Gemini vs Coinbase â which one is better?

Gemini vs Coinbase – which one is better?

Gemini vs Coinbase – which one is better?

According to a recent report, cryptocurrency searches have almost tripled over the last six months. This is in light of the current COVID-19 pandemic which has brought the world to its knees. People are fully aware that the ongoing crisis is going to adversely affect the economy hence they are looking for a haven to store their wealth. Normally they would turn to gold, but as they say “cryptocurrencies are the new gold.” This leads us to the next very critical question; what is a cryptocurrency? I would like to believe that most of my readers have come across this term before because cryptocurrencies have been making headlines and grabbing so much attention lately. However, for those who have never heard of this term before, you have so much catching up to do; but don’t you worry because I’ve got you covered.

Cryptocurrencies are digital coins whose operation is exclusively online.

Most of them do not have a physical representation. Also, they have the same uses as the fiat money we are accustomed to. Some common cryptocurrencies include Bitcoin, Ethereum, Ripple, Bitcoin Cash, and Monero. One of the many ways in which cryptocurrencies differ from traditional money is in the way that they are acquired. While traditional money is distributed by central banks, cryptocurrencies are bought from online exchanges. As a beginner in crypto, you need an exchange that is user-friendly and available in your country. Very many people want to embark on their cryptocurrency journey but do not know just where to start. Today there are very many exchanges to choose from; Gemini and Coinbase are two of the biggest and most trusted exchanges out here. The following “Gemini vs Coinbase” review explores the two exchanges in such a way that you will be able to make an informed decision about which one suits you best

Gemini vs Coinbase: what is Gemini?

Gemini is a well-respected cryptocurrency exchange which was founded in 2015. Its mane is a reference to the zodiac sign that depicts a pair of twins which is quite clever because it is the brainchild of the Winklevoss twins. Its creators are two of the earliest investors in Bitcoin. With its headquarters in New York and strict compliance with existing regulation; the exchange has quickly become a favorite among high-volume investors and institutional traders. One of its outstanding features is that it offers extra security to its users, unlike most other exchanges. This exchange is all-rounded; it allows its users to purchase cryptocurrencies using fiat money which is not the case for many exchanges. It also offers an “on and off-ramp” to cryptocurrency making it a direct competitor with the likes of CEX.io, Kraken, and Bitstamp. It also offers users a lot of extra security features that are lacking in many exchanges.

Distinctive Features

Has highly respected staples of the cryptocurrency industry
Offers both bank and wire deposit options
Responsive customer support
Allows both cryptocurrency and fiat money withdrawals
Offers advanced trading options in the form of different kinds of buy and sell orders
Within the US, it accepts deposits made using Automated Clearing House (ACH)
Gemini supported states include Hong Kong, Puerto Rico, South Korea, Canada, and the US
Accepts both cryptocurrency and fiat money
Offline storage of cryptocurrency and fiat money to protect from hacking

Coinbase Vs Gemini: what is Coinbase?

Coinbase is arguably the most popular digital currency globally. Its headquarters are currently in San Francisco, California and it was established by Fred Ehrsam and Brian Armstrong in 2011. Coinbase is user-friendly and easy to maneuver as compared to other exchanges. It also offers various options for buying and purchasing different digital assets. Most cryptocurrency exchanges are advanced with sophisticated buying and selling options such as ‘limit orders’ and ‘market orders’. It is the absence of these sophisticated features that make Coinbase well suited for beginners. Once you get accustomed to the exchange you can then progress to GDAX which is a more advanced platform that is associated with Coinbase.

Distinctive features

Available in over 100+ countries including USA, UK, Canada, Singapore, and Australia
It offers very responsive customer support
Deals with both cryptocurrency and fiat money
Offers simplified instant buying options
Bitcoin Cash and Litecoin are available
Both the money and cryptocurrency are stored offline for protection from hacking

Gemini vs Coinbase: How is Gemini better than Coinbase?

Better security

First of all, both exchanges take their customers’ protection very seriously and have additional security measures in place. They both separate the users’ money from the money which they use to operate. And also enforce the two-factor authentication which decreases the likelihood of an account being hacked or phished. Those are just a few of the security measures that both exchanges have put in place.

