Weekly Market Report 7/5/16

| July 5 2016

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

Greenspan: world must return to Gold standard

Gold price forecast: Gold’s final warning of impending monetary collapse

Marc Faber: Gold ’is my preferred currency’

London Gold dealers report surge in coin, bar demand on Brexit vote

This Week’s Headlines:

Gold
My updated Jan 11, 2016 WMR Gold prediction
Gold’s 14 most bullish fundamentals
Silver
My updated 2016 Silver price prediction
Rare and Bullion coin update
Recommended investment commitment and diversification

GOLD

June was a very profitable month for Gold investors with the price increasing $121.50 (10%) for the month and closing last Friday at $1,339 per ounce. Gold continues its 2016 rally, increasing $279 (26%) since the beginning of the year. During international trading on July 4, Gold continued its rally, reaching a high of $1,357 per ounce. Gold has firmly moved above the $1,300 support level, and is now on its way to the $1,400 resistance level.

Today: Gold has seen very active trading in Asia and Europe this morning, ranging from a high of $1,360 to a low of $1,345 per ounce. Both physical and paper Gold demand continue to increase from European and Asian investors. Brexit physical Gold buying in Great Britain is at record levels. British Gold sovereigns are big sellers in coin stores.

Back to top of report

My updated Jan 11, 2016 WMR Gold prediction

My January 11, 2016 WMR Gold Prediction

“Now that Gold broke back above the $1,100 per ounce resistance level last week, it is changing the bearish sentiment of many of the professional traders in the commodity pits around the world. With Gold moving above $1,100, I expect some consolidation, then the rally will continue through 2016. I expect to see Gold reach $1,400 per ounce this year and trade in the $1,350 per ounce area by year end.”

Now 6 months later, I am updating my prediction for the Gold price. I try to be conservative with my Gold/Silver predictions, but with Gold reaching $1,362 in June, I needed to revise my year-end prediction. I now believe Gold will reach $1,550 per ounce this year and trade in the $1,500 per ounce area by year end. The bullish fundamentals for Gold keep getting better.

Back to top of report

Gold’s 14 most bullish fundamentals

Physical demand for Gold and Silver investment products is at the strongest level in years. Many world mints report record 2016 sales for bullion coins, showing double digit percentage increases this year. Sales of U.S. Eagles ending June 30, 2016 are up 228% for Gold and 20.5% for Silver. Both are at an all-time high record pace.
Worldwide interest rates are at historic lows, with nine major countries quoting negative interest rates.
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 has passed 19 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 continues to drop, filling heavy physical demand. This could soon cause a short squeeze on sellers of Gold.
ETF (paper) Gold investors have been aggressively buying in 2016, with GLD holdings increasing 311.64 metric tons since January 1; up 48.5% in six months.
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.
The U.S. Dollar is continuing its recent trend of weakening against the Euro, which will increase premiums on Gold, especially on the British, French, and Swiss pre-1934 Gold coins.
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? Gold is up 26% and Silver is up 42% this year, compared to a 2.9% decline in the NASDAQ.
More countries are repatriating their Gold being held at the NY Federal Reserve Bank.
Brexit is causing uncertainty in the financial world and driving conservative investors into a proven safe haven, Gold.
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.
In the Basel III agreement, which is being implemented by the world banking system from 2013 to 2019, Gold will be upgraded from a Tier III asset to a Tier I asset. This will encourage many large banks to increase their Gold holdings.

Back to top of report

SILVER

The Silver price just keeps on rolling higher. On Friday, Silver reached a high of $19.98 per ounce before closing at $19.58 per ounce. That is up an amazing $5.81 (42%) since the beginning of the year. CME trading volume for September 5,000-ounce Silver contracts is extremely high, especially for summer trading. The increased demand helped the Silver price break above the major $20 per ounce long term resistance level in world markets on July 4. Silver actually reached a new 2016 high of $21.16 on July 4 in Asian and European markets. The short sellers are on the run, and margin calls are causing them to cover their short sales. The July 4 rally was on light holiday trading, which is not a strong sign that this breakout is real. If Silver can stay above $20 in today’s U.S. trading, it would give Silver an excellent chance to make $20 its support level. If not, Silver should trade between $18 and $20 for a while building a new base to continue its 2016 bullish rally.

Today: Over the long holiday weekend the Silver price experienced a lot of price volatility. Silver reached a high of $21.16 per ounce on July 4, and a low of $19.56 this morning. This 8% high/low trading range happened today on the highest exchange volume I have seen in three years. The trading volume was over 150,000 5,000-ounce CME Silver contracts (750,000,000 ounces).

Back to top of report

My updated 2016 Silver price prediction

My revised Silver price prediction for year end 2016 is now $25.00 per ounce. I look for Silver to move back above $20, then trade between $20 and $22 per ounce during the summer. In the fall and winter, I look for Silver to reach or exceed my $25 prediction.

In the first six months of the year, the U.S. Mint has sold 26,250,000 1oz Silver Eagles. This is a 20.5% increase over 2015, and at a one million ounce per week record pace.

Last week, the Silver/Gold ratio dropped to 68.36-to-1.

Back to top of report

Rare and Bullion coin update

With the Gold price up 26% and Silver increasing 42% in the first six months of the year, what is happening in the rare and bullion coin markets?

To answer that question, you first must understand the five different types of coins:

U.S. Collector coins: Silver, nickel, and copper coins under $300 and Gold coins under $1,500
U.S. Investment grade certified coins: Silver, nickel and copper coins from $300 to $10,000, and Gold coins between $1,500 and $25,000
U.S. Modern new issues: Silver, Gold, and Platinum coins (1986-2016) priced over $1,000
U.S. Certified rarities: Silver coins over $10,000 and Gold coins over $25,000
U.S. and World Gold/Silver bullion coins: newly minted and pre-1934

U.S. Collector coins
This area of numismatics has been on the defensive since 2009 as the low end collector is focusing on their job and everyday expenses during a difficult economy. Even in the face of this year’s higher Gold/Silver price, coins in this low price range have not increased.

U.S. Investment grade certified coins
This is a very popular area of classic numismatics in certified in PCGS or NGC holders. Prices for Silver Dollars and U.S. Gold coins have recently started to move higher. Dealer inventories are at record lows and numismatic trading exchanges are seeing increases in bids and a decline in ask prices. If the recent spot Gold and Silver price increases hold at their current levels, values of U.S. Investment grade certified coins will normally play catch up within a few months.

Modern new issues
These are the most popular items on many internet auction sites. Newly released U.S. issues are very hot, while many of the older issue U.S. coins have remained stagnant during the low activity summer months.

U.S. Certified rarities
Showing the best price appreciation in the past few years, demand continues to outweigh existing supplies for U.S. Certified rarities. Recent auctions have brought record high prices and in a few cases, over a million dollars.

U.S. and World Gold/Silver bullion coins
Demand for newly minted Gold bullion coins (i.e., Eagles, Buffalos, Maple Leafs and Krugerrands) has increased at a good pace. The pre-1934 European and U.S. Gold coins are very popular with investors, and premiums are on the rise due to the strong European and British demand caused by the Brexit concerns.

Back to top of report

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.

Back to top of report

REMEMBER THE BLOG

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.

Categories: Weekly Market Report