July 2024 - Week 3 Edition
Our Firm Represents GOLD at Freedom Fest 2024 in Las Vegas
Despite gold setting a new high at the close of this year’s Freedom Fest in Las Vegas, the yellow metal had a relatively small presence at this year’s convention, compared to previous conventions. There was a “Bitcoin Lounge,” but no Gold Room. I was on the only main stage Gold Panel, along with my friend Gary Alexander, who served as emcee, and another panelist, who minted wafer-thin gold financial notes.
Also, I was one of only two platinum sponsors to speak at the closing banquet, where I referred to the history of gold and silver rising by 24% and 47%, respectively, in 2020, the last time Donald Trump and Joe Biden faced off in a presidential election. I also mentioned the fact that gold has risen in the past four election years and is way up in for the fifth election year in a row. In bringing this up, I quoted Mark Twain’s observation, that “History does not repeat itself, but it does often rhyme.”
Speaking of history repeating itself, my associates Jerry Jordan and Gary Alexander and I were in a seminar on the unresolved issues of the JFK assassination of 1963 when we got the news on our cell phones that President Trump had been shot at 3:15 on Saturday. That came a day after Robert F. Kennedy, Jr., gave a stirring talk at Freedom Fest with a small security team that he had to pay for himself – since the Biden Administration (through Homeland Security) had repeatedly turned down any and all requests for Secret Service protection for this major presidential rival. Finally, after the tragic shooting of Trump, Kennedy has now been granted Secret Service protection.
In my banquet talk – which came just four or five hours after President Trump narrowly escaped a sniper’s bullet, I also mentioned that the former President took time out of his busy schedule in 2017 to stay by the bedside of then-House Majority Whip Steve Scalise, who was shot by a Bernie Sanders supporter on the morning of June 17. Scalise and other House and Senate members were practicing for the annual charity Congressional baseball game when he was shot and left in critical condition. The audience did not seem to be aware of this.
I also noticed there were a handful of other gold dealers at Freedom Fest and some did not seem to be aware that Nevada requires sales tax collection on all gold products except bars and rounds. Some did not even know about the correct IRA requirements for precious metals inclusion. As I said in our gold panel, to a big round of applause, we have worked long and hard to make precious metal coins and bullion purchases TAX FREE in 44 of the 50 states and the others could fall soon! I’ll have more about Freedom Fest next week but be sure to call your representatives now, before gold reaches $2,500.
We Change Our Gold Performance Chart for the First Time Since 2008
You might notice that we have changed our Gold (and Silver) Performance Chart (below) for the first time since we launched the chart, soon after the Metals Market Report was launched during the Great Financial Crisis of 2008-09. We used the then-recent starting dates of January 1st in 2000, 2005 and 2008 to show the comparative gains in gold, silver and the two major stock market indexes.
In this revision, we chose to keep 2000 as our starting year, since we are approaching the 25th anniversary of Y2K in just over five months. That gives us the necessary long-term comparison over the past 25 years. However, we have chosen to replace 2005 and 2008 with the pre-COVID starting point of January 1, 2020, and then the pre-Fed interest rate-rising date of January 1, 2022. That’s because the financial world still operates under the illusion (delusion) that gold will RISE when interest rates fall and gold will FALL when interest rates rise “since gold doesn’t pay interest and therefore gold will trade at a disadvantage to cash when interest rates are high or rising.”
As we have often said here, this interest rate theory was proven false when interest rates rose to 20% between 1976 and 1980, yet gold staged its biggest bull market ever. When gold peaked at $850 per ounce in early 1980, the prime rate was nearly 20%. Gold’s next biggest bull market, from 2001 to 2011, also included a major interest rate rise, from 1% to 5.25% in the Fed funds rate from 2004 to 2006 and yet gold kept rising during that time, from $400 to $600 an ounce.
This time around, the Fed raised the federal funds rate the fastest ever – from near-zero to 5.25% in just 16 months, from April 2022 to July 2023 – and as our new chart shows, gold and silver have virtually doubled the stock market’s performance since the start of 2022, despite that huge rise in interest rates. Gold is up 34.4% (and silver 30%) vs. 13.3% for the Dow and 17.4% for the S&P.
So, gold has doubled the S&P 500 and silver has doubled the Dow during a time of rising rates – yet the news this Wednesday morning still says gold is up “on speculation the Fed will begin interest rate cuts in September, since Fed Chairman Jerome Powell said on Monday that after the recent inflation data, policymakers have greater confidence that inflation is approaching the Fed’s 2% goal.”
Will they ever learn? We don’t know and we don’t really care, since we remain ahead of this market curve. Call your account representative today to learn about our new and exciting gold and silver recommendations for your collection, portfolio or IRA.
On Wednesday morning, July 17, gold came within $12 of our predicted target of $2,500, reaching yet another new all-time high of $2,488 on the futures market, before settling back down to $2,458. Pundits say the gains came primarily on speculation that the Fed will begin interest rate cuts on September 18, since Fed Chairman Jerome Powell said on Monday that after the recent inflation data, policymakers have greater confidence that inflation is approaching the Fed’s 2% goal. Also, in the midst of the Republican National Convention, it looks like Trump has the inside track to victory but if the Democrats rally and “the wrong guys win in November,” Steve Forbes, who I visited with again in Las Vegas, and I both think gold could soar well beyond $2,500.