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Metals Market Report Weekly Archive
 

The Mike Fuljenz Metals Market Report

June 2019 - Week 1 Edition

A Short Summary of Why Gold is Going Up

Gold surged $45 in the last week from $1,280 to $1,325, and $55 in the last month. Gold is now at its highest price since last February. By comparison, the Dow Jones index fell 6.7% in May and the S&P 500 fell 6.6%, giving gold more than a 10% advantage over stocks in the last five weeks. This is typical of the seasonality of stocks vs. gold. With stocks, there is a saying, “sell in May and go away,” since stocks tend to be flat from May to October, while gold tends to rise in the summer and fall months.

Gold is rising strongly – even while other commodities are flat or declining. Crude oil is down and silver is flat. The dollar is strong, yet gold is rising. This tells us that gold is responding in its traditional role as a “crisis hedge.”  And now, interest rates are suddenly collapsing in the U.S., drawn down by the negative rates in Europe and Japan. German two-year bonds have been under zero-percent yield for almost five years.  Additionally, the 10-year U.S. Treasury bond yield collapsed to 2.13% (a 20-month low) on Friday, giving gold an “even playing field” when placed in competition with low or zero interest in leading currencies.

And now, in addition to the escalation of tariffs on Chinese imports, President Trump has suddenly announced new tariffs imposed on Mexico, to be enacted June 10th if Mexico doesn’t help stop the flood of illegal immigrants into the U.S.  This may disrupt a newly drafted revision of NAFTA and cause a new trade war with our southern neighbor. There are also new tensions in Britain and the European Union after last week’s European Parliament elections in which many existing leaders were either thrown out or their coalitions were delivered stunning blows. The European Union now seems to be unravelling.

In America, calls for impeachment from Democrats have now escalated following Robert Mueller’s press conference last week. Such uncertainties in the past have usually led to a strong gold market and a rare coin bull market – as in the 1972-74 Nixon impeachment process after Watergate, and in the 1987 threat of impeachment after Iran-Contra during Ronald Reagan’s second term. Even though it is unlikely that the Democrats will succeed in convicting the President of “high crimes and misdemeanors” in the Republican-controlled Senate, the process of impeachment tends to unsettle the nation and tends to lead to higher gold coin prices.

Silver 1-Ounce American Eagle Sales rise 40.7% in 2019, While Gold 1-Ounce Sales Rise 12.1%

The U.S. Mint has reported sales figures of the American Eagle gold and silver coins through May 31, 2019, with the silver one-ounce coin totals reaching 8,987,000 ounces, up 40.7% from the 2018 totals of 6,387,500 through the same five months.  The number of full one-ounce gold American Eagles sold rose 12.1%, from 66,000 ounces in 2018 to 74,000 ounces in 2019. Total gold American Eagle sales in all sizes reached 104,000 ounces vs. 96,000 ounces in the first five months last year, an increase of 8.3%.

As Gold Prices Rise, Beware of Appraisals from “We Buy Gold!” Ads

When gold prices rise as rapidly as they have in the last week, we tend to see ads placed in newspapers saying “We Buy Your Gold,” offering “top dollar,” with offices set up in hotel rooms or other temporary locations. Such operations often bid grossly lower prices than market values for both bullion and rare coins.

About a decade ago, a managing editor of a Beaumont, Texas newspaper, spent eight months testing a variety of these price offerings from traveling gold buyers. He borrowed a beautiful rare coin worth $13,000 from me and was told it would fetch $250. Another rare coin worth $10,000 got a bid of $60 — not exactly “top dollar.” The traveling gold buyers played on the customer’s ignorance and the investigation led to criminal and civil charges against the now-defunct company.

You should also beware of taking rare coins to a pawn shop or any other non-specialist in coins. You wouldn’t take your rare art or fine wine collection to a coin dealer for appraisal, and neither should you take a rare coin collection to a wine dealer or a pawn shop for any kind of fair appraisal. Pawn shops routinely offer only 20% to 30% of a coin’s value, as they are in the business of making loans and temporary storage, not paying fair value.

