Sprott Precious Metals Watch
SPROTT PRECIOUS METALS COMMENTARY
Despite a seemingly slam-dunk supply/demand imbalance, platinum's spot price has bounced around in a trading range between $1,400/oz and $1,730/oz. More recently it has come back down to test the bottom end of that range, but current developments in the ETF space suggest that the platinum price may be set to improve significantly in the coming months.
Gold imports to India set for record
"Gold has been rapidly flowing into the major gold markets in order to meet this intense demand. In India, a market that represents 28 per cent of consumer demand, imports of gold are headed towards record levels in the second quarter of 2013. We anticipate about 300 to 400 tonnes of imports in the second quarter, as much as a 200 per cent year-on-year increase and almost half of total imports last year."
On This Day in 1933
Thursday, June 13th, 2013 You were considered a hoarder and a slacker if you still resisted turning over your gold to the government. From the New York Times, June 13, 1933: Roosevelt had only been in office for 101 days and while there was broad bipartisan support for inflationary policies in Congress, it’s safe to say that most of those who voted for FDR never expected him to confiscate private holdings of gold coins, bullion, and certificates. Roosevelt called the measure a temporary one (it wasn’t), and he followed it up by invalidating gold clauses in private contracts that obligated payment in gold dollars, which had the effect of devaluing the assets of bond and contract holders. Many of these hoarders and slackers purchased gold as a hedge against the (Fed-fueled) inflationary boom of the 1920s and then hung on to it during the Hoover years when his crazed and unprecedented interventions in wages and prices caused a normal market correction to devolve into a depression. Why would they trust Roosevelt any more?
Platinum market likely to hit record deficit in 2013
The platinum market is likely to hit a record deficit of 844,000 ounces in 2013, HSBC says, as supply shrinks and demand, especially from ETFs picks up.But, despite this favourable fundamental picture, the bank has cut its average price forecasts for this year and next to $1,580/oz and $1,725/oz from $1,710/oz and $1,800/oz respectively.The reason for this, the bank writes, is that “Platinum has been more influenced than we had anticipated by the sharp swings in the gold price and this will pull average prices lower for this year and next.”Nonetheless, the fundamental picture for platinum remains engaging. On the supply side, HSBC is forecasting total global production of c5.646moz for 2013, with South Africa by far the biggest producer.
Workers At Anglo Platinum Disrupt Operations
JOHANNESBURG--Some 2,400 workers occupied an Anglo American Platinum (AMS.JO) mine in South Africa on Friday, disrupting operations even as union leaders held negotiations with government and company officials on how to end such wildcat strikes.A worker representing the miners said the strike at the Thembelani shaft at the mine in Rustenburg northwest of Johannesburg began when workers showed up for their shift around 4 a.m. They descended into the mine, but once underground, refused to work.
John Embry: 'everyone should look at Zero Hedge, Sinclair and KWN'
Bernanke’s Tapering Talk Backfires Amid Bond Yield Surge
Federal Reserve Chairman Ben S. Bernanke has repeatedly said a reduction in the Fed's $85 billion in monthly bond purchases wouldn't mean an end to record easing. Investors are behaving as if they don't believe him.The yield on the 10-year Treasury note has risen to 2.15 percent, an almost 14-month high, from 1.63 percent on May 2 as investors bet the Fed will begin trimming bond buying. The surge is undermining Bernanke's unprecedented effort to hold down borrowing costs and combat 7.6 percent unemployment.The Fed chairman needs to persuade markets that tapering monthly purchases wouldn't bea prelude to aggressive policy tightening and ensure rising interest rates don't choke off the weak U.S. economic expansion, said Michael Gapen, a former section chief at the Fed Board's Division of Monetary Affairs."They are playing with fire when they want to talk about tapering but don't explain how it fits in with the rest of the exit strategy clearly," said Gapen, a senior U.S. economist at Barclays Plc. "You risk the premature tightening that you want to avoid."
South African platinum fund now holds 20 pct of world total
The NewGold Platinum exchange-traded fund launched by Absa Capital in late April already accounts for around 20 percent of total global platinum ETF holdings, data from the fund showed on Thursday.
