Will Gold/Silver prices be affected by Tax Reform Legislation

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This Week’s Headlines:

Gold
Is Tax Reform Legislation on the Horizon?
Silver
Recommended investment commitment and diversification

GOLD

Last week, Gold continued to trade in a narrow trading range between $1,271 to $1,281 per ounce. Many of the key financial indicators traded within a very tight range as the Gold price showed excellent consolidation. Gold closed Friday at $1,272, up $3 for the week.

Gold and Silver appear to be in a base building phase as the primary financial markets are waiting for news that will give them a direction. Whether it is the possibility of new tax reform legislation coming from Congress or some other international developments, the U.S. Dollar and interest rates markets are apparently in a holding position.

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Is Tax Reform Legislation on the Horizon?

Some financial analysts believe the passage of tax reform legislation would be negative for precious metals, however, I strongly disagree. After the House of Representatives released their original Tax Reform Legislation, hundreds of special-interest-group lobbyists started putting pressure on their federal legislators. In recent statements from key Senators, it is clear that the Senate version of the Tax Reform bill reverses or changes many of the key deductible eliminations.

As Chairman of our industry’s Federal Gold & Silver Political Action Committee, I have discussed with a few lobbyists what they believe the final legislation would look like, if passed.

They believe that to secure passage this year, and that is key, the bill would add trillions of dollars to the Federal deficit, and it would be highly inflationary. Historically, inflation is good for precious metal investments.

Why is passage of the Tax Reform legislation this year important? Many Republican Congressmen and Senators believe, after the failed Health Care bill, that if Tax Reform isn’t passed this year, it would mean that the Republicans could lose control of the Senate and/or House in the 2018 elections.

I continue to believe we will see a purchasing opportunity for Gold in the next few weeks with either a test of the $1,250 support level or a move back above the key $1,300 per ounce level.

Whichever happens, I strongly recommend taking advantage of this opportunity.

Today: How boring, another narrow trading range day. Gold has traded within a $5 high/low range today, from $1,275 to $1,280 per ounce.

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SILVER

Last week, Silver continued to trade above and below the key $17 per ounce support/resistance level. Silver reached a low of $16.77 and a high of $17.25, closing Friday at $16.84 per ounce, up $.02 for the week. Many of the same factors that influence movement in the price of Gold also affect Silver. During the past few weeks, the Gold and Silver prices seem to be moving together. I would expect to see the Gold/Silver ratio stay within a narrow range.

The Gold/Silver ratio has increased to 75.59-to-1.

Today: Silver is performing better than Gold this morning. Silver is trading back above the key $17 per ounce resistance level on respectable volume.

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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.

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