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Welcome
to the October Issue of the GoldfingerCoin.com Newsletter! This
month we have three great articles for you as well as the silver update.
Silver
Update
Silver prices are
near twenty-year lows. We aren't predicting the price will rise in the
near future, but if you are investing for the long term silver is an
extremely good buy right now.
MEGA
CHANGES: Telling Story by Mary & Pamela Aden
Stocks and Gold
have both changed their long-term trends in recent months. Read this
article to see where the new trends in the markets are going.
Bullion
Bars of All Shapes and Sizes
A guide to the
various species of gold bullion bars and how to avoid bad ones. This
article covers what kind of investors should buy gold bars and where to
get them at the best price.
Accept
Payments with E-Bullion
This article
examines how you can use E-Bullion to take payments online without the
hassle of a credit-card merchant account.
If you look at the
long term silver chart below you will see that Silver prices are
approaching their 1993 lows. At this price, silver is actually trading
about 33% below the the average cost to mine it out of the ground.
Generally speaking when the price of a precious metal falls below the cost
to mine it the market is trading near a long-term bottom.
For the past two
decades silver has traded in a 5-8 year cycle ranging from $3.80 to $8.00
with highs over $10. While the price of silver could conceivably fall as
far as the $3.80 - $4.00 range in the near future, it is still a bargain
at $4.36 where it is trading today.
If your time horizon
is ten years or more then you have a strong liklihood of being able to buy
today at $4.36 and sell in the future for $7.00 or more per ounce.
Goldfinger Coin
& Bullion has 1 Toz. American Silver Eagles in stock as well as 1 Toz.
Mint Rounds. To place an order call the Goldfinger Trading Desk at 805-482-4425.
Gold is an
incredible market. It's so cyclical that it's sometimes uncanny. We're
often amazed at the consistency of these cycles and this month was no
exception.
The decline that
began on June 4, for instance, was due to end at any time. And right on
schedule, gold hit bottom last month and it's been rising since then.
Gold shares usually
lead gold and many moved sharply higher this month. Gold shares are
pointing the way and they're telling us that gold is headed higher too.
Interestingly, the stock market is now reinforcing this as well.
MEGA CHANGE
UNDERWAY
Most important,
something very big is happening. Not only are we talking about major
trends, which normally last a year or two, but we're also talking about
MEGA SUPER trends, which generally last several years.
Charts 1 and 2
clearly illustrate this. They're two of our favorite charts because
they're telling the story loud and clear. And we urge you to follow along
in order to clearly understand the big change that is now taking place.
Both of these charts
are monthly and they're shown together with a 20 month (1.67 years) and 40
month (3.33 years) moving average. Since these averages are very
long-term, they identify and confirm the MEGA SUPER trends. Plus, they're
not apt to give false signals since they don't change direction easily.
STOCKS &
GOLD: TRADING PLACES
 Looking
at the S&P500 on Chart 1 first, note that it broke clearly
below these two long-term moving averages in early 2001, which was a very
bearish signal. In addition, the moving averages turned super bearish late
last year when the 20 month crossed below the 40 month moving average for
the first time in two decades. This alone suggests that the bear market in
stocks is likely going to last for years.
But that's not all.
The S&P has also formed a huge head and shoulders top, which is the
most massive top ever built in the history of the U.S. stock market. This
top formation was confirmed last month when the S&P broke below the
950 level (see horizontal line). Based on this technical pattern and the
breakdown, the S&P could now eventually drop to the 550 level as a
downside target. That would be an incredible 40% decline from current
levels
So this chart is
telling us we're in for a long lasting and grueling bear market in stocks.
Interestingly, this is exactly the opposite of what gold is showing on Chart
2.
As you can see, gold
broke clearly above its two long-term moving averages in late 2001, just
months after the stock market's breakdown. This was a very bullish sign.
