Weekly Market Report 04/02/12

This week’s Market Report provides you with an update on the precious metal markets, and the reasons why now is the right time to add Platinum to your precious metal and numismatic holdings, along with a two-day only Platinum special offer.

GOLD

The volatility in the gold market continues. Last week gold tested the $1,700 resistance level, reaching $1,696.90 per ounce on Tuesday morning before seeing floor professional’s taking short term profits.  For the second week in a row the gold price closed higher than the previous week. Last Friday gold closed at $1,671.90, up $9.50 per ounce for the week.  During the week gold never closed below $1,650, and the lower the market traded, the more active gold trading became.  Again this past week gold continues to build the base for its next attempt to break through the $1,700 per ounce resistance level, on its way to set new all-time highs.

As we enter a new month, we are back on the bullish track with gold up $12 an ounce today. Let’s look back on what has happened since the beginning of the year. With all the volatility in the markets, gold managed to increase $106.10 per ounce (6.78%) in the first three months of the year. At the same rate of increase for the balance of the year, gold would reach $1,990 per ounce by Dec. 31, 2012; $10 under my year-end price target.

What does the Public think of Gold as an investment?

In a recent public survey of best investments, Gold received the highest rating of 37% of American investors who believe that Gold is the best investment. What does this mean? 37% is very bullish for Gold; 37% of the public believes that the value of their savings denominated in Dollars will not keep up with future inflation.  However, when that survey percentage number reaches 51%, we will see Gold well over $2,000 per ounce. At 51% I would start to be concerned, because that brings too many buyers into the market. At that point, it may be a good time to think about selling your Gold, because when surveys show that the majority of the public is buying or selling, it would be the time to go the opposite way.  

Mixed Opinion on the direction of the Gold price from Leading Financial Institutions

The price of gold, one of the most eagerly watched indicators of market confidence, is currently “too low” relative to real interest rates, according to commodities analysts at Goldman Sachs. The analysts forecast that gold will rise to $1,785 per ounce over the next 3 months, $1,840 over the next 6 months, and $1,940 over the next year.

Swiss bank, UBS, cut its 2012 full-year forecast for gold last Thursday, citing a continued improvement in the global economic outlook, particularly in the U.S. UBS reduced its 2012 gold forecast by 18%, to $1,680 a troy ounce. The bank had previously forecast the metal to average $2,050/oz this year. "A continuing U.S. recovery, material erosion in Fed quantitative easing expectations, rising Treasury yields, a stronger dollar, and questions surrounding the durability of the Fed’s low-until-2014 rate pledge, all combine to act as the prime culprits that cause us to pare back, for now, our previously aggressive call," said UBS analyst Edel Tully.

SILVER

Last week Silver took its price direction from the Gold market, reacting to the same global news events that affected Gold’s price; i.e., Eurozone finance ministers raising the two rescue funds (EFSF/ESM) to 700 billion Euros, with an additional 240 billion Euros that can be used in emergency situations like Spain and Portugal, through mid-2013.

During the week Silver had a high of $32.84, with a low of $31.63 per ounce, closing the week at $32.48, up $0.21 from last week.  Silver under $32.00 per ounce finds bargain buyers on a global basis. I believe we have seen the bottom for silver, as it refused to breakdown below $31 for the past month, and consistently rallied back to above $32.00 per ounce. We are now in the month of April. Remember that last year silver rallied sharply from $37.73 per ounce on April 1^st to $49.84 per ounce on April 25^th.

The U.S. Mint reported on Friday that demand for 1oz Silver Eagles remains strong, with sales reaching 10,139,000 by the end of the first quarter (March 30, 2012).

PLATINUM

While Gold was up $9.50 per ounce last week, Platinum was up $16.20, closing the week at only $1,644.10 per ounce, and at a $27.80 discount to the Gold price. This provides you an opportunity to purchase Platinum at a discount to Gold. Great timing, as the new 2012 1oz Platinum Maple Leafs were just released last week. We are offering a special discount on Canadian Platinum 1oz .999 Maple Leafs. Just call us at 888-454-0444, or visit our website www.Mintstategold.com, and use coupon code PLMAPLE2012 to receive a $20 per coin discount. This discount is only available until Tuesday, April 3, 2012. There is a minimum of three coins per order, and payment by Check or Bank Wire Only. If Platinum doesn’t represent 10% of your current precious metal diversification, please consider adding it now.

Recommended investment commitment and diversification:

Precious Metal commitment: Minimum of 35% 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 to 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.