(Sponsored Content) Last Friday, New York spot gold closed above $2,600 for the first time ever, setting a record high near $2,620 and putting $3,000 gold in sight. Gold bullion has now risen 27% this year and set new all-time highs in six of nine months. I think it's just the start, writes Bill Musgrave with Dana Samuelson, vice president and president, American Gold Exchange Inc.
What is driving the latest leg of this astonishing rally? In a word, the Fed. The central bank cut interest rates by a whopping 50 basis points last week, the first reduction since 2020 and the biggest in 16 years. It's just the fourth time ever that an easing cycle has begun with a 50-point cut. All the others were during severe economic crises. Yet Chairman Powell, in his press conference, stressed that the economy remains “healthy.”
What has changed? The Fed’s focus. Its dual mandate is to maintain both price stability and full employment. With inflation ebbing back towards 2%, the Fed is now pivoting sharply – perhaps belatedly – to the job market, which has been weakening for months. The size of the rate cut betrays the urgency of the pivot, despite Powell's assurances.
Check out my latest Gold Commentary on our YouTube channel here. I drill down into the changes in the labor market that have provoked this unusually big step from Fed and explain why projections for future cuts are more aggressive than just a month ago.
To take advantage of this very bullish easing cycle, understand that silver looks very solid again. It’s testing a new breakout and when it runs, it runs hot! Don't wait if you’re interested in buying silver. The silver-to-gold ratio remains high at around 84 to 1. The ratio dropped down to 73 earlier this year when silver took a run, but failed to go higher. If the ratio comes back down to about 62 to 1, that’ll put it in the $40 to $45 an ounce range. So, silver remains cheap.
If you’re interested in silver, I have a special on 2023 British King Charles Britannias which I can offer as low as $2.79 over spot. This is great value on a sovereign-minted one-ounce silver coin out of Great Britain. I also have silver eagles at our regular everyday price as low as $4.99 over spot. Find them here.
A great gold special I can offer is a classic vintage European gold coin, the Napoleon III 20 Francs in Extremely Fine grade, minted in France from 1850s to1870. These historic coins are not rare, but they're a little scarce and they don’t have minting cost overhead since they are so old.
Napoleon III 20 Francs contain .1867 oz gold, which is between 1/10 oz and 1/4 oz size gold Eagle bullion coins. Right now, I have a little horde I found in the marketplace so I can offer them as low as 5% over gold value. That’s as good as it gets for small trading-sized physical gold coins! Find them here.
To learn more about American Gold Exchange, please visit Amergold.com
