Weekly Market Report 1/11/16

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

Rare coin sold for $2 million at Tampa auction

Silver Institute Report Dec 2015

2016 Gold and Silver forecast

This Week’s Headlines:

Gold
What 2016 looks like for Gold
2016 Eagles/Buffalo Pre-Order now available with Lowest Premium Guarantee
Platinum
Silver
Rare Coin Market Report
Recommended investment commitment and diversification

GOLD

As I mentioned in last week’s Weekly Market Report, January has a great history of showing increases in the price of Gold, and this January is no disappointment. Last week Gold rallied $52.80 per ounce, from $1,060.30 to $1,113.10, before seeing a $9.90 decline due to profit taking on Friday. What is more important is that Gold has broken above its key $1,100 per ounce short term resistance level. Also, during Thursday’s trading, when Gold reached its weekly high of $1,113.10 per ounce, the CME trading volume was over 200,000 hundred-ounce February Gold contracts.

A significant factor in last week’s Gold increase, in addition to the sizeable fresh demand for physical Gold products, was the continued devaluation of the Chinese Yuan. The Chinese love buying Gold at a bargain price and with the Yuan’s decreasing value versus the U.S. Dollar, they are aggressively buying Gold at an attractive price. Other contributing factors to last week’s Gold rally were the 700-point drop in the Dow Jones Industrial Average, and the December Jobs report. While the jobs report showed an increase and was higher than expected, wage growth still remains low.

Today: This morning the Gold price has been in a tight $8 high/low range, just above and below the important $1,100 resistance/support level. Trading volume has been strong as Gold tries to consolidate above the $1,100 per ounce level.

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What 2016 looks like for Gold

1. Now that Gold broke back above the $1,100 per ounce resistance level last week, it is changing the bearish sentiment of many of the professional traders in the commodity pits around the world. With Gold moving above $1,100, I expect some consolidation, then the rally will continue through 2016. I expect to see Gold reach $1,400 per ounce this year and trade in the $1,350 per ounce area by year end.
2. The U.S. Dollar should continue its recent trend of weakening against the Euro, which will increase premiums on the British, French, and Swiss pre-1934 Gold coins.
3. Physical demand for Gold by investors and Central Banks will continue to grow, putting pressure on depositories and stockpiles to make immediate deliveries. This would drive up premiums on the spot Gold price, while causing a shortage in physical supplies around the globe.
4. Mining production will continue to fall, as the cost of Gold production moves higher.
5. More countries will repatriate their Gold held at the NY Federal Reserve.
6. The concept of a U.S. Gold Standard will be considered by the Republican candidate for president.

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2016 Eagles/Buffalo Pre-Order now available with Lowest Premium Guarantee

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PLATINUM

Platinum closed last Friday at $877 per ounce; more than a $200 discount to the spot Gold price. This has only happened four times in the past twenty years, and Platinum rarely stays at a discount to Gold for more than a year. The Canadian Platinum Maple Leaf is the best bullion coin on the market, with the lowest premium over spot Platinum.

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SILVER

Last week, Silver moved higher with Gold Monday through Thursday, reaching a high on Thursday of $14.39 per ounce. On Friday, the bears and technical traders came back and aggressively sold into the market, driving the price down to $13.87 per ounce. On Friday, Silver closed at $13.91 per ounce, up $0.12 for the week. $14 per ounce remains a key resistance level for Silver, and a close above that level for three consecutive trading days on good volume would be helpful to regain the bullish sentiment.

The Silver/Gold Ratio is currently at an amazing 78.88-to-1.

Today: $14 per ounce continues to be a difficult level for the Silver price to move above. Trading is active and demand is very healthy, but traders continue to be bearish.

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Rare Coin Market Report

I just returned from the Florida United Numismatic (FUN) coin convention in Tampa, FL. This convention is a major event for the rare coin community with thousands of dealers, investors, and collectors in attendance. In addition to having a large trading floor with over 500 rare coin dealers, there was also a major rare coin auction. The activity level was excellent on the convention floor with a lot of demand for many of the high-grade certified new issues. Many of the dealers were actively purchasing a limited amount of high quality U.S. rare coins.

It is estimated that the overall rare coin market in the U.S. was at about $5 billion in 2015. That includes major auctions, private transactions made at coin shows, and mail order, internet, and coin store sales. That figure does not include bullion coins, PCGS/NGC bullion items, or the modern coins sold directly by the United States Mint.

An 1894-S Silver Barber Dime was sold at the convention for almost $2 million, see the link to the article above.

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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.

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