Is Gold at a Turning Point?
There's no way to sugarcoat the dismal performance of the precious metals in recent months. But a revisitation of the reasons for owning them reveals no cracks in the underlying thesis for doing so. In fact, there are a number of new compelling developments arguing that the long heartbreak for gold and silver holders will soon be over.
Japan to become more like Cyprus – bail-ins for Japan banks
Japan's Financial Services Agency will enact new rules that will forced failed bank losses on investors, if needed, via a mechanism known as a "bail-in," according to The Nikkei. Mitsubishi UFJ (MTU), Mizuho Financial (MFG) and Sumitomo Mitsui (SMFG) are among those proposing amendments to allow them to issue the types of preferred shares or subordinated bonds that would be used in such cases, the report noted.
Can Bernanke Avoid a Meltdown in the Bond Market?
The past few weeks have given us a hint of what might happen when the Federal Reserve starts to reverse its super-easy monetary policy. Expect turbulence in financial markets, especially for assets that have moved far above normal or reasonable valuations. A return to normality eventually implies a benchmark 10-year Treasury yield of 4 percent or more. It won't happen all at once, but that's where we're heading. With yields at roughly 2.2 percent, there's a long way to go. This transition will mark a recovery of the equity culture and the cooling of investors' protracted love affair with bonds. To those of us who were paying attention back in 1994, it all seems quite familiar. Chairman Alan Greenspan had made it reasonably clear that the Fed was about to start raising rates. Even so, the news seemed to come as a shock. I remember being on a trip to Australia after the Fed made its move. From the scale of the sell-off in Australian bonds, you'd have thought an inflation panic was breaking out, or that the Fed had lost all credibility -- but no, it was simply that many people had invested heavily in Australian (and European and other developed-market) bonds to take advantage of the yield spread over U.S. Treasuries.In recent years, the search for yield has gone wider and deeper. The resulting deviation from normal valuations has been amplified by the shift of pension funds and insurance companies out of equities into fashionable bonds, and by the lingering effects of the great financial crisis of 2008 and 2009. It seems inevitable that some version of the shock of 1994 is going to happen again.
FM to Indians: Please, Don't Buy Gold
The government plans to announce a review of the foreign direct investment limits as also coal pricing and allocation to power plants and gas pricing by the end of June, finance minister Palaniappan Chidambaram told reporters on Thursday. The finance minister made an appeal to Indians to stop buying gold.
Inside Story: Gold, Trust, And The Federal Reserve - The Video Documentary
From the inside of the Federal Reserve's gold vault (where we are told one quarter of the world's bullion resides) to NYC's diamond district and the gold-dealers on the streets, this NatGeo documentary is a fascinating walk through the reality of trust, money, and gold. As the narrator notes, "the Fed's discretion is so trusted that few depositors have ever asked to see if their gold is still here," except of course Germany now that is, adding (from the exact opposite perspective to the man that runs the building) that, "for thousands of years people used gold as money... it's the perfect recyclable money...." The must-watch video then progresses to the reality of our financial world where he explains, the trillions in money that is transacted every day "used to be backed gold, but is now supported by the promise of our government... The fact that it all works based on trust alone is simply taken for granted," leaving the ominous question of "who is in charge" of that 'trust'? Cue Ben Bernanke - who answers the question of what the world would look like without a Fed... bank runs, stock market crashes, and financial chaos.
JP Morgan's Customer Gold Inventory Falls 61% Overnight!
EmptyVaultJP Morgan’s Eligible (Customer) gold inventory fell a whopping 61% today. That’s 6.7 metric tonnes of gold taken off of JP Morgan’s inventory. As you can see in the chart below, there are only 136,380 oz of gold left in Morgan’s Customer inventory. Basically, JP Morgan has a little more than 4 metric tonnes of gold left in its Eligible or Customer inventory. Furthermore, that 217,844 oz withdraw from JP Morgan’s vault accounted for 28% of its total inventory….meaning JP Morgan only has approximately 555,000 oz left in its total inventory.
