Our story is a fun one this week. We will show you the massive collection of collectibles, Civil-war era gold that was found in a corn field recently. You read that right, there is still hidden caches of old US gold hidden around the country. Will you be lucky enough to stumble upon one?
Gold and Silver Analysis
The focus on the gold and silver chart is similar this week, so we are just going to show you one of them. The story is similar for both.
Simply put, gold and silver have both broken ranks and moved to the upside. This is occurring during a seasonally weak period for the metals. Traders, however, are betting on higher gold and silver prices for the rest of the year. Something about bank failures, cryptocurrency winter, and geopolitical uncertainty has the market spooked. So instead of going short on both gold and silver, traders are staying interested.
This does not mean that gold and silver will not suffer a summer swoon as they do most of the time. But it does give confidence that the market is recognizing risk factors that are going to drive the metals higher later in the year. I would not read any more into it than that, but that is still a nice reversal from expectations this time of year. I will take it!
The Macro View
The biggest piece of news this week is the lower CPI print for inflation, at just 3%. This is quite the reversal from the first half of the year, and the pressure we saw on prices last year. However, I would like to offer a word of caution. We have been saying that prior to what is expected to be a major, world recession, prices will fluctuate in an inflation-deflation cycle.
This type of volatility in consumer prices is also reflected in financial market prices as well. We can see that despite XRP receiving a positive court ruling freeing it from regulatory purgatory, the crypto markets are all down today. Bitcoin, Litecoin, and Ethereum are off their highs. One could see this and think that the crypto markets are in trouble because XRP is suddenly back in play again. Here are my thoughts on that.
XRP is more than likely to play a role as the rails system (connector system) for the central bank digital currencies (CBDCs). That is what it is essentially designed for. So, it does make sense that XRP’s victory, in this scenario, puts downside pressure on what is private competition in Bitcoin and Ethereum for the CBDCs.
The ruling is also very positive for other cryptos that may have similar features as XRP. Many crypt analysts are correctly pointing out how this could be positive for the overall crypto market, but the rulings on crypto are likely not done yet either. I expect the SEC and other regulators to continue to take a very tight look at the cryptos themselves, the exchanges, and any companies like banks or tech that support them. The fight over regulatory requirements for the private crypto market are not over yet, in my opinion. But today will come to be seen as a landmark decision in the life of the crypto market for years to come.
We had some weaker jobless claims than expected which indicates some firmness in the temporary labor markets. But this is a single data point in an otherwise quiet week. It is difficult to make too much of it now. Next week we get more relevant data which we will go over in detail in the next article.
Story of the Week
A farmer found 700 Civil War-era gold coins in his cornfield recently. As reported by Live Science magazine, a Kentucky corn farmer found this treasure trove when working in his field. First, congratulations to this man for finding over $1 million in gold at melt value. But wait, it gets better.
While the story does not report how much the Kentucky man received for his find, we can anticipate his payout is much higher than just the metal melt value found in the coins. The coins are valuable for their rarity given the time frame they were minted. Beyond that, their historical significance is extraordinary.
I hope that the man received a proper appraisal for his newfound booty and was able to turn that into a nice retirement fund. But assuming he holds on to it all, at least he does not have to grow and pick corn anymore if he does not want to. While the find is nice, it does bring into scope the value of collectible coins.
My own personal journey with collectible coins has also been positive. They have held value extremely well since I purchased them 4 years ago. And looking at the historical chart, many popular numismatic coins do well over time when gold is in high demand. The demand for bullion often spills over into higher-premium items such as pre-1933 coins and other coins of similar historic and national affinity value.
If you like US coinage and are a fan of the time, then this collection likely has an extreme value that may not be measured simply in price terms. And that is where collectible coins drive a much different market dynamic than regular gold bullion.
Coin of the Week
Staying within this week’s article theme, I am picking a collectible coin for the coin of the week. Pre-1933 bullion is significant because it marks the time in which gold was no longer used as money in the US, and we set upon the current system of purely fiat (paper) money with no natural metal backing. JM Bullion has a nice collection of these coins at fair premiums to the market. Research this market first before you buy. But if you are curious about collectible coins, I fully recommend you take a look.
