Janet Yellen Promises Congress She'll Extend Fed Stimulus Measures and Create Inflation

Announcer:

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.

Janet Yellen:

Our country has come a long way since the dark days of the financial crisis but we have farther to go. I believe the Federal Reserve has made significant progress toward its goals but has more work to do.

Mike Gleason:

Well gosh, I guess we should ALL breathe a sigh of relief knowing that America's central planners are on the job!

Welcome to this week's market wrap podcast, I'm Mike Gleason.

That was the voice of Janet Yellen in testimony yesterday before the Senate banking committee. President Barack Obama's pick to head the Federal Reserve indicated that with the official unemployment rate coming in at 7.3%, the Fed has a mandate to keep stimulating until the jobs market shows more signs of improvement.

Gold and silver prices, which had fallen early in the week, rallied leading up to and following Yellen's remarks on Thursday. The metals are flat this morning. For the week, gold is virtually unchanged and still resting below the key psychological level of $1,300 an ounce, coming in at $1,288 as of this Friday morning recording. However, silver is still down nearly 4% on the week, and currently trades at $20.78 per ounce.

The other white metals – platinum and palladium – are also trading mixed. Palladium couldn't follow through on last week's rally, and prices fell back into a months' long trading range. Palladium currently trades at $732, down about 4% for the week. Meanwhile, platinum is coming in at $1,443 per ounce – and like gold it is relatively unchanged since last Friday's close.

Each of these four precious metals have held above their respective July lows, but they're trading essentially where they were at in early August. Will weeks of consolidation finally give way to a sustained rally? Well, the answer may have as much to do with investor psychology as with monetary policy.

All year long, investors have reflexively bid up the stock market in response to Fed stimulus and expectations of future stimulus – effectively using stocks as an inflation hedge. That's left precious metals markets without a visible role to play.

Of course, behind the scenes retail buying of physical bullion remains strong. In fact, 2013 is going to be a record year for Silver Eagle coin sales. But the hedge funds, paper ETF traders, and leveraged futures speculators got shaken out of the market early in the year and haven't yet come back in on the long side.

The hot money continues to chase U.S. stocks. But with the S&P 500 sitting at all-time highs – up 22% year to date – valuations are getting a bit stretched. Price/earnings ratios are well above historical averages. We've seen this before, and we know how it ends. The party may go on for a while longer, but it won't last forever.

Eventually, the bull market will exhaust itself, and investors will rotate out of relatively overvalued assets and into relatively undervalued assets. Gold this year has been a mirror image of the S&P 500 – it's down 22%.

It could be that the spark gold needs to get going again is outflows from the stock market, which could begin at any time. If you own stocks, now is a prudent time to be hedging your portfolio with the addition of some relatively undervalued gold, or silver bullion.

Well this week's 99 cent silver bonanza at Money Metals Exchange will soon be coming to an end. Our slashed premiums and free shipping offer has been shaming the competition and bringing customers out in droves. The most popular item has been 10-oz silver bars, which, like our 100-oz bars, are still available at just 99¢ over the silver spot price per ounce.

Meanwhile, those preferring the smaller size can obtain 1-oz silver rounds at just $1.19 over spot, or Canadian Silver Maple Leafs at $2.39 over spot. And those premiums apply no matter how small your order. However, customers who spend at least $5,000 worth of these discounted silver items will receive free shipping and insurance and their entire order.

We've been overwhelmed by the demand but inventory is still available at these bargain basement levels, an offer made even better by the recent dip in silver prices. To check pricing or to place an order you can either visit us online at www.MoneyMetals.com, or just give us a call at 1-800-800-1865 and one of our knowledgeable and no pressure specialists will be happy to assist you. But time is running out so don't delay.

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 depreciating dollar... with speed, with accuracy and with top notch service. Have a great weekend everybody.

Announcer:

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.