Weekly Market Report 07/14/14

This Week’s Headlines:

Gold
Russia surpasses US Gold production for first time in 25 years
Silver
The July 2014 CoinStats is Now Available
Recommended Investment Commitment and Diversification

Gold

Last week the Gold price increased another $16.80 per ounce, while trading between $1,312 and $1,346 per ounce. Last Thursday Gold broke above the $1,332 per ounce resistance level on the highest trading volume of the week (179,170 August CME hundred ounce Gold contracts).

Gold is now consolidating in a new $1,300 to $1,350 per ounce level, while building its base for the next resistance level. It isn’t surprising to see today’s test of the $1,300 per ounce support level before moving to the next major resistance level of $1,392 per ounce (this year’s high). By year end I am looking for Gold to reach the $1,500 per ounce level, on its way to reaching a new all-time high of $1,920 per ounce by early 2016.

Gold’s rally continues to move higher, closing up for the sixth week in a row. Since May 30th Gold has increased $90 per ounce (7.2%) on excellent volume. But, more important is that the mindset of many professional traders has turned positive. Earlier traders were shorting Gold on rallies, and covering on dips, now they are buying on dips and selling when Gold hits resistance levels. This change of traders attitude is very positive for the near term direction of Gold.

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Russia surpasses US Gold production for first time in 25 years

The Minister of Natural Resources and Environment of Russia, Sergey Donskoy said, that for the first time in 25 years, Russia is now the world’s third biggest producer of Gold after China and Australia. In the last five years, 270 mineral deposits were found in Russia, despite Russia not being a leading country for mineral exploration investment. The U.S. is now the fourth biggest Gold producer. In 2013, Russia increased its Gold production by 12.6 percent achieving 254.241 tons according to the Russian Gold producers union. China, the world’s major Gold producer, increased its Gold production by 6.2 percent to 428.16 tons a year.

Over the last decade Russia’s Central Bank acquired 570 metric tonnes of Gold. This amount is almost triple the weight of the American Statue of Liberty and makes Russia the world’s biggest buyer of Gold. The amount is also a quarter more than runner-up China, Bloomberg reported on Monday. Countries like Russia and China use their Gold stockpiles as an economic buffer against another possible wave of economic crisis or US dollar devaluation, since they both remain concerned of the US Federal Reserve’s stability and prefer to hedge their bets on Gold. Gold has also proven to be a sound investment and opportunity for the Russian state to make money, since Gold prices are crawling upwards for the last 12 years.

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Silver

Silver had another good week. It was up $0.32 per ounce, closing on Friday at $21.46. Silver attempted twice to break out above the $21.60 per ounce resistance level last week. Like Gold, this is the sixth week in a row that Silver has moved higher. In the past six week Silver has rallied $2.76 per ounce or 14.8% on better than normal trading volume for summer months.

I believe that the past six weeks are just the beginning for a bullish move higher in Silver. I expect to see Silver break above the $21.60 resistance level this month. Next is the $22.22 per ounce level, (the 2/24/2014 yearly high) by the end of July. I look for Silver to reach $25 per ounce by year end and to test the 2013 high of $32.48 by the end of 2015. Silver is now on its way to test the all-time high of $49.84 by 2016.

The Silver/Gold ratio has moved lower, and is currently at 62.32 to one.

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The July 2014 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 that allows you to identify the best values in certified rare coins. I am proud to offer this unique and informative tool exclusively to our clients. The CoinStats is now updated for July 2014 and is available either in a PDF or Excel format. I have added $10 Gold Indians to the other five series of $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 found listed on the Best Value page. These are not the modern issue bullion coins or low-grade circulated coins. These are PCGS/NGC Certified MS63 or higher Gold and Silver U.S. rare coins, dated prior to 1936, which have a proven track record of appreciation and also offer excellent liquidity. To receive the latest CoinStats analysis, just insert the word CoinStats on the subject line and email me which of the six series you would like to see and which format.

I have enlarged the CoinStats algorithm by adding a new column that shows the increase in the PCGS/NGC population for the past five years. Investors realize that the PCGS/NGC population does increase, but comparing the percentage of that increase is an important component in the selection of undervalued Gold and Silver rare coins.

What is surprising? Some of the five year population results in the CoinStats report show that some coins have actually declined over that period. How could this happen? There are a number of legitimate reasons that a PCGS and/or NGC certified coin could have a lower population in a five year period.

1. The coin could have been cracked out of its holder and re-submitted, but the owners never sent in the old certificate to the grading service so that it could be deducted.
2. The coin could have been upgraded or crossed and the owner never sent in the PCGS or NGC label.
3. Because the new PCGS/NGC Plus grades are not yet incorporated into the CoinStats numbers, the coin may now have a Plus grade.

Plus grades will be added to the CoinStats Report when the quantities increase to a level that allows me to incorporate them into the statistical analysis

Because I believe that CoinStats is one of the best tools for rare coin collectors and investors to recognize great value, I will continue to look for ways to provide more important information. Your input on CoinStats is always appreciated.

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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

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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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