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Find out how gold can now earn a recurring passive monthly yield, making for a lucrative investment. Weighing up the investment options on the financial market can present a dilemma when choosing between the safety of gold, as a traditionally stable asset, and the yield-bearing potential of bonds. Gold vs. Bonds Both bonds and gold are widely considered to be low-risk investments. When speaking of bonds, we are referring to fixed income instruments that represent a loan made by an investor to a borrower eg. government, or corporate bonds. They are often understood as an I.O.U (``I Owe You“- a signed informal notice of an unpaid debt) between a lender and borrower, including details such as the date when the loan will be paid back, and the terms of variable or fixed interest made by the borrower. Of course, the risk is never completely absent from any investment, especially in the short term, where market volatility plays a significant role in manufacturing risk. Bonds have experienced a historic low in their interest rates recently, transforming them into an incredibly cheap investment worth considering. If interest rates do eventually start to climb again, this would offer investors a modest recovery on the yielding potential of their bonds. However, the spot price of bonds that are already in circulation would be hit - particularly those which have the longest maturity. While the outlook for bonds appears gloomy, the future of gold presents itself much more optimistically. Indeed, investors anticipating the long-term benefits of holding gold have rarely been disappointed. Gold experienced a pivotal moment in economic history when president Nixon announced on the 15th of August 1971 that the US would stop trading gold for dollars at the fixed rate of $35 an ounce - otherwise known as the fall of the Bretton Woods Agreement. Fifty years after its collapse, gold has increased in price 50 times over. Bullion Reaching New Heights Bullion reached a historical peak in its pricing of $2,074 an ounce last summer, before slipping back to under $1,800. Despite this, the long term trajectory of gold remains positive, in accordance with our recent market analysis. In contrast, Treasury Yields still seem to be caught in a long-term bearish trend. As inflation rises, the yielding potential, for the majority of bonds in many economic areas, such as the European Union, Switzerland and Japan, is still below zero. The U.S. rate hike forecasts are just as underwhelming, with most Federal Reserve officials expecting the first interest rate increase - only by 1% - in 2023. This means that investing in bonds, with a projected maturity time of one to five years, is generating a negative return or loss for investors who have parked liquidity there. Of course, gold and bonds are likely to appear in the portfolio of any investor, but their roles are very different. Gold has always been a safe haven for investors. Its function, as an asset that protects wealth, will become even more effective if the markets experience uncertainty and crisis. With a focus on stocks, which have skyrocketed over the past 15 months, investors can expect to observe the turbulent lows and highs of the market. Just since the low of the Covid-19 pandemic, the S&P 500 (a stock market index tracking 500 publicly traded domestic US companies) has already doubled in value to the current state. It seems that sooner or later, there will be new corrections as the market responds to the dramatic shifts and changes, making gold the safest store of value for every investor. Earning a Yield on Gold As opposed to bonds, Kinesis gold (KAU) and silver (KAG) offer investors a recurring and reliable monthly yield, paid directly into their Kinesis accounts - for life. Rather than waiting to utilise their investment, as is the case when awaiting bond maturity, participants of the Kinesis system experience a sense of immediacy, with the ability to spend, send and transfer their KAU and KAG as physical-digital currencies, just like regular cash. By holding Kinesis gold and silver, investors can access the yield-bearing benefits, traditionally associated with bonds, coupled with the appreciating value of gold as a stable asset. In other words, the best of both worlds. Not to mention, on October 6th 2021, Kinesis paid out a 6.99%* annual yield on gold that competes with and, in many cases, outperforms traditional investment options in the market like property, bonds, bank deposits, and dividend-yielding stocks. Find out more about the yielding potential of gold. KINESIS YIELD *Yields will fluctuate based on transaction volume. Please note that past annual yield figures, taken from Kinesis’ Holder’s Yield, October 6th 2020 - October 6th 2021, are not indicative of future figures. Carlo Alberto De Casa is an external Market Analyst for Kinesis Money. He also writes as a technical analyst for the Italian newspaper La Stampa. Carlo Alberto provides regular commentary for UK outlets including the BBC, Telegraph, the Independent Bloomberg & Reuters. He is also a commentator for CNBC Italy. He worked for Bloomberg as their Equity Research Fundamental Analyst before joining brokerage ActivTrades in 2011 to specialize in currency markets and commodities. In 2014 he published a book on gold and the gold market, followed by a new updated edition in 2018. This report is not an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance.
