Weekly Market Report 9/23/13

This Week’s Headlines:

Gold
Federal Reserve’s surprise move is bullish for Gold
Silver
Rare Coin Market Update
Recommended Investment Commitment and Diversification

GOLD

The Gold market showed a lot of volatility last week. Gold first set a two month low of $1,291 per ounce, then rallied $61.70 per ounce for the largest increase in price over the last 4 ½ years. Gold ended the week up $24 per ounce on very heavy trading volume. There appears to be sizeable support at $1,300 per ounce, with market resistance at the $1,375 level. This morning Gold is trading at $1,327 per ounce, about unchanged from Friday’s close.

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Federal Reserve’s surprise move is bullish for Gold

Last Wednesday, in a surprise move, the Federal Reserve said they would continue their $85 billion bond-buying program for at least another month. Most market and Fed analysts thought the Fed would begin reducing its monthly stimulus by $10 to $20 billion. After the announcement Gold quickly rallied $50 per ounce in after-market trading, continued higher, and reached $1,375.40 per ounce Thursday morning.

Since last September the Fed has been buying $85 billion in bonds each month in an effort to lower long-term interest rates, particularly mortgage rates. This stimulus program was designed to fire up the U.S. economy. The Fed plans to keep this strategy in place for the time being, with plans to re-evaluate the policy at its next meeting at the end of October.

The Fed’s statement said they will maintain the pace of bond purchases while awaiting conclusive evidence that the economy will strengthen. The Federal Reserve has also downgraded its U.S. economic growth outlook for the balance of this year and 2014. Logic dictates that if you are lowering your outlook for the economy, you would not cut back your stimulus program; however, markets are not always logical.

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SILVER

Last week Silver had more volatility than Gold, with a high/low range of over 10%. The Federal Reserve statement drove Silver up $1.73 per ounce immediately. The monthly $85 billion stimulus program, considered by many economists as inflationary, should therefore be more helpful for the Silver price than for Gold. Silver closed the week up $0.21 per ounce, at $21.93 per ounce. The Silver/Gold ratio has weakened and is now at 60.77 to 1.

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Rare Coin Market Update

I head to Long Beach, California this Wednesday fo 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. The demand for investment quality Gold and Silver U.S. rare coins has continued to grow, while most dealer’s inventories are at very low levels. These fundamentals are an outstanding harbinger of much higher prices coming very soon. At recent major conventions I have seen tremendous demand both at the auctions and on the dealer trading floor where the 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 needing to raise both their asking and bid prices for many of their Gold and Silver rarities.

I want to thank my clients who have updated their want lists last week. If you haven’t already sent your rare coin want list to me or David, please email one of us 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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