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Gold "Coins Are Probably Of More Value Than Anything Else" - CME President

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In a remarkably candid interview, the President and Executive Chairman of CME Group Inc, Terrence Duffy,  told Bloomberg TV that today gold buyers "don’t want certificates ... They want the real product".  

When asked by Cristina Alecci at the Milken Institute 2013 Global Conference in Los Angeles on Bloomberg Television's "Street Smart."about gold, Duffy says

"What’s interesting about gold, when we had that big break two weeks ago we saw all the gold stocks trade down significantly, we saw all the gold products trade down significantly, but one thing that did not trade down, was gold coins, tangible real  gold.  That’s going to show you, people don’t want certificates, they don’t want anything else.  They want the real product."

"I think that is the value of gold."

"Whether you are going to own mining stocks are anything else. I think the coins are probably of more value than anything else."

The CME Group Inc or Chicago Mercantile Exchange is the world's largest futures exchange company. It owns and operates large derivatives and futures exchanges in Chicago and New York City, as well as online trading platforms. It also owns the Dow Jones stock and financial indexes, and CME Clearing Services, which provides settlement and clearing of exchange trades.

The CME's President's comments were noticed by Mike Krieger of Liberty BlitzKrieg and featured on Zero Hedge.

Slowly but surely, gold coins and bars value as safe haven assets, unlike gold futures and other paper and digital forms of gold, is being realised.

All paper forms of gold, particularly leveraged ones, should be avoided due to counter party and systemic risk. 

The exception to the rule regarding certificates are Perth Mint Certificates. They are in effect warehouse receipts which are fully backed by physical gold, silver and platinum - ounce for ounce - from the AAA rated government of Western Australia.

Mints from the U.S., Great Britain and Australia have all seen a surge in demand after gold futures fell 13% in mid April.

The U.S. Mint’s gold coin sales have reached their highest level since December 2009.


Gold in USD, 5 Year – (Bloomberg)

Gold coin sales at the U.S. Mint in March were 62,000 ounces, while in April sales reached 209,500 ounces and back in December 2009 they recorded 231,500 ounces of coins sold.

Silver-coin sales in April were 4.2 million ounces up from 3.36 million in March.


Silver in USD, 5 Year – (Bloomberg)

The price drop has shifted investor sentiment out of gold backed ETF’s and into physical gold.

The yellow metal has fallen 12% this year, even after an 11% gain from $1,321.50/oz on April 16.

Demand was so strong after the price retracement that the U.S. Mint ceased sales of its .10/oz gold coins on April 23.


Platinum in USD, 5 Year – (Bloomberg) 

In Australia, consumers were cueing in lines ½ of a kilometre to purchase gold coins.  In jewellery stores in China and India they had their stock depleted in a day, according to The World Gold Council.

The heightened demand brings premiums that investors are paying to have the precious metal in their hands. 

In India they are paying 5 times the amount before the price drop in April.  In Singapore and Hong Kong consumers are paying nearly $3/oz, said to Ng Cheng Thye, the head of precious metals at Standard Merchant Bank (Asia) Ltd.

In the U.S., the Arizona Senate passed legislation to make gold and silver accepted as currency, and it now goes to the governor for approval. This is a further step by citizens to protect themselves against the lack of control and collusion in the current international monetary system.


Palladium in USD, 20 Year – (Bloomberg)

NEWS
U.S. Mint Sales of Gold Coins Jump to Highest in Three Years – Business Week

Gold edges down, investors cautious ahead of Fed - Reuters

Gold ETP Holdings Cap Record Decline Wiping $17.9 Billion - Bloomberg

Arizona lawmakers pass bill making silver, gold legal tender - Reuters

COMMENTARY
CME Chairman On Gold: “People Don’t Want Gold Certificates, They Want the Real Product” - Bloomberg

'There will be more wealth confiscation, without a doubt' – The Telegraph

The 'monarchs of money' and the war on savers – CBC News

Eurozone risks Japan-style trap as deflation grinds closer – The Telegraph

China Goes Gold Crazy. Why Now? - Forbes

Structure in Gold and Silver Spread Fluctuations – Social Science Research Network

For breaking news and commentary on financial markets and gold, follow us on Twitter.

