August 2020 - Week 1 Edition
Goldman Sachs Raises Their 12-Month Forecast to $2,300 Gold and $30 Silver
Goldman Sachs recently upgraded their 12-month forecast for gold by 15%, from $2,000 to $2,300, and they pushed their silver forecast up 36%, from an already-outdated $22 to $30 per ounce.
“Combined with a record level of debt accumulation by the U.S. government, real concerns around the longevity of the U.S. dollar as a reserve currency have started to emerge,” Goldman analysts said. “If central banks can just digitally create money out of thin air, then it could easily undermine the fiat money system, potentially devaluing currencies or worse. Gold would look very attractive in that scenario.”
The Best Storage Option for Your Precious Metals
Last Tuesday, July 28, Danielle Braff of The New York Times wrote an article about gold storage, a subject that has interested us for a long time. She interviewed a lot of interested parties, with some fascinating facts, but I’m afraid there was some disinformation presented in the article. She quoted several operators of private bullion vaults, who had a vested interest in recommending against the use of bank safety deposit vaults.
They also noted that some buyers are choosing to go the old-fashioned route and are storing their gold at home. Numerous YouTube videos and bloggers explain how to bury gold bars in everything from mincemeat to the backyard. But it’s wise to consider your options before simply stuffing your gold in a burial tube under a tree. They often leak! We strongly advise against burying gold in your mincemeat, in your backyard, or under a tree! Even a home safe is subject to a criminal holding you at gunpoint or knife point and demanding your access code. My 40 years of experience has shown that a bank or reputable security center safety deposit box is your best option.
Braff also reported that a survey of 1,000 people found that one out of six have invested in gold or other precious metals since May, and about half of Americans are seriously thinking about buying gold. That’s encouraging considering that an April Gallup poll reported that Americans had cooled somewhat on stocks after the big stock downdraft in March.
Gold rose over $2,000 on Tuesday, August 4, and Silver outpaced all other investments the last week of July (+6%), reaching nearly $25 per ounce. One of the biggest reasons is that the U.S. dollar fell sharply, making July the worst month for the dollar (-3.8%) since April 2011. The dollar also recently hit a two-year low.
During the first seven months of 2020, there were 494,500 Troy ounces of Gold American Eagles sold at the U.S. Mint vs. only 119,000 ounces for the same seven months in 2019 despite periodic work shutdowns due to coronavirus, and a complete cessation of production of $5 tenth-ounce gold Eagles for a three month period. During all of July 2020, the total gold American Eagle ounces sold reached 115,500 ounces, up 21-fold (+2,000%), vs. just 5,500 ounces sold in July 2019.
For the first seven months of 2020, 13,681,000 one-ounce Silver American Eagles were sold by the U.S. Mint, a 21.5% increase over the 11,262,000 ounces sold in the same seven months of 2019. There were also several work stoppages at the Mint due to novel coronavirus concerns. Premiums to dealers and investors rose sharply on all gold and silver American Eagle coins, partly due to rising demand and partly due to supply shortages.
Market note: Choice uncirculated $20 Gold Liberty Double Eagles selling for under $4,000 are currently hot and are moving up faster than gold bullion. The market for rare gold coins is starting to pick up steam. It is important that you call your representative now for more details
The Adens Declare “Gold is the Best Investment in the World Today”
In their popular financial newsletter, Pamela and Mary Anne Aden declared on July 17 that gold is “the best investment in the world today” and told their readers “we want you on board the gold train as it pulls out of the station.” The Adens outlined some of the reasons why: “Gold is, and always has been, the world’s safe haven. That is, during times of uncertainty, insecurity, economic or political upset, war, devaluations and more, gold has always come out as #1. And this track record goes back more than 5,000 years… Throughout history, gold has always maintained its purchasing power, and again, no other investment comes close…. Plus, gold is durable and it’s beautiful, which has also made it superior to other mediums of exchange.” They then go back through history, from the Egyptian pharaohs, who were buried with their gold, through the Roman empire, to the Spanish conquistadors, to the 1849 Gold Rush, the Vietnam boat people; to the present, when we’ve seen gold beat every other investment since 1970, since 2000, and this year, too.
The Adens also say new money printing will begin fueling inflation, driving the dollar lower, and pushing gold higher, reaching new record highs:
“Once gold hits new record highs, sky’s the limit. As we’ve pointed out before, if this bull market unfolds like the previous ones did, the gold price could ultimately soar to the $7,500 to $25,000 level. We know that sounds crazy, but it’s happened before, and it could happen again. That’s even more so the case considering we’re in uncharted waters and these are unprecedented times. But regardless of where gold ends up, the point is, gold is the very best investment in today’s environment. It’s poised to outperform stocks and bonds, and it’s where you want to be. It’s not too late. We believe the big exciting up moves lie ahead.”
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