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Metals Market Report January 2019 - Week 2 Edition

January 2019 - Week 2 Edition

Gold Starts Year Strongly

Gold remained above $1,280 in the first week of the year, starting the year strongly, while stocks remained in their erratic pattern of falling rapidly (down 660 Dow points on Thursday), then recovering on some good news the next day. Gold has become far more stable than stocks as well as more profitable over the last three months. Silver performed even better last week, up over 25-cents (+1.65%) to $15.72.

A Run on Common-Date Gold Coins Could Push Rare Coin Prices Up Next

Over the last few months, with gold moving up and demand increasing for gold “starter coins,” like the American Gold Eagle, we have seen a bigger movement in the next-step up in rarity, the common-date MS-63 gold coins, especially the $20 Liberties.  For instance, a recently advertised $20 Liberty Double Eagle in MS-63 has risen $120 while gold moved up $60.  Many dealers without a generous inventory of available coins have seen how supplies can dry up quickly and they must resort to filling orders with lower quality coins.

A word to the wise: It behooves you to start accumulating rare gold coins now. When common-date coins move up, the rare dates and types tend to soon move up too! It often only takes a relatively small percentage move in the gold market to eventually generate a larger percentage gain in the rare coin market. We maintain a multi-million-dollar inventory of rare gold and silver coins, so we already have the expert selected coins you need on hand. Very few dealers have a strong inventory like ours. Others may take your order, only to find there is a delay in making the delivery, due to shortages from suppliers or have to settle for other dealers rejects.

Call us. Our experienced account representatives can counsel you on the best mix of coins for the 10% to 25% portion of your portfolio you should place in precious metals. Very few dealers have an experienced and award-winning numismatist on board with my kind of experience and expertise in coin grading, authentication and award-winning book-writing on the leading U.S. gold and silver coin types, as well as my 40+ years of hands-on experience and networking in the rare coin market.

James Grant Lists the Many Reasons to Buy Gold – in Barron’s (November 30)

Back on November 30, when gold traded at $1,217, Barron’s published a debate on gold between James Grant, editor of Grant’s Interest Rate Observer, and gold bear Daniel Weiner, editor of The Independent Adviser for Vanguard Investors. Weiner used the standard debating technique of comparing gold’s price since its “bubble peak” of $850 in January 1980 as “proof” that gold is not an inflation hedge. A choice of almost any other long-term starting date in history shows gold beating inflation, so a choice of this peak month in 1980 reflects an easily-spotted anti-gold bias. Now, here is Jim Grant’s succinct list of positives:

  • Gold is an investment in disorder, not a hedge against inflation.
  • Gold is scarce, malleable, ductile, beautiful, indestructible.
  • Gold is a monetary asset, not a credit instrument. It is cash, not a promise to pay. It is final payment itself. Gold competes with currency and the promises to pay currency.
  • Gold, which has probably never traded at zero – not in a Millennia – is a store of value.
  • Gold explains itself: One look tells you it’s valuable. You don’t need a computer server, electrical outlet or instruction manual.
  • Gold is out of favor. While gold yields nothing, it nonetheless out-yields $7 trillion of notes and bonds worldwide that (a decade after Lehman) still yield less than nothing.
  • Gold is mute: You don’t have to listen to the earnings call.
  • Gold’s price is the reciprocal of the world’s faith in central banks.

Grant concludes: “If you approve of a decade-long suppression of market interest rates and of trillion-dollar budget deficits in a time of supposed bounding prosperity, by all means, don’t exchange your paper money (or digital representations of paper money) for gold. But if you harbor the well-founded suspicion that something’s not quite right in this overleveraged world, do yourself a favor. Lay in some real money.”

In the five weeks since that debate was published, gold rose $71 (+5.8%) while the S&P 500 fell 8.3%.

Congratulations, Jim Grant!


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