 

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Wed, 05/01/2013 - 14:38 | 3519085 LuchadorChumba
LuchadorChumba's picture

Amigos, I am El Jefe, and you are my pupil. All this gold talk is really pissing me off.

Callate!

But listen, because there are Gallos de pelea engaging us in a battle of Wills... you know that... Mike Krieger guy, Sinclair n Turk n Turd and others. Pendejos don't realize the whipping they are gonna get. We believed that not a clucking would be heard again, that they’d cower before inbred farmers ridicule. But you can smell it—the odor of fighting roosters. We must warp that fucking mirror, give new reasons to peck and scratch, where open eyes lose their authority to say what they see. Use the Luchador methods while stealing the worm from their mescal.

If the public, uh, i means audience starts moving on this informacion before we have a chance to get all the physical in our chonies, there's gonna be trouble.

Zerohedgers, why have you become sterile like those half-breed Dalmatian-Chihuahuas of TJ?

Me estudiantes! The silencing of loud mouth sons-of-bitches doesn’t require removal of all back talk, it only demands the smack down of ideas that might grow. We must get ready for la pelea del año, the fight of the year. Remember los Rudos, the crass ones like us use it for its end game, which isn’t just money, but to inflame the passions of the ignore-ant for a larger purpose.

Viva El Luchador!

www.askchumba.com

Wed, 05/01/2013 - 22:07 | 3520886 i-dog
i-dog's picture

It's somewhat disingenuous of you to name Krieger, Turk n Turd while failing to mention your own moufpieces - Jones, Keiser n Celente - who are also pushing physical gold ownership (though, admittedly, trying to steer the sheep towards a preference for silver). Perhaps you could "shut them up" for us first? Please?!

Wed, 05/01/2013 - 13:36 | 3518729 Kastorsky
Kastorsky's picture

now we have a greatest price discovery tool of all times called ebay.

and it shows that 1 oz is selling for no less than $1560, if you are lucky.

Generally it is over $1600

http://www.ebay.com/csc/i.html?_from=R40&_sacat=0&_nkw=1+oz+gold+eagle&LH_Complete=1&LH_Sold=1&rt=nc

smaller denomination (1/10) over $1800/oz

Wed, 05/01/2013 - 15:50 | 3519459 Thisson
Thisson's picture

That's only after factoring in all of Ebay's egregious fees and markups.  Markup for stamps, markup for shipping, markup for insurance, markup for paypal, etc etc etc.  Screw that!  Use Bullion Direct's Nucleo exchange instead!

Wed, 05/01/2013 - 15:18 | 3519271 anarchitect
anarchitect's picture

I think Terry Duffy knows that the CME is no longer a legitimate price discovery mechanism and that his announcement is laying the groundwork for a move to 100% margin. In other words, a cash market for buying and selling physical instead of a rigged casino.

Wed, 05/01/2013 - 13:28 | 3518685 uncle_vito
uncle_vito's picture

If gold coins coins did not trade down, then why can you buy them so cheaply at the US mint.   Gold coins did not trade down because they are not easy to sell.   How do you take them out of your safe and get them to a dealer to sell.   Pretty difficult.

Wed, 05/01/2013 - 15:54 | 3519466 Thisson
Thisson's picture

Gold is just about the easiest thing to sell there is.  You haven't seen all those WE BUY GOLD signs everywhere?  Just go to any pawn shop, coin shop, etc. and know the going rates ahead of time.

Wed, 05/01/2013 - 15:21 | 3519292 DosZap
DosZap's picture

Gold coins did not trade down because they are not easy to sell. How do you take them out of your safe and get them to a dealer to sell. Pretty difficult.

 

BS, easy take it out drive to Dealer and sell.Paranoia over carrying Au or Ag to your Dealer is crazy, your not advertising what you have on your person, or in the box.Plus as insurance never go unless packing(that is true for every day  NOT selling PM's).

