On Wednesday, the Federal Reserve announced it would keep its rates low for a while to allow the economy to recover. The thinking behind the announcement is that with lower rates in effect, businesses would be more inclined to invest, thus stimulating economic activity. The day after the announcement, gold bolted $41.40 to $1,340 an ounce, and silver $0.87 to $20.65 per ounce. Although precious metals are in a customary slow phase as the summer months take hold, investors clearly saw that maintaining a cash position would yield them little or no interest, so they jumped on the opportunity to pick up precious metals at low prices.
Published in Gold Investing
Gold prices bounced off their lows of the month to stabilize around the $1,248 an ounce mark, but there’s nothing to indicate commodities, including gold and silver, have found a floor. It’s probably little comfort to investors that the weakness in prices are reflected across a broad range of commodities including crude oil, gasoline, industrial metals, and food products.
Published in Gold Investing
Monday, 02 December 2013

Gold Continues Lower

Asian demand for physical gold stepped up to slow the fall of gold and silver prices, as demand for bars, coins, and jewelry picked up in China — but it wasn't enough to reverse the recent downtrend. In early trading on Thursday, gold was down another $33.16 to $1,241.74 an ounce; and silver prices firmed up just under $20.
Published in Gold Investing

As we move closer to the end of 2013, and official fiscal-cliff argument toggles back and forth, it’s all too easy to sink into despair. Particularly if you’re a precious metals investor.  What in the world happened to gold predictions of $1,800 by the end of this year?  And what in blazes became of silver predictions surpassing the all-time high of $52 per ounce reached in 1979?  Are precious metals about to tank?

We need to step back and look at the total picture.  In doing so, as recently as a month ago, analyst Jeff Clark offered a graph of the gold price vs. an adjusted monetary base.  His conclusion?  He’s not at all deterred by a short-term consolidation.  His gold prediction for the end by year-end 2014 logs in at $2,500 per ounce.  Given gold’s current tendency to tightly cling to the low $1,700 level, Clark’s gold prediction makes classic sense.


His reasoning is that as long as the Fed sustains quantitative easing “through eternity,” continued printing of money puts an upward pressure on gold prices.  Clark observes further that as prices rise and attract many more investors, supplies will become limited, thus driving up prices even further.  Premiums on coins, he also mentions, tend to rise at times like this. 

Since the great mass of investors waits until prices move very high before buying, others will crowd into the market like sheep, concludes Clark.  “The average investor won’t want to be left behind,” he reasons.  This kind of behavior is generally true of investing in general.  The dot.com mania of the 1990s is a good example.  People rush into a market based on rumor and saturated media coverage.

Peter Krauth, the global resources specialist for Money Morning, is even more ambitious about his silver predictions.  He bases them on a common pattern that’s evident in the relationship between gold and silver.  Although silver moves “almost in sync with gold,” it does so dramatically.  Krauth sees silver as “gold on steroids.”  Consequently, he predicts that the gold/silver ratio will move to 20 in the long term.  Today the ratio of gold-to-silver runs about 52.68.  A move to 20 would suggest silver will move up much faster than gold.  So if gold indeed goes to $2,400 per ounce in 2014, look for silver to move to $120.00 per ounce.

Given this background, we interpret the sluggishness of gold and silver prices as a bullish sign.  Metals have not tanked at al.  Gold and silver are holding their support levels.  This suggests that investors are watching and waiting.  Some may, as UBS suggests, be looking for a better deal.

If you’ll forgive us the play on words, everything now hangs on the fiscal-cliff discussions.  The fundamentals remain in place.  So do not short-change your own gold and silver predictions. Once again we stress, don’t wait to buy.  Better to buy and wait.  Beat the herd.  The precious metals bull market is far from over.

Published in From The CEO

Commodities declined, erasing this year’s advance, on speculation that demand for energy, industrial metals and some agricultural products will slump because of the sluggish global economy.