Andrew Maguire and Craig Hemke break down the huge delivery requests on March COMEX contracts. Watch this week's Live from the Vault for: 5:05 How is gold and silver price determined?8:35 The history of gold and silver price manipulation12:00 How to stop corruption in the gold and silver market18:04 Wall Street Silver VS paper market corruption19:05 Unallocated gold and silver scam explained26:41 Physical price VS paper price28:13 Current physical demand pressure will push prices parabolic29:59 Wall Street Silver movement piling pressure on the COMEX41:57 Delivery requests soaring on the COMEX52:30 COMEX on the run54:16 Unprecedented physical silver demand In this week’s Talking Gold blog, Andrew Maguire and TFMetalsReport founder, Craig Hemke, crunch the numbers on upcoming requests for COMEX Gold and Silver Futures delivery. March Gold Contracts Historically, the March contract presents very little volume or open interest. However, as the typically sleepy month draws to a close, we are observing huge delivery requests on the Gold Futures (GC) market. With only a few trading sessions remaining before March contracts expire, there are more than 30 tonnes of gold standing for delivery. March Silver Contracts In terms of March silver delivery contracts, there are 11,660 open contracts representing over 1813 tonnes of physical silver. To put that into perspective, the current figure is already 361 tonnes higer than the December contract, the biggest delivery month of the year to date. Watch Andrew Maguire share his forecast on how high gold and silver will go post-Basel III in last week’s Live from the Vault. Previous March Delivery Requests Craig takes a look back at previous March contracts underlines the significant uptake in delivery obligations targeted at the COMEX. Around the time the paper market broke, the COMEX delivered close to 2,900 March contracts. At the time, this level of delivery demand was extraordinary, with all March deliveries from 2015 to 2019 combined standing at around 800. As the March 2021 contract closes, we’re approaching an astonishing 10,000 contracts. With the exception of last year, the March 2021 delivery orders are set to be around 25 times the average. A cursory glance at these statistics shows the delivery requests on the COMEX have soared. According to Andrew Maguire and Craig Hemke, all signs indicate that the Gold and Silver Futures markets are coming under increasing stress as a delivery vehicle. Make sure you catch next week's Live from the Vault The opinions expressed in this publication are those of Andrew Maguire and do not purport to reflect the official policy or position of Kinesis. This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.
