Weekly Market Report 06/25/12

This week the July issue of CoinStats is now available for U.S. $20 Gold coins, U.S. Silver Dollars, and Walking Liberty Half Dollars. CoinStats is an in-depth statistical analysis of popular rare coin series which allows investors to identify the best values in certified rare coins. 

GOLD

Another highly volatile week for the precious metal markets, with Gold trading in a $73 High/Low range.  Thursday’s disappointing Federal Reserve news, delaying future monetary stimulus, led to a $50 selloff.  Last week Gold closed at $1,572 per ounce, down $61 (3.76%) on a heavy volume of trading.

Gold continues its base building, sideways trading action, with $1,642 being resistance, while $1,524 per ounce has shown to be major support.  However, I do look for another attempt to break out over $1,642 per ounce very soon, which should immediately drive Gold up to the $1,700 resistance level. Meanwhile the Gold bears believe if Gold breaks down below the $1524 level, it could go down to test the $1,425 level.

On June 18, 2012, the FDIC distributed a rule-making notice to member banks, telling them it intends to change collateral rules, among other things. Under new rules, Gold Bullion would be entitled to a zero percent risk weighting. This new weighting for Gold is the result of a Basel Committee of Banking Supervision decision, and implements aspects of the Dodd-Frank Act. See complete article at: http://www.mintstategold.com/investor-education/cat/news/post/FDIC_gold_return/

This is extraordinarily bullish long term news for Gold, as virtually all American banks have not held Gold as a reserve asset since 1934. This would reclassify Gold as a zero risk asset, forcing many U.S. banks to take another look at Gold as reserves and collateral. 

In Gold-specific bullish news, the Comex net speculative length in Gold rose 11.3 tonnes last week to stand at 427.3 tonnes. This was the result of a 19.7-tonne drop in shorts, and a slight 8.5-tonne decrease in longs, according to data provided by the Commodity Futures Trading Commission (CFTC).

Experts Continue to be bullish on Gold

Tom Fitzpatrick, one of Citibank’s top technical analysts stated today on CNBC that he feels Gold will be $2,050 per ounce by year end, and $2,400 within a year with the possibility of reaching $3500 per ounce. HSBC Holdings PLC (one of Britain’s largest multinational banks) believes Gold will rally above $1,900 by year-end, based on the likely impact of easy monetary policy around the global.

The European bank and financial services company, Societe General, predicts that Gold could surge as much as 500% in the near future. “Societe General is ‘enthusiastic on Gold’ — so much so that in their latest cross-asset strategy report, they call ‘buy Gold ahead of QE3’ their number one strategy, saying it is ’the perfect asset to benefit’ from additional loose monetary policy.” One of the reasons Societe General is so confident that Gold will increase in value is because of the historical relationship between the price of Gold and the U.S. monetary base. The European bank states that, “if Gold catches up with the increase in the monetary base since 1920 (as it did in the early 80s), its price would rise to USD 8500/Oz,“ just to ”close the gap with the monetary base increase since July 2007.”

SILVER

Silver had the worst of 2012, closing down $2.08 per ounce for the week. Silver ended the week at $26.66 per ounce; the lowest price since November of 2010. Silver is clearly more sensitive to the plus and minuses of any future global quantitative easing, and right now global central banks provided enough stimulus to alleviate a potential recession throughout the eurozone nations.  Right now the Silver/Gold ratio is 58.77 to 1, the highest ratio in almost two years, making Silver an outstanding value investment.

Many Indian investors are making a beeline for Silver, and are refraining from buying Gold due to its high price, though Gold is expected to give a 20% return in 2012. See complete article at: http://www.mintstategold.com/investor-education/silver_coins_hot_in_india/

Rare Coins

This week I will be attending the Whitman’s Baltimore coin convention, one of the most popular rare coin shows in the east. As I have previously reported, it is getting harder and harder to locate and purchase high quality Gold and Silver rarities. I have an extensive want list for client and company rare coins, and I hope to pick up some investment quality rare coins. If you haven’t updated your want list in the past three months, please email me ASAP.

The new July 2012 CoinStats is now available

My numismatic CoinStats report is the best investment tool for rare coin investors. CoinStats is an in-depth statistical analysis of popular rare coin series which allows you to identify the best values in certified rare coins. I am proud to offer this unique and informative tool exclusively for our clients. The July 2012 CoinStats update is now available for $20 Gold Saint Gaudens, $20 Gold Liberties, Morgan & Peace Silver Dollars, and the Walking Liberty Half Dollar series.

The CoinStats Report provides a list of my recommended certified U.S. Gold and Silver coins, which are 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 1936, that have a proven track record of appreciation.

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

Recommended investment commitment and diversification:

Precious Metal commitment: Minimum of 35% of investment capital

Diversification:  Gold 50%, Silver 35%, Platinum & Palladium 15%

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.