Gemini however, takes some extreme measures to secure its customers’ funds. They have secured the few digital assets that are stored online in a hot wallet using Amazon Web Services which high level of security controls. Also, only high-level employees can access the coins stored on hot wallets not to mention the hot wallets are accessed through multi-factor authentication (more advanced than two-factor authentication). They use two-level cold storage whose access to cold storage requires the simultaneous actions of more than one employee, thus increasing security. Both hot and cold wallet keys are secured on hardware that has passed a high level of security checks. Lastly, security hardware comes from different manufacturers to prevent supply-chain issues. These extreme measures could be the reason why it was picked by the Chicago Board Options Exchange to settle its Bitcoin futures in 2017. Its high-security precautions make it a better alternative for professional traders who store large volumes of cryptocurrency. However, be advised that exchanges are not suitable for long term storage.

2. Lower fees

Gemini outperforms Coinbase when it comes to fees; they are your best bet to save as much as possible on fees. It does not charge fees for deposits or withdrawals and it only charges a 0.25% or even less fee for trading. Coinbase on the other hand charges around 1.49% for bank transfers and purchases and 3.99% for credit/debit card purchases. Thanks to their very low fees, Gemini is the best alternative for high-volume traders. Most professional traders feel that Coinbase eats a very huge chunk of their profits.

Coinbase vs Gemini: How is Coinbase better than Gemini?

User-friendliness

Coinbase certainly beats Gemini when it comes to user-friendliness. Their website is not only easy to maneuver but also quite responsive. They offer an immediate option for buying and selling digital coins. You can signup, make a deposit into the site and successfully buy your first cryptocurrency in just a matter of seconds. Although the registration at both Gemini and Coinbase is pretty much alike, Coinbase is much easier for a beginner to maneuver. There are no confusing terms, you just log in and conduct your transactions. Gemini is friendlier for experienced traders because it has more advanced features; it offers a clutter-free interface, clean and the options are set out. However, for an absolute beginner, Coinbase is the charm.

Higher trade volumes

Most new users make their first few purchases using Coinbase because it is very user friendly; it is therefore not surprising that the exchange trades more coins than Gemini. For instance, in 5 months. Coinbase can trade over 5.20 BTC while Gemini only trades 1.7 BTC.

Coin availability

While both platforms offer a small variety of cryptocurrencies, Coinbase has a better coin availability than Gemini. They provide Bitcoin, Ethereum, Litecoin, and Bitcoin Cash; while Gemini provides Bitcoin and Ethereum only. This makes Coinbase a better option for traders who prefer to deal with a wider variety of coins.

Extensive deposit methods

Coinbase and Gemini both have different ways of funding their customers’ accounts. However, Coinbase offers more extensive deposit methods; their customers can buy their digital coins using a debit card, a credit card or a bank transfer. While Gemini only offers the bank transfer option. Cryptocurrency deposits are welcome for the specific cryptocurrencies supported by either exchange. Withdrawals follow the same deposit methods for either exchange.

Offers higher purchasing limits

Coinbase does not give any clear limits on new customers; instead, these limits are dictated by factors such as account verification, buying history and account age. The customer’s limit is shown on his/her account’s verification page. Bank transfer limits can reach up to $5,000 per week while credit card limits can go up to $60 per week. Gemini, on the other hand, has predefined bank transfers purchasing limits of $ 500 per day. Therefore, Coinbase is your better option if you are looking to immediately lock in a price higher than $500. Lastly, both Gemini and Coinbase offer wire transfers for those users looking to deposit larger sums; though prior direct communication with them is mandatory.

Conclusion

There you have it! Our complete guide of Gemini vs Coinbase. I hope that helped in distinguishing between the two exchanges. Coinbase is recommended for beginners; despite its high fees the convenience and user-friendliness are commendable. It is also the best option for you if you want to use a credit card. Gemini, on the other hand, is best for experienced traders, those who want to take their trading to another level. It is also a great option when it comes to saving on fees. With both sites being trustworthy, secure and very responsive to their customers; the winner of the Gemini vs Coinbase battle boils down to the user’s needs and preferences. What do you think? Which one is better? Is it Gemini or is it Coinbase?

