By Patrick A. Heller
Commentary on Precious Metals Prepared for …..

It has been somewhat widely reported by the media that Thanksgiving weekend retail sales volume fell from 2012 levels.  I can think of two significant probable reasons why this occurred.

uncle_sam_coinFirst, even though the US government and the media are trying to pretend that the US economy is improving, the percentage of working age Americans holding jobs has fallen since last year.  It is so bad that the rate of job-holders is now at a 35-year low!  According to RealtyTrac and others who gather data on the US residential market, somewhere between 60% and 90% of all homes that have finished the foreclosure process have yet to be offered for sale by the lenders who took possession of them.  So, reports that the inventory of available homes for sale is declining are absolutely misleading.  Approximately 47% of homes that have finished the foreclosure process are still being occupied by the borrowers who defaulted!

When times are tough, the uncertainty about the near future encourages people to be more careful with their spending.  As a result, I’m sure this weak economy and high uncertainty had something to do with lower weekend sales.

Second, tens of millions of Americans are in the middle of losing their existing health care coverage and face the prospect of either being unable to replace it at all because of the glitches at or possibly having to pay a higher price for replacement coverage that may provide lower benefits than the previous policies.  Literally, a high percentage of the US population right now does not know if they will have health care coverage on January 1, 2014.  All this uncertainty no doubt also encourages people to hold onto their hard earned money until they know for sure what will happen.

This desire to curtail expenditures is almost certainly reducing demand for physical gold and silver in the US now and into the near future.  The United States used to be the world’s second largest gold consuming nation.  Now it has slipped a few notches since China has surpassed India as the largest consuming nation.  Even though the government of India is trying to discourage gold imports by higher taxes and other restrictions, demand for gold in India is so strong that it is now trading in that country for about $125 above the world spot price.

When the spot prices of precious metals tumbled in mid-April and there was a partial shutdown of the US government at the beginning of October, my company experienced a huge surge in demand for physical gold and silver.  With the latest major price drop that began almost two weeks ago (and that I expect to continue through the release of the US Non-Farm Payrolls report this Friday morning), there has been only a relatively modest surge in demand.

Still, even though physical gold and silver demand in America is not as significant a part of global demand as in years past, the reduced demand does have some impact.  Consequently, my opinion is that gold and silver prices right now are somewhat lower than they would be if the launch of the Affordable Care Act (Obamacare) had not been, and continues to be, such a fiasco.

What do you think?


Patrick A. Heller was honored with the American Numismatic Association 2012 Harry J. Forman Numismatic Dealer of the Year Award.  He owns Liberty Coin Service in Lansing, Michigan and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects.  Past newsletter issues can be viewed at  Other commentaries are available at Numismaster (under “News & Articles) .  His award-winning radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 AM Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at


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