The Standard & Poor’s GSCI Spot Index (MXWD) of 24 raw materials fell 1.4 percent to settle at 639.3 at 4 p.m. New York time. Earlier, the gauge touched 635.1, the lowest since Aug. 3. The measure also erased 2012 gains in May and July. The last annual drop was in 2008.

The International Monetary Fund cut its 2012 global-growth forecast to 3.3 percent on Oct. 9 from a July prediction of 3.5 percent and said the euro area will contract 0.4 percent. The economy in China, the biggest user of everything from copper to cotton, has slowed for seven straight quarters.


“The commodity complex is very sensitive to the demand destruction that is happening because of the global slowdown,” said Stanley Crouch, who helps oversee $2 billion of assets as chief investment officer at New York-based Aegis Capital Corp. “We are due for a big sell-off in the risk assets, and so commodities will not do well as the macro concerns remain.”

Cotton futures fell the most in 10 weeks, and crude oil dropped to the lowest since mid-July. Gasoline declined for the ninth straight session, the longest slump since at least October 2005. Copper dropped to the lowest since Sept. 7.

European leaders have struggled to contain the region’s debt crisis that prompted Greece, Ireland and Portugal to get bailouts.
‘Collateral Damage’

“People are still worried about demand from Europe and the collateral damage from Europe itself,” said Dan Denbow, a portfolio manager of the $2.1 billion USAA Precious Metals & Minerals Fund in San Antonio. “If Europe continues to slide and if it slides further into recession, does that tip the Chinese soft landing into something worse and therefore hurts commodity demand even more?”

Spain’s economy contracted for a fifth quarter, adding pressure on Premier Mariano Rajoy to seek more European aid. Chinese factories are losing pricing power in the worst wholesale-cost deflation since 2009, signaling company earnings may deteriorate further.

“For a while, global growth is off the table,” said John Stephenson, who helps manage $2.7 billion at First Asset Investment Management Inc. in Toronto. “You’ve got Europe clearly in the middle of a crisis. Commodities go lower and investors should adopt the fetal position.”
Stocks, Bonds

The MSCI All-Country World Index of equities has gained 9.8 percent this year. Treasuries returned 1.5 percent, a Bank of America Corp. index shows, and the dollar declined 0.3 percent against a basket of major currencies.

Coffee, cotton and sugar have posted the biggest declines among GSCI components this year. Wheat in Chicago has gained the most, while corn and soybeans have reached record highs this year, as the most-severe U.S. Midwest drought in five decades scorched crops.

Hedge funds reduced net-long positions across 18 U.S. commodities futures and options by 4.4 percent to 1.18 million contracts in the week ended Oct. 16, the lowest since July 24, government data showed on Oct. 19.

“The problem we have ultimately is that it’s hard to find where the growth story comes from,” Jeffrey Sherman, who helps manage more than $45 billion of assets for DoubleLine Capital in Los Angeles, said in a telephone interview. “What you’re having is a retracement of risk markets.”

The GSCI index gained 6.8 percent in the first quarter, tumbled 13 percent in the second and jumped 11 percent in the third. The gauge posted an annual decline only twice since 1999.

Published in United States Economy
Wednesday, 10 October 2012

US Coin Production Has Huge September

Coin production in the United States had a huge September, especially when compared to August numbers. While September wasn’t the biggest month of 2012 (as it relates to coin production), it was one of the bigger ones, and with the huge jump from August it was a nice sign for United States coins.

More pennies, nickels, dimes and quarters were struck in September for use by the American people. The new quarter depicting Denali National Park in Alaska and have not been issued yet. Even though the new quarter was not issued, it was still counted as part of the number of coins struck and it will be released shortly.


New figures for coin production just hit the wire, and they place the monthly production total at 905.34 million coins, the third highest this year and well above the 811.42 million from September of last year. As you can see, coin production was in full swing last month and may continue that way for the last three months of 2012.

