Precious Metals Industry David Cramer, Nicole Fleischman, Carson Foust & Henry Frobose

Background of Precious Metals First used by Egyptians, Sumerians, Greeks, Athenians and Romans Columbus came to America and found gold Remove Cherokee Indians to Oklahoma California Gold Rush Forty-niners Panning Gold became a medium of exchange

Background of Precious Metals 1920s- U.S. was economically booming Great Depression President Franklin Roosevelt wrote an executive order taking all but $100 of U.S. citizen’s gold Increased the value of gold by 75 percent

Gold’s Average Price YearApproximate Price Per Troy Ounce 1800s- 1920s$ s$ s$ s$ s$ s$35.00* 1970s$36.00-$306.00* 1980s$ s$ s$ $800.00* *Denotes rapid price fluctuation throughout those years.

Uses of Gold Currency, investment Coins, gold bullion Jewelry, Awards Dental work, medical uses Crowns, bridges Electronics Cell phones, computers, TVs

Uses of Silver Currency Jewelry and awards Silverware Medicine Electronics High conductivity, lower price than gold

Copper Third most-used industrial metal Used for wiring and plumbing Wires, pipes, roofing Good conductor, resistant to corrosion

Iron and Steel Iron and Steel make up 95% of all metal produced annually by weight Least expensive industrial metal Strongest industrial metal Automobiles, tools, machines, bridges, fasteners Can be made corrosion-resistant by adding chromium, nickel, tungsten

Aluminum The earth’s second most abundant metal Resistant to corrosion, light weight Used in airplanes, automobiles, bicycles, pop cans, foil Highly recycled because of its valuable properties

Other metals Platinum Often added to gold or silver in jewelry Used in catalytic converters in cars Cathodic protection systems Uranium Used for nuclear power reactors, nuclear weapons, armor, ammunition

What are some companies within the precious metal industry?

Kay Jewelers Founded in 1916 by Sol and Edmund Kaufmann Reading, Pennsylvania Three big metals: Platinum, Gold and Silver “Every kiss begins with Kay” “Although product offerings have changed through the years, shopping at Kay has remained a valued tradition.”

U.S. Steel Founded in 1901 by Andrew Carnegie, J.P. Morgan, Charles Schwab and Elbert H. Gary Pittsburgh, Pennsylvania Big Metal: Steel “In response to economic changes in the steel industry, the corporation reduced its domestic raw steel production capability through a number of restructurings. In addition, the corporation entered into several steel joint ventures with both domestic and foreign partners.”

U.S. Steel tax-free spin off of the steel and steel related businesses into a freestanding, publicly traded company known as United States Steel Company

Metals USA Founded in 1996 Houston, Texas Big Metals: Aluminum, Steel and specialty metals Three Groups: Plates and Shapes Group Flat-Rolled Group Building Project Group

Gold Bubble Burst False security of investment with gold Factors: State of the U.S economy and the U.S. dollar value Amount of Investors

Gold Bubble Burst Con’t When if ever should you invest in gold?

Industrial Metal Burst Cont’d YearApproximate Price Per Troy Ounce 1800s- 1920s$ s$ s$ s$ s$ s$35.00* 1970s$36.00-$306.00* 1980s$ s$ s$ $800.00* *Denotes rapid price fluctuation throughout those years.

Industrial Metal Burst Factors The Chinese Economy The relationship between supply and demand

The Value of Precious Metals in 2010 Type of Precious MetalApproximate Price Per Troy Ounce Platinum$ Gold$ Palladium$ Silver$15.27 Nickel $.36* Copper$.11* *Denotes the value of precious metals in 2009.

Investments and the Precious Metal Bubble Low Interest Rates for Savings Accounts Many Americans see safety in Precious Metal Investments because of its recent steady increase rather than investment in other Companies in the Stock Market Many Americans do not have enough diversity in their investments

Inflation and Precious Metal Market Historically the value of gold reaches it higher values when the value of a dollar is low and Inflation is high The value of a dollar continues to fall

What about high inflation? Currently Inflation is not a problem, however after the recession in 2009 the scare is Inflation will start to rise. One way to prevent this precious metal bubble will be to control inflation

Other Effects of a Bursting Bubble Jewelry Market Housing Market Build Materials Electrical Wiring Many other markets effected if people lose there savings

Look back to the Past... In 1980 there was a sharp correction or “burst” in the Gold market. The price of Gold had been rising for years when the price was cut in half. The weakening of the US dollar as well as inflation contributed to this downfall.

Prediction for the Future... Many precious metal values continue to rise The value of the US dollar is decreasing Inflation? With inflation adjustment the value of an ounce of Gold would need to be over $2000 in order to compare to !980

Final Thought If inflation is not kept under control in the next few years the value of precious metals will continue to increase and then it is inevitable that the precious metal “Bubble” will Burst!

Fun Facts ~ Gold What occupation has used gold since 700 B.C.? What government agency uses a large quantity of gold because of it’s conductive capabilities? Raise your hand if you have something gold on you right now.

Questions??