Weekly Market Report 11/9/15

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

Germany’s Degussa: A bull in a bearish Gold market

“Great Optimist” Faber says “I added to my Gold position”

There are now 293 ounces of paper Gold for every ounce of physical as Comex registered Gold hits new low

China Gold consumption rises 7.8%

This Week’s Headlines:

Gold
Gold price at an important crossroad
Gold fundamentals are looking good
Silver
Recommended Investment Commitment and Diversification

GOLD

Last Friday the U.S. Labor Department reported that the U.S. economy added 271,000 jobs in October. Strong hiring in October drove the unemployment rate down to 5%. This increase in jobs was much higher than economists had predicted and both the stock and precious metal markets declined quickly.

After the job’s announcement, Gold immediately dropped $21, breaking below the key $1,100 support level and reaching a low of $1,084.50 per ounce. After reaching the lows on Friday, I saw bargain buyers and short sale covering hit the Gold market. The CME trading volume for the most active Gold contract (Dec 2015) picked up dramatically with over 200,000 hundred-ounce contracts (the highest for last week).

Gold closed last Friday at $1,087.70 per ounce, down $53 for the week and below the important $1,100 per ounce support level.

The jobs report from the Labor Department also directly affected the value of the U.S. Dollar. After the announcement, the U.S. Dollar rallied sharply, reaching a 13-year high against a basket of 16 currencies. During trading last Friday, the U.S. Dollar reached $1.05 to the Euro, which further added to the negative sentiment for Gold and Silver.

Today: This morning Gold is holding in a narrow range from $1,089 to $1,096 per ounce. Gold needs to move back above the $1,100 per ounce level quickly to encourage investors.

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Gold price at an important crossroad

After breaking below the important $1,100 per ounce support level, what is coming next for the Gold price? Gold’s five year low of $1,072 per ounce was reached on July 24. If Gold doesn’t rally back above the $1,100 per ounce level by week end on heavy volume, I believe it will re-test the low before year end. Like I have said before, I believe Gold will reach its five year low this year and start its major rally to a new all-time high (above $1,920 per ounce) in the next couple years.

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Gold fundamentals are looking good

I firmly believe the Gold price has bottomed out this year and the fundamentals have never looked better for the price to continue higher:

1. Physical demand for Gold and Silver investment products is at the strongest level in years.
2. Worldwide interest rates are low, making Gold/Silver an excellent alternative.
3. Global quantitative easing (money printing) in the U.S., China, Japan, and Europe is increasing at an unbelievable rate.
4. Gold mine production is falling dramatically as the cost of production goes higher.
5. Central banks continue to trade their U.S. Dollars for Gold, thus building their reserves.
6. Stockpiles of Gold in exchanges and depositories continue to drop, filling heavy demand.

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SILVER

It wasn’t a pretty week for Silver investors with Silver dropping 5.63% by week end. Silver closed last Friday at $14.69 per ounce, down $0.88 per ounce, and the lowest Silver has been since October 2. More importantly, Silver broke below the key $15.00 per ounce support level. Most of the weakness in the Silver price was due to the same factors that I mentioned above that caused Gold’s fall.

Today: Silver has found some bargain buyers and short covering above the $14.50 per ounce level. Physical demand remains strong, but it isn’t transferring that demand into the commodity futures markets.

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We are still in the same building at 5855 Topanga Canyon Blvd, CA 91367, but now in Suite 410. The phone numbers are still the same: 818-592-2800 & 888-454-0444. We look forward to continuing to offer you excellent service!

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Recommended Investment Commitment and Diversification:

Precious Metal commitment: Minimum of 30% 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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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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