Here are some monthly comparisons dating back a year from September:

September 2011 - September 2012 Coin Production Figures

Month Mintages Rank
September 2012 905.34 M 3
August 2012 655.55 M 11
July 2012 906.62 M 2
June 2012 975.59 M 1
May 2012 819.86 M 5
April 2012 858.04 M 4
March 2012 781.70 M 8
February 2012 579.86 M 12
January 2012 802.50 M 7
December 2011 431.78 M 13
November 2011 715.96 M 9
October 2011 690.66 M 10
September 2011 811.42 M 6

As you can see, September ranks third overall for the year, yet coin production for each coin was up overall for the month when compared to August.

  • 33.7% for Lincoln cents,
  • 98.5% for Jefferson nickels,
  • 11.2% for Roosevelt dimes, and
  • 96.7% for America the Beautiful Quarters

Coin production in the U.S. is very strong right now. The huge jump in numbers from August to September may have something to do with the stimulus that was presented by the Feds, or it may just be that September happened to be a very strong month for coin production.

Either way, we should continue to see strong coin production numbers for the rest of 2012 and into the early part of 2013. How strong? One can never be too sure, but numbers comparable to these September’s numbers seem very possible.

Published in United States Economy
Tuesday, 25 September 2012

Put a Silver Bullet in Your Portfolio

It’s time for another reminder about silver.  At today’s close of $33.995 per ounce, and with a current gold:silver ratio of 51.60, we just can’t ignore the gray metal.  And neither should you.

In the precious metals family, gold is the child that just has to grab all the media and investor attention.  As a result, every once in awhile we feel obliged to put forth a wakeup call about gold’s underestimated sibling – silver.  Silver is more volatile, and exhibits more velocity than gold in a bull market.  And silver is more tied than gold to a very conspicuous industry demand.

In the last four years, silver has soared a whopping 211%, 20% in 2012 alone, whereas gold has spiked 108%.  Recently, silver investment specialist, David Morgan, has observed that there was a great deal of short covering in the silver market.  Professionals in the mining industry short silver over a very long period to hedge production; and when they cover or close out their short positions, it’s a strong indicator that silver is on its way up again. 


Morgan now feels silver is cleared to go above $35 per ounce, if not $40 per ounce by the end of the year – not an outlandish bet at all when you look at today’s closing price.  Although industrial demand was slightly off in 2011, the year before saw production up 18% due to rising demand.  Silver is being used increasingly in health care, computers, cell phones and solar panels, not to mention clothing, bandages and medical devices.

But investment demand also drives silver.  In January and February of 2011 sold as many dollars of silver as they did gold.  Back then, the U.S. Mint advised prospective investors that it was unable to strike more Silver American Eagles.  It announced “The United States Mint will resume production of American Eagle Silver Uncirculated Coins once sufficient inventories of silver bullion blanks can be acquired to meet market demand for all three American Eagle Silver Coin products.” 

Though not recently, the gold:silver ratio has averaged 16 to 1.  As I’ve often stressed, markets have memory.  If industrial demand for silver increases and that ratio took hold once more, the price of silver would surge to over $125 per ounce, over double its all-time high of $52 per ounce price during the infamous Hunt brothers run up in 1979.

You might ask if that’s realistic, or even possible.  Keep in mind, with unlimited quantitative easing in force, assets inflate.  As an industrial asset, silver can inflate along with all others.  And once small investors get involved with precious metals in a big way, many in dire economic straits will opt for the metal with the lower-per-ounce price for asset protection.

What silver can ultimately be faced with, then, is a simultaneous pull from the investment and industrial sectors with gold giving it a push up in price along the way.  When it comes time to diversify your own portfolio, make sure you put a silver bullet in your portfolio.

Published in From The CEO

Gold and Silver American Eagle coin sales generated a huge spike in sales for the month of September. Demand for these wildly popular coins was the biggest since January of this year as increases of 5.1% for gold and 10% for silver have been reported.

