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Metal Market Report March 2022 - Week 3 Edition

March 2022 - Week 3 Edition

Coins, Porkchops and Proposals

Last week, I was in Colorado Springs at the American Numismatic Association’s National Money Show. I was buying coins for our clients and networking with leading dealers from across the country. Most agreed with me that the coin market remains hot, overall, and many quality rare coins that we deal in and recommend are becoming harder to find and are rising in price.

On the day I arrived for the convention, it began snowing and the next day, as I made my way to the convention it was two-degrees outside. However, that would not deter me in my quest for numismatic knowledge and coins for our clients. Later that day, I was honored at a lunchtime presentation by the president of the ANA, Dr. Ralph Ross, with the 2022 ANA Presidential Service Award. This is award given for outstanding service to the organization – the largest and most prestigious coin organization in the country and the only one chartered by Congress. 

While there, I had a little fun at an exhibit where you can place your head into a mock $100,000 1934 gold certificate – the largest denomination U.S. banknote ever produced. The real banknote features President Woodrow Wilson but my version features me, Mike Fuljenz. 

My wife had accompanied me to the show this year and on our final night there, she and I went to a nice restaurant at the convention hotel. As we looked over the menu, I decided to order the Italian fried porkchop. When it came out it was huge and extended outside the edges of the dinner plate. As I wondered where they found such a large porkchop, my wife suggested I take a photo of it to show our friends its largesse.

No sooner than I had taken a photo with my cell phone of the porkchop than a young man sitting at a table to my left asked if I would take a photo of, he and the young lady accompanying him. As he noted, I was taking a photo of a porkchop, after all, so I figured why not. He handed me his phone and as I got ready to take the photo of him with his date, he got down on one knee, pulled a small box containing a diamond ring from his pocket and proposed to the young lady. I snapped pictures as quickly as I could and then the entire restaurant began clapping for the young couple when she said, “yes.”

Soon after, three little girls came running up to her to see her new engagement ring. They were giddy with excitement.

The restaurant sent over a couple of glasses of champagne for their special moment and an amateur photographer secretly bought their dinner. It just goes to show you that you never know what’s going to happen when you take a picture of a porkchop, especially at a money convention.

Volatile Gold Prices Continue Upward Trend

Gold topped $2,000 over the weekend and early this week, but when the Producer Price Index (PPI) came in slightly lower than expected on Tuesday, the stock market rallied, and gold slipped down to $1,920. However, gold rallied a bit after the Federal Reserve announced only a quarter-point interest rate increase on Wednesday. (A month ago, most pundits predicted a half-point rate increase.) Despite this week’s volatility, gold is still up far more than stocks this year.

U.S. Budget Deficit Update

Once a month, we update the U.S. budget deficit numbers. In February 2022, the federal government spent $217 billion more than it accumulated in tax payments. The government spent $506 billion in February (a $6.6 trillion annual spending rate), while collecting only $290 billion in tax revenue. In the first five months of the 2022 fiscal year, the accumulated deficit is now $476 billion and the total (multi-year) federal debt level has surpassed $30 trillion.

So far, in the 2020s, precious metals have been strong in the even years and weak in the odd years

 

Inflation Rates are Still Soaring – With the Biggest Annual Increase in 40 Years

On Tuesday, March 15, the Producer Price Index (PPI) was announced as gaining 0.8% (month over month) in February (that’s nearly a 10% annual rate), following a 1.2 % rise in January. For the past 12 months, producer (wholesale) prices are up 10%. Also, on Thursday, March 10, the February Consumer Price Index (CPI) came in at the highest rate in 40 years, up 7.9%. Those numbers don’t reflect huge price spikes for several commodities in early March, partly due to the war in Ukraine cutting off some supplies of oil, key minerals like lithium, and agricultural products such as potash.

Early last week, crude oil futures soared to $139 per barrel, nickel soared 250% in under a week and saw trading halted at the London Metals Exchange. Wheat prices soared 40% in a week. Numbers for March will be released April 12-13 and they should boost gold’s price.

 

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