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Metal Market Report June 2020 - Week 4 Edition

June 2020 - Week 4 Edition

More Big Banks Get on the Gold Bandwagon

With gold rising last week by $50, more big banks and investment advisors are getting on the gold bandwagon. Reuters recently spoke to nine private banks, which oversee a combined $6 trillion in assets for the world’s richest clients, and most have advised clients to increase their allocation to gold, partly since gold is the only major asset class to rise in 2020. Four of the banks added forecasts of higher gold prices.

Morgan Stanley added a 5% position to commodities including gold as of March 31. While the bank said it is unlikely to advise a position above 10% in commodities, Lisa Shalett, the Chief Investment Officer of Wealth Management at Morgan Stanley, said they “could get there,” especially if inflation picks up materially. “Our view is that the weight of monetary supply expansion is going to ultimately be debasing to the dollar, and the Fed commitments, which (are) anchoring real rates, make the case for gold pretty sturdy.” Super-rich investors, said Shalett, are “very concerned about wealth preservation and, in many ways, they have a longer historic lens than some of our other clients, so they do worry about inflation.”

UBS of Switzerland, the world’s biggest wealth manager, said that gold could hit $1,800 by year-end in their “base-case scenario,” due to ultra-low interest rates and investors seeking gold to hedge their portfolios, but they added that gold could reach a record high of $2,000 in the event of a second wave of coronavirus infections. UBS’ Kiran Ganesh said, “With the recent equity rally, people have become more nervous. People are actively seeking portfolio hedges that might perform well in a range of scenarios.”

Also, Wells Fargo’s head of real asset strategy at their Investment Institute, John LaForge, said, “I’m now getting as many questions on gold as I do on oil, which says a lot from my perspective.” And Oliver Gregson, head of the United Kingdom and Ireland at JPMorgan Private Bank said inquiries had gone up as clients increasingly viewed gold as “a port in a storm.” He forecast a $1,750 year-end target for gold.  Call your experienced “Team Mike” representative to learn more!

Let’s Go to the Movies – At Home!

They’re not making many new movies now – they can’t, not with rules about social distancing and face coverings. Even in the fall, you won’t see many new movies in theaters, unless they were already “in the can” before February, like the 25th James Bond film, “No Time to Die,” scheduled to debut in April.  It’s now rescheduled for November 20 in theaters.  So, why not curl up with some “golden oldies” on video?

My friend Gary Alexander lives on a remote island with no theaters nearby, so I sent him some old films he hasn’t yet seen, starting with musicals, since he is a musician who has missed a few musicals since he moved offshore in 2004. One is “The Greatest Showman” (2017) about P.T. Barnum, with Hugh Jackman singing the title role. Jackman is also great in singing the role of Jean Valjean in 2012’s “Les Miserables.”

The Barnum movie also has a connection to the numismatic world in that Barnum was elected mayor of Bridgeport, Connecticut in 1875 and was instrumental in launching the Bridgeport Hospital in 1878. He started his Barnum circus late in life at age 60 and is buried in a Bridgeport cemetery he designed himself.  The Bridgeport Connecticut low-mintage centennial half dollar was issued in 1936 to honor the 100th year of the incorporation of Bridgeport, with the obverse depicting Barnum, the city’s most notable citizen.

Some other movies to consider watching these days include a couple of true-to-life sports histories:

The Greatest Game Every Played” (2005), a film about U.S. golf pioneer Francis Ouimet, set in 1913, and “Glory Road” (2006) about the all-black 1966 West Texas NCAA championship basketball team.

In more recent years, here are three well-written and produced films about some more eccentric slices of life:

The Accountant” (2016) starring Ben Affleck as an autistic accountant doubling as an assassin.

Crazy Rich Asians” (2018), a “Hallmark movie on steroids” about the wealthy youth in Singapore.

Knives Out” (2019), a mystery starring Daniel Craig investigating a family murder.

For an older favorite, check out the action film featuring Will Smith, “Enemy of the State” (1998).

Birthday of “The Continental” Currency – vs. Today’s Surrender to the Barbarians and Looters

On June 22, 1776, Congress issued $2 million in new bills, known as “Continentals.” The new paper currency featured the likeness of Revolutionary soldiers and the inscription, “The United Colonies.”  Unbacked by gold or any other assets, the bills led to immediate inflation. As George Washington noted in 1778, “A wagonload of currency will hardly purchase a wagonload of provisions.” The highest full-year inflation rate in U.S. history was 29.8% in 1778 – not eclipsed in the last 242 years. The Continental left our young nation with a heavy war debt. Chastened by that inflationary experience, America minted gold coins in the 1790s and resisted the urge to issue new paper notes until the dawn of the Civil War.

On June 15, 1775, George Washington was named Commander in Chief of the Continental Army, and the U.S. Flag was born June 14, 1777. For over six years, General Washington fought a defensive campaign in mud, ice and heat against a far superior British force – just as he had done against the French in the Seven Years War. He was so popular with his troops and the public that he was the only man they wanted to become our First President. He served eight years as President when he would have far preferred retiring to run his coastal Virginia farm. Then he retired from power, as few world rulers had ever done.

Last week, Flag Day was observed in America, then George Washington’s statue was toppled and burned after being wrapped in a U.S. flag in Portland, Oregon, on June 18. Nobody seemed to care to defend him (Joe Biden’s campaign certainly didn’t) and the national media disturbingly seemed mostly silent about it.

More on Project 2020 – New High-Quality Coins Are Coming in Each Week

Just a reminder. Every week, we get a few new rarities in our “Project 2020” campaign for the finest rare coin collectibles. Call your experienced “Team Mike” representative for a description of our quickly changing inventory of classic American gold and silver coins, but you must act fast. As a mentor of mine used to say, there is a difference between a “fast” rabbit and a “dead” rabbit. When gems come into our inventory, they tend to move fast. That’s why you want to be a fast rabbit in fast-changing markets.

We make our selection of “Project 2020” coins based on several factors, including sheer beauty, historical importance, popularity and low population capitalization (a coin’s value times the numbers of coins seen). We’re finding that these coins are becoming tougher and more costly to buy, since the market for many gold coins priced under $10,000 is rising. Civil War-dated and Carson City-minted coins are especially in high demand. Over the last few months, we have posted over $2 million in new bids, higher than any other dealer, on hundreds of different coins in our attempt to acquire the finest specimens of lower-mintage, low-population $10 and $25 Gold American Eagles, $2.50, $3.00, $5.00 and $10.00 Indians, Type II and Type III Liberty Gold, and the best classic Commemorative halves.

Although our bids on these coins are still rising, we continue to invest in these coins because we believe they are still underpriced relative to their population capitalization. In the process of accumulating these coins, we scrutinize each coin very carefully. We never sacrifice in our quest for top quality. We buy only hand-selected, top-quality specimens. That is why you should only buy rare coins from well-recognized experts. Each coin should have good eye appeal. When you see these coins, you will know what I mean. Each is a classic piece of American history. Owning these coins is like holding history in your hands.


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