1st American Reserve Blog

As of Monday Morning, when we planned to send out this Metals Report, two hurricanes were headed for the Texas Gulf Coast near our border with Louisiana.  First, Hurricane Marco has been downgraded to a tropical storm for the time being, but it may hit our coast Tuesday night.  Hurricane Laura is predicted to be a Category 2 hurricane at present and it is likely to hit near Beaumont on Wednesday night. Although there may be some difficulty reaching us by phone for a while, if the past is any guide, we will relatively soon after the storm passes be able to take your orders and ship products again in a timely manner.

 

Continue reading "Flash Alert! Two Hurricanes are Headed for Beaumont – But We Are Prepared!"

Our 2019 predictions were “right on” for $1500 gold, but our 2020 predictions were too conservative. Back in July 2019, we “boldly” predicted $18 silver by year’s end and $20 silver in 2020. We got the $18 silver within three months and then we got $20 silver by July 21 – then silver kept on rising to nearly $30!

 

Continue reading "Our 2020 Gold and Silver Price Projections Were Too Conservative!"

The U.S. Dollar Index is down nearly 10% (-9.7%) in the last five months, due largely to the massive creation of trillions of new dollars in stimulus money and deficit spending by Congress, plus Federal Reserve liquidity for bank lending in the wake of the COVID-19 pandemic. In time, this is almost certain to fuel a new round of higher inflation and higher gold prices. The gold price rise has begun, and now the inflation rates have started to rise, despite the 2020 recession temporarily dampening consumer demand.

Continue reading "July Inflation Grows at a 7.4% Annual Rate"

One of the most successful investors of the last 50+ years has always had an eye for value. The big headlines on Friday showed that the “Sage of Omaha” was unloading his long-time holdings in U.S.

bank stocks and buying gold stocks. At the mid-point of each quarter (August 15 in this case), hedge fund managers are required to release their holdings to the SEC. We have usually reported any unusual moves in the gold market by these hedge fund managers. This time around, there have been more “first time” gold buyers than usual. For instance, Mason Capital Partners, Sandell Asset Management and Caxton Associates all initiated new positions in the SPDR Gold Trust, which has followed the price of gold by rising about 30% year to date. But there’s no question that the most outstanding rookie buyer in the gold market is Warren Buffett.

 

Continue reading "Warren Buffett Switches from Banks to Gold"

In times past, gold “spiked” to a peak and then fell back, so that the peak would have been a good time to sell bullion.  That is probably not the case this time. Gold has not spiked to a sharp peak, this time around, as it did in 1979-80. This rise has taken five years and this last rise has been gradual. The 2011 rise from $1,500 to $1,900 was fairly sharp, but gold prices stayed above $1,500 for another 18 months in that case.

 

Continue reading "Now is Not the Time to Sell - 1st American Reserve advises"

Gold pierced the $2,000 “barrier” last week and stayed above $2,000 all week, reaching a record high of $2,078. Silver soared to $29.90 before correcting – an amazing 149% run from barely $12 last March. The gold-to-silver ratio had dropped from 125-to-1 in March to a historically normal 70-to-1 Monday. 

Silver’s rapid rise to $29 is not without precedent. In 2011 as well as 1980, silver spiked to nearly $50 an ounce when gold was rising at a more moderate pace. The major reason for silver’s more rapid rise is that it is a much narrower market, so that the same amount of money entering the silver market will drive it much higher than the gold market, on a percentage basis. When the metals markets are rising, silver will often attract more money since it is more affordable to more investors than the higher-priced gold.

Brokerages are starting to back silver: TD Securities said that “Silver continues to outperform and remains our precious metal favorite.… strong investment flows and robust industrial demand combine for strong performance at a time when the microstructure creates a disincentive for silver bullion traders to sell.”   

Here are some of silver’s fundamental market advantages over gold from a trading perspective

Smaller Supply: The annual supply of new silver is around one billion ounces, while the annual supply of gold is 120 million ounces. Using the start-of-year prices of $1515 gold and $18.04 silver, that’s about $18 billion in silver vs. over $180 billion in gold – or 10 times as much gold capitalization as silver.

This explains why silver is far more volatile than gold. If $10 billion moved into the silver market, it would push silver prices up sharply, but it would only move gold up slightly, and it probably wouldn’t budge Apple stock.  Both gold and silver are tiny specks of stock market dust compared to stocks like Apple, now worth $2 trillion – or Microsoft or Amazon.com, worth $1.6 trillion each. It takes 10 years of newly mined gold and silver to equal the market value of Apple, so precious metals are still grossly undervalued.

Affordability. Another reason silver moves faster than gold is that more investors can afford silver than can afford gold. That’s why it’s called “poor man’s gold.” This was the basis of the Presidential elections of the 1890s – the silver (or bi-metallic) standard vs. gold standard. The Eastern establishment favored the gold standard, but the western farmers and miners could not afford to buy even a single ounce of gold.

The Democratic candidate William Jennings Bryan criticized the gold standard and favored inflating the currency by the free coinage of silver, which gained favor in that deflationary age among the debt-ridden farmers whom Bryan championed. In 1896, he gained fame his speech, ending: “You shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold.”

Industrial demand. Silver also has far more industrial uses than gold, so when the global economy recovers, silver should perform better than gold, but that angle is not in play this year. In normal times, silver demand is 60% industrial and 40% investment. This year, silver’s investment angle has prevailed.

ilver is More Volatile than Gold – Like “Gold on Steroids”

Gold pierced the $2,000 “barrier” last week and stayed above $2,000 all week, reaching a record high of $2,078. Silver soared to $29.90 before correcting – an amazing 149% run from barely $12 last March. The gold-to-silver ratio had dropped from 125-to-1 in March to a historically normal 70-to-1 Monday. 

 

 

 

 

Continue reading "Silver is More Volatile than Gold – Like “Gold on Steroids”"

In their popular financial newsletter, Pamela and Mary Anne Aden declared on July 17 that gold is “the best investment in the world today” and told their readers “we want you on board the gold train as it pulls out of the station.”  The Adens outlined some of the reasons why: “Gold is, and always has been, the world’s safe haven. That is, during times of uncertainty, insecurity, economic or political upset, war, devaluations and more, gold has always come out as #1. And this track record goes back more than 5,000 years… 

Continue reading "The Adens Declare “Gold is the Best Investment in the World Today”"

Continue reading "Get to Know the “Team Mike” Professionals at 1st American Reserve Working with Dr. Mike Fuljenz, America’s Gold Expert®"

Last Tuesday, July 28, 2020 Danielle Braff of The New York Times wrote an article about gold storage, a subject that has interested us for a long time. She interviewed a lot of interested parties, with some fascinating facts, but I’m afraid there was some disinformation presented in the article.  She quoted several operators of private bullion vaults, who had a vested interest in recommending against the use of bank safety deposit vaults.

Continue reading "The Best Storage Option for Your Precious Metals"

Goldman Sachs Raises Their 12-Month Forecast to $2,300 Gold and $30 Silver
Goldman Sachs recently upgraded their 12-month forecast for gold by 15%, from $2,000 to $2,300, and they pushed their silver forecast up 36%, from an already-outdated $22 to $30 per ounce. Continue reading "Goldman Sachs Raises Their 12-Month Forecast to $2,300 Gold and $30 Silver"

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