GOLD

This morning the big news which affected the financial markets was the dramatic increase in January’s Non-Farm worker’s job report. Initially, Gold fell over 1%, and then rallied.  At 11am PST, Gold is trading at $1,739.50 per ounce, down $18.90 per ounce on active volume for a Friday.

Today, the Labor Department reported that the U.S. economy created 243.000 new non-farm jobs in January. The January increase was the highest in nine months and the unemployment rate dropped to a near three-year low of 8.3 percent.

Talks between Greece and its international lenders continue to drag on, with euro zone finance ministers aiming to agree on a second financing package on Monday.      

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose nearly half a percent to 1,277.135 tonnes by Feb 2 -- their highest since Dec.20.     

SILVER

Silver reacted with Gold on the Non-Farm workers report.  Silver is down $.58, per ounce at 11am PST, trading at $33.78 per ounce on normal volume.

Other Important news that affects precious metal prices:

The U.S. Commerce Department reported today that factory orders rose 1.1% in December,. Economists polled had expected a 1.4% rise. But the report was bolstered by an upward revision to November, where orders were revised to a 2.2% increase from an initially reported 1.8% rise.

GOLD

Gold is still in rally mode and as of 11am PDT, is up $13.20, actively trading at $1,756.20 per ounce. The next minor resistance levels are at $1,765 and $1,780, with a major resistance level at $1,800 per ounce. The International Monetary Fund announced that Turkey added about 500,000 oz of gold to its reserves in the month of December which brings its grand total to 6.28 million ounces.  Central banks adding gold to their reserves has been a trend that has gained momentum over the last 5 years and set a record high in 2011.

SILVER

This morning silver broke through the $34 per ounce resistance level and traded as high as $34.20 per ounce, before we saw some profit taking. Right now at 11am PDT, Silver is trading up $0.55 at $34.26 per ounce on heavy volume.  Silver, as do all the other precious metal, has been taking its direction from Gold.  The U.S. Mint reported record sales for January at 6,107,000 1oz .999 Silver Eagles sold.

While sounding just a tad preachy in his February newsletter, Bill Gross' latest summary piece on the economy, on the Fed's forray into infinite ZIRP, into maturity transformation, and the lack thereof, on the Fed's massive blunder in treating the liquidity trap, but most importantly on what the transition from a levering to delevering global economy means, is a must read. First: on the fatal flaw in the Fed's plan ....

GOLD

Gold is continuing its fast paced increase that started in January (10.8%), the best January increase in 32 years. Today at 11am PST, gold is up $10.40, trading at $1,746.20 per ounce on with excellent volume.

The World’s central banks have become net purchasers of gold bullion after many years being net sellers.  In 2011 central banks purchased 430 tonnes of gold, five times more than in 2010, and the highest since 1964. Much of this new demand has come from ‘emerging markets' central banks like Mexico, Russia, Turkey, South Korea and of course China and India.

SILVER

Silver’s recent increase has outpaced Gold’s stellar performance. Today, Silver has increased another $0.29, trading at $33.85 per ounce at 11am PDT.  For a brief time last night Silver traded over $34 per ounce, reaching $34.13 per ounce before we saw resistance.   $34 per ounce should not be a major resistance level in the face of the strength in the Gold price. 

Other Important news that affects precious metal prices:

China's official Purchasing Managers' Index showed the manufacturing sector expanded modestly in January, with the index reading inching up to 50.5 from 50.3 in December, above a 49.5 reading forecast.

GOLD

Wow, what a month for gold investors! Gold was up $170 per ounce, or (10.8%), trading at $1,735.80 at 11am PDT today with active volume.  As for today, the market held a tight trading range, watching developments at the European debt crisis meeting.

The mood in Europe brightened on Tuesday, with European Union political leaders agreeing in principle to a permanent 500-billion-euro bailout fund. The European Stability Mechanism (ESM) is a fiscal compact that requires governments to take corrective actions when budget deficits stray from targets.

Elsewhere in the region, Greek Prime Minister Lucas Papademos said "significant progress" has been made and that a deal between the government and its creditors could be reached by the end of the week.

