The Michael Fuljenz Metals Market Report: August 2012, Week 4 Edition
Gold rose 8 days in a row over the last two weeks. After falling under $1600 on Tuesday, August 14, gold rose each of the next eight trading days, closing above $1670 on Friday, its highest close since early April. Gold broke above its summer ceiling of $1625 last Tuesday, when the Federal Reserve said that it might become involved in a new round of monetary easing "fairly soon." Silver rose even faster, rising from $28.07 on Monday to $30.87 on Friday, up 10%. Meanwhile, Platinum enjoyed its second straight $75 weekly gain. The first rise followed the violence at South Africa's platinum mines, while last week's surge came after the threat of nationalization of South Africa's mines to prevent further labor violence.
The Indian Gold Coin That Will Become "The Face of Numismatics"
One important Indian 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, worth over 15 million dollars, 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 Indian gold coin investments. (Hint: I'm currently working on a feature article related to this unique Indian gold coin. It's expected to be published in a national magazine by the end of the year.)
Indian Gold Coin Demand Increases
It seems like not a day goes by that I don't see or hear a major advertisement for the artistically-acclaimed Indian gold coins. I am also receiving more calls from dealers for my book "Indian Gold Coins of the 20th Century," which received the 2010 Investment Book of the Year award from the Numismatic Literary Guild. Just last week, two very large dealers wanted books and other materials to further their sales of $2.50 and $10 Indian gold coins. Both dealers are encouraging their customers to build sets for fun and diversification, something I encourage in my book, along with a comparison to the best examples in the National Numismatic Collection in the Smithsonian Museum. These ads and book requests reflect the growth of demand for many Indian gold coins, which could result in higher prices. Waiting to buy these rarities may result in missing out entirely or paying higher prices, as many of these coins seem to be awakening from their recent slumber.
You Can Own Coins Just Like Those In The Smithsonian
Did you know the United States has a coin collection? You can own gold coins that actually rival those in the National Numismatic Collection housed at the Smithsonian in Washington, DC.
During the early years of the 1800's, the United States Mint in Philadelphia began setting aside particularly nice examples of coins struck there as a matter of record or celebration of excellence. This resulted in the incredible U.S. Mint Collection.
During the 1920's it was transferred to the Smithsonian Institution where it resides today in the National Museum of American History.
The National Numismatic Collection contains one of the largest cabinets of United States coins ever assembled with high grades and rare varieties not seen elsewhere. I was fortunate to privately view this amazing collection with the Smithsonian's Senior Curator of Numismatics and Louisiana Congressman Jimmy Hayes years ago. I left in awe.
Today, you too can own classic rare gold coins that rival those in the legendary National Numismatic Collection. For decades I have helped satisfied customers nationwide acquire coins that equal or surpass the quality of those in the Smithsonian Institution. Call now to find out about the availability of gold coins in our multimillion dollar inventory that meet or exceed the quality of those in the National Numismatic Collection. And if you are interested in how a coin you already own compares to the top examples held in the Smithsonian, just ask your knowledgeable representative. We are glad to research this information for you, our valued customer.
Why the Precious Metals are Suddenly Taking Off
For several weeks now, gold has seemed "frozen" within a narrow trading range, but we have been saying that it is actually building momentum for another price surge. We covered part of the reason last week, with the seasonal trends of gold's normal annual surge starting in late August and September. Then, we witnessed an unexpected turn that pushed precious metals above their previous summer trading ranges:
The U.S. Federal Reserve released minutes of their last Federal Open Market Committee (FOMC), in which they said that "additional monetary accommodation would likely be warranted fairly soon unless incoming information points to a substantial and sustainable strengthening in the pace of economic recovery." That is by far the strongest language the Federal Reserve has used about "easing" this year.
Two years ago at this time, the economy seemed to be in the doldrums and gold was stuck in a trading range - just like it has been recently - when Mr. Bernanke surprised the world by announcing a second round of quantitative easing (QE2) at the Fed's meeting at Jackson Hole, Wyoming. That announcement lifted the price of gold to new highs within a few short months. Could something like that happen again? Either way, the world will closely watch Mr. Bernanke's next talk at Jackson Hole this coming Friday.
Complicating matters further, the Republican Presidential candidate Mitt Romney recently confirmed that he would NOT re-nominate Mr. Bernanke to head the Federal Reserve if he (Romney) wins. In addition, many of the Fed's most prominent pro-easing "doves" were nominated by President Obama. Even though the Fed is not political, maybe Mr. Bernanke and the "doves" would like to preserve their jobs by helping to stimulate the economy just before the election, helping Obama's bid for a re-election. We'll know more after the FOMC's next meeting on September 12-13, right after the Democratic Party national convention.
Gold was "Oversold" in July but it is now Shining with Renewed Luster
Wall Street loves gold once again! For weeks, we have been writing about how the speculators had sold or shorted paper gold ETFs in recent months, but the news (released August 15) that George Soros and John Paulson added to their gold holdings in the second quarter caused a lot of the "me, too" hedge fund managers to leap back into the gold market before gold stages another sharp rally in the autumn months.
Marcus Grubb, the World Gold Council's managing director for investment noted that the demand for gold ETF's surged to an all-time high in August. "So something is starting to move, and therefore we are in the camp that says gold is going to have a much stronger second half this year," said Grubb.
Last week, gold fund manager Frank Holmes commented that gold has finally moved above its 50-day and 100-day moving price averages, which, he says, is an "indication of potential strength." The last time gold was trading this long below its moving averages was in August 2008, after which gold rose sharply. In fact, we have seen a significant rise in gold prices from August to November in the last three years.
The Republican Party Endorsed the Gold Standard
The Republican Party endorsed the gold standard last week. The committee drafting the official Republican platform before this week's convention included a proposal to establish a commission "to consider the feasibility of a metallic basis for the U.S. currency" and "to investigate possible ways to set a fixed value for the dollar." The gold market, as I expected, did not respond to this announcement.
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