Weekly Market Report 10/21/13

This Week’s Headlines:

Gold
Fundamental reasons for this turn in the Gold price
Silver
October 2013 CoinStats now available
Recommended Investment Commitment and Diversification

GOLD

Last week Gold crossed and closed above the important $1,300 per ounce resistance level (also showing excellent support above the major $1,250 per ounce support level). At the end of the week Gold had closed at $1,314.60 per ounce, up $46.40 by Friday, the largest weekly rally for Gold in over two months.

Last week’s rally happened on heavy volume buying while the dollar stumbled. As congress kicked the national debt can down the road, precious metals moved higher. This was based on the belief that this temporary deal (to avoid a historic U.S. debt default) will cause the Federal Reserve to delay any reduction in its monetary stimulus. Last week’s pivotal Gold move tells me that Gold is off and running back to the $1,400 price level in the short term, and that professional traders are now back on Gold’s bullish bandwagon.

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Fundamental reasons for this turn in the Gold price

I believe the $40 rally in the Gold price last Thursday was the turning point I have waited two years to see. The fundamentals for this turn in the Gold price have never been stronger. Let me recap today’s status for the major fundamentals that will allow Gold to set record highs within the next 18 months.

1. The national debt has been kicked down the road by Congress and is reaching $17 trillion with no reduction in sight.
2. The Federal Reserve is continuing to spend $85 billion a month (over 1 trillion yearly) until next year to stimulate the economy.
3. Worldwide physical demand for Gold and Silver investment products (coins, bars, and jewelry) continues at record pace.
4. This is a record year for many of the world’s largest central banks to exchange their paper dollars for Gold.
5. European and Japanese Governments are printing billions of Euros and Yen.
6. The Chinese government will add over 1,400 metric tonnes of Gold to their reserves this year. This is an all time record high. This moves the Chinese closer to building their Gold holdings to over 10,000 metric tonnes, a major step in replacing the U.S. Dollar as the reserve currency of the world.
7. Gold holdings in U.S. commodity exchange depositories have been reduced over 30% this year while investors and governments are taking physical delivery.
8. According to the World Gold Council, mining production for new Gold will increase just half of 1% this year, while mining companies suffer with labor problems, environmental controls, government interference, and low prices.

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SILVER

Two weeks ago after Gold dropped $41, I was surprised to see how well the Silver price performed, staying above the key $21 per ounce support level. Last week, as Gold rallied $46 per ounce, I was again surprised that after a major rally in Gold, Silver did not close above the important $22 per ounce resistance level. Breaking above $22 per ounce is important because many professional traders have recently been trading Silver with a bearish spread, shorting rallies and covering on corrections. A powerful break above $22 would get these same traders to put a bullish spread on Silver.

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October 2013 CoinStats now available

Our numismatic CoinStats quarterly 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 U.S. certified rare coins. I am proud to offer this unique and informative tool exclusively to our clients. The October 2013 CoinStats report is now available for $20 Gold Saint Gaudens, $20 Gold Liberties, Morgan & Peace Silver Dollars, and the Walking Liberty Half Dollar series.

CoinStats provides a list of my recommended certified U.S. Gold and Silver coins which are found listed on the best value page. These are not the 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 1948. These investment quality rarities have a proven track record of appreciation over the past 60 years or longer.

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

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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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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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