Weekly Market Report 6/27/16

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

Gold races to 2-year high as investors seek refuge from Brexit

Gold surges after Brexit becomes reality

China’s hidden plan to accumulate Gold

A new case for Gold?

This Week’s Headlines:

Gold
Why is Brexit causing Gold/Silver to rally?
Silver
Recommended investment commitment and diversification

GOLD

Wow, Gold traded at a low of $1,251 last Thursday afternoon as it appeared that the British were going to vote to stay in the European Union. Some market analysts were predicting that Gold could test its $1,200 long term support level if the outcome of the Brexit vote was to remain in the Union. Then, in the early evening on Thursday, the Brexit vote started to change and Gold started to rally. By that night, when it was clear that the British were going to leave the European Union, the price of Gold rallied over $100. Gold reached a high of $1,357 before sellers appeared, as many of the European stock markets were down over 10% in early Friday trading.

On Friday, the Brexit vote hit the U.S. Markets, with the Dow Jones Index dropping 611 points, with the S&P 500 and Nasdaq dropping by even larger percentages. European bank stocks were hammered and the British Pound reached a record low versus the Dollar. Estimates show that over $2 trillion worth of assets were destroyed.

During this stock and currency market disaster, Gold moved to new 2016 highs. Last Friday, the Gold price closed at $1,322 per ounce, up $58 for the day on record volume. Friday’s trading volume on the CME exchange reached 528,155 hundred-ounce Gold contracts, a 2016 record high. That’s over 52 million ounces of .999 fine Gold (more than $68 Billion worth) in just one day. Gold has now increased $105 for the month and is up $262 (24.72%) since the beginning of the year.

Today: Gold reached a high of $1,335 per ounce in Asian trading this morning. As the markets in Europe opened, Gold held firm as equity markets (especially bank stocks and financial institutions) dropped. Many of the European currencies continued to decline.

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Why is Brexit causing Gold/Silver to rally?

The Brexit Gold rally is based on concerns that this could be a harbinger of a breakup of the European Union. This breakup will likely cause other economically strong members of the 28 nation European Union to follow Great Britain’s exit. It is likely to take two years for England to withdraw from the European Union, and the uncertainty will continue to cause financial and economic problems.

Additionally, with the U.S. Dollar now increasing in value versus the British Pound and Euro, it’s a good bet that the U.S. Federal Reserve will not raise interest rates this year. The repercussions of the Brexit are just starting to be made public and will continue to drive the stock markets lower, and the Gold and Silver prices much higher. I look for Gold to consolidate above the $1,300 per ounce level and gradually move higher, reaching the $1,400 per ounce resistance level next month.

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SILVER

Silver shot up with Gold last Thursday night, reaching a high of $18.35 (a new 2016 high) after trading at a $17.25 low earlier that day. During last Friday’s trading, the volume for both physical and paper Silver investment items was very strong. Silver closed last Friday at $17.79, up $1.80 for the month, and up $4.01 (29%) since the beginning of 2016. The next attempt to break above the key $18 per ounce resistance level should happen next month. That would be the third attempt and the most likely to be successful.

Last week the Silver/Gold ratio increased to 74.34-to-1.

Today: Silver reached a high of $17.95 in early trading before seeing short term profit taking in the Silver market. This drove the price down to $17.60 per ounce, where it then found aggressive support.

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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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