Gold & Silver test recent lows

By Barry Stuppler

| July 3 2017

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

Why Is Russia Buying So Much Gold?

Top money manager: Gold may hit $1,500 for first time since 2013

China May Silver imports hit best since Dec 2010

How much Gold do Americans own?

Swiss Gold exports jump 39% to 5-month high in May

Gold: A zero-risk monetary asset

This Week’s Headlines:

Gold
Silver
Recommended investment commitment and diversification

GOLD

Last week Gold traded between $1,236.50 and $1,259 per ounce. Gold closed last Friday at $1,242.30 per ounce, down $14 for the week. It was a disappointing week for Gold investors. Although Gold traded above the key $1,250 per ounce level for four of the five trading days, it couldn’t hold that level on Friday. Gold is now in a defensive phase, with the possibility of testing the $1,220 level before turning higher. During this time, when Gold is in a short-term correction, it’s important to understand the many reasons that Gold is the best long-term investment vehicle. The following are 15 fundamental reasons you need to have Gold as one of your long-term investments.

Gold’s 15 most bullish fundamentals

Physical demand for Gold and Silver investment products is at the strongest level in years. Demand is primarily from Asian, Middle Eastern, and European markets.
11 states have passed, or have pending, legislation to make Gold and Silver legal tender.
Global quantitative easing (money printing) in the U.S., China, Japan, and Europe is increasing debt at an unbelievable rate. The U.S. National Debt is approaching $20 trillion.
The World Gold Council is reporting mine production falling dramatically as the cost of production rises.
Central banks around the globe continue to trade their U.S. Dollars for Gold, thus building their Gold reserves.
Stockpiles of Gold in depositories continue to drop, filling heavy physical demand. This could soon cause a short squeeze on sellers of Gold.
Uncertainty over the future of President Trump is causing extra demand for physical Gold investment products around the globe.
Chinese investors, the world’s most aggressive Gold buyers, are switching out of equities into physical Gold and Silver. Gold buying is continuing to grow.
Both the North Korean and Syrian problems could be explosive.
The financial consultants, money/fund managers, and commodity professionals that are being interviewed in the financial media have become bullish on Gold and Silver. Why? Even at today’s low prices, Gold is up 7.87% and Silver is up 4% this year.
10-year Treasury interest rates reached a 2017 low of 2.14%, while the U.S. Dollar Index is below 96, the weakest level this year.
U.S. M2 money supply is accelerating, doubling from $6.5 billion to $13 billion in the past 10 years. After growing at 6% for the past couple of years, it has now grown to 8½% for the past year. This will lead to serious inflation and a much higher Gold and Silver price within the next 12 to 18 months.
Many precious metal professionals and analysts strongly believe that China is accumulating massive amounts of Gold in an effort to replace the U.S. Dollar (as the world’s reference currency) with the Chinese Yuan. If this happened, it would diminish the value of your U.S. Dollars. Last year, the International Monetary Fund (IMF) formally added the Chinese Renminbi to the basket of reserve currencies. If the Renminbi became the world’s reserve currency, there would be a dramatic increase in the price of Gold valued in Dollars.
In the Basel III agreement, which is being implemented by the world banking system between 2013 and 2019, Gold has been upgraded this year from a Tier III asset to a Tier I asset. This will encourage many large banks to increase their Gold holdings and make loans on Gold.
Effective December 2016, over 100 million Muslim investors will be adding Gold to their holdings. A new Sharia Gold Standard was announced at the World Islamic Banking Conference.

Today: This morning Gold broke below the $1,230 per ounce 200-day moving average, quickly hitting a low of $1,221 before seeing short-covering and fresh buying. Since there was no significant negative news, today’s decline appears to be a final clean-out on light volume, ahead of the major move higher I have been waiting for.

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SILVER

Last week, Silver closed at $16.63 per ounce, down $0.02 on average trading volume. Silver traded in a narrow price range for the entire week, from $16.23 to $16.92 per ounce. Silver reached a high of $17.75 per ounce before the Federal Reserve June 14 announcement. Last week Silver was stable, while the price of Gold dropped $14. Silver has major support at $16 per ounce and resistance at $17 per ounce.

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 each). Offer is subject to available supply.

The Gold/Silver ratio has decreased to 74.72-to-1.

Today: When Gold sold-off, Silver fell at a much faster rate, hitting a low of $16.09 before seeing bargain buying. Silver could reach its $16 per ounce support level before making the turn.

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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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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.

Categories: Weekly Market Report