May 2022 - Week 2 Edition
Gold at Record High in Euros
Gold is Trading Up 2% for the year, which is somewhat amazing in light of the U.S. Dollar’s near 10% gain this year and its 15% gain in the last 12 months. The U.S. Dollar Index (DXY) was 90.1 on this date last year and it is 103.8 now (+15.2%), which means that if gold is slightly up in U.S. dollar terms, then it is massively up in terms of many other currencies. Indeed, gold is now trading at record highs in euros.
The April Consumer Price Index Rose More Than Expected – Buy Gold Now!
On Wednesday morning, May 11, the Biden Administration was hoping to proclaim the “end of inflation” by saying it peaked in March. That was one reason President Biden gave his “pre-buttal” speech on inflation on Tuesday, attempting to discredit the inflation figures in advance by proclaiming that 50% of inflation was the fault of Covid and 50% was Putin’s fault. The undertone of his message was that he shouldered no blame for giving away billions of dollars nor did the U.S. Federal Reserve for printing cash at will. But the April Consumer Price Index (CPI) came in one tenth higher than expected (+0.3% vs. +0.2%) and the “core” rate—which excludes the more volatile food and energy prices—increased by 0.6% on the month, a doubling from March’s 0.3% “core” gain, providing a sign of broad-based inflationary pressure. In addition, the 12-month aggregate increase was still at a 40-year high of +8.3%, far exceeding wage gains.
In addition, airline fares surged 18.6% in April from the prior month, the fastest rise on record. Restaurant dining prices rose 0.9% (an 11% annual rate), the most since October. One analyst defied President Biden by saying, “Inflation is no longer just contained to the supply chain — these pressures are actually becoming more broad-based,” according to Aneta Markowska, chief financial economist at Jefferies LLC.
In general, inflation doesn’t hurt well-off people who own their homes or have fixed mortgages at low rates, or who work from home or have a short commute and have few or no children to feed and educate. However, for the typical family with multiple children and two working parents with long commutes and rising housing costs, this recent surge of inflation is a budget killer. Recent studies have shown that rising wages have not kept up with the three major pocketbook issues for most households – food, energy (for heating, cooling and commuting), and housing costs (primarily the monthly rent or mortgage note).
The tight labor market has boosted average hourly earnings by 5.5% over the last year, through April, but Consumer Prices were 8.3% above last April, so consumers are almost 3% behind, not counting a higher tax bracket for higher income in many cases. Moreover, wage gains are starting to recede as employers are seeing slower business gains in a declining market for most products with the GDP declining in the first quarter of 2022: Wages grew by only 0.3% in April, the second slowest rate in the last eight months.
Gold is a well-known inflation hedge, so gold rallied on the CPI increase Wednesday, and it may rally further on Thursday’s release of the commodity-oriented Producer Price Index (PPI) for April. Buy Gold Now!
We Recommend Silver Bars or Rounds (or Alternative Coins) for Larger Silver Bullion Purchases -- Not the 2022 American Silver Eagle
A continuing shortage of silver and silver blanks available to the U.S. Mint makes the American Silver Eagle a poor selection in this year’s silver market. It is a poor selection for large quantity purchases; however, American Silver Eagles are still great for collectors and for gift giving in small quantities.
There are delays in production and delivery and huge price markups on the order of $13 or more above spot silver prices, which is not practical for larger orders of bullion coins. Imagine paying more than 50% over spot when you can buy the same amount of silver in the same Brilliant Uncirculated condition for just 10% or 20% over spot prices. With silver recently around $22 per ounce, imagine paying $35 for a silver bullion coin!
Silver bars and rounds are far better buys for as little as about $3 over spot per ounce (for 10 ounces) or about $2 over spot per ounce for a kilogram, or the 2022 Great Britain Silver Britannia for about $5 over spot in BU condition. Call your account representative and discuss the array of best choices at current premiums and prices. Buy Silver Now!
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
Referrals are the greatest compliment you can give to me.
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.
Important Disclosure Notification: All statements, opinions, pricing, and ideas herein are believed to be reliable, truthful and accurate to the best of the Publisher's knowledge at this time. They are not guaranteed in any way by anybody and are subject to change over time. The Publisher disclaims and is not liable for any claims or losses which may be incurred by third parties while relying on information published herein. Individuals should not look at this publication as giving finance or investment advice or information for their individual suitability. All readers are advised to independently verify all representations made herein or by its representatives for your individual suitability before making your investment or collecting decisions. Arbitration: This company strives to handle customer complaint issues directly with customer in an expeditious manner. In the event an amicable resolution cannot be reached, you agree to accept binding arbitration. Any dispute, controversy, claim or disagreement arising out of or relating to transactions between you and this company shall be resolved by binding arbitration pursuant to the Federal Arbitration Act and conducted in Beaumont, Jefferson County, Texas. It is understood that the parties waive any right to a jury trial. Judgment upon the award rendered by the Arbitrator may be entered in any court having jurisdiction thereof. Reproduction or quotation of this newsletter is prohibited without written permission of the Publisher.