 

Wed, 05/01/2013 - 15:07 | 3519239 RockyRacoon
RockyRacoon's picture

WFT?  You just proved that you don't know diddly about gold -- in any form.

Wed, 05/01/2013 - 23:13 | 3521145 Imminent Crucible
Imminent Crucible's picture

Not easy to sell? Have you ever bought or sold any?

It's quick and VERY easy:

1. Call DillonGage or any other bullion dealer.

2. Lock in price.

3. Mail coins.

4. Take check out of mail box.

It's only difficult if you don't have any idea how the thing works.

 

Wed, 05/01/2013 - 13:26 | 3518675 sixbilliondollarman
sixbilliondollarman's picture

Whether it's a paper reciept for gold or a paper reciept for some shit stock...as long as the store accepts hastily printed green pieces of paper then one should have those too.

what are we talking about here anyways?

If it's an investment...hopefully some profit or interest is a good idea!

If it's a medium of exchange...fiat green fed notes or EBT cards are preferred*

If it's a store of wealth [not a fuckin investment] Gold works as it always have.

If you want to barter on Craigslist...you better have some good shit.

Everything else is cockslappers who either are pro or con with gold.

Pro= "I lost fiat coupons holding gold so I must hold the faith"!

Con= I can't afford gold so I talk shit about it...

everyone in the middle should have a little of all.

once again the mix is simple:

 

A little investment, some medium of exchange & some store of wealth.

It's so simple- what the fuck is wrong with you people who argue to the death over metals?!?!?!

 

http://www.youtube.com/watch?v=0cTAtIqZ8nY&feature=fvwrel

Wed, 05/01/2013 - 12:58 | 3518544 flight77
flight77's picture

In 1947 my gradmother got for her massive Golden ring 1 bottle of Apple juice from a farmer. The farmers hat their stables filled with carpets, paintings and everything worse something.they were the  big war profitteers. Their land was guarded by armed "Feldschütz". an dvolunteers paid with some food.My father, living in Frankfurt walked long miles to get a few potatoes.
Gold wasn´t worth what people thought.
Tools, cigarettes or tobacco, better some booze. That were the currencies of choice. The rest was barter. Same in the Weimarer Republik. You better believe it. People in the Cities were dying like flies. No food around. Keep on dreaming with your Gold, but in tough times it is not worth a lot

 

Wed, 05/01/2013 - 14:36 | 3519080 besnook
besnook's picture

gold was only worth 35 dollars/oz in 1947 making a gram worth just over a dollar. massive gold ring says nothing but gold rings rarely weigh more than 10 grams and a woman's ring 5 grams. most weigh between 1 and 4 grams  of diluted gold so the price was probably fair considering the value of food post war and apple juice particularly. saying there is no value in gold and silver in a shattered economy defies thousands of years of history. zimbabwe is the latest example. google it. interesting and prescient.

Wed, 05/01/2013 - 15:55 | 3519482 Thisson
Thisson's picture

Even according to your math, that would still be a very expensive bottle of applejuice.  At ~$45 per gram, 1-4 grams would be $45-$180 for a bottle of apple juice. 

Wed, 05/01/2013 - 16:32 | 3519605 besnook
besnook's picture

first you can halve that value for 14ct(,585 specifically). second, apple juice would have been a bit of a luxury with the premium attached and thirdly, food in general would have been very expensive a the time. again, take the example of zimbabwe where there is no art, jewels, real estate or cigarettes to trade. food obviously can be exchanged for food(which is why a few chickens are invaluable in a collapse, the proverbial golden egg) but the people were panning for the equivalent 3 dollars(today's dollars) worth of gold to buy some bread that would have cost pennies in a normal economy. fourthly, the present value of gold is the only true measurement so the 35 dollar/oz of gold is the only pertinent value. think about it for a second. apple juice may have been coveted but with water as a free substitute why would someone buy it except as a luxury. given the times the person must have been wealthy and thought the deal was fair.

Wed, 05/01/2013 - 23:09 | 3521133 Imminent Crucible
Imminent Crucible's picture

Apple juice? Are you kidding?

