Gold breaks above $1,300 resistance; U.S. Mint here I come

By Barry Stuppler

| October 16 2017

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

Why silver prices are on fire

David Ryder has been nominated as next Director of the U.S. Mint

Central banks hedging against geopolitical risk with gold

India’s Sept gold imports jump 31% on festive demand

The fiction in Chinese gold reserves and media import coverage

This Week’s Headlines:

Gold
China and India effect on the price of Gold
Silver
On my way to Washington D.C. today
October 2017 CoinStats is now available
Recommended investment commitment and diversification

GOLD

Last week was a great week for Gold investors. Gold rose $10 last Monday on excellent trading volume and never looked back. The Gold price was up four of the five trading days. Gold closed at $1,302 per ounce last Friday, up $30 for the week, and up $153 (13.28%) since the beginning of the year. The fact that Gold closed over the important $1,300 per ounce resistance level is short-term bullish for Gold. I continue to look for Gold to break above the $1,350 per ounce resistance level by November, on the way to $1,400 by year end.

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China and India effect on the price of Gold

As we exit the Chinese Golden Week holiday and enter the Indian Wedding Season, the next month looks good for the Gold price. Let me explain. China’s Golden Week holiday lasts for seven consecutive days when Chinese companies close down and encourage workers to make long-distance family visits. This is very negative for Gold because it causes a sizable drop in precious metal demand and trading volume. In 2017, Chinese Golden Week ran from October 1st to 7th and the price of Gold dropped $10 per ounce. When the holiday ended on October 7th and Chinese buying came back into the market, Gold rallied $30 per ounce. Remember, China accounts for roughly one-third of the world’s Gold demand.

India’s Wedding Season starts mid-October and runs through December. Extravagant weddings in India date back thousands of years and have consistently caused heavy demand for Gold. Traditional Indian weddings involve a bride draped in Gold, helping India to become the world’s largest consumer of Gold jewelry. India accounts for roughly 35% of the world’s Gold demand, with 50% of that being spent on jewelry for the average 10 million weddings held there each year.

There is no historical pattern or strategy that I can find that shows Gold always moves higher between October through December. However, the increase in Chinese and Indian buying is definitely a major bullish factor, but interest rates, currency fluctuation, and geopolitical events will also affect precious metal prices.

Today: As of 11am today, we are seeing good volume from Asian buyers today, supporting the important $1,300 level for Gold. However, after the President’s speech today with senate majority leader Mitch McConnell talking about a wide array of issues, including tax cuts, the dollar index is starting to increase and Gold is now testing the $1,300 level. This should allow a new opportunity to get into Gold before the Indian Wedding Season starts.

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SILVER

Silver out-performed Gold last week, showing a $0.62 (3.7%) increase. Silver’s sharp rally pushed the price over the $17 per ounce resistance level. Silver closed on Friday at $17.41, up $1.42 (8.9%) since the beginning of the year. The next resistance level is $18, which has proven to be a difficult level for Silver to stay above.

The Gold/Silver ratio has decreased to 74.93-to-1.

Today: While Gold is currently above the $1,300 level as of 11am, Silver is correcting slightly, but still holding well above the $17 level.

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On my way to Washington D.C. today

As the new president of the Professional Numismatist Guild (PNG), I was invited to attend a Numismatic Forum at the U.S. Mint this week. At this Forum, I’ll have the opportunity to give U.S. Mint officials my input on the following issues:

Themes and Subjects for future coinage
Anniversary designs for re-released coinage
Length of program and quantities minted of future coin series
Educational ideas for youth products
Marketing and promotional ideas

I’ll provide some information on this meeting in the next Weekly Market Report.

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October 2017 CoinStats is now available

Our numismatic CoinStats report is a great tool for rare coin investors. CoinStats is an in-depth statistical analysis of popular rare coin series that allows you to identify the best values in certified rare coins. I am proud to offer this unique and informative tool exclusively to our clients. CoinStats has been updated for October 2017 and is now available. Six different series are available: $20 Gold Saint Gaudens, $20 Gold Liberties, $10 Gold Indians, Morgan & Peace Silver Dollars, and the Walking Liberty Half Dollars. The CoinStats report provides a list of my recommended certified U.S. Gold and Silver coins which are found listed on the Best Value page. These are not the modern issue bullion coins or low-grade circulated coins. These are PCGS/NGC certified MS63 or higher Gold and Silver U.S. rare coins, dated prior to 1948, which have a proven track record of appreciation and also offer excellent liquidity. To receive the latest CoinStats analysis, just put the word CoinStats in the subject line and email me which of the six series you would like to see.

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Recommended Investment Commitment and Diversification:

Precious Metal commitment: Minimum of 30% of investment capital

Diversification: Gold 55%, Silver 35%, 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