Don’t Buy Based On Confiscation Scares
Yes, it is true that in 1933 President Roosevelt issued an order to collect gold from U.S. citizens because the bank panics of that year and other factors were draining the Federal Reserves gold supply, and we were on a gold-based currency standard back then. And yes, Executive Order 6102 exempted rare and unusual coins from having to be turned in.
People who did turn in their gold received $20.67 an ounce. Soon after, the U.S. Treasury set the price at $35 an ounce. Ouch.
However, some gold dealers use these facts to scare investors into buying overpriced coins. Some history: Hello, the U.S. is no longer on the gold standard and hasnt been since 1971. And the limit on gold ownership in the U.S. was repealed in 1974. So notwithstanding the paranoia-laden pitches of some salesmen , there is no danger of gold confiscation.
Further, the confiscation sales pitch is usually based on a very broad definition of rare and unusual coins. Theyll say anything minted pre-1933 has numismatic value, says Michael Freedman, president of Euro Pacific Precious Metals. In fact, Freedman says, there were millions and millions of gold coins minted in the 1800s and early 1900s that were simply coin of the realm. They have no numismatic value.
So How Do You Find A Reputable Dealer
Good question. There are thousands of dealers in the country, but there is no federal regulation and little state regulation. The U.S. Mint has a list of national dealers and dealers by state that it checks but doesnt vouch for. White says that the Mint checks those dealers against the Better Business Bureau list for complaints, as well as online to see whether there is any negative information about the firm and to get a feel for how the company conducts and promotes itself.
However, given that the Mints authorized purchasers are obviously trusted by the Mint, you may want to buy directly from one of them. We checked with each of them, and here are their rates, terms and conditions.
MTB : 212-981-4510. MTB sells primarily to wholesalers, but individuals can buy from the company, too. It charges 4.5% over the spot price. Theres no minimum purchase, but there is a minimum commission of $25. No discount for bulk purchases.
CNT : 508-697-9600. Minimum purchase of $1,000. The company does a background check you must provide several pieces of information, including your drivers license number. Traders work off a current spot-price screen, which changes throughout the day. No discount for bulk purchases and no standard commission given.
Dillon Gage: 800-375-4653. Minimum order of $5,000. The dealer ships everywhere in the U.S. for a flat $25 fee the markup is 7%.
Take A Hint From Gold Prices And Run From Wells Fargo Stock
WFC stock is an inverse trade of gold and there’s reason why investors are piling in to one, but not the other
In early June, Wells Fargo shares offered the most encouraging sign that the banking sector was ready for a comeback. At the time, the May jobs report was much stronger than anticipated, suggesting that the doom-and-gloom naysayers were dead wrong. Not surprisingly, then, Wells Fargo stock skyrocketed.
Unfortunately, the optimism was short-lived, even though further encouraging news, including Mays retail sales report, indicated that the economy was benefiting from pent-up demand. But that wasnt enough to overcome sharply rising novel coronavirus cases during the summer. As well, surging social unrest which occasionally turned to violence overshadowed any enthusiasm for Wells Fargo stock.
But with Covid-19 cases again on the mend, should investors reconsider the bullish argument for WFC? If the net interest income forecast is anything to go by, prospective buyers should stay on the sidelines. According to Bloomberg reporter Hannah Levitt:
The bank had previously said it expected 2020 net interest income revenue from customer loan payments minus what the bank pays depositors its largest source of revenue to drop to $41 billion to $42 billion, or down as much as 13% from last year. Weaker-than-expected loan demand is responsible for the more pessimistic forecast for its largest source of revenue, Chief Financial Officer John Shrewsberry said Monday.
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Should I Buy Gold Or Gold Stocks
There is a significant difference between investing in physical gold vs. Gold stocks are more liquid and are easily tradable like any stocks, while paper gold is more susceptible to market risk than physical gold. As a result, physical gold can act as a hedge against the stock market and do well in a down market.
The Banking Sector Is Desperately Out Of Touch
Indeed, if Im reading the latest unemployment report from the U.S. Bureau of Labor Statistics correctly, its virtually guaranteed that small businesses outside the restaurant sector will experience devastation. And that will have a material impact on Wells Fargos loan demand moving forward.
Currently, the BLS reports that white men have an unemployment rate of 6.9%. In contrast, Black workers have an unemployment rate of 13%, Asians at 10.7%, and Hispanics at 10.5%. So, in a twisted way, the coronavirus has been a positive development for many whites: they can enjoy their high-paying office jobs from home.
But that doesnt help Wells Fargo. Because one of the great pre-pandemic stories was that immigrants and communities of color were starting their own businesses. Today, that narrative has been flushed down the toilet.
