Weekly Market Report 8/29/16
Links to recent informative articles on precious metals and rare coins:
Gold’s paved the way so now could be Silver’s turn
India’s Gold bar imports soared 47% in Apr-July ’16
Too much money, not enough Gold
Gold
Silver
Recommended investment commitment and diversification
Last Friday, Gold closed at $1,324 per ounce, down $22 for the week. During the week, there was some positive economic news that could increase the possibility that the Federal Reserve could raise interest rates later this year. For most of last week’s trading, Gold stayed in a tight $20 range, between $1,320 and $1,340 per ounce.
After a 26% increase for the year, August Gold trading is a classic example of price consolidation. As we work our way through the summer months towards Labor Day, precious metal trading volumes will probably weaken and prices could sell off.
We do have a 30% possibility of Gold testing the $1,300 long term support level before the upward move continues. It is very common to see what is referred to as a Final Clean Out before a major rally starts. The clean out gives professional traders the ability to drive the price down on weak volume and quickly take a major long position ahead of a major rally.
Today: Gold reached a low of $1,315 per ounce this morning on light volume. The Gold price rallied back to its recent trading range in European markets as demand picked up.
Last week, Silver traded above and below the important $19 per ounce resistance/support level, closing Friday at $18.44 per ounce, down $1.26 for the week. Like Gold, I believe that after the 45% increase in Silver since the beginning of the year, it is very bullish that the price is in a consolidation phase during these low volume summer months. The real question is: How much could Silver decline before finding major support? My best guess is down to $18.00 per ounce, which would be a 15% correction from the July 5, 2016 high of $21.23 per ounce.
Last week, the Silver/Gold ratio dropped to 71.80-to-1.
Today: Silver reached a low of $18.39 per ounce in early Asian trading. Silver rallied with Gold in later trading as the trading volume picked up.
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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