On Friday Gold fell for a seventh straight day, its longest losing streak in four years, as speculation that the Federal Reserve may soon rein in monetary easing lifted the value of the U.S. dollar versus other major currencies. The dollar rose, hitting a near three-year high against a currency basket, helped by comments from San Francisco Fed chief John Williams on Thursday the bank could begin easing up on stimulus this summer.

Today Gold was on the defensive from the start in Asia, the continued drop in the ETF stockpiles is a constant negative. However, the extraordinary global physical demand easily offsets the drop in ETF holdings, but the ETF (paper Gold) holdings drop is getting all the press. At 11am PDT today, Gold is down $23 per ounce, trading at $1,364 per ounce on heavier than average volume for a Friday.

SILVER

As Gold has fallen during the past seven trading days Silver surprisingly held up better and did not break down below the $22 per ounce support level. At 11am PDT today, Silver is trading at $22.32 per ounce, down $0.37 per ounce.

Early this morning in Asian/European trading Gold tested and held above the $1,370 per ounce level on heavy volume. Gold is still on the defensive, but we are seeing sizeable demand at these attractive levels. At 11am PDT Gold is trading at $1,387, down $11.20 per ounce on heavy volume.

World Gold Council first quarter 2013 in Gold demand summary

The World Gold Council just released the extraordinary 1st 2013 quarter Gold demand numbers.

Consumers power Gold jewelry demand, up 12% in Q1 2013

Q4 2012 recovery in the jewelry sector continued into the first quarter of this year. Global jewelry demand of 551 tonnes, a record of US$28.9bn, surpasses the previous quarter’s record.

Q1 2013 Gold investment: ETFs down 177 tonnes, bars & coins physical demand up 378 tonnes

The decline in investment demand relative to Q1 2012 was solely attributable to the net outflows from ETFs, which obscured the strong rise in investment for Gold bars and coins at the retail level.

Technology Gold demand contracted 4% in Q1 2013

In the first quarter of 2013, demand for Gold in the technology sector declined by 4% year-on-year to 102 tonnes. In value terms, demand was 7% lower at US$5.4bn.

Central banks continue steady level of Gold purchases in Q1 2013

Central banks added 109.2t of Gold to their reserves in Q1 2013, the ninth consecutive quarter of net purchases. The sector accounted for 11% of demand in the first quarter, worth a value of US$5.7bn.

Total supply of Gold little changed in Q1 2013, up 1% year-on-year to 1,051.6 tonnes

A modest year-on-year increase in Q1 mine production was countered by a decline of a similar magnitude in the supply or recycled Gold with the net result that total supply grew by 1%.

SILVER

Silver reached a low of $22.05 in Asian/European trading this morning. Physical demand is still strong, but supplies have been increasing and the premium on Silver rounds and eagles is dropping. At 11am PDT today, Silver is down only $0.13 per ounce, trading at $22.69 per ounce.

This morning Gold fell for the fifth straight session, hitting a three-week low as the dollar strengthened to a six-week high versus the euro after weak euro zone economic growth data. Another negative for Gold was the nonpartisan Congressional Budget Office announcement late yesterday that the U.S. budget deficit will shrink by the end of fiscal 2013 to $642 billion, the smallest shortfall in five years.

Once Gold dropped below the psychologically important $1,400 per ounce support level, pre-placed computerized sell orders were triggered from professional technical chart traders for both Gold and Silver, driving the Gold price down to $1,389.00. If the Gold price doesn’t quickly rally back above the $1,400 level, we could see the April low level of $1,322 re-tested again.

As of 11am PDT today, Gold is trading at $1,398.20, down $28.80 per ounce on heavy volume.

U.S. Budget Deficit improved for 2013

The improvement in the U.S. budget deficit for fiscal year 2013 was a result of three major factors account for most of the long-term improvement: a better economy, a continued slowdown in the rate of medical inflation — which reduces the cost of Medicare and Medicaid — and higher taxes that Congress approved as part of the "fiscal cliff" deal in January, the budget office said. In addition, the automatic budget cuts that took effect this spring have reduced spending in the short term. The government also will benefit this year from dividend payments it is getting from the two giant housing finance agencies bailed out during the financial crisis.

SILVER

This morning Silver hit a low of $22.51 per ounce before a combination of profit taking and new buying hit the market.  At 11am PDT today, Silver is down $0.69, trading at $22.76 per ounce on heavy volume.

