Weekly Market Report 3/2/15

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

Apple buying a third of world’s Gold to meet demand for iWatch

China Gold imports from Hong Kong rebound in January

Have the big banks been manipulating Gold and Silver prices?

Indian Gold Imports Might Surge As RBI Removes Curbs

This Week’s Headlines:

Gold
Apple needs 746 tonnes of Gold for the new iWatch?
Silver
Recommended Investment Commitment and Diversification

GOLD

Gold got on the positive track last week, increasing $8.20 for the week, closing at $1,213.10 per ounce. Last week Gold reached a low of $1,190.60, testing the very important $1,200 per ounce level. I am looking for Gold to move back above the $1,223 level this week, which is bullish for the short term direction of the Gold price.

A year from now we are going to look back at 2014 and early 2015 and realize that Gold continuing to test the very important $1,200 per ounce level during this time was crucial to establishing a firm base for the rally that took the Gold price to new highs. Forty-seven times during 2014 and 2015 Gold has traded below $1,200 per ounce; at one point it reached a low of $1,130.40 per ounce on November 7, 2014. However, each time Gold traded below its major support level of $1,200, it rallied back above that level quickly, and many times on heavy volume.

This morning Gold tested the $1,223 per ounce short term resistance level in Asia/Europe/U.S. and failed to breakthrough. Gold dropped to $1,206 per ounce before sizeable buying appeared.

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Apple needs 746 tonnes of Gold for the new iWatch?

There are four article links at the top of this Weekly Market Report which I recommend reading. The article about Apple possibly purchasing 746 tonnes of Gold to manufacture the Gold iWatch is in my opinion highly unlikely. The Apple article projects that they would produce one million watches a month. If we presume that the estimate is accurate, the real question is how many will be the Gold iWatch. With the Gold iWatch containing 2 ounces of 18kt Gold, the value of the Gold alone is $1,700 per watch. Allowing for the movement, case and band, plus a normal Apple markup, I would estimate the retail price to be over $5,000. At that price, I would estimate that Gold iWatch sales will be less than 5% of the one million monthly iWatch sales. That would still be 37 tonnes of Gold, an impressive number.

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SILVER

Last week Silver closed at $16.55 per ounce, up $0.27 per ounce for the week, but down $0.70 per ounce for the month. During last week’s trading Silver tested the important $16.00 support level twice, held, and then rallied back on good volume both times. Silver has continued to trade in the $16.25 to $16.65 range for the past two weeks. $18 per ounce continues to be the major long term resistance level.

Demand for physical Silver products continues to grow globally as discussed in the February 2015 Silver Institute Report. Read the report at: http://www.mintstategold.com/articles/SilverReportFeb2015.pdf

Right now the Silver/Gold ratio is at 73.26-to-1

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Recommended Investment Commitment and Diversification:

Precious Metal commitment: Minimum of 45% of investment capital

Diversification:  Gold 45%, Silver 45%, Platinum & Palladium 10%

Diversification includes 50% in long term investment quality rare coins and 50% short term bullion products

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