Worse, the pandemic has put a blight on many individuals finances. Thus, moving forward, they may not qualify for loans under a traditional commercial banks risk assessment standards. But that also creates an opportunity for fintech innovators to address the last mile problem of the lending industry. If we dont have a solution to this crisis soon, fintech may be poised for a massive disruption.
On the date of publication, Josh Enomoto held a long position in gold.
Article printed from InvestorPlace Media, https://investorplace.com/2020/09/take-a-hint-from-gold-prices-and-run-from-wells-fargo-stock/.
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Finding A Reputable Dealer
Its best to do business with a large, established gold dealer who is located in the United States. Do an internet search of the dealer’s name that youre considering doing business with and see what comes up. Look at customers reviews, and also take note of how long the dealer has been in business. Check out its Better Business Bureau rating. Once youve determined which dealers are the most reputable, you can browse their websites for the different types and weight of gold bars they have for sale.
Gold Bubble Alert: Wells Fargo Warns Clients
Here’s to a gutsy call from Wells Fargo Private Bank, which told clients in no uncertain terms this week that “interest in gold investing has reached the level of a speculative bubble.”
That’s right: they used the “B” word — and they’re sure to get plenty of grief over it. Such is the ardor of the gold bugs.
True, gold prices have risen to $1,800 an ounce from $1,600 in less than a month, and plenty of canny strategists say the precious metal could easily hit its real all-time high of $2,400 in the not-to-distant future.
But the team at Wells Fargo Private Bank would rather call it a bubble now and maybe miss some upside than let their clients suffer potentially catastrophic consequences.
“As with all bubbles, we know that we run the risk that our view may turn out to be wrong in the short run however, we believe that we will be proven right in the long run,” says Erik Davidson, deputy chief investment officer for Wells Fargo Private Bank, in a report to clients.
Warning SignsAmong the many credible reasons for steering clients away from gold, one that stands out is historically gold prices have also been known to go down — and to do so with great volatility. As Davidson says:
In another salvo, the strategist says gold’s inflation-fighting properties are greatly overstated. Although it’s true gold’s been in a bull market for more than a decade , over longer periods of time equities have outshone gold by a brilliant margin.
But let Davidson have the last word:
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Gold Is The Ultimate Repudiation Of Wells Fargo Stock
If youre one of my regular readers, you may know that I already discussed the inverse relationship between gold and Wells Fargo stock. In August, I mentioned that in terms of average year-over-year returns, these two have a cyclical, inverse relationship: as one goes up, the other goes down.
Further, because the reckless deficit-spending has not been reconciled and also because were about to blow up our budget in an unprecedented manner gold and WFC stock may be at a major inflection point. One could soar in value while the other plummets.
The million-dollar question is, which one? If Im looking at all the fundamentals and interpreting them correctly, you want to be very careful with your exposure to Wells Fargo stock.
Between 1995 through 2002, gold and WFC recorded a negative 81% correlation coefficient. Between 2005 through 2010, and between 2011 through 2019, the negative coefficients were 56% and nearly 85%, respectively.
So far this year, gold and WFC have an inverse 73% correlation. While Wells Fargo stock has struggled to gain traction, gold bullion has been soaring to record highs. Therefore, if history is any guide and I think its a pretty good one right now you would expect this inverse relationship to continue for at least the next few years.
Richard Wants To Know Can I Sell My Gold To A Bank
Richard: You know I have 20 gold bullions and scrap gold here. The scrap gold is a mixture of some rings, a necklace, some thin chains, cufflinks, a wristwatch band, earrings and a brooch. I know that gold sells by the weight and thats why I weighed it. All the scrap gold has a weight of 51.74 pennyweights. Can I sell my gold to a bank? And if yes, do you think they are willing to accept the scrap gold too?
Alan: I know some banks are buying gold coins. But just bullions like yours and no other coins and especially no scrap gold. But I dont know nationwide operating banks that are buying coins. Banks that buy gold coins are mostly smaller banks with just a couple of branches or even only one branch. There is another drawback that they only buy your gold coins back if you are banking with them. So, you would need to open a bank account in order to make the deal and consider, some banks take up to 20 days to close the selling deal. Why? It is because most banks are not able to determine the authenticity of your coins. They send your gold coins away to get proof of authenticity. Im not sure if this procedure is hassle-free. Thats very questionable.
Richard: I understand. But wouldnt it be a good idea for banks to buy gold in any condition?
Richard: Maybe not but it would be very convenient for me as a consumer.
Alan: I agree with you.
Alan: Thank you.
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Can I Deposit Bullion I Already Own
No. Absolutely never. In order to repel money launderers BullionVault requires that all incoming monies come from a source which has been validated in the banking world. Each BullionVault account only accepts monies from its original funding source, and only remits funds back to that source.
