Weekly Market Report 5/16/16

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

Gold has entered a new bull market: JPMorgan

Alice in Wonderland economics leads us towards Gold

WGC 2016 Q1 Gold Demand report

I’m with Stan Druckenmiller, Gold has every reason to rise

The scale of the Gold market

This Week’s Headlines:

Gold
Silver
Platinum
Recommended investment commitment and diversification

GOLD

Last week Gold continued to consolidate its 2016 gain of $200+. Gold traded between $1,258 and $1,289 all last week on excellent volume. Last Friday Gold closed at $1,273, down $21 for the week, but still up $212 for the year. I believe Gold will break out of this consolidation phase by month end and move above the key $1,300 per ounce resistance level.

Starting June 1, China’s customs and central bank will allow companies that have done frequent cross-border Gold transactions to apply for a single permit that will allow up to 12 Gold shipments per year. This should increase Chinese Gold demand.

"In the second quarter, $1,300 to $1,400 is a fairly reasonable price for Gold as the central banks are not going to raise interest rates any time soon," said Mark To, head of research at Wing Fung Financial Group in Hong Kong. "I think overall sentiment is very positive for the Gold market."

Look for a major increase in demand for Gold this week as India starts the festival of weddings. India, the world’s second largest user of the precious metal, has seen a surge in demand to the highest level in two years.

One of the many factors that is supporting this year’s Gold rally is the continued increase of Gold into the ETF depositories (i.e., GLD). The GLD Gold depository increased 47-tons since the beginning of May, and now stands at 851.13 tons of Gold, the highest level since 2013.

Today: Gold opened $5 higher this morning in Asian trading on news of a slowing in Chinese economic growth and a small selloff in Asian stock markets.

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SILVER

Last week Silver tested its $17 per ounce support level three times and surprisingly held all three times. Last Friday Silver did reach a low of $16.85 per ounce but rallied back to close at $17.13, down $0.39 for the week but still up $3.36 since the beginning of 2016.

$18 is a very important resistance level for Silver. A confirmed break above $18 would be very bullish for Silver and a major step toward $20 per ounce.

Both paper and physical demand remain strong worldwide. Many official and private mints are reporting record demand, with shortages of supply. This year the U.S. Mint has been averaging monthly sales of over 4.5 million ounces of 1oz .999 Silver Eagles. 2016 sales are now almost 21 million 1oz Silver Eagles which is higher than last year and on pace to hit 50 million.

Last week the Silver/Gold ratio closed at 74.29-to-1.

Today: Silver reached a low of $17.04 (above the key $17 per ounce support level). At that point bargain buying appeared and the Silver price rallied $0.20 on excellent volume.

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PLATINUM

Platinum closed last Friday at $1,052 per ounce, down $33 last week. As Gold moves higher this year, it appears that Platinum is moving up at a higher percentage. Platinum is trading at more than a $200 discount to the spot Gold price. This has only happened four times in the past twenty years, and Platinum rarely stays at a discount to Gold for more than a year. The Canadian Platinum Maple Leaf is the best bullion coin on the market, with the lowest premium over spot Platinum.

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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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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.

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