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https://zerocrypted.com/gemini-vs-coinbase-which-one-is-better/

David

March ructions deter bullion banks from gold futures

photo of three poured gold bullion bars“Big bullion banks including HSBC have pulled back from trading gold futures after disruption in the market that flared up in the coronavirus crisis.”

USAGOLD note: An interesting look at what happened back in March when COVID-19 disrupted the flow of bullion in the gold market and affected settlement on the COMEX. Some bullion banks were caught short forcing them to take a major mark to market loss when premiums bolted higher. Delivery first notice day, by the way, was yesterday (5/28/2020), so we will see in time whether or not a similar event to March is in progress on the June contract.

Henry Sanderson/5-27-2020

David

The precious metals continue to climb to higher pricing

As the last trading day of the month comes to a conclusion, precious metals futures traded moderately to strongly higher on the day. Today’s gains were felt across the metals.

However, none of the other metals could keep up with the precious ore and today could be summed up by the lone ranger himself “Hi-Ho silver away!”. SI futures were running like a horse in the Kentucky derby and in addition to earlier gains this month, silver galloped over 20% higher for the month.

The gains in silver were superb with the precious white metal gaining 2.88%. The July futures contract closed at $18 48 ½ cents, after factoring in today’s gains of almost $0.52. Technical studies indicate that resistance first starts at $18.65 per ounce, with major resistance at $19.

Gold also had a very strong finish closing higher on the day, as well as higher on the month. Gold futures basis the most active August 2020 contract gained $14.70 (+0.85%) and is currently fixed at $1743 per ounce. Our technical studies indicate that the first level of resistance occurs at $1765, with major resistance at $1788 per ounce.

Palladium futures gained 1.73%, a total of $32.90 with August futures closing at $1934.50. Platinum gained $5 in trading today, with the most current July futures currently fixed at $873.10 per ounce.

Strength in the precious metals this month can be attributed to two factors. The first of which is the global pandemic which has resulted in economies worldwide contracting. This global contraction of GDP has resulted in central banks worldwide taking emergency measures to aggressively curtail the economic damage.

The Federal Reserve along with the U.S. Treasury Department have taken dramatic steps infusing approximately $6 trillion in aid relief packages to individuals, small businesses and corporations. The massive government stimulus was a major underlying reason that both global equities and precious metals moved higher this month.

The second factor contributing to this month’s dramatic rise in the precious metals is due to the increased tensions between the United States and China. This tension stems from the recent unrest in Hong Kong, and the response by the United States.

Yesterday U.S. Secretary of State, Mike Pompeo declared Hong Kong to be no longer autonomous from China. That was followed by today’s press conference President Trump held in the White House Rose Garden. During this conference President Trump announced that the United States is leaving the World Health

Organization, and will begin to revoke Hong Kong’s special status. He also said that the United States would move to sanction Chinese officials if they continue to smother Hong Kong.

The economic fallout will take years before economies globally return to their pre-pandemic levels. It is also highly likely that the tension between the United States and China will continue. As such these two factors could have a profound impact on precious metals pricing taking the entire complex higher.

By Gary Wagner

David

The bubble is building; how did famed gold investors make their fortune?

Famed investor Stanley Druckenmiller has recently said that the current return to risk ratio in broad equities is the worst that he has ever seen in his career, and that is the sentiment shared by Bob Thompson, portfolio manager at Raymond James.

Thompson told Kitco News that this market is “entirely liquidity driven.”

74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

“This market rally has been totally fed by the Fed over time. The bubble is building. We have corporate debt. Here in Canada, we have massive consumer debt,” he said. “This is how it happens. People are going to blame the coronavirus for this, but the coronavirus is just the pin that popped the bubble. The bubble was already there.”

Thompson’s comments come as China passed legislation to enact special security laws in Hong Kong that could strip away the city’s autonomy and freedoms, analysts say.

“People have to realize that China is a communist country. They use capitalism to their advantage…so sooner or later they were probably going to do this to Hong Kong. I think they chose this opportunity because things are in a bit of turmoil right now anyway. So obviously it’s going to be a big issue with trade going forward and the coronavirus is going to be played as a political issue so we can blame somebody,” he said.

