Weekly Market Report 9/16/13

This Week’s Headlines:

Gold
Larry Summers the Next Federal Reserve Chairman?
Silver
Rare Coin Market Update
Recommended Investment Commitment and Diversification

GOLD

Last Thursday Gold tested the $1,360 support level and didn’t hold. Immediately after the breakdown, Gold dropped below $1,360 per ounce as a large number of professional traders watching their technical support charts immediately shorted (sold) Gold. This large amount of selling drove Gold down to $1,320 per ounce.

After Thursday’s decline, the market opened weaker on Friday and hit a low of $1,304 before seeing heavy demand, taking Gold back to $1,324 by end of trading. The recent postponement of a possible Syrian air strike had already driven Gold lower on Sept. 5 and there was no other major news announcement that could have caused last week’s sizeable decline.

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Larry Summers the Next Federal Reserve Chairman?

Some analysts believed that last week’s decline in Gold was due to the possibility of Larry Summers being selected as the new Federal Reserve Chairman. Mr. Summers, an academic economist, is considered to be a Keynesian and therefore negative on Gold. This could have been an accurate assumption as Gold climbed $8 per ounce in this morning’s Asian trading after the announcement that Larry Summers had withdrawn from the race to be the next chairman of the Federal Reserve. It was believed that Mr. Summer’s withdrew his name from consideration to succeed Fed Chairman Ben Bernanke after liberal pressure soured his confirmation prospects. Janet Yellen, now the main candidate for the job, is believed to be less likely to make any serious changes to the current Fed policy concerning stimulus and precious metals.

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SILVER

Silver declined 9% last week, the largest single week correction since April, closing the week at $21.72 per ounce. Silver did break through two important support levels, $22 and $23 per ounce. What is surprising about Silver’s recent decline is that physical demand for Silver investment products has never been higher around the world. In the U.S., 1 ounce Silver Eagle sales have reached 34,250.000, which is more than the 33,742,500 sold in 2012 and we still have over 3 ½ months left in 2013. The Silver/Gold ratio has weakened for Silver and is now at 60.25 to 1.

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Rare Coin Market Update

Next week I head to Long Beach, California to the Long Beach Coin Expo. This rare coin convention should be well attended and I am hoping to fill our clients’ rare coin want lists. As the certified investment quality rare coin market soars, I am seeing increasing demand from our clients for the CoinStats recommended Gold and Silver coins.

For the past nine months I have been reporting from major coin conventions that demand for investment quality Gold and Silver U.S. rare coins has continued to grow, while most dealer’s inventories were at very low levels. These fundamentals were an outstanding harbinger of much higher prices coming very soon. At these major conventions I see tremendous demand at the auctions and on the dealer trading floor where prices have been driven up 15% or more on many of the CoinStats recommended Gold and Silver rare coins. Many of the dealers who attend these conventions have reported raising both their asking and bid prices for many of their Gold and Silver rarities.

If you haven’t already sent in your rare coin want list to David or myself, please email me your list of coins needed.

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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

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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 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.

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