Gold’s Biggest Week Since 2011?

Gold’s biggest week since 2011? Gold looks like it’s headed for its biggest weekly rally in nine years driven by anticipation of another interest rate cut by the U.S. Federal Reserve and on investors fleeing to safe-haven assets because of a volatile equities market and coronavirus fears.

This morning’s strong U.S. job numbers failed to put a dent in Gold’s support. February’s Nonfarm payrolls rose by 273,000, a huge jump over the forecast 175,000. The unemployment rate edged down to 3.5%. Gold stayed firmly above $1,680 on the news, but Dow failed to find support, falling 700 points at the opening. Normally, such strong job numbers would have been a stock market boon, but the knowledge that these numbers do not yet reflect the impact of the coronavirus on our economy rendered the data powerless as a lagging indicator.

The most active gold futures contract rose 1.5% Thursday to settle at $1,668 an ounce on Comex. The yellow metal advanced 6.5% in the first four days of this week and appeared headed for a new seven-year high. The April contract is currently at $1680.70.

“There is definitely scope for gold to test $1,700, although maybe it is a bridge too far this week, unless we get a shocking nonfarm payrolls,” said Jeffrey Halley, senior market analyst at Oanda Corp., told Bloomberg. “Coronavirus turmoil next week will likely see gold get the momentum it needs.”

U.S. stocks slid again Thursday, with the Dow Jones Industrial Average dropping 3.6% and the Standard & Poor’s 500 Index sliding 3.4%. Equities were still higher for the week. Stocks had their worst week since the Great Recession last week but were bolstered by a surprise 50 basis point interest-rate cut by the Federal Reserve on Tuesday. Both lower interest rates and declining equities are typically bullish for gold.

The Fed’s emergency rate cut was the first since 2008 and came amid mounting concern that the spread of the coronavirus will curb global economic growth. The CME FedWatch Tool shows 100% odds of another rate cut by the Fed at policy makers’ next scheduled meeting on March 18. The tool showed the probability of another 50 basis point cut at 99.2%, with the chance of a 75 basis point cut at 1.9%.

Gold “is immune to the virus,” Jeff Currie, Goldman Sachs’s head of global commodities research, said in a note to clients earlier this week. And money manager Jeffrey Gundlach told CNBC that the price of gold will go to a record high against the dollar as the Fed cuts rates.

The global bond market rallied, with 30-year Treasury yields sliding below 1.5% for the first time.

The coronavirus, designated COVID19, has killed almost 3,400 people worldwide and sickened about 98,000. Most of the cases have been in China, where the outbreak started. The virus is a WHO-designated global health emergency.

May silver futures rose 0.9% Thursday to settle at $17.39 an ounce on Comex. Front-month silver futures gained 5.7% in the four days of this week after dropping 12% last week.

Spot palladium, a metal used primarily in autocatalysts, rose 0.1% Thursday to $2,545.31 an ounce. It is up a bit this morning at $2,547.22. The metal rallied 14% in February. Spot platinum decreased 1% Thursday to $866.30 an ounce. Currently, platinum has risen 32.96 to $900.51.

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Is a Troy Ounce the Same as a Regular Ounce?

If you want to buy or sell gold, other precious metals, or gemstones, you will want to check the current ounce price to determine its value.  However, don’t think that you can get an accurate dollar amount by weighing your gold on a postage scale, for instance, because an ounce of gold is called a troy ounce and is very different from the avoirdupois ounce that is commonly used in the United States.

It’s very important to know some basic weight terms if you want to understand charts and discussions and news reports about precious metals and gemstones.  Therefore, I’ve provided for you a concise glossary of terms below: avoirdupois ounce, troy ounce, grain, and pennyweight.

NOTE:  While most of the world uses the metric system, the United States primarily uses the U.S. customary system (also called the American system) to measure weight.

Avoirdupois ounce is abbreviated oz.

1 avoirdupois ounce = .911458333 troy ounces, 437.5 grains or 28.349523125 grams

Definition of Troy Ounce

Gemstones and precious metals such as gold, silver, and platinum are sold by the troy ounce.  It is heavier than the avoirdupois ounce.

Troy ounce is usually abbreviated t oz or sometimes oz t.

