Precious Metals Week in Review
Gold sputtered out of the gate last week from its open at $1,712.00 and dipped below the psychologically important $1,700.00 level on Wednesday at $1,693.00. In an uneventful finish to the week it slowly climbed back past the open to $1,716.00 on a weaker dollar. All eyes are still focused on the September 20 -21 Federal Reserve Meeting and decision on interest rates. All indications, including recent verbal confirmation by Fed Chief Jerome Powell, is to expect a mega .75 basis point increase in the “commitment” to lower inflation.
With the 30-yr fixed mortgage average in the U.S. at 6.589%, new originations have fallen to a 22 year low according to CNBC. The current lack of interest in taking on a mortgage with such a hefty interest rate and corresponding higher payment, has taken a toll on housing starts which were down 9.9% month over month in July. The Homebuilder Confidence index dipped below 50% for the first time since 2014. Evidence that explains the cautious nature in “Spec” housing starts. When considering gold bullion and coins as a hedge against mainstream traditional paper assets, it is important to consider the stability and growth potential compared to the losses incurred by not diversifying. Even if gold and silver respond to the chaos negatively, any losses historically have been a fraction of other assets.
Silver broke ranks with its yellow cousin by making a strong move last week from the opening bell throughout the week. Opening trading at $18.05 and boldly marching forward each session, throughout the week. Opening trading at $18.05 and boldly marching forward each session, silver boasts a 4.25% increase closing trading Friday afternoon at $18.85. Precious metals dealers report continued brisk purchasing of physical silver in all forms, bars, rounds, and coins. Random Year Silver American Eagles have reached an astronomical premium as demand has outstripped supply once again. Typically, when demand overtakes supply on the tremendously popular Silver Eagles is an excellent barometer of the lack of confidence in traditional markets by non-institutional speculators and blue-collar investors. The upside nature of the SAE market is evident in pricing. Internet dealers are selling rolls of Silver American Eagles at $35.00-$36.00per coin. This 88% premium level is not deterring the Silver Bugs from accumulating physical silver at what they still consider to be bargain pricing.
The feel of the market is one of uncertainty of which way the wind is blowing. The four-decade high inflation levels are cutting into purchasing decisions by U. S. households. Restaurant Associations report lighter than post-Covid levels. Households admit to taking fewer and shorter trips. Prioritizing is affecting the smaller investors’ purchasing habits. The problem is there is no wind to measure. It is wise to believe that the wind will pick up after the midterm elections. With predictions of a major upheaval in at least the U. S. House and possibly the Senate as well, the wait and see attitude is understood. You can expect that wind begins to blow. It will blow briskly. The consolidation phase of both metals appears to be completed and all that is needed for a breakout is a catalyst. Don’t wait for the headlines, prepare now before he explosion in price occurs.
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If you are looking for a safe investment that will hold its value even in times of high inflation, precious metals may be the answer for you. Check out our FREE eBook to learn more about using precious metals as a hedge against inflation. Our team at GMRgold can help you get started with your investments and provide guidance along the way.
GMRgold was created to serve as a safe and stable diversification partner when buying, selling, and trading gold, silver, platinum, and palladium. Let us advise you on new products, portfolio diversification, IRA and 401(k) options, valuation of your collection, and other matters related to the precious metals market. Call us today at 877-795-9585 or fill out our online contact form to learn more about our solid solutions using precious metals to diversify your portfolio.