Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.
Precious metals markets enter summer trading with investors looking for signs of a directional move.
Gold and silver prices consolidated this spring with silver showing more of a downside bias. Silver did find 200-week moving average support in early May, however. That long-term trend indicator is also now heading in an upward direction. So, there is a good chance that the lows for the year are in.
This week’s price action has silver little changed for the week and currently comes in at $22.12 per ounce.
Gold is having a nice reversal here today and is now up 0.9% for the week to bring spot prices to $1,877 an ounce.
Platinum is off 5.5% for the week, giving back most of last week’s robust gains to trade at $985 as of this Friday morning recording. And finally, palladium checks in at $1,981 per ounce after suffering a weekly decline of about $50 or 2.4%.
Metals markets have yet to fully reflect broader inflation pressures in the economy, a statement you’ve heard us repeat many times in recent months.
As food and gasoline prices hit record after record, another inflation problem is also impacting consumers. It’s been dubbed “shrinkflation.” It refers to the practice by manufacturers and retailers of disguising price increases by shrinking unit sizes.
For example, bottles of juice are getting slimmer. Bags of chips are getting lighter. And the Associated Press reported this week that a small box of Kleenex that had 65 tissues last year now has just 60.
Businesses everywhere are shrinking staff and shrinking the services they provide to customers. Hotels now nudge guests to opt out of daily housekeeping, or make it just it totally unavailable altogether. Airlines barely provide anything resembling customer service anymore, while also eliminating many flights due to rising fuel costs and a lack of pilots and flight crews.
The decline of the flying experience compared to the charm and glamor of decades past is due in part to inflation. Instead of raising airfares to reflect the costs of maintaining previous standards and amenities, airlines have decided to offer bare bones service and nickel-and-dime passengers for anything they might want.
The shrinkage of customer service and unit value at stores allows corporations to avoid drastic price hikes. But savvy consumers won’t be fooled. They know that price isn’t the same thing as value.
At the grocery store, what matters most isn’t the price tag on a product per se, but how much product consumers are getting for the price. The best value is usually found in larger sized products.
That is also true to a significant extent when it comes to bullion products. Fractional sized coins of less than one ounce tend to cost more than full ounce or larger coins when considering the costs per ounce. Large bullion bars often provide the best value in terms of metal content.
But there are exceptions to be aware of. Sometimes premiums on pre-1965 silver coins or scratched and dented gold coins are among the lowest available. Although such deals are a little harder to find nowadays though considering a lack of selling of these secondary market only items.
Sometimes buyers find utility in fractional sized items or aesthetic value in coins that arrive in mint condition.
Bargain hunters at the grocery store will often opt for generic or store-branded products. In many cases, they have exactly the same ingredients as pricier counterparts next to them on the shelf that are put out by more recognized name brands.
This principle also applies to bullion shopping. A popular name brand such as the U.S. Mint’s American Eagle will carry a sizeable premium over a round issued by a private mint that is less well known.
In fact, we strongly suggest customers consider avoiding purchase of silver Eagles until and unless premiums become more reasonable. There’s little rationale to sink money into Silver Eagle premiums – that’s good money you may frankly never recover when you sell.
A Statue of Liberty silver round produced privately by Money Metals has the same .999 purity as a Silver Eagle. If they were both melted down, they would look exactly the same, have exactly the same physical properties, and be worth exactly the same amount. Silver stackers who opt for the Statue of Liberty round will save at least $5-7 per ounce compared to the American Eagle, which is manufactured by the extremely poorly managed U.S. Mint.
The Statue of Liberty round is Money Metals’ newest silver bullion offering. These one-ounce beauties are a great addition to any investor's portfolio. They are stylish and carry meaningful symbolism. The rounds feature the shared value which made America great – liberty and self-reliance.
Many other silver bullion products represent great value as well – especially at currently depressed spot prices. And when you buy from Money Metals, you can be assured that you won’t experience shrinkflation in either the products we offer or the award-winning customer service we provide.
An ounce of silver or gold will always be worth its exact weight in silver or gold. By contrast, a depreciating U.S. dollar may at some point not even be worth the paper it’s not printed on!
Before concluding today, I want to make a quick mention that we’re now accepting applications for the 2022 Sound Money Scholarship – a Money Metals program to help savvy students pay for the ever-increasing costs of college.
Starting back in 2016, Money Metals Exchange set aside 100 ounces of gold as a fund to reward outstanding students who display a thorough understanding of economics, monetary policy, and sound money.
The Sound Money Scholarship is open to high school seniors, undergraduate, and graduate students with an interest in economics, specifically the free-market tradition. Applicants do not have to be economics majors to be eligible.
If you know a student who might be interested in applying, please direct them to MoneyMetals.com/scholarship for more information. Applications must be submitted by October.
Well, that will do it for this week. Be sure to check back next Friday for our next Weekly Market Wrap Podcast. Until then this has been Mike Gleason with Money Metals Exchange, thanks for listening and have a great weekend everybody.
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.