Charles Oliver on BNN Market Call
Kinross Cancels Plan to Develop Ecuadorean Gold Mine
Kinross Gold Corp. (K), Canada's third-largest producer by revenue, decided to stop developing the Fruta del Norte mining project in Ecuador after it couldn't agree with the government on economic and legal terms.Kinross will take a charge of about $720 million in the second quarter, the Toronto-based company said yesterday in a statement. The company informed the government of its decision ahead of the expiry of the exploration concession on Aug. 1, Chief Executive Officer J. Paul Rollinson said in a phone interview."We've been at the negotiating table for two years," Rollinson said yesterday. "Sometimes the best deal is the one you don't sign, and we believe that's the case here."
Deutsche Bank opens 200-tonne gold storage facility in Singapore
In a bid to capture part of the surging demand globally for physical bullion, Deutsche Bank has launched its second-biggest gold storage vault in Singapore. Deutsche Bank has launched its second-biggest gold-storage vault in Singapore that can hold up to 200 tonnes of the metal as it looks to capture surging global demand for physical bullion.
China Approves Gold-Backed ETPs as Domestic Buyers Chase Bullion
China approved two domestic exchange-traded products backed by gold as global holdings of the precious metal in ETPs dropped to a two-year low.Huaan Asset Management Co. and Guotai Asset Management Co. received the China Securities Regulatory Commission's permission to start the funds, which will be denominated in yuan, said Liu Jianqiang and Li Yebin, spokesmen for Huaan and Guotai. They will be traded like stocks on the Shanghai Stock Exchange (SHCOMP), tracking movements of spot gold on the Shanghai Gold Exchange, Liu and Li said separately by telephone from Shanghai.
China Leaders Tested on Growth Resolve After Slowdown: Economy
China's new leaders face a test of their resolve to forgo short-term stimulus for slower, more-sustainable growth after May trade, inflation and lending data trailed estimates, signaling weaker global and domestic demand. Industrial production rose a less-than-forecast 9.2 percent from a year earlier and factory-gate prices fell for a 15th month, National Bureau of Statistics data showed yesterday in Beijing. Export gains were at a 10-month low and imports dropped after a crackdown on fake trade invoices while fixed-asset investment growth moderated and new yuan loans declined. "The May data will force China's leadership and the central bank to rethink growth and inflation -- it seems they were too optimistic about growth and too concerned about inflation," said Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd. in Hong Kong. "It's a test for China's leadership to see whether they are determined to reform."
Palladium, Platinum Rally on Potential Supply Disruptions
Palladium settled at a two-month high and platinum rallied to an eight-week high Thursday an concerns about a potential strike at a platinum mine in South Africa. Meanwhile, gold prices rallied on a sharp drop in the dollar, which retreated to a one-month low against the euro and the yen. Palladium for September delivery, the most active contract, rallied $5.85, or 0.8%, to settle at $762.30 a troy ounce on the New York Mercantile Exchange. This was the highest settlement since April 2.Members of the Association of Mineworkers and Construction Union this week voted to go on strike at platinum-producer Lonmin PLC (LNMIY, LMI.LN), but the union's president has asked members for more time to negotiate with the company's management."We want to avoid a strike," AMCU president Joseph Mathunjwa said. AMCU members say they are frustrated with the union recognition process at the mine after the group recently beat out a rival union for members. Union officials at AMCU and rival National Union of Mineworkers have been shot and killed in recent weeks.Lonmin stepped up security at its Marikana mine late Thursday as the company continued discussions with unions to try to stave off further unrest. The mine was the site of a violent strike last August when police killed 34 protesters, leading to strikes spreading across South Africa's mining sector.
Source: Wall Street Journal
RBI And Government Target Gold To Lower Current Account Deficit
(Kitco News) - The Indian government continues to target gold as a way to reduce its current account deficit and has now increased the duty on gold imports to 8% from 6%.The increase comes only a day after the Reserve Bank of India announced that it was expanding restrictions on gold imports on consignment basis to all nominated agencies including premium and star trading houses.In its continued attempt to dissuade people from investing in gold, Thursday, at an event in Mumbai, Finance Minister P. Chidambaram said that the RBI has advised banks against selling gold coins to retail customers. The minister also said that banks should not advise their clients to invest in gold.
