Weekly Market Report 11/07/11

GOLD

Last week Gold traded in a very narrow price range, closing the week up $8.10 at $1,755.40.  Gold closed above $1,700 per ounce over the past nine trading days, building an excellent base to reach an $1,800 per ounce resistance level sometime this week. Last week Gold was surprisingly strong given that we had a very strong dollar versus the Euro, and no QE3 announcement from the Federal Reserve came on Thursday.

The financial world continues to be effected by the Greek Saga; concerns about European banks being insolvent and sovereign governments defaulting on their debt has had a negative effect on the world’s equity and bond markets.  It now appears that on Sunday Greece’s politicians agreed to form a unity government to approve a euro zone bailout, with Prime Minister George Papandreou stepping down. German newspapers reported over the weekend that leaders at the Group of 20 summit in Cannes, France, had floated the idea that the Bundesbank’s gold reserves could be used to underpin the European Financial Stability Facility, but that the plan was quickly rejected by senior German officials.

As we approach the end of the year I expect to see a major gold rally. There have been 13 different sovereign governments that have added gold to their reserves in 2011. We are seeing record investment and jewelry demand in Asia and the Middle East, and this has caused shortages of gold investment products in some markets. Plus the supply problems, as we hear reports of major gold mining properties losing production due to labor and environmental holdups or nationalization.  All these facts, plus new quantitative easing in Europe as part of the Eurozone settlement, lead me to believe that we are going to see new highs in the price of gold by year end.

SILVER

Last week Silver dropped $1.20 per ounce, closing the week at $34.08 per ounce. Global concerns of a double dip recession has not allowed silver to keep up with the rising gold price. The gold to silver price ratio has gone up to 51 ounces of Silver being equal to 1 ounce of Gold.

Chinese people have a cultural and historical liking for silver, as both ornaments and accessories. However, they are now increasingly seeing it in a new light, as an investment. Investment in silver has been booming since last year, with the trading volume exploding.

The trading volume of silver on the Shanghai Gold Exchange (SGE), China’s only exchange for the precious metal, surged 751% year-on-year in 2010. Demand continues to grow with the volume in September 2011 being more than six times that of the same period in 2010.

PLATINUM

At a $125 discount to gold, platinum looks very attractive. When the Eurozone gets their act together this discount will disappear.  So, if you have not already added Platinum to your precious metal investment holding I would recommend doing it now.  The best trading platinum investment product is the 1 ounce .999 Australian Platypus, which trades at a low premium. 

Recommended investment commitment and diversification: 

Precious Metal commitment: Minimum of 35 % of investment capital

Diversification:  Gold 66%, Silver 24%, Platinum & Palladium 10%

Diversification includes long term investment quality rare coins and short term bullion products.

2012 Hyperinflationary Study Booklet just released

I am very proud to announce that my 2012 Hyperinflation study has been completed. The booklet, titled “Is Hyperinflation the US Government’s Only Way Out?” began being mailed out last week. The study answers two very important questions, “Is a gold standard possible?” and “Can gold be confiscated again?”

This 32 page booklet is my 2nd edition and completely updated with eight more pages than the 1st edition, released last May. A combination of great client suggestions on how to improve my 1st edition, along with all the global and domestic events that have occurred since May 2011, has allowed me to completely update the study.

If you do not receive your copies by next week, please contact my office immediately. Once again, I am asking for your opinions and/or suggestions to improve the 2013 edition.

New CoinStats

I believe that my CoinStats report is the best investment tool for rare coin investors. CoinStats is an in-depth statistical analysis of popular rare coin series that allow investors to identify the best values in certified rare coins. I am proud to offer this unique and outstanding investment tool exclusively to our clients.

The October 15, 2011 CoinStats update is now available for $20 Gold Saint Gaudens, $20 Gold Liberties, and Morgan & Peace Silver Dollars.

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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.