Plus, four months ago the moving averages turned super bullish when the 20
month crossed above the 40 month moving average for the first time in
almost 10 years. Again, this strongly indicates that the bull market in
gold is going to last for years and it's still in its early stages
 Gold
may have also formed a head and shoulders bottom, but it's not as clear as
the head and shoulders top on the S&P500. If this proves to be the
case, which would happen once gold rises and stays above $325, then gold
could continue up to near the $400 level.
NEW ERA IN THE
MAKING
The bottom line is
that stocks and gold generally move in opposite directions and as long as
stocks stay bearish, gold's bull market is going to remain in force.
A picture is worth a
thousand words and these charts tell the story of what's currently
happening more clearly than all the discussions you hear on TV or in
business publications. These are the markets talking and they're telling
us in no uncertain terms that the tide has clearly changed. Plus, it's a
big change that happens once every 10 or 20 years
It's also a
fundamental change, indicating a new era is clearly underway. It's telling
us that investors have lost faith in paper assets. After being burned in
the stock market, they're going to want tangible assets like gold in the
years ahead. Knowing this keeps us way ahead of the game. So despite the
short-term ups and downs in these markets, keep your eye on the major,
mega trends. Go with them, and you'll do just fine.
Mary Anne and
Pamela Aden are internationally known investment analysts and editors of
The Aden Forecast, a market newsletter providing specific forecasts on
gold, gold shares and other major markets. Click here to visit their
website at http://www.adenforecast.com
We have all read
stories with references to the gold bars in Fort Knox as well as the gold
of many countries stored underground in Manhattan. But most people have
never even seen or touched a gold bullion bar in person.
According to the
World Gold Council, "A gold bar is defined as any gold item,
regardless of shape, which is made by a bar manufacturer, records the name
of the manufacturer, the precise weight and the precise purity, and is
sold at a low premium above the gold price."
Bullion bars come in
an unbelievable array of shapes and sizes ranging from the tiny one gram
bars encased in plastic made by Credit Suisse to the four hundred ounce
bars of the London Bullion Market Association.
Originally bars over
1 kilogram were used maily in the bullion industry while gold coins
circulated in the general economy as money. Over the past century central
banks encouraged people to trade in their gold coin for paper currency,
and then eventually removed the redeemability of the currency for gold. At
the same time for various reasons many states around the world imposed a
VAT or sales tax on gold bullion coins. In Canada as well as other
locations, this tax applies to coins but not bars.
Over time, refiners
started casting smaller and smaller denominations of gold bars in order to
facilitate tax-free bullion transactions. Today you can purchase bars in
the following denominations: 1 g, 2.5 g, 5 g, 10 g, 1 Toz., 10 Toz. and
more. Gold bars of one ounce size and smaller are usually minted to the
same strict specifications as bullion coins and come encased in hard
protective plastic.
Here are some of the
more common types and manufacturers of bullion bars:
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One Gram Bar
One gram
bars are made by several refiners and come in a wide variety of
forms usually with a hard plastic casing. Shown here is a 1 gram
Harley Davidson gold bar by Pamp Suisse Refiners.
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One Ounce Bar
Once Troy
Ounce bars are manufactured by Credit Suisse, Johnson Matthey,
Metalor and others. The bar is about two thirds the size of a
credit card.
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Ten Tola Bar
The "Tola"
is a measure of weight in India. Ten tolas = 3.75 troy ounces.
Tola bars, also known as "TT Bars," are very popular
in the middle east and Asia and are becoming more known in
Europe and North America.
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Ten Ounce Bar
The ten
troy ounce bar is rare on the market today, but these are
popular with stock brokerages and other investment firms that
hold medium amounts of gold for their clientelle.
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The Kilobar
The
kilobar (1000 g) is the world’s most widely traded small gold
bar. It is popular among investors and fabricators as it is
normally traded at an extremely low premium above the prevailing
value of its gold content.
While most
kilobars have a flat ‘international’ shape, traditional
kilobars in the shape of a ‘brick’ are still preferred by
some investors and fabricators in Europe. The bar shown here is
by Dowa Mining Co. Ltd., Tokyo, Japan.