U.S. bullion coin demand still at 'unprecedented' levels : Mint
(Reuters) - Demand for U.S. gold and silver bullion coins is still at "unprecedented" high levels almost two months after an historic sell-off in gold released years of pent-up demand from retail investors, the head of the U.S. Mint said on Wednesday. His comments are likely to allay concerns among some traders that frenzied buying by mom-and-pop investors since mid-April after prices plunged to two-year lows had started to fade. Their interest has helped prices recover to above $1,400 an ounce, providing key support to prices after institutional investors fled the futures market and exchange-traded funds. "Demand right now is unprecedented. We are buying all the coin (blanks) they can make," Richard Peterson, acting director of the U.S. Mint, said in an interview referring to the Mint's suppliers.
China’s Gold Imports From Hong Kong Slump on Quota Backlog
China's gold imports from Hong Kong slumped in April from a record as banks failed to get quotas fast enough to meet surging demand from mainland buyers keen to purchase bullion as prices fell into a bear market.Mainland buyers purchased 126,135 kilograms, including scrap, compared with 223,519 kilograms in March, according to Hong Kong government data today. Net imports, after deducting flows from China into Hong Kong, were 75,891 kilograms, from 130,038 kilograms a month earlier, according to Bloomberg calculations. "Some qualified banks used up their gold import quota in the first three months and weren't able to get the paperwork done fast enough to bring in bullion in April," said Tian Rui, vice president of the precious metals division at INTL FCStone Trading Co. "We might see higher imports in May because demand surged after the rout."
Silver Equities too cheap: Maria Smirnova
Maria Smirnova joined Sprott Asset Management in 2005 and currently co-manages the Sprott Silver Equities Class. I asked for her insight into the current market environment for silver and silver companies. “We must discern which companies could survive the downturn. This is not a market where junior resource companies can raise money unless they have something tangible to offer. For this reason, we are focusing on companies that are already producing metal. They should stand the highest chance of surviving the current weak environment for resource equities. “If the merits of a junior’s assets are weak, they may go bankrupt and be removed from the market. Companies with solid projects become takeover targets for mid-tier and major mining firms.”
Gold & Silver Soaring As Embry Hits 50 Years In The Business
Eric King: “Today celebrates half a century in the business for you. What are your thoughts at this point in the bull market because you have seen a great deal of market action in the last half a century in this business?” Embry: “Everything is so different from when I first started that it’s like I’m on a different planet. What’s happened with respect to high frequency trading, algorithms, just overall manipulation, these markets aren’t anything like they were 20, 30, 50 years ago, and I don’t think it’s for the better.
Impala Platinum Shaft Halted as About 3,000 Workers Go on Strike
Impala Platinum Holdings Ltd., theworld’s second-biggest producer of the metal, said about 3,000workers started an unauthorized strike after an employee wasdismissed from one of its South African mines yesterday. Workers didn’t report for duty at shaft No. 14 inRustenburg, northwest of Johannesburg, Bob Gilmour, a spokesmanfor the company, said by phone. “They are protesting thedisciplinary action,” he said. Spokespeople for the Association of Mineworkers andConstruction Union, which represents more than 50 percent ofemployees at Impala, didn’t answer calls. The National Union of Mineworkers didn’t know about the strike, spokesman LesibaSeshoka said by phone.
RBI bans gold imports with bank credit
MUMBAI: In what traders termed a near panic reaction to the sliding Indian rupee, the RBI banned import of gold by domestic consumers through bank credit and has made overseas purchase of the precious metal a cash & carry business.The move will nearly cripple retail jewellery trade and probably lead to higher smuggling into the country, putting the clock back by nearly two decades when socialistic governments restricted gold imports. A day after P Chidambaram said that"necessarily we will have to check' gold imports," the central bank barred gold importers using letter of credit from banks for gold imports.
JPM Vaulted Gold Slides To New All Time Low
Moments ago, the daily Comex update showed that yet another 15.4K ounces were withdrawn out of JPM, following the latest gold withdrawal, offset by a 49K ounces reallocation. This however is still short of the roughly 70K ounces due for delivery. Long story short, as of close of activity on June 3, the total gold held by the JPMorgan depository is now the lowest it has ever been at just 788,786 ounces and once again falling fast.
