Weekly Market Report 5/23/16

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

4 practical reasons to consider reallocating some assets to Gold

Hedge funds keep betting on Silver even as rally starts to fade

 

This Week’s Headlines:

Gold
Silver
Recommended investment commitment and diversification

 

GOLD

After Gold’s five-month increase from $1,060 to $1,306 per ounce in 2016, we were due to see a minor correction. When the Federal Reserve released their latest minutes last week, we saw it. The Fed’s minutes left an opening for a possible interest rate increase in June. This news caused Gold/Silver to decline sharply and the U.S. Dollar to rally. After the Fed news, Gold briefly dropped below the key $1,250 per ounce support level, reaching a low of $1,246 per ounce in Asian trading. When Gold traded below the $1,250 price level, bargain buying appeared, which rallied the price back above $1,250 on heavy volume. This is an excellent price for precious metal owners to add more Gold to their holdings.

The Fed announcement doesn’t represent any serious concerns, as the U.S. Federal Reserve bank is committed to a long term low interest rate policy. But, Gold trading around $1,250 does represent a great buying opportunity.

George Soros, who once called Gold “the ultimate bubble,” has resumed buying the precious metal after a three-year hiatus. Last Monday, the billionaire investor disclosed that in the first quarter of 2016 he made a $123.5 million investment in Gold.

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). This is the vehicle that George Soros used for his 2016 Gold purchases. The GLD Gold depository has increased from 642 to 869 metric tons of Gold (35%) since the beginning of 2016, the highest level the depository has been at since 2013.

Gold closed last Friday at $1,252.30, down $19.80 for the week, but still up $193 since January 1, 2016.

Today: During Asian trading this morning Gold reached a low of $1,243 per ounce before attracting fresh buying. A move back above the key $1,250 per ounce needs to happen very soon.

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SILVER

After last week’s Fed announcement, like Gold, Silver also reacted negatively, breaking below the key $17 level and reaching a low of $16.35 on Thursday. The trading volume that day was 73,669 five-thousand ounce contracts (368 million ounces), the highest trading volume this month. Last Friday, Silver closed at $16.53 per ounce, down $0.60 for the week, but still up $2.75 since the beginning of 2016.

Both paper and physical Silver 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. Today, the U.S. Mint sales for 2016 are now almost 22 million 1oz Silver Eagles which is higher than last year and on pace to hit an all-time record of 50 million.

Last week the Silver/Gold ratio closed at 75.80-to-1.

Today: Silver found excellent demand when it reached $16.30 per ounce in early morning Asian trading.

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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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