By Zach Scheidt
This post JUST IN: Amazon Prime Gold? appeared first on Daily Reckoning.
Amazon is taking over the gold market.
I’ve seen it with my own eyes!
Last night, I was minding my own business, searching for textbooks for my daughters. This year, their school has moved to digital textbooks — which means we have to buy the Amazon Kindle book for each of their classes.
And as I was looking through the titles, an ad for gold coins popped up.
I guess I shouldn’t be surprised.
After all, Amazon is taking over every other hot market including retail, music, video, cloud computing – and even organic foods through its purchase of Whole Foods.
Call me naive, but I was surprised to see that I could buy a one ounce gold coin with my Amazon Prime account…
Amazon’s Foray Into the Hot Gold Market
Here’s a screenshot of the ad served up on my computer.
Since I’ve been actively researching gold coins and other precious metals, my computer must have cookies that tell Amazon I’m a great candidate to buy gold coins. I wouldn’t be surprised if you saw a similar ad on your computer soon.
Of course, it makes sense for Amazon to break into this market. After all, investors are using precious metals to protect their wealth from inflation and a falling dollar. And according to what I’m seeing, this is just the beginning of a major trend!
If Amazon can capture just a small part of this demand — and mark prices up just a bit on gold and silver coins — the company will lock in some serious profits!
Of course, the gold coin market will only be a small part of Amazon’s growing global business. And by now, you should know that I’m not going to suggest you buy Amazon’s stock. The shares are too expensive and risky.
But the mere fact that Amazon is profiting from selling gold coins should tell us something about the gold market. Specifically, that demand is strong…
Strong Demand From Gold ETF Investors
So where is the demand for gold coming from, and what should we expect in the second half of 2017?
This week, I’ve been reading through the World Gold Council’s second quarter report on the global gold market. And I’ve come across some very compelling statistics.
The first thing that caught my eye was the 56 tons of gold purchased by ETF investors in the second quarter.1
Now to be clear, these are purchases of exchange traded funds that are backed by gold. When investors put money into these funds, the fund managers then have to either buy physical gold, or buy “paper gold” (financial contracts that rise and fall with the price of gold).
I call this the “lazy man’s way” of buying gold.
It’s easy to do in any brokerage account (including an IRA or 401(k) account). If the price of gold moves higher, your ETF investment will increase in value. This of course assumes that the financial markets continue to operate normally.
Demand for gold-backed ETFs helps to drive the price …read more
Source:: Daily Reckoning feed
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