September sales of American Eagle silver coins came in at 3,255,000. This accounted for a 13.4% jump over the 2,870,000 sold in August. It was only the second time this year that the 99.9% fine silver coins made it past the 3 million mark. January continues as the 2012 frontrunner with 6,107,000, the second all-time monthly leader on the books. That being said, September was a solid month.


September are not traditionally known for having huge sales figures for silver American Eagles. Last year remains the top September with sales of 4,460,500. Prior to that, orders during the month had peaked in 2010 at 1,880,000. As you can see, except for a few Septembers here and there, sales were always slow for this month.

The gold American Eagles did very well also in September. September sales of American Eagle gold coins came in at 68,500 ounces with every size — one ounce, one-half ounce, one-quarter once, and one-tenth ounce — gaining. It marks a 75.6% improvement over the 39,000 ounces sold in August.

Just like the Silver Eagles, the only better sales month for the coins in 2012 was January when 127,000 ounces were delivered. The same moth last year was also higher at 91,000 ounces.

Despite sales figures being way up in September, overall sales numbers for these coins, and almost every other coin, are still down for the year. As a matter of fact, we are currently running the lowest sales total through the first nine months of a year since safe-haven demand began climbing in 2008 with the Great Recession.

While coin sales are slowly recovering, many have chosen to slow down their buying of certain coins and try to focus on other investments that will help keep their money safe during these tough times. That being said, the spike in sales prices are also a sign that investors and collectors are starting to come back and realize that buying gold and silver coins is actually one of the very best ways to protect your money and invest for the future.

Published in Gold Investing

Don’t look now, but after sales figures for July for the gold and silver American Eagles were released many people wondered if the coins were loosing their grip as the most popular coins around. The answer to that…. NO!. August sales figures were just released an it turns out that that gold and silver American Eagle coins are still as popular as ever.

While numbers are still down overall from the same time a year ago, August 2012 sales of the coins showed a 4.5 percent surge in gold, and a 12.6 percent surge in silver. This was a nice turnaround from the numbers that posted for July sales of the coin, as those numbers were way down across the board.


August sales of American Eagle silver coins tallied to 2,870,000, or 26.0% higher than July’s 2,278,000. Although down 22.0% from the same time a year ago, last month was the second best August in the Eagle’s 26-year history.August sales of American Eagle gold coins advanced 39,000 ounces, up 27.9% from the 30,500 ounces that were sold in July, but also down 65.2% from a year ago. As you can see, numbers are starting to pick up, but are still way down from a year ago when gold and silver American Eagles were selling at a much faster rate.

The America the Beautiful series also continues to perform well, as noted below in the numbers update for this series of coins.

American the Beautiful Sales

  • 2012-P El Yunque National Forest 5 oz. Silver Bullion Coins — up 3,500 to 16,700
  • 2012-P Chaco Culture National Historical Park 5 oz. Silver Bullion Coins — up 9,600 to 17,000
  • 2012-P Acadia National Park 5 oz. Silver Bullion Coins — up 5,200 to 15,100
  • 2011-P Olympic National Park 5 oz. Silver Bullion Coins — up 400 to 85,900
  • 2011-P Vicksburg National Military Park 5 oz. Silver Bullion Coins — up 400 to 39,500
  • 2011-P Chickasaw National Recreation Area 5 oz. Silver Bullion Coins — up 300 to 29,700

As you can see, while these coins are not setting any sales records, their popularity is very much in tact and they continue to sale at a nice pace. Coin buying and collecting is still a major outlet for many investors, as they view it as a way to buy something tangible and a way to strengthen their portfolios and keep their money safe.

Published in Investment Grade Coins
Thursday, 30 August 2012

An Important Reminder About Silver

Friday, August 31, was a significant day for Gold.  The yellow metal spiked $34.60 in one day to wind up at $1,692 per ounce on the tail of Fed Chairman Ben Bernanke’s speech at Jackson Hole, Wyoming.   The precious metals market clearly reacted strongly to his announcement that the Fed will continue to monitor the economy closely, and remain open to a third round of quantitative easing (QE3). 

Published in From The CEO
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