Weekly Market Report 07/16/12

This week, I am also requesting clients and friends support for HR 5977 (Collectible Coin Protection Act of 2012) which helps stop the flood of high quality Chinese counterfeit U.S. rare coins that are currently being imported into our country, and then sold here in the U.S.

GOLD

During the past week Gold continued to build a base, while the high/low spread is narrowing.

I would consider last week’s volume to be average, with the weekly high at $1,595 and the low at $1,554, only a $41 range for the entire week. The $1,554 per ounce price was truly a major support level and a price that brought in sizeable demand. Friday, Gold closed at $1,592, up $13 per ounce for the week and very close to the high.  I anticipate some price stabilization early this coming week, followed by a move back to above the $1,600 per ounce level by next weekend.  Six times in the last two months Gold has crossed above $1,600 per ounce and then dropped back below. This week I expect it to cross over $1,600 per ounce and stay there, making $1,600 per ounce the long term support level.

MERRILL LYNCH BULLISH ON GOLD

Francisco Blanch, Head of Global Commodity & Multi-Asset Strategy Research at Merrill Lynch, says that he expects the Federal Reserve to initiate an asset-purchasing program for as much as $500 billion in the second half of the year. This will drive spot Gold much higher by the end of the year. "We think that $2,000 an ounce is sort of the right number,” Blanch said on CNBC Asia’s Squawk Box on Thursday. “We believe that ultimately the Fed will be forced to do quantitative easing. If it happens in September, as our economists expect, we will get a rally sooner in Gold. If it happens after the election (in November), we will get the rally a little bit later; probably we will touch $2,000 an ounce sometime next year.” 

In Gold we Trust

I just read an extraordinary 100+ page article on Gold by the Erste Group Research called “In Gold We Trust” making the case why you should take your holdings of Gold up to 25% of your investment holdings right now; please take the time to read it.     http://www.mintstategold.com/investor-education/in_gold_we_trust/  

SILVER

Silver was up $0.45 last week, closing the week on Friday at $27.37 per ounce.  Last Thursday Silver hit a low of $26.42 per ounce, at which point the volume had increased (the highest for the week) and the market had rallied $0.64 per ounce within a few hours.  We continue to see increasing demand every time Silver drops below $26.50 per ounce. The more announcements of increasing monetary stimulus coming out of Europe and Asia, the more underlying strength Silver will have, because it will lead to economic recovery and the potential of inflation within the next 12-18 months. At the current price, Silver continues to be an excellent value investment, with limited risk versus the potential upside.

Last Thursday, HSBC Bank cut its outlook on Silver prices for this year, but said that it remains "moderately bullish" on the metal and expects prices to rally later in the year amid renewed investor demand. HSBC expects Silver to average $31 a troy ounce this year, down 9% from previous forecasts. HSBC analyst James Steel said, "We believe that after declines in [the first half], the Silver market will rally and hit $33 per ounce by the end of the year.” That’s a 17% increase within the next five months.

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 build 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 that are currently coming into our country. This legislation provides badly needed enforcement “teeth” for 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 their Congressman to request that they co-sponsor HR5977. According to our industry lobbyist, the more Republican and Democratic Congressmen that co-sponsor our legislation, the better the chance we have to bring the bill to the House of Representative’s floor for unanimous consent by year end.

For example, one of our colleagues in Texas took a few minutes to speak with Rep. Pete Sessions last week, and persuaded him to support HR5977. Rep. Sessions is now proud to be a co-sponsor of the bill. I’d like to say ‘Thank you very much’ to our Texas colleague. 

My Congressman is Rep. Henry Waxman. Last week I called his office, made an appointment, and went to see him to discuss the importance of HR 5977 and ask for his support.  I arrived at his office and spent 20 minutes discussing rare coins and precious metals, and answered his questions about HR 5977. I am hoping that when he returns to Washington D.C. he will contact Congressman Lamar Smith and offer to be a co-sponsor of our legislation.

Please take a few minutes of your valuable time to contact your local members of Congress (links provided below) and urge them to support this very important bill.

To find the name and contact information for your local member of the United States Congress visit http://www.contactingthecongress.org/ and enter your complete zip code.

If you wish to call your Congressman visit http://clerk.house.gov/member_info/mcapdir.aspx to get the Washington D.C. office phone number of your representative.

For more information on HR5977, see http://www.mintstategold.com/investor-education/cat/news/post/collectible_coin_protection_act/  

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.