Gold rose 5.5% in the first half of 2023, and gold was one of the best-performing commodities in a year when most commodities fell. Many energy-related commodities and the platinum-group metals fell by double-digits as the Fed tightened the money supply and raised interest rates. As the first half of 2023 drew to a close last Friday, we also saw a big rally in stocks on a series of surprisingly positive economic statistics, which point to the likelihood that the U.S. may avoid a recession this year, despite many official predictions that indicated 99% certainty of a recession or “hard landing.” These positive economic readings also raise the odds that the Federal Reserve will raise rates by another 0.25% at the end of July, which could put a damper on gold’s price in the short term.
The U.S. Mint has partially updated its bullion sales totals on its Web page, after months of neglect! It turns out the sales aren’t too far off last year, but their premiums are still outrageously higher for Silver American Eagles when compared with other major world mints. While dropping recently, wholesale premiums are still $7.25-plus over spot price, well above the Perth Mint at $2.50 over spot, the British Royal Mint and the Royal Canadian Mint, both of which are at $2,40 over spot.
Bullion Coin (Sales in Ounces) June 2022 June 2023 Jan-June ’22 Jan-June ‘23
Gold American Eagle 52,000 37,000 (-29%) 741,500 728,000 (-2%)
Gold American Buffalo 21,500 14,000 (-35%) 259,500 273,500 (+5%)
Total Gold Bullion 73,500 51,000 (-31%) 1,001,000 1,001,500 (+0.1%)
Silver American Eagle 925,000 1,255k (+36%) 10,715,500 9,497,000 (-11%)
The Mint Website mentions its “modest premium” for silver Eagles but I would call that “false modesty.”
The Silver American Eagle is not a good buy, unless you want to give a few coins to children or grandchildren as a gift. Also, the Eagle is only .999 pure, which is good, but some other world mint bullion coins are .9999 pure. Ask your account representative for popular comparable silver bullion products at much lower premiums.
The Role of the National Coin & Bullion Association (NCBA)
I have served on the board or Executive Board of the National Coin and Bullion Association since 1995 and was involved with its predecessor, the Industrial Council of Tangible Assets (ICTA), from its inception. My associate back then (and now), Gary Alexander, was present when ICTA was launched in May 1983 during a New Orleans conference of leaders in the “hard money” newsletter and bullion business.
Here is part of what Gary wrote in his June 1983 “Alexander’s Monthly Economic Newsletter” (AMEN):
“Mid-May 1983 marked the 200th anniversary of the Treaty of Paris, which gave America independence. This week also marked the 50th anniversary of the death of the Gold Standard in America in 1933. Also, the M1 Money Supply crossed the psychological half-trillion ‘barrier’ with no sonic boom, from $499.9 billion to $506.9 billion, marking a $13 billion rise in three weeks (a 56% annual rate). But on Thursday, May 19, I witnessed an event that just might change the direction of our nation, not immediately, but as part of a glacial reversal of the Megatrend of the 20th century, away from a seemingly benign collectivism of Big Brother, and toward the participatory activism which characterized the birth of our nation.”
“In New Orleans on May 19th, more than 60 leading figures in business and political action met at the Airport Hilton to plan a counterattack against a series of anti-hard asset measures being sponsored by various leftist politicians and special interest groups.
“These people pledged a significant amount of money, to promote the cause of financial freedom. I could be forgiven my flair for the dramatic, it reminded me of the Continental Congress 210 years ago. Men of substance pledged ‘their lives, their fortunes, and their sacred honor’ when 56 of them signed the Declaration of Independence…
In my four decades of active involvement and three decades on the ICTA/NCBA board, I am most proud of working toward the removal or lowering of tax rates on the sale of coin and bullion products in Texas, Louisiana, and other states over the last couple decades. It was exactly 10 years ago, on the eve of the Fourth of July in 2013 that I led member dealers in Texas, and lobbyist Jake Posey, to make the case to the Texas legislature to expand their sales tax exemption for rare coins and some precious metals, including gold, silver and platinum, by eliminating the $1,000 threshold. Without the unity of our members – although we vigorously compete for business! – we could not win these victories for all our customers.
Please consider supporting dealers like us, who fought to obtain sales tax freedom on precious metals, when you choose a rare coin and precious metals dealer.
Metals: End- 2022* June 30, 2023 2000 2005
Gold $1,812 $1,912 +5.5% $290 (+559%) $437 (+338%)
Silver $23.95 $22.47 -6.2% $5.34 (+321%) $6.78 (+231%)
*Final London fix of 2022 vs. June 30’s final London price
Stocks: End-2022 June 30, 2023
Dow 33,147 34,407 +3.8% 11497 (+199%) 10021 (+243%)
S&P 3,839.5 4,450 +15.9% 1469 (+203%) 1142 (+290%)