Weekly Market Report 2/16/16

By Barry Stuppler

| February 16 2016

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

Collapse of Paper Gold and Silver Market May Be Close At Hand

China on Massive Gold Buying Spree

Why Gold Has Been on a Tear in 2016

WGC 2015 Gold Demand Full Year Report

This Week’s Headlines:

Gold
Gold’s 12 Most Bullish Fundamentals
Silver
Platinum
Recommended Investment Commitment and Diversification

GOLD

Last week the world’s stock markets continued to decline, while the Gold price was up $81 as it continued its 2016 bullish rally. Last week’s Gold increase of 7.1% is the best weekly performance since December 2008. Gold is up $179 per ounce (16.89%) and the DJIA is down 1,452 points (8.3%) since the beginning of the year.

The price of Gold moved above the key $1,200 long term resistance level last Thursday with an amazing $53 rally, reaching $1,263, on extraordinarily high trading volume. Moving above $1,200 was very significant, as many commodity experts and financial advisors are now recommending buying Gold. Many market analysts now believe that Gold has ended its four year bearish downslide (from its all-time high of $1,920 per ounce on Sept 6, 2011) and will now move substantially higher.

All three avenues for Gold investment have confirmed this major breakout is real:

Spot Gold is up $179 since the beginning of the year on very heavy trading volume.
GLD, the most popular Gold ETF, has increased 16% and inventories are up 68 tonnes since January 1, 2016.
The very popular Gold equity ETF, GDX, has increased sharply since January 1, 2016.

Gold/Silver investing is back and demand continues to grow at a record pace.

The World Gold Council (WGC) released its 2015 full year Gold Demand report last week. This report provides firm data that Gold demand is increasing and mining production is dropping. Please take 10 minutes to read it.
Read the full report at: www.mintstategold.com/investor-education/wgc_2015_gold_demand_full_year_report/.

The U.S. Mint sold 163,000 ounces of Gold Eagles as of Feb.12, 2016, up 64% compared to last year’s sales.

THIS WEEK: Gold tested the $1,200 support level yesterday, reaching $1,202 per ounce before holiday buying appeared. This morning, Gold broke through the $1,200 resistance level; reaching a low of $1,190 after Goldman Sachs told its clients to sell Gold. After the selloff, the buyers came rushing in to take the price above $1,210 per ounce.

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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 continue 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 68 tonnes since January 1.
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. Since January 1 the DJIA is down 8%, Nasdaq is down 13%, and more than $7 trillion has disappeared from the World’s equity markets.
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.

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SILVER

Silver closed last Friday at $15.79 per ounce, up $1.01 from the previous week and up $2.01 (14.59%) since the start of the year. To say Silver has broken out of its bearish trend and is now in a bullish rally is an understatement. The velocity and trading volume of the current Silver move is very impressive. Many of the professional commodity traders that have made a good income in the past four years by short selling Silver rallies are rethinking that strategy now. It would be very healthy for Silver’s long term move higher for the price to consolidate in the $15 to $16 per ounce trading range.

As of February 12, 2016 the U.S. Mint has sold 8,000,000 one-ounce .999 Silver Eagles. This is higher than last year, and ahead of the record 47,000,000 pace of 2015 sales.

The Silver/Gold ratio is currently at an amazing 78.49-to-1.

THIS WEEK: Silver reached a low of $15.12 during the past two days on profit taking. The short sellers were able to take the market down $0.60 before the buying overwhelmed them.

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PLATINUM

Platinum closed last Friday at $958 per ounce, up $54 for the week. Platinum is trading at more than a $260 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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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