Weekly Market Report 12/19/11

GOLD

We saw a dramatic correction in the gold price last week.  This was caused by continued concerns over the European Sovereign and banking debt crisis. (An overview and my thoughts on this issue in the paragraph below).  Gold dropped $118.90 per ounce (6.9%) between Friday Dec.9th and Friday Dec.16th, closing the week at $1,597.60 per ounce.  The low price for the week was Thursday morning in Asia, as gold found sizeable support at $1,562.50.

Why did gold sell off so dramatically? Because the financial Minster’s meetings in Brussels on Dec. 9th did not lead to any solutions to the Sovereign Debt Crisis, and the European Central Bank did not announce at the Brussels’ meeting any major bond offering to bail out the PIIGS countries. The outcome of the Brussels’ meeting resulted in creating substantial uncertainty in the world’s financial markets, making the possibility of a European debt default or a breakup of the Eurozone a real possibility. Last Monday the global financial markets reacted to this with a rush to liquidity, causing a sizeable selloff in all commodities, energy, and equity markets around the globe. Margin call selling resulted in driving down gold, which broke the $1,700 level and later the $1,600 resistance level.

Gold needs to get back above $1,600 per ounce and stay there for a few days to build confidence with floor traders. 

SILVER

Silver’s correction last week was $2.58 (8.01%), closing the week at $29.67.  The low for the week was $28.12 on Thursday morning in Asia. Asian demand has slowed down from November’s record pace.  $30 per ounce has turned from a support number to a resistance number as the market price for Silver looks for a new trading range.

Silver to Gold Ratio is 53.85 to 1.

RARE COINS

On January 3^rd 2012 I’m heading to Orlando, Florida for the Florida United Numismatic Coin Convention.   This convention is a major event for dealers, investors and collectors and I’ll be there for the entire week.  If you haven’t already updated your numismatic want list with our company I would recommend that you email me an update.

Recommended investment commitment and diversification:

Precious Metal commitment: Minimum of 35 % of investment capital

Diversification:  Gold 75%, Silver 20%, Platinum & Palladium 5%

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

YEAR END GOLD and SILVER LIKE KIND TAX TRADES

As we approach Dec 31^st we have an opportunity to make some year-end like kind trades for gold and silver without any tax obligation.

For Gold, we recommend trading 1oz Gold Krugerrands, Maple Leafs, and U.S. Eagles for European Pre-1933 Gold coins. This like kind trade offers many benefits.

For Silver, we recommend trading 10 to 100oz Silver Bars and junk 90% U.S. Silver coins for low premium Pre-1933 U.S. Silver Dollars. 

Please contact us to discuss prices and availability. For more details on Like Kind trades please contact your tax professional.    

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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 to 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.