It has been rather difficult for us to issue market updates over the past few months. Just like the weather in Austin, things have been changing dramatically from one day to the next. By the time we had something to send out, market conditions had changed so much that we were forced to start over. So today we will briefly share with you what's been going on the past few months along with some recommendations that you should strongly consider.
This was the without a doubt the busiest Summer in the precious metals business since 2011. As one would expect, stock market volatility drove a lot of people into precious metals, and fast. In a matter of days supplies were wiped out causing premiums on Silver Eagles to rise as high as $5 over spot per coin (on a wholesale level) with several week delays. Even 90% junk silver was bid at $4 an ounce over spot. Gold surged to $1,200 an ounce and silver touched $16.50, both moving solidly higher as equity markets were in the red.
It seemed like things were about to get really ugly in late September when an abysmal jobs report came out the morning of Friday the 25th. The DOW was down several hundred points under 16,000 and later that day, for no apparent reason, the stock market turned. Since that time, the DOW is up nearly 2,000 points-in five weeks. It appears we have gone back to "bad news is good news" for stocks.
This past week the U.S. debt limit was raised, again. By the time Obama's term is up we will have $20 Trillion in debt, nearly double the amount we had when he got in office.
All year there has been the question of whether or not the FED will raise interest rates. Raising interest rates sends a message that the US economy is on firm ground. Even with the trillions of dollars we have printed since the financial crisis to stimulate the economy, the Fed has not been able raise interest rates since June of 2006.
Through it all, gold has been range-bound between $1,100 and $1,200 an ounce for most of the year and appears to have built a strong base around $1,100. Silver has also been building a base around the $15.00 mark. Platinum seems very interesting at the moment: it's around 20 times rarer than gold yet can be bought today for around $150 less than gold. Physical platinum has been very tight---we are waiting on the Royal Canadian Mint to deliver us 200 platinum Maple Leafs from early October.
Let's Look at the Big Picture
According to NBER (National Bureau of Economic Research), there have been 11 business cycles from 1945 to 2009, with the average length of a cycle lasting about 69 months, or a little less than 6 years.
The DOW bottomed in 2009 around 7,000 and has been in a bull market since...and this coming February will mark 7 years of the current expansion cycle. Understanding these cycles allows one to effectively position their investment portfolios and in a world ridden with unprecedented debt levels the next recession could be very interesting, indeed.
Here is the million dollar question: When will the current economic cycle end?
There isn't any doubt that the fundamental reasons for owning precious metals prices haven't changed. In addition to owning bullion, we've found an area that seems to offer incredible value at this moment in time: Certified Pre-1933 U.S. Gold.
Here are three areas of this marketplace that appear very oversold at the moment, and why:
Recommendation #1:
$20 St. Gaudens graded by PCGS or NGC in Mint State 64
- Two months ago these were over $1,650 per coin and gold was the same price
- Under 525,000 in all dates and mints certified in MS-64
- Traded as high as $2,370 in 2009
- Contains .9875 ounces of pure gold
Special price just $1,395 each - incredibly low premium over gold content and in near-gem quality!
Recommendation #2:
$10 Indian Heads graded by PCGS or NGC in Mint State 63
- Two months ago these were over $1,100 each and gold was the same price
- Around 90,000 in all dates and mints certified in MS-63 by NGC and PCGS
- Traded as high as $2,100 each in 2009
- Contains .48375 ounces of pure gold
Special price just $969 each - jumps to over $1,400 per coin in MS-64!
Recommendation #3:
$5 Liberty Heads graded by PCGS or NGC in Mint State 64
- Two months ago these were over $900 each and gold was the same price
- Under 26,000 in all dates and mints are certified in MS-64 by NGC and PCGS
- Traded as high as $1,980 each in 2009
- Contains .241 ounces of pure gold
Special price just $765 each - they jump to over $3K per coin in the next grade level up!
Questions? Give us a call and we can help. Several of our clients have been trading in some of their bullion to take advantage of these oversold conditions in the Pre-1933 U.S. gold market. Call for best pricing on larger deals.
