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 Fed handed investors a surprise this week. And the precious metals markets responded in a big way.
After months of build-up for a taper, Ben Bernanke and company chickened out and decided not to trim their monthly bond-buying program at all. Chairman Bernanke cited potential problems to the economic recovery and vowed to continue the current loose monetary policy indefinitely.
The Federal Reserve's rate's guidance and its ongoing holdings of securities will insure that modern trade policy remains highly accommodative; consistent with an aggressive pursuit of our mandated objectives of maximum employment and price stability.
Committee participants generally believe that because the headwinds to recovery will abate only gradually. Achieving and maintaining maximum employment and price stability will require a patient policy approach that involves keeping the target for the Federal Funds rate below its longer run normal value for some time.
The Fed's decision to postpone tapering gave a boost to ALL asset markets. The mainstream financial media, of course, cheered the new record highs in the Dow Jones and S&P 500 indexes.
What an upside down financial world we live in... negative economic forecasts nowadays cause excitement among investors! It seems that everything goes back to the Fed. Poor economic numbers mean more money printing by the Fed. And more money printing means higher prices across the board.
But what responded the most to the Fed's policy decision were precious metals. On Wednesday, gold gained $55 on the day, or 4.2%, while silver shot up 5.5%.
In the weeks leading up to the big FOMC meeting, we at Money Metals Exchange had been telling our customers, along with followers to our podcasts and weekly email bulletins all over the world, that the Fed's announcement would likely be positive for metals prices. We figured the market was pricing in expectations for the Fed to do more to restrain itself than it was actually willing to do.
Gold and silver prices were conveniently knocked down in the days leading up the Fed's "surprise" admission that the economy at this point can't take any cutbacks in Quantitative Easing without heading back toward recession. Perhaps the Fed's announcement will serve as a catalyst for precious metals outperformance going forward.
While the Fed didn't paint a rosy picture for the economy, it did offer a bullish outlook for currency printing. And that's bearish for the value of the dollar. The U.S. Dollar Index is down 1.2% on the week.
In another surprise development this week, former U.S. Treasury Secretary Larry Summers withdrew from being considered as the next Federal Reserve chief. Summers had been thought to be Barack Obama's likely pick for the job, but those farthest to the political left in Congress balked. They want the next Federal Reserve head to take an even more activist role in using monetary policy to stimulate and monkey with the economy than Bernanke, if you can imagine that. And apparently Summers was deemed to be too cautious.
The door is now open for the Fed vice chair Janet Yellen or another candidate with an extremely dovish bent to replace Bernanke when he steps down in January. A former economics professor at University of California Berkeley, Yellen is on record saying she would push interest rates into negative territory if she could figure out how to do so. She also believes that Americans with capital to their name, that is, those miserly savers out there, have a responsibility to share their capital with others.
The White House could announce its Fed nomination as soon as next week.
As for the market action, we've got gold up about 2% this week after all the volatility. It's down a bit today as of this Friday morning recording and currently trades at $1,351 an ounce, down a little over 1% on the day. Silver is giving back some of its weekly gains today but is still looking at about a 2% increase for the week and comes in at $22.65 an ounce.
Despite the strong price action and a kick up in retail demand,Money Metalsis currently able to ship out virtually all of our gold, silver, platinum, and palladium bullion products without any type of lead time at all.
Before wrap up this week's podcast, I want to highlight a few product specials going on at Money Metals Exchange right now.
In gold, we still have a small supply of those beautiful, 2013 fractional Australian Kangaroo coins that we've been running on promotion all this week. The 1/10th ouncers are now sold out, but we still have a few of the 1/4-ounce 2013 Kangaroos at 7% over melt value – and a good number of the 1/2-ounce coins at only 5.25% over gold spot.
These .9999 pure gold coins – all individually encapsulated in air-tight hard plastic coin capsules – can be had for 4 to 5% less than the equivalent American Gold Eagle fractional coins. But when they're gone, they're gone.
The Perth Mint is making room for the just released 2014 coins, and we snatched up all of the remaining 2013s so we could pass the savings on to you. Act fast, because they'll be gone very soon.
Also, we've added a little more supply this week on a few historic U.S. gold coins – I'm talking about the $5 and $10 Liberty's and Indians, as well as the $20 Liberty and $20 St. Gaudens. Premiums on these century-old coins range between 7 and 8 percent over the melt value, which is a fantastic deal when compared to the modern day gold bullion coins.
As for silver, our Perth Mint 2013 blowout sale extends to the white metal as well. The beautiful Australian 1-kilo silver coins are still available at a steep discount at this time. Right now you can pick up the kilo coins at only $1.59 per ounce over the silver spot.
Just give us a call at 1-800-800-1865 to place an order by phone, or visit www.MoneyMetals.com to place an order 24 hours a day, 7 days a week 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 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.