Another Strong Month for US Mint Gold and Silver Bullion Sales
American Silver EagleAlthough the United States Mint's gold and silver bullion sales receded from the exceptionally strong levels seen in April, the monthly sales for May handily exceeded year ago levels. The lower market prices for gold and silver continue to result in higher demand for physical precious metals.During May 2013, sales of the popular one ounce American Silver Eagle bullion coins reached 3,458,500. This was a decline compared to the prior month when 4,087,000 coins were sold. However, it represented an increase of 20.3% compared to the year ago period when sales were 2,875,000.The monthly sales total for Silver Eagles still may not be a reflection of total overall demand for the coins. The US Mint continues to conduct sales under their allocation program, which rations the available supplies amongst authorized purchasers. In January an initial burst of demand was strong enough to exhaust the Mint's entire inventory of coins.
Off the Charts: Sign of Excess?
The NY times notes that NYSE margin debt is at an all-time high and that margin debt to GDP ratio is above 2.25%. The other two times that margin exceeded 2.25% of GDP was in 2000 and 2007.
The American Consumer is Not Okay
The spin-doctors are hard at work talking up America’s subpar economic recovery. All eyes are on households… Don’t believe it…Over the 21 quarters since the beginning of 2008, real (inflation-adjusted) personal consumption has risen at an average annual rate of just 0.9%. That is by far the most protracted period of weakness in real US consumer demand since the end of World War II – and a massive slowdown from the pre-crisis pace of 3.6% annual real consumption growth from 1996 to 2007… Over most of the postwar period, this post-recession release of pent-up consumer demand has been a powerful source of support for economic recovery. In the eight recoveries since the early 1950’s (excluding the brief pop following the credit-controls-induced slump in the 1980’s), the stock-adjustment response lifted real consumption growth by 6.1%, on average, for five quarters following business-cycle downturns; spurts of 7-8% growth were not uncommon for a quarter or two. By contrast, the release of pent-up demand in the current cycle amounted to just 3% annualized growth in the five quarters from early 2010 to early 2011. Moreover, the strongest quarterly gain was a 4.1% increase in the fourth quarter of 2010. This is a stunning result… With the benefit of hindsight, we now know that the 12-year pre-crisis US consumer-spending binge was built on a precarious foundation of asset and credit bubbles. When those bubbles burst, consumers were left with a massive overhang of excess debt and subpar saving…
Gold Still Gleams for China’s Miners
Deal activity has declined since last year, but Chinese gold miners continue to buy mines, as they count on a recovery in gold prices. On Friday, Chinese gold miner Kingwell Group Ltd. said it plans to make an offer for more than half of Brazilian Gold Corp. , a Canadian mining firm with a major project in northern Brazil, taking the value of deals launched by Chinese companies this year to $436 million, according to data provider Dealogic. The total is a fraction of last year’s $2.9 billion, but it is sharply higher than the $260 million worth of deals from Canada, where some miners are seeking to sell noncore assets in response to the decline in gold prices. The nation is home to Barrick Gold, the world’s biggest gold miner, as well its smaller rival Kinross Gold Corp.
Source: Wall Street Journal
Platinum Near Two-Week High on South Africa Concerns
Platinum futures rose to the highest price in almost two weeks on Monday after a South African mineworkers union official was killed in a shooting, raising worries of fresh labor strife in the top platinum-producing country.The most actively traded platinum contract, for July delivery, was recently up $23.70, or 1.6%, at $1,485.50 a troy ounce on the New York Mercantile Exchange. Futures rose as high as $1,494 an ounce, the highest intraday price since May 21.A member of South Africa's National Union of Mineworkers was killed and another wounded in a shooting at the union's office at platinum miner Lonmin PLC (LMI.LN) on Monday.Platinum prices "received some support from the news," said Peter Hug, director of trading with Kitco Metals. "The South African situation needs to be watched closely."South Africa accounted for 73% of platinum mine output last year, according to Johnson Matthey, a specialty chemicals company and major platinum user. Production in South Africa fell 15% last year as strikes rippled through the industry following clashes at Lonmin's Marikana mine.
