Gold Jumps Above $1,100 an Ounce as Stock Market Plummets

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gold eagles

Today was an encouraging day for gold investors. The precious metal rose above $1,100 an ounce, breaking above a 100 day moving average. Silver also managed to climb out of its rut as it continued to climb above $14 per ounce, breaking its 50 day moving average.

The reason for these dramatic moves is no mystery. Investors are placing their bets on these safe haven assets after several weeks of frightening economic news. Today saw the Dow briefly plunge 500 points, the S&P 500 reached its lowest level since February of 2014, and nearly 1,400 stocks on the New York Stock Exchange fell to 52 week lows.

Global economic news isn’t looking any better either. China recently reported its slowest economic growth in 25 years. Oil prices continue to fall, and global shipping is dead in the water. In fact, there is so little demand to ship goods, that it is now cheaper to rent a dry bulk tanker than it is to rent a Ferrari.

However, it’s hard to say if precious metals are finally ready to break out. Gold and silver have had little bumps like this before that didn’t amount to anything. But market fears are the greatest drivers of precious metal demand, so if the global economy continues to take a beating in the months ahead, then we will likely see a new gold rally in the near future.

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Contributed by Joshua Krause of The Daily Sheeple.

Joshua Krause is a reporter, writer and researcher at The Daily Sheeple. He was born and raised in the Bay Area and is a freelance writer and author. You can follow Joshua’s reports at Facebook or on his personal Twitter. Joshua’s website is Strange Danger .

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  • It is far more likely that some large volume customer demanded that they deliver the real physical metal that was purchased and blew the top out of the short selling that had been holding the prices down. It is pretty hard to find an empty bulk ship since all of them are full of undeliverable crude oil.

    • SP_88

      I hope they continue to demand delivery of physical gold. This paper market nonsense is just a bunch of crooked old men screwing people and manipulating the market. It would be nice if silver went up too, I could make some money. It’s a good thing I bought it cheap and also I found a lot of pre ’64 coins in my change. Some people paid $38 – $40 an oz. and they will need to wait for a while before they get their money back.

      • The use of physical gold and silver as money will take a long time to grow to the size where it will spawn recognition of PMs as money, and it will probably require the implementation of the large hordes of PMs in the possession of the central banks to gain widespread acceptance. I couldn’t care less whether it is ever recognized, since my PM dealer has finally come to understand what I’ve always told him, that he will eventually be my banker. Since I regard only PMs as money, and last bought silver for $43 an ounce, I can only chuckle when $50 silver is mentioned. I anticipate triple digit silver and 4 or 5 digit gold are at the end of the yellow brick road.

        • SP_88

          That would sure be nice. I bought a lot of my silver at around $14 – $15 an ounce, plus I found quite a bit of it in change that I got at face value. I would go to the bank and buy several hundred dollars in quarters, look through it all and take all the 1964 and earlier coins, replace them with newer quarters and return it for either more quarters or nickels. And when I got sick of doing it, I just brought it all back and got my money back. So I got about 40 ounces of silver for maybe $35 – $40. It took a couple of years to do it, but I enjoyed doing it. I wish I had kept better track of how much I spent on silver so I would know how much money I made, but it doesn’t really matter. I would make money if I sold it all today at $15 an ounce. I did buy a lot of it for $15 or so, so I am only making money because of the coins I found in change. But if I figure in my time, then no, I’m not making anything. But I don’t look at it like that. If I’m sitting in front of the tv or whatever than I wouldn’t be earning anything anyway.
          But if I wait until triple digit prices for silver, I would be rich. I could finally buy a Rolls Royce and a big house in the Hampton’s. (I don’t know where or what the Hampton’s are, I just hear people say it, and I don’t really have that much silver)

          • Junk silver is pretty much all out of circulation now. It will be worth holding onto for use as money when it is recognized as being worth several times its face value. You do know that triple digit generally means over $100, which isn’t that far away, once the spot price rises to the real value.

          • SP_88

            By junk silver, I assume you mean old coins right? I like the old coins because it is easily recognized as being real silver (90%), so trading and bartering with it is easier. But I stopped buying rolls of coins from the bank to look through because I would go through a few hundred dollars in change just to find one or two quarters from ’64 or earlier. I’ve gone through a hundred rolls of quarters and not found anything. 15 – 20 years ago I was finding silver coins all the time.
            With silver bars it’s easier to get screwed because people will melt down all sorts of crap and mold “silver” bars out of it and it will only be part silver. I don’t know if it’s easy to tell by weight and volume if it’s off or not, but when you’re bartering out somewhere, who is going to go through all the trouble to test for purity. I would imagine that there are ways to make silver bars weigh the same with other filler material and I would be very skeptical of them unless I bought them from a reputable dealer, but then if I need to sell them, the buyer is going to have the same skepticism because I’m not a reputable dealer. I know that I’m reputable, but they don’t know me.
            If silver was ever a hundred dollars an ounce I would make out very well. I got lucky buying it when I did. Plus the ones I found in change, and I even bought some from a guy at work who was probably spending the money on drugs. He sold me 2 rolls of Mercury dimes for $75 and a roll of standing liberty quarters for $50 and assorted old silver coins here and there for real cheap.
            I’m wondering if I should sell them when the spot price is a hundred dollars or if I should hold onto them for bartering.

          • American coins that contain silver are colloquially known as junk silver.
            The content and purity of any piece of melt can be determined by specific gravity, aside from the fact that tungsten and gold have almost identical specific gravities. Tungsten and gold can be separated by their electrical characteristics.
            I am holding onto all of my junk silver to use in trade. Since PMs will be worth much more, we’ll need small pieces to make change and incidental purchases. Most of the non-junk silver coins will continue to circulate based on their metal content.

          • SP_88

            Thanks for the info, I appreciate it.

          • Glad I could help. Keep your powder dry.

  • NonYo Business

    Thank the Federal Reserve.

    Thank you Rothschild!!!

  • Gil G

    As long as the oil price stays low so too will gold.