The latter half of April was undoubtedly a historical two weeks for gold. As the start of May approaches there have been a few interesting stories come to light around the topic of precious metals. Here is quick overview of what happened this week in Gold.
Arizona Pushes to Make Gold Legal Tender
The Republican-led Senate gave final approval on Tuesday to a bill that would make Arizona the second state (behind Utah) to recognize gold and silver as true legal tender. The last step would be for Governor Jan Brewer to sign the bill into law. If everything goes through, the measure would take effect in 2014.
This measure is reflective of a growing distrust surrounding the American dollar. With multiple rounds of money printing, a massive national deficit, and inflation still looming over the value of the U.S. dollar – it’s no wonder more states are opting for alternative forms of currency. Furthermore, states such as North Carolina, South Carolina, Minnesota, Colorado and Idaho have entertained similar legislation.
Automatic IRAs in California?
Because Social Security is not enough to retire on, the Obama administration is proposing that employers automatically enroll workers in an IRA. Last year California adopted a version of this bill which would automatically take 3 percent of an employee’s paycheck and deposit into a conservatively managed IRA. The question still remains as to who would manage these accounts and how fees could be kept low enough for it to be viable. Workers may naturally opt out of this automatic withdrawal, yet many experts argue that this automatic savings is actually the best way to save for retirement.
Self-directed IRA’s that include gold and silver may be a viable option here. Depending on how the details are sorted in coming years, employees may have the opportunity to begin purchasing precious metals through their employee sponsored IRA. Custodian issues and fees still need to be sorted out, however this could provide a stable retirement vessel for individuals wanting to provide for their retirement, yet are not sure where to start.
Gold Prices and Chinese Demand
On Monday and Tuesday of this week gold held steady around the $1470 per ounce mark. Wednesday posted a loss for the yellow metal of about $20.00 per ounce; however Thursday saw gold bounce back to its prices earlier in the week. Some experts believe this is due to a recent buying pattern of a unique group of people in China.
According to the radio program “Voice of China”, Chinese housewives have spent over $16 billion dollars in the past two weeks buying up around 300 tons of gold. It’s possible this large demand from China is keeping the price of gold hovering right around the $1470 per ounce mark.