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100 Ounce "COMEX"
Bar
The COMEX bars are
manufactured by refineries in the United States. Metalor is the largest
COMEX refinery in North America.
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400 Ounce Bar
The
classic gold brick, "400 Ounce" bars actually vary
between 380 and 420 ounces of gold. The fineness can vary
between .995 and .9999 depending on the refiner and the batch.
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For a more
exhaustive list of the different kind of gold bars you can visit the World
Gold Council "Gold
Bars Collection" on the web.
Who Should
Buy Bullion Bars?
For the small
investor who wants to have a physical gold portfolio nearby, we recommend
bullion coins as the safest and most liquid investment. If you live in
Ontario or other high tax provinces in Canada buying small bars instead of
coins will save you up to eight percent on the purchase price of the gold.
For collectors who
like art with value, the various "art bars" make an excellent
investment provided that you do not pay too high of a premium over the
spot price of gold. Small art bars trade on auction sites like e-bay
at very competitive prices.
For investors who
are holding larger quantities of gold, bullion bars may provide a
significant savings and economy of scale. Generally speaking you want your
bar size to be no larger than 1/10th of the total value of that segment of
your investment portfolio. This allows you some liquidity without having
to sell the whole lot.
For example, someone
with $100,000 to $1 million to invest in a gold portfolio might want to
purchase kilobars. Someone with $1 million or more might want to purchase
400 Ounce Bars.
If you are planning
to relocate to a different part of the world then gold bars are an
extremely portable form of wealth. One gold kilobar weighs two pounds and
is worth $10,300 at the time of this writing. $1 million worth of gold
weighs about 220 pounds at current prices. Gold bars are not subject to
the same scrutiny as large quantities of cash and are highly liquid and
acceptable in any country in the world where private ownership of gold is
legal.
Storage
and Handling
The London Bullion
Market Association and Hallmark Refineries have established a "chain
of integrity" in order to keep substandard and counterfeit bars out
of the bullion industry as much as possible. This chain of integrity means
that a certified refinery, transporter, or storage repository can buy or
sell the gold to another member of the chain of integrity without
performing a full melt assay and recast of the bar. This saves
considerable time and expense. As a result, any bar that is taken out of
the chain of integrity instantly looses a little bit of its liquidity and
value, because it will have to be subjected to a full melt assay and
recast as a new bar in order to be re-admitted to the chain of integrity.
For this reason,
most investors and institutions who own gold bars keep them in a certified
repository. There are several different ways to do this. You can open an
account with a bullion bank such as Scotia-Mocatta,
or The
Delaware Repository, or you can own gold in a pool account through
bullion certificates issued by the Perth Mint, JP Morgan, or an e-currency
account such as E-Bullion.
In terms of
liquidity, buying or selling allocated gold in a custodial account
requires an actual change of title, just like selling a car. Gold
certificates such as the Perth
Mint are more liquid because they are standardized and guaranteed by
the State of Western Australia. E-Currency accounts have the highest
liquidity because gold balances can be transferred instantaneously via the
transaction interface at the web site.
When taking delivery
of gold bars in the United States the best methods for small quantities
are US Registered Mail and UPS. Both of these options allow you to fully
insure the gold being shipped. (When shipping Kilobars you are usually
limited to two per package.)
For larger
deliveries Brinks Armored Car Service is the preferred delivery technique.
Brinks is certified by the London Bullion Market Association as well as
Hallmark which means that Brinks deliveries remain within the chain of
integrity.
Where to
Purchase Gold Bars
When purchasing gold
bars it is always best to purchase through a reputable bullion dealer.
There are a fair number of adulterated bars in the industry created during
eras when the gold price was relatively high, such as the early eighties.
If the gold price were to rise significantly then there is likely to be
another flood of counterfeit bars.
The only safe way to
purchase bullion bars from an unknown source is to have a full melt assay
performed by a certified refinery. This will result in a new bar with the
hallmark of the refinery stamped on it. This process detects all forms of
adulteration ranging from gold-coated tungsten counterfeits to underweight
and low purity bars.
