Weekly Market Report 01/16/12

GOLD

A new year and another great beginning for gold investors. For the second week in a row gold has closed higher, building an excellent base between $1,600 and $1,660 per ounce.  Last week, gold closed at $1,630.80, up $14 per ounce for the week on excellent volume, with increasing demand for physical investment products.

Today, with the U.S. markets closed due to the Martin Luther King Holiday, the European markets and Euro are weak due to the S&P credit rating downgrades of nine European countries.

The fundamental factors for gold ownership keep looking better. This week we saw three basic bullish components; an increase in paper money, higher physical demand, and a worsening sovereign debt crisis.

1)      Pimco’s Bill Gross just said that “Central Banks are Printing Money like Gangbusters”. Since Pimco (the world’s largest $244 Billion bond fund) consults with, and represents, many of the global Central Banks, Gross’s statement is very bullish for precious metals. The more Government’s debase their currencies by cranking up their printing presses, the higher gold and silver prices will go. See the complete article at http://www.mintstategold.com/investor-education/cat/news/post/central_banks_print_money_like_gangbusters/

2)    Physical demand is increasing at an extraordinary pace, as Chinese investor’s physical off-take is underpinning the gold market. Mainland China bought 102,779 kilograms from Hong Kong in November, up from 86,299 kilograms in October (19% increase). See the complete article at  http://www.mintstategold.com/investor-education/cat/news/post/china_2012_gold_panic/

Gold demand is not just increasing in Asia; it is global. Reports from the Middle East and the U.S. show that demand for gold investment products is increasing. The U.S. Mint said that it sold 82,500 ounces of American 1 ounce gold eagle coins in the first 11 days of January. Full-month sales would reach 235,000 ounces at that pace, the highest since 1999.

3)    Standard and Poor’s downgrades of the debt ratings for nine eurozone countries, including France and Austria. The sovereign debt of countries like France and Austria has always been considered as one of the safest Triple-A investments by financial institutions and now they are suspect. Read the full story at: http://www.mintstategold.com/investor-education/sandp_downgrades/

I believe that these 3 bullish factors, combined with other fundamentals, are excellent reasons for gold ownership. The current attractive price of only $1,600+ per ounce makes the timing for adding to your gold ownership look very appealing. Since the start of Gold’s upward move in 2001 we have seen sharp prices increases followed by downward correction, then a period of base building, and then another move to new all-time highs. 

Since September of 2011 (when the price corrected from the $1,920 per ounce high) gold has built an excellent base in the $1,600 to $1,700 per ounce area. Gold fundamentals look good, world events are positive for gold, and the base building is in its final phase ahead of a major breakout.  I believe that we will see a new all-time record high of over $2,000 per ounce this year and the upward move will start soon.

SILVER

Silver had a hard time staying above the $30 resistance level last week. It traded above the $30 per ounce level the last four days of the week, only closed above $30 on Thursday, and then quickly sold off on Friday closing the week at $29.52 per ounce. Silver was up $0.83 for the week on an average volume of trading. 

Domestic physical demand for Silver .999 fine 1 ounce Eagles is turning the market sentiment toward bullish. The U.S. Mint has already sold 4.26 million ounces of the 1oz 2012 Silver Eagles to authorized buyers from Jan. 3 through Jan. 10. At this pace, full-month deliveries may reach 14.2 million ounces, more than twice the record of 6.422 million ounces sold January 2011. Considering that the total 2011 sales were an all-time record of 39.8 million 1oz Silver Eagles, this is an unbelievable pace.    

The Silver to Gold Ratio is at 55.24 to 1

2012 First Strike U.S. 999 Silver Eagles

We expect to have our first delivery of the 2012 1oz Silver Eagles this week. Our first U.S. Mint sealed boxes of .999 U.S. Silver Eagles are considered First Strikes.  You can lock in your purchase of 100 or more 2012 Silver Eagles at today’s low prices. First Strike, mint sealed Green Monsters (500 pieces) are also popular for collectors and investors.  Call the office to speak with David or myself for current prices, 888-454-0444.

PLATINUM

Great week for the price of Platinum, up $80.60, as compared to gold being up $14 per ounce.

The Platinum to gold discount is now down to $142.00; very bullish. I have raised the recommended investment diversification for Platinum/Palladium to 10%, see below.

Recommended investment commitment and diversification:

Precious Metal commitment: Minimum of 35% of investment capital

Diversification:  Gold 70%, Silver 20%, Platinum & Palladium 10%

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

RARE COINS UPDATE

New CoinStats Available

My numismatic CoinStats report is the best investment tool for rare coin investors. CoinStats is an in-depth statistical analysis of popular rare coin series which allow investors to identify the best values in certified rare coins. I am proud to offer this unique and informative investment tool exclusively for our clients. The January 2012 CoinStats update is now available for $20 Gold Saint Gaudens, $20 Gold Liberties, and the Morgan & Peace Silver Dollar series.

While the collector coin market continues to be weak, the high end gold and silver investment quality rarities (over $50,000 each) did set record prices at this month’s FUN Heritage Auction. The best values and opportunities are in the middle area ($3,000 to $49,000) where the market is still undervalued. The CoinStats Report provides a list of my recommended certified Investment quality US gold and silver coins, listed on the best value page.  These are not the overly hyped modern issue bullion coins or low grade circulated coins, they are PCGS/NGC Certified MS63 or higher gold and silver U.S. rare coins, dated prior to 1936, that have a proven track record of appreciation.

For the latest CoinStats analysis, just email me with which series you would like to see.

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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.