The Michael Fuljenz Metals Market Report: December 2012, Week 2 Edition
Last Week: Gold fell $11 (-0.6%), Silver fell $0.33 (-1.0%), Platinum fell $5 (-0.3%) and stocks gained 0.1%.
Gold closed above $1700 last Friday after falling below $1700 on Thursday. Part of gold's latest decline was based on a stronger dollar, since the U.S. economy is growing (slowly), while Europe is mired in a long recession. This week, on Monday, December 10, gold opened up $10, with silver and platinum up even more in percentage terms. The bull market is still intact, with new buying pushing gold back over $1700 whenever sellers start to panic or market manipulators try to push the price of gold down.
When skeptics predict a gold price collapse, ask them, "Did you make that same prediction in 2000?" If so, they are "zero for the 21st Century." Gold will likely keep rising, as it has done for the last 12 years.
- Gold 52 weeks ago (December 12, 2011): $1659
- Gold's price at the start of 2012: $1574
- Gold's London Low for 2012: $1537 on May 16
- Gold's London High for 2012: $1792 on October 4
U.S. Investors are Buying More Gold Coins after the November Election
The re-election of Barack Obama as President has led to some surprisingly strong sales in both guns and gold. Gun sales soared last month, as orders overwhelmed inventories, and we saw a similar trend in our business - a surge in demand for numismatic and gold bullion coins to our mostly conservative collectors and investors. Supplies of quality rare gold coins on the market have been significantly reduced, many prices increased and major dealers reported more million dollar sales days to me in November then in any other month this year.
Nationally, sales of U.S. American Eagle gold bullion coins soared in November. During the first 10 months of 2012, Eagle sales averaged just 54,000 ounces of gold per month, but in November of 2012, Americans bought 131,000 ounces of Gold Eagles, more than double the previous monthly average.
Two More Bullish Signs for Gold Demand in 2013
Morgan Stanley has selected gold as its top metals investment for 2013, saying: "Gold remains our preferred fundamental metal exposure heading into 2013. Gold has long been viewed as a safe haven and store of value. However, in recent years, global fiscal and monetary developments have given gold a more prominent role as both a central bank reserve asset and one with a value akin to cash." Morgan Stanley said that its reasons for supporting gold include a weaker U.S. dollar caused by easy money policies, continued central bank buying, gold ETF demand, and the coming recovery in gold demand from India.
Central banks are continuing to buy gold. In particular, the Bank of Korea said that it bought 14 tons of gold in November, their fourth gold purchase in the last 18 months. The Bank of Korea explained their decision: "Gold is a physical, safe asset that allows (us) to deal with changes in the international financial environment more effectively." The Bank of Korea now owns 84.4 tons of gold, a six-fold increase since June, 2011, but this amounts to only 1.2% of Korea's foreign reserves, so they have room to buy more.
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