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Metal Market Report May 2022 - Week 1 Edition

May 2022 - Week 1 Edition

Gold closed April at $1,911.30 (in London), but it slipped below $1,900 in early May trading. Silver also managed to remain positive for the year through the end of April. In contrast, stocks fell sharply on Friday, April 29, bringing the S&P 500 down double-digits for the year and NASDAQ down over 20%, which is the definition for a “bear market.” Some major tech stocks are down 45% (Facebook) to 70% (Netflix).

Month-End Summary for April 2022 (and Year to Date)

April is usually a good month for stocks, but this April was the worst month for NASDAQ (-13.3%) since the bloodbath of October 2008. In addition, the benchmark S&P 500 declined 8.8% during April alone.

Gold and silver declined during April, but gold fell just 1.6% while silver and platinum fell over 5%. Compared to the bloodbath in stocks, the metals did very well – both in April, and year-to-date.

The U.S. Mint More Than Doubled its Gold Bullion Sales in April (Over 2021)

We don’t have the figures yet on gold ETF sales during April but from the look of the stock market, many investors must have dumped their stocks during April and put some of that money in gold ETFs.

As for physical gold, the U.S. Mint had a banner month for gold bullion sales in April, with both the American Eagle and American Buffalo gold coins doubling their sales levels over April of 2021:

Year-to-date, the gains are smaller in percentage terms, but still positive in both bullion gold coins:

Tennessee Gained Sales Tax Exemption on Retail Sales of Coin and Bullion

There are many reasons I go to the leading coin shows around the nation – primarily to take the pulse of the market and to find some bargains for our customers. Last week’s Central States Numismatic Society convention in the Chicago suburb of Schaumburg, Illinois was no exception. While there, I learned from fellow members in the National Coin and Bullion Association (NCBA), the new trade name for ICTA, that a Tennessee bill offers sales-tax exemptions on retail sales of coins, currency, and precious-metals bullion.

Last Wednesday, April 27, 2022, the Tennessee House passed, and the Senate concurred on April 28, that the exemption will take effect upon receiving the governor’s signature, or 10 days after it reaches the governor’s desk if he takes no action. Republican governor Bill Lee, a lifelong businessman interested in promoting economic gains, has indicated he will sign the bill. According to NCBA executive director David Crenshaw, “Over the last seven years, Representative Bud Hulsey and Senator Frank Nicely have shown unrelenting perseverance in an effort to get this measure passed.” Also, various Tennessee coin dealers helped the effort when they formed the Tennessee Precious Metals, Coin & Currency Coalition in 2019. Many NCBA members like me also helped with the Tennessee dealers’ efforts.  Tennessee now joins 40 other states that have complete or partial sales-tax exemptions on the retail sales of coins and precious-metals bullion.

I also had some other valuable contacts at the Illinois convention. I spent quality time with the top coin grader at PCGS, Steve Feltner. Since I used to be a coin authenticator and grader at the ANA decades ago, I wanted to know how the PCGS submission methods may have changed over the years.  We also discussed the development of “registry sets.”  I then spent quality time on the phone with Rick Montgomery, the top grader, finalizer and president at NGC. He has been with NGC 20 years and before that was President of PCGS. I have known Rick, since we graded together at the ANA, for almost 40 years and many in the industry consider Rick to be the coin industry’s finest authenticator.

Sales activity at the Chicago-area coin show was very brisk. Many dealers said it was one of the best shows they had participated in in years.  Most said the availability of product was limited and that they had to pay much more this year for the same types of coins that they bought last year.

 

And finally, in the fun department, it was a treat to meet Patrick McBride, who appears as Ben Franklin at conventions. He reminded the audience that he appears on the much-desired $100 bill and silver 50-cent pieces, even though he never became President. His compatriots – George Washington, Thomas Jefferson and Alexander Hamilton – only made the quarter and $1 bill (Washington), nickel and $2 bill (Jefferson) and $10 bill (Hamilton).

 

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