Weekly Market Report 2/18/14

This Week’s Headlines:

Gold
Does China Plan to Use Gold to Internationalize the Yuan?
World Gold Council Releases 2013 Gold Demand Numbers
2014 44-Page Gold Booklet is Being Mailed Out This Week
Silver
Recommended Investment Commitment and Diversification

GOLD

Gold’s price has increased for the past eight consecutive trading days, closing last Friday at $1,319 per ounce. Gold was up $56 last week and $117 since the beginning of 2014. However, the most important issue is that it has moved above the key $1,300 per ounce long term resistance level. The reason that this is important is that many professional commodity traders and technical traders have been shorting (selling) Gold on any rally believing that they could make money because they believed that it would not rally above $1,300 per ounce. Now, the traders’ overall thinking has changed and they are not shorting rallies. Current thinking is that if Gold shows good demand above $1,300 per ounce they may start buying on dips.

What caused last week’s $56 per ounce rally in Gold? A combination of things. First of all, economic issues, a fall in monthly retail sales and a rise in the weekly jobless claims helped to fuel weakness in the U.S. dollar, luring traders to perceive the safety of Gold. Second, the Chinese came back from holiday and were major buyers of physical and paper Gold. Also, China’s Gold Association reported that China’s Gold consumption jumped 41% last year (to exceed 1,000 tonnes for the first time) while a sharp slide in prices attracted buyers for jewelry and bullion. This demand surge has helped China become the No. 1 Gold consumer in the world and should support prices. Gold consumption in China grew to 1,176.40 tonnes last year, with jewelry demand climbing 43% to 716.50 tonnes and bullion demand soaring 57% to 375.73 tonnes.

During our Holiday there was news that Japan’s fourth quarter GDP was much lower than expected. This news resulted in lowering the value of the U.S. Dollar and driving Gold higher, which closed in Asia up $4 per ounce, at $1,223.

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Does China Plan to Use Gold to Internationalize the Yuan?

I wrote about the issue of what China is planning to do with all the Gold it has been accumulating in my new Gold Booklet. Now Dhara Ranasinghe, a senior writer for CNBC, writes that China plans to use their Gold to internationalize its Yuan. "The massive flow of Gold into the country does make it seem plausible that they [China’s authorities] could be moving in the direction of using Gold in the effort to internationalize the currency and escape what is seen as a domineering dollar”, according to a new report from Lombard Street Research. Read the complete article at www.mintstategold.com/chinagold

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World Gold Council Releases 2013 Gold Demand Numbers

The World Gold Council just released its 2013 Gold Demand report showing that 2013 saw the largest volume increase in jewelry demand in 16 years as consumers across the globe reacted to lower Gold prices. Full year demand was 2,209.5t, 17% above 2012 and the highest level since the onset of the 2008 financial crisis. These facts and many more are available in the World Gold Council report. Visit 2013 Gold Demand to read more.

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SILVER

It’s about time that Silver broke out. After six weeks of disappointing price activity we finally saw it move above $20 and $21 per ounce as Gold clearly broke out above the $1,300 resistance level. Last Friday, Silver closed at $21.42 per ounce, up a whopping $1.49 (6.93%) for the week and $2.08 (10.76%) from the beginning of 2014. What I would like to see is price consolidation from last week’s rally allowing Silver to stay above $21 per ounce for at least a week. This would allow professional and technical traders, as well as chartists, to establish (purchase) new long positions.

The Silver-Gold ratio has now dropped to 61.57 to 1.

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2014 44-Page Gold Booklet is Being Mailed Out This Week

GOLD: REAL MONEY

Your Ultimate Protection
Against Inflation and Deflation

After six months of research and three months of reviewing, editing, and proof reading, my 2014 Gold Booklet was finally sent to the printer last week. It will be delivered back this Wednesday, and start going out. I am truly excited about mailing you, my loyal clients, 2 copies. I believe that this is one of my very best works of research and analysis of the precious metal markets. I want to publicly thank my son David and Rick Rhoads for all of their input and advice. If you want to read an internet copy of my Gold Report, it is now available on www.coinmag.com by just providing your name and email address.

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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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