Weekly Market Report 12/9/13

This Week’s Headlines:

Gold
China reports soaring exports and $33.8B Nov surplus
Tax Loss Strategy
Silver
Pre-order 2014 First Strike Silver Eagles
Recommended Investment Commitment and Diversification

GOLD

Last Friday Gold closed at $1,229 per ounce, down $21 per ounce on the heaviest volume of trading that I have seen in weeks. The battle between the precious metal bulls and bears is causing wide daily trading ranges. Twice last week the Gold price hit a low of $1,210 per ounce; both times massive buying appeared driving the price up $20. Many professional floor traders are trading Gold and Silver on the commodity exchanges from a negative position, shorting rallies and covering on dips.

The next three weeks of precious metal trading should be exciting. There might be an excellent opportunity to purchase Gold and Silver at a great price should tax loss selling continue to drive the markets lower. Any positive U.S. economic news could also be a negative catalyst for Gold and Silver, similar to what happened last Friday when the U.S. Labor Department announced that 203,000 jobs had been added in November. This figure was higher than the 180,000 jobs estimate and Gold immediately dropped $14 per ounce on concerns that the Fed would cut its $85 billion monthly stimulus program.

Gold has major support at $1,200 per ounce, and long term support at $1,180 (June 28, 2013 lows). There is short term resistance for Gold at $1,250 per ounce. Any break below or above those levels will be a great indicator of the short term direction. Technical traders would be sellers if Gold breaks below $1,180 per ounce, and become buyers if Gold can close above $1,250 per ounce. As for the long term, I expect to see the value of Gold and Silver go much higher in 2014.

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China reports soaring exports and $33.8B Nov surplus

Gold opened up $8 per ounce today as China posted its biggest trade surplus in almost five years on Sunday. Soaring exports ran ahead of modest import growth, potentially resurrecting a source of friction with the US. In November, China’s trade surplus rose to $33.8 billion from $31.1 billion the month before. Exports staged a rebound, rising 12.7% from November of last year, well ahead of October’s 5.6% growth. This is a positive sign for the global economy, Gold, and China.

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Tax Loss Strategy

After 11 straight years of Gold increasing in value, it appears that for 2013 we will see the price drop. If the Gold price closes below the December 31, 2012 price of $1,645 per ounce by year end, it will break this 11 year streak. This gives long term Gold and Silver investors the opportunity to use 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 taxes 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 have sold your Gold, you can buy back your Gold bullion coins, or buy other pre-1933 low premium Gold coins that can provide you better privacy. This strategy also works for Silver bullion purchases.

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

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SILVER

Silver closed last Friday at $19.52 per ounce, down $0.51 for the week. Silver was unable to close above the key $20 per ounce resistance level all week. Many professional commodity market traders have been shorting (selling) Silver every time it gets near $20. Silver did make a recent low last Wednesday at $18.89 before we began seeing bargain buying and a short covering rally. Back on June 28, 2013 Silver did reach a low of $18.17 per ounce before rallying sharply on heavy volume. There is a possibility that Silver will see that level again before year end.

The much watched Gold/Silver ratio has sunk to almost 63 to 1. This is a very high ratio for many long term Silver investors.

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Pre-order 2014 First Strike Silver Eagles

Stuppler & Company is now accepting orders for 1st Strike U.S. 2014 Silver Eagles at only $4.24 over spot in lots of up to 499, and $3.99 over spot for 1st strike in the Green Monster box (500 coins).

You can lock in today’s low Silver price for delivery early in 2014. Call or email me at 888-454-0444 or [email protected].

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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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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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