Weekly Market Report 8/5/13

This Week’s Headlines:

Gold
The Federal Reserve keeps the stimulus coming
Silver
Collectible Coin Protection Act
Recommended Investment Commitment and Diversification

GOLD

For two weeks now spot Gold has closed above the important $1,300 per ounce level. During the past two weeks Gold traded below $1,300 twice, but managed to close above it. The most noteworthy was last Friday when Gold reached a low of $1,282 per ounce in early Asian trading. This is noteworthy because during the Asian lunchtime, programmed stops were triggered in the metals market when Gold traded below $1,300. The price drop was caused by rumors that the U.S. employment report (due out when the U.S. markets opened) would be substantially higher than expected.

During Asian trading pre-placed computerized orders are triggered when certain price points are hit. The $1,300 price level had offered excellent support for Gold over the past two weeks. As the December futures climbed through that level many chartists placed stop loss orders at $1,299 per ounce. So, when the employment rumor hit the Asian market and Gold dropped below $1,300 the volume of sales spiked and drove the price down sharply on heavy volume. When the U.S. employment numbers were released, the price reversed direction and ran up to $1,318 per ounce very quickly.

I believe last Friday’s trading is very bullish for Gold, as chartists will now be less likely to place stop losses at the $1,300 per ounce support level again. This was evident this morning when Gold reached a low of $1,297 per ounce and I didn’t see any serious programmed selling.

I look for Gold to continue to move higher, and to break above the $1,368 and $1,400 resistance levels in August, and to close above $1,500 per ounce by year end. I am recommending that my clients make additional purchases to increase their Gold holdings immediately.

Back to top of report

The Federal Reserve keeps the stimulus coming

The Federal Open Market Committee (FOMC) issued a 700-word statement last Wednesday, but all they really needed to say was ’no changes’. The Fed’s policy-making committee voted to press ahead for now with its campaign to increase job creation. The FOMC statement said nothing about how much longer it would continue to add $85 billion a month to its holdings of mortgage-backed securities and Treasury securities. The Federal Reserve left its economic outlook basically unchanged, suggesting that the central bank still intended to reduce the volume of its purchases later this year.

Back to top of report

SILVER

During last week’s five trading days Silver never closed above the $20 resistance level. Silver did trade above $20 per ounce three times last week but could not hold. Last Friday Silver closed at $19.91 per ounce, up $0.28 for the day, and $0.14 for the week. I continue to be very disappointed with the Silver price, particularly in the face of the strength of the Gold price. Silver needs to close and stay above the $20 per ounce price level for professional traders and technical chartists to become bullish.

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. With the recent drop in Silver prices, demand and premiums have increased. As of July 31, 2013 the U.S. Mint has sold 29,450.500 Silver Eagles, compared with 19,670,000 for the same period in 2012. This is an increase of 9,780,500 (49%) in just seven months, setting an all-time record pace. 2013 has seen the highest amount of sales in the first seven months of a year since production of the Silver Eagles began in 1986. Demand remains at an unprecedented level, and sales of Gold and Silver coins may reach an annual record this year.

Back to top of report

Collectible Coin Protection Act

It is my pleasure to report that last night HR 2754, the Collectible Coin Protection Act (Formally HR 1849), the anti-counterfeiting legislation, passed the House of Representatives and is now on the way to the Senate. This legislation is extremely important to the rare coin and bullion community.

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