Marc Faber: The World Is a Mess, But Junior Mining Stocks Could Double
The world's economy is in tatters and safe havens are few and far between, says legendary contrarian Marc Faber. The banking crisis in Cyprus has shown that even bank deposits are not safe. The publisher of the Doom, Boom and Gloom newsletter, surveying the world from his perch in Hong Kong, discusses the impact of unemployment in Europe, the economic slowdown in China, asset bubbles and the turnaround prospects for precious metals miners. Faber also reveals his investment strategy for these volatile times in this interview with The Gold Report.
Sprott - This Is Why There Is Such A Massive Shortage Of Gold
Decline in GLD tonnage shows gold's strength, Sprott tells King World News Interviewed today by King World News, Sprott Asset Management CEO Eric Sprott discloses that rising gold price premiums in Shanghai precede gold tonnage reductions in the exchange-traded fund GLD. While news reports and market commentaries have been portraying the decline in GLD's gold tonnage as a sign of gold's weakness, Sprott says, it is actually an indication of strength and shows the shortage of gold among bullion banks.Sprott's evidence provides support for the contention made two weeks ago in an interview with King World News by Hong Kong fund manager William Kaye, who said GLD's gold was being looted and shipped to Asia in an arbitrage scheme.
'Bazooka at a knife fight' – the April 12 gold takedown – Arensberg
However, in looking at the maths behind the transactions Arensberg notes that the 124 tonnes would have amounted to around 40,000 COMEX contracts, while the position limit at that time of the month would have been 3,000 contracts for an individual trader. So, on Arensberg’s calculations he notes that “in order for the initial 124 tonne sale to have occurred “legally” it would have had to have been 14 traders, all with zero orders open, all acting simultaneously, all acting independently, in their own self-interest, without colluding with each other to “sell-for-effect” or conspiring to foment a price smash.” The chances of this happening are, to say the least, infinitesimal. Yet the Commodities Futures Trading Commission (CFTC), the regulatory body supposed to oversee such dealings is seen to be making no attempt to investigate.
China's Demand For Physical Quadruples Gold Premium
The premium that gold buyers in China pay to take immediate delivery of bullion has jumped four-fold in the last six weeks following the gold price 'crash'. As Bloomberg notes, even before the mid-April drop, China's gold imports jumped to a record in the first quarter as domestic demand (776 tons) outweighed domestic supply (403 tons). Images of consumers overwhelming jewelry shops were everywhere but the following chart clarifies just what the suspected gold manipulation did for demand as China's gold premium, while admittedly noisy, jumped from a long-run average of around $7 to over $32! As one analyst notes, the gold "premium is a function of demand and supply, and right now you could interpret the high premium in Shanghai as a sweetener to entice the overseas gold supply to flow into China."
BIS records startling collapse of eurozone interbank loans
Cross-border lending is falling drastically across the western world as banks slash exposure to Europe and bend to tougher capital rules, according to data from the Bank for International Settlements. Foreign bank loans fell by $472bn (£311bn) in rich countries in the fourth quarter of last year, contracting at an 8pc annual rate. The retrenchment was led by a collapse of interbank loans in the eurozone, where lenders in the creditor states continue to pull back from periphery countries.Volumes fell by $284bn across the eurozone, a 20pc rate of contraction. Belt-tightening by banks is a key reason why the region remains stuck in recession for the seventh quarter in a row.The BIS said in its quarterly report that the markets are “under the spell of monetary easing”, convinced that central banks will keep the asset boom going despite signs of “broad deceleration” in the US economy and fatigue in China.