Who are Wallstreetbets, and how come a group of rogue Redditors is on everyone’s lips? What is short-selling and will it lead to a reexamining of the silver market value? This week in finances has undoubtedly belonged to WallStreetBets - a semi-anonymous, self-appointed Reddit collective of small investors. WallStreetBets first targeted GameStop, catapulting its shares from $18 to almost $480 over the course of 4 days, before swiftly moving its focus toward silver just a couple of days later, increasing its value by 20% practically overnight. The financial market was electrified by the unexpected yet utterly understandable revolt of the Redditors, who collaboratively diverted the market game, hitherto exclusive to the investment tycoons. But how was that possible, and what is the mechanism behind this trading frenzy? What is a Short Squeeze? The origin of the Squeeze spectacle has risen as a consequence of the short-selling practice - a perfectly legal yet morally dubious investment model based on speculating a decrease in value of a specific business. Shorting investors borrow a company's stock, immediately selling it, and - as the said institution marks down its price - return them to the lender, intending to pocket the difference. A fund model, resembling the self-serving attitude of a tiger on the prowl, predating vulnerable businesses, in the hope of benefiting from the market adversities. GameStop, a high-street game retailer, severely depleted by the pandemic, appeared to be attractive prey for professional shorters. This time, however, another player joined the game! A group of Redditors operating under the WallStreetBets name decided to step in, propelling the interest in antecedently undervalued shares and pumping its worth far beyond its forecasted price. Their concerted efforts reached a 2200% increase crescendo on January 28th, generating titanic losses to short-sellers and equally colossal media attention. A Silver-Tongued Devil As short-selling became the in-vogue term of the week, silver was suddenly thrust into the WallStreetBets group. The precious metals market responded immediately. A leveraged army of Redditors, interested in the highly undervalued SLV market, quickly jumped on the opportunity. Within one evening, silver reached its eight-year high and touched the $30 barrier for a brief moment, before it started correcting itself. Was that merely a distraction from the mainstream movement, aiming at the GME? A substantial percentage of WallStreetBets users are undoubtedly qualified to recognize a rare opportunity to revise silver’s unutilized potential. According to specialists, silver is a highly undervalued asset with an artificially lowered market worth. An overwhelming quantity of every-day use objects contains a stance of silver as its building block. How come, then, its tremendous industrial demand does not translate into its price? It seems like it’s time for the value of silver to be reexamined. But who are WallStreetBets? Who are they and what exactly fuels their agenda? They’re a Reddit based collaborative of amateur investors, conceived by Jaime Rogozinski in 2012. A group initially meant to counterbalance the conventional Wall Street forums by offering non-elitist access to financial information, which by the end of January grew to over 3.5 million strong. A group, distinctive in their sympathetic approach to investing and providing a commune spirit for the individual traders, but far too overgrown to be consciously administered. Simultaneously, moldable enough to be prone to unregulated insidious engineering and subsequently - provoked into relentless crusades, just like the unstoppable GME Squeeze we’ve just witnessed. Regardless of the traditional narrative propagated by the media, WallStreetBets are not necessarily single-handedly orchestrating the financial market coup. Their captivating payback was simply highlighting the issue that’s been well observed and well known by the financial analysts for years. Ultimately, the money market has collapsed under the weight of its own manipulation - WalllStreetBets merely happened to organize themselves at the right moment, tipping the domino that set off the chain of events. WallStreetBets - The Movie Even if the speculative rush is short-lived, it certainly shows the power of plenty that can be built when in the hands of organized, passionate amateurs. It shows that billionaire-owned hedge fund schemes can be perturbed when individuals recognize the scope of their potential. Why did they step in? Certainly not just for profit, but in order to take a stand against an excess of capitalistic might. Provoking a power shift in the financial market, in a heartening fashion that could easily serve as material for a movie script. What does the future hold? It most likely belongs to the individual investor, whose eyes are finally open not only to the stock market manipulation but also to the amplitude of its own influence. As of today, the WallStreetBets group ballooned from 3.5 to 8.4 million within a week, with the awareness of small traders constantly growing. The sudden surge of interest sparks another question - where will their focus move next? Whether it will be silver, or... could it be gold this time?
