Weekly Market Report 2/8/16

| February 8 2016

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

Bulls may win gold tug-of-war in China, India

Keeping an Eye on Gold Bullion Supply and Demand

Chinese Seen Buying More Gold as Investors Seek Haven Assets

This Week’s Headlines:

Gold
Gold’s 12 most bullish fundamentals
Silver
Platinum
Long Beach Coin Expo
Recommended investment commitment and diversification

GOLD

Gold has ended its four year bearish downslide from its all-time high of $1,920 per ounce on Sept 6, 2011. After reaching a low of $1,045 on Dec 3, 2015, trading volume demand has continued to increase. Last Friday’s close price of $1,158 per ounce was up $113 from the December low, and the price continues to move up with tremendous momentum. Gold is up $97.40 (9.1%) since the beginning of the year as the world’s equity, debt, and crude oil markets are falling.

$1,200 per ounce should be tested this week as Gold’s major demand/supply fundamentals keep getting better and better.

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Gold’s 12 most bullish fundamentals

Physical demand for Gold and Silver investment products is at the strongest level in years. Many world mints report record 2015 sales for bullion coins and are showing double digit increases this year.
Worldwide interest rates are at historic lows, with nine major countries quoting negative interest rates.
Global quantitative easing (money printing) in the U.S., China, Japan, and Europe is increasing debt at an unbelievable rate. The U.S. National Debt just passed 19 trillion.
The World Gold Council is reporting mine production falling dramatically as the cost of production goes higher.
Central banks continue to trade their U.S. Dollars for Gold, thus building their reserves.
Stockpiles of Gold in depositories continues to drop, filling heavy physical demand. This could soon cause a short squeeze on sellers of Gold.
ETF Gold investors have been aggressively buying in 2016, with GLD holdings up 50 tonnes just in January alone.
Chinese investors, the world’s most aggressive Gold buyers, are switching out of equities into physical Gold and Silver. The Gold buying will increase as we approach the Chinese Lunar New Year.
The U.S. Dollar is continuing its recent trend of weakening against the Euro, which will increase premiums on Gold and especially the British, French, and Swiss pre-1934 Gold coins.
The financial consultants, money/fund managers, and commodity professionals that are being interviewed on financial media have become bullish on Gold and Silver as the equity market falls. The DJIA is down 7%, and Nasdaq is down 12.8% since January 1, 2016.
More countries are repatriating their Gold being held at the NY Federal Reserve Bank.
The idea of a U.S. Gold Standard is being discussed by a few of the Republican candidates for president.

So far this year Gold has broken above the $1,100 and $1,150 resistance levels and is now moving towards the very important $1,200 per ounce resistance level. $1,200 is quite significant as many commodity experts and financial advisors will recommend buying Gold above $1,200 because it has broken the long term downtrend and will move higher.

I believe it is clear that the four year down trend in the Gold price has stopped, and the recent consolidation with heavy volume is a sign of higher prices coming very soon. I continue to believe that Gold ended its downslide on Dec. 3, 2015 at $1,045 per ounce, and the uptrend has started this year. I conservatively look for $1,400 per ounce Gold before year end, on its way to a new all-time record high.

The U.S. Mint sold 124,000 ounces of Gold Eagles in January, up 53% compared to January 2015 sales of 81,000 ounces.

Today: This morning the equity markets continue to decline as Gold moves higher, up over $35 since Friday’s close. The Gold market is testing its major $1,200 long term resistance level for the first time in eight months.

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SILVER

Silver closed at $14.77 last Friday, up $0.54 for the week, and $1 since the beginning of the year. Last week, Silver tested the $15 per ounce resistance level twice and reached $15.07 in late trading on Friday. $15 per ounce is a key long term resistance level, and many chart technicians will short sell Silver at that level with the hope of a retracement back to $14.50. However, they will cover that short sale if the rally moves above $15.40 per ounce. Silver continues to find strong demand in the physical market, as well as excellent trading volume on the Silver commodity trading floors around the globe.

As of February 5, 2016 the U.S. Mint has sold 7,000,000 one-ounce .999 Silver Eagles. This is higher than last year, and ahead of the record 47,000,000 pace for 2015 sales. Additionally, on that same February 5th date, there were 827,000 ounces of Silver withdrawn from the CME warehouse. As stockpiles continue to drop the price will grow stronger.

The Silver/Gold ratio is currently at an amazing 78.34-to-1.

Today: Silver rallied sharply, moving to a high of $15.43 per ounce on very heavy demand. The short sellers are on the run as fresh buying takes the market to a three month high.

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PLATINUM

Platinum closed last Friday at $904 per ounce, up $30 for the week. Platinum is trading at more than a $250 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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Long Beach Coin Expo

Last week, David and I attended the Long Beach Coin Expo. This rare coin convention was attended by thousands of coin dealers, collectors and investors. It was nice to see the aisles full with rare coin buyers. Many of the dealers who attend this convention reported low inventories and that they were raising both the bid and ask prices for many of the most popular Gold and Silver rarities.

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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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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.

Categories: Weekly Market Report