Metals Market Report Archive

The Mike Fuljenz Metals Market Report

The Michael Fuljenz Metals Market Report: January 2013, Week 4 Edition

Gold and the other precious metals rose again last week, pushing gold into positive territory for the New Year. Silver rose almost 5% last week and platinum is up nearly 10% for the first three weeks of the New Year. The World Gold Council has reported that global gold demand in the third quarter of 2012 (the latest quarter for which they have complete statistics) was up 13% from the previous quarter. China's gold demand in the third quarter of 2012 was 176.8 tons - 16% of global demand.

Reflections on Monday's Holiday and Inauguration Ceremony

As we honor the birthday of Dr. Martin Luther King, Jr. and the Second Inauguration of President Barack Obama on Monday, we can recall some very important anniversaries of freedom in America, including:

  • The 150th anniversary of the enactment of the Emancipation Proclamation in January, 1863.
  • The 50th anniversary of Dr. Martin Luther King's "I have a dream" speech in August, 1963.
  • We also lost some freedoms 100 years ago, with the birth of the income tax and the Fed in 1913.

The highly-acclaimed movie, "Lincoln," dramatically re-enacts the passage of the 13th Amendment (ending slavery) in early 1865, at the end of the Civil War and near the end of President Lincoln's life. This movie dramatically shows what miracles can happen when a principled President works through the seemingly insurmountable problems he faces in a hostile Congress - good lessons for today's politicians!

Considering the hostility between our current President and Congress, everyone - on all sides - would do well to watch "Lincoln," then replay Dr. King's "I Have a Dream" speech, and then read President Lincoln's Second Inaugural address (written in his own hand, not by a paid speech writer), in which the President overcame his fatigue and depression after a long and bloody war that claimed 620,000 lives to say - in words now engraved in the Lincoln Memorial - "With malice toward none; with charity for all; with firmness in the right, as God gives us to see the right, let us strive on to finish the work we are in."

Such words contain profound lessons for today's politicians! Both Parties are more concerned with blaming the other Party rather than taking responsibility for cutting spending and balancing budgets - the same way any family or small business would do - and are doing! America has suffered four years of budget deficits running over $1 trillion per year, and the outlook is for more trillion-dollar deficits for as far as the eye can see. Raising taxes alone won't solve this. Politicians talk about all the cuts they have made, many over 10 years, but we still have more trillion dollar deficits looming. That's the bottom line! The government needs to go on a spending diet!

Since President Obama first took office on January 20, 2009, many commodities have doubled, including gold, silver and crude oil. If these commodities grow by the same percentage rates in President Obama's second term, we could see $3,400 gold, $90 silver and $235-per-barrel oil four years from now and much higher rare gold coin prices!

CommodityJan 20, 2009Jan 20, 2013GainJan 20, 2017*
Gold $835 $1,685 +101.8% $3,400/ounce
Silver $11.32 $31.94 +182.2% $90.12/ounce
Oil $38.74 $95.56 +146.7% $235.70/barrel

*The January 20, 2017 prices represent projected gains based on the same percentage gains already seen in Obama's first term.

The U.S. Mint Ran Out of Silver Eagle Coins - After Only 10 Days!

Last Thursday, the U.S. Mint told authorized dealers that the 2013 American Silver Eagle bullion coins were sold out within just 10 days of first going on sale, January 7, 2013. On January 7, authorized purchasers placed orders for 3,937,000 of the 2013 one-ounce Silver Eagles, worth approximately $125 million at current silver prices. Total Eagle sales quickly topped six million ounces before the Mint halted sales. Now, the premiums are rising on the 2013 Silver Eagles. This is indicative of the extreme demand for precious metals, coins and guns, after last November's election and the continuing challenge of reducing government spending and reducing the deficits.

Before launching the 2013 Silver Eagle coin on January 7, the Mint unexpectedly sold out of the 2012-dated coins early, on December 17, 2012, with no Silver Eagles available at all from December 17 to January 7. And now, the Mint has said that they MIGHT make 2013 Silver Eagles available on or about the week of January 28 through February 1, although those coins will only be distributed under an "allocation process" (i.e., rationing). Since 2008, the Mint has rationed Silver Eagle bullion coins from time to time.

Where is the "Fair and Balanced" Reporting on Gun Violence in America?

