Your Gold & Silver Outlook: 2013
APRIL 08, 2013
Your Gold & Silver Outlook: 2013
Silver prices have delivered the best gains since 2002, according to Lloyds TSB. But, of course, the key question for precious metals investors is whether gold and silver will continue to be a good performer for 2013.
What’s Happened So Far
The prices of gold and silver decreased slightly last week. This caused some notice from the media and investors. Even with the extremely concerning news coming out of Cyprus's, gold and silver didn't pull up from their downward price movement.
Gold has been trading at new lows for the year and Silver making multi-year lows. Some commentators are suggesting that the Gold/Silver bull market is over with.
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The Real Deal
Although off to a rough start, we still believe gold and silver are paced to go higher.
Gold and silver investments may have shot up five years ago, but they have been extremely popular this year.
In January, the United States Mint sold 7.5 million American Silver Eagle Coins. Yet in all of 2007, the US Mint sold only sold 9.9 million American Silver Eagles. So in the first month of 2013, the US Mint sold 75% of what it did in 2007.
In fact, demand was so strong that the Mint temporarily ran out of stock and had to suspend sales for roughly 10 days. In addition, the premiums of American Gold Eagle Coins hit highs not seen since June 2010.
The US Mint is expecting to sell a record number of silver American Eagles in 2013.
We know that to some investors, problems that surfaced during the recent recession, such as the collapse of the mortgage-backed securities market, prompted them to seek safety in tangible, versus "paper," assets. This is one of many factors boosting interest in owning physical gold and silver bullion.
Another trend that is surfacing is state legislation similar to the one passed in 2011 in Utah. This allowed gold and silver bullion coins issued by the US Mint to be used as legal tender.
People place their gold and silver bullion coins in the Utah Gold & Silver Depository and receive a card that acts similar to a debit card which they can use to make purchases of up to 80 percent of the coins' current value. A dozen other states have been considering similar legislation.
Some commentators seem temped to call this gold and silver bull market dead and gone. We think differently.
The fundamentals of gold and silver have not changed. There are still massive amounts of new currency in circulation. The United States Mint is selling record amounts of gold and silver. And most importantly, the role of gold and silver as monetary metal, not just another commodity, is beginning to resurface in states like Utah.
We haven’t seen nothin’ yet.
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