1st American Reserve Blog

Gold rebounded early Monday, November 16, to nearly $1,900 per ounce ($1,897.20) as the U.S. dollar weakened. The move marked a recovery from its sudden $100 drop a week before, when Pfizer announced a COVID-19 vaccine and raised hopes for a sudden end to the pandemic.

Gold fell on Monday, November 9, from $1,960 To under $1,860 an ounce in under six hours, from 6am to noon (EST), based on preliminary announcements of an effective COVID-19 vaccine being available, however that conclusion is premature and there is no reason why a solution to COVID-19 should in any way be related to the price of gold. The Congress and the Fed have already over-spent $3+ trillion in 2020 and they are on track to over-spend by at least $1 trillion per year under President Joe Biden, especially if Biden succumbs to the policies of Kamala Harris, Bernie Sanders and Alexandra Ocasio-Cortez.  Either way, future deficits will only escalate, driving the price of gold and silver much higher.

John Linscomb, an assistant manager at 1st American Reserve, joined the company 17 years ago. His background is interesting in that he grew up on a cattle ranch and continues his love of the outdoors. During hunting season, when he is not in the office or spending time with his family, you can find John in a deer stand. In the summer, he is known to hook a few lunkers, as well.

John is especially proud of 1st American’s A+ rating with the Better Business Bureau and the fact they have been accredited with the BBB since 2002.

Giant banks like Bank of America and Goldman Sachs say that silver could double to $50 per ounce if Joe Biden wins next week’s presidential election, primarily due to enactments of some elements of the New Green Deal, which could double silver’s industrial demand for solar panels and other applications.

First, we are likely to see commemorative versions of the Morgan and Peace dollars in 2021 to mark the centennial year of the final Morgan dollar and first Peace dollar in 1921. In mid-1921, we will also see a change in the reverse design of the gold and silver American Eagles. These will engender new interest in both the old and new designs and generate new interest in coin collection, resulting in numerous new ads posted in various media, which generates new customers. Experience has shown us over the years that about one out of six of these many new buyers of bullion coins later turns into buyers of numismatic coins, strengthening the market for years.

Gold doesn’t need inflation to soar, just so long as gold delivers a “real” positive return – a positive gain after inflation, especially in comparison to prevailing short-term interest rates.  With the Federal Reserve now promising to keep interest rates at or near zero through 2023, investors can accumulate gold with confidence that it will deliver real returns for at least the next three years, and likely much longer, due to the huge infusion of new fiat currency and federal deficit spending this year and for many years to come.

Now that many leading mainstream banks have raised their gold price target and have recommended a significant portion of one’s portfolio be in gold, it’s time to make sure that your regular portfolio and your retirement portfolio are properly balanced in precious metals. After all, as the Bank of America said when it raised its target price of gold to $3,000, “The Fed Can’t Print Gold.”

The U.S. Department of Labor reported last week that its Producer Price Index (PPI) rose by 0.3% in August (a 3.6% annual rate), higher than the economists’ consensus expectation of a 0.2% increase. Service costs rose 0.5% in August, and some commodities have risen spectacularly in price since March. Lumber and silver have more than doubled in the last six months, while copper and gold have each risen over 40%.

Now that many leading mainstream banks have raised their gold price target and have recommended a significant portion of one’s portfolio be in gold, it’s time to make sure that your regular portfolio and your retirement portfolio are properly balanced in precious metals. After all, as the Bank of America said when it raised its target price of gold to $3,000, “The Fed Can’t Print Gold.”

Now that gold prices have set a new high, we have seen more price predictions above $3,000 per ounce. This week, I noticed that the same person who once bet my friend Gary Alexander that gold would fall below $1,000 in 2017 – and later predicted gold would go above $3,000 – has now predicted $5,000 gold.

Gold has been rising when the dollar falls and falling a bit when it rises, but when the dollar begins to fall farther and faster, you can expect a strong rush to gold, as has been happening in Turkey and – to a lesser extent – in countries like Russia and Argentina, where their currency is chronically weak. The Wall Street Journal wrote about this last week in an article entitled, “In Turkey, Weak Lira Powers Fresh Gold Rush: Turkish households bought record volumes of gold this summer – and safe boxes to keep it at home.”  

We have been telling you about a wide array of changes coming in U.S. coins. First, we heard about the new Morgan and Peace dollars probably coming in 2021 to mark the centennial of the final Morgan dollar year and first Peace dollar year. Then we heard about a new change in the American Eagle reverse designs in 2021. These new coin issues next year will create great interest in old and new collectors and in precious metals in general, with new ads posted in the media, generating new customers and new national interest.

Big Banks Say that Silver Could Double to $50 with a Biden Victory
Giant banks like Bank of America and Goldman Sachs say that silver could double to $50 per ounce if Joe Biden wins next week’s presidential election, primarily due to enactments of some elements of the New Green Deal, which could double silver’s industrial demand for solar panels and other applications.

“Investors help, but industrial demand ultimately moves the needle” for silver prices, wrote a team of Bank of America strategists led by Michael Widmer last August. Annual silver demand, now about 2,285 metric tons, could increase by 87% to 4,272 tons over the next 15 years based on de-carbonization of the U.S. sector alone, according to the BofA strategists, who believe this new demand could “push silver into a sustained deficit,” which last occurred from 2006 to 2011, pushing silver up to $48.58  in April 2011.

It's also wise to shun cold calling, mail-order or Internet coin dealers who distribute price guides but then deliver coins graded by substandard certification services without an FTC recommended 15-day return privilege. The Federal Trade Commission has cautioned that some certification services have looser grading standards than the industry norm and warned that coins sold by dishonest coin dealers too often are graded by such companies as "part of fraudulent sales schemes...intended to mislead consumers." Remember price guide prices are typically for PCGS or NGC graded coins and not for grading services whose similar-sounding initials could be confused with PCGS or NGC. Have your dealer repeat each grading service's letters one by one.

The unpredictability of market values has been dramatized in recent years by the frequent ups and downs of precious metal prices. Gold, silver and platinum all have trended significantly higher in long-range terms - but all have experienced corrections that have caused their bullion value, and that of bullion-sensitive coins struck from these metals, to fall sharply in the short run. Similar changes can, and have, also occurred over the years with numismatic coins - those whose value is based more on their collectibility.