The big news in precious metals this past month was gold's volatility. In fact, gold seemed to set the trend for all the major precious metals in June. The yellow metal plunged from a per-ounce price near $630 at the New York close on June 1 to a multi-month low just above $560 on June 13. Silver, which was trading at just below $12.50 an ounce at the start of the month, nearly fell below the $9 mark on June 14, eroding gains from the previous month. However, silver continued to follow gold's rise in subsequent weeks on news of higher oil prices. Spot palladium followed a trend similar to gold and silver for June, starting strong, stabilizing temporarily, and then dipping considerably mid-month. Palladium reached its lowest level in six months before climbing above the $300 mark. Finally, platinum showed strength early on, reversing its downward trend from the end of May, only to give up more than $100 per ounce by mid-June. Like the other major precious metals, the white metal showed signs of recovery, edging upward before stabilizing near $1,200.
| June Spot Price Summary (U.S. Dollars) | ||||
| Silver | Gold | Palladium | Platinum | |
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| High | 12.58 | 644.50 | 359.00 | 1260.00 |
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| Low | 9.02 | 562.50 | 275.00 | 1121.00 |
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| Open | 12.55 | 643.50 | 345.00 | 1246.00 |
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| Close | 11.03 | 614.15 | 320.90 | 1238.70 |
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CONTENTS
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Market Summary - June 2006 |
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Gold Down, But Definitely Not Out |
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Purchasing Silver Bullion |
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Precious Metals Worldwide News |
ABOUT NORTHWEST TERRITORIAL MINT PRECIOUS METALS MONTHLY
Combining market summary information and insightful analysis, this publication offers an insider’s perspective on the numbers, trends, and moves that drive the precious metals market, allowing you to stay on top of the most important investment news each month without investing hours of your precious time.
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CHARTS
The following charts display the low, high and closing spot price of each metal for the month of June, 2006. Source: Northwest Territorial Mint spot prices as posted at nwtmintbullion.com.
The following charts display the closing spot price of each metal for the five months ending June 30, 2006.
You can order the 2006 first-strike American Buffalo by calling Northwest Territorial Mint toll-free at 800-344-6468. Purchases of 4 or fewer oz. can also be made on our secure online store.
Gold Down, But Definitely Not Out
by Ross Hansen
Has gold lost some of its luster in recent weeks? It may appear so on the surface, but as financial advisors and trusted market analysts have warned time and again – making judgment calls based solely on appearances can be dangerous.
In the long run, they argue, good fundamentals are what really count.
While some have looked at tumbling gold prices this past month and cited seemingly valid reasons as to why the yellow metal will continue to falter, other analysts have taken a more global view of the situation.
Those bearish on gold trumpet three main factors for a continued price decline: rising interest rates; a strengthening U.S. Dollar; and stable oil prices (attributed to easing tensions in the Middle East).
They argue that gold's 'safe-haven' status – its attractiveness as an investment during periods of turbulence – has largely eroded because of recent world economic and political developments, namely the death of al-Zarqawi in Iraq, and the easing tensions over Iran's nuclear ambitions.
Furthermore, they contend that the large-scale speculative buying rush is over and that the same investors who caused the upward pressure on gold in May have been responsible for its sharp decline over the past month, suggesting that gold's value was unrealistically inflated by their presence in the market. As evidence, they offer up gold's 25% price drop since mid-May.
But the precious metals market wouldn't be as exciting as it is if all analysts took the same view. And many who look at the current situation see a bright future ahead for gold and other precious metals.
In a recent article appearing in the online version of MoneyWeek, the London-based financial news publication, one analyst concluded that the current market shakeup offers a great buying opportunity for investors willing to get in on gold and other precious metals, provided that they are willing to ride out the occasional rough patch.
Many agree with this analyst's position and argue that reasons for optimism in gold are ample. The first thing they point to in making their case is the fact that gold is still up nearly 20% over last year despite the recent sell-off.
Next, they cite gold's increasing credibility as a viable world currency. Though many western nations have abandoned a gold-backed currency in favor of fiat money, gold's perceived stability seems to be attracting increased investment from nations in the Middle East and Asia — including China, which is considering quadrupling its gold reserves according to a May 9 Reuters news story. Currently, China has the fastest-growing economy in the world.
