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Economics / Inflation Jun 12, 2022 - 09:29 PM GMT

By: MoneyMetals


Precious metals markets enter summer trading with investors looking for signs of a directional move.

Gold and silver prices consolidated this spring with silver showing more of a downside bias. Silver did find 200-week moving average support at the $21 level in early May, however. That long-term trend indicator is also now heading in an upward direction. So, there is a good chance that the lows for the year are in.

Metals markets have yet to fully reflect broader inflation pressures in the economy, a statement you’ve heard us repeat many times in recent months.

As food and gasoline prices hit record after record, another inflation problem is also impacting consumers. It’s been dubbed “shrinkflation.”  It refers to the practice by manufacturers and retailers of disguising price increases by shrinking unit sizes.

For example, bottles of juice are getting slimmer. Bags of chips are getting lighter. And the Associated Press reported this week that a small box of Kleenex that had 65 tissues last year now has just 60.

Businesses everywhere are shrinking staff and shrinking the services they provide to customers. Hotels now nudge guests to opt out of daily housekeeping, or make it just make it totally unavailable altogether.  Airlines barely provide anything resembling customer service anymore, while also eliminating many flights due to rising fuel costs and a lack of pilots and flight crews.

The decline of the flying experience compared to the charm and glamor of decades past is due in part to inflation. Instead of raising airfares to reflect the costs of maintaining previous standards and amenities, airlines have decided to offer bare bones service and nickel-and-dime passengers for anything they might want. 

The shrinkage of customer service and unit value at stores allows corporations to avoid drastic price hikes. But savvy consumers won’t be fooled. They know that price isn’t the same thing as value.

At the grocery store, what matters most isn’t the price tag on a product per se, but how much product consumers are getting for the price.  The best value is usually found in larger sized products.

That is also true to a significant extent when it comes to bullion products. Fractional sized coins of less than one ounce tend to cost more than full ounce or larger coins when considering the costs per ounce. Large bullion bars often provide the best value in terms of metal content.

But there are exceptions to be aware of. Sometimes premiums on pre-1965 silver coins or scratched and dented gold coins are among the lowest available. Although such deals are a little harder to find nowadays though considering a lack of selling of these secondary market only items.

Sometimes buyers find utility in fractional sized items or aesthetic value in coins that arrive in mint condition.

Bargain hunters at the grocery store will often opt for generic or store-branded products. In many cases, they have exactly the same ingredients as pricier counterparts next to them on the shelf that are put out by more recognized name brands.

This principle also applies to bullion shopping. A popular name brand such as the U.S. Mint’s American Eagle will carry a sizeable premium over a round issued by a private mint that is less well known. 

In fact, we strongly suggest customers consider avoiding purchase of silver Eagles until and unless premiums become more reasonable.  There’s little rationale to sink money into Silver Eagle premiums – that’s good money you may frankly never recover when you sell.

A Statue of Liberty silver round produced privately by Money Metals has the same .999 purity as a Silver Eagle. If they were both melted down, they would look exactly the same, have exactly the same physical properties, and be worth exactly the same amount. Silver stackers who opt for the Statue of Liberty round will save at least $5-7 per ounce compared to the American Eagle, which is manufactured by the extremely poorly managed U.S. Mint.

The Statue of Liberty round is Money Metals’ newest silver bullion offering. These one-ounce beauties are a great addition to any investor's portfolio. They are stylish and carry meaningful symbolism. The rounds feature the shared value which made America great -- liberty and self-reliance.

Many other silver bullion products represent great value as well – especially at currently depressed spot prices. And when you buy from Money Metals, you can be assured that you won’t experience shrinkflation in either the products we offer or the award-winning customer service we provide.

An ounce of silver or gold will always be worth its exact weight in silver or gold. By contrast, a depreciating U.S. dollar may at some point not even be worth the paper it’s not printed on!

By Mike Gleason

Mike Gleason is President of Money Metals Exchange, the national precious metals company named 2015 "Dealer of the Year" in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

© 2022 Mike Gleason - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2022 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

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