As soon as the Treasury prints the first new $1,000 bill, I'm going to whip out the One Hundred Trillion Dollars, Reserve Bank of Zimbabwe I have stashed away, and I'm going to buy California and kick Jerry Garcia Moonbeam and everybody else except Sierra Nevada Brewing out of the place. I'll hire some Mexicans to take out the trash.

If a hundred trillion ain't enough for California, I'll buy New Jersey instead and bulldoze Newark and Camden back into pine barrens. Chris Christie and President Mobongo can go hug each other somewhere else.

Onward and upward!

Wed, 05/01/2013 - 16:06 | 3519509 akak
akak's picture

"AppleJuice4Gold!"

Wed, 05/01/2013 - 14:12 | 3518909 Cobra
Cobra's picture

You may be failing to see that gold holders also hold other things of value.

http://www.hotsaucedepot.com/Essential-Extractor-Pot-Distiller-Complete-...

Here's to making your own - ummm - fuel...

Wed, 05/01/2013 - 13:35 | 3518736 akak
akak's picture

All I can say in response to your little apocryphal story is that your grandma was a piss-poor bargainer who, like the average American today, did not know shit about the value of gold.  Like all those fools who take rare antiques to a pawn shop to sell them for a third of their true market value, or the idiots who send their gold jewelry to a "Cash for Gold" ripoff artist for pennies on the dollar.

Wed, 05/01/2013 - 13:55 | 3518821 flight77
flight77's picture

Well, I understand that the information I posted creates fears. But it is the simple truth.And nearly everyone was "piss poor" and hungry. Food was the real Gold. Gold wasn´t worth a lot. If you don´t believe it, keep on dreaming. and just to inform you, since their was already a complete craschdown of the Currency in the Weimarer Republic, people were a lot more aware about the risks of papre money than nowadays. And my Grandma wasn´t a piss poor bargainer, but a very brave woman, who tried to survive without husband and 4 little children,- and all kids survived.

Wed, 05/01/2013 - 15:29 | 3519338 EINSILVERGUY
EINSILVERGUY's picture

My mother was 10 years old near Kaiserslautern in 1947. I heard a similar story but I also heard that cigarettes and chocolate was used as currency in 45,46. My mother lived in a village where they were fortunate to grow some of their own food and they had wine and stored food from the cellar.  They also had small amounts of silver (the reichmarks were  ~90% part silver) and gold which they did not use.  Things were horrible until around 1948-49. thankfully my mother was in the American sector so that part of the Rhineland recovered faster.

Wed, 05/01/2013 - 14:21 | 3518987 silvermail
silvermail's picture

When times are tough, many people are dying of hunger. But those who have the gold, always survive or die last.
Everything else - just an empty bla bla bla, which has no relation to reality.

Wed, 05/01/2013 - 14:49 | 3519167 flight77
flight77's picture

Well, like I said, the farmers got all the gold, and you didn´t have much ground for negotiating a better price. and these farmers were often (not always) pretty greedy.

Wed, 05/01/2013 - 15:37 | 3519369 Snake
Snake's picture

We are not facing a mad max, apocalyptic scenario.  We are facing deep, structural (ecological, geopolitical, financial and economic) changes.  These changes will take time, sometimes speeding up, slowing down sometimes, sometimes on their own, other times as a result of human intervention.  The price of physical gold will rise without a doubt, speeding up or slowing down at different rates in different junctures, I think.

Wed, 05/01/2013 - 15:19 | 3519272 somecallmetimmah
somecallmetimmah's picture

"...and these farmers were often (not always) pretty greedy."

Indeed.  Those damn, lazy farmers.  Whadda they done for anyone lately?!?

They're the REAL problem...

Wed, 05/01/2013 - 15:03 | 3519221 RockyRacoon
RockyRacoon's picture

So, you're saying gold is actually money.  It can be traded for goods/services.  The only point at issue is the exchange rate.   Looks like the farmer was simply smarter than your ancestors.  There ya go.

Wed, 05/01/2013 - 15:24 | 3519316 msmith9962
msmith9962's picture

When things are really good for civilization (say 10% of the time) gold has little value and when things are really bad (say 10% of the time) gold has little value because most people really just want to survive = food/security.  So 80% of the time gold is a good bet.