India May Consider More Steps to Curb Gold Imports
NEW DELHI-India may consider more steps in early June to reduce domestic gold consumption if imports of the metal remain high this month, a senior finance ministry official said Thursday. Gold imports in April more than doubled in value from a year earlier to $7.5 billion as prices hit a two-year low. Imports are expected to be high again in May because of the wedding season and festival-related demand. "Imports have jumped substantially in the first fortnight of May. We are waiting for the complete month's data before taking a call if more measures are required," the finance ministry official told The Wall Street Journal. He didn't elaborate what steps the government may take, but said there is no plan to ban gold imports or to further raise the import tax. Industry executives said the government may limit the amount of gold imported by state-run agencies such as MMTC Ltd. 513377.BY -0.85% and State Trading Corp. of India Ltd. "It's very difficult to ban imports as gold is an emotional issue in India. Any such move will also lead to a rise in the smuggling of gold," the official said.
Source: Wall Street Journal
Hong Kong retail sales climb 21pc as gold falls
Plummeting gold prices brought the city an additional HK$4.45 billion in retail sales last month as consumers took advantage of the slump to snap up jewellery and watches, although jewellers expect the gold craze will now taper off.Hong Kong's retail sales jumped almost 21 per cent to HK$43.1 billion in April, the highest in 16 months, excluding February's skewed figure.A government spokesman said the rise was largely down to a 68 per cent rise in sales of jewellery, watches and other luxury goods because of a jump in gold-related sales.Gold contributed the bulk of the growth, given that the category only saw a sales increase of 10 to 11 per cent in the past months, the Hong Kong Retail Management Association said.
German Retail Sales Fall for Third Month as Unemployment Rises
German retail sales (GRFRIAMM) unexpectedly fell for a third month in April as unemployment rose, suggesting the recovery in Europe's largest economy is struggling to take hold.Sales, adjusted for inflation and seasonal swings, dropped 0.4 percent from March, when they fell a revised 0.1 percent, the Federal Statistics Office in Wiesbaden said today. Economists had forecast an increase of 0.2 percent, according to the median of 25 estimates in a Bloomberg News survey. From a year earlier, sales increased 1.8 percent.German unemployment rose more than economists forecast in May, even as it remained near a two-decade low, signaling six-straight quarters of recession in the euro-area are affecting the domestic economy. Still, business confidence rose this month for the first time since February and consumer confidence is set to climb to the highest since 2007 in June, according to market researcher GfK AG.
Pimco warns Carney may devalue sterling
Incoming Bank of England governor Mark Carney may try to devalue the pound by as much as 15%, according to Pimco. The Times reported that Pimco’s head of sterling portfolios Mike Amey said that subdued domestic growth will leave Carney short of options to boost Britain’s economy when he takes over in July.Amey (pictured) said Carney may attempt to depreciate sterling against North American currencies and emerging markets ones, but not the euro, in an effort to help British exporters tap into foreign demand.The Times reported Amey as saying: ‘He [Carney] is clearly not going to state this upfront, but he is going to try and keep sterling from going up and, probably, he’s going to want to see it go lower.’‘On a trade weighted basis I think another 10% to 15% is manageable.’
Cyprus bailout caused a mini-run on banks: ECB
The euro zone’s botched bailout of Cyprus caused a mini-run on banks in many of the currency union’s 17 members in April, exacerbating the decline in lending to the real economy, data from the European Central Bank showed Wednesday. The ECB said that the level of private bank deposits in most countries in the euro zone fell in April, although much of the money withdrawn appeared to find its way to banks elsewhere in the region. On aggregate, household deposits rose by 10 billion euros ($12.9 billion) on the month, extending the trend of recent months. The country most affected was inevitably Cyprus itself, where private deposits fell 3.2 billion euros ($4.11 billion), or 7.3%, in a single month to €41.32 billion. This figure reflects only actual deposit flight, as savers and businesses tried to get their hands on as much cash as possible under the capital controls imposed after the bailout was agreed on. It doesn’t include the write-downs that will be imposed on uninsured deposits in the system, a process that’s still continuing. The impact was also felt strongly in Greece, where private deposits fell €2.8 billion, or 1.6%, on the month. They are still nearly 10% up from their low point in June last year, however, reflecting a gradual return in confidence since the second restructuring of the country’s sovereign debt and the accompanying recapitalization of its largest banks.In Spain, deposits fell 1.5% to their lowest level since October and are down 6.6% from a year earlier, while in Slovenia, they fell 1.9% and in the Netherlands, they fell 0.8%.Switzerland moved a step closer to settling past legal issues over suspected tax evasion by Americans using Swiss bank accounts after the country’s cabinet agreed to a plan to allow its banks to deal directly with the Department of Justice. John Letzing reports. Offsetting those developments, banks in France, Germany, Belgium, Austria, Estonia and Slovakia all registered inflows in deposits, in line with their recent trend.
