Weekly Market Report 1/13/14

This Week’s Headlines:

Gold
Silver
7 Great Reasons to Own Silver
Rare Coin Market Report
Pre-order 2014 First Strike Silver Eagles
Recommended Investment Commitment and Diversification

GOLD

Last Friday Gold closed at $1,246.90 per ounce, up $8.30 per ounce for the week and up $45 (3.7%) since the beginning of the year. While trading volume on the world’s exchanges has been heavy, the demand for physical investment products around the globe is reported to be going at an extraordinary pace.

Monday and Friday were the key days for Gold achieving this year’s 3.7% increase. Monday, Gold opened at $1,237 per ounce on the CME and at one point during trading was hit with heavy selling, driving the price down to $1,212 per ounce. Gold buyers stepped up to the plate and Gold quickly rallied to close back at $1,238 per ounce. On Friday, the U.S. government reported that the U.S. economy had only created 74,000 jobs last month. This was positive for Gold prices because economists had previously forecast that the U.S. economy would generate 197,000 jobs. After this report from the Department of Commerce, Gold rallied and closed the day at $1,246.90 per ounce, up $17.50 per ounce. Gold rallied because the market feels that the Federal Reserve will begin to slow the pace of any cuts in its economic stimulus program.

Many professional commodity traders and analysts feel that Gold needs to rally above $1,250 per ounce to become short term bullish. Gold needs to go above $1,300 per ounce to drive professional traders to aggressively purchase it for a long term hedge.

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SILVER

Silver continues to mirror Gold’s price direction, but under-performed Gold’s increases last week resulting in a ridiculous Silver/Gold ratio of 61.66 to 1. Last Friday, Silver closed at $20.22 per ounce, up $0.05 per ounce for the week. Silver is up $0.88 per ounce (4.5%) since the beginning of 2014, and physical demand continues to be very strong worldwide.

The world’s Silver markets continue their bull/bear fight to stay above the key $20 per ounce price level. Silver traded below $20 per ounce all five trading days last week, reaching a low of $19.31 per ounce last Wednesday. Right now, with Silver trading in this price range it is an outstanding value. For professional traders to become bullish, it needs to stay firmly above $20 per ounce, and hopefully breaking above $22 per ounce which has not been reached since November 7, 2013.

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7 Great Reasons to Own Silver

I read an informative bullish article that provided seven great reasons to own Silver at the current Silver/Gold ratio of 61.66 to 1. You can read the article at: http://www.mintstategold.com/investor-education/silver_investments_better_than_gold/.

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Rare Coin Market Report

I just returned from the Florida United Numismatic (FUN) coin convention in Orlando. This convention is a major event for the rare coin community, with thousands of dealers, investors, and collectors attending. 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 as high as any rare coin convention that I have seen for the past 20 years. Dealers were aggressively bidding on, and purchasing, a limited amount of high quality U.S. rare coins which were available. Prices in the auction for Gold and Silver rarities (valued over $50,000) were running at approximately 20-25% higher than last year.

It is estimated that the overall rare coin market in the U.S. was at about $5 billion in 2013. That includes auctions and private transactions made at coin shows, by mail order, online, and at coin stores, but does not include numismatic bullion items or the modern coins sold directly by the United States Mint.

Why did the market for high-quality rare U.S. coins do so well in 2013?

I agree with my friend Terry Hanlon, the current President of the Professional Numismatist Guild (PNG) who said, “Over the course of this year we continued to see the precious metals market decline and the stock market rise. The U.S. and other world economies, specifically the Eurozone, are seeing an economic recovery, however temporary it may be.  A growing interest in rare coins is typical in this type of environment. The same for fine art which is booming right now. Rare coins and fine art seem to coincide with one another in this economic environment.”

"Smart investors and collectors see a good buying opportunity with some of their profits taken from the increase in stocks being reinvested in rare coins. There’s also the continuing interest in hard assets with the confidence that rare coin values will grow with the success of the economic conditions, even as the precious metals themselves may be declining,"

The prices realized for U.S. coins at public auctions this past year totaled nearly $393 million, the highest aggregate total anyone can recall. 

There was incredible competition for so-called ’trophy coins’ with 11 U.S. coins selling at auctions for more than $1 million each in 2013. One historically significant coin, believed by many to be the first Silver dollar struck by the United States Mint in 1794, sold for $10 million. That’s the highest confirmed price ever paid for any rare coin.

The following are twelve U.S. rare coins that sold for more than $1 million dollars in 2013 at public and in private transactions:

1. 1794 Flowing Hair Silver dollar, $10,016,875
2. 1804 Type I Silver dollar, $3,877,500
3. 1913 Liberty Head nickel, $3,172,500
4. 1880 Coiled Hair Gold $4 denomination Stella, $2,574,000
5. 1796 Silver quarter-dollar, $1,527,500
6. 1792 Silver half disme (early spelling of dime) $1,410,000
7. 1796 Silver dollar, $1,175,000
8. 1783 Nova Constellatio Quint Type II, $1,175,000
9. 1852 Augustus Humbert $10 Gold coin, $1,057,500
10. 1792 half disme, $1,145,625
11. 1879 Coiled Hair Gold $4 Stella, $1,041,300
12. The 12th U.S. rare coin that changed hands for more than a million dollars in 2013 was an 1894 San Francisco Mint dime that sold for over $2 million in a private sale

A year-end survey by PNG of auction houses in the United States indicates they sold an aggregate total of $392.8 million of U.S. rare coins in public auctions in 2013

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Pre-order 2014 First Strike Silver Eagles

Stuppler & Company is now accepting orders for 1st Strike U.S. 2014 Silver Eagles at only $4.19 over spot in lots of 100-499, and $3.99 over spot for 1st Strike in the Green Monster box (500 coins).

You can lock in today’s low Silver price for delivery early in 2014. Call or email me at 888-454-0444 or [email protected].

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Recommended Investment Commitment and Diversification:

Precious Metal commitment: Minimum of 40% of investment capital

Diversification:  Gold 50%, Silver 45%, Platinum & Palladium 5%

Diversification includes 50% in long term investment quality rare coins and 50% short term bullion products

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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.

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