April 2024 - Week 2 Edition

Gold and Silver Are up 10% to 15% in the Last 12 Trading Days

Gold and Silver have each risen on 11 of the last 12 trading days and silver is up 10 trading days in a row, with gold up nearly 10% in that time and silver up 15% in 10 trading days. Specifically, the June Gold contract on the COMEX market rose from $2,158.10 on Friday, March 22 to $2,372.40 on the April 10 opening, up $214, or +9.93%. May Silver on the COMEX market is up even more, rising from $24.48 on Tuesday, March 26 to $28.27 on the April 10 open, +15.5% in 10 consecutive rising days. The U.S. Dollar Index (DXY) shot up on the high inflation news report released on April 10, so it is now up 3.4% year-to-date, which means precious metals are up about 3.4% more in terms of a basket of global currencies, outside the dollar.

Also, gold is a referendum on the Party in Power and gold is giving a “D-minus” grade to Bidenomics and the global unrest that has erupted under his watch. Since the gold price was free to float back in 1971, gold has tended to rise when monetary policies were bad and fell when relatively sound money returned. In the late 1970s, gold “voted against” the inflationary policies of Jimmy Carter by rising from $105 to $850 in four years, then gold “voted for Reagan” by dropping into a trading range in the 1980s.

More recently, gold rose during George W. Bush’s eight years, and then soared during Barack Obama’s first term, with his trillion-dollar deficits each year but then gold settled down under Donald Trump’s term. Now, gold has recently risen strongly once again under the debt-ridden, inflationary Biden policies.

To confirm this analysis, The Wall Street Journal printed a weekend review of gold at the end of March, stating that gold’s recent rise is about more than inflation (“A Bet on Gold is a Bet on Fear,” March 30-31, 2024) – and that was written when gold was “hitting record highs above $2,100” not the recent $2,300+.

The Journal article basically covered the 50-year history of gold’s bull markets since 1975 but it closed with the fear angle: “Now think of our current moment. The Ukraine War rages on, tensions between China and the U.S. are on the rise, and a clash over Taiwan can’t be ruled out in the foreseeable future. One of the most contentious presidential elections in U.S. history is approaching, with both sides of the political divide fearing unusually dire consequences should they lose.” The article cited record-high central bank gold purchases, especially by China, perhaps as, “precautions against future sanctions.”

Here are two aspects of failed Bidenomics: (1) Soaring deficits in a rising economy and (2) high inflation:

In the first half of Fiscal Year 2024 (ending September 30), Biden’s policies ran up a deficit of $1.064 trillion, a $2.13 trillion annual rate. Tax revenues are not the problem, they are up 7% and corporate tax revenues are up 35%.  However, deficit spending rose faster, with interest on the federal debt rising 43% and Medicare and Social Security costs rising 10%. Yet, Mr. Biden now wants to forgive more college debts!

And on April 10, we got news of March’s Consumer Price Index (CPI) early Wednesday, with the rise coming in “hotter than expected” once again, at +0.4% (a 5% annual rate) vs. the +0.3% expected. The 12-month CPI rise was 3.8% or almost double the Fed’s 2% target rate. The biggest monthly hit was energy prices, rising 1.1% in March after rising 2.3% in February. This early morning release pushed the stock market futures down and Treasury bond rates up, justifying the overnight rise in the precious metals.

There is No Santa Claus in Rare Coin Deals

The other day, a doctor came into our offices and presented me with a collection of Seated Liberty Silver Dollars minted from 1840 to 1873, asking for an evaluation. Even before close evaluation, I said this “looks wrong,” but upon picking one up, I knew it was counterfeit.  So, I said, “Let’s weigh it.” It turns out the coins were 20% light. As an element in the periodic table, silver has a set weight, as do silver dollars and this was obviously minted with a lighter alloy.  Then, I gave it what we call the “ring test,” which “clinked” compared to the solid ring of a real silver dollar. These coins were also thinner on the rim ridge.

Another confirmation was that he paid a smaller amount than the coins were worth and even less than what the underlying silver would have cost, the “melt value” of silver at the time. I asked him where he bought the coins and he said he was on a tour in Europe and thought he was getting a good deal from a dealer.

There are no such “bargains” or “steals” in the coin market.  I think it is fair to say that dealers on the street know exactly what they are doing. They probably know more about the daily price of gold and silver and rare coins than most new coin dealers just starting out in the business. You should always buy from a reputable dealer with a proven record of experience. I have been involved with consumer protection in rare coins and precious metals for decades.

I helped write the Consumer Alert on buying gold for the Attorney General of Texas and was selected as the 2021 Dealer of the Year by the American Numismatic Association (ANA).  My books, media appearances and newsletters about gold and rare coins have won “Best of the Year” awards from the Numismatic Literary Guild [NLG] or the Press Club of Southeast Texas or both. The lesson is: Never pay below spot or market value, thinking you are getting a bargain. There is no Santa Claus in numismatics.

Call us today to safely and easily buy genuine gold and silver bullion and rare gold coins.

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