Metals Market Report Archive
Metals Market Report 06-05-2024

The Mike Fuljenz Metals Market Report

June 2024 - Week 1 Edition

May Market Summary + Rising Mint Sales for Silver

As mentioned this past week, silver ran laps around gold and stocks in May and now that we have the complete monthly figures for the month, silver tailed off in the past week but still kept its commanding lead for the month (up nearly 15%) and year-to-date (up 27%).

 

Just to remind you of silver’s gains in the last three months, it was trading at $22.67 at the end of February, after declining during the first two months of the year. Then it began a 33-plus percent surge over the past three months after losing 5% in the first two months of the year. Silver’s biggest May jump came after President Biden’s massive May 14th tariff increases.  

Over the past three full years (2021-23), the Silver Institute estimates there was a cumulative deficit of 474 million ounces, equivalent to 14,743 metric tons of silver. Adding this year’s estimate of a 215-million-ounce (6,700 ton) supply-demand deficit brings the cumulative four-year deficit to 21,443 tons of silver, which is mostly why silver’s price has doubled in the last five years.

As We Celebrate D-Day This Week, Let’s Not Forget the Other “D” Word

This week we celebrate the 80th anniversary of D-Day, June 6, 1944, by honoring those few remaining heroes who survived that harrowing day on the Normandy beaches. We could honor our veterans even more by remembering how we recovered as a nation after World War II. We paid off our sky-high war debts by balancing our budgets for most of the next two decades and moved our debt-to-GDP ratio from a record 120% in 1945 down to one-third of that level (40%) by 1965, under a strong dollar, a partial gold standard and silver in many of our circulating coins. Now, we are back to a debt-to-GDP ratio above 120% without any World War to blame it on and our debts are growing twice as fast as our economy.

Last Thursday, we learned our economy is growing slower than expected, just +1.3% in the first quarter. The most shocking figure was that we added nearly $600 billion in red ink to our federal budget deficit in a quarter in which we added only $300 billion to our economy, a 2-1 debt-to GDP ratio.

That means our debt-to-GDP ratio will keep growing. Only two developed nations today have a greater debt-to-GDP ratio than the U.S. – Japan (at 262%) and Italy (at 138%). Both of those nations have very had weak economies and stock markets over a long time period. Japan’s latest quarterly GDP growth rate is negative -2%, its budget deficit is minus 4.8% of GDP in 2024 and the yen is down 11.5% to the dollar this year.  Japan’s stock market recently took over 30 years to climb back to its previous all-time high from 1989 –even longer than the 25 years it took the Dow to recover from a similar 1929 crash. Italy’s economy is just as weak and its stock market is still 30% below where it was in 2001.

We are in danger of entering a long-term decline of our market and currency if we remain in this high and rising debt situation but the Biden Administration doesn’t seem to care. This is a major year of decision: If voters don’t elect members of Congress and a president devoted to lower spending and higher growth, America may be heading the way of Italy and Japan, as a fading superpower in our lifetimes. If “the wrong guys win” in November, as Steve Forbes and I discussed in October,” gold will almost certainly soar to over $2,500 and we may have lost our last chance to stop this rising mountain of red ink the government is creating.

Now, is the time to diversify your portfolio, IRA and collection by easily adding gold, silver and rare coins. Call your professional account representative ASAP.

Gold and Silver Still Affected by Profit-taking but Making Steady Upward Progress

Gold Rose $32 on June 3, the first trading day this month but then it lost that gain on Tuesday, June 4th as investors sold to take profits to offset other losses. Silver dipped below $30 after trading above that level since May 17 but is expected to keep marching upward. The dip is basically a silly short-term overreaction to economic news in both directions, with a weak manufacturing report coming out on Monday and a strong jobs opening report on Tuesday. These indicators go back and forth and they should have little or nothing to do with the price of gold or silver in the long term.

 

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