SD Metal & Markets: With gold breaking-out to multi-year highs, you won’t want to miss this insider’s look at the bullion industry…
Another strange week in financial markets as hoopla for what the Federal Reserve was going to do with targeted interest rates was once again visited upon us.
This past Wednesday, June 19th, 2019, the US central bank Federal Reserve and it’s Open Market Committee decided to leave interest rates unchanged, yet they also hinted at standing ready to cut interest rates in the months to come to potentially accommodate financial markets as a possible recession draws near.
Last week our guest David Jensen pointed out that the previous 2 Federal Fund Rate cut cycles were closely intertwined and followed by financial market recessions. So the ongoing meme that somehow if the Fed cuts rates it will be good for financial markets, in the long run, remains dubious based on past cycles.
What you are looking at right now is a Bloomberg chart tweeted on Wednesday by Real Vision’s Raoul Pal, and it shows the full fiat currency era in terms of Fed Funds Rate cut cycles versus recessionary timeframes.
The correlation is not perfect, but about 75% of the time the Fed’s cutting of interest rates got closely followed by financial market valuation losses for the mass of US stock shareholders.
Turning now to the gold and silver markets on the day of this recording 7:45 PM Eastern on Wednesday, June 19th, 2019. The silver spot price reacted positively to the news that the Federal Reserve is likely to go full dovish with accommodative policies. We are closing the day with the silver spot price around $15.20 per troy ounce in full fiat US dollars.
As for the gold price, similar story with a day closing $1,365 per ounce fiat Federal Reserve not price. Remains to be seen if gold can find enough strength to plow through this long-running $1,400 oz resistance level any time soon, or will it merely be a little later for gold to resume its long-awaited upswing in price.
The gold-silver ratio has fallen below the near 30-year high mark of 90, closing the day’s trading at 89.5 ounces of silver to afford one mere troy ounce of gold. If we do end up seeing Federal Fund Rates cut and the US dollar somehow strengthens into the end of summer, do not be surprised to see this ratio climb a bit higher and possibly threaten the 1930 Great Depression-esque 100 level.
For more thoughts on the Federal Reserve’s interest rate decision to stay put (but we might cut rates soon) communication this week, I suggest checking out the 30-minute conversation I had Wednesday midday with Silver Doctor’s Paul ‘Half dollar’ Eberhart on our Silver Doctors youtube channel. <— I will leave a link to that video in our Full Show Notes.
As for this week’s guest, given that I am traveling this Friday, June 21st, 2019… a few days prior, I engaged in a reversal of roles for this week’s Metals & Markets podcast.
Rather than my interviewing an expert in the precious metal and or financial industry, I got interviewed by a precious metal vlogger and youtube channel Dobson777a.
We touch on various nuances in the high volume bullion industry, and that discussion gets underway right after this brief message from our show’s sponsor.
Who is SD Bullion?
How did SD Bullion begin?
Where are is SD Bullion located?
The Top 10 Bullion Products and how we differentiate our services?
How can bullion buyers retain anonymity? (Learn more about Bullion Reporting Statutes)
If you do buy locally, always buy cash on the barrel the same moment, no delays.
This Tulving debacle is just one example of those who have been burned before.
About the concept of using a USPS PO Box to take bulky delivery of bullion to keep its final long term storage location better disguised.
The concern of using private UPS or FedEx locations for any bullion delivery (this often breaks the insurance policy).
How shipping bullion in the USA without 3rd party bullion dealer insurance policies in place, is best done using USPS Registered Mail.
When people sell bullion to us, what is the process?
What is SD Bullion’s shipping methodology? How do you do it?
The methodology and choices made when packaging various bullion products.
We discuss some bullion safes and vaults that we offer at SD Bullion.
A few points on bullion safes and storing gold or silver at home.
The fact that we also offer Home Bullion Insurance services which also can cover collectible numismatic coins at mere basis points (fractions of a percentage) per year based on aggregate fiat currency valuations of the precious metals and coin collections being privately held first hand.
We got to talking about 90% Junk Silver Coins and the spectrum of which kinds people like and precisely why.
We discussed how cheap the Platinum vs Gold price is at the moment.
We talked a bit about Jesus Christ-era silver coin product SKUs on SD Bullion.
What is the silver price going to look like in 10 years?
I made a video a few weeks back entitled, “When to Sell Silver?” and that primarily has some crystal clear pointers about what I deem silver’s fair value to be and when it may make good sense to reallocate some bullion holdings into other asset classes.
By the way, James here, I misspoke, the eastern price aggregate for silver is about $80 USD oz today not $85. That can and will change with time.
How having a prudent bullion investment allocation always makes common sense when living in a full fiat currency era.
The controversy of cleaning 90% junk silver coins and why when cleaned, they remind us about how we became a great nation.
Thanks to Dobson777a for taking the time to speak with me at SD Bullion.
And thank you, listeners, for your interest in our weekly silver gold podcast market wrap.
About the Author
James Anderson has a BA in finance from Loyola University New Orleans. He has both worked and invested in the physical investment grade bullion markets prior to the 2008 global financial crisis.