelling rinse of very large short bets that the specs assumed was profit in the bank, when they sold these calls. Andrew Maguire’s parting thought: In the medium term, the bulk of liquidity providers see silver, as we do, at a minimum price of $21.50. I'm not saying this month I'm talking about after options expiry. Although, when silver starts to run, it is hard to stop. Next Episode: Andrew Maguire reassesses the gold and silver markets after the upcoming options expiry points. Don’t miss out: Subscribe to the Kinesis Youtube channel
In what may come as a surprise to many, an analysis of various asset classes over the 21st century, reveals gold bullion has been the best performing single asset class. The findings reaffirm physical gold bullion as an investment asset important in any diverse investment portfolio and demonstrate the position of gold bullion as an outright investment asset. The below graph demonstrates the superior performance of gold (XAU), from January 2000 - April 2020, to other asset classes across several markets.For a look at the resilience of the gold price to the Covid-19 pandemic, have a look at our blog post. Over the two decades since the millennium, the investment asset gold bullion (XAU) has performed the strongest across all single asset classes. The above comparison shows the total returns, taking dividends into consideration.Physical gold bullion (XAU) outperformed the strongest indices across both the bond and equity markets, over this period. Gold bullion outperforms the bond markets Despite traditional gold storage producing no yield, physical gold bullion narrowly outperformed the highest performing yield-producing assets, across the bond markets The next best performing single asset to physical gold bullion was the Barclays 10+ US Treasuries TR (TSY); a bond market which has seen its yield fall from 6% in 2000, all way down towards 0 today. The Barclays 10+ US Treasuries TR, was closely followed by the Barclays Capital U.S. Treasury Inflation Protected Securities (TIPS). Gold bullion outperforms stock markets Physical gold bullion exceeded the performance of various high-performing stock markets. The analysis shows equities made up the 4th, 5th and 6th single assets in order of overall performance. The best performing stock market over the period proved to be the S&P 500 Total Return (SP500TR), followed narrowly by The Morgan Stanley Capital International Emerging Markets (MSCI). The next market in order of overall returns was the Morgan Stanley Capital International Emerging Markets Europe, Australia and the Far East (EAFE). Physical gold bullion: a high-performing investment asset? Often thought of as an investment asset of stability, rather than an investment asset for outright profitability, gold (AUX) has performed impressively. Especially, when we consider traditional gold bullion investment generates no yield. However, a physical gold bullion investment with Kinesis unlocks an additional form of revenue, which only builds on physical gold bullion’s market strength and innate price stability. Earn a yield from your physical gold bullion investment With Kinesis gold bullion and silver bullion based digital currencies, gold investors no longer have to choose between a secure investment in gold bullion and a yield-bearing investment. For the first time in economic history, Kinesis allows gold investors to generate a passive yield from their gold investment, through our unique transaction-fee sharing yield model. The Holders Yield Kinesis users access a yield simply for holding gold: the Holders Yield. A passive yield that is generated from a 15% proportionate share of global transaction fees across the Kinesis network. The Kinesis system allows users to access physical gold bullion’s price stability and impressive market performance, while generating an additional unique form of profitability from the investment asset. Learn more about all 5 yields accessible through the Kinesis system here. How much are the storage fees? In gold and silver bullion investment first, Kinesis users pay no storage fees for the physical gold bullion and silver bullion underpinning Kinesis gold and silver digital currencies. All storage costs are covered by transaction fees across the Kinesis network, and made possible by our extensive vaulting network. Physical gold bullion investment, by the gram At Kinesis, our gold price is not tied to the priced of 1oz of gold. We decided to price gold by the gram, making physical gold bullion accessible and affordable as an asset investment for everyone. Physical gold bullion’s impressive market performance and historic price stability make the investment asset an attractive addition to any investment portfolio. The unique passive yield and chargeless storage of Kinesis gold investment, combined with gold priced by the gram, bring new value and profitability to gold investment, in a format truly accessible to all. Strengthen your investment portfolio with Kinesis gold and silver digital currencies today.
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