Weekly Market Report 07/30/12

This week’s Market Report provides you with an update on the precious metal markets, especially last week’s Gold breakout above $1,600 per ounce.  I am also requesting that my clients and friends contact their Congressman and ask them to support HR 5977 (Collectible Coin Protection Act of 2012.) This proposed legislation would stop the flood of high quality Chinese counterfeit U.S. rare coins currently being imported into our country and sold. Lastly, I share information about the World’s Fair of Money coin convention starting in Philadelphia next week.

GOLD

It appears that Gold’s price consolidating in the $1,560 to $1,600 per ounce price range is over. Last week we saw a serious breakout above $1,600 per ounce. Gold stayed above $1,600 the last three days of the week. For the week, Gold was up $35.20 per ounce, closing on Friday at $1,618 per ounce. The Gold chart shows short term resistance at $1,626 per ounce, and a move above that level could easily take the price up to $1,650.

Friday Gold closed at $1,618 per ounce, which is within $2 of last year’s Gold close on the same day. Last July, Gold increased $294 per ounce (to $1,912) in less than 30 days. Normally, during the summer months the Gold price is relatively quiet, but with global debt problems and central banks talking about adding monetary stimulus, I believe that a major Gold rally is very possible this summer.

Gold’s basic bullish fundamentals of increasing central bank purchases, growing global monetary stimulus and debt, and decreasing Gold supplies from mining operations and recycling, are firmly in place. Gold is your ultimate safe haven investment during times of extraordinary global monetary stimulus.

I cannot stress enough that we are very close to a major Gold price rally, and I highly recommend adding to your Gold holdings immediately to take advantage of the current low price.  

CHINESE GOLD DEMAND KEEPS ON GROWING

For the first five months of 2012, at least 315 tons (10.1 million ounces) of Gold were imported to China. This quantity exceeds one-third of all global newly mined supplies during this same time period. The actual quantity imported by China is almost certainly higher, since the Chinese government has a habit of not reporting all of the Gold it adds to its reserves until a few years later (this information is provided by my good friend Patrick Heller.) For more information on increasing Chinese Gold demand, please read Pat’s complete article at: http://www.mintstateGold.com/investor-education/physical_Gold_shortage/

SILVER

Silver’s price action continues to disappoint me. With Gold up $35.20 (2.2%), Silver managed to increase only $0.19 per ounce (.7%), less than a third of Gold’s increase.  Last Friday Silver closed at $27.49 per ounce, up $0.19 for the week on very light trading volume. Last week Silver traded with a low/high of $26.92 to $27.85, a very tight range considering that Gold had a $53 price range.

Silver’s price weakness is not being caused by sizeable selling, but from very light buying. If Gold stays above $1,600 this week, Silver needs to get above $28 per ounce and stay there for three trading days to become short term bullish. I have lowered the Silver percentage in the “Recommended Investment Commitment and Diversification” section below to 30% and have increased the percentages of Platinum and Palladium, since I feel that they offer a better value and price appreciation at this time.

PLATINUM & PALLADIUM

Both of these markets look like outstanding value investments, with Platinum trading at a $209 (or 12.9%) discount to Gold (historically, Platinum trades at a 10-30% premium to the Gold price), and Palladium trading at only 35% of the Gold spot price (historically, Palladium trades at a minimum of 50% of the Gold price.) The value of both of these metals are directly affected by global economic slowdown. Both Platinum and Palladium are the primary agents in catalytic converters for the emission systems in automobiles, and we are seeing an increase in automobile production.  

I strongly recommend adding one or both of these rare metals to your investment holdings. I have increased the “Recommended Investment Commitment and Diversification” for Platinum & Palladium to 20% of your precious metal investments.

The Canadian 1oz Platinum and Palladium Maple Leafs are the most actively traded investment vehicles, and since these are our #1 selling bullion items, we can offer them at a small premium over spot metal content. For a current quote on these items please visit:

Platinum, http://www.mintstategold.com/platinum-1/bullion-coins-and-bars/platinum-canadian-maple-leafs.html

Palladium http://www.mintstategold.com/palladium-1/bullion-coins-and-bars/palladium-canadian-maple-leafs.html

RARE COIN UPDATE

On Wednesday, August 1, 2012, I leave for Philadelphia to attend the largest rare coin event of the year.  The American Numismatic Association (ANA) holds its World’s Fair of Money convention in August every year.  The show is a spectacular event for the numismatic community. Most of the World’s Mints create elaborate displays for their new and old coinage. The U.S. Mint and Bureau of Printing and Engraving offer their newly minted coinage and sheets of new currency, along with other interesting numismatic products. Thousands of numismatic dealers have, and share, bourse tables to offer their numismatic specialties. Tens of thousands of collectors and investors attend club meetings and spend days viewing the displays, exhibits, the bourse floor, and the auction lots. If you’re a numismatist and enjoy collecting or investing, this is truly a must attend event.

Starting August 3, I am also attending some important PNG, ICTA, ANA, and Gold and Silver Political Action Committee (G&S PAC) meetings prior to the convention’s opening day. I am also scheduled to look at some coin collections that I am hoping to purchase.

If you haven’t already updated your rare coin Want List with me, please do so as soon as possible and email me a copy by July 30, 2012. I hope to buy two large collections of U.S. Gold and Silver Dollars while I’m in Philadelphia.

SALES TAX EXEMPTIONS FOR GOLD AND SILVER AT RISK

The Wall Street Journal reported on Monday, July 16, 2012, that Republican Governors have joined Democrats in supporting federal legislation that would end the sales tax break for online purchases. This agreement has less to do with political ideology than the need for states to increase their revenues. The National Conference of State Legislatures estimates that collecting sales tax on online purchases could provide states with $23 billion in new revenue annually.

I am aware of, and monitoring, three different federal "internet sales tax" proposals currently under consideration by Congress - the Main Street Fairness Act (S. 1452, H.R. 2701), the Marketplace Equity Act (H.R. 3179) and the Marketplace Fairness Act (S. 1832).  All three of these proposed legislations could directly or indirectly affect current laws in many of the states that offer sales tax exemptions for rare coins and precious metals. 

HR 5977 (Collectible Coin Protection Act of 2012)

HR 5977 needs to be passed into law this session of Congress.
Please contact your Congressman to ask for their support of HR 5977

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 (Collectible Coin Protection Act of 2012), introduced on June 20, 2012, helps to stop the flood of high quality Chinese counterfeit U.S. rare coins 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 my clients and friends to email or call their Congressman and request that they co-sponsor or support HR5977. According to our industry lobbyist, the more Republican and Democratic Congressmen that support 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.

If you want to keep track of the progress on this important legislation you can follow it on: http://www.goldandsilverpac.com/Coin_Protection_Act.html

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 are willing to call your Congressman visit http://clerk.house.gov/member_info/mcapdir.aspx  to find the Washington D.C. office phone number of your representative.

Please email me when you have contacted your Congressman with the results of your communication.

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

If your residence or business is located in the San Fernando Valley of California

We have planned a fund raising cocktail party for Congressman Howard Berman on August 22, 2012. If you would like to attend, or send a check thanking him for his support of HR5977, please contact our office. 

Recommended investment commitment and diversification:

Precious Metal commitment: Minimum of 35% of investment capital

Diversification:  Gold 50%, Silver 30%, Platinum & Palladium 20%

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.