U.S. Mint sales of 1 ounce .999 Silver Eagles as of May 15^th hit an extraordinary 20,435,000 coins.  Physical demand for Silver investment products has been soaring during the recent decline in the market price.

LISBON, May 14 (Reuters) - Portugal will not replicate a deal that allowed Cyprus to sell its gold reserves under its bailout, Bank of Portugal Governor Carlos Costa said on Tuesday, adding that its reserves were unchanged at 382.5 tonnes.

"It is not applicable in Portugal," he told reporters. "What happened in Cyprus (on gold reserves), just like a lot of other things there, cannot be replicated in Portugal."

Last month Cyprus said a sale of gold reserves worth 400 million euros was among the options for its contribution towards an international bailout, which also forced bank depositors to bear part of the costs in a ground-breaking move in Europe.

"If we can say today that the Bank of Portugal is among a small group of central banks with adequate risk provisioning ... is mostly because we have significant gold reserves," Costa said. The value of Portugal's reserves rose 3.6 percent last year to 15.51 billion euros due to gold price fluctuations, but Costa said the actual quantity remained the same.

He added that Portugal, which resorted to an EU/IMF bailout in 2011 and has applied painful austerity measures since, remains on course to exit its three-year recession next year and grow just over 1 percent despite a worsening European downturn.

"There are no reasons to revise the economic forecasts," he told reporters. The bank's 2013 forecast of a 2.3 percent contraction is the same as the government's, but its 2014 growth projection is higher at 1.1 percent, compared with 0.6 percent.

Earlier this morning in Asian markets, many economists cut China’s economic growth forecasts for the coming year. The revised forecasts lowered China’s growth from 8% to 7.8%. This news negatively affected the Gold and Silver prices. This morning Gold tested the key $1,420 per ounce level and held. To become short term bullish, we need to see Gold break back above the $1,450 per ounce area.

At 11am PDT today, Gold is trading at $1,427 per ounce, down $9 per ounce on average volume.

SILVER

Silver hit $23.13 per ounce earlier this morning on the Chinese economic news, then quickly bounced back. We continue to see excellent support for Silver above $23 per ounce.

At 11am PDT today, Silver is down $0.30 per ounce, trading at $23.43 per ounce.

Gold opened lower this morning in the Asian markets and found substantial buying at the $1,424 per ounce level. Sales of ETF paper Gold holdings continue to drive holdings lower, while physical demand for Gold investment products continues to increase. At 11am PDT today, Gold is trading at $1,436 per ounce, down $3 from last Friday's price.

World’s largest money manager bullish on Gold

BlackRock Inc. (BLK), the world’s largest money manager, said it is still bullish on Gold. BlackRock’s President, Robert Kapito, said on May 9 that he would still buy the metal, echoing billionaire John Paulson, who is sticking with a bullish view even after losing 27% of his Gold Fund last month.

Collectible Coin Protection Act

As chairman of the Gold and Silver communities’ Political Action Committee (Gold & Silver PAC), I am proud to share the introduction of HR 1849, the Collectible Coin Protection Act into the House of Representative on May 7th. This Federal legislation amends and updates the Hobby Protection Act passed over 30 years ago. HR 1849 allows both law enforcement and civil action against manufacturers, importers, and sellers of counterfeit coins and bullion products, as well as providing enforcement against the unauthorized use of registered trademarks belonging to collectible certification services.

This legislation is non-partisan and has no financial effect on the budget; therefore I am asking my friends who have a relationship with their local congressman to contact them and request they be a co-sponsor of HR 1849. Please let me know of any positive replies.

SILVER

Silver showed excellent support this morning in the $23.50 per ounce level. The volume of sellers on the commodity markets has diminished, while demand for physical Silver investment product has stayed very strong. At 11am PDT today, Silver is down $23.73 per ounce, up $0.03 per ounce on average volume.

Gold
World’s largest Money manager bullish on Gold
Rumors of Germany offering Gold loans to Italy and Greece
China keeps buying and producing more Gold
Silver
Rare Coin Market Update
Collectible Coin Protection Act
The April 2013 CoinStats is now available
Recommended Investment Commitment and Diversification
 

GOLD

Last week there was a war going on in Gold trading pits around the globe. A financial minister at the G7 monetary meeting said that “Gold could retest the recent $1,322 low” and the Bank of America Merrill Lynch stated that “Gold could hit $1,200 per ounce in the short term.” These statements, combined with a strong U.S. Dollar versus the Euro and Yen, kept Gold on the defensive all week.