Andrew Maguire reveals the official intervention behind the first week’s action in the gold markets. Watch this week’s Live from the Vault for: 2021 gold and silver price expectations.Important Q1 and Q2 stairsteps for gold and silver.Concerns around supposed bearish COT report addressed.Strong physical demand vs new US dollar strength.The marketwide impact of Basel III rules. In this week’s update on the gold and silver markets, Andrew Maguire drills down on the fundamentals evidencing official intervention in the first two week’s trading of 2021. Opening action The moment New Year’s trading began, the upside Gold Futures driven Monday gap opened. However, the opening action of 2021 was rightly met with caution in the markets, with Andrew Maguire reminding us that “these futures driven gaps tend to get closed.” As the week progressed, two major US Federal Reserve events in quick succession each triggered a slump in the gold price. With the Federal Open Market Committee (FOMC), 6th January, and the release of Non-Farm Payroll data, January 8th, both historically weighing on gold. A recurring market trend Andrew Maguire observed last year with the September release of Non-Farm Payroll data. However, Andrew Maguire reports that the New Year downside gap close was far more aggressive than could possibly have been anticipated in such a strong physical market. Watch Andrew Maguire look ahead to March and the global impact of Basel III rules on the gold price in fortnightly Kinesis show ‘Live from the Vault’. Official interventions According to Andrew Maguire, the fall in the gold price was the result of the intervention driven by the Bank of International Settlements (BIS). The BIS orchestrated two officially driven sell-offs geared around the obligatory US Federal Reserve events, as Andrew Maguire sees it. Andrew Maguire explains that the official interventions experienced last week were counterintuitive, considering the bullish crosses exhibited in the markets. As gold got within touching distance of $1950 per ounce, Andrew Maguire believes the BIS instigated a sell-off that drove prices back down to their mid-December comfort levels. The precious metals expert reports that the official objective was targeting a rapidly rising gold price, preventing physical support levels from being anchored above the $1950 level. In Andrew Maguire’s view, without calculated intervention, fresh stairstep supports at $1950 would have exposed deeply underwater offside unallocated BIS bets. Price movement that would have exposed the bank to a rinse of large shortstops, as well as initiating fresh sideline buying coming in at the $2,000 per ounce mark. What’s next for gold? The long-time wholesaler reveals that the bullish demand condition accelerated last Friday, referencing widespread reports of strong spot and physical gold buying. Andrew Maguire does not see the price being sustained below $1850. Andrew Maguire’s parting thought: Very short term volatility aside both gold and silver are coiling for a strong rally. Next Episode: On next week’s Live from the Vault Andrew Maguire will give you an update on where the all-important wholesale market interest levels are aggregating. Don’t miss out: Subscribe to the Kinesis YouTube channel The opinions expressed in this publication are those of Andrew Maguire and do not purport to reflect the official policy or position of Kinesis. This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.
Andrew Maguire looks ahead to the introduction of Basel III rules in March 2021 and breaks down the expected global impact on banks, the gold markets and the price of gold itself. Watch this week’s Live from the Vault for: New year targets for gold and silver.The price liquidity providers and trading houses see silver hitting early in the New Year.Insight into gold over the holiday season.Physical delivery demand for COMEX gold continues to escalate.Details on the cash settlements banks are taking for November contracts. Table of Content What is Basel III? And what will change? When does Basel III take effect? What are the implications of Basel III? Is Basel III mandatory? What does Basel III mean for banks’ gold reserves? What does this mean for the gold? What is Basel III? And what will change? Basel III (pronounced Bah-zel) is a set of international regulatory rules introduced to improve the regulation, supervision, and risk management of banks. Currently, banks are able to classify gold as a Tier III asset, the riskiest asset class. However, following the implementation of Basel III rules, gold allocation must be moved to a Tier I asset. When does Basel III take effect? According to the FSB, the Basel III reforms are in the early stages and will take full effect from January 2023. What are the implications of Basel III? Andrew Maguire reports that Basel III rules coming into effect in March 2011 through to January 2021 will eliminate the 50% evaluation haircut on physical gold reserves. For those of you unfamiliar, a ‘haircut’ is the difference between the current market value of an asset and the value given to that asset for purposes of calculating regulatory capital or loan collateral. The precious metals expert explains the absence of a haircut is extremely important if unallocated gold continues to be utilised as a funding source for gold leases at current levels. For example, the Bank of International