Gold & Silver Make New 2019 Highs, Help Fight The Counterfeiting Problem
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Help Combat Counterfeiting In |
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Last week, Friday was the most significant day with Gold closing at a new 2019 high of $1,526 per ounce. As of Friday, Gold is up $250 per ounce (20%). We are clearly on course to reach the $1,600 level, a lot sooner then I had expected. What is causing the sharp increase? Let’s look at what happened on Friday:
Speaking from a conference in Jackson Hole, Wyoming, the Federal Reserve Chairman Powell vowed to “act as appropriate to sustain the expansion” in the U.S. economy. Chairman Powell also added “The Fed can adjust its polices to developments in trade policy”.
Traders felt that this indicates there will be more interest rate cuts this year. So, the U.S. Dollar and interest rates on the 10-Year Treasury dropped to a record low of 1.52%. At the same time, the DOW JONES fell over 500 points.
With interest rates dropping and more cuts on the horizon, plus a weaker U.S. Dollar and Dow, precious metals quickly moved much higher.
The Chinese trade war also heated up last Friday. The Chinese State Council announced a decision to impose tariffs ranging from 5% to 10% on $75 billion U.S. goods, with more to come. This added more incentive for Gold/Silver demand and prices moved up 2%.
Right now, I continue to be very bullish on Gold and hope we will see some consolidating below $1,550 per ounce for a short period before moving to the $1,600 level (my Year-End prediction). However, I am now considering raising my year-end prediction, due to the factors mentioned above and one more I’ll share with you.
Both China and Russia are encouraging their citizens to buy Gold. China has eased restrictions on imports of Gold and Russia has removed the VAT tax on Gold (see articles above). For years both countries have been selling U.S. Dollars and Treasuries and buying Gold, but now they are helping their citizens to increase their Gold holdings.
Today: Gold reached a high this morning of $1,554 per ounce, a new six year high, on Asian and European and early COMEX safe haven buying. At that point the White House announced that China had contacted U.S. trade officials overnight saying they wanted to return to the negotiating table. China has yet to confirm the comment. Gold dropped $20 per ounce on that announcement, however it is still up $8 for the day.
Last Friday, Silver closed at $17.40 per ounce, up $0.29 for the week, and up $2 since the first of the year. This is the highest price Silver has traded at since January 2018. Silver is clearly on the way to test the important $18 per ounce resistance level fairly quickly. The popular Silver-to-Gold ratio has been moving south in the past month. Between July 5th and August 23rd, the Silver-to-Gold ratio has dropped from 93.30-to-1 to 88.30-to-1. It’s clear that Silver is following Gold higher and has been increasing in price at a faster pace. The big question I have is, when Gold slows down the increase and consolidates in a nice trading range, will Silver stay above recent support levels? My concern is based on current demand. The physical Gold demand is growing, the physical Silver demand is nonexistent.
Today: Silver reacted to Golds move this morning and quickly rallied an incredible $0.37 per ounce (2.1%). However, when Gold sold off, Silver surprisingly held most of its daily gains. Silver needs to stay above the key $17.50 level for a while, as it builds a firm base for the first move towards the important $18 per ounce resistance level.
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Help Combat Counterfeiting In |
An important Rare Coin and Precious Metal Request
One of the most serious problems that the rare coin and precious metals community has faced is the large numbers of counterfeit coins being manufactured and distributed by China. The quality of counterfeited coins and bullion product has gotten better and better during the past 5 years, threatening to erode our markets.
Many of the industry leaders confered three years ago to attack this problem. We incorporated a 501-C Tax Exempt corporation called Anti-Counterfeiting Educational Foundation and hired Beth Deisher as Director.
Beth, with a small staff, has accomplished the following:
Educated and assisted Law enforcement to attack our counterfeiting problem.
Provided resources to assist with investigations and prosecutions.
Created a nationwide network of more than 90 numismatic experts who assist local, regional and federal law enforcement agencies on cases involving counterfeit coins and precious metal bullion products. The Task Force also provides education to consumers about how to protect themselves from being defrauded by counterfeit coins and precious metals bars they may encounter..
Worked with the CBP and the U.S. Secret Service to provide training for field agents.
Is completing a website for Law Enforcement and Dealers providing them information on counterfeits.
In the past two years, the Task Force has helped Law Enforcement in over 70 cases against counterfeit sellers.
The Anti-Counterfeiting Educational Foundation recently hired former Texas Police Chief Doug Davis, founder of the effective Numismatic Crime Information Center, to now serve in the important role of ACEF Anti-Counterfeiting Director, as Deisher is stepping down to devote more time to research and writing.
Last year, when I was President of the Professional Numismatic Associations (PNG), the board approved incorporating the ACEF into the PNG as a way to guarantee future security for fighting the counterfeiting problem, but current and future funding is key to success. I have committed $5,000 per year, and other industry leaders have done similarly. However, further funding is necisary to ensure the ACEF can enact optimal protectons in the rare coin and precious metal markets.
I am calling on the community to take part in these increased efforts, and ask my clients to please consider sending a tax-deducible check, made payable to ACEF by mail to:
ACEF
28441 Rancho California Road
Suite 106
Temecula, CA 92590
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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.
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