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Metal Market Report June 2021 - Week 5 Edition

June 2021 - Week 5 Edition

Gold Mining Supply Declines for the Second Year in a Row

Most markets are based on supply and demand. The supply of new gold is extremely limited, and finding new gold is getting harder each year, while the supply of new dollars is expanding by trillions each year. 

Gold is the perfect form of money due to its rarity, portability, beauty, indestructibility, divisibility and long heritage as money on all continents. In terms of rarity, gold is one of the rarest elements on earth, making up between 0.001 and 0.006 parts per million of the earth’s crust – that’s between one and six parts per billion. Nearly all of the easy or visible gold on the earth’s surface has been found. Now, gold miners are digging deeper to find fewer parts per million of gold at greater and greater expense. Just think of the TV show, Gold Rush.

According to the latest data released by the Word Gold Council (WGC), global gold mine production peaked in 2018 at 3,652.8 metric tons. Production declined 1.5% to 3,597.2 tons in 2019 and then fell another 3.3% to 3,478.1 tons in 2020 for a total decline of 5% in newly mined gold in the past two years.

Another major change comes in the source of that gold. South Africa was the leading source of gold in the 20th Century but it is no longer in the Top 10 among producers. The top two gold producing nations are America’s old Cold War foes, Russia and China, with China’s totals declining and Russia’s rising fast.

 

Call us today to find out what the best gold investment options are for your portfolio!  We look forward to serving you.  Have a safe and enjoyable 4th of July holiday.

U.S. Budget Deficit Soars

Gold and silver remain relatively firm but at slightly depressed levels as we approach the mid-year point but the generally falling U.S. dollar and rising U.S. budget deficit are both inflationary and should contribute toward long-term gains in gold prices. Our weekly price chart shows long-term gold vs. stock prices but once a month we will also show the situation with the dollar and deficits:

  • The U.S. budget deficit is announced once per month. The most recent announcement was for May 2021 (on June 10). Government red ink for May 2021 was $132 billion, pushing the total deficit for the first eight months of Fiscal Year 2021 to $2.063 trillion.
  • With four months left in FY21, the U.S. budget deficit is on pace to equal last year’s record $13 trillion annual deficit. Total federal debt now stands at $28.2 trillion.
  • President Biden has proposed another multi-trillion infrastructure plan. In order to pass this, the “debt ceiling” will need to be raised before Congress goes into recess this August.
  • The U.S. Dollar Index currently stands at 91.9, down 10.6% from its peak on March 15, 2020, at the start of the COVID-19 pandemic, when Congress and the Fed started creating trillions of new unbacked dollars for relief spending. The Dollar Index has rallied 2.5% in the last month.

Get to know the “Team Mike” Professionals at 1st National Reserve
Working with Dr. Mike, America’s Gold Expert ®

Ryan Verde
1st National Reserve Manager

Ryan Verde, Manager, 1st National Reserve, has worked 27 years at 1st National Reserve. He is married with three children (two daughters and a son). His hobbies are golf and the shooting sports, but his passion is coaching kids, including youth football, baseball and basketball. Ryan was a college baseball player.  He has also served on area football and baseball boards and served as a volunteer at the area Boys’ Haven.  At work each day, he is proud of our business standards and ethics, as we maintain an A+ rating with the Better Business Bureau (BBB) and deliver award-winning materials to customers.

His favorite coins are the American Gold Eagle and Type II $20 Liberty gold coins. Ryan says, “The American Gold Eagle is the most popular gold bullion coin in the world, and it is both beautiful and provides financial security for our customers.  I also enjoy helping clients easily diversify their IRAs with American Gold Eagles.” As for the $20 Libs, Ryan adds: “I really love the history of the Type II $20s.  They were only minted from 1866 to 1876 and were our first double eagles with the motto ‘In God We Trust.’ My customers appreciate our ability to find the rarer examples of this series for their sets, many of which are included in our innovative 20/20 program.”

Ryan is here for you.  Please don’t hesitate to contact him.

 

 

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