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Fed Maintains Policy of Money Printing and Rock-Bottom Interest Rates
Urgent Update on Gold and Silver Developments in Today's Podcast
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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 podcast, I'm Mike Gleason.
Well, the Federal Open Market Committee on Wednesday did what it does best. It prompted investors to parse words and probe for subtle nuances and hidden meanings to try to glean clues as to what the Fed's next move will be.
The Fed surprised nobody by leaving interest rates unchanged and reaffirming its intention to continue purchasing $85 billion worth of bonds each and every month. The real question is how much longer Federal Reserve officials intend to keep the current ultra-accommodative policies in place. Will the Fed's next move be to increase or reduce the size of their so-called Quantitative Easing? Analysts looking for hints on future policy direction keyed in on a couple of key words: the "I" word and the "R" word.
Despite the FOMC raising the possibility of increasing its stimulus, precious metals experienced a mild selloff mid week. However, they did get a slight boost on Thursday following the European Central Bank's decision to cut interest rates for the first time in nearly a year. The move weakened the euro and strengthened the dollar, but gold and silver still managed to eke out gains in dollar terms for the day.
For the week, silver remains down slightly. As of Friday morning, it trades just a hair above $24 per ounce. Gold, meanwhile, has fared a little bit better. It looks to finish the week with a slight gain. It trades at $1,468 as of this recording on Friday morning.
The gold price is nearly identical to the platinum price. We've seen the two precious metals switch places in terms of premiums and discounts multiple times this year. At the moment platinum – at $1,499 per ounce – carries about a $30 premium to gold.
Platinum hasn't gotten much attention amidst the headline-making action recently in the gold and silver spot and retail bullion markets. But it is quietly showing some relative strength. During the April panic selling spree that drove gold and silver futures prices to multi-year lows, platinum held above its 2012 lows. Platinum's sister metal palladium held up quite well also. At $696 an ounce, palladium currently trades at more than $100 above its 2012 lows. We'll see if the positive divergence in platinum and palladium prices proves to be a leading indicator for a recovery in gold and silver prices.
Speaking of divergences, last month produced major divergences in the paper gold and silver market, which saw panic selling, and the retail bullion market, which saw a massive surge in investor demand. U.S. Mint data for the month of April shows that sales of American gold Eagles soared to 210,000 ounces, the most since December of 2009. This, even as the Mint suspended sales of the tenth-ounce Gold Eagles mid month. The Mint sold 502,000 ounces' worth of gold coins through the first four months of the year. That's more than quadruple the number of ounces sold over the same period last year!
The Mint is also struggling to keep up with demand for its popular silver Eagle coins. Year to date, the Mint has sold more than 18 million, which puts silver Eagles on pace this year to break the all-time record for annual sales of 40 million silver Eagles, set in 2011.
Money Metals Exchange has just reduced our delivery delays a little bit on American Eagle products, though premiums do remain rather elevated. We are happy to offer lower-premium alternatives, including our exclusive gold and silver rounds, as well as bars and some government-minted coins, such as the gold Australian Kangaroos and the silver Austrian Philharmonics. While some may insist on the American Eagles we strongly recommend investors take a hard look at products that are more reasonably priced in terms of the premium above spot. Now would be a real good time to consider an alternative that can save you several dollars per ounce, which is quite significant when you're talking about a sub $25 spot price for silver.
Check out what we have available, either online at www.MoneyMetals.com or by calling one of our knowledgeable and no-pressure specialists at 1-800-800-1865. And remember, you can now place orders online, or by phone like always.
Well that will do it for this week's market wrap podcast, thanks for listening. This has been Mike Gleason with Money Metals Exchange reminding you that we remain fully committed to getting you the most value for your depreciating dollar... with speed, with accuracy, 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.