However, with the Federal Reserve continuing to pump liquidity into the monetary system, investors are likely to shrug off any escalating tensions between the U.S. and China for now.

In terms of investing strategies that have worked, Thompson’s book “Stock Market Superstars” details the way some of the best fund managers have picked stocks, one of whom is Eric Sprott, former chairman of Sprott Inc.

“There were a few things that I learned, one of them I learned from Eric [Sprott] is conviction. You have to have conviction, you can’t pay attention to what other people are saying. You have to do your own research,” he said. “There’s a saying, ‘stock market corrections are when stocks are returning to their rightful owners’ and I think that’s a great strategy, because if you have conviction you’re going to stick with it.”

By Kitco News

David

âRocks beat stocks’ gold is still on its way to $1,900 â Bloomberg Intelligence

‘Rocks beat stocks’ gold is still on its way to $1,900 – Bloomberg Intelligence

The gold market has seen consistent selling pressure since hitting a 7.5 year high last week, but one analyst said that investors need to keep their eye on the bigger-long term picture.

Mike McGlone, senior commodity strategist at Bloomberg Intelligence, said that gold is just starting its bull rally and investors shouldn't get caught up in the short-term price action, "missing the forest for the trees."

McGlone described the latest price action in gold as "noise within the trend."

"The next really big step for gold is getting above $1,900; it's just a question of time," he said, "I don't see what it is going to take not to go higher and I can think of a dozen reasons for it to go higher."

With the Federal Reserve expected to maintain its extremely loose monetary policy and the global economy nowhere near the road to recovery after being disseminated by the COVID-19 pandemic, gold will remain in a long-term uptrend.

As to what will be the catalyst to drive gold prices to its next stage in its bull run, McGlone said he is looking at over-valued equity markets. McGlone's comments come as the S&P 500 pushed to its highest level since early March, closing Wednesday's session at 3036 points.

"The equity market, I view as delusional at these levels," he said. "I don't think equity prices are sustainable at these levels and that is the biggest debate on the planet, I think right now. The rock is beating stocks."

With more than 30 million people applying for employment in the U.S. even as lockdown measures around the country start to ease, McGlone said that a recovery won't mean business as usual.

"I don't think we're going to come back to the old days of spend what you can right away. We're going back to saving and preparing for the worst, which means more demand for things like gold and bonds," he said. "And there's no more yield in bonds."

As to the timing of his call for gold prices at $1,900, McGlone said that if equity markets see another sharp correction in the fall, then gold prices could be at his target by the end of the year or early 2021.

By Kitco News

David

How the immune system works

Our immune system is essential for our survival. Without an immune system, our bodies would be open to attack from bacteria, viruses, parasites, and more. It is our immune system that keeps us healthy as we drift through a sea of pathogens.

This vast network of cells and tissues is constantly on the lookout for invaders, and once an enemy is spotted, a complex attack is mounted.

The immune system is spread throughout the body and involves many types of cells, organs, proteins, and tissues. Crucially, it can distinguish our tissue from foreign tissue — self from non-self. Dead and faulty cells are also recognized and cleared away by the immune system.

If the immune system encounters a pathogen, for instance, a bacterium, virus, or parasite, it mounts a so-called immune response. Later, we will explain how this works, but first, we will introduce some of the main characters in the immune system.

White blood cells

A white blood cell (yellow), attacking anthrax bacteria (orange). The white line at the bottom is 5 micrometers long.

Image credit: Volker Brinkmann

White blood cells are also called leukocytes. They circulate in the body in blood vessels and the lymphatic vessels that parallel the veins and arteries.

White blood cells are on constant patrol and looking for pathogens. When they find a target, they begin to multiply and send signals out to other cell types to do the same.

Our white blood cells are stored in different places in the body, which are referred to as lymphoid organs. These include the following:

Thymus — a gland between the lungs and just below the neck.

Spleen — an organ that filters the blood. It sits in the upper left of the abdomen.

Bone marrow — found in the center of the bones, it also produces red blood cells.

Lymph nodes —small glands positioned throughout the body, linked by lymphatic vessels.

