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.
The top story, metals in full meltdown mode. Gold down more than 26% this year. By the way, it's on track for its worst quarter on record. Silver even worse...
Well, as trading for the month of June closes out, gold and silver will register their worst quarterly performances in decades. In fact, you'd have to go all the way back to 1920 to find a time when gold got hit this hard.
And with that golden nugget of information, welcome to this week's market wrap podcast, I'm Mike Gleason.
We are literally experiencing a once in a century event. The markets have defied all logic and broken every rule in the book. Never in our lifetimes have we seen gold and silver prices hit oversold extremes on the charts, in the sentiment gauges, and in the positioning of COMEX traders, and yet continue to fall precipitously.
Gold briefly breached the $1,200 level on Thursday before managing to close a few dollars above it. Prices are slipping again, with gold trading $1,195 as we're recording this podcast on Friday morning. As for silver, it's down another 7% on the week. Prices are flat so far today. It's hard to believe, but silver now trades at just $18.70 per ounce, a level most of us in the industry thought we'd never see again.
If history is any guide, we're unlikely to see this unprecedented wave of selling hit these markets again for generations. That means the current situation could represent the opportunity of a lifetime to load up on gold and especially even more beaten-down silver.
We'll only know in retrospect when the final lows are put in, but the selling has gotten quite ridiculous. It costs most major gold miners over $1,300 all-in to produce an ounce of gold. And very few silver miners can turn a profit selling silver at under $20 an ounce. So that means that supplies of gold and silver going forward are going to tighten.
And when prices rise, you can bet that mining companies will be slow to invest in new mines, new equipment, and new employees. They got burned this last time around, and will not be eager to stick their necks out. The supply situation that will result will help to fuel the next phase of the bull market.
Add it all up and these prices for precious metals aren't realistically sustainable. So what's behind these puzzling events?
Well, either some new epoch is upon us in which new supplies of gold and silver won't ever be needed, or, the madness of crowds has caused the futures markets to malfunction and go haywire. There's also one other possibility. It could be that these seemingly unnatural moves in metals prices really are unnatural – meaning that prices have been artificially manipulated to the downside.
That possibility was discussed this week on a leading financial news channel that usually shuns such topics.
Speaker 1: The big elephant in the room is the central governments that own gold. They can jerk this thing around any way they want. Is it beyond reason to think that they're manipulating the price of gold to keep people into the equity market? It wouldn't surprise me a bit.
Speaker 2: Really? It wouldn't? Because, listen, those things are going around, right? People are talking about it. Our central banks manipulating the price. You've got some of this conspiracy blogs that are always throwing this stuff up. How about the fact that it is just darn easy to sell gold these days because it's not just a wheelbarrow and a safety deposit box?
Speaker 1: Why would it surprise that they manipulate the price of gold when they clearly manipulate the price of the bond market every day?
The big bullion banks that hold concentrated short positions would certainly be capable of jerking prices downward, especially if they had the backing of the U.S. government. But they can't push prices much below the costs of production – at least not for very long. Lower prices would bankrupt the mining industry and cause supply to collapse as I mentioned a moment ago. And if that did happen, it would be a longer-term catalyst for much higher prices.
On the demand side, we're seeing very strong buying volumes for retail bullion products, even though this is normally a slow time of year. Mints are struggling to keep up with what is turning out to be a record-setting pace of demand in 2013.
Large national dealers like Money Metals Exchange continue to encounter scarce supply and elevated premiums on products such as 90% U.S. silver coins.
Meanwhile the U.S. Mint has been on hamster wheel when it comes to production of the Silver Eagles and continues to push out deliveries and restrict order sizes from the wholesalers, who in turn are holding the line on near record high premiums for Eagles.
With all that said, Money Metals's rock-bottom Canadian Silver Maple Leaf price comes at a perfect time, especially when you add in this unprecedented buying opportunity for the beaten down metal.
Through the end of today we're offering a premium of only $2.57 over spot on any quantity size order of silver Maples. Compare this with any other precious metals retailer, and you'll quickly find this is the best deal going in silver in the entire industry right now.
For those looking for gold we've got 1 Oz Canadian Gold Maple Leaf Coins at a discount as well. Any order size is just $47 over spot per coin. Plus those who order $10,000 or more worth of gold and/or silver Maples will also have their entire order shipped for free. Just give us a call at 1-800-800-1865 or visit our website, www.MoneyMetals.com, to place an order through our secure shopping cart.
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.
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.