The statements from the G7 and BofA last week both talked down and sold down the Gold price until it broke the $1,450 per ounce support levels, at which point algorithm and computer programs triggered technical sell orders from professional chart traders. Three times last week they were able to drive the Gold price to under $1,450. The first two times they tried were last Tuesday and Wednesday, but Gold quickly rallied back on sizeable demand. The third time was last Friday, when they were able to drive the Gold price down to $1,418 per ounce, and again the demand came in taking the Gold price back to $1,448 per ounce by the end of aftermarket trading. Gold could have surpassed $1,450 per ounce if it had traded for just another 10 minutes. The volume of trading last Friday in the U.S. surprisingly was Gold’s highest of the week (23 million ounces for the most popular CME June contract.)

At the beginning of this week we could see margin call and program selling, but if last week’s low of $1,418 holds on heavy volume, it could be the final test. However, if Gold breaks that level then $1,400 is where major support really is.

Back to top of report

World’s largest Money manager bullish on Gold

BlackRock Inc. (BLK), the world’s largest money manager, said it is still bullish on Gold. BlackRock’s President, Robert Kapito, said on May 9 that he would still buy the metal, echoing billionaire John Paulson, who is sticking with a bullish view even after losing 27% of his Gold Fund last month.

Back to top of report

Rumors of Germany offering Gold loans to Italy and Greece

With debt in Italy and Greece continuing to build, and shortage of fresh capital to help stimulate their economies, there are rumors that they may use the Gold in their central bank reserves to borrow capital from Germany. History shows us that in 1974, Italy borrowed $2 billion from the Bundesbank, using Gold as collateral. Portugal did the same thing, borrowing $1 billion from the Bank of International Settlements (BIS) in 1975-1977, and India used its Gold to borrow from Japan in 1991. Gold has proven to be excellent collateral for a loan, as all of these loans were paid back within five years.

Back to top of report

China keeps buying and producing more Gold

China consumed a total of 320.54 tonnes of Gold in the first quarter; this was an increase of 25.6% year-on-year. With Gold prices still falling from higher levels earlier in the year, it is likely that consumption of Gold will continue at robust levels in China in the second quarter. In the first quarter, China produced 89.91 tonnes of Gold, an 11.26 percent increase over the same period last year.

Back to top of report

SILVER

During last week’s decline in the Gold price, Silver actually held up much better. With Gold declining $27.60 (1.88%), Silver dropped only $0.35 (1.48%), closing the week at $23.65 per ounce. Silver has been showing an increasing volume of buyers every time it gets near $23 per ounce. Physical demand for Silver investment products has increased at an extraordinary pace worldwide, driving up coin and bar premiums due to major shortages. The Gold/Silver price ratio is now at an astonishing 60.72 to 1.

Back to top of report

Rare Coin Market Update

Last week I attended the New Orleans’s American Numismatic Associations National Money Show. This rare coin convention was well attended and there was a major storage of investment quality Gold and Silver rare coins. Dealer inventories are at record lows and auction sales for top quality certified investment quality rare coins are soaring. In that type of environment, it was very difficult to purchase many CoinStats recommended coins there.

Since the financial crisis of 2008 the U.S. rare coin market has been unchanged to lower (in the face of Gold and Silver prices doubling) because of very weak domestic demand due to the recession. Based on an increase in the Gold and Silver bullion prices, many U.S. Gold and Silver rare coins have been substantially undervalued and have been excellent values.

For the past six months I have been reporting from major coin conventions that the demand for investment quality Gold and Silver U.S. rare coins has been growing, while most dealers’ inventories have been at very low levels. These fundamentals are an outstanding harbinger for much higher prices to come very soon.

Back to top of report

Collectible Coin Protection Act

As chairman of the Gold and Silver communities’ Political Action Committee (Gold & Silver PAC), I am proud to share the introduction of HR 1849, the Collectible Coin Protection Act, into the House of Representatives on May 7, 2013. This Federal legislation amends and updates the Hobby Protection Act passed over 30 years ago. HR 1849 allows both law enforcement and civil action against manufacturers, importers, and sellers of counterfeit coins and bullion products, as well as providing enforcement against the unauthorized use of registered trademarks belonging to collectible certification services.