There are two main types of leukocyte:

1. Phagocytes

These cells surround and absorb pathogens and break them down, effectively eating them. There are several types, including:

Neutrophils — these are the most common type of phagocyte and tend to attack bacteria.

Monocytes — these are the largest type and have several roles.

Macrophages — these patrol for pathogens and also remove dead and dying cells.

Mast cells — they have many jobs, including helping to heal wounds and defend against pathogens.

2. Lymphocytes

Lymphocytes help the body to remember previous invaders and recognize them if they come back to attack again.

Lymphocytes begin their life in bone marrow. Some stay in the marrow and develop into B lymphocytes (B cells), others head to the thymus and become T lymphocytes (T cells). These two cell types have different roles:

B lymphocytes — they produce antibodies and help alert the T lymphocytes.

T lymphocytes — they destroy compromised cells in the body and help alert other leukocytes.

BOOST YOUR IMMUNE SYSTEM

David

Gold futures selloff strongly as it closes below spot gold

Gold futures basis the June 2020 Comex contract closed down $30.50 (-1.76%), and is currently fixed at $1705.10. The June contract traded to a low of $1700 before recovering slightly. At the same time spot gold is currently trading down $17.30 and fixed at $1710.30.

Today’s lower pricing has created an inversion between gold futures (the June contract) and spot pricing, with spot above the futures contract prices. This selloff occurred with strong tailwinds provided by dollar weakness. According to KGX (Kitco Gold Index) spot gold actually sold off by $32.85. However, after factoring in a gain of $15.55 directly attributable to dollar weakness selling in gold as well as all the other precious metals was limited due to a weak dollar.

All of the precious metals traded lower on the day. A large component of today’s lack of safe haven allure was the strength of U.S. equities which traded strongly higher. According to MarketWatch, “Gold futures ended lower on Tuesday as global equities rallied, in response to the lifting of business lockdowns as the coronavirus pandemic recedes, along with encouraging reports of progress toward a COVID-19 vaccine, dulling the yellow metal’s haven appeal.”

The S&P 500 traded to a high of 3021 before closing just below 3000 at 2991.77, resulting in a net gain of 1.23% today. The Dow Jones industrial average gained over 500 points (+529.95) closing just shy of 25,000 points and gaining 2.17% today. This is the highest-level U.S. equities have traded to since the pandemic began reached America in mid-March. This caused investors to re-focus on positive signs and optimism as restrictions were eased in the United States.

Based on our technical studies, gold futures broke below critical levels. First the 23.6% Fibonacci retracement level at $1709.40. More importantly breaking below the support trendline based upon the previous lows since the middle of April to current pricing.

Although it is noteworthy that gold futures held above the key psychological level of $1700, and in fact that was the intraday low. However, if this level does not hold the next support level does not occur until $1660 per ounce, the 38.2% Fibonacci retracement level. The Fibonacci levels cited above are based upon data set which begins mid-March when gold traded at $1450 per ounce, up to this year’s high at $1788.

By Gary Wagner

David

What Is your Immune system?

What Is Your Immune System?

You’ve heard of your immune system. But how much do you know about it?

There’s a good reason to find out. When you understand everything that it does for you, and how everyday things affect it, you can help it keep you well.

1. It Looks Out for You

Your immune system works to root out germs and other invaders that have no business in your body.

For example, if you inhale a cold virus through your nose, your immune system targets that virus and either stops it in its tracks or primes you to recover. It takes time to get over an infection, and sometimes you need medicine to help, but the immune system is the cornerstone of prevention and recovery.

2. It Likes It When You Relax

Do your best to tame your stress. When you’re wound up, your immune system doesn’t work as well as it does when you’re confident and mellow about your challenges. That may make you more likely to get sick.

3. It’s Got Agents Standing By.

Other than your nervous system, your immune system is the most complex system in your body. It’s made up of tissues, cells, and organs, including:

4. It Learns From Your Past

You’re born with a certain level of protection, or “immunity.” But it can get better.

Think of a baby or young child who comes down with colds, earaches, or other everyday illnesses often and babies who are breast feed continue to get antibodies from their mother while they are making their own.. Their immune system is creating a "bank"of antibodies as they are exposed to illnesses for the first time, enabling them to fight off future invaders.

