Weekly Market Report 07/09/12

In this week’s Market Report, I am requesting the support of clients and friends for HR 5977 (Collectible Coin Protection Act of 2012) which helps to stop the flood of high quality Chinese counterfeit U.S. rare coins that are currently coming into our country from being imported and sold.

GOLD

The combination of a shortened holiday week and Friday’s disappointing U.S. employment report led Gold to decline $25.30 per ounce on Friday, ending the week at $1,578.50 per ounce. Gold continues to build its base for the next bullish leg up, going higher than last August’s $1,912 per ounce price.

For the last two months Gold has traded between $1,526 on the low to $1,642 at the high. During these two months Gold traded below $1,550 eight times, but quickly rallied back on heavy volume. With the recent IMF reports of sizeable buying by Government Central Banks this year, I believe that $1,526 to $1,550 is the key entry level for Central Bank buying. If I am correct, we should see an increase in the June Central Bank purchases over May’s figures.  

For the past six months the Gold market has shown to be headline driven. The price of Gold has overreacted to both positive and negative headlines. This past week Gold has continued to demonstrate the same type of price volatility. What was considered normal for Gold trading for the past 10 years has changed. The increasing volatility and trading activity of Gold/Silver is being driven by global headlines and has changed what was considered normal precious metal trading activity.

Based upon the recent deluge of Government data showing a slowing of the economies of the largest nations, I believe that as we enter the corporate earnings season, we are going to see disappointing earnings from many of the largest multi-nation corporations. This should reinforce the call by economists and analysts for more monetary stimulus (QE) by major central banks in Europe, Asia and the U.S.  

There has been a lot of discussion recently as to whether Gold is a safe haven or a risk asset investment. I believe that Gold is all of the above, and also a financial insurance policy with extraordinary benefits. One of the benefits is that you retain the premiums and that they increase in value at a faster pace than the loss of the buying power of your paper money assets. I am in the process of writing an article which will explain in great detail the concept of Gold as your financial insurance policy.

SILVER

Silver lost $0.69 per ounce last week, closing the week on Friday at $26.92 per ounce. Silver is very near its 2012 low of $26.10 per ounce, that it hit on June 28, 2012. It continues to be more sensitive than Gold to negative economic data being released in Europe, Asia and the U.S. The additional weakness has driven the Silver/Gold ratio to 58.65 to 1, the highest ratio since 2010. Silver would be short term bullish if it could rally back to above $28 per ounce, and long term bullish if it could move above $30 per ounce again. On the bearish side of the scale, Silver needs to hold above $26 per ounce, otherwise $25.20 is a possibility.

Support HR 5977 (Anti-Counterfeit Legislation)

As Chairman of the Gold & Silver Industry’s Political Action Committee (G&S PAC) I have been privileged to help our numismatic community in building support for our anti-counterfeit legislation. HR 5977, introduced on June 20, 2012 (Collectible Coin Protection Act of 2012) helps stop the flood of high quality Chinese counterfeit U.S. rare coins which are currently coming into our country. This legislation provides badly needed enforcement “teeth” to the Hobby Protection Act of 1978, focusing on any manufacturer, importer, or seller of U.S. counterfeit coins.

I am asking that my clients and friends email or call your Congressman to 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, click here.

The 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 Liberties, Morgan & Peace Silver Dollar, and Walking Liberty Half Dollar series.

The CoinStats Report provides a list of my recommended certified US 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.