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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 American Reserve
Working with Dr. Mike Fuljenz, America’s Gold Expert ®

Robert Patton
1st American Reserve Director

Robert has worked in the numismatics industry for 30 years and helped found 1st American Reserve in February 1998. He has worked since Day 1, for the past 23 years, to ensure the company is well-respected and serves its clients with professionalism and integrity.

Together, Robert and his wife have five children and he enjoys spending time with them. His favorite hobbies include cooking and hunting, sometimes combined by camping with his family. He has been a Boys Haven Board Member for many years and has volunteered in support of many of his children’s activities.

Robert is proud that 1st American Reserve has maintained an A+ rating with Better Business Bureau (BBB) and that they deliver award-winning industry materials and service to our customers. But Robert is most proud of his team of knowledgeable representatives, their tenure and the service they provide to their clients.

His favorite coins are those produced by the Carson City Mint and the $2 ½ and $5 Indian gold coins – many of which are included in our innovative 20/20 program. Of the Carson City coins, he says, “I appreciate the history surrounding the popular Carson City Mint and the relatively limited number of coins it minted, and I feel good about providing my clients with some of the best Carson City gold coins available.” Of the $2 ½ and $5 Indians, he says, “They are particularly beautiful and popular as they are the first incused design coins struck by the U.S. Mint.”

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

 

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