Weekly Market Report 9/30/13

This Week’s Headlines:

Gold
Central Banks keep buying Gold in August
Silver
Rare Coin Market Update
Recommended Investment Commitment and Diversification

GOLD

Last week the Gold market traded in a very tight price range. Gold traded from $1,305 on the low to $1,345 on the high, closing last Friday at $1,339 per ounce, up $6.70 for the week. September has been a consolidation month for the Gold price after some major rallies in July and August. $1,300 per ounce is a strong support level; however, the $1,350 per ounce resistance level has encouraged traders to short Gold.

The Festival and wedding season in India is coming up in October, the peak Gold demand season. Chinese buying is expected to increase as much as 100 metric tonnes for September and October due to current attractive low prices. I see October as a bullish month for Gold.

The continued congressional debate over the budget could cause the U.S. government to shutdown tomorrow and is giving support to the Gold price. The mid-October deadline to raise the $16.7 trillion debt ceiling could force the United States to default on some payment obligations. This would drive down the value of the U.S. Dollar, while helping the price of Gold to increase when valued in U.S. Dollars.

The European Central Bank finds itself in the spotlight this week as it mulls over ways to curb expectations of rising interest rates and boost the chronically weak credit in the Eurozone. This week there is a LBMA Precious Metals Conference in Rome. Over the weekend the World Gold Council’s representative, Albert Cheng, was interviewed at the conference. Mr. Cheng stated that physical demand for Gold investment products in China is very healthy and could reach an all-time record of 1,000 metric tonnes this year.

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Central Banks keep buying Gold in August

In August eight of the world’s central banks increased their Gold reserves. Turkey was the largest buyer with a purchase of 23.34 metric tonnes. Russia added 12.72 tonnes which increased their current Gold reserve to 1,015 metric tonnes. Six other countries, including the Ukraine, Azerbaijan, and Kazakhstan, added 2 more tonnes of Gold. Concerns regarding the depreciating U.S. Dollar and Euro were quoted as the reason for the continued purchase of Gold.

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SILVER

Last week Silver also traded in a very tight price range from $21.30 on the low to $22.18 on the high. Silver tried to break above the $22 per ounce resistance level three times last week, and all three breakouts were met with professional selling. Physical demand for Silver investment products continues to be very strong worldwide. The U.S. Mint sold 2,525,000 1oz Silver .999 Eagles in September, bringing the yearly total to 35,600,000 1oz Silver Eagles. At this pace the Mint would reach over 40 million Silver Eagles sold for 2013, an all-time record. The Silver/Gold ratio has weakened, and is now at 61.34 to 1.

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Rare Coin Market Update

I attended last week’s Long Beach Coin Expo. This rare coin convention was well attended by rare coin and currency dealers, collectors and investors. This is one of the top ten rare coin conventions of the year, and demand for investment quality Gold and Silver U.S. rare coins was at record levels. Demand both at the auction and on the dealer trading floor was at a very high level. Many rare high grade Gold and Silver coins sold for record prices during the auction and on the trading floor.

The demand for high quality Gold and Silver certified rare coins is extraordinary and I expect prices to quickly begin reflecting that demand. I recommend adding to your investment quality rare coin holdings as soon as possible.

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Recommended Investment Commitment and Diversification:

Precious Metal commitment: Minimum of 40% of investment capital

Diversification:  Gold 50%, Silver 45%, Platinum & Palladium 5%

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.

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