Weekly Market Report 12/16/13

This Week’s Headlines:

Gold
Tax Loss Strategy
Silver
Pre-order 2014 First Strike Silver Eagles
Recommended Investment Commitment and Diversification

GOLD

Last week Gold traded between $1,219 and $1,268 per ounce on excellent volume. On Wednesday strong economic news from China and Japan caused Gold to rally sharply in overnight Asian trading. The rally continued in London and on the CME; traders that were short on Gold covered their sales when spot Gold broke above the $1,250 resistance level. Heavy trading volume on U.S. commodity markets drove Gold up $34 (to $1,268 per ounce) before some profit taking came in. It was disappointing to watch Gold break above the key $1,250 resistance level last Wednesday, but not hold by Friday’s $1,234 per ounce close.

The US Federal Reserve will be meeting on Tuesday and Wednesday this week. The meeting could spell out the Fed’s plans as to when they might begin tapering the stimulus program. If the tapering is likely to begin in March there could be some relief to the pressure on the precious metal.

From now until year end, I give Gold a 40% chance of staying in the $1,200 to $1,268 trading range. I believe Gold has a 40% chance of temporarily breaking below the key $1,200 per ounce level, with the possibility of hitting a new yearly low. However, there is a 20% chance of Gold breaking above the $1,269 resistance level by year end. Based on this week’s Federal Reserve statement these projections could come quicker.

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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 $19.60 per ounce, up $0.08 for the week. After breaking above $20 per ounce on Wednesday, Silver was unable to close above the key $20 per ounce resistance level by Friday. Many professional commodity market traders have been shorting (selling) Silver every time it gets near $20. I saw some short covering on Wednesday and selling resumed on Thursday.

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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