February 2023 - Week 1 Edition

Gold Outpaces All Metals in January with $100 Gains

Gold rose over $100 per ounce in January, as the U.S. dollar continues to fall. Since the end of September, the U.S. Dollar Index is down over 10%, helping to push gold up nearly 20% and silver up 29%, even though silver is slightly down in January. This first month of the year has been a “gold only” rally among the precious metals, since the global economy has continued to be stalled, slowing the any growth in the industrial metals (the Platinum Group and silver). The Federal Reserve is also meeting this week, and most analysts expect a small (0.25%) interest rate increase that may be their last of this cycle.

For the first nine months of 2022, as we have reported here, gold rose fairly well in terms of the euro, British pound and Japanese yen, due to a strong U.S. dollar, but gold was weak in dollar terms. That all turned around when the U.S. dollar began to fall in the fourth quarter due when the euro and yen began to raise rates, too Here’s how the metals have fared since the Dollar Index peaked in late September:

This trend should continue as the European Central Bank (ECB) plans to continue to raise rates even after the Fed may stop raising rates after this week’s meeting of the Federal Open Market Committee (FOMC). Call our experienced account representatives now to better position your gold and silver portfolio.

Gold (and Most Stocks) Are Up Strongly in January

Gold is up in January because the dollar is falling and the Fed is close to the end of its interest-rate-raising cycle. There is also now a huge added cost of financing a ballooning federal deficit, which the Democrats don’t seem to want to stop increasing. Stocks are rising despite the current earnings report season being very disappointing. With over 30% of S&P 500 companies reporting so far, corporate earnings are down 5%, the first drop since the third quarter of 2020, when COVID was surging.

U.S. Mint Bullion Coin Sales Continue to Decline Due to Production Challenges and High Premiums

The U.S. Mint continues to lag behind last year’s sales of the American Silver Eagle series due to past delays in production, delivery and high costs charged by their authorized purchasers. These prices are then passed on to retail dealers as higher premiums, making the American Silver Eagle prohibitively expensive for a bullion product compared to other global mints or bullion products.

The January 2023 American Silver Eagle sales were 21% below January 2022 sales, despite silver’s 29% price gain in the past four months. American Gold Eagle coin sales were 19% below last January’s sales, despite gold’s recent gains and American Gold Buffalo sales were lagging by 13%. The U.S. Mint has pricing and public relations problems they have been working to fix for over a year.

The American Eagles Beat the Miner 49ers - As the Two Oldest Mints Fight for A Super Bowl Slot

The two cities hosting our two oldest active Mints – Philadelphia and San Francisco – faced off in the National Football Conference Championship Game on January 29, 2023 – and each of their names is tied to gold – either to mining it or minting it: The 49ers and the Eagles. What’s more, their game date fell one day before the 89^th anniversary of The Gold Reserve Act of 1934, when President Franklin D. Roosevelt (on his birthday, no less) revalued gold by 69%, from its long-fixed price of $20.67 per ounce to a new value of $35. He then transferred ownership of all the monetary gold in the United States to the U.S. Treasury. “Monetary gold” included all coins and bullion held by individuals and institutions.

The final score on the football field was 31-7. For coin and history nerds, it would have been historically more satisfying to see a final score of 35-20 or 35-21, equivalent to gold’s price before and after the Gold Reserve Act of 1934.

The Philadelphia Mint, our first repository of Gold and Silver coins, single-handedly prevented any and all major inflation for over 120 years, until the birth of the Federal Reserve in 1913, by maintaining a steady flow of gold and silver coinage. The Mint was established by The Coinage Act of 1792, which also declared that an American Eagle be on the reverse of all U.S. gold and silver coins. Gold ownership of circulating coins was outlawed in 1933 for Americans and silver was removed from U.S. coins in 1965, but the Mint revived the American Eagle gold and silver coin series during the Reagan era in 1986. 

The San Francisco Mint was founded in 1853 after gold was discovered on the American River near Sacramento 175 years ago last week, on January 24, 1848.  The namesake of the advancing army of gold seekers was the 49ers. Today’s San Francisco 49ers, won 12 games in a row going into Philadelphia on Sunday, led by their rookie quarterback, Brock Purdy and their "gold standard" place-kicker named Robbie Gould (pronounced "Gold"), a 17-year veteran out of Penn State. However, the 49ers couldn’t handle the superior moves of the Mother Mint at Philadelphia and lost 31 to 7. In short, Jalen Hurts put the hurt on the Purdy party and the Chiefs limped Mahomes to Victory. Now, Philly will face Kansas City in Arizona in the Super Bowl.

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