Weekly Market Report 10/27/14

Links to recent informative articles on precious metals and rare coins:

South Africa Mint releases new Gold coin

Russia adds record 1,200,000oz physical Gold to reserves

This Week’s Headlines:

Gold
Swiss Referendum is bullish for Gold
Silver
Travel to Baltimore and Washington DC this week
October 2014 CoinStats
Recommended Investment Commitment and Diversification

GOLD

Last week Gold tested the very important $1,250 per ounce resistance level twice and couldn’t find enough demand to stay above $1,250. For the past two weeks, Gold has found good demand above $1,220 per ounce during trading, but a combination of short term profit taking and professional short sales stops the rally from staying above $1,250. Last week’s 400 point rally in the U.S. Stock Market’s DJIA, plus a strong move higher in the value of the U.S. Dollar, were also negatives for Gold. On the week, Gold dropped $7.30 per ounce, closing on Friday at $1,231.80.

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Passage of Nov 30 Swiss referendum is bullish for Gold

On November 30, voters in Switzerland will decide: whether or not to ban further Gold sales by the Swiss National Bank (SNB); whether to make physical Gold bullion at least 20 percent of the bank’s assets; and whether to repatriate all Swiss-owned Gold stored by other central banks, including the U.S. Federal Reserve. A recent poll shows that this national initiative has 45% of the citizens in support of it, 39% opposed, and 16% undecided. Considering the historic conservatism of Swiss citizens I believe this referendum will pass.

After passage of this national initiative, the SNB will have five years to increase the nation’s holdings of Gold from 8% of reserves to 20% of reserves. Right now the value of the 8% reserves of Gold owned by the SNB is about $40 billion (1,040 metric tonnes of Gold). This initiative means they would need to purchase more than 1,500 tonnes of Gold by 2019 to reach 20% of reserves, plus repatriate any Gold outside of Switzerland. In other words, in order to reach 20% of the national reserves the SNB would need to buy another $60 billion worth of Gold.

Long term, the passage of this initiative would have a very bullish effect on the Gold price. However, think about the short term effect when the referendum passes. Short term, it would provide a great incentive for nations like China, Russia, India, and Brazil (who have been aggressive buyers), as well as many large Gold investors, to quickly increase their Gold holdings.

“If the Swiss vote to boost Gold reserves, as well as providing extra physical Gold buying, it will also be a strong signal supporting the monetization of Gold – a move away from fiat money,” analyst William Adams said. “This may well encourage other countries to follow suit.”

This referendum is very important and as we approach the November 30 vote there will be lots of information and polls coming out of Europe. Voter polls on the results of the referendum could have an effect on the price of Gold so I will keep you updated with any news.
The following is a recent article about the campaigns of the referendum’s pro and con supporters: http://www.mintstategold.com/investor-education/swiss_gold_campaign/.

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SILVER

Silver’s price action continued to disappoint me last week, with low trading volume and the inability to stay above $17.50 per ounce. Last Tuesday, Silver rallied to $17.54 per ounce, but sellers quickly appeared on Wednesday driving the price down to $17.23 per ounce. Silver did reach a low of $17.04 last Thursday before buyers came in, and Silver ended a very disheartening week at $17.18 per ounce, down $0.15 for the week. I continue to look for a bullish turn in the Silver price very soon, but I need to see a change in market sentiment, hopefully with an intra-day reversal on heavy trading volume. The Silver/Gold Ratio has set another 2014 record of 71.69-to-1.

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Travel to Baltimore and Washington DC this week

Wednesday I head to Baltimore for the Whitman rare coin convention and ICTA* board meetings. Whitman is the last major coin show of the year and I will be trying to locate many of the rare coins on my clients want lists. If you have not updated your want list recently, please email me by tomorrow (Tuesday, 10/28/14).

On Thursday I plan to visit the Capital Building in Washington DC with Jimmy Hayes, our industry Lobbyist, to talk with key legislators and their aids in an effort to secure passage of the Collectible Coin Act, HR2754. This is the Rare Coin and Bullion Industry’s anti-counterfeiting legislation. As Chairman of the Gold & Silver Political Action Committee (G&S PAC), HR2754 is the highest item on my agenda. This very important legislation has already passed the House of Representatives with a unanimous vote before the summer break, and has been sitting in the Senate Finance Committee since then. HR2754 does not affect the budget, is non-partisan, and has no opposition. I need to generate some interest and support, with the hope of getting passage after the November 4 elections during the Lame Duck session.

*ICTA
Industry Council for Tangible Assets is the Rare Coin, Currency and Precious Metal’s communities legislative and regulatory watchdog. I have been a board member since it was founded in 1982.

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October 2014 CoinStats is 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 certified rare coins. I am proud to offer this unique and informative tool exclusively to our clients. CoinStats is now updated for October 2014 and is available in PDF format. Six different series are available: $20 Gold Saint Gaudens, $20 Gold Liberties, $10 Gold Indians, Morgan & Peace Silver Dollars, and the Walking Liberty Half Dollars.

The CoinStats report 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. These are PCGS/NGC Certified MS63 or higher Gold and Silver U.S. rare coins, dated prior to 1948, which have a proven track record of appreciation and also offer excellent liquidity. To receive the latest CoinStats analysis, just put the word “CoinStats” in the subject line and email me which of the six series you would like to see.

I want to thank the clients who gave suggestions on how to improve CoinStats. Those recommendations are appreciated and as a result I have implemented some changes beginning with the October 2014 CoinStats report. On the Best Value page you will now see coins that have increased in value in blue, and coins that have deceased in red. Additionally, new coins are indicated as such on the Best Value page.

If you have any suggestions for CoinStats, please feel free to email me. Because I believe that CoinStats is one of the best tools to help rare coin collectors and investors recognize great value, I will continue to look for ways to provide more important and relevant information. Your input on CoinStats is always appreciated.

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Recommended Investment Commitment and Diversification:

Precious Metal commitment: Minimum of 45% of investment capital

Diversification:  Gold 45%, Silver 45%, Platinum & Palladium 10%

Diversification includes 50% in long term investment quality rare coins and 50% short term bullion products

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REMEMBER THE BLOG

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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