October 2024 - Week 5 Edition

If You Want to Sell Your Coins, It’s Best to Wait Until the New Year!

With gold and silver prices continuing to rise, some investors may be tempted to sell now, or in the coming holiday season to fund some gift shopping. A better solution would be to give gold and silver coins as gifts to family members but if you are planning to take profits on your coins, a better solution is to wait until the spring. Many coin dealers try to reduce their inventories at the end of the year for various reasons, including state taxes on that inventory, so they may not offer you the best prices during the final months of the year, making it a poor time to sell your coins.

Instead, if you have some extra cash on hand, you should be out bargain-hunting among those of us who are eager to sell some of our inventory right now as we deplete our year-end stockpiles! Call your professional representative today and buy gold now. I strongly recommend adding gold, silver and rare coins to your portfolio routinely to ensure you have covered your financial bases.

Gold and Silver Stage Latest Rally While the Dollar and Interest Rates Soar!

The latest rally in gold and silver is even more impressive since the U.S. Dollar Index (DXY) is up 3.7% after the Federal Reserve cut short-term interest rates by half a point on September 18.

In a second and much bigger surprise, long-term interest rates have soared in the month since the Federal Reserve CUT short-term rates by 0.50%. Since then, the benchmark 10-year U.S. Treasury rate has risen by 65 basis points (0.65%), from 3.64% to 4.29%, and the 30-year rate, which parallels home mortgage rates, is up almost 60 basis points (0.6%), from 3.95% to 4.54%. The average 30-year mortgage rate is now at 6.6%, up from 6.1% on September 18th. 

In many cases, gold and silver fall when interest rates rise and/or the dollar rises but not this time around. Here is a table of facts surrounding the amazing rally of gold and silver while the U.S. dollar and long-term rates rose after the Fed cut short-term interest rates.

This tells us the Fed’s big (0.5%) rate cut was probably a mistake. They were probably making up for their previous procrastination. A more modest 0.25% cut would probably have been wiser.

The resulting rise in long-term interests has probably hurt the chances of Kamala Harris winning the election next week. It is likely the mostly Democratic-leaning Fed governors hoped the move would help her win but it backfired against her with rising rates on long-term mortgages for home buyers and businesses.

I Met with Texas Governor Greg Abbott

Last week, I was able to again meet with Texas Gov. Greg Abbott, whom I have known since he was the Texas Attorney General. I also met with the current AG, Ken Paxton, with whom I worked on the consumer alert for gold buyers, protecting consumer rights and guarding against counterfeit products, fraud and theft.  In talking with Governor Abbott, we covered the waterfront on next week’s elections but one of the most interesting things he said is what Elon Musk told him.

It turns out that Elon Musk moved his corporations – SpaceX and X – out of California into Texas because of the stifling regulations and lack of timely communication in the Democratic Party-dominated state led by Governor Gavin Newsom. Musk had a choice between that and business-friendly Texas, where he built a huge building in 12 months versus the two years it took him just to get a few permits approved to start building the same type of building in California. Musk told Governor Abbott that now, as the song says, “All my X’s live in Texas.”

When it comes to politics, Abbott thinks the Senate will go 52 to 54 seats to the Republicans for a clear majority, although Texas Senator Ted Cruz faces a tough fight. Abbott said the House race will likely be tighter and it may flip to the Democrats but it’s too close to call at this point, so everyone needs to be sure to vote. The Presidency isn’t the only race too close to call. In fact, the race for President is only close in about seven states and certain counties there, while the race for Congress matters in all 50 States.

Gold Continues to Shatter New Records

Gold set another new high of over $2,750 on Monday, October 28 and silver topped $34 on the futures market. In early trading on Monday, gold slipped, as the pundits said, “geopolitical risk ebbed after Iran said its oil industry was operating normally following Israel’s strike on military targets over the weekend.” Gold fell $22 an ounce on the opening before quickly recovering to set new highs above $2,750. Silver closed Monday at $33.75 per ounce, up over 41 percent since January 1.

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