Wed, 05/01/2013 - 15:20 | 3519278 ParkAveFlasher
ParkAveFlasher's picture

lmao at this thread. "Ze Americans respect nussing!"

Wed, 05/01/2013 - 12:39 | 3518439 The Dancer
The Dancer's picture

But I thought Glenn Beck was a traitor for telling folks to buy gold coins!

Wed, 05/01/2013 - 12:38 | 3518433 Cone of Silence
Cone of Silence's picture

I am sticking with,   Only people who currently hold gold now, are buying into the reduced price.  No new buyers are coming into the market, and the old hands are purchasing early to capture the reduced price. 

 

To test this,  I want to ask you guys a question that is below the belt.    Give me a thumbs up if you asked your wife before you bought your first gold coin, Honey,  I think the financial world is going to blow up, and buying these coins will help protect our financial future.     And your wife said,  Sweetums,  you are a genius.  What a great way to ensure our prosperity over the long haul,  of course buy as many as you can, and use the kids college fund to buy even more. 

 

Give me a thumbs down,  if, you did one of the following.  You did not tell your wife about buying your first gold coin.  You are hiding these coins from her at the present time.   She has found the coins in your penthouse box, and has noticed that the kids college fund is going down.   She has talked with all of her friends about how you bought these worthless coins that do not even pay interest,  and they all have told her its a bad idea,  even the Edward Jones lady who is in the business and knows.   Your wife has called you a lunatic for buying those worthless coins with our hard earned money. 

Wed, 05/01/2013 - 15:41 | 3519413 EINSILVERGUY
EINSILVERGUY's picture

I don't have to tell the wife but she knows what I'm doing.  I'm converting one form of currency for another. Since I spent 10 years in Finance and have explained to her a number of different financial topics ( she is part Austrian so she has been exposed to the history Of Weimar and post WWI Germany) I really don't have to convince her.  She does get a bit peeved when I don't want to spend money on superfluous crap but thats becasue she is still trying to hold on to the old paradigm. Fortunately we have no kids so its only us we are having to worry about

Wed, 05/01/2013 - 14:30 | 3519044 msmith9962
msmith9962's picture

Ha!  The furthest I get after sharing a bottle of wine over dinner is that people tend to think their future will be like their past and have a hard time seeing differently.  After thinking for a moment, she agrees.  Other than that I can only get her onboard with the hugelkultur gardening.

Wed, 05/01/2013 - 12:51 | 3518496 fortune114
fortune114's picture

Me, typical month: "Looking everything over this month I think we should buy one gold eagle and 20 silver."

Her: "Double that."

 

Me, a few weeks ago: "Did you ever hear of BitCoins?"

Her: "Is it that Internet money?  Don't you dare buy any of that f****** s***!"

Me: "Easy! I just wanted to know if you heard of it."

Her: "Yes.  Someone in Minnesota was trying to sell their house and would only take BitCoins."

Wed, 05/01/2013 - 12:19 | 3518360 The Dancer
The Dancer's picture

This split between paper and physical is going to tell the real tale...I find it fascinating, personally....

Wed, 05/01/2013 - 12:11 | 3518311 MacroAndCheese
MacroAndCheese's picture

When are you gold shills going to get a life and pay for your own advertizing rather than writing rubbish and passing it off as analysis or useful information. 

Wed, 05/01/2013 - 12:28 | 3518386 MacroAndCheese
MacroAndCheese's picture

For those who gave me a "thumbs down," do a google search on GoldCore, they're just peddling their wares like used car salesmen.  At least infomercial people pay for their spots and you can see them coming.  This is a load of BS designed to generate commission sales.

Wed, 05/01/2013 - 12:31 | 3518409 fourchan
fourchan's picture

it doesnt make them wrong.

Wed, 05/01/2013 - 12:38 | 3518432 MacroAndCheese
MacroAndCheese's picture

Really?  Do you think in Australia people were lining up 1/2 km to buy gold?  When?  1979?  Go ahead, have at it, but this is a blog for useful information and analysis, not worthless propaganda designed to scare you into buying gold from them at a huge markup.

