Weekly Market Report 03/31/14

This Week’s Headlines:

Gold
2013 Worldwide Central Bank Gold Demand
Numismatic Update
Silver
Recommended Investment Commitment and Diversification

GOLD

Last week’s Gold trading was very disappointing. The price broke down below the key $1,300 per ounce support level, closing on Friday at $1,295 per ounce, down $42 for the week. I spotted an interesting trend; this is the 4th quarter ending in a row (June 30th 2013, Sept 30th 2013, and Dec 31st 2013) when Gold closed at or near the lowest point. I can only explain this by saying that many mutual funds managers don’t want their investors to realize that they had invested their client’s funds in Gold earlier in the quarter. This strategy works since they report results quarterly. Based on this strategy we could see Gold reach the monthly lows today, followed by a nice rally during the balance of the week.

The market has not yet focused on increasing worldwide physical demand for Gold. The International Monetary Fund reported that Russia has increased its Gold holdings by 7.247 tonnes to 1,042 tonnes in February. Turkey and Kazakhstan also raised their bullion reserves. Turkey’s Gold holdings rose 9.292 tonnes to 497.869 tonnes. More and more Central banks are running away from the U.S. Dollar and moving into Gold.

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2013 Worldwide Central Bank Gold Demand

The following is the 2013 Worldwide central bank demand for Gold:

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Numismatic Update

Last week I was at the Whitman Coin Expo in Baltimore, Maryland. This is a major coin convention, with over 400 dealers with tables on the bourse floor, along with thousands of collectors and coin investors in attendance. I spent Thursday morning through Saturday afternoon on the trading floor looking to fill client want list coins, as well as any of the CoinStats recommended U.S. Gold and Silver coins. I was only able to purchase 8 high quality Gold and Silver coins over my entire trip. The investment grade, high quality U.S. coins are just not coming out until we see much higher prices.

Many of the dealers that I spoke with who specialize in U.S. Gold and Silver rarities were embarrassed by the lack of quality coins that they were able to offer. A few of my friends, long time dealers, discussed their frustration with me about their inability to fill their client’s want lists. They were willing to pay more than current price levels had the coins been available. However, they agreed that we are now in the third year of a major bullish cycle for U.S. Gold and Silver rarities and they really want to build up their inventories. History has shown us that the average bull cycle for Gold and Silver U.S. coin rarities can easily run for 6-8 years.

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SILVER

Silver closed last Friday near the weekly lows, at $19.79 per ounce, down $0.52 an ounce. Like Gold, Silver dropped below its major support line ($20 per ounce) and wasn’t able to rally back on Friday. The last time Gold broke its $20 per ounce support level it didn’t come back up until it reached $18.72 an ounce. If Silver doesn’t turn back up by week’s end, we may see that level again.

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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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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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