Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.
The gold market rallied this week as the U.S. dollar took another leg lower.
The Dollar Index broke down to 7-month low on Thursday. Currency traders reacted to a government report showing inflation retreated in December. That increases the likelihood of the Federal Reserve winding down its rate hiking campaign soon.
Gold prices rallied on expectations for a more dovish Fed. The monetary metal is up 2.4% this week to trade at $1,919 an ounce. Silver, meanwhile, is up 1.0% now for the week to come in at $24.20 per ounce. Platinum is off 3.5% since last Friday’s close to trade at $1,076. And finally, palladium is putting in a weekly loss of 2.4% to bring the per ounce price to $1,822 as of this Friday morning recoding.
Well, has inflation peaked? The Consumer Price Index fell 0.1% in December, bringing headline CPI down to an annual rate of 6.5%.
That’s still well above the Fed’s target, of course. And despite seeing some relief in fuel costs last month, consumers continued to face rising food prices.
Price inflation may be moderating overall, but the inflation problem is far from solved. The underlying cause is the depreciation of the currency. The more dollars the government borrows into existence and the more dollars the Fed creates out of thin air to buy government bonds, the less those dollars are worth.
Nobody in Washington, D.C. seems to have a handle on how to tame spending or balance the budget. Some individual members of Congress have bold reform ideas. But they have no path to implementing them given the political realities of divided government and entrenched establishment leaders in both parties.
Sound money advocates are making more gains at the state level. In Tennessee, Sen. Frank Niceley has introduced the Tennessee Bullion Depository Act. The bill would establish a depository to operate either exclusively or nonexclusively as a precious metals depository and may be held and operated privately. A House version of the bill, sponsored by Rep. Bud Hulsey, is expected to be introduced soon.
Niceley and Hulsey are steadfast champions of sound money, earning them the 2022 Sound Money Legislator of the Year award last year for their work on eliminating Tennessee's state sales tax on gold and silver.
The depository would serve as the custodian, guardian, and administrator of certain bullion and specie that may be deposited by the state of Tennessee or by private individuals or entities.
Privately owned and operated, a state-chartered depository enables citizens to store their precious metals for a fee. And the involvement of the state in an otherwise private depository potentially provides an additional layer of constitutional protection against federal-government aggression, such as the gold expropriation of 1933.
Using a depository account, citizens could also someday engage in transactions using gold and silver electronically. An account holder could make a purchase and pay the seller by transferring precious metals to the buyer’s account. The funds being transacted could also be converted to Federal Reserve Notes and deposited into an account at a typical bank.
States that help set up depository systems will help further to bring gold and silver into use as an alternative to the inflationary paper-money system.
Of course, individuals in every state have options for storing their precious metals securely. And with crime on the rise, it is becoming increasingly important to make sure your bullion holdings are secure.
Money Metals Exchange Specialists have heard numerous horror stories from clients who have had their bullion stolen from inside their own house.
The culprits often turn out to be people who were known by the victims and invited into their home. Common perpetrators of in-home thefts include caregivers, housekeepers, and contractors. Sometimes even relatives or acquaintances take advantage of the trust they are given and steal from those close to them.
Unfortunately, most home safes are not as “safe” as people think they are. A safe that is plainly visible in an obvious location such as in a garage or in a master bedroom closet practically announces itself to thieves as the place to find your valuables.
Any burglar who has some tools, some skills, and some determination can break into a typical home safe.
For convenience and for immediate access during an emergency, you’ll want to store some of your precious metals at home. But maybe not all of them.
The old adage, “don’t put all your eggs in one basket” applies. A single point of access for your entire bullion stash means it is potentially vulnerable to a single security breach.
Having multiple storage locations in your home or around your property makes it less likely that an individual criminal will be able to loot all your valuables. Having at least one other storage location far removed from your home will ensure that you never suffer a total loss even if your property is invaded and ransacked from top to bottom.
The risks to keeping valuable tangible assets at home include not just burglary, but fire, flood, and other disasters that could render your home destroyed or inaccessible.
A commercial vault facility has far stronger and more sophisticated anti-theft systems in place than you ever could have inside your home.
Money Metals Depository is based in Idaho, and it’s become so popular that we are in the process of building a new 40,000 square foot facility which will make it the largest depository by far in the Western United States. MMD is routinely audited, and it operates with the blessing and support of the state government of Idaho.
More than 10,000 Americans have already established storage accounts at Money Metals Depository, making it the fastest growing precious metals depository in America by far.
When it comes to physical security, a professional vaulting service such as Money Metals Depository also cannot be matched. Our facilities offer armed guards, Class 3 vaults, multiple perimeters, state-of-the-art electronic security, dual controls, and fully segregated storage. Our facility is also located in an adjoining building with the county sheriff’s office.
And if that’s enough, your bullion holdings are also fully insured in the unlikely event of loss or damage by Lloyds of London.
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.