The Michael Fuljenz Metals Market Report: July 2012, Week 5 Edition
Gold recovered strongly last week. After falling on Monday, July 23, gold rose $11 on Tuesday, $18 on Wednesday, $17 on Thursday and $6 on Friday, reaching a new six-week high of $1624. Just when most of the financial media were telling us about gold's "weakness," the yellow metal got up off the canvas and surprised the paper-pushing investment advisors on Wall Street and financial TV. However, there were a few exceptions - mainstream media outlets that praised gold while it was selling cheaply:
- Gold 52 weeks ago (July 29, 2011): $1628.50
- Gold's average price during 2012: $1643.00
- Gold's London Low for 2012: $1537 on May 16
- Gold's London High for 2012: $1788 on February 29
Fast Rabbits & Dead Rabbits At The Money Show
I recently visited with one of our most respected colleagues regarding his attendance and experiences at a national money show. At the show, he observed many instances where dealers would see a coin they liked, but feeling the price may be too high, briefly walked away to deliberate the purchase before making a decision.
He Who Hesitates Loses!
When they returned, they would be disappointed to find the coin had just been sold. He reported this happened many times, and led him to comment, "There are two kinds of rabbits, fast rabbits and dead rabbits. In this market, if you find a very rare and desirable coin, it does not pay to hesitate or deliberate too long, you will only lose on the good deals that remain." I concur!
Act Now!
If you do not want to wait for potentially higher prices, now is the time to act. Collector and investor demand, for many coins, is widespread and growing and prices seem to be poised to head higher.
The Mike Fuljenz Market Expert Advantage:
It's Called Experience, Leadership & Recognition
- Our customers typically get hand-picked quality coins from the "freshest" deals on the market because of The Mike Fuljenz Market Expert Advantage. Because of his decades of outstanding personal reputation and dependable financial dealings in the marketplace, he and his team get first or early pick of the best of new coin deals in select recommended areas for their customers which means many other dealers later get the leftovers for their customers
- Quality is assured because coins are selected by a true market expert who has hands-on experience at a national grading service and taught numerous seminars nationwide for numismatic organizations on the important topics of grading, counterfeit detection and market trends.
- A Market Expert carries extensive inventory in their recommended areas so they can deliver the best coin quality and value all the time for their customers. Many other dealers can't afford to or just don't carry much inventory, and have to hurriedly order other dealer's leftover inventory when customer orders and payments are received.
- A true Market Expert is a contributor to leading guide books so you can be assured you are getting competitive value for hand-picked quality coins and service in the select areas that he specializes in. The Market Expert helps author the guides most other dealers read.
- Compared to other dealers the Market Expert typically pays very high buy prices to their customers for coins they routinely sell and need. Because he has so many customers for select gold coins and his inventory moves quickly, the Market Expert's offers to buy coins usually substantially exceed offers from other dealers nationwide. The Market Expert typically pays much higher prices for gold coins in select areas he specializes in compared to what customers often net from auctions which typically include substantial buyer and seller fees.
- The Market Expert is recognized by his peers for his expertise and leadership regionally and nationally. He has won awards from organizations like the Numismatic Literary Guild and led organizations regionally and nationally by serving as a chairman, board member and officer. When he speaks or makes predictions, other market leaders listen!
- The Market Expert continually creates demand, popularity and support for coins in select areas of his expertise by authoring award-winning books, articles and advertisements that draw new collectors, investors and dealers to these areas.
- Offers the advantage of an industry-leading swap out policy after the end of the company's 15 day return privilege so customers are better assured of owning a coin they like long term.
Barron's and 60 Minutes Foresaw Gold's Rise Last Week
On Monday, July 23, three disparate sources seemed to bet on gold's recovery while the price was down. After gold was mired in the $1570s for several days, Barron's ran an extremely bullish interview with Stephanie Pomboy, founder of MacroMavens, titled "The End of Fiat Money." The CBS TV magazine, 60 Minutes, then aired a bullish story about gold demand in India, and the Aden Sisters also published a study predicting that gold's bottom-fishing expedition would end soon - and it did. The Adens mentioned that gold has held above its December 2011 lows all year, even while the dollar was strengthening and the summer months are often seasonally slow for jewelry demand.
In the Barron's interview, Stephanie Pomboy must have shocked the stock-oriented readers of that paper when she said, "I envision a gold-backed currency system. We are going back to hard money rather than a fiat system where debtors can silently default by inflating their debts away." She added that this would be "very bearish for stocks and bonds...I would own gold [and] companies tied to mining." If we go over a fiscal "cliff," she predicted the S&P index (now at 1385) would decline to a low of 500.
On Sunday night, July 22, 60 Minutes repeated their 13-minute segment on "The Importance of Gold in India." The piece began: "If owning a home is part of the American Dream, then the Indian Dream is to own gold. Nowhere is that more obvious than at an Indian wedding." A common saying is "no gold, no wedding," and there are 10 million weddings each year in India. All 1.1 billion Indians believes that gold is a primary form of savings. An Indian gold expert said "It's a disgrace not to own gold." India is traditionally the #1 nation in gold and silver demand, but China has surpassed India so far in 2012. As much as China loves gold, China does not have the traditional fanatic core of gold buyers that exists in India. It's too early to tell but the recent recovery in the Indian rupee might help India regain the #1 spot.
Three Major Central Banks Meet This Week to Haggle over "Quantitative Easing"
Gold rose last week, despite a stronger dollar (vs. the euro). Last Thursday, as the euro was touching a two-year low at $1.205, Mario Draghi, the head of the European Central Bank (ECB), said that he would do "whatever it takes" to rescue the euro. That promptly stopped the euro's slide toward $1.20, sending both stocks and gold up. But his comments left observers wondering what the "whatever" might be.
European leaders, like Americans, are great with tough-talk about solving problems, but very light on the specifics. This week, there will be a two-day meeting of the Federal Open Market Committee (FOMC), the Fed's monetary policy-making unit, which convenes every six weeks or so. On Thursday, the ECB's policy-making committee will make its announcement about what their promise of "whatever" means. The Bank of England also meets this Thursday to discuss monetary policy there. If any one of these three major central banks (or all three) pursue "quantitative easing" (QE), then the metals should shoot up.
With the Olympics lasting until August 12 and most of Europe taking all of August off for vacation, this week may be the last chance for Europe to come up with "whatever works" before heading for the beach.
As for our Fed, they have been watching the economy slow down sharply. Last Friday's announcement of 1.5% second-quarter GDP growth rate was down from an already-anemic 1.9% in the first quarter, with more declines forecast for this quarter. Since the "doves" (a code word for the group favoring monetary expansion, such as money-printing) dominate the FOMC, with the man who nominated most of the doves (President Obama) up for election, there might be a dramatic swing toward monetary easing this week. If we see inflationary policies re-instituted before the upcoming elections, look for gold and silver to soar.
The Gold Coin That Will Become "The Face of Numismatics."
One important gold coin from the early 20th century could someday become "the Face of Numismatics" in the 21st century. It's a gold coin so valuable and so beautiful that in the future you'll probably see it on almost every national news story about rare coins, and you'll see replicas advertised on TV. What's the gold coin? In a future Metals Market Report I'll tell you about it, and why I and many other numismatic experts believe someday it will be widely considered the most important and valuable coin an individual can own -- and how it will affect you and your gold coin investments. (Hint: I'm currently working on a feature article related to this special gold coin. It's expected to be published in a national magazine by the end of the year.)
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