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Money Metals News Alert
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March 17, 2025
– Gold and silver prices shined last week. Gold managed to briefly break
through $3,000/oz and silver closed at its highest level since 2012.
The metals have been outperforming
U.S. equities for more than two decades, but the past few weeks have put a
spotlight on that fact.
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There are a number of
potential factors driving the recent outperformance.
Tariffs will be disruptive
to multinational companies reliant on overseas manufacturing and imports.
At the same time, much of
the U.S. supply of gold and silver comes from Canada, Mexico, and South America
where tariffs are expected to make imported metal more expensive.
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And the U.S. Congress has just punted
once again when it comes to reining in inflationary government spending.
Despite higher metal prices, demand in
the retail bullion markets remains muted, premiums are low, and inventories are
plentiful. While some investors are encouraged by the strong price action, others
view the higher prices as an opportunity to sell.
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Gold : Silver Ratio (as of
Friday's closing prices) – 88.1 to
1
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Sidestep These Gold & Silver Blunders...
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The unfortunate truth is that it is
possible for bullion investors to lose money in an up market. Some buyers are
learning that lesson now, and it is worth sharing.
Those who understand how these markets
work can make better decisions about what to buy and when. They might even take
advantage of the bullion market idiosyncrasies to magnify gains.
At Money Metals, we go to great
lengths to educate the public about this topic. However, not everyone has seen or
taken our advice.
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An example: One of our
clients was among the waves of investors buying coins, rounds, and bars in 2021.
They ignored our warnings to stick with low premium bars and rounds – and
instead chose to purchase silver American Eagles which were in very short supply
at the time.
Premiums for that coin
– the amount bullion dealers charge above the silver market price –
were at unprecedented highs due to inventory shortages.
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It was the result of a potent
combination of factors. Eagles were the most popular silver product any bullion
dealer sold. The market was flooded with buyers while sellers had vanished.
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U.S. Mint Incompetence Causes
Erratic Premium Swings
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And Eagles are produced by the inept
U.S. Mint, an absolutely incompetent organization which actually dramatically
shrank production despite overwhelming demand!
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Money Metals had been loudly
encouraging clients to avoid paying the inflated premiums and turning to other
items. We regularly published warnings about Eagles being significantly
overpriced. However, there has always been a strong impulse among buyers to stick
with official U.S.
Mint coins.
The silver market price at
the time was $25.20/oz. The premium was a whopping $14/oz. So our client paid more
than $39 for each 1 oz coin. (Other dealers were charging even more.)
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The U.S.
Mint has become notorious for its mismanagement.
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Last week, when the client called to
discuss selling, he discovered the premiums had collapsed. There are plenty of
sellers now, and the sky-high premiums in recent years have come way down.
The silver price had risen to $33.50,
but the total bid price, including the bid premium, for his Eagles was about
$34/ea. The client is currently underwater by roughly $5/coin despite silver being
$8 higher.
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Avoid High Premium Items and
Focus on the ???Melt Value???
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The first thing to understand about
bullion investing is that the metal you buy has TWO components. There are
essentially two independent markets driving bullion prices and they don???t
necessarily move in the same direction.
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The first component is the
market price, or ???spot???
price for the metal, and it is set in the futures markets. This is the price
talked about in the media and it is what most people focus on.
The other component is the
premium mentioned above. This is a price gold and silver dealers add to the market
price to determine the total price for any retail bullion product.
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When it comes to premiums, the
manufacturing capacity of mints and refiners who produce coins, rounds, and
retail-size bars matters a great deal. So does the volume of buying and selling
amongst bullion investors.
In other words, mine output and the
availability of large
COMEX deliverable bars haven???t been much of a factor in premiums – at
least up to this point. It???s all about supply and demand in retail coins, rounds,
and bars...
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This week's Market Update was
authored by Money Metals Director Clint Siegner.
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This copyrighted material may not
be republished without express permission. Offer only available through email
promotion. Offer does not apply to previous orders and may not be combined with
any other offer or program. Special shipping rates or other restrictions may apply
to international orders. The information presented here is for general educational
purposes only. Money Metals Exchange and its staff do not act as personal
investment advisors. Nor do we advocate the purchase or sale of any regulated
security listed on any exchange for any specific individual. While our track
record is excellent, investment markets have inherent risks and there can be no
assurance of future profits. You are responsible for your investment decisions,
and they should be made in consultation with your own advisors. By purchasing from
Money Metals, you understand our company is not responsible for any losses caused
by your investment decisions, nor do we have any claim to any market gains you may
enjoy. Money Metals Exchange is not a regulated trading ???exchange??? as defined by
the CFTC and the SEC.
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