Weekly Market Report 4/29/13

This Week’s Headlines:

Gold
Physical Gold sales are soaring
Central Banks continue buying Gold in March
Silver
Rare Coin Market Update
April 2013 CoinStats now available
Recommended Investment Commitment and Diversification

GOLD

Last Monday and Tuesday Gold tested the $1,400 per ounce support level and held. While holding above the key $1,400 per ounce level the trading volume was above average. This is a good sign that our recent down move is over. Last Friday, Gold reached $1,483 per ounce in early trading before seeing weekend profit taking, and closed the week at $1,453.80 per ounce, up $58 per ounce. This week I believe we will see the Gold price support level move to $1,450 and hopefully test the $1,500 resistance level.

Last week’s Gold rally was in the face of a 40 ton drop in the popular SPDR’s ETF. The GLD fund reached a three-year low of 1,083 tonnes of Gold. While this very popular paper Gold investment’s stockpile has been dropping, the global physical investment demand for Gold coins, bars, and jewelry has been soaring.

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Physical Gold sales are soaring

Great Britain’s Royal Mint reports that Gold coin sales have more than tripled in the month of April. The U.S. Mint has temporarily suspended sales of its one-tenth ounce American Eagle Gold bullion coins because of its inventory depletion (due to strong demand), but continues to fill the heavy demand for the one-ounce, one-half ounce, and one-quarter ounce coins.

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Central Banks continue buying Gold in March

The Russian Federation, the world’s 8th largest holder, lifted its Gold reserve for a fifth straight month in March, adding 4.7 tonnes of Gold to its reserves (which stood at 981.648 tonnes by the end of last month) IMF data showed. Turkey raised its holdings by 33 tonnes to 408.874 tonnes, and South Korea increased its holdings by 20 tonnes in February to 104 tonnes. I believe that Central Bank Gold purchases in April will be substantially more than what was previously reported for March.

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SILVER

With the Silver price falling more than 19% at one point since the beginning of the month, one would think that its recovery would be more like Gold’s. Until last Thursday, Silver’s price recovery was much weaker than Gold’s. Last Thursday Silver rallied sharply, up $1.30 and closing at $24.14 per ounce; ending the week on Friday at $23.75 per ounce, up $0.79 on the week. Silver should continue to take price direction from Gold this week, but badly needs to move above $25 to regain any bullish sentiment from the professional traders.

Global physical demand for Silver from investors has been overwhelming. The U.S. Mint has had extremely heavy demand for the 1oz .999 Silver Eagles and has suspended orders until it is able to catch up with back orders. The U.S. Mint has sold 17,455,000 1oz Silver Eagles since the start of 2013, and is running at a record 40,000,000 pace. Physical demand hasn’t just been for Silver Eagles, other Silver investment products are having record sales for the year as well.

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Rare Coin Market Update

Last Wednesday through Saturday I attended the Central States Numismatic Society’s (CSNS) rare coin convention in Schaumburg, Illinois. This convention is considered a major numismatic event with a prestigious auction and over 500 coin/currency dealers in the bourse room. At this convention the very rare 1913 Liberty Head nickel was sold for $3.17 million, in addition to two other rare U.S. coins which sold for over $1 million.

Since the financial crisis of 2008 the U.S. rare coin market, in the face of Gold and Silver prices doubling, has been unchanged to lower because domestic demand (due to the recession) was very weak. Based on the increase in the Gold and Silver bullion prices, many U.S. Gold and Silver rare coins were substantially undervalued and have been excellent values.

Over the past six months I have been reporting from major coin conventions that the demand for investment quality Gold and Silver U.S. rare coins has been growing, while most dealer’s inventories were at very low levels. These fundamentals were an outstanding harbinger for much higher prices to come very soon. Well, at the CSNS convention the demand at the auction and on the dealer’s trading floor drove prices up 10% or more on many of the CoinStats recommended Gold and Silver rare coins. Many of the dealers attending the convention reported raising both their asking prices and bids on many of their Gold and Silver rarities.

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April 2013 CoinStats now available

Our numismatic CoinStats quarterly report is the best investment tool for rare coin investors. CoinStats is an in-depth statistical analysis of popular rare coin series that allows you to identify the best values in U.S. certified rare coins. I am proud to offer this unique and informative tool exclusively to our clients. The April 2013 CoinStats report is now available for $20 Gold Saint Gaudens, $20 Gold Liberties, Morgan & Peace Silver Dollars, and the Walking Liberty Half Dollar series.

CoinStats provides a list of my recommended certified U.S. Gold and Silver coins which are found listed on the best value page. These are not the overly-hyped modern issue bullion coins or low-grade circulated coins; they are PCGS/NGC Certified MS63 or higher Gold and Silver U.S. rare coins, dated prior to 1948. These investment quality rarities have a proven track record of appreciation over the past 60 years or longer.

For the latest CoinStats analysis, just put CoinStats in the subject line and email me at  [email protected] with which series you would like to see.

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Recommended Investment Commitment and Diversification:

Precious Metal commitment: Minimum of 35% of investment capital

Diversification:  Gold 55%, Silver 40%, 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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