Weekly Market Report 7/25/16
Links to recent informative articles on precious metals and rare coins:
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Gold to hit $3,000 to $5,000 an ounce
Gold
Gold’s 14 most bullish fundamentals
Silver
Recommended investment commitment and diversification
Right now, the Gold markets are showing low trading volume and a narrow high/low price range. This is a normal result for a summer month with a Gold price that’s consolidating after a 25% increase in the first six months of 2016. Last Friday, Gold closed at $1,323.40, down $4 for the week, but still up $263 for the year. If Gold doesn’t break back above $1,330 per ounce this week, it has a good chance of testing the $1,300 per ounce support level before moving higher. Remember, any significant bullish or bearish economic or terrorist news would have a dramatic effect on the Gold price during the summer months.
Based on recent trading activity, I believe it is likely that Gold could test the important $1,300 per ounce support level. I believe this down move will be brief and will represent an excellent opportunity to pick up Gold at a great price. Below I have again provided the 14 most bullish fundamentals that will hopefully encourage you to take advantage of the dip, should it occur.
Today: This morning, Gold trading volume is light, with Gold reaching a low of $1,312.30 per ounce. Gold is currently trading at a four week low while waiting for short term direction after the Federal Reserve meeting and statement later this week.
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 July 2, 2016 are up 208% for Gold and 21.3% 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 321 metric tons since January 1; up 51.5% 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 24.8% and Silver is up 42% this year, compared to a 3.8% increase 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.
Silver broke below the very important $20 per ounce support level last Wednesday, and closed below $20 the remaining two trading days. Silver closed last Friday at $19.69, after reaching a low of $19.27 earlier in the week. Silver is showing more price support at current values than Gold. If Gold breaks down and reaches the $1,300 support level, it is a good bet that Silver will reach a low of $19 per ounce.
Last week, the Silver/Gold ratio dropped to 67.21-to-1.
Today: When Silver reached a low of $19.29, buyers appeared and the price quickly rallied higher. Silver needs to move back above the key $20 price level quickly to keep the short term rally positive.
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.