The average number of deaths per year caused by drunk driving is 10,839, vs. 6,009 for handguns, 1,817 for knives, 674 for blunt objects like hammers and 453 for rifles but only 18 for so called "assault rifles." While the tragic murders in Newtown, Connecticut are deservedly in the spotlight, the singular focus on semi-automatic rifles by some politicians seems mostly agenda-driven when one rationally studies the numbers. In past studies, children under 10 are twice as likely to drown in a bathtub than die as a result of a gun accident. Swimming pool drownings occur in the age group of 0-19 over twice as often as accidental firearm deaths.

Each senseless new shooting or gun accident is reported in great detail in the media, leading many politicians to propose new gun laws rather than swimming pool prohibitions. However, the presence of a gun in a household, by itself, is not the source of accidents or violence. The mental state of the gun user is a far more serious consideration, as we have seen in the psychological profiles of recent perpetrators. This needs more study and reporting rather than focusing solely on the gun.

While many in the press report these acts of gun violence, rarely have you ever heard a reporter give you the other side of the story - of how guns in the home can save lives, too? The NRA magazine has a column called "Armed Citizen," in which they summarize about 10 local news stories of people who protected their home, business or property in the latest month. These families were protected from horrific criminal acts just because they were armed citizens. So, the next time you hear a horrific, unfortunate story about gun violence, ask if that media source is "fair and balanced" enough to present equal time to the positive use of guns to protect property and lives - especially the lives of those who are physically weaker, such as the elderly, women or defenseless children.

Here is one example from the NRA's most recent "Armed Citizen" column:

"A mother of two was home with her children in Loganville, Ga. when she heard a repeated knocking at the door. Concerned, the mother called her husband, who told her to 'get the kids and hide.' The mother complied, retrieving a gun and taking her children to a crawlspace. By the time they were hidden, the criminal who had been knocking at the door had made it inside the house and was making his way towards the closet where the family was hiding. The home invader opened the crawlspace door, at which point the mother fired six shots from a .38-caliber revolver, striking the criminal five times. The mother kept the revolver trained on the home invader as he exited the house. Once outside, the criminal tried to flee in his vehicle, but only made it a short distance before he was captured by police. Walton County Sheriff Joe Chapman commented that 'When you got five bullets in you, it makes you kind of disoriented.' The proud husband praised his wife following the incident, stating, 'My wife's a hero...she protected her kids. She did what she was supposed to do.'" - From the Atlanta Constitution, January 4, 2013

Some prominent politicians have said that they wanted to take away all our guns, under the guise of stricter background checks or limited shot capacity. Syndicated columnist Cal Thomas pointed out that Senator Dianne Feinstein (D-Calif.) told 60 Minutes in 1995, "If I could have gotten 51 votes in the Senate of the United States for an outright ban, picking up (every gun)...'Mr. and Mrs. America, turn 'em all in,' I would have done it." And in 2004, when he was an Illinois state senator, Barack Obama voted against a bill that affirmed the right of citizens to defend themselves against home invasions." I'd like to hear President Obama, on the White House lawn, explain that vote to the media and the Loganville, GA mother and her two kids cited earlier. The problem with gun laws, of course, is that criminals ignore them, but if we can equally focus on reducing or better rating the violence in video games, movies and other media by just a few percent, and also present some positive news of a gun's role for protection at home and in the wilderness, that could also reduce the amount of unnecessary violence in society.

Also, it seems The Justice Department should prosecute more people who lie or deliberately provide inaccurate information about their criminal histories on firearm background checks. Studies show that those who lie are more likely than the average person to commit a violent crime. In 2010, the most recent date that figures are available, just 44 of the almost 80,000 Americans who failed background checks due to lies or incorrect information were charged with a crime. Even with competing prosecutorial priorities, an improvement in this area should also reduce murder rates some.

I Met Texas Attorney General (and future Governor?) Greg Abbott Last Week

Last Thursday, I was one of about 30 business leaders in Southeast Texas to be invited to meet with Texas Attorney General Greg Abbott in Beaumont. We discussed important issues with Mr. Abbott for over an hour. We were able to ask questions about the status of "Obamacare" in Texas, Second Amendment issues, freedom of religion and other issues. We were also able to hear his strong vision for the state of Texas and the country. I was proud to be invited to be one of 30 leading regional businessmen to join in this discussion and appreciated that Attorney General Abbott took the time to meet with us.

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