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Metals Market Report Weekly Archive
 

The Mike Fuljenz Metals Market Report

August 2018 - Week 3 Edition

Report from “The World’s Fair of Money” in Philadelphia

At the site of America’s first national Mint, I am always able to meet with the movers and shakers in our industry, as well as those who run the Mint and print our money.  For instance, Len Olijar, Director of the Treasury Department’s Bureau of Engraving and Printing (BEP) humorously introduced himself by saying “I make $840 million a day,” referring to the amount of paper money he prints each day! I also met the very gregarious Director of the Mint, David Ryder and was encouraged about his efforts to fight counterfeiting of U.S. coins. I have consulted with the U.S. Mint three times in the past on these and other issues.

At the Thursday night awards banquet, I’m pleased to report that I received another award from the Numismatic Literary Guild for “Best Radio Presentation” for my “Coin Show” programs on KLVI AM radio 560. This makes more than 60 NLG awards in 13 different categories I’ve received over the years. I was also honored for the radio program earlier this year by the Press Club of Southeast Texas.   I was also honored by Professional Numismatists Guild (PNG) for 25 years of membership in that prestigious organization. I'm actually the only PNG member coin dealer in Southeast Texas.

I also consulted with other numismatists and found that the coins needed most by our customers are those that are the hardest to find of any year I have gone to the World’s Fair of Money in the past 20+ years. Hard-to-find coins include Mint State 1908-S and 1909-S $5 Indian gold coins, 1911-S $10 Indian gold coins and 1868-P and 1880-S $20 Liberty gold coins.  Also, MS-65 and MS-66 slightly-better date $2-½ Indians were more difficult to find than even during the bull market of 2005-2008 when many Indian gold coins doubled in price. Low-population PCGS and NGC coins were also in very strong demand by buyers working on condition census sets.  This type of demand with lack of supply often leads to rising prices.

Speaking of low-population key coins, one of the “coolest” coins I saw was a PCGS-graded MS-65+ 1933 $10 Indian gold coin with a CAC sticker.  It was being offered for about $1 million.  Due in part to the May 1, 1933 executive order of President Franklin Roosevelt, the 1933 $20 is illegal to own, so the 1933 $10 is the only 1933 U.S. gold coin legal to own.  The U.S. Treasury had on display three 1933 $20 Saint Gaudens.  The finest-known Eliasberg 1913 Liberty nickel, one of five known, sold for $4.56 million.

Finally, I went to an industry event at the Museum of the American Revolution in Philadelphia with my former Congressman, who is also a collector and an avid historian, Jimmy Hayes.  We highly recommend this museum to you.  The short movie (under 20 minutes) shown there is very moving.  It concludes with the viewing of George Washington’s actual tent that he used during the 7+ years he was almost always with his troops in the field during the Revolutionary War, when our nation’s survival hung in the balance. Washington’s continued presence in the field solidified the respect his troops had for him during and after the war.  The oval shape of his tent provided the inspiration for the later Oval Office in today’s White House.

Now is the Perfect Time to Diversify from Stocks into Precious Metals and Rare Gold Coins

Gold dipped to $1,160 last Wednesday and then immediately shot back up to $1,175 and stayed above that support level for the rest of the week.  On Monday, gold rose back above $1,190.  The scare last week seemed to be triggered by gold selling in Turkey, but the main cause is a strong dollar and the momentum of a strong stock market luring investors away from gold and into a rising stock market.

As we near the end of August, we are approaching September, the worst month for stocks and the best month for gold. Beyond that, the current stock market is now in record territory – the longest bull-market ever – while gold is in a very depressed situation, similar to past market bottoms.  The time to diversify is not AFTER the stock market has fallen, or gold has taken off, but before these major moves begin.

History has shown that stock market declines can happen fast. Stock market declines happen faster and sharper than stock market increases, while the opposite is true with gold: Price increases in gold are far sharper and faster than the declines in gold prices.  Here are some examples of stock market dangers:

  • Earlier this year, January 26 to February 8, the U.S. stock market declined over 10% in just 10 trading sessions. The Dow Jones Industrial average suffered its only two 1,000-point daily declines in one week, falling 1,175 points on February 5 and 1,033 points on February 8, 2018.
  • We are now approaching the 10th anniversary of the financial crisis of 2008, triggered by the failure of Lehman Brothers on September 15, 2008. The stock market fell sharply (down 40%) in just two months, September 19 to November 20, 2008, eventually falling 55% by early 2009.
  • This week, the current bull market has become the longest-ever bull market, eclipsing the bull market that ran from October 10, 1990 to March 25, 2000. The current bull market began on March 6, 2009. That doesn’t mean it will end tomorrow, but its days are historically numbered.

There is no particular hurry to exit stocks and buy gold, but the point is that you should not wait for stocks to start falling, because when the correction comes, it can come fast, leaving you with weaker bids for your stocks.  Better to be a week or a month early than a day late.  The same goes for gold and rare coins. When gold and rare gold coins take off, they rise rapidly. You can easily miss the first 10% of the rise. Wall Street often does! They wait for the first big move before they issue their buy signals.  Smart investors act like the billionaires who are looking for the missing rare coins in their collections while prices are attractive, as they are now.

 

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