Gold is back on the road to $1,300/oz

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

Gold Will Start Heading Higher On “Dwindling” Supply

Russia Adds Another 21.8 Tons to Gold Reserves in May

Traders Sent Gold Imports Soaring in May

President Trump Should Open Fort Knox Gold Vaults

India Said to Plan Gold Policy Overhaul for $19 Billion Sector

This Week’s Headlines:

Gold
Silver
Recommended Investment Commitment and Diversification

GOLD

Last week we saw Gold break below the key $1,250 support level, reaching a low of $1,241.70 per ounce. On June 6, Gold made its second attempt at breaking above the key $1,300 long-term resistance level, reaching a high of $1,298 before seeing profit taking. After June’s Federal Reserve announcement confirming more interest rate increases this year, the Gold price turned south. By June 21, the price of Gold hit $1,241.50, a $57 decline in 11 trading days. Then on June 22, Gold turned higher, moving back above the key $1,250 per ounce resistance/support level on the highest trading volume for the week. It’s important for Gold to continue to stay above $1,250 this week. Gold closed last Friday at $1,256.40 per ounce, up $0.10 for the week.

Demand for physical Gold continues to increase worldwide as China continues to lead other nations in increasing their Gold reserves. Last month, Russia added another 21.8 metric tons to its national Gold reserves, and Switzerland reported their Gold exports had jumped 39%, to 170 metric tons, based on demand from India. With Gold trading below $1,250 in late June, I would suspect that the central banks have been active buyers in June. Plus, the 10-year Treasury bond and the U.S. Dollar Index continue to decline, which will be helpful for the Gold price.

Today: Someone sold 56 tons of Gold (1.8 million ounces) in just 60 seconds this morning. Gold was trading at $1,255 at the time, and the price immediately dropped to $1,235. The exchange is trying to figure out if this was a legitimate sale, or an entry mistake. The price has since moved back to $1,244 per ounce based on a weaker U.S. Dollar.

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SILVER

Last week, Silver closed at $16.65 per ounce, down $0.01 on average trading volume. Silver traded in a narrow price range the entire week, from $16.32 to $16.76 per ounce. Silver reached a high of $17.75 per ounce before the June 14th Federal Reserve announcement. I think one of the main reasons Silver sold-off more than Gold was because of concerns about the inflation rate during Janet Yellen’s press conference. The Fed is disappointed with the current inflation rate, and was considering raising the target to 2%. Silver has always been considered to be the primary inflation hedge.

As we approach the summer months, Silver is showing weaker physical demand. Premiums on many of the popular Silver investment products have dropped in the past month. The premium on the popular U.S. 1oz BU Silver Eagles has dropped 10%, from $2.50 over spot to $2.25 over spot on minimum quantities of 100 coins. 20-coin rolls of Pre-1905 white PCGS MS63 Silver Dollars are available at only $1,040 ($52 ea.), and 5 rolls (100 coins) are available for $5,000 (only $50 ea). Offer is subject to available supply.

The Gold/Silver ratio has increased to 75.47-to-1.

Today: Silver reacted to the drop in the Gold price, reaching a low of $16.42 before moving back up. A weaker U.S. Dollar helped Silver to rally.

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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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