Weekly Market Report 07/02/12

European Statement Moves the Gold Price

After three years and twenty European Summits that have resulted in nothing but rhetoric and vague statements by financial and prime ministers and the Eurozone leadership on the seriousness of the sovereign and banking debt crisis situation, we finally got a serious first step.

The deal was done in customary Eurozone style, in the early hours of the morning on the last day of the summit meetings in Brussels. Mario Monti, Italy’s Prime Minister, lead concerted effort with Mariano Rajoy, the Spanish Prime Minister, with support from the new French President, Francois Hollande, to force Angela Merkel, Germany’s Chancellor, to accept the need for short term measures to deal with the current debt crisis.

What was the deal agreed to by the Eurozone leadership?  The key elements of the deal were a new centralized system for European banking supervision, one that would act much like the FDIC in the US. This is the first step towards a badly needed Eurozone banking union. Then they agreed to allow the Eurozone‘s rescue fund to recapitalize Spain’s problem banks directly, and to buy Italian sovereign bonds. The leadership also agreed to provide an EU €120bn “growth pack” package and they also agreed to the start of negotiations for closer fiscal and economic co-operations.

The results of the European deal sparked the biggest daily rise this year in European and U.S. stocks, crude oil, the euro/dollar exchange rate, Spanish/Italian bonds and precious metals.

GOLD

Gold rallied over $50 per ounce on the Friday’s Eurozone statement, closing the month of June at $1,604.20 per ounce, up $40 per ounce for the month, and $37.30 for the week. Last week, we saw a $60 price range from a low/high ($1,547.60 to $1,607.80 per ounce), with Friday’s spark increase happening on the highest trading volume of the week.

Central Banks Continue to Buy More Gold in May
Turkey’s central bank has raised its reported Gold holdings by 5.692 tonnes in May to 244.986 tonnes, International Monetary Fund (IMF) data showed on Tuesday, as it joined a string of countries in increasing bullion reserves this year. Kazakhstan lifted its Gold reserves by 1.8 tonnes last month, the IMF’s international finance statistics report showed, having added 2.02 tonnes to its holdings in April. Ukraine increased its reserves by another 2.1 tonnes, after adding 1.4 tonnes the previous month. Russia said last week that it had upped its Gold reserves by 15.6 tonnes in May, to just over 911 tonnes.

SILVER

Silver increased $0.95 per ounce last week, closing the week on Friday at $27.61 per ounce. Silver was unable to breakthrough the $28 per ounce resistance level all week. It’s about time that investors recognize how undervalued Silver is at $27.61 per ounce or less. The Silver/Gold ratio is currently over 58 to 1, the highest ratio since 2010. As the European monetary stimulus, along with any quantitative easing from Asia and the U.S. hits the financial markets, will be very positive for Silver.

Support HR5977 (Anti-Counterfeit Legislation)

As the Chairman of the Gold & Silver Industry’s Political Action Committee (G&S PAC), I have been privileged to help our numismatic and bullion industry build relationships with many key federal legislators. On June 20, 2012 our community, with the help of Congressman Lamar Smith and Fred Upton (co-authors) of HR5977 (Collectible Coin Protection Act of 2012) introduced our anti-counterfeit legislation. This legislation provides enforcement teeth to the Hobby Protection Act of 1978. On June 27, 2012, during a visit to the House of Representatives in Washington DC, I and a few fellow numismatists were able to speak with a number of Congressmen about supporting HR5977.

My visit to Congress was followed up with my first G&S PAC Rare Coin and Bullion Industry Congressional Awareness Event held at a restaurant across the street from the House of Representatives. At the event we had the opportunity to show Congressmen and their staff Chinese counterfeit coins, both uncertified and in counterfeit certified holders, in an effort to convince them to co-sponsor this important legislation.

I am requesting that my clients and friends email or call your Congressman and request that they co-sponsor HR5977. To find the name and contact information for your local member of the United States Congress visit http://www.house.gov and click on “Representatives”.

For more information on HR5977, and the Gold and Silver Political Action Committee’s Congressional Awareness Event, see http://www.mintstategold.com/investor-education/collectible_coin_protection_act/

Rare Coins

Last week I attended the Whitman Coin and Collectibles Expo in Baltimore, one of the most popular rare coin shows in the east. As I have reported before, it is getting harder and harder to locate and purchase high quality Gold and Silver rarities, and this convention just confirmed that fact again. I was only able to pick up six coins from client want lists of hundreds.   

July 2012 Coinstats is Now Available

Our 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 Liberty, Morgan and Peace Silver Dollar, and 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 and 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.