Weekly Market Report 12/23/13

This Week’s Headlines:

Gold
Federal Reserve’s Dec. 18th Announcement
Tax Loss Strategy
Silver
Pre-order 2014 First Strike Silver Eagles
Recommended Investment Commitment and Diversification

GOLD

Last Wednesday’s Federal Reserve announcement reducing the $85 billion monthly stimulus caused a real war in the precious metal trading pits. Gold initially dropped $12 (to $1,222 per ounce) then quickly rallied to $1,245 on massive short covering. After the short covering rally, Gold actively traded between $1,232 and $1,239 per ounce on excellent volume until the bears took control in after-market trading, driving the price to under $1,220 by the close. During last Thursday morning’s trading on Asian markets Gold’s decline continued, reaching a low of $1,193 per ounce. The sell-off continued in Europe and the U.S. on Thursday, with Gold hitting $1,186 per ounce. Last Friday we saw bargain buying in the Asian, European and U.S. markets, driving the Gold price back above the $1,200 per ounce level.

This morning Gold traded as low as $1,191.80 per ounce on Asian markets before rallying back above the important $1,200 level. The volume is not what I would like to see, but it is a holiday week and a good number of traders are on vacation.

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The Federal Reserve’s Dec. 18^th Announcement

Chairman Bernanke gave his last Fed policy report on December 18, 2013. His statement and press conference afterwards provided three major changes in the Federal Reserve’s policy.

The three major policy changes are as follows:

• The Fed is cutting $10 billion from its monthly $85 billion stimulus program starting January 2014
• The Fed will continue to cut $10 billion from the stimulus every month after January 2014
• The Fed has extended its very low interest rates policy until December 2015

The first two changes were expected, however, extending the very low Federal Reserve interest rates until December 2015 was a very bullish surprise and equity markets quickly rallied. The continued low interest rates are very bullish for precious metals and we should see a rally in the New Year.

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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 $19.42 per ounce, down $0.18 for the week. Silver did reach a low of $19.10 per ounce on Thursday as Gold broke below $1,200 per ounce. Many professional commodity market traders have been shorting (selling) Silver after it dropped below $20. However, there was heavy short covering when Silver reached last week’s lows. The much watched Gold/Silver ratio is now at 61.9 to 1.

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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 $4.39 over spot in lots of up to 499, and $4.19 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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