Gold/Silver 2017 Rally moving higher –15 Bullish Gold Fundamentals<br />Weekly Market Report 2/13/17

| February 13 2017

Links to recent informative articles on precious metals and rare coins:

Druckenmiller bought Gold after reversing November stance

It might be impossible to keep up with China’s demand for Gold

This Week’s Headlines:

Gold
Gold’s 15 most bullish fundamentals
Silver
Rare Coin report
Recommended investment commitment and diversification

GOLD

Gold continues its 2017 rally, closing Friday at $1,236, up $16 per ounce for the week, and up $85 (7.4%) since the beginning of the year. Gold reached a new 2017 high of $1,246.60 last Wednesday. Interestingly enough, Gold’s new 2017 high came in the face of a strong increase in the value of the U.S. Dollar last week. Gold is on track to make its first attempt to reach the next resistance level of $1,250 per ounce later this month.

Though I’ve said it numerous times, it bears repeating that I think Gold & Silver will move a lot higher this year; however, they won’t be going straight up. From January 1 to February 10, Gold moved from $1,150 to $1,235, an increase of $85 (7.47%). During that time, we saw short-term profit taking hit the market and the price was driven down to $1,179 on January 27. At that point, the break consolidated and started back up again, setting a 2017 high by last week. Any time Gold reaches a resistance or support level, we sell-off or see bargain buying, followed by consolidation. I believe the price of Gold is going to move much higher, so take advantage of any sell-off in the price.

Today: A strong U.S. Dollar and equity market caused Gold to sell-off this morning. Gold found bargain buyers after reaching a low of $1,220 per ounce. Gold continues to show excellent support and I look for this retracement to be brief.

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Gold’s 15 most bullish fundamentals

Physical demand for Gold and Silver investment products is at the strongest level in years. Many world mints reported record 2016 sales for bullion coins, showing sizeable increases.
Worldwide interest rates are at historic lows, with nine major countries quoting negative interest rates.
Global quantitative easing (money printing) in the U.S., China, Japan, and Europe is increasing debt at an unbelievable rate. The U.S. National Debt is approaching $20 trillion.
The World Gold Council is reporting mine production falling dramatically as the cost of production rises.
Central banks around the globe continue to trade their U.S. Dollars for Gold, thus building their Gold reserves.
Stockpiles of Gold in depositories continue to drop, filling heavy physical demand. This could soon cause a short squeeze on sellers of Gold.
Uncertainty with our new President is causing extra demand for physical Gold investment products.
Chinese investors, the world’s most aggressive Gold buyers, are switching out of equities into physical Gold and Silver. Gold buying is continuing to grow.
The U.S. Dollar has started moving lower vs. the Euro and other world currencies. This causes the price of Gold denominated in U.S. Dollar to be higher.
The financial consultants, money/fund managers, and commodity professionals that are being interviewed in the financial media have become bullish on Gold and Silver. Why? Even at today’s low prices, Gold is up 6% and Silver is up 9.65% this year.
More countries are repatriating their Gold being held at the NY Federal Reserve Bank.
U.S. M2 money supply is accelerating, doubling from 6.5 billion to 13 billion in the past 10 years. After growing at 6% for the last couple years, it has now grown to 8½% for the past year. This will lead to serious inflation and a much higher Gold and Silver price within the next 12 to 18 months.
Many precious metal professionals and analysts strongly believe that China is accumulating massive amounts of Gold in an effort to replace the U.S. Dollar (as the world’s reference currency) with the Chinese Yuan. If this happened, it would diminish the value of your U.S. Dollars. Last year, the International Monetary Fund (IMF) formally added the Chinese Renminbi to the basket of reserve currencies. If the Renminbi became the world’s reserve currency, there would be a dramatic increase in the price of Gold valued in Dollars.
In the Basel III agreement, which is being implemented by the world banking system between 2013 and 2019, Gold has been upgraded this year from a Tier III asset to a Tier I asset. This will encourage many large banks to increase their Gold holdings and make loans on Gold.
Effective December 2016, over 100 million Muslim investors will be adding Gold to their holdings. A new Sharia Gold Standard was announced at the World Islamic Banking Conference.

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SILVER

Last Friday, Silver closed at $17.93 per ounce, $0.45 higher for the week and up $1.99 (12.5%) since January 1. This year, Silver blew through the $17 per ounce resistance level, and now is on its way to breaking above the $18 per ounce resistance level. Trading volume on the CME (Silver future contracts) continues to grow, hitting 88,742 five-thousand-ounce March Silver contracts on Friday, the highest it’s been since December 16, 2016. This increasing demand combined with the growing physical demand, should take Silver to $20 per ounce within a couple months.

The supply of physical Silver is expected to have a deficit of 52,200,000 ounces for 2016. This marks the fourth consecutive year in which the market has realized an annual physical shortfall. While such deficits do not necessarily influence prices in the near term, multiple years of annual deficits can begin to apply upward pressure to prices in subsequent periods.

The Gold/Silver ratio has decreased to 68.92-to-1.

Today: Silver briefly broke above the key $18 resistance level this morning, reaching a high of $18.01 per ounce. Silver then sold off with Gold and found excellent support at $17.75.

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Rare Coin report

This week, I will be attending the February 2017 Coin Expo convention in Long Beach, California. This is the first major rare coin convention of 2017 on the west coast, and I expect to see a very active trading bourse floor. With hundreds of the major rare coin dealers and thousands of collectors and investors, I’m hoping to pick up many of the undervalued $20 Gold Saints, and Morgan Dollars, to build up our inventory and fill clients’ want lists. Please, update your want list if you haven’t recently.

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Recommended Investment Commitment and Diversification:

Precious Metal commitment: Minimum of 30% of investment capital

Diversification: Gold 50%, Silver 40%, Platinum & Palladium 10%

Diversification includes 50% in long term investment quality rare coins and 50% short term bullion products.

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Categories: Weekly Market Report