Weekly Market Report 11/25/13

This Week’s Headlines:

Gold
Tax Loss Strategy
Silver
Recommended Investment Commitment and Diversification

GOLD

The Federal Reserve’s October policy minutes that were released last week showed the possibility that the Fed may be reducing the $85 billion monthly stimulus program within a few months. These minutes are considered negative for Gold and Gold sold off sharply the entire week, closing Friday at $1,244.10, down $43.30 per ounce for the week.

Last week Gold broke down below the key $1,250 per ounce resistance level and is now in a down trend. This morning Gold reached a low of $1,225.80 per ounce before seeing sizeable purchasing. I spoke with a few professional CME floor traders who believe the market is trying to find support, but the short term direction is lower. There is also a large number of Gold investors who are planning to sell their Gold and take a tax loss, then re-invest early next year (see Tax Loss Strategy below.) Long term major Gold support is at the $1,200 per ounce level. There is an excellent chance that Gold will test that level by year end before turning higher. Gold reached a low of $1,179.80 per ounce on June 28, 2013 before rallying sharply on high volume, reaching a high of $1,438 per ounce within two months.

Back to top of report

Tax Loss Strategy

After 11 straight years of Gold increasing in value, it appears that the price by year end will close below the December 31, 2012 price of $1,645 per ounce. This gives long term Gold and Silver investors the opportunity to use any of their losses (in Gold or Silver) to offset long term capital gains from other investments.

How does it work?
If you have sold profitable stocks, real estate, or other assets this year and owe income tax on the capital gain profits, you can sell enough Gold Maple Leafs, Eagles, or Krugerrands (which have declined from your original cost) to offset your profits, thereby eliminating your capital gain liability. Then, 31 days after you sell your Gold, you can buy back your Gold bullion coins, or buy other pre-1933 low premium Gold coins that provide you better privacy. This strategy will also work for Silver bullion purchases.

I recommend that you look at your capital gain liability and the cost basis of your Gold and Silver bullion and coins, talk to your accountant, and then call me.

Back to top of report

SILVER

Last week wasn’t very pretty for Silver investors with Silver dropping below the key $20 per ounce support level. Silver closed last Friday at $19.86 per ounce, down $0.86 per ounce (4.1%) on light volume. Silver did reach a low of $18.17 per ounce on June 28, 2013, before rallying sharply on heavy volume, and there is a possibility of Silver seeing that level before year end.

Last week the Silver/Gold ratio weakened and is now at 62.70 to 1.

Back to top of report

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

Back to top of report

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.

Back to top of report