Weekly Market Report 6/10/13

This Week’s Headlines:

Gold
France Prohibits Sending “Currency, Coins, and Precious Metals” By Mail
The new French law is a form of capital control
Silver
Collectible Coin Protection Act
Recommended Investment Commitment and Diversification

GOLD

Volatility has finally returned to the Gold market. Last week Gold had a $46 per ounce high/low price range, from $1,377 on the low to $1,423 on the high. Gold closed last week within that trading range, at $1,383 per ounce, down $10 per ounce. Last Friday’s report showing improvement in U.S. employment caused concern that the Federal Reserve’s QE program may be cut short; this news drove Gold down $30 per ounce.

Bloomberg reports that professional Gold traders are the most bullish since before the bear market began two months ago. The retreat in equities from an almost five-year high, along with a weakening dollar, has spurred the current heavy demand for Gold investment products. Nineteen analysts surveyed by Bloomberg expect prices to rise next week, with eight bearish analysts and six neutral. This is the largest proportion of bulls since March 22.

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France Prohibits Sending “Currency, Coins, and Precious Metals” By Mail

A new French Law, which was enacted May 23, 2013, states that the French government has decreed that it is forbidden to send all forms of currency – coins, cash, and all forms of precious metals (coins, bars and jewelry) - by mail. This legislation was just published on the Legifrance website, the French government’s entity that is responsible for publishing legal texts online. It was not announced by the government and not covered in the media. There were no publicized communications and nobody in the government justified or explained this decision.

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The new French law is a form of capital control

This law is an attempt to restrict the growing private market in France affecting people buying bullion online, including through eBay, which is increasingly popular. The freedom of people to trade amongst themselves is a form of civil liberty, as is the right to privacy. The selling and buying of precious metals in France is already subject to strict regulations. This new law is just one more step in the French government’s effort to restrict precious metal ownership.

Up until September 2011, French citizens could easily buy and sell Gold coins and bars with cash. Since September 2011, French citizens have been forbidden to buy precious metals in person, with cash. As a result, they had to buy their precious metals by trade mail, crossed checks, or wire transfer, or be “punished by a fine of fifth grade” which is a fine of some €1,500/oz.

At the beginning of 2013, UPS began stopping French people from taking delivery of precious metals. Three months ago, in March of 2013, FedEx began stopping French people from taking delivery of precious metals. Perhaps not coincidentally, in recent days, FedEx has stopped allowing companies and individuals to send (or receive) Gold and other precious metal bullion coins and bars by insured mail to (or in) Germany and the UK.

This is an important story that bears watching as it appears that governments internationally, from India to France, are attempting to control, restrict, and make it difficult for their citizens to own precious metals. History has shown us (please read my 2013 Hyper-inflation Report, available at www.coinmag.com) that the first step by nations concerned about the debasement of their currency (which results in serious inflation) is to enact currency and precious metal controls. What has happened in France could easily go worldwide, making it more difficult to purchase Gold/Silver at the current attractive price and premiums. I would strongly recommend adding to your current precious metal holdings before the war against Gold expands to other nations and drives physical demand to an unprecedented level.

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SILVER

Last week was a disaster for Silver, it ended the week at $21.74 per ounce, the lowest close since 2010. Last Friday when Gold dropped $30 an ounce, Silver broke through the $22 per ounce support level. When that happened the professional traders immediately shorted Silver, which took the price down to $21.51, before profit taking came in at the close and Silver ended the trading session at $21.74 per ounce. Silver has short term support at $21 per ounce, and long term support at $20 per ounce. The Silver to Gold ratio has reached an unbelievable 63 ½ to 1 level.

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Collectible Coin Protection Act

As chairman of the Gold and Silver communities’ Political Action Committee (Gold & Silver PAC), I am proud to share the introduction of HR 1849, the Collectible Coin Protection Act, into the House of Representatives on May 7, 2013. This Federal legislation amends and updates the Hobby Protection Act passed over 30 years ago. HR 1849 allows both law enforcement and civil action against manufacturers, importers, and sellers of counterfeit coins and bullion products, as well as providing enforcement against the unauthorized use of registered trademarks belonging to collectible certification services.

This legislation is non-partisan and has no financial effect on the budget; therefore I am asking my friends who have a relationship with their local congressman to contact them and request they be a co-sponsor of HR 1849. Please let me know of any positive replies.

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Recommended Investment Commitment and Diversification:

Precious Metal commitment: Minimum of 40% 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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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.

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