Vaccines work in much the same way. They turn on your immune system by introducing your body to a tiny amount of a virus (usually a killed or weakened one). Your body makes antibodies in response that protects against threats like measles, whooping cough, flu, or meningitis.Then, when you come in contact with that virus in your everyday life, your immune system is already primed to kick in so that you don’t get sick.

5. It Can Change Over Time

Your immune system can become less effective as you get older. That can make you more likely to get sick or get infections. You are also more susceptable to infections as you age or if you have a weakened immune system.

6. Medical Conditions that Weaken your immune system

Conditions which can weaken you immune system include:

autoimmune diseases

cancer

steroids

chemotherapy

7. You Can Help It Out

The classic things that keep your heart, brain, bones, and the rest of you well are also good for your immune system:

Eat nutritious foods.

Stay active.

Work to keep your weight healthy.

Don’t smoke.

If you drink alcohol, keep it moderate (no more than one drink a day if you’re a woman, and two drinks daily if you’re a man)

Boost your Immune System

David

Why is gold not rallying? This research points to ‘market manipulations on a scale rarely seen before’

Why is gold not rallying? This research points to 'market manipulations on a scale rarely seen before'

Shouldn't assets like gold and bitcoin be trading higher, especially with all this COVID-19 uncertainty? This is the question one U.K. research team asked with results pointing to major market manipulation.

“We are witnessing financial market manipulations on a scale and frequency that have rarely been seen before. The lack of integrity by a few powerful market players is causing a major financial market melt-down from which the current form of our global economy may never recover,” said University of Sussex Business School professor of Finance Carol Alexander.

The analysis was conducted by the University of Sussex Business School’s CryptoMarketRisk project team, which tracked trades in financial markets and reported large-scale manipulation that went unnoticed by the busy regulators.

“The CryptoMarketRisk team at the University of Sussex Business School have been tracking trades on these markets in recent months and have detailed huge sell orders on gold futures, massive pump and dump on copper futures and large spoofing orders on key crypto exchanges,” University of Sussex said on its website earlier in May.

“Some single trades on COMEX have been so large as to move prices – clear contraventions of U.S. laws on market abuse. But widespread market turmoil means regulators such as the CFTC have a lot on their plates right now, meaning even large-scale manipulation of these markets to remain below the radar of regulators,” the university added.

The university’s study pointed to these manipulation as the reasons why gold and bitcoin did not see a surge mid-March when markets saw major selloffs across the board.
“As funds flow out of equities one would expect demand for gold and bitcoin to increase. But this time around, safe havens have behaved completely differently. Gold and bitcoin have fallen at the same time as US equities,” Alexander wrote. “As the S&P 500 crashed in March 2020, gold had its worst week in eight years when it should have been its best, because of massive shorts on COMEX gold futures. Bitcoin has also been driven down by some pretty obvious manipulation bots on the unregulated crypto derivatives exchanges, especially BitMEX.”

The study also made comparisons to the 2008 financial crisis by looking at the relationship between the S&P 500 index and gold.

“Following the Lehman Brothers collapse in September 2008, the correlations between the S&P 500 index and gold, or the Swiss Franc, or US Treasuries were all around minus 40%. During March and April 2020 the correlation between the S&P 500 index and gold was plus 20%,” the University of Sussex said.

The researchers ran similar calculation with bitcoin and the U.S. dollar.

“Even more surprising is the behaviour of the bitcoin/US dollar rate – since this cryptocurrency emerged in January 2009 its behaviour was completely uncorrelated with any traditional asset, but as the S&P 500 index plummeted in early March 2020, so did bitcoin. Their correlation was plus 63% then, and it remains unsettlingly high at 40%,” the university’s post stated.

Those who stand to gain the most from this are holders of the U.S. dollars and U.S. assets, the post continued. “These become the main sources of positive returns for global investors in attempts to curtail the recent trend of some central banks to diversify their reserves away from the U.S. dollar,” it said.

By Anna Golubova
For Kitco News

David

How Would Gold Perform In a Second Stock Market Crash?

1929… the 1970s… 2000… 2008… and now 2020?

In the biggest stock bear markets over the past nine decades, there was an initial crash… followed by a big bounce… and then a more severe selloff, a “second leg down” if you will.

