Weekly Market Report 2/22/16

| February 22 2016

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

Canada’s gold sell-off bucks international trend

China Imported 217 Tonnes of Gold as London Dumped Precious Metals

WGC 2015 Gold Demand Full Year Report

This Week’s Headlines:

Gold
What do I expect now?
Gold’s 12 most bullish fundamentals
Silver
Platinum
Recommended investment commitment and diversification

GOLD

I believe the history of precious metal ’bullish rallies’ and ’bearish sell-offs’ will show that last week’s Gold trading confirmed that the four year downtrend has ended. Identifying the start of a bullish rally or a bearish selloff is important to commodity traders and any successful investor. Gold’s price history shows that on Sept. 6, 2011 Gold reached an inner-day high of $1,920.80, then closed near that day’s low at $1,873.30 per ounce on very high trading volume. That day’s type of trading is referred to as an inner-day reversal. This was a bearish signal for the Gold price, and that down trend was confirmed on Sept. 26, 2011, when the spot Gold price closed at $1,595 per ounce. Gold had dropped $325 in just 15 trading days from its all-time high of $1,920.80 per ounce, as well as breaking below two important support levels ($1,800 and $1,700 per ounce). Since that day, Gold has never traded above the $1,800 per ounce resistance level.

Since the beginning of 2016 we’ve had a $200 rally from $1,060 to $1,260 per ounce, followed by a $70 profit taking selloff down to $1,190. Now, the rally continues. The Gold price has broken above the key $1,100 and $1,200 per ounce resistance levels. Additionally, last Tuesday, after Goldman Sachs recommended to its clients to short sell Gold, it tested its $1,200 support level then quickly rallied back above $1,230 by Thursday, with extraordinarily high trading volume.

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What do I expect now?

Based upon the current global economy with negative growth and interest rates, as well as lower equity and crude oil prices, I expect to see more and more investors and central banks coming to Gold as the ultimate safe store of value. Domestic and worldwide demand continues to grow for physical Gold, Paper Gold (ETFs), and Gold mining shares. Therefore, I see the price of Gold continuing its bullish move higher, with more consolidation above $1,200 per ounce before moving to the next resistance level of $1,300. At some point within the next 60 days, I believe that many of the investors who took Goldman Sach’s advice to short Gold will cover those short sales, at a loss, and Gold will break above the $1,300 level. 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. See http://www.mintstategold.com/investor-education/cat/news/post/wgc_2015_gold_demand_full_year_report/

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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, especially on 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.

The U.S. Mint sold 186,000 ounces of Gold Eagles as of Feb.19, 2016, up 87% compared to last year’s sales.

Today: This morning Gold again tested the very important $1,200 per ounce support level. Gold reached a low today of $1,202 before sizeable buying appeared and took the price back to $1,210 very quickly.

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SILVER

Silver closed last Friday at $15.37 per ounce, down $0.42 from the previous week but up $1.59 (11.56%) since the start of the year. Silver did sell off with Gold last week, but never fell below the key $15.00 per ounce support level. The volatility of the price movement during recent Silver trading is much higher than Gold, and should remain that way for the foreseeable future.

As of February 19, 2016, the U.S. Mint has sold 8,926,500 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 80.06-to-1.

Today: When the bears were able to take the Gold price down to $1,202, the Silver price reached a low of $14.92 this morning. At that point the buyers came back and quickly took the Silver price to $15.20 per ounce.

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PLATINUM

Platinum closed last Friday at $945 per ounce, down $13 for the week. Platinum is trading at more than a $265 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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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