This legislation is non-partisan and has no financial effect on the budget; therefore I am asking my friends who have a relationship with their local congressman to contact them and request they be a co-sponsor of HR 1849. Please let me know of any positive replies.

Back to top of report

The April 2013 CoinStats is now available

Our numismatic CoinStats quarterly report is the best investment tool for rare coin investors. CoinStats is an in-depth statistical analysis of popular rare coin series that allows you to identify the best values in U.S. certified rare coins. I am proud to offer this unique and informative tool exclusively to our clients. The April 2013 CoinStats report is now available for $20 Gold Saint Gaudens, $20 Gold Liberties, Morgan & Peace Silver Dollars, and the Walking Liberty Half Dollar series.

CoinStats provides a list of my recommended certified U.S. Gold and Silver coins which are found 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 1948. These investment quality rarities have a proven track record of appreciation over the past 60 years or longer.

For the latest CoinStats analysis, just put CoinStats in the subject line and email me which series you would like to see.

Back to top of report

Recommended Investment Commitment and Diversification:

Precious Metal commitment: Minimum of 35% of investment capital

Diversification:  Gold 55%, Silver 40%, Platinum & Palladium 5%

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

Back to top of report

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 through 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.

Back to top of report

Today’s very strong U.S. Dollar, combined with an announcement from the G7 monetary meeting that “Gold could retest the $1,322 low”, and a statement by Bank of America Merrill Lynch “That Gold could hit $1,200 per ounce in the short-term”, caused the Gold price to breakdown below the current $1,450 per ounce support level. After the support level was broken, many short term traders came in to short the market, driving prices down to $1,419 before sizeable buying came in to drive the market higher.

As many governments around the world stimulate their economies by increasing the money supplies, we hear nations and large financial firms talking down the Gold price. Gold, in addition to being a commodity, is proving to be an excellent currency alternative. Unfortunately, Gold doesn't have a nation to defend it against disparaging talk;  just concerned individuals looking to Gold for safety against debased currency.  

At 11am PDT today, Gold is trading at $1,439 per ounce, down $34 per ounce on a very heavy volume of trading.

SILVER

As Gold fell, Silver followed, reaching a low of $23.17 per ounce earlier this morning. I have commented many times that Silver needed to break above $24 to look short term bullish. Right now, I am saying Silver needs to stay above $23 per ounce to prevent a massive drop. If Silver drops below $23, the next support level is $20.

On the positive side, today’s Silver decline, in percentage terms, was less than Gold's, plus we continue to see strong global physical demand for all of the popular Silver investment products, i.e. bars, trade units, and coins.

At 11am PDT today Silver is trading at $23.70 per ounce, down $0.13 per ounce on heavy volume.

Today Gold has been consolidating in the $1,460 to $1,480 per ounce area. The sentiment in the trading pits has recently changed. Most professionals on the trading floor that I speak with are now buying on dips, versus remaining neutral or selling on rallies. This is very positive for the short term direction of Gold. However, I still need to see Gold breakout above $1,500 per ounce to confirm that the long term bullish trend line is still in place. Physical demand for the popular Gold investment products is running at record levels, while paper Gold (the ETF’s) continue to see their holdings drop.

At 11am PDT today, Gold is trading at $1,473, unchanged for the day on average volume.

SILVER

Silver continues to trade in a very tight price range. Today’s range was $23.70 on the low to $24.15 on the high. There appears to be sizeable selling when the price goes above $24 per ounce. At 11am PDT today, Silver is down $0.07, trading at $23.83 per ounce on average volume.

Yesterday in the U.S., and early this morning during Asian trading, Gold tested the $1,450 per ounce support level and HELD on a very heavy volume of trading. This is the third time Gold showed sizeable demand under $1,450 per ounce. Now, Gold should breakout above the $1,490/$1,500 resistance level and continue its move higher.

Today, in the face of a very strong U.S. Dollar versus the Euro, Gold has rallied sharply on heavy demand. At 11am PDT, Gold is trading at $1,473.00 per ounce, up $21 per ounce on heavy volume.

SILVER

Yesterday Silver dropped to $23.40 per ounce when Gold sold off. Today’s low was only $23.68, but Silver continues to have a problem rallying above the major resistance $24.00 per ounce level. At 11am PDT, Silver is up $0.11 from yesterday’s close, trading at $23.90 per ounce on average volume.