Weekly Market Report 10/15/12

This week’s Market Report discusses the Gold/Silver consolidation as they continue to build an excellent base for the next breakout above their current resistance levels. Also, the October 2012 CoinStats update is now available for $20 Gold Saint Gaudens, $20 Gold Liberties, Morgan & Peace Silver Dollars, and the Walking Liberty Half Dollar series.

GOLD 

Last week was very lackluster for Gold market trading. Trading volume on the CME commodity exchange never went above 150,000 Gold contracts, as compared to last week when it surpassed that level three times. This week’s closing Gold prices stayed between $1,759 and $1,775 per ounce, ending the week at its lowest price of $1,759.70 per ounce. Gold tested the $1,730 per ounce level this morning. This is a very important support level, and I believe we should see trading volume increase dramatically and the price should hold.  Remember, many of the largest rallies we have seen in Gold over the past eleven years have started with a drop to the support level in order to clean out the nervous small investors.

Hedge funds and other major commodity speculators are piling into the Gold markets for a second week in a row. Friday’s trade data is showing that the net long-money position has increased by nearly $1 billion. Managed money’s net length in Gold futures and options traded on New York’s COMEX rose by 2,547 contracts (254,700 oz) to 198,194 contracts (19,818,400 oz) in the week that ended October 9 -- the largest such holding since August 2011.

Again, for the ninth week in a row, the largest weekly Gold price increase was on Thursday or Friday.  What that means is that if you had purchased Gold at Wednesday’s Gold closing price, you would have had a profit by the next day. With the next Presidential Debate scheduled for Tuesday night, Wednesday’s Gold trading could be exciting to watch.

Trade Deficit Continues to Grow

The U.S. Commerce Department reported today that the trade deficit widened by 4.1% in August to $44.2 billion; close to the consensus forecast of Wall Street economists of $44 billion. Both imports and exports declined in August, but exports fell at a faster pace.

Last Call for Gold

Gold at under $1,800 per ounce still represents an excellent entry point for new purchases. However, as we get closer and closer to the all-time highs of $1,920, the risk/reward ratio does not look as good as it does right now. I believe that we will see Gold go above $2,000 per ounce very soon, so why wait? Look at the Recommended Investment Commitment and Diversification section below. If your Precious Metal commitment isn’t a minimum of 35% of your investment capital, make those purchases now.

SILVER

Silver closed last week at its lowest price of $33.67 per ounce, down $0.90 for the week on very low volume. Ever since Silver broke above $34.00 per ounce five weeks ago it has been in a tight trading range. During this consolidation period we have seen demand for physical Silver continue to increase. Back in late July and early August, Silver had a similar five week consolidation period prior to breaking out above the $30 per ounce resistance level. $36 per ounce is the next important resistance level, while $32.50 per ounce is the current support level.

Silver Confiscation in 1934

Many Gold investors know that in 1933 President Roosevelt signed Executive Order No.6102, which resulted in U.S. Gold confiscation. However, investors are unaware of Executive Order No.6814. In 1934, President Roosevelt signed Executive Order No.6814, The Silver Purchase Act of 1934, which caused American citizens to turn in their Silver or have it confiscated by the government. The following is a link to an article that provides more information about Executive Order No.6814: http://www.mintstategold.com/investor-education/silver_confiscated_by_roosevelt/

PLATINUM & PALLADIUM

The Platinum and Palladium prices continue to be affected by news coming out of South Africa. Last week Platinum was down $48 per ounce, while Palladium declined $24 per ounce. Last Friday, Platinum closed at $1,659 per ounce, $100.40 under the Gold price, compared to the price last week when Platinum was only $73.60 per ounce lower than Gold.

The October 2012 CoinStats is now available

Our numismatic CoinStats report is the best investment tool for rare coin investors. CoinStats is an in-depth statistical analysis of popular rare coin series that allows you to identify the best values in certified rare coins. I am proud to offer this unique and informative tool exclusively to our clients. The October 2012 CoinStats update is now available for $20 Gold Saint Gaudens, $20 Gold Liberties, Morgan & Peace Silver Dollars, and the Walking Liberty Half Dollar series.

The CoinStats Report provides a list of my recommended certified U.S. Gold and Silver coins that are found listed on the Best Value page. These are not the overly-hyped modern issue bullion coins or low-grade circulated coins, they are PCGS/NGC Certified MS63 or higher Gold and Silver U.S. rare coins, dated prior to 1936, that have a proven track record of appreciation.

For the latest CoinStats analysis, just put CoinStats in the subject line and email me which series you would like to see.

Recommended investment commitment and diversification:

Precious Metal commitment: Minimum of 35% of investment capital

Diversification:  Gold 50%, Silver 40%, Platinum & Palladium 10%

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.