Weekly Market Report 08/13/12

This week’s Market Report provides you with an update on the precious metal market activities, especially as Gold remains above $1,600 per ounce. Also included in this week’s report is my rare coin update from the ANA at the Philadelphia World’s Fair of Money Coin Convention.   

I am also asking my clients and friends to 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 that are currently being imported into our country and sold.  

GOLD

Last week, for the first week since early May 2012, Gold stayed above the $1,600 per ounce level for all five trading days. The bullish trend of higher-lows and lower-highs continued last week with the low/high price range of $1605/$1629 at only $24. Physical demand for Gold was strong at the $1,605 price level on most of the Asian commodity exchanges. This past week the $1,600 support level was firmly planted, while the resistance level of $1,630 was tested for the twelfth time since June 1, 2012.  Will the thirteenth be the charm?

The base for Gold, built over the past four months, virtually guarantees that the next leg up could easily test the old high of $1,920 per ounce. I am just waiting for the next central bank announcement (U.S., Europe, or Asia) for monetary stimulus, to start the rally.

Physical Gold Demand in Asia Keeps Increasing

South Korea increased its Gold holdings by nearly one third in July, buying 16 tonnes of Gold for $810 million, at an average cost of $1,582 per ounce. This purchase is part of South Korea’s central bank’s efforts to diversify its massive foreign exchange reserves. For more details see http://www.mintstategold.com/investor-education/cat/news/post/south_korea_buys_gold/

China imported 382.79 tons of Gold from Hong Kong during the first half of this year. This is up 64.95 tons from the same period last year, according to the Census and Statistics Department of the Hong Kong government.

Reuter’s obtains documents about Fed’s concern over monetary collapse

The Federal Reserve and the U.S. Office of the Comptroller of the Currency have directed five of our nation’s largest banks to make plans for preventing collapse, according to documents obtained by Reuters. For more details see http://www.mintstategold.com/investor-education/fed_banks_plan_preventing_collapse/

SILVER

Last week Silver continued to be range bound. The entire week, Silver’s low/high price range was only $0.78 per ounce, going from $27.53 to $28.31. Silver closed the week at $28.06 per ounce, up $0.26 per ounce, on very low trading volume.  Silver did close above $28 per ounce between Tuesday and Friday, with unexciting trading on poor demand.  If Gold breaks out this coming week above $1,630 per ounce, Silver demand will need to firm up and I need to see a move back to $30 per ounce to regain the market professional’s bullish sentiment. 

The price of corn surged to new record high prices on Friday. This came after the U.S. Department of Agriculture slashed its estimates for the next U.S. corn crop by 16.9% from its previous low estimate in July.  This record breaking price of $8.44 a bushel was caused by the drought ravaging the U.S. Farm Belt, which has destroyed a sixth of our country’s corn crop in just one month. Record high prices for corn and other grains is highly inflationary. Inflation is a major stimulus for higher Silver prices.

PLATINUM & PALLADIUM

Of the two metals, Palladium showed better fundamentals and price appreciation last week. Both of these markets look like outstanding value investments, with Platinum trading at a $223 (or 13.7%) discount to Gold, and Palladium trading at only 35.8% of the Gold spot price. Historically, Platinum traded at a 10-30% premium to the Gold price, while Palladium traded at a minimum of 50% of the Gold price.

I strongly recommend adding one or both of these rare metals to your investment holdings.

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 only 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

I just returned from the Philadelphia World’s Fair of Money Rare Coin Convention. This show was the busiest that I have seen in the past three years.  Many high end numismatic coins sold for record prices at two auctions, and on the dealer’s bourse trading floor.  Gold/Silver bullion coins and bars are actively trading at current price levels. The middle of the market, investment quality rare U.S. Gold and Silver coins in the $2,500 to $50,000 price range, have become very popular at current levels. I believe that the 3 ½ year bear market for these investment quality coins is over. We are now in the consolidation phase, and dealers and investors are aggressively building up their inventories.

I was lucky to purchase a small group of 1928 $20 Gold St Gaudens, graded MS66 by PCGS, on the floor of the show. We offered these to our clients in last Wednesday’s rare coin email offering for only $2,899 each. As of Friday, we only had 12 of these Gem Gold rarities left, so please contact [email protected] if you wish to purchase one or two of these high grade rarities.

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 see 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/   

Fund Raiser for Congressman Howard Berman

If your residence or business is located in the San Fernando Valley of California, near my office, 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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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 to 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.