Exchange-traded funds that track precious metals and miners slumped Tuesday in premarket trade, on track for their biggest daily decline since March, suggesting that a long run-up might be on track to reverse course. The SPDR Gold Shares ETF GLD, 0.94% was down 3.2%, while the VanEck Vectors Gold Miners ETF GDX, 2.11% lost 4.5%. The iShares Silver Trust SLV, 3.13% slid about 6%, and the Global X Silver Miners ETF SIL, 3.98% was down about 5.5%. Both precious metals GC00, 0.13%SI00, -0.17% have surged to record highs over the past several weeks, boosted by declining interest rates and geopolitical concerns.
No Trade dollars were produced for circulation after 1878, but the Philadelphia Mint continued to strike proofs for collectors until 1884. When collectors and dealers became aware of the proof-only status of the denomination a popular speculation in the proofs sprang up. The increased demand resulted in a record mintage of 1,987 proof Trade dollars in 1880. Although the speculation peaked in March, and subsided after that, the Mint continued to strike proofs throughout the year. Looking and this coin in hand and comparing it to our images, we must say – a picture isn’t always worth 1000 words. In actuality, this example boasts light to medium pink and golden centers encircled by luscious violet and blue-green borders. Said differently, ignore the pictures! No non-CAM/UCAM’s have been graded higher by NGC.
Offered at 15,500 delivered
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Gold slumps when its inflation-adjusted price is as high as it is now
Gold today is nearly as overvalued as it’s ever been over the past five decades. That’s the conclusion reached by just-released research from Campbell Harvey, a finance professor at Duke University; Claude Erb, a former commodities portfolio manager at TCW Group, and Tadas Viskanta, founder and editor of the investment blog AbnormalReturns.com.
Their research couldn’t be more timely. In the wake of gold GC00, 0.01% breaking above the $2,000 level, enthusiasm for the yellow metal has reached a fever pitch. Earlier this week, for example, MarketWatch reported that a fund manager forecasted that gold could double to to $4,000 an ounce.
Before I discuss this new research, let me emphasize that its conclusion has nothing to do with the extreme bullishness that has prevailed for several weeks now among short-term gold timers. That’s a bearish omen, as I noted three weeks ago, and gold’s price nevertheless has continued to jump ever higher into all-time high territory.
This new research focuses instead on gold’s fundamental value, in much the same way that Wall Street analysts calculate a stock’s fair value. The fundamental justification for a higher gold price that is most often mentioned is inflation. This rationale is repeated so frequently, in fact, that few of us stop to subject it to historical scrutiny. If we did, we would find that it enjoys little statistical support.
08/07/2020 Frank Shostak/Mises Wire/Mises Institute
Why does the dollar bill in one’s pocket have value? The value of money is established, according to some experts, because the government in power says so. For some commentators the value of money is on account of social convention. What this implies is that money has value because it is accepted. And why is it accepted? …because it is accepted! Obviously this is not a good explanation of why money has value.
The Difference between Money and Other Goods
Let us try another approach. Demand for a good arises from its perceived benefit. For instance, people demand food because of the nourishment it offers them. Likewise, people demand money not for direct use in consumption, but in order to exchange it for other goods and services. Money is not useful in itself, but because it has an exchange value—it is exchangeable in terms of other goods and services. Money is demanded, because it offers the benefit of its purchasing power, i.e., its price.
Consequently, for something to be accepted as money it must have a preexisting purchasing power, a price. So how does a thing that the government proclaims will become the medium of exchange acquire such purchasing power, a price?
After several years of low mintages and intermittent production, Walking Liberty half dollar production increased dramatically in 1934, and production remained stable until the series ended in 1947. Production at the three mints averaged 2.8 million coins per issue from 1916 to 1933, and 10.6 million from 1934 to 1947. That is one of the reasons that some collectors only seek the latter issues, the so-called “short set” of Walking Liberty half dollars. This one is somewhat lighter in brighter in hand, as compared to our images. The NGC population is just 9 (two of which are NGC Star-designated examples) with none higher.
Offered at $12,950 delivered
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