August 2023 - Week 1 Edition

Gold Closed July Above $1,970 As Dollar Declined

Gold closed July above $1,977, as key inflation data showed signs of returning, especially the cost of gasoline at the pump, with crude oil prices rising from under $70 per barrel at the start of July to over $80 at the end of the month. Gold dipped to $1,903 in early July but shot back above $1,950 in the second half of the month. The Fed raised short-term interest rates well above 5%, even though long-term rates remain around 4%, thereby “inverting” the yield curve (making long-term rates cheaper than short-term rates), which has historically led to a recession, but seems to be providing a “softer landing” this time around.

As August opened, the dollar rallied, pushing gold back down below $1,950. Gold and stock traders await Friday’s jobs report – which is usually a mistake, since this report is invariably subject to massive revisions in future months, as it is a premature body count of new jobs created the previous month. At times like this, it makes sense to look at long-term financial and geo-political fundamentals, not some trivial economic statistics, subject to wide future revisions, to which most traders invariably overreact.

Reminder: Send Me Your “Wish List” of Coins THIS WEEK

Next week, I’ll be attending the nation’s largest money show of the year, the “World’s Fair of Money” in Pittsburgh,” August 8-12.  I have been going to these shows for over 50 years now. Even though I will be receiving some special awards there, which I covered here last week, I want you to know that my main purpose for going to this and other shows is to look for specific coins for you, our clients. Now is the time to make up your “wish list” of coins and call your account representative so that we can have a master list to look for those specific coins you want the most for your collection or investment portfolio.

Metals Recovered Well in a Strong July

The U.S. Dollar Index (DXY) bottomed out in early July at a level under 100, down almost 12% from its peak last October. This has been a major cause of the surge of precious metals since last October. So far in 2023, the DXY is down about 2% (and -1% in July) but that’s enough to help fuel a strong month for precious metals, with silver rising 8.4%, platinum +5.8% and gold up over 3%.

During July, the British pound rose 1.9% and the euro rose 1.4%. For the year, these two key European currencies are up 6.6% and 3.4%, respectively, reflecting the long-term decline in the U.S. dollar. I implore you to add precious metals to your portfolio. Please call your professional account representative ASAP.

The U.S. Mint has updated its Web page on bullion coin sales and we now see somewhat healthier sales in gold and silver American Eagle and gold Buffalo coins.  For the first seven months of 2023, sales of both gold and silver bullion coins are slightly down, but almost equal to the same seven months in 2022:

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