Weekly Market Report 5/26/15

| May 26 2015

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

Central Banks Continue to Stock Up on Gold

It’s Time to Hold More Cash and Buy Gold

This Week’s Headlines:

Gold
Silver
Greek Debt problem becoming critical
Fundamentals for higher Gold price remain strong
Recommended Investment Commitment and Diversification

GOLD

Gold started last week on an excellent note, reaching $1,232 during intra-day trading in New York. Then on Tuesday, as improving economic news in the U.S. was reported and the U.S. Dollar strengthened vs. the Euro, Gold sold off $20 per ounce. That selloff caused Gold to test the important $1,200 support level. The good news is that Gold closed above the $1,200 per ounce support level all five trading days last week. Last Friday, Gold closed at $1,204 per ounce, down $21 for the week.

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Greek Debt problem becoming critical

Greek Finance Minister, Yanis Varoufakis, said yesterday that Athens would struggle to meet its upcoming debt payments. Greece still needs to strike a deal with its creditors in order to receive the remaining 7.2 billion Euros ($8 billion) in ECU bailout assistance. Greece has been shut out of bond markets, and without the bailout assistance Greece is running out of cash to pay its bills. It must repay four loans, totaling 1.6 billion Euros ($1.76 billion), to the International Monetary Fund next month. The first payment of 300 million Euros is due on June 5. This payment is seen as the next crunch point for state coffers and a default on this payment would cause a crisis in the world’s financial markets.

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Fundamentals for higher Gold price remain strong

While the price of Gold has been primarily stuck in the $1,180 to $1,220 trading range, with a few exceptions, I continue to believe we have seen the bottom of the market. Last week’s move to $1,232 per ounce lacked support after the European Central Bank’s decision to speed up bond buying caused the U.S. Dollar to rally sharply. Gold needs a sustained move above $1,250 per ounce to regain the long term bullish direction. I believe that is coming very soon.

The fundamentals for a major increase in the Gold price remain strong. Remember, last year Gold was up in every major currency except the U.S. Dollar. Why will Gold move higher in all major world currencies this year? Let me share some of the reasons:

Major military and political problems in the Middle East.
Worldwide quantitative easing (money printing) especially in China, Japan, and Europe.
Central Banks continue to trade their U.S. Dollars for Gold, thus building their Gold reserves.
Extraordinary physical demand for Gold and Silver investment products in China and India.
Global Gold production is dropping as the cost of mining increases.
Interest rates have reached historical lows worldwide.

Gold fell $18 per ounce this morning (a two-week low) as the U.S. Dollar pushed higher, reaching $1.07 versus the Euro. This morning’s drop in the Gold price followed comments from Federal Reserve Chair, Janet Yellen, which reinforced the U.S. Central Bank’s tightening bias on monetary policy.

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SILVER

After a 6.67% increase two weeks ago, last week Silver was able to stabilize above $17 per ounce. Silver hit a recent high of $17.78 last Tuesday before closing the week at $17.05. Silver closed above $17 all five trading days last week, but was down $0.51 for the week. Physical demand for Silver investment products keeps growing in Asia and the Middle East. I continue to look for Silver to reach the important resistance level of $18 per ounce very soon.

The Silver/Gold ratio dipped to 69.47 to 1.

Silver followed Gold lower this morning, reaching a low of $16.66 per ounce.

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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.

Categories: Weekly Market Report