1 troy ounce = 1.097142857 avoirdupois ounces, 20 pennyweights, 480 grains, or 31.1034768 grams

1 kilogram  = 32.15 troy ounces

NOTE:  There are 12 troy ounces in a troy pound, as opposed to 16 avoirdupois ounces in an avoirdupois pound.  Therefore, a troy pound is lighter than an avoirdupois pound.  However, the troy pound is no longer being used which helps a lot!

Definition of Grain

A grain is a unit of weight in both the U.S. customary system and the troy system that weighs the same under both systems. Its abbreviation is gr.

1 unit of grain = 0.002285 ounces or 0.06479891 grams

Definition of Pennyweight

Jewelers use the pennyweight in calculating the amount and cost of precious metals used in fabricating or casting jewelry.  Dentists still use the pennyweight as the measure of precious metals in dental crowns and inlays.  It has no relation to penny coins.

Pennyweight is usually abbreviated dwt or pwt, and occasionally PW. Why is dwt the most common abbreviation? The “d” was taken from the ancient Roman penny-like coin denarius and was the abbreviation for the penny before the decimalization of the British monetary system.  Then it was used as an abbreviation for pennyweight and still is.

20 pennyweights = 1 troy ounce

1 pennyweight = 1/20 of a troy ounce, 24 grains, 7.777 carats, approximately 0.055 ounces, or 1.55517384 grams

How to Convert Avoirdupois Ounces to Troy Ounces

Multiply the number of ounces x .912 to get the approximate number of troy ounces; for example, 4.50 ounces x .912 = 4.10 troy ounces.

In Conclusion

Well, I hope you found this introduction helpful!  Let me know if you enjoyed this information or if there is something I can add to it to make it easier to understand or better in any way.  Thanks!

Tags: American system, avoirdupois ounce, definition of grain, definition of pennyweight, definition of troy ounce, Gemstones, metric system, precious metals, sell gold, troy ounce, U.S. customary system

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The Difference between Pure Silver, Sterling Silver, Coin Silver, Junk Silver, and Silver Plating

Technically, silver is a metallic chemical element whose chemical symbol is Ag (Argentum) and whose atomic number is 47. Pure silver is a precious metal that is used to make jewelry, tableware (silverware), and coins, among other things.  It also has many other uses which we will discuss in future posts.

The millesimal fineness system is used to show the purity of silver (pure silver), gold, and platinum alloys by parts per thousand of pure metal by mass in the alloy.  For example, if an alloy contains 92.5% silver, it is referred to as “925.”  [NOTE: An alloy is a mixture of two or more metals to obtain desirable qualities such as hardness, lightness, and strength.]

Fine silver (99.9% pure)

Is too soft to use in jewelry or almost anything else because it bends, breaks, and stretches too much. For this reason, manufacturing jewelers and silversmiths mix copper with it to give it some strength without discoloring it.  Copper is the industry standard.  However, some countries use other alloys as well.

When you see “.999 fine silver” or “999” stamped on an item, it is considered pure silver.  It is softer and more malleable than sterling silver.  It is used in bullion bars, and is also known as three nines fine.

Sterling silver

Also known as standard silver. Is what jewelry and silverware are traditionally made from, which is 92.5% silver and 7.5% copper.  That is why you sometimes see .925 stamped on your jewelry.  In the U.S., only a minimum of 92.5% fine silver can be marketed as “silver.”

Sterling silver jewelry is often plated with a thin coat of .999 fine silver to give the item a shiny finish (called “flashing”).   Silver will tarnish unless an anti-tarnish coat is added.  Rhodium is sometimes used for this thin coat because it is very shiny and never tarnishes.  However, rhodium is a very expensive option compared to the silver finish.

Coin silver

Is an alloy of 90% silver and 10% copper.  Therefore its millesimal fineness is 900, also known as one nine fine.  Most United States silver coins are made of coin silver.

Junk silver

Is an informal term used in the United States, United Kingdom, Canada, and Australia for any silver coin which is in fair condition and has no numismatic or collectible value above the bullion value of the silver it contains. Such coins are popular among people seeking to invest in silver, particularly in small amounts. The word “junk” refers only to the value of the coins as collectibles and not to the actual condition of the coins.  Also, junk silver isn’t necessarily scrap silver.

Silver-Plated

silver-plated item has a thin coating of silver deposited onto a base metal which has a lower value than silver.  Once used as plating, silver cannot be easily recovered, so it is of no value to those who are accumulating silver as an investment. EPNS means electroplated nickel-silver and is sometimes stamped on silver-plated items.

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