Furthermore – BullionVault is very particular about the source of its bullion bars. To be acceptable to BullionVault bars must have been supplied by authorised refiners and bullion merchants with all the guarantees of bullion quality which this implies to the receiver in a given local bullion market. Only bars supplied in such a way are sufficient to merit the BullionVault guarantee of quality which all subsequent owners of any bar within BullionVault are entitled to expect.
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Is Interest Paid On Money Held In The Pooled Segregated Client Account
No. BullionVault’s client bank account isn’t intended for you to hold large sums of money for long periods of time. But if your quarterly interest entitlement would ordinarily exceed $100, and you have held the cash in the client account for less than 1 year, contact us via email and enquire about a commercial discount on your future commissions. This is operationally more efficient for us, and saves you paying tax on your interest only to then pay us commissions out of taxed money.
How Do I Find A Bank That Sells Gold
While there are banks that do sell gold, the selection of assets for purchase are often limited to a select assortment of gold coins. Nowadays, fewer and fewer banks actually hold physical gold that theyre willing to sell over the counter. If youre determined to buy gold from a bank, make sure you contact them beforehand to ensure they have the supply to sell.
A better alternative for most buyers are trusted online retailers like Nationwide Coin & Bullion that offer similar products shipped directly to you at a competitive rate.
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Can I Pay By Debit/credit Card
UK bank account holders can make their first deposit using a debit card . Larger first deposits and subsequent deposits must be made by bank transfer.
The card processors charge higher fees for use of credit cards or non-UK cards meaning that we cannot accept these cards. Retailers selling goods on high margins can absorb such fees. But this isnt possible for us as we charge low commissions . Neither do we accept pre-paid cards as these are not associated with a bank account.
Is Gold A Good Investment
John LaForge of Wells Fargo Investment Institute explains what investors should know about gold and its place in an investment portfolio.
Todays investors may be wondering if gold has a place in their investment portfolio. In fact, gold is consistently one of the most asked-about assets here at Wells Fargo which is why Wells Fargo Investment Institute recently released a Gold Series of reports that addresses investors most frequently asked questions about the precious metal.
Unlike stocks and bonds, which are financial instruments created in the last 800 years, gold was discovered nearly 5,000 years ago and later coined in present-day Turkey. Impervious to both air and water, all of the gold ever mined remains above ground today.
Gold has a rich history of worth in both value and money , as well as a reputation for surviving all types of social and economic turbulence. Despite its reputation, gold is actually not a cure-all for every investment scenario.
Contrary to popular belief, gold has not always:
- Been an inflation hedge
- Moved opposite the U.S. dollar
- Increased in value when stocks have dropped
- Protected investors against the over printing of paper currencies
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Don’t Pay A Premium For Proof Coins
Proof coins are special editions struck for collectors and often mounted in a special case. The dies used to make them are often finely polished and yield particularly pretty coins with mirror finishes. Proof editions are usually valued more highly than regular coins — by collectors. The premium you pay for proof coins may be inflated and may disappear, depending on the market. So, for investment purposes, stick with regular coins.
Don’t Buy Gold From A Cold Caller Over The Phone
The Federal Trade Commission reports a rise in boiler rooms hawking gold coins or bars. Dama Brown, staff attorney for consumer affairs in the FTCs Atlanta office, says that these operators usually make inflated claims about the potential profit from gold, such as tripling your money in 30 days. Such claims are often coupled with warnings about the weak economy and how gold, as a hard asset, is less risky than stocks, she says.
Brown says your first clue that these arent calls from legitimate sources is if your phone number is in the National Do Not Call Registry but the gold salesmen call anyway. It surprises me, the number of people who will go ahead with a sale when dealing with someone who has already violated the Do Not Call list, she says.
Also, these outfits dont give you physical possession of the gold, but claim to hold it for you in a vault. “In some cases, these are outright scams and no gold exists,” Brown says.
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What Is The ‘spread’
Lots of people quote prices on the BullionVault order board. The spread is the difference between the bid and offer prices, i.e. the difference between the price at which gold can be immediately sold and the price at which it can be immediately bought. It varies from vault to vault and currency to currency.
What Is The Best 1 Oz Gold Coin To Buy
Top 7 Best 1 Oz Gold Coins to Buy1 oz Gold Maple Leaf Coin Royal Canadian Mint. 1 oz Gold Kangaroo Perth Mint. 1 oz Gold Buffalo Coin United States Mint. 1 oz Gold Philharmonic Coin Austrian Mint. 1 oz Gold Britannia United Kingdom Royal Mint. 1 oz Gold Krugerrand South African Rand Refinery.More itemsAug 26, 2020
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