Welcome to Money Metals Exchange's weekly market wrap podcast. Helping precious metals investors during these treacherous times. Now, here's this week's market wrap with commentary and analysis from the fastest growing precious metals dealer in America, Money Metals Exchange.
Welcome to this week's market wrap, I'm Mike Gleason.
Post-election blues among investors – and concerns over what Congress might do to avert the looming fiscal cliff – are weighing on the markets. Since election day, the S&P 500 has lost 5.3% of its value.
Gold and silver are holding up much better. Gold is virtually unchanged since November 6th, holding steady at $1,717 an ounce through Thursday's market close.
Meanwhile, silver is up 1.5% over that period. It trades at $32.65 as this Market Wrap is being recorded on Friday morning.
Normally, silver exhibits more vulnerability to stock market declines and bad economic data than gold. The reason is that a big part of silver demand comes from industry, much more than with gold. But so far silver isn't fazed by the adverse post-election market conditions.
The fact that silver is even outperforming gold in this environment suggests underlying strength in the precious metals market, as investors flee to the relative safety of hard assets.
And while investment demand isn't the largest component of silver demand, it can – and does – drive prices at the margins.
Also on the rise in recent days have been platinum and palladium. Palladium got a boost on Tuesday following the release of a bullish forecast by the well-known refiner Johnson Matthey. The company projected palladium would finish 2012 with a supply deficit of 915,000 ounces.
The causes of the deficit are a 15% increase in demand and reduced supply coming out of Russia and South Africa. Approximately two-thirds of all platinum and palladium comes from South Africa, which is experiencing massive on-going violent labor strife and threats of mine nationalization.
Both platinum and palladium are showing gains for the week – palladium in particular – and since election day. But despite this recent strength, platinum continues to trade at a discount to gold.
Platinum has spent all of the past 14 months priced below the yellow metal, the longest sustained discount period since 1985. It normally sells at a sizeable premium to gold, so for precious metals investors who lack platinum bullion exposure, now might be a good time to obtain some. We doubt its discount to the gold price will persist much longer.
Speaking of persistence, the most dedicated champion of sound money in the U.S. Congress gave his farewell address on the House floor on Wednesday. I'm referring, of course, to Texas Congressman Ron Paul, who is retiring at the age of 77. During a particularly noteworthy part of his 48-minute speech, he posed some pointed questions about gold and the soundness of the U.S. dollar.
Congressman Ron Paul's Farewell Speach
Congressman Paul's warnings against fiscal excesses and monetary abuses have long been ignored by his colleagues in Washington. But his predictions are slowly coming to pass.
The currency crisis Dr. Paul anticipated years ago is still in its early stages. As the world increasingly rejects the dollar, people will increasingly turn to precious metals as monetary reserves, as stores of value, and as honest money.
We also want to highlight a few product specials going on right now at Money Metals Exchange. In gold, we still have a good supply of those beautiful, 2012 fractional Australian Kangaroos coins. They're available in the 1/10-th ounce and the 1/4 ounce sizes. These .9999 pure gold coins can be had for 4-5% less than the equivalent American Gold Eagle fractional coins.
Also, we've added some more supply this week of a few historic U.S. gold coins –mainly the $5 and $10 Liberty's and Indians. Premiums on these century old fractional coins range between 5 and 6 percent over the melt value, which is a fantastic deal. That's barely more than what one would pay for most 1-ounce modern day bullion coins.
As we've said before we're only carrying these items because they're lightly polished and have no true numismatic value, meaning the premiums are similar to other bullion type products.
The lack of any true collectible value doesn't stop the rare coin shysters out there trying to sucker folks into purchasing these same coins at substantial mark-ups, often 5-10% more than what we're charging right now. By the way, if the premiums were to rise on these coins – you won't hear us talking about them. We only sell things that offer solid value to our customers.
And finally, for anyone looking to add some platinum to their precious metals portfolio, the Australian Platypus 1-ounce coins are available at a slight discount right now. The Perth Mint has asked us to help them unload their remaining 2012 inventory to make room for next year's release.
Updated pricing on the Platypus can be found on our website at www.MoneyMetals.com, but for pricing and availability on any of the other specials I mentioned, just give one of our precious metals specialists a call. The number is 1-800-800-1865.
Well, that will wrap it up for this week's podcast. Thanks for listening.
This has been Mike Gleason with Money Metals Exchange reminding you that we are fully committed to getting you the most metal for your depreciating dollar – with speed, with privacy, and with top-notch service.
Have a great weekend everybody.
Thank you for joining us for this edition of the Money Metals Exchange Weekly Market Wrap. Be sure to come back next week, and don't forget to subscribe to our weekly podcast through iTunes. For answers to all of your questions, or to discretely and securely buy or sell gold or silver coins, bars, and rounds, call 1-800-800-1865. Our knowledgeable and no-pressure specialists are standing by between 7:00 a.m. and 5:30 p.m. mountain time, Monday through Friday. Visit us at www.MoneyMetals.com or call 1-800-800-1865.
About the Author:
Mike Gleason is a Director with Money Metals Exchange, a precious metals dealer recently named "Best in the USA" by an independent global ratings group. Gleason is a hard money advocate and a strong proponent of personal liberty, limited government and the Austrian School of Economics. A graduate of the University of Florida, Gleason has extensive experience in management, sales and logistics as well as precious metals investing. He also puts his longtime broadcasting background to good use, hosting a weekly precious metals podcast since 2011, a program listened to by tens of thousands each week.