Can Gold and Silver Be Used as Legal Tender in Texas?

Cassie Bastien

4/5/2017 10:15:24 AM

Daily Gold & Silver Market Report – 04/05/2017

Texas Sen. Bob Hall introduced Senate Bill 2097 March 10, which “includes a number of provisions to establish Gold and Silver as legal tender in Texas,” TenthAmendmentCenter.com Communications Director Mike Maharrey said. “The bill authorizes the payment of taxes and fees in Gold and Silver in certain circumstances [and would prohibit] the seizure of Gold or Silver by state authorities.” Interestingly,Texas is not the only state to consider Precious Metals as legal tender. Other states include Utah and Louisiana. Article I, Section 10 of the U.S. Constitution says, “No State shall…make any Thing but Gold and Silver Coin a Tender in Payment of Debts.” SB2097 takes a step toward that requirement, long ignored by all states. Maharrey says, “Such a tactic would undermine the monopoly or the Federal Reserve by introducing competition into the [government's current] monetary system.” That being said, there are steps that must be taken at the state level to promote the use and acceptance of Gold and Silver, and that itself could take time.

Gold Spot Steady Ahead of Trump Meeting

Investors are taking a step back from riskier assets ahead of a meeting between U.S. President Donald Trump and Chinese President Xi Jinping Thursday and Friday. Additionally, the Federal Reserve's March meeting minutes are scheduled for release Wednesday and investors will be looking for clues on further U.S. interest rate hikes. Reuters Reporter Sethuraman NR said, “Spot Gold on Tuesday hit its highest since Feb. 27 at $1,261.15 [per ounce], but failed to close above its 200-day moving average for the third time this year.” Jiang Shu, Chief Analyst at Shandong Gold Group, said, "Whether the Federal Reserve would raise rates in its June conference is not very certain. The market is waiting for more economic indicators from the U.S and speeches from Fed officials to assess the probability of a rate hike in June." Sethuraman noted spot Gold prices have only climbed “nearly $60 since the rate hike in March” as uncertainty surrounds President Trump's polices and European elections have increased the appeal of safe-haven assets such as Precious Metals. Shu says if this meeting between President Trump and President Jinping does not turn out well, “we might see a weak U.S. dollar and rising Gold price.”

Crude Oil Rises to Four-Week Highs

On reports of a North Sea oil field possibly shutting down and a decline in U.S. supplies, crude prices rose to a four-week high. Bloomberg reporter Mark Shenk said, “Futures advanced 1.6 percent in New York, as market observers prepared for a U.S. Energy Information Administration (EIA) release on stockpile figures Wednesday.” A Bloomberg News survey of analysts found U.S. crude supplies were expected to have dropped 150,000 barrels last week. Bob Yawger, Director of the Futures Division at Mizuho Securities USA Inc. in New York, said, "There’s an expectation, one that I don’t share, that the EIA and American Petroleum Institute (API) will report crude draws. Gasoline inventories are supposed to continue to draw." Even as the number of active U.S. oil rigs rose to its highest since September 2015 and Libya was said to restore production, Organization of Petroleum Exporting Countries Secretary-General Mohammad Barkindo said Sunday that he is “cautiously optimistic that the market is already rebalancing.”

• A Bloomberg News survey shows crude output by OPEC members fell by 200,000 barrels a day in March, helped by cuts in Nigeria and Libya that aren’t part of a production-curbing accord.
• Oil rose 5.5 percent last week, the most since December, after Kuwait and other members of OPEC joined with Oman to voice support for an extension of the six-month output cuts that began in January (Bloomberg.com). 

At 11:15 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,250.20 Up $8.70
• Silver, $18.35 Up $0.07
• Platinum, $963.70 Up $0.80
• Palladium, $815.90 Up $7.00

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