Weekly Market Report 9/6/16
Links to recent informative articles on precious metals and rare coins:
U.S. Mint sells last 2016 American Eagle platinum bullion coins
India preparing comprehensive Gold policy
China can and will confiscate Gold from SGE, banks & Chinese citizens, when it suits them
Why Gold could be worth $1,700/oz: Deutsche
Gold
Gold’s 14 most bullish fundamentals
Silver
Rare Coin Report
US Mint releasing Standing Liberty 2016 Gold Centennial
Recommended investment commitment and diversification
I’ve said numerous times that Gold had a strong possibility of hitting its $1,300 per ounce long term support level by Labor Day. Gold did reach a low of $1,302 per ounce on Thursday, Sept 1st, a 2-month low for Gold. By late Thursday, Gold had rallied back to $1,317 and continued the rally on Friday, closing at $1,326.70 for the week. It is important to note that Friday’s Gold rally was on the largest trading volume of the week, 234,793 hundred-ounce December CME contracts. Gold was actually up $1.20 for the week.
European and Asian trading during our September 5th Labor Day holiday confirmed that Gold’s Sept 1st low of $1,302 (on heavy volume) was the clean out I’d been anticipating. What do I expect to see from here? I look for Gold to gradually work its way back above the $1,350 per ounce level very soon, and consolidate in that area. Gold should then build a base in the $1,340 to $1,370 per ounce range, getting ready for another attempt at the $1,400 resistance level.
Today: This morning Gold opened strong in Asian trading and continued that strength in European and U.S. markets. Gold demand from jewelry manufactures picked up dramatically after the August holidays. Gold reached a high of $1,352.60 on excellent demand today.
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 Sept 2nd, 2016 are up 9% for Gold.
- 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 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 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 292 metric tons since January 1st; up 45.5% in eight 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 25% and Silver is up 40% this year, compared to a 5% 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 hit its recent low of $18.37 per ounce on Monday, August 29th. Even in the face of traditional summer weak trading volume, Silver found lots of bargain buyers last week. Silver closed last Friday at $19.36 per ounce, up $0.72 for the week, and a $5.59 (34%) increase since the beginning of 2016. The Silver price performed very well early last week in the face of the weakness in Gold trading.
How do I expect the Silver price to perform this month and for the remainder of the year? I look for a little more price consolidation between $19 and $20 per ounce this week. Once Silver firmly moves above the key $20 long term resistance level, I expect to see Silver quickly reach its July 5th high of $21.23 per ounce before the end of October.
Last week, the Silver/Gold ratio increased to 68.51-to-1.
Today: Silver moved higher this morning, reaching a high of $20.14 per ounce. Physical and paper Silver demand should pick up as we move into the fall months. This is the first attempt to break $20 per ounce.
This week David and I will be attending the September Long Beach Expo, one of the last major rare coin conventions of 2016. After an exciting ANA convention in Anaheim last month, I expect to see a very active trading bourse floor. With hundreds of the major rare coin dealers and thousands of collectors and investors, I’m hoping to pick up many of the undervalued $20 Gold Saints, and Morgan Dollars, to build up our inventory and fill clients’ want lists. If you are in the Long Beach, California area on Sept 8th or 9th, please visit us at Table 826
U.S. Mint releasing Standing Liberty 2016 Centennial Gold coin
This coming Thursday, Sept 8th, the U.S. Mint will be releasing a 1/4oz Gold Standing Liberty 2016 Centennial coin for the 100th anniversary of the 1916 Standing Liberty Quarter design. Prices for this coin should be released within the next 24 to 48 hours. Based on the fact that the Mint is producing 100,000 coins and limiting purchases to a maximum of 1 per household, we expect to initially see prices spike on these coins. We are encouraging our clients that are interested in this coin to wait, as we expect to see prices correct, enabling us to offer them to you in about 3-6 months, graded a perfect MS70 First Strike by PCGS, at a much more affordable price after the market settles.
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.
