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Metal Market Report April 2021 - Week 5 Edition

April 2021 - Week 5 Edition

LBMA Sees an 11.5% Gold Rise and 38.7% Silver Increase in 2021

Every January, the experts at the London Bullion Metals Association (LBMA) predict the prices of the major metals for the year ahead. Their report was published in early February when gold was around $1,800 and silver was around $27 per ounce, respectively. At the time the report was published, the average price projection for the year 2021 was $1,974 for gold and $28.50 for silver, but the annual increase was far higher for silver:

Historically, the LBMA forecast has been quite accurate, but last year they were far too conservative, predicting an average gold price of only $1,559, or about $210 (-12%) below the actual annual average of $1,770 – in gold’s best year since 2010. This year, 12 of the 32 analysts predicted that gold would average $2,000 or more during the full year. The median (mid-point) of all 32 projections was $1,965 per ounce.

The lowest 2021 gold price forecast was by analyst René Hochreiter of Noah Capital Markets/Sieberana Research in Johannesburg at $1,650 with a peak of $1,840, but we’ve already seen prices far above $1,840.

The analyst who picked the highest gold price this year was Thorsten Polleit of Degussa, a German-based small-bar retailer, who forecast a peak price of $2,680 after a low of $1,750 (already exceeded at $1,685) and an average price of $2,300 in 2021. As gold’s main price influences, he cited “the politically dictated lockdown crisis...artificially low interest rates...[and] unprecedented growth rates [in] the money supply."

After a weak first quarter, all four of the precious metals have enjoyed a strong April, so far:

Precious Metals Gains During April 2021, So Far (Basis London pm price Fix)

Next week, we will bring you our regular monthly summary, including bullion sales by the U.S. Mint.

Gold and Silver Trend Higher in April

Gold rose $10 last week (+0.6%) and silver rose $0.25 (+1.0%), continuing their strong recovery during April, mostly in response to the overspending by Congress and the U.S. Treasury.  An increase of coronavirus cases overseas (especially in India) and a weaker dollar also pushed gold up. This week, the Federal Reserve will hold one of its eight-times-per-year meetings of the Federal Open Market Committee (FOMC) with an announcement due Wednesday on the state of the economy, interest rates and any change in its long-held belief that inflation, at worst, will only be a “transitory” threat later this year.

Rare Coin Market Continues to Heat Up – Along with the Weather

As the weather warms up and the nation begins to tentatively get out and about, we’re seeing rising dealer sales that are pushing rare coin prices up along with the April surge in bullion prices. Multi-million dollar coins have been selling on a regular basis in recent months. 

These coins are out of reach for 99.99% of coin investors.  Their impact, however, is now being felt for the broad majority of coin investors and collectors, since the rest of the rare coin market is also gaining ground and we’re continuing to see upward changes in the prices across a wide variety of numismatic types, grades and mints we recommend.

Americans have a lot of money to spend. In the last year, the U.S. government has printed trillions of dollars in “fiat” money, and recent studies by the Federal Reserve have shown that about 75% of that money has gone to savings or paying down debt. Never have Americans had so much money sitting in the bank. Most of us are not traveling, going on cruises or even driving much, so this money is free to go into investments.

If some of that money is “burning a hole in your pocket,” consider that some analysts are concerned that stocks are skating on thin ice, trading at historically high “price-to-earnings” ratios. It is definitely time to diversity into more gold and rare coins. I encourage you to call your representative and ask about what rare coins are now on the verge of making their next move up.


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