GOLD 00.00 1.20 0.00%
SILVER 00.00 1.20 0.00%

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Metal Market Report July 2021 - Week 3 Edition

July 2021 - Week 3 Edition

The New American Eagle Has Landed in our Offices! Call to Claim Yours

The promised delivery of new Gold and Silver American Eagles has just arrived in our vaults. The Eagles have landed!

Be sure to call soon to reserve your supply, as I am sure they will go fast. You need to see this new reverse design to believe its beauty.  This is the first design change since the series debuted in 1986.

The most dramatic new feature is the eagle’s fierce gaze on the Gold American Eagle coin, rendered in such fine detail that its beak and dense plumage appear life-like. The sculptor said she “hoped to capture the intensity of his stare” through this up-close cropping since “the American Eagle is such a noble bird… His gaze speaks of pride and wisdom passed down through generations of time.” I think you will agree with me (and her) that this bold new design could generate a wave of renewed pride in being American for those who hold this coin.

The new design of the American Silver Eagle reverse features a depiction of the American bald eagle in flight, as designed by Emily Damstra. Once again, the Eagle is displaying strength and nobility, but this time with its whole body on display, and in motion, swooping down with its wings flexed behind its back and a large oak branch gripped in its talons. (The oak is a symbol of strength as well as our National Tree.)

Before closing, I have to add that our rare coin inventory of high-quality, high-end historical American gold and silver coins has been diminishing lately since fewer high-quality rare coins have become available among leading dealers and collectors. Many more are holding on to their investments than are selling them, so we are seeing prices rise for many coins under $25,000 and a number of coins over $25,000 when there is bidding competition from set builders – which is a great way to diversify and build wealth.

Be sure to call soon to reserve your favorite rare coins for those rare times when they become available. In the meantime, order these magnificent American Eagles as soon as possible. The U.S. Mint has had coin shortages through most of this year, but we currently have limited quantities of these new coins in our vaults so you can order more to hand out as gifts to family members as powerful symbols of America’s greatness. Check with your representative to order while supplies last.

U.S. Federal Budget Deficit Review

Gold Remained Above $1,800 all last week, peaking above $1,830 on Thursday before contracting to $1,820 Friday and $1,815 over the weekend, but stocks fared worse. Even though the blue-chip stocks hit highs early last week, most stocks then collapsed. The small-stock Russell 2000 index fell 5.2% last week. On Monday, July 19, gold dipped below $1,800 early but recovered quickly, while the Dow lost over 1,000 points (-3%) before recovering, mostly over fears of new COVID-19 outbreaks of the Delta variant attacking various nations, causing rising hospitalizations and deaths, especially among the unvaccinated.

Here is our monthly review of the U.S. federal budget deficit and the latest trends in the U.S. dollar.

  • The S. federal budget deficit for June was announced on July 13. The federal government took in $450 billion in June – including the June 15 quarterly IRS filings – but they spent $623 billion (a $7.6 trillion annual rate), resulting in $173 billion more in red ink. With three months left in Fiscal Year 2021, the cumulative deficit is $2.2 trillion and it is expected to exceed $3 trillion by the end of FY21.
  • The total federal debt (the accumulated debt from all past years) now stands at $28.4 trillion.
  • The Democrats have proposed a $3.5 trillion infrastructure plan, which would bloat the deficit further.
  • The S. Dollar Index currently stands at 92.84, down 9.7% from its peak of 102.82 on March 15, 2020, at the start of the COVID-19 pandemic, when Congress and the Fed began creating trillions of dollars in fiat currency. However, the Dollar has rallied 3.6% since May 25, and that has depressed the price of gold.

Commodities RULE, but their Roles are Reversed – for Now!

In 2020, commodities soared, led by the precious metals. Silver was up 48% and gold rose 25% in 2020. Each enjoyed its best performance since 2010. At the same time, crude oil fell 20% on much lower demand due to the economic lockdown. At one point, oil futures fell below zero due to no buyers.

This year, the opposite happened. Commodities are still up, beating all other asset categories, at +21%, but the energy sector is the leader (up about 50%), while gold and silver are slightly down. This reflects a decreased fear of COVID-19 and an increased investment in the “re-opening” of the economy. For instance, there are now more daily airline passengers than there were at this time in 2019 – before the pandemic – and over the busy July 4th weekend some gas stations ran out of gas, even at these higher prices.

Year-to-date gains in selected commodity markets*

Meanwhile, it’s important to keep an eye on gold’s fundamentals more than its price, namely: (1) New gold mine supply has declined two years in a row. (2) Demand for bullion coins at the U.S. Mint is up 32%, year-over-year, as we showed in our July (Week 1) edition; (3) Inflation is rising at double-digit annual rates for the first time in decades: Used car prices rose over 11% in just the last month! The cost of dining out just rose the most in a single month since 1982, and (4) The Biden Administration is preparing another multi-trillion-dollar spending package, which they hope to pass without a single Republican vote and are pushing the budget deficit to over $3 trillion this year. All of these are powerful incentives to buy gold.  Call your account representative today for more recent information and product availability!


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