Weekly Market Report 4/27/15

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

Chinese and Indian Gold Buying: At the Peak since January 2014

China’s Stealth Gold Reserves To Quadruple as IMF Seek Answers

Indian Gold Sales Surpass Expectations For Akshaya Tritiya – Analysts

Currency Wars Back As Russia Buys One Million Ounces of Gold in March

This Week’s Headlines:

Gold
Silver
Central States coin auction shows great demand
Recommended Investment Commitment and Diversification

GOLD

Last week Gold broke below the recent $1,180 per ounce support level. Gold closed on Friday at $1,175 per ounce, down $19.30 for the day, and $28 for the week. Friday’s break below the recent support level is negative, but I doubt it will stay below that level, or test the 2015 low of $1,141 per ounce like some analysts have called for. It would be very healthy for Gold for the price to move back above the key $1,200 resistance/support level this week.

Last week’s two primary headline stories that led to Gold’s big sell-off were Greece’s bail out negotiations and the Chinese Central Bank actions.

The situation in Greece is the current Greek government’s refusal to implement the reforms promised to the European Central Bank (ECB) by the previous government. In addition, the current Greek government has not proposed alternatives to its creditors that are considered adequate. Discussions continue between the ECB and the Greeks, but there is no solution on the horizon. If Greece does not secure additional funding it must default either on its citizens, the IMF, or the ECB. This would cause the ECB to withhold all support for the Greek banks, forcing Greece to impose capital controls and withdraw from the Euro.

As for the Chinese situation, last week the Chinese Central Bank pumped money into their financial system by cutting the portion of deposits that banks were required to maintain. This action freed up an extraordinary 1.3 trillion Yuan for new lending. These funds should keep prices stable and support economic growth. Please click on the two Chinese article links at the top of this market report to get a better understanding of why China is a major player in the coming Gold rally.

Both the Greek bailout and the Chinese monetary stimulus are very bullish for the long term outlook of the Gold price.

This morning the buyers came back, as Gold moved back above the $1,200 resistance, reaching a high of $1,204.60 during trading.

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SILVER

Silver closed last Friday at $15.63 per ounce, down $0.59 (3.65%) for the week. Dropping below the key $16 per ounce support level means the bears regain control of the trading. It is possible for the Silver price to test the 2015 low of $15.26 per ounce, unless it moves back above the $16 level this week. Right now the Silver/Gold ratio is at a record 75.15 to 1.

This morning the Silver price rallied, moving up to $16.51 (over 4%) on excellent volume. Breaking back above the key $16 resistance level is short term very bullish for Silver.

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Central States Coin Auction shows great demand

Last week’s Central States Numismatic (CSNS) coin convention auction shows us that demand is very strong for numismatic rarities. At CSNS, a major rare coin show, the dealer trading floor was quite active as the focus was on a $40 million plus auction of many numismatic rarities. The auction resulted in record prices for early 18th and 19th century NGC and PCGS Gold, Silver, and Copper proof and mint state type coins. A very scarce 1880 Coiled Hair Proof-67 $4 Gold Stella sold for almost $1.8 million.

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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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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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