Finally, those who hold a rosy view of gold's future point to the recent past for support. While many have argued that interest rate hikes — expected to continue throughout the year — are reason enough to steer clear of gold, those on the opposite side of the argument point to the gold price surge of the late 1970s, which occurred in the face of rising interest rates.
No one can predict exactly where gold is heading in the short or long term, but analysts who focus on more than just immediate concerns seem to favor the position that gold is temporarily down, but certainly not out.
Purchasing Silver Bullion
by Northwest Territorial Mint Staff
Gold has consistently grabbed bigger headlines than silver and its allure among investors has always seemed stronger. The past several weeks have certainly illustrated this point.
The release of the new pure gold American Buffalo coin by the U.S. Mint on June 22 and speculation about falling gold prices have garnered considerable media attention while silver's steady performance throughout the second-half of June seems to have gone almost unnoticed.
With the spotlight focused squarely on gold, it's easy to overlook silver's buoyant performance throughout 2006. Despite falling off a 25-year high reached in mid-May, silver is still up more than 30% over last year.
Yet even those seasoned bullion investors, who stay on top of market news and who may trade frequently in gold, may not know all they need to know about investing in silver.
How to Invest in Silver Bullion
If you've decided that silver is indeed an indispensable metal for your portfolio, here are a few things you might want to consider:
What kind of silver bullion should I buy?
Like other precious metals, silver comes in bars and rounds. Typically, silver rounds come in a one-ounce size while bars are available in a variety of denominations (1, 5, 10, 100, and 1,000 oz.). When considering liquidity – the measure of how easy it is to sell or trade a particular asset – silver rounds are generally preferred, owing to their portability and popularity among investors worldwide. However, silver bars are typically seen as a better value overall because they can be obtained at lower premiums over the spot or market price. In addition, they offer investors the opportunity to take a sizable position in silver without the cost or hassle of making large numbers of purchases.
How can I be sure of the purity of the silver I am buying?
Silver bars and rounds are stamped with their purity and content, generally denoted in Troy ounces, a commonly recognized unit of measurement. The purest investment grade silver is marked .9999-fine. The silver Canadian Maple Leaf is a popular example of a .9999-fine silver one-ounce bullion round.
Should I only own nationally minted silver bullion?
The principal argument for buying government-minted silver rounds, such as the American Eagle and the Canadian Maple Leaf, is that these are more recognizable to prospective buyers, and thus, easier to liquidate. However, silver bullion products created by Northwest Territorial Mint and other private mints, which include both bars and rounds, carry a lower premium than do government coins and can potentially yield a better rate of return upon sale. Most advisors suggest including bullion from both sources in your portfolio.
Precious Metals Worldwide
News & Trends from Around the Globe
U.S. Mint Releases Purest American Gold Coin
Buffalo Roams Again
On June 22, the U.S. Mint released the American Buffalo from captivity. The long-awaited $50-face-value legal tender coin contains one-ounce of .9999-fine (24-k) gold, making it the first-ever pure gold coin authorized by Congress, produced by the U.S. Mint, and released to authorized purchasers and qualified retailers. The new coin is based on the classic design created by famed American sculptor James Earle Fraser for the 1913 "buffalo nickel." The pure gold American Buffalo is now available at Northwest Territorial Mint.
NYMEX Seeks to Introduce Gold Futures in China
The New York Mercantile Exchange (NYMEX) announced its intent to introduce gold futures in China, which are currently barred by the Chinese government. Looking for cooperation from Shanghai Gold Exchange, officials from NYMEX said that they are hoping to launch gold futures as a joint product with the Chinese exchange.
LBMA Predicts Higher Gold Prices Through 2007
The London Bullion Market Association (LBMA), regarded by central bankers, investors, and market analysts as a highly influential and reliable source for information about precious metals, held its annual conference in Montreux, Switzerland June 25-27.
At the close of the conference, the association projected that gold will increase by more than 10% over the next 12 months.
Platinum Price Gains Forecast by CPM Group
Officials from CPM Group, a world-renowned precious metals market research firm based in New York, forecast a steady rise in platinum prices over the next six months, deriving mainly from increased investor interest, especially in the futures market. The group's report, released June 27, cited the recent trend among investment fund managers and other institutional investors to take large positions in platinum as the principal factor that will continue to fuel platinum price increases throughout the rest of 2006