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Gold and Silver Fighting Strong Dollar

Gold and silver are down due to another strong surge in the U.S. dollar, due to the aggressive rate-raising regimen Federal Reserve Chairman Jerome Powell announced after this past week’s meeting of the Federal Open Market Committee (FOMC).  In essence, he said the Fed would raise rates again (probably by 0.75%) just a week before the mid-term election in November, and then raise rates another 0.50% before Christmas in order to match current short-term (two-year) Treasury rates of 4.4%. (In the last week, 2-year rates rose from 3.9% to 4.4% and 10-year rates rose from 3.5% to almost 4.0%)


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Gold Rallies

Gold dropped $5 last week on a temporarily stronger dollar, which is up about 1% so far in 2021. On Friday, January 15, gold fell from about $1,855 to $1,825, then reached a six-week low before rallying by Wednesday morning to $1,868. Currently, gold is caught in a tug-of-war between the bullish pull of an anticipated $1.9 trillion stimulus package and the temporary pressure of the dollar’s strength, but the dollar will likely weaken when the Fed and the Treasury pour trillions more fiat money into multiple relief efforts in the new year.

“Project 2020” Enters 2021 With New Momentum

We announced “Project 2020” nearly a year ago as a project to “quietly” assemble an inventory of what we think will be the “cream of the crop” in the numismatic universe.  These top rare coin winners are based on several factors, including sheer beauty, historical importance, popularity and low population capitalization - a coin’s value multiplied by the number of coins in a specific grade. We knew it would be difficult to find these rare coins quietly, as these coins are always hard to find in any quantity without attracting attention.


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Gold Recovers

Gold recovered to $1,840 late Monday, December 14, after correcting late last week following a series of anemic inflation reports and delays in the Congressional relief packages. The Consumer Price Index and Producer Price Index were each up only slightly, leading investors to think that the trillions in newly printed deficit dollars won’t fuel inflation, but that is only due to recent economic lockdowns and COVID fears. Once the economy opens up, we are likely to see sharply rising inflation.

Gold Gained 2% on Tuesday

Gold gained $36 (2%) on Tuesday, December 1, as a new “stimulus package” works its way through Congress. This came after gold fell by a similar amount last Friday in its first fall under $1,800 since last July. Part of the drop was technical, since many traders set “stop losses” under technical support levels like the 200-day moving average.  Since the drop happened on thin volume in the early morning hours of a post-holiday trading session with few traders present, the move was steep, and unsupported by buyers.

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George H.W. Bush Coins Launch the “Roaring 20s” Coin Rush Next Week

We have been writing about the new “Roaring 20s” increase in new gold and silver coins to be designed and minted in the 2020s, including a new design on the reverse of the American Eagle gold and silver coins next year – the first change in 35 years, since their inauguration in 1986. We’ll probably also see silver dollar coins commemorating the centennial of the transition year for the two classic silver dollars produced in 1921, which was the final year of the Morgan silver dollar and the first year of the Peace silver dollar.  That will surely excite the coin buying public!


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Here’s Another $5,000 Gold Price Prediction

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.


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1st American Reserve reiterates Major Wall Street Firms' New Forecasts of $3,000 to $5,000 Gold by 2022-2023

Gold rose $23 Monday morning, September 14, from $1,940 to $1,963, before settling into the high $1950s, mostly based on a weaker dollar, which was in turn based on hopes of continued “quantitative easing” by the Federal Reserve when they meet this Tuesday and Wednesday.  Gold futures also rose $13 last week. In Gold will hit new leveladdition, gold-backed ETFs rose for the ninth straight month in August, as 39 tons of bullion worth, $2.1 billion at market prices, were added to gold ETFs in August, with seven tons bought in Asia.

Major mainstream investment advisory services are now predicting gold prices more than doubling in the next 2-3 years. First of all, Bloomberg Intelligence “is not ruling out $4,000 gold by 2023,” noting that the gold bull market is “just beginning.” Despite silver’s recent surge – growing twice as fast as gold since spring – Bloomberg Intelligence senior commodity strategist Mike McGlone LAO predicts that gold will outperform silver in the second half of the year, due primarily to a weak economy and weaker dollar.

“Gold has the catalysts to maintain performance leadership into year-end, in our view,” McGlone wrote. “Central-bank rate easing and U.S. bond yields gravitating toward zero are solid underpinnings for gold, as is the potential for increased U.S. stock-market volatility approaching the presidential election.”


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Comparison Performances of Precious Metals vs. Stocks During the First Eight Months of 2020

Gold had a good week, rallying after every correction. On Monday, August 31, gold rallied as the dollar weakened to its lowest level in two years as U.S. coronavirus cases topped six million. (Investors have often bought gold as a hedge against economic uncertainty, such as times when the coronavirus pandemic has worsened, or when the economy has flattened after beginning to rise.) For the month of August, gold reached its peak on August 6 and then remained above $1,900 in late August, while silver kept rising.


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USA Today Quotes Mike Fuljenz (and Our Customers) in a Positive Gold Article

Today’s September 1, USA Today published in their Money Section an extensive and positive article on gold (“Gold Gleams in Hard Times”). Even though they only quoted me once (officially), they paraphrased a lot of material I gave them, and what I told them about the qualities of gold. They also quoted some interviews from our satisfied customers, which we helped set up for them. You will probably recognize many of these statements because you heard them here first in the weekly Metals Report – months ago.


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Gold is Rare, Paper is Cheap: That Should Spell Higher Gold Prices

The dollar is down 10% in the last five months in part because the Federal Reserve added $3 trillion to its balance sheet and the U.S. Congress passed $3 trillion in relief packages through May with more to come.

The 2020 federal deficit is $2.8 trillion through July 31. All this compares with a paltry 108 million ounces of new gold mined each year. Even at $2,000 per ounce, that’s only $216 billion, less than 10% of the budget deficit and less than 1% of annual GDP.  Gold is very hard to find, and it is increasingly found only in politically dangerous jurisdictions or in difficult geographical locations for mining equipment.

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Gold Had a Roller Coaster Week

Gold had a roller-coaster week, topping $2,000 an ounce again last Tuesday, August 18, as the U.S. Dollar dropped to its lowest point in two years, falling over 10% in a 5-month period since March 18.  Then, gold drifted lower as the dollar rallied. On Friday morning, August 21, gold fell from $1,950 down to $1,910 before rallying back above $1,940 as U.S. initial jobless claims climbed back above 1 million again.

Warren Buffett Switches from Banks to Gold

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.

Photo by Mark Hirschey
Photo by Mark Hirschey

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.


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

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.


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

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… 

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