A Guideline for Getting Your Coin Collection Appraised

We have often been asked by individuals with large coin collections, or inheritors of such coin collections, to appraise those collections or to make an offer. In order to maximize your time and the appraiser/dealer’s time, here are some helpful tips to getting a fair and efficient appraisal.

#1: Never “clean” a coin.  It usually reduces its value!  Originality is highly valued!

#2: Always prepare a list describing your better silver and gold coins first.  “Better” coins include those certified coins by a grading service like PCGS and NGC. Those should be listed first.  Make this list before mailing your coins or visiting the appraiser/dealer in person.  If you have any questions about what are “appropriate coins,” call the appraiser/dealer in advance.

#3: All non-certified silver coins have value but don’t necessarily need to be individually listed.  This means silver dimes, quarters and half dollars minted in 1964 and before. They are currently worth about nine times their face value.  Thus, 10 dimes are worth about $9.  Simply count the number of your silver dimes, quarters and halves and put them in a box or baggy separately.

#4: Circulated silver dollars struck from 1878 to 1935 are worth at least $13 for circulated coins, but some mint marks and dates are worth much more.  Simply make a count of those on your list.  The appraiser will scan for better dates.  Uncirculated Morgan and Peace Dollars are worth much more than circulated dollars so do not clean them and package them separately or in rolls of 20.

#5: Any coins in coin holders should be listed separately, while coins in albums can be listed by type of album and how many coins are in the album. For instance, government mint and proof sets should be listed individually by date or as a number for each date, like (5) 1958 proof sets.

#6: Do not send an appraiser/dealer circulated low-denomination coins, such as wheat pennies, Jefferson nickels or well-worn buffalo nickels without getting approval first.  Considering the weight for postage on pennies and nickels, the costs can be prohibitive.

#7: Once your listing process is complete, select an appraiser/dealer who is an award-winning member, better yet board member, of leading numismatic organizations like the PNG, ICTA, ANA or NLG.  I am a board member of ICTA and NLG and received awards from all four.

Remember, do not mail or drop in on an appraiser/dealer without letting them know first.  You also want to make sure the expert does not have prior engagements and is there when you arrive.  And, should you make an arrangement to mail your coins to a reputable dealer, be sure to take quality photographs of your coins should they be lost in transit.  This will help if you need to file a claim on your insurance or a police report.

Finally, if you are dealing with the estate of a relative and your relative did not pay a premium for loose circulated coins, they probably do not have large values.  Extremely valuable “error coins” are rare, so don’t get your hopes up on having one of those rarities, unless it is certified.

Also, very rare coins are often counterfeited in China or in the Middle East, like rare 1804 dollars, so if you have one of those it is probably counterfeit.  For the past three decades I taught counterfeit detection and law enforcement seminars. I have seen numerous counterfeit dollars and gold coins of all kinds and I’ve seen mint marks added to many altered coins. Be aware that the counterfeit coin industry has grown exponentially in recent decades. Once again, your key two-word guideline is always, “buyer beware.”

 

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Important Disclosure Notification
All statements, opinions, pricing, and ideas herein are believed to be reliable, truthful and accurate to the best of the Publisher's knowledge at this time. They are not guaranteed in any way by anybody and are subject to change over time. The Publisher disclaims and is not liable for any claims or losses which may be incurred by third parties while relying on information published herein. Individuals should not look at this publication as giving finance or investment advice or information for their individual suitability. All readers are advised to independently verify all representations made herein or by its representatives for your individual suitability before making your investment or collecting decisions. Arbitration: This company strives to handle customer complaint issues directly with customer in an expeditious manner. In the event an amicable resolution cannot be reached, you agree to accept binding arbitration. Any dispute, controversy, claim or disagreement arising out of or relating to transactions between you and this company shall be resolved by binding arbitration pursuant to the Federal Arbitration Act and conducted in Beaumont, Jefferson County, Texas. It is understood that the parties waive any right to a jury trial. Judgment upon the award rendered by the Arbitrator may be entered in any court having jurisdiction thereof. Reproduction or quotation of this newsletter is prohibited without written permission of the Publisher.

 

 

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