June 2022 - Week 5 Edition
Shady Russian Gold Could Still Infiltrate Market, Affect Price
Gold remains above $1,820, despite the 8% rise in the U.S. Dollar Index (DXY) so far this year. Gold’s price reached $1,840 per ounce over the weekend but Western sanctions against Russian gold pushed the yellow metal down a bit Monday morning after the Group of Seven (G7) nations voted to ban new imports of bullion from Russia in another attempt to punish Russia for invading Ukraine. The key nation among the G7 is the United Kingdom (UK), since London plays a major role in distributing gold bullion. However, markets in Asia will keep trading Russian gold and nobody knows the gold’s origin after that!
The Number of Gold Investors and Volume of Gold Investing Keeps Climbing
Gold bullion is the clear winner among major investment asset classes, so far, in 2022 – merely by staying relatively level in U.S. dollar terms and rising substantially in terms of most other leading currencies. Since many global stock markets are mostly down by double digits and bonds fall in price as their yields rise, gold is the winner by merely holding on to its value.
Gold’s superior performance has driven more mainstream investors to the gold bullion market, both in physical coins and bars and in gold exchange-traded funds. In the physical market, we have reported on the U.S. Mint’s dramatic year-over-year increase in gold coin sales. Next week, we will bring you the mid-year report on Mint bullion sales. This week, we heard from the Royal Canadian Mint that total international gold bullion coin sales rose in the first quarter by 14%, year-over-year, to nearly 59 metric tons. That made it the best quarter in 35 years for gold bullion coin sales on a global basis, and we know from history that after 18-24 months about one in six bullion coin investors start to look into buying rare coins.
As for gold ETFs, we reported this past week that the World Gold Council calculated that total gold ETF sales rose to 268.8 metric tons in Q2, 58% above the 170 metric tons bought in the same quarter in 2021. Now, we have learned the total number of investors who have put money into some form of gold exchange-traded products since the start of the pandemic in March 2020 is now over four million, up 747% from the number of gold ETF investors before March of 2000. In time, these paper gold investors will want to own the “real thing,” – gold coins in their hand and some will want to own rare coins, too.
Gold Still Dominates the 21st Century
Gold has already won the 20th century, since the U.S. dollar lost 98% of its value to gold in the century after the birth of the Federal Reserve Bank in 1913. Gold has also beaten the dollar handily in the last 50 years since Nixon closed the gold window in 1971. Gold has also beaten stocks over the past 50 years.
Gold skeptics always like to measure its performance from its “bubble peak” of $850 in January of 1980, but gold was only above $700 for about a week and that kind of measurement is just as unfair as measuring stocks from their peak last January. Over any reasonably long-term period – say, 25, 50 or 100 years, gold outshines most major stock indexes and certainly it has whipped the U.S. dollar quite easily.
As we reach the end of June, we are now 22-1/2 years into the new century. Even though the U.S. dollar is at a 20-year high against a basket of other leading currencies, gold has trounced the dollar easily by gaining 529% in U.S. dollar terms – and significantly more in terms of other currencies.
Compared to the major U.S. stock market indexes, gold has tripled the returns of the U.S. stock market.
Gold has a 5,000-year track record of performance as “real money.” In the past decade, cryptocurrencies arose as a competitor to gold and cash, but most people bought bitcoin and other crypto’s to make a quick buck, not to use them as money. After that bubble popped, many recent investors have run for the exits because of crypto’s extreme volatility. Still, there is a real future for private currencies as a means of exchange using blockchain technology.
Get to know the “Team Mike” Professionals at Universal Coin & Bullion
Working with Dr. Mike Fuljenz, America’s Gold Expert ®
Steve Solis
Universal Coin & Bullion Sr. Account Representative
Referrals are the greatest compliment you can give to me.
Steve Solis, a Sr. Account Representative at Universal Coin & Bullion, has worked for the company more than 19 years. He was born in Karnes City, TX but his family soon moved to Houston. After graduating high school, Steve came to Beaumont and obtained a bachelor’s degree from Lamar University in Beaumont. While there, he also played on the university’s baseball team and met his future wife.
Steve and Leslie have been together for nearly 20 years and have two daughters. In his spare time, he plays guitar and is active in cycling and likes to fish occasionally. However, his favorite past-time is spending time with his family and that’s easy because he helps coach his girls in softball and soccer.
Steve’s charitable endeavors include supporting Texas Children’s Hospital, Boy’s Haven and Happy Hearts.
Numismatics for Steve became a passion and then a career. While at Lamar, he met with representatives of Universal Coin & Bullion and became a sales representative. His nearly two decades with the company have allowed him the opportunity to see and sell some of the rarest coins in existence. He’s even found “The King” of Carson City minted coins – an 1870-CC $20 Liberty Gold Eagle – and provide one to two separate clients.
Steve’s passion for helping his clients and finding the coins they need for their collections is one of the reasons he has been so successful through the years. There is great satisfaction when a client finds a coin they need to complete their set. Steve does collect coins for his own personal collection to share that legacy with his family but he also collects signed albums from his favorite musicians, as well.
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