This morning I arose to another weak day in gold. That was disheartening until I found that we are $10 an ounce higher than last week. So currently we have gold up just under 1 percent and silver down 1.5 percent with platinum losing nearly 3 percent to put the ratio versus gold underwater again. While these numbers are not rosy, I can’t help but believe we are in a major shakeout period for hard assets. There is much in the media about $1,934 having been the top for gold and silver’s test of $50 last year as a major top signaling the end of the bull market and this does scare me.
I believe we are witnessing a deflationary scare. The equities markets want more monetary easing. This being an election year power hungry politicians will deliver. Monetary (fiat) stress, deficits and rising debt will continue.
Gold type coins have been active with generally negative sentiment along with bullion, although the little guys are bucking the trend. I looked back five years to March 30, 2007, and find this of note: $20 Saints in MS-65 were at $1,375 basis gold at $663.60 or 2.07 times bullion. Today they are 1.36 times bullion. And $20 Liberties of the same grade are $60 cheaper at $3,950.
For the first time Trade dollars in G-4 are now over $100. They were moving up strongly a few years ago, but then Chinese counterfeits spooked the market. Now that numismatists have been educated, or have access to good information, confidence has returned.