Weekly Market Report 06/09/14

This Week’s Headlines:

Gold
Something is Fishy in the Gold Market
China Trade Surplus Increases 94%
Silver
Rare Coin Report
Recommended Investment Commitment and Diversification

GOLD

On the last trading in May, Gold broke below the key $1,250 resistance level, reaching a low of $1,242 per ounce. Last week Gold tested the $1,240 price level for four days in a row, and that support level held on excellent demand. By Friday, Gold had rallied back to above the key $1,250 per ounce level, closing at $1,252.50, up $6.50 for the week.

The Gold price is now hovering just above four-month lows. Gold market bears have the firm overall short-term technical advantage. Prices are in an 11-week-old downtrend on the daily bar chart. The Gold bulls’ next upside near-term price breakout objective is to produce a close that is above the solid technical resistance at $1,268.50. The bears’ next near-term downside breakout price objective is to see closing prices below solid technical support at $1,240, $1,220 and then the key $1,200 level. The first resistance level for the bulls was at last week’s high of $1,258 and then at $1,280 per ounce.

Last Thursday morning at an important European Central Bank meeting, the bankers made a decision to cut the rate for bank deposits to a negative .01%. This was done in order to stimulate the European economy, (which has been in a recession for the past 3 years) while incentivizing European banks so they would increase lending to commercial businesses. On that news the value of the Euro increased versus the U.S. Dollar, the price of Gold rallied $9 on that day, crossing over the key $1,250 per ounce price level.

Back to top of report

Something is Fishy in the Gold Market

I have just posted on our website an informative article from Bengt Saelensminde of Money Week called “There’s something fishy going on in the gold market”. This article discusses what has happened since January 2013, when the German Central Bank requested the return of 674 metric tonnes of Gold. The Banque de France was asked to return 374 tonnes, while the U.S. Federal Reserve in Manhattan was asked to return 300 tonnes, of the 1,530 tonnes being held by the U.S. Fed.

"Then, about a year and a half ago, Germany was rumored to be asking for an audit of its Gold held in foreign depositories. Supposedly, the American custodians said take a hike."

"…You can only imagine the Germans response to the announcement that the transfer, of their Gold back to them, would take eight years (by 2020) to fulfill."

"A full year after Germany had asked for its Gold back, only 37 tons had been delivered. What’s more, a paltry five tons came from the US. The rest was from France."

To read the complete article, Click below: http://www.mintstategold.com/investor-education/fishygold/

Back to top of report

China Trade Surplus Increases 94%

Over the weekend, the Chinese General Administration of Customs stated that the May trade surplus had increased to $36 Billion, up 94% from April 2014. What is important about this number is that other than increasing China’s cash reserves, their exports rose 7%, while imports declined 1.6% from the previous year. This decline in imports signals a weakening in consumer demand from the world’s second-largest economy. The May 2014 numbers confirm the concerns from many of the world’s leading economists that the Chinese economy is slowing down.

Back to top of report

SILVER

Last week Silver traded as low as $18.65, and traded below $19 until Thursday’s European Central Bank rate cut their news. After this announcement was made, Silver quickly rallied to $19.18 per ounce before seeing short term profit taking. Last Friday, Silver closed at $19 per ounce, up $0.32 for the week. It’s important to have Silver close above the key $19 per ounce support level this week. It can trade below $19, but continually closing above $19 per ounce may help to change many professional traders strategy of shorting Silver on rallies. The Silver/Gold ratio is now 65.95 to one.

Back to top of report

Rare Coin Report

I have just come back from the Long Beach Coin Expo rare coin convention in California. This convention is a major event for the rare coin community, with thousands of dealers, investors, and collectors attending. The show has a large trading floor with over 300 rare coin dealers. The activity level was the highest that I have seen in the last 10 years. Dealers were aggressively bidding on, and purchasing, a limited amount of high quality U.S. rare coins that were available. Because of the article in the numismatic press about my recent purchase of the 1927-D Saint for $1.3 million, our table became “Saint Central”. I was offered and purchased a small quantity of $20 Gold Rarities.

Back to top of report

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

Back to top of report

REMEMBER THE BLOG

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 through 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.

Back to top of report