This year is the centennial of the birth of President John F. Kennedy in 1917. There was a surge in demand for 1964 Silver Kennedy Half Dollars around the date of his birth (last May 29), and there will likely be another surge in demand when the last remaining Kennedy assassination files are released, perhaps this week. President Trump recently promised to expedite the release. “Subject to the receipt of further information, I will be allowing, as President, the long blocked and classified JFK FILES to be opened.”
A White House official told reporters last Saturday: “The President believes that these documents should be made available in the interest of full transparency unless agencies provide a compelling and clear national security or law enforcement justification otherwise.” The White House also said that they were working “to ensure that the maximum amount of data can be released to the public” by the October 26 deadline. As soon as they are released, we will cover any breaking news and perhaps tie it into a Kennedy coin article as the date of the tragic assassination (November 22) approaches.
London Bullion Market Association Predicts $21.60 Silver by October 2018!
Gold is up over 11% this year, with silver gaining 5%, vs. declines in most other commodities. The annual meeting of the London Bullion Market Association last week predicted that gold will be at $1,367 a year from now, for a gain of 6.7%, but they predicted a much larger surge in the price of silver. In their meeting held in Barcelona, the LBMA predicted that silver would soar 21% to $21.60 by October 2018.
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Goldman Sachs Finally Warms Up to Gold
For the last few years, Goldman Sachs has been bearish on gold, even as gold rose from its most recent low of $1,050 in late 2015. Gold is now up over 20% in the last two years, but Goldman Sachs has been consistently predicting a drop below $1,000 gold. Now, however, in a new report titled Fear and Wealth, Goldman Sachs states, “We believe that precious metals remain a relevant asset class in modern portfolios, despite their lack of yield.” In what sounds like a ‘born again’ experience, Goldman added that gold’s role as an asset class is “neither a historic accident or a relic,” a sharp rebuke to former Fed Chair Ben Bernanke and the late economist John Maynard Keynes, who dismissed gold in those very words.
Goldman turned ‘gold-bug’ with added statements like this: “Indeed, by looking at each of the physical properties of an ideal long-term store of value…we can clearly see why precious metals were initially adopted and why they remain relevant today…. Stated more simply, we are talking about the drivers of ‘risk-on, risk-off’ behavior in markets…This factor matters so much to gold precisely because it is a safe-haven asset. Accordingly, as uncertainty increases, preferences shift towards having more gold in the portfolio, driving prices higher.” Turning to Asian demand, Goldman wrote “As more emerging market (EM) economies — including China — are set to grow to [higher] income levels over the next few decades, the underlying long-term demand picture remains supportive of gold prices… This makes wealth an important, but easy-to-overlook [factor] in short-term forecasting” – a new “driver” of gold prices.
Goldman then compared the properties of gold to Bitcoin, whose price has been vacillating wildly in recent months. “While both require expertise for correct long-term storage, gold wins because cryptocurrencies are vulnerable to hacking through online wallets or the user’s computer or smartphone, are subject to regulatory risk, and network and infrastructure risk during a crisis.” Gold has a limited supply, gold is better at keeping its purchasing power, and has much lower daily volatility, they said.
Gold is universally valued for its rarity and beauty, fulfilling all the requirements to be the world’s oldest and most perfect form of money. Gold fulfills all three definitions of money: (1) A store of value, which means people can save it for later use with confidence it will retain value; (2) a unit of account, which means that it provides a proven way of setting prices by weight; and (3) a medium of exchange, which means gold is fungible and portable, so people can use it to buy and sell across borders. According to the most reliable historical studies, mankind has mined only 165,000 tons of gold throughout human history. That sounds like a lot, but it’s less than one Troy ounce per person on earth. That amount would fill about 3.5 Olympic-sized swimming pools, or a 94x50 basketball court stacked 64 feet high with solid gold.
A Vast New Gold Supply is Created – If You Can Mine It
A huge new supply of gold was discovered last week. Scientists revealed that two neutron stars collided and created what they estimate to be perhaps one quintillion tons of gold. The explosion of this “kilo-nova” also created vast amounts of both gold and platinum. Daniel Kasen, a theoretical astrophysicist at Cal-Berkeley, told NPR that the amount of gold produced was roughly 200 Earth masses and the amount of platinum was 500 Earth masses. Alas, this mine is located 130 million light years away, so earth-based miners will take a pass on this source but this only underlines how valuable and rare gold is here on earth.
Mike Fuljenz is the Official Precious Metals Expert for Townhall Finance
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