SILVER

The silver price increase for January was even more extraordinary that gold. At 11am, PDT Silver is trading at $32.56 per ounce, up $0.06 for the day and up $4.68 per ounce (16.7%) for the month. By Friday, I’ll have January’s U.S. Silver Eagles and Canadian Silver Maple Leaf sales numbers.  I expect them to be at a record pace, as domestic demand for physical Silver continues to grow. 

Central banks are holding more gold but they're holding very much more wood-pulp and although there may ultimately be a change in structure of a global reserve currency this may still be some time away.

The gold price on Wednesday broke up through the downtrend starting at last summer's record high. Or so a technical analyst studying the price chart would tell you.

But just as in late 2007 - from where gold began a 55% run inside 6 months - this week the price of gold bullion ....

GOLD

Gold trading is virtually unchanged, down $0.60 per ounce at 11am PDT, trading at $1,732.40 per ounce. Gold reached its highest price in more than seven weeks last Friday. Investors awaited the outcome of Greece's debt deal talks, but slower-than-expected GDP growth within the United States was a minor negative.

Gold also got a boost from reports the world's biggest hedge fund.  Bridgewater Associates ($120 Billion) is bullish on bullion as a hedge against inflation as governments print more money to reduce debt.

EU leaders will sign off on a permanent rescue fund for the euro zone at the EU Summit today. They are also expected to agree on a balanced budget rule in national legislation, but unresolved problems in Greece could derail those discussions.

Last week’s Chinese New Year caused physical demand in China to be absent. Today’s gold price may look high to Chinese buyers after gold jumped almost 5% while they were away. I'll be watching physical flows to see whether China jumps in and continues the rally or sit back to see if the market comes back.

SILVER

After an extraordinary price increase last week, up 6.68%, and up 21% since Jan 1^st, the market as paused.

At 11am PDT we are seeing excellent volume, as silver trades at $33.50, down $0.42 per ounce. Domestic demand for physical silver continues at a record pace. As of last Thursday, the U.S. Mint reported selling over 5,547,000 1 ounce .999 Silver Eagles. An extraordinary number considering last year was a record year with almost 40,000,000 sold the entire year.

This week's Market Report provides you with an update on the precious metal markets and what last week’s announcement by Federal Reserve Chairman Bernanke will mean to your precious metal holdings.

GOLD

What a week for Gold and Silver investors. Last week’s Federal Reserve announcement confirms that the direction for Gold and Silver prices this year will be substantially higher. Gold closed last Friday at $1,732.20 per ounce, up $68.20 per ounce for the week, and up $166.40 (10.62%) since January 1st.  Today gold has traded in the narrow base building price range; excellent support for the rally.

Federal Reserve Chairman Bernanke stated that interest rates were going to be held down until late 2014 and inflation would not breach 2% in the near future, but long term rates could climb to 4% or more. Bernanke’s statement, combined with an ECB’s injection of 500 Billion Euros ($650 Billion) into the European banking system, caused gold and silver to rally sharply. 

Factors that could also influence gold prices upward are the developments in the Middle East and Greece. Iran has threatened to immediately start an oil embargo on European countries and has already threatened to block oil tankers that travel through the Straits of Hormuz. Approximately 25% of the world’s crude oil supplies travel through the Straits of Hormuz on their way from the Middle East to Europe and the Western World.  A European oil embargo, combined with any stoppage of oil from the Middle East, could drive up crude oil prices by 20-30%, and increase gold prices by 10%.

The Greek economic tragedy continues to unfold; the current impasse between creditors and debtors of Greek debt appears to be near settlement. The primary issues are the size of the debt cut that the E.C.B. and Greek government are willing to take, and the interest rate to be paid on the replacement securities. Is there a direct relationship between these developments coming out of Greece and the price of Gold? Yes, because the ECB & IMF policy will directly affect the future sovereign debt issues in Portugal, Italy, Spain, and Ireland (PIIGS).  The more quantitative easing provided by the ECB & IMF, the higher gold prices will rise.

