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Metal Market Report September 2019 - Week 1 Edition

September 2019 - Week 1 Edition

New Silver Dollars May Come in 2021 -
The Centennial Year of the Morgan/Peace Dollar Transition

In 1921, the final peace treaty for World War I was signed between Germany and the United States. In honor of that event, the final Morgan silver dollar was minted, and the first Peace dollar was minted. The year 1921 is the only year in which both a Morgan and a Peace dollar were minted. And now Congress may be considering a bill to mint limited-edition Morgan and Peace dollars possibly with a Carson City (Nevada) mint mark on the centennial of that event in 2021.  At a U.S. mint forum I was invited to last year, mint representatives expressed interest in some form of this project if Congress doesn’t act.

Silver dollars are one of the most popular coin series on the market and the coinage transition year of 1921 is one of the most significant dates in our country’s and numismatic’s history. The issuance of a new Morgan dollar with a proposed Carson City mint mark, and maybe others, should stimulate not only Morgan dollar sales but also the Carson City series, including the popular Carson City silver dollar-size gold double eagles.

House Bill 3757 was introduced on July 16 to authorize production of “no more than 500,000” Morgan and Peace silver dollars in their original designs by George T. Morgan and Anthony di Francisci, respectively.  Many believe this proposed program has the potential to do more for the overall Numismatic market than any other U.S. Mint product ever released.

The use of the Carson City mint mark is significant, since the “CC” mint mark helped launch the silver dollar boom in the late 1970s, when about 3,000 bags (about three million Silver dollars – many of which were Carson City Silver dollars) were turned over by the Treasury to be sold by the General Services Administration.  Many of these were in uncirculated condition.  The Carson City dollars were sold in 1973 and 1974 and again in 1979-1980. Their sales helped fuel rare coin bull markets and that could happen again!

The most important point to remember now is that this legislation must pass, and for that it needs co-sponsors. The numismatic community is currently getting behind this legislation by contacting Congressional representatives to become co-sponsors.  I will be hosting a lunch meeting with two area Congressmen this week.

Most Major Commodities Declined in July and August – Except Gold and Silver

In August alone, Silver rose 11.6% and Gold rose 7.1% while stocks fell nearly 2%.  Year-to-date, the precious metals are beating stocks by 3% to 6%, depending on the index, with gold and silver on track for their best year since 2010.  Silver is up 20% in the two months since we predicted $18 silver by year’s end – a prediction that came true in just seven weeks. This is all the more amazing since the July-August period was a time of huge declines in most other major commodities, especially industrial metals.

From July 1 to September 1, gold gained 10% and silver gained 20%, but most other commodities were down in those two months. The S&P GSCI index, which tracks 24 commodities across five sectors, declined by more than 4% in August after falling 0.7% in July, due to the uncertainty surrounding the U.S./China trade war and resulting global economic slowdown.

The biggest declines in August, according to Barron’s, were in iron ore (-27%) and gasoline (-18%). In agricultural products, lean hogs and corn were both down about 10% in August.  Ethanol was down 7%. U.S. oil futures fell by over 6% in August and copper lost more than 4%. By contrast, gold was up 7.1% in August and silver was up 11.6%, because they are primarily monetary metals with investment demand.

There is a hope that some industrial metals may make a turnaround in September and that global growth may return. The Baltic Dry Index (BDI) measures changes in the cost of transporting raw materials, such as coal, copper, cement and iron ore. It is a leading economic indicator for future economic activity, and last week, the Baltic Dry Index traded at a nine-year high, showing a resurgence in shipped raw materials.


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