Weekly Market Report 01/23/12

GOLD

The direction of the gold price continues higher. Three weeks into the New Year and Gold has increased each week at an excellent pace. Gold closed at $1,664.00 per ounce on Friday, January 20th, up $ 33.20 for the week and $97.20 (6.2%) since the start of 2012.  As I mentioned last week, the fundamental factors for gold ownership keep looking better.

Demand

China’s appetite for gold continued to grow at a rapid pace in 2011. It’s investment in gold bullion rose 45% to 258 metric tons, with jewelry fabrication rising 16% and eclipsing the 500-ton mark for the first time. Last week, the Industrial & Commercial Bank of China (the world’s largest bank by stock-market cap) announced that 2.33 million Chinese citizens now buy Gold through its gold accumulation savings account program. See a great article on the growth of Chinese gold demand at https://www.mintstategold.com/investor-education/cat/news/

Central Banks trading Dollars for Gold

The net purchase of Gold by central banks in the last year amounted to 430 tons – more than a fivefold increase from the previous year and the highest level since 1964.

Sovereign debt problems

The IMF announced last week that it was looking to raise an additional $500 billion to help “combat the world’s spreading fiscal emergencies.”  Additionally, there has been progress made by Greece to reach a deal with its private creditors. This would allow them to rollover over 200 billion Euros ($257 Billion) of Greek debt by voluntarily exchanging outstanding bonds for new securities. 

Supply

South Africa reported that its gold production fell 4.5% year on year

Timing has always been the key to successful investing, therefore, adding to your gold holdings when the price is under $1,700 per ounce could easily give you a 17% return by year end. I believe that we will see a new all-time record high of over $2,000 per ounce this year. This year’s upward move for Gold has begun.

SILVER

Silver had quite a week. Up $2.15 per ounce (7.29%) , closing at $31.67 per ounce  last week.  When Silver finally broke the important $30 resistance level, it just kept on going. Silver was up $1.16 per ounce on Friday, as news began to come out on progress in the negotiation with Greece’s creditors on the debt exchange for new securities. When silver broke out above $30.88 (the 50-day moving average resistance line) we saw a lot of short covering, driving Silver to hit $32.10 per ounce in late electronic trading on heavy volume for a Friday.

The Silver to Gold Ratio is at 52.70 to 1

Silver’s recent price performance has been very impressive and the price is still 33% below the 2011 lows. I have increased the precious metal recommended investment diversification for Silver by 10%.  (See Below)

Recommended investment commitment and diversification:

Precious Metal commitment: Minimum of 35% of investment capital

Diversification:  Gold 60%, Silver 30%, Platinum & Palladium 10%

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

RARE COIN 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, which are 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 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.