Goldfinger Coin
& Bullion is a dealer of bullion bars of all shapes and sizes.
Goldfinger's bars are stored within the Hallmark chain of integrity for
easy transfer. Bullion banks such as Scotia-Mocatta and others will also
sell bullion bars directly to their account holders.
For help in choosing
which gold investment is right for you can call the Goldfinger Coin &
Bullion trading desk at 805-482-4425. Hours are Monday - Friday, 8AM -
5PM, Pacific Time.
The Internet has
made it possible for millions of people to work from home and compete toe
to toe against large corporations and retail chains. Payment technology,
however, has been slow to adapt to the new environment. Getting set up to
accept credit cards can be difficult for many people trying to get started
with their home business.
Person to Person
(P2P) payment systems allow anyone to make a payment over the Internet to
anyone else. There are two basic kinds of P2P payment systems: those based
on credit cards and ACH, and those based on gold.
PayPal and C2it are
excellent examples of credit card based systems. At first they may seem
convenient, but they share the unfortunate drawback of credit cards:
charge backs. A merchant or individual who accepts PayPal may have the
funds pulled back out of his or her account months later when PayPal
receives a chargeback from the credit card company.
This leaves
merchants very vulnerable, because PayPal does not allow the merchant to
verify address information against the credit card records. This problem
is so prevalent with PayPal that there are whole websites
devoted to educating the world about the problems with PayPal.
Gold based payment
systems such as E-Bullion
facilitate person to person payments that clear instantly and cannot be
reversed by a chargeback. This means that merchants who accept payment
with E-Bullion can be certain that the funds are good before they deliver
the merchandise. E-Bullion also works well for accepting payment on
Internet auction sites such as ebay.
It is very easy to
accept payment in E-Bullion from your website. No programming ability is
required. Just create
an E-Bullion account if you don't already have one. Then you can generate
the HTML code for your payment link using the E-Bullion
Jump Start Wizard. You answer the questions and the wizard will
generate the html code that you can insert into your web page. Then
visitors to your page can click to pay you.
The E-Bullion Jump
Start Wizard is also an excellent way for non-profit organizations and
volunteer sites to accept donations without opening a credit-card merchant
account.
If you have clients
who want to pay with a credit card, you can direct them to Goldfinger Coin
& Bullion where they can fund
an E-Bullion account with their credit card. In this way you protect
yourself from the risk of chargeback, because Goldfinger does the due
diligence on the card holder.
If you want to pay
someone using E-Bullion it is very simple if they already have an
E-Bullion account. If they don't, or if you want to pay your bills online,
it is very easy to do this from the E-Bullion site. Just log into your
E-Bullion account and look at the options under "withdrawals".
You can have a check sent to anyone, allowing you to pay your bills with
E-Bullion. You can also send a bank wire from your E-Bullion account.
For those of you who
have a small business buying and selling items on ebay, the E-Bullion
Debit Card is a very handy way of converting E-Bullion to cash at your
local ATM machine. This means you can accept payment over the Internet in
E-Bullion, and then use your E-Bullion account to buy groceries at a store
with a POS terminal that takes debit cards, or you can convert your
earnings to cash at the ATM.
E-Bullion
transactions are one tenth the cost of credit cards, clear instantly, and
have no chargebacks. For small businesses and home entrepreneurs,
E-Bullion is the easiest way to take payment. If you don't have an
E-Bullion account yet, click here
to open one now.
The
Goldfinger Newsletter is published by Goldfinger Coin & Bullion of
Camarillo, California. Goldfinger sells bullion coins and bars of all
kinds. To view our web catalogue visit our website at www.goldfingercoin.com.
For questions please email us at sales@goldfingercoin.com or call
805-482-4425.
The
E-Bullion Company is a Panama Corporation wholly owned by Goldfinger
Bullion Reserve Corporation. E-Bullion allows people anywhere in the world
to open a secure gold or silver bullion account from the Internet.
E-Bullion allows gold and silver to circulate as currency. For more
information visit our website at www.e-bullion.com.
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