SOFAZ to increase gold reserves to 30 tonnes by year-end
Baku. Vahab Rzayev – APA-Economics. State Oil Fund of Azerbaijan will increase gold reserves to 30 tonnes by the end of 2013, said the Executive Director Shahmar Movsumov.Movsumov says the Fund has purchased 22-23 tonnes of gold so far and 7-8 tonnes have already been brought to Azerbaijan.Movsumov stated that SOFAZ is not concerned about changes in the prices of gold at the world markets and it does not intend to sell gold due to low price.
No saviour in sight as world credit cycle rolls over
This may be as good as it gets for the world economy. The HSBC index for the global business cycle hit a three-year high around Easter, and has since rolled over. “We see building evidence of a cyclical downturn,” said Fredrik Nerbrand, HSBC’s global asset guru. “We find it highly troubling that the eurozone is still marred in a recession at the same time as our cyclical indicators appear to have peaked.”…The Credit Suisse index of Global Risk Appetite has been flirting with the “euphoria” line, not far short of levels seen in 1987, 2000 and 2007…
Volcker Cautions Federal Reserve May ‘Fall Short’
“It’s fashionable to talk about a dual mandate, that policy should somehow be directed toward two objectives, of price stability and full employment,” Volcker told the Economic Club of New York. “Fashionable or not, I find that mandate both operationally confusing and ultimately illusory.”… “Asked to do too much, for instance to accommodate misguided fiscal policies, to deal with structural imbalances, to square continuously the hypothetical circles of stability, growth and full employment, then it will inevitably fall short,” Volcker said. Those efforts cause it to lose “sight of its basic responsibility for price stability, a matter that is within the range of its influence.”… “The implicit assumption behind that siren call must be that the inflation rate can be manipulated to reach economic objectives,” according to Volcker. “Up today, maybe a little more tomorrow and then pulled back on command. Good luck in that. All experience demonstrates that inflation, when fairly and deliberately started, is hard to control and reverse.”
Rosengren Says Significant Fed Accommodation Still Needed
“While we have seen some improvement in labor market conditions, significant accommodation remains appropriate at this time,” Rosengren said…“If the incoming economic data do not reflect improvements consistent with both elements of our dual mandate, I believe the Fed should be willing to increase asset purchases,” Rosengren said…
"...the market is manipulated!" according to GATA's Chris Powell
India to import around 350-400 tonnes of gold in Q2; Asia demand to hit record: WGC
LONDON: Asian gold demand from this April to June will reach a quarterly record as bullion consumers in the region take possession of supply freed up by selling from exchange-traded funds (ETFs), the World Gold Council (WGC) said on Wednesday. Gold prices fell to their lowest in more than two years at $1,321.35 an ounce in mid-April on signs of economic improvement in main markets and fears that central banks around the world could start to curtail their bullion-friendly policy measures.
U.S. sales outlook gives big boost to auto stocks
The prospect of U.S. vehicle sales soaring to record levels has auto stocks in high gear. Merrill Lynch analyst John Murphy predicted that sales could hit 18 million a year by 2018, a decade after the industry was in such horrible shape that two Detroit auto makers went into bankruptcy protection. Whether GM’s share price hits that level depends mainly on the U.S. market, which hit a trough of 10.4 million in sales in 2009 and is forecast to rise to well above the 15-million-vehicle level this year. Three key variables underpin the current recovery in U.S. sales and expectations that it will continue through 2020, said industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc. His own forecast is slightly less optimistic but still calls for sales to reach 17.5 million by 2018.
Asia gold demand to hit quarterly record, absorb ETF outflow-WGC
Asian gold demand from this April to June will reach a quarterly record as bullion consumers in the region take possession of supply freed up by selling from exchange-traded funds (ETFs