Wed, 05/01/2013 - 15:21 | 3519294 silvermail
silvermail's picture

Somewhere I've heard all this nonsense, but where? Ah, yes - I've heard the exact same nonsense in 2008 when gold price fell from $ 1,000 to $ 700! LOL

Every time, when gold takes a step back for the next jump, the crowd trolls trying to feed me his vomit. However, this is only standard pattern of trolls and nothing more.

Wed, 05/01/2013 - 14:07 | 3518884 Swarmee
Swarmee's picture

As an engineer I want the full bandwidth. Separating the signal from the noise is MY job. Why the fuck would I trust someone else's filter? Is the MSM going to only start telling the truth if we turn down the volume on shills for our side?

I think not.

EVERYONE is selling their book, but good lies have a spark of truth in them, so get good at finding it and piecing together a sensible reality from all that hype. You should be questioning everything, be aware of confirmation bias and adjust for it.

Wed, 05/01/2013 - 13:31 | 3518716 akak
akak's picture

A despicable gold-hating troll says what?

Wed, 05/01/2013 - 12:09 | 3518296 Cone of Silence
Cone of Silence's picture

This guy is telling you to hold gold coins?  They are getting ready to smash the price down. 

Wed, 05/01/2013 - 12:16 | 3518326 shutdown
shutdown's picture

Getting ready?  

Wed, 05/01/2013 - 12:04 | 3518256 Taint Boil
Taint Boil's picture

No Shit

Wed, 05/01/2013 - 12:29 | 3518400 StychoKiller
StychoKiller's picture

Mmmm, Aurum, much more tasty than paper... :>D

Wed, 05/01/2013 - 11:54 | 3518199 Precious
Precious's picture

http://en.wikipedia.org/wiki/Collapse_of_the_Western_Roman_Empire#Sack_o...

In Western Europe, after the Collapse of the Western Roman Empire, coins, silver jewelry and hacksilver (silver objects hacked into pieces) were for centuries the only form of money, until Venetian merchants started using silver bars for large transactions in the early Middle Ages. In a separate development, Venetian merchants started using paper bills, instructing their banker to make payments. Similar marked silver bars were in use in lands where the Venetian merchants had established representative offices. The Byzantine empire and several states in the Balkan area and Russia also used marked silver bars for large payments. As the world economy developed and silver supplies increased, in particular after the colonization of South America, coins became larger and a standard coin for international payment developed from the 15th century: the Spanish and Spanish colonial coin of 8 reales. Its counterpart in gold was the Venetian ducat.

Wed, 05/01/2013 - 14:12 | 3518929 Swarmee
Swarmee's picture

Exactly.

The line is "My ducats! My daughter!"

Not "My fiat! My female!"

Wed, 05/01/2013 - 12:12 | 3518317 disabledvet
disabledvet's picture

Revolutionary...even by today's standards. "came from the east" no less. If Western Europe didn't happen to have discovered the New World who knows how history would have changed or been altered. But indeed it did and we live with that "accident"...an accident hidden from the world for centuries!!!!!...even today. "How do you hide a Continent (or two)" you ask? ....hmmm..."go figure."

Wed, 05/01/2013 - 13:24 | 3518679 ATM
ATM's picture

Hide?? There were millions of people lving in the Americas before it was discovered and it was very prosperous, much more so than Europe at the same time.

The only reason the Europeans were able to take control was the diseases that wiped out most of the natives in the first 80 years after contact. The natives were better fed, better clothed, and healthier than the Europeans who arrived.

Wed, 05/01/2013 - 16:02 | 3519504 EINSILVERGUY
EINSILVERGUY's picture

Actually, the reason the natives lost out was becuase they did not understand or comprehend the western idea of property ownership.  they believed that the land was like water, air or sunshine.  Had they understood this concept they would have recogneized the europeans as a true threat and killed them before they could be resupplied. Once europeans reached a critical mass reinforced with firearms it was a fait accompli

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