SILVER

The Silver price is having quite a rally. Silver closed last Friday at $33.79 per ounce, up $2.15 (6.68%) for the week, and 21% since the start of the year. For months I have been saying that Silver needs to break above the $30 per ounce level to become bullish. On January 19th, silver finally stayed above the $30 per ounce level for the entire day and closed above $30.50 per ounce; since then, the silver price has gone straight up, reaching $33.96 last Friday.

After breaking out above the $30 per ounce level, silver looks to be quickly heading for its next resistance level of $35. If you look at last year’s silver price performance, you’ll see that when silver moved up or down it happened quickly. Silver moved from $36 to $49.85 within a month, and dropped back to $34.34 by the next month. Silver has built an excellent price base in the latter part of 2011, while its supply/demand fundamentals have improved.

The Silver to Gold Ratio is now at 51.26 to 1

Recommended investment commitment and diversification:

Precious Metal commitment: Minimum of 35% of investment capital

Diversification:  Gold 60%, Silver 30%, Platinum & Palladium 10%

Diversification includes long term investment quality rare coins and short term bullion products

RARE COIN UPDATE

This week I am attending the Long Beach Coin Expo, in Long Beach, California. This is also a major coin convention where thousands of dealers, investors, and collectors attend. I plan to focus my attention on purchasing graded MS63 and higher U.S. $20 Gold Liberties & Saints and Morgan & Peace Silver Dollars. Supplies have been thin lately, primarily because most dealers’ inventory levels are low now and they are aggressive buyers. Investment quality high end gold and silver rarities are always on my want list. 

Please forward your rare coin want lists to me by Wednesday AM.

January 2012 CoinStats Available

My numismatic CoinStats report is the best investment tool for rare coin investors. CoinStats is an in-depth statistical analysis of popular rare coin series which allow investors to identify the best values in certified rare coins. I am proud to offer this unique and informative investment tool exclusively for our clients. The January 2012 CoinStats update is now available for $20 Gold Saint Gaudens, $20 Gold Liberties, and the Morgan & Peace Silver Dollar series.

While the collector coin market continues to be weak, the high end gold and silver investment quality rarities (over $50,000 each) did set record prices at this month’s FUN Heritage Auction. The best values and opportunities are in the middle area ($3,000 to $49,000) where the market is still undervalued. The CoinStats Report provides a list of my recommended certified Investment quality US gold and silver coins which are listed on the best value page.  These are not the overly hyped modern issue bullion coins or low grade circulated coins, they are PCGS/NGC Certified MS63 or higher gold and silver U.S. rare coins, dated prior to 1936, that have a proven track record of appreciation.

For the latest CoinStats analysis, just email me which series you would like to see.

REMEMBER THE BLOG

If you want to be updated on what is happening in the gold, silver, and rare coin markets any weekday, our company offers a daily blog Monday to Friday at www.stupplerblog.com

All statements, opinions, pricing, and ideas herein are believed to be reliable, truthful and accurate to the best of the Stuppler & Company’s knowledge at this time.  Stuppler & Company disclaims and is not liable for any claims or losses which may be incurred by third parties while relying on information published herein.  Individuals should not look at this publication as giving finance or investment advice or information for their individual suitability.  All readers are advised to independently verify all representations made herein or by its representatives for your individual suitability before making your investment or collecting decisions.

India is the first buyer of Iranian oil to agree to pay for its purchases in gold instead of the US dollar, debkafile's intelligence and Iranian sources report exclusively.  Those sources expect China to follow suit. India and China take about one million barrels per day, or 40 percent of Iran's total exports of 2.5 million bpd. Both are superpowers in terms of gold assets.

By trading in gold, New Delhi and Beijing enable Tehran to ....

The price of gold is roaring back from its latest temporary correction, sending the bears into  full withdrawal. If you sold your gold in December as it fell to $1525 an ounce, you’re probably feeling foolish at the incredible $210  rise to $1735– a 15% move in no time at all. Gold, you see, is not a commodity like oil and copper and wheat. It is rather an alternative currency– one that  finds buyers when....