President-Elect Trump causes high volatility in Metals Markets<br />Mint State Gold - Weekly Market Report 11/14/16
Links to recent informative articles on precious metals and rare coins:
’Helicopter Money President’ Trump to Create Inflation and Gold Will Rise
Gold Suffers Largest Weekly Loss in More Than 3 years
Gold Seller Running Out of Bars, Coins in London After Trump Win
Gold
Silver
U.S. Mint releasing 2016 Walking Liberty Gold coin Thursday
Recommended investment commitment and diversification
Last week, after it appeared that Donald Trump would become our next president, precious metal trading was definitely extraordinary. In early Asian trading Wednesday morning, Gold reached a high of $1,355 per ounce, an $80.50 increase over the New York close. At that point, major sellers appeared driving the price down to $1,305. Then, after the London and New York markets opened the Gold price quickly rallied back up to $1,338. Then came another sell off, with Gold closing at $1,273.50 per ounce on Wednesday, as the U.S. Dollar rallied with energy and bank equities leading the U.S. Stock market higher. It is highly likely that Gold will test the important $1,200 long-term support level early this week. A great buying opportunity!
Last Wednesday’s trading volume on the New York CME Gold commodity futures market was 817,239 hundred-ounce December Gold contracts. That’s over 81 million ounces of Gold (valued at over $103 billion) trading volume, the highest I have seen in the past five years.
What happened?
In the face of a possible run-away Gold price, some entity or nation sold over $10 billion worth of future contracts (85,000 contracts) into the world’s commodity futures markets. Many nations are replacing their Dollar holdings by building their Gold reserves, and they like an orderly market. One of these countries, or a very large financial institution, may have felt they needed to stop a run-away Gold price, so they sold $10 billion worth of Gold futures.
Last Wednesday’s Gold trading reminded me of Lehman Brother’s $600 billion bankruptcy in September of 2008, which caused the U.S. banking systems’ bailout by the Federal government. At that time, Gold initially dropped $60 (to $740 per ounce) on heavy volume. That drop caused sizable margin calls which forced many speculators to sell. Then, Gold rallied $140 by the end of the month when traders/economists realized there would be quantitative easing, and the long-term effect was very bullish for Gold.
What are Gold investors doing?
Gold investors are buying, and buying in a big way. Dealers in Europe, the Middle East, and Asia are reporting major increases in sales, and many dealers are out of stock and back ordered on most of the popular Gold and Silver physical investment products.
Today: A sharp increase in the value of the U.S. Dollar combined with a move up in interest rates kept Gold on the defensive. Gold hit a low of $1,211 in late Asian and European trading.
Silver ended a very volatile week last Friday at $17.38 per ounce, down $0.99 for the week on very high trading volume. Silver broke below the key $18 per ounce support level last Friday. Silver pretty much followed the Gold price lower during the week. Many economists feel that if Donald Trump can work with Congress they will stimulate the economy and the inflation rate will increase in 2017. The Silver price has always been a great beneficiary of increasing inflation.
The Silver/Gold ratio has decreased to 70.43-to-1.
Today: Silver reached a low of $16.62 this morning on heavy trading volume. Wow, Silver has dropped over $2 per ounce in less than two weeks! Silver is an incredible value at the current price.
U.S. Mint releasing 2016 Walking Liberty Gold coin Thursday
On Thursday November 17, 2016 the U.S. Mint is set to release the Walking Liberty 2016 Centennial Gold coin. This 1/2oz Gold coin is the final of the 3-coin 100th Anniversary series, which included the 2016 Mercury Dime (1/10oz Gold) and the 2016 Standing Liberty (1/4oz Gold). The Mint still has not released the price of this coin yet, but they should do so by about Wednesday, Nov 16th if they follow their historical pattern.
Based on the history of the previous two coins in the series, we are recommending to our clients to wait on buying the Walking Liberty as the mintage of 70,000 appears to be a very optimistic number. The U.S. Mint also imposed a sale limit restriction of 3 coins per household. Given that the U.S. Mint had a similar restriction on the 1/4oz Standing Liberty coin, which they subsequently removed within a couple of weeks of the coin’s release (attributed to poor sales) we are advising clients to wait until the second-hand market has purchased these coins for grading. We expect that the market will be inundated with these coins. Most likely in a couple of months both the graded perfect 70 by PCGS/NGC, and the ungraded coins should have an attractive price. So if you’re not in a rush, we recommend that you wait. We’ll be looking to acquire these coins in a couple months to offer them to our clients at the best price possible, both individually and in the 3-piece sets.
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.
REMEMBER THE BLOG
If you want to be updated on what is happening in the Gold, Silver, and Rare Coin markets any weekday, our company offers a daily blog Monday through Friday at www.stupplerblog.com
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.
-
-
-
-
Both Gold And Silver Break Below Test Support Levels ByApril 30 2024
-
Both Gold And Silver Showing Excellent Demand Above Support Levels ByApril 29 2024