Could it happen again?

As Mark Twain said, “history doesn’t repeat itself but it often rhymes.”

And some of the world’s most successful hedge fund managers are convinced a second drop is coming…

Billionaire David Tepper, considered one of the world’s most successful hedge fund managers, said last month that “stocks are the most overvalued I’ve seen in my career.”
Stanley Druckenmiller, whose net worth is $4.7 billion, says “the risk-reward for equities is maybe as bad as I’ve seen it in my career.”
So-called bond king Jeffrey Gundlach says, “I’m certainly in the camp that we are not out of the woods… I think a retest of the low is very plausible.” He said at the same time that he initiated a short position against the stock market.
Billionaire Mark Cuban says “the stock market is overvalued… it’s almost impossible to predict where consumer and corporate demand is going to come from. And because of that, it’s hard to create a valuation for businesses.”

With trillions of stimulus flooding the market, I don’t know if we’re looking over the cliff at another crash in the stock market or not. Even Mike Maloney mentioned that stocks could just as easily melt up as they could melt down.

But if we do get another leg down, I wanted to know… what happens to gold in the “crash after the crash”?

Gold in Second-Leg Crashes

I examined the four biggest bear markets in US stocks, ones that included a bounce and then a “second” leg down, and measured gold’s performance during each of those second selloffs. I had an idea of what I might find, but even I was surprised at the results. If you own gold I think you will be, too…

1929 – 1933

The stock market crash of 1929 kicked off the Great Depression. After that initial selloff, stocks bounced over 20%, but then proceeded to fall an incredible 84.5% over the next two years.

As most of you know the gold price was fixed during this time, and President Roosevelt nationalized it in 1933 anyway. But investors could own gold stocks as a proxy. Gold equities saw huge buy volumes during the Great Depression.

Here’s how the largest gold producer in the US at the time, Homestake Mining, performed during the Dow’s second leg down.

Homestake Mining—what some investors bought since they couldn’t own gold—ROSE 87.5% during this period. You can see it went on to rise much further, but from the beginning of the Dow’s second leg down to its eventual bottom, this proxy for gold ownership soared.

1973 – 1975

The mid-1970s was an ugly period for stock investors. The S&P 500 fell 20% in the first seven months of 1973. It then bounced 10%, but reversed into a second decline that lasted a year and resulted in a 44.1% drop.

Here’s how gold did during that second leg down.

Gold ROSE 52.7% in that second leg down. It eventually eased off when stocks started to climb again, but during the dark days of the second crash, it once again soared.

2000 – 2002

In early 2000 the S&P 500 was toppy and choppy. It fell as much as 10% but then gained that and more back. But that second leg down got ugly, as the S&P fell 48.9% over the next two years.

Here’s how gold did during that second leg down.

The gold price ROSE 15.3%, while the S&P fell by almost half.

Keep in mind this was during the “tech wreck” when the Nasdaq fell 66%.

You could talk me into starting the “second” leg down later, and if so the S&P’s loss would’ve been lower, but the gain in gold would’ve been higher.

Either way, the message is the same: gold once again rose during the second leg down for the broad stock market.

2007 – 2009

We all remember the Great Financial Crisis that started in 2008. Stocks starting falling in late 2007, the S&P dropping 16% in five months. It bounced about 10%, then began a second leg down and fell 52.5% over the next 10 months.

Here’s how gold performed during that second ugly downdraft.

The gold price ROSE 5%. That’s not as much as the prior ones, but it logged a gain during the period when stocks lost over half their value.

So, what do we conclude from this?

Gold Has Risen in Major Second Down Legs

In the stock market’s four worst bear markets, ones that included a major second leg down, the gold price has risen every time. It may suffer in the initial crash that kick-starts a bear market, but in these worst cases the demand for gold—and the price—surged when stocks started a second leg down.

Is that what gold will do if stocks crash again today? History is on our side, but whatever is ahead it’s reassuring to know that gold doesn’t follow stocks, and instead does what it’s done for centuries: serve as a hedge, as a store of wealth, and as the strongest form of money mankind has ever had.

Jeff Clark, Senior Analyst, GoldSilver.com

David