Daily Market Report

Gold Stagnant – Plus Bitcoin Update

Stagnant Gold prices are not helping attract the professional players into the market. The price of Oil at a 4 year high trading over $70 dollars pulling some Wall Street Gold traders into a market with more upside potential and more volatility.

A stronger U.S. Dollar keeping a lid on any Gold rally and the price of Silver is just treading water at these levels.

Continued strong corporate earnings reported keeping the average investor in the equity market.

Overall compliancy has settled into the equity markets and unless something changes in that market or the U S dollar sells off significantly versus other currencies, the price of Gold has little chance of obtaining a sustained rally.

News From the Cryptocurrency Front

On Friday, Goldman Sachs became the first Wall Street Bank to announce that they are moving forward with plans to set up the first Bitcoin trading operation on the street. This is a move that could create more legitimacy to the cryptocurrency and lend further support to the CME’s decision to take on Bitcoin as a future’s cash settled contract.

While Goldman is not initially going to be buying and selling actual Bitcoins the Bank is going in that direction looking for the possibility of receiving regulatory approval and how to address the high risks associated with trading this type of product.

Since we have been receiving many questions regarding the Bitcoin craze and the new Blockchain platforms, I decided to once again write about the relationship between Blockchain and the Cryptocurrency.

In the past we had spoken about the practical applications in the Blockchain network and how Cryptocurrencies fit into these platforms.

I'll try to keep it simple. First let’s talk about how Blockchain network works. A Blockchain is a highly encrypted and verified shared document, in which each entry in the chain must be confirmed and verified chronologically before the process can continue. Picture it as a computer spreadsheet that is duplicated thousands of times across a network of computers. You can also call it an incorruptible program of anything of value.

What makes the Blochchain technology so exciting is the thousands of potential applications being developed. The Blockchain system is going to change everyone’s life from the way you transact business or manage your assets , to the way you use your computer applications, vote, rent a car, and eventually prove who you are.

Just think how this technology can transform banking transactions, personal hospital records and government data such as social security records and driver licenses. All these applications that you control who has the right to see them.

Currently, there are hundreds of developers working with private enterprises, corporations and governments starting to offer specific applications as needed.

Now to explain how Bitcoin relates to the Blockchain.

Bitcoin is a digital currency launched in 2009 with the intention of simplifying online transactions by bypassing government control of currency. It does this by storing and transacting the currency over a Blockchain network. Bitcoin is not a Blockchain in itself. Rather you can describe the Blockchain as the operating system and Bitcoin as one of the many applications on the Blockchain network.

Cryptocurrencies, or digital coins as they are also known, are bought and sold through an electronic network. You can buy or sell your Bitcoin or one of the hundreds of other currencies offered in the network. The Blockchain of cryptocurrencies is a community record across the globe where each node in the network records and verifies the data of each transaction that occurs in that network.

Each computer on the network competes on unscrambling the answers, and the winning computer adds this ‘block’ to the ‘blockchain’ in the order that the ‘block’ arrived. The winner broadcasts his proof to the rest of the network, which checks that proof and verifies it before queuing the ‘block’ to complete the transaction. Parties involved are assured that participants have screened and okayed the transaction.

For someone as old as I am, this is where I fall off the ship. I understand the concept, but how these transactions occur behind the scenes makes me uncomfortable. I’m an old brick-and-mortar guy. Nonetheless, it is important to understand the basics because Blockchain applications are here to stay and will affect everyone on the planet in the years to come.

I hope I gave you some understanding on how this works. To clear my head I’m going up to the attic to try and find my yo-yo and top. Life was much simpler then.

Have a wonderful Monday.

Investing in Precious Metals

Many Investment advisors recommend precious metals as part of a properly diversified portfolio to provide capital appreciation, liquidity, and a hedge against conventional paper assets. Because precious metals are counter-cyclical to paper assets, a diversification into gold, silver, and platinum can therefore reduce the total risk of your overall portfolio and preserve your wealth. History supports the premise that investment in precious metals is the best protection against uncertainties in the future.

Market Insights Newsletter

Sign up for the free newsletter

Sign Up