Weekly Market Report 7/22/13

This Week’s Headlines:

Gold
Gold backed Chinese Yuan?
U.S. Mint Gold sales up 83% and 115% in first six months
The Great Japanese Gold Rush
China and India continue to report record Gold imports
Senators ask Fed Chairman Bernanke about Gold
Silver
U.S. Silver Eagles sales on all-time record pace
Platinum & Palladium
Trading Recommendation
July 2013 CoinStats now available
Recommended Investment Commitment and Diversification

GOLD

For the second week in a row the price of Gold increased, closing last Friday up $15.30 per ounce at $1292.90 per ounce. Gold showed excellent consolidation last week between $1,270 and $1,300 per ounce. It’s very healthy for Gold to consolidate at this week’s price level while building a solid base for the next leg higher. Many Gold professionals and analysts strongly feel that $1,300 per ounce is a very important resistance level.

Today’s rally that drove Gold to above $1,300 per ounce immediately started traders and speculators covering their short sales. If this breakout is confirmed by Gold closing above $1,300 per ounce for three straight trading days, this should convince many professionals and analysts to become bullish on Gold.

Back to top of report

Gold backed Chinese Yuan?

I just read an interesting article about the Chinese backing the Yuan with Gold in order to replace the U.S. Dollar as the world’s reference currency. The article is available for your review at: http://www.mintstategold.com/investor-education/cat/news/post/china_backs_yuan_with_gold/.

Back to top of report

U.S. Mint Gold sales up 83% and 115% in first six months

As of June 30, 2013, the U.S. Mint reports that they have sold 629,000 ounces of U.S. Gold Eagles, up from 343,500 ounces sold for the same period in 2012, a dramatic 83% increase for the popular U.S. Gold Eagles. In the same period, the U.S. Mint sold 161,500 ounces of .999 Gold Buffalo coins, a 115% increase over the 75,000 ounces that were sold in 2012.

Back to top of report

The Great Japanese Gold Rush

Last week the upcoming Japanese Upper House (similar to our U.S. Senate) election caused heavy speculative Gold buying and a weaker Yen as Tokyo’s Gold futures rallied last Friday. The rush into Gold investments by Japanese investors is partly due to concerns over changes in their tax system that will go into effect when the Liberal Democratic Party (LDP) and its New Komeito Party (NKP) coalition partner win the election, which they did on Sunday July 20, 2013. “It isn’t just future contracts that have received a boost but also physical Gold as well” said Tanaka Kikinzoku Kogyo K.K., Japan’s biggest Gold retailer, who has reported a threefold increase in Gold sales for the Q2, which ended June 30, 2013.

Back to top of report

China and India continue to report record Gold imports

In the face of increasing import duties on Gold and retailers not being able to borrow funds from their bank, Gold imports by India have now surpassed 900 metric tonnes in 2013 - which is up from 860 tonnes for the entire year of 2012.

Last week the London-based World Gold Council said that China’s purchases may surpass 1,000 tonnes in 2013, up from 817 tonnes. With a ton of Gold being valued at $41.6 million, it means China’s purchase (based on this price) could be around $41.6 billion. China is currently the world’s biggest Gold producer with over 400 tonnes last year, which highlights the vast gap between domestic production and demand.

Back to top of report

Senators ask Fed Chairman Bernanke about Gold

When Mr. Bernanke was asked about the falling price of Gold, which is down nearly 25% this year, Bernanke admitted he doesn’t understand the yellow metal. “No one really understands Gold prices,” Bernanke told the Senate Banking Committee, adding that he doesn’t pretend to either. Bernanke had more things to say about the yellow metal. Calling it “an unusual asset,” the Fed Chairman noted people hold Gold both as “disaster insurance” and as an inflation hedge. He expressed surprise about the latter, noting “movements in Gold” don’t predict inflation well.

Like many other economists, analysts, and professional commodity traders, Bernanke has found that the movements of the Gold price can be very frustrating. In many cases there is no direct cause and effect relationship between an event or announcement and the increase or decrease in the Gold price. For thousands of years Gold has protected individuals and nations from currency debasement, which ultimately destroys the currency with serious inflation. Gold is the only true indicator of loss of confidence in paper money being debased by governments. As the U.S., European Union, and Japanese governments continue there QE and stimulus programs, the higher Gold will go. History does repeat itself when it comes to nations that are engaged in printing excessive amounts of paper money to fund massive deficit spending.

Back to top of report

SILVER

While Gold was up $15.20 per ounce (1.2%) last week, Silver dropped $0.33 per ounce (1.68%), closing the week at $19.46 per ounce. This was a very disappointing performance given the continued heavy demand for physical Silver investment products. Last week Silver made three attempts to rally above the key $20 per ounce resistance level and couldn’t accomplish it. Today, with Gold breaking above $1,300 per ounce, and Silver breaking above $20 per ounce again, Silver needs to stay above $20 per ounce and close there for 3 straight trading days to restore many of the analysts and professional trader’s confidence in a bullish trend.

Back to top of report

U.S. Silver Eagles sales on all-time record pace

Sales of one ounce .999 Silver Eagles from the U.S. Mint are heading towards their best year ever as the price of Silver declined 35% since the start of 2013. As of July 19, 2013 the U.S. Mint has sold 27,575,500 Silver Eagles, a 40% increase over the same period in 2012, and at an all-time record pace. With the recent drop in Silver prices, demand and premiums have increased. Demand remains at an “unprecedented level,” and sales of Gold and Silver coins may reach an annual record this year said Richard Peterson, the acting Director of the Mint.

Back to top of report

PLATINUM & PALLADIUM

Palladium continued its recent move higher, closing last Friday at $749.70 per ounce, the first precious metal to be higher for the year. Palladium has increased $47.15 per ounce since January 1. Platinum was up $24.30 per ounce last week, closing the week at $1,431.20 per ounce and trading at a $138 premium to the Gold price.

Back to top of report

Trading Recommendation

In my August 13, 2012 Weekly Market Report I made the recommendation to purchase 1oz Platinum Maple Leafs while they were trading at a $223 discount to Gold. Today, Platinum is trading at a $138 premium to the Gold price, therefore I am recommending trading back into Gold and picking up approximately $300 per ounce.

Back to top of report

July 2013 CoinStats now available

Our numismatic CoinStats quarterly 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 U.S. certified rare coins. I am proud to offer this unique and informative tool exclusively to our clients. The July 2013 CoinStats report is now available for $20 Gold Saint Gaudens, $20 Gold Liberties, Morgan & Peace Silver Dollars, and the Walking Liberty Half Dollar series.

CoinStats 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; they are PCGS/NGC Certified MS63 or higher Gold and Silver U.S. rare coins, dated prior to 1948. These investment quality rarities have a proven track record of appreciation over the past 60 years or longer.

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

Back to top of report

Recommended Investment Commitment and Diversification:

Precious Metal commitment: Minimum of 40% of investment capital

Diversification:  Gold 55%, Silver 40%, Platinum & Palladium 5%

Diversification includes 50% in long term investment quality rare coins and 50% short term bullion products

Back to top of report

REMEMBER THE BLOG

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.

Back to top of report