by Mike Gleason, Money Metals:

Even “Government Sachs” Is Now Worried About the Federal Reserve Note

Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.

Well, today concludes perhaps the most incredible month the precious metals markets have seen in a decade or more. It certainly was an extraordinarily busy month here at Money Metals Exchange. A tremendous number of new buyers have entered the market in recent weeks, and we are very fortunate to welcome an increasingly large proportion of those Americans as new Money Metals customers.

Over the years, Money Metals has been especially successful in attracting first-time buyers by virtue of our vast educational resources and content, our helpful, non-commission sales team, our wide array of programs and product offerings, and our customer service philosophy.

Even as we have staffed up dramatically to handle the new surges in demand over the past few months, we are actively beefing up our staff levels even further to accommodate for the ongoing growth. We are deeply thankful for your patience and trust. And we will never let you down.

Well, without further ado, let’s get right to this week’s market update.

Another big week for precious metals markets as gold prices catapulted to new record highs.

The monetary metal traded as high as $1,975 an ounce on Wednesday. As of this Friday recording, gold comes in at $1,980 and shows a 3.7% or $70 an ounce gain for the week. As July comes to a close, gold is up better than 11% for the month and has advanced nearly 30% for the year.

Gold’s record-setting rise has been driven by Federal Reserve stimulus, dollar weakness, and strong safe-haven investment demand. Even the Wall Street-centric financial media is taking note:

Financial News Anchor #1: Gold is shining once again, this morning. The spot price is touching all-time highs, as the dollar index sits around a two year low.

Financial News Anchor #2: Those gold prices have hit an all-time high. The spot price of gold reaching a record.

Gold traditionally surges in times of turmoil. In this case, the economic impact of the pandemic, and those US/China tensions. They are sending investors to this safe haven. But the Federal Reserve’s monetary easing measures, they also have a part to play in the price of gold.

The Federal Reserve on Wednesday left its benchmark interest rate unchanged near zero. But rates are actually going down in real terms as inflation threatens to come roaring back. That’s a hugely bullish factor for precious metals.

On the other hand, deflationary pressures could quickly return if the Fed lets up on the monetary gas. The GDP report on Thursday showed the nation’s gross domestic product contracted in the second quarter at an unprecedented annual rate of 32.9%. The collapse in economic output was offset by a surge in fiscal stimulus that caused personal incomes to actually grow overall.

Additional stimulus checks from Uncle Sam are likely coming soon. At least another $1 trillion will be added to the budget deficit, which is already the largest in history. But during a pandemic and in an election year, deficits don’t matter – at least not to members of Congress.

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