Settlements (BIS) has shown record leasing flows, all consisting of unallocated gold. Andrew Maguire predicts that the onerous financial conditions of Basel III would lead to massive leasing costs. Given the fragility of the paper to physical gold condition, with physical delivery demand for COMEX gold continuing to escalate, Andrew Maguire reports that Basel III rules are proving a source of great concern for the LBMA. Watch Andrew Maguire explore the unprecedented physical bullion delivery requests for COMEX Gold in last week’s ‘Live from the Vault’. Is Basel III mandatory? Yes, it does. The European Banking Authority announced in March 2021 that from December the Basel III monitoring exercise will become mandatory. Internationally active banks-members are committed to implementing and applying Basel III standards within the time frame established by the Basel Committee. This will happen in order to have a better sample size from more banking and credit institutions. What does Basel III mean for banks' gold reserves? Currently, paper gold is not a 1st tier asset. Only fully allocated physical bullion that has no counterparty risk attached that qualifies as a first-tier asset. As we mentioned earlier, Basel III rules coming into effect in March through to January 22 will eliminate any valuation haircut. The new rules will require a provable 1:1 ratio of fully allocated gold reserves, with no counterparty risk. Under Basel III rules, every central bank will be able to revalue its physical reserves higher, from a current 50% haircut into a fully cash exchangeable asset. Andrew Maguire believes that central banks will be able to pay off massive swathes of debt by revaluing gold. According to the precious metals expert, gold would not only act as a cash asset, but would also behove central banks to revalue the dollar price of gold. What does this mean for the gold? Andrew Maguire believes Basel III rules will lead to a sanctioned gold reevaluation, while ultimately driving a more physical market. In this week’s episode of Live from the Vault Andrew Maguire looks at how Basel III rules will affect the price of gold and reveals the level at which he estimates the precious metal will be revalued. Andrew Maguire’s parting thought: Basel III rules are going to be bullish for gold. Next Episode: Andrew Maguire carries out another detailed round-up of the gold and silver markets. Don’t miss out: Subscribe to the Kinesis YouTube channel The opinions expressed in this publication are those of Andrew Maguire and do not purport to reflect the official policy or position of Kinesis. This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.
Andrew Maguire looks ahead to the gold price after US election day is finally over. https://www.youtube.com/embed/cEMdhPtTGR4 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’. In this week’s deep dive into the gold and silver markets, Andrew Maguire provides insight into the short and long term impact of the US election on the gold price. The gold price after the US election Andrew Maguire believes that regardless of the ultimate resolution of the US election, once an initial period of volatility settles the outlook for gold is positive. For positive indicators for the gold price, the precious metals expert points to the massive stimulus package announced by each presidential candidate. According to Andrew Maguire, the vast inflow of stimulus into the economy will balloon global debt, in turn, swelling physical gold demand. Relative to weakening fiat currencies, gold will do what it has done for thousands of years, act as a safe haven. Andrew Maguire International safe-haven physical demand In the wider market, Andrew Maguire shares word of safe-haven demand coming in from large European and Asian banks. The precious metals expert reports the banks are already securing physical gold and silver against paper gold and silver, ahead of an anticipated depreciation of fiat value. In an unprecedented move, the banks intend to take physical delivery for December gold long Futures contracts. The reports have confirmed by a source at the desk of a very large first-tier European bank, disclosing that their institution is busy locking in Futures contracts for delivery. The professionally hedged positions are seeking delivery, at the end of November. Watch Andrew Maguire reveal China’s unprecedented move into physical silver, in last week’s Talking Gold from fortnightly Kinesis show ‘Live from the Vault’. What does this mean for traders and investors? In light of the current market conditions, Andrew Maguires suggests that margined traders should watch their “stops or stand aside until the situation becomes clearer.” Speaking on this period for investors, the long-time wholesaler believes “this is a hell of an opportunity to average in and buy some gold and silver at bargain prices.” In the terms of the long term outlook for gold, Andrew Maguire predicts that “once the volatility has settled, very strong fundamentals will come into focus.” Don’t miss out: Subscribe to the Kinesis YouTube channel Next Episode: Andrew Maguire carries out another detailed round-up of the gold and silver markets. The opinions expressed in this publication are those of Andrew Maguire and do not purport to reflect the official policy or position of Kinesis. This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.