Gold & Silver Breaking Out - New CoinStats Is Here

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Gold is finally back on track after selling off from the January 8th, 2020 high of $1,611 per ounce, during the Iranian missile crisis. Gold has spent the past two weeks testing support by reaching a low of $1,535 and hitting resistance at $1,560 per ounce. This was an excellent period of consolidating and base building for the Gold price. Never during this period did the Gold price break below the 2019 closing price of $1,519 per ounce. Based on no specific news, other than reports of increased Gold buying by the world’s Central Banks, Gold broke out of the consolidating phase on Thursday. Gold continued its breakout on Friday closing at $1,570.50 per ounce, up $11.60 for the week, on excellent CME trading volume.

A client of ours shared this J.P. Morgan Asset Management chart with me last week. As you can see, during the 20-year period from 1999 to 2019 Gold was the #2 assets class, behind Real Estate Investment Trusts. During that 20-year period Gold increased 7.7% compounded yearly. When we update it to 2000-2020, numbers of $274.45 and $1,519.50, the increases show an 8.92% compounded yearly. In this time period of very low to negative interest rates, I believe J.P. Morgan has made a great argument for Gold as an excellent investment. Plus, Gold offers instant liquidity that many of the other investment classes don’t.

Today:
Gold reached a high of $1,588 per ounce during early Asian trading, before seeing some light profit taking in European and U.S. trading this morning. Some analysts believe that the Gold rises is partial caused by Coronavirus fears, as the virus continued to spread beyond China, adding to investors’ concerns about a global health emergency that could disrupt the world’s economy. Gold is back on track to reach the important $1,600 resistance level. Gold is current trading at $1,582 per ounce.

In the January 7th, 2019 Weekly Market Report, when Gold was trading at $1,285 per ounce, I made the following prediction: “I believe we will see the price of Gold reach $1,480 by year-end, a 16% increase for 2019.” Gold closed the year at $1,519.50, an 18.87% increase, reaching a high during the year of $1,555 per ounce.

Today, based on the following four primary facts:

1) Sizeable increase in physical Gold demand from Central Banks and major investors

2) Low interest rates in the U.S. and around the world

3) Extraordinary government deficits and growing debt

4) The U.S. Federal Reserve’s latest quantitative easing monetary policy

I believe we will see the price of Gold reach $1,750 per ounce by year-end, a 15.2% increase for 2020.

Last week, Silver trading had substantial difficulty and far more volatility than Gold, to end the week up only $0.04, at $18.05 per ounce. During last week’s trading, Silver tested it’s $17.50 per ounce support level a couple times and held. Silver finally broke through the important $18 per ounce resistance level on Friday, in lockstep with Gold moving over $1,570 per ounce.
With the Gold price apparently heading toward its $1,600 resistance level, it’s logical to believe Silver will start to rally towards the $18.50 level. The Silver-to-Gold ratio has increased again, reaching 86.78-to-1 ounce of Gold.

Today: This morning the Silver price is moving hand-in-hand with the Gold price. Silver reached a high of $18.32 earlier in the trading day. During U.S. trading Silver is finding support above the $18.10 per ounce area.

January 23rd marked the 60th anniversary of my rare coin career. In 1960, I was 15 years old and working selling screen doors, door-to-door for my father. On one particularly exhausting Saturday, I noticed a coin shop in the far corner of a fairly non-descript shopping center. I went in for a rest and looked around. Of particular interest to me was the Bid Board by the counter. These boards, which you can still find in some shops, had rare coins in plastic baggies affixed to it, with room for customers to write down their bids for that week.

What really caught my eye, however, were these brand-new rolls of pennies, fresh from the U.S. Mint in Philadelphia. The shop owner, who seemed like an amicable old fellow, told me they were in pristine condition. A roll of fifty pennies cost 80 cents, and twenty rolls went for $16. I bought the twenty rolls: my very first coin investment. I put the pennies in my drawer and all but forgot about them until, a few months later, after a particularly good day selling screen doors, I went back to the coin shop and asked if there were any more pennies for sale. The shop owner remembered me. With a raised eyebrow, he asked if I still had the rolls.

“Yes, I do.”

“Tell you what. I’ll give you $100 for them.”

I thought to myself, Hhmm, $100 for an initial $16 investment? Interesting.

I knew that I had something of value, but I wasn’t sure how valuable or why they were so much more than I’d originally paid. My gut instinct told me that they were worth more than the $100 I was being offered. So, I phoned a couple of other coin shops, and soon discovered that, in 1960, the year the pennies were minted, the “6” in “1960” was minted too small, which meant the die had clogged up in the middle of the number, so they weren’t “clean” enough to fit the Mint’s standard. When the die was enlarged and minted at the end of the month, the “6” was larger too. Suddenly, the coins with the smaller “6” were deemed rare, given a very small and now discontinued mintage. Consider this: today the error coins, those with the smaller “6,” are worth $2 each, whereas the coins with the larger “6” are worth a mere 2 cents. Now back to 1960, and that eureka moment when I realized that my rolls were worth not $100 but $400! My $16 investment had grown into $400 in just three months. Sayonara, screen doors. Bring on the coins! I didn’t hesitate, and I’ve never looked back. In four months, I studied a lot and opened a coin shop in my father’s building supply retail store in Gardena.

I’m writing a book about my life in the rare coin and precious metal community, I hope to have it ready by the summer.

I’m proud to announce that the 2020 version of CoinStats has been updated with plus grades and other new features. CoinStats for January 2020 provides a statistical analysis of six different U.S. rare coin series: $20 Gold Saint Gaudens, $20 Gold Liberties, $10 Gold Indians, Morgan & Peace Silver Dollars, and the Walking Liberty Half Dollars.

One of the new changes in the 2020 version of CoinStats is all the populations and prices are from PCGS, we have deleted NGC populations. The reason for this change is over 80% of my clients only purchase PCGS coins, so I wanted to focus on PCGS data only. A new addition is information in increases in all PCGS grade populations from issue to issue, plus increases in popular PCGS Registries at the bottom of the Best Value page.

The CoinStats report provides a list of recommended certified U.S. Gold and Silver coins which are found listed on the Best Value page. These are not the modern issue bullion coins or low-grade circulated coins. These are PCGS certified MS63 or higher Gold and Silver U.S. rare coins, dated prior to 1948, which have a proven track record of appreciation and also offer excellent liquidity. I would appreciate your input on the changes in CoinStats. To receive the latest CoinStats analysis, just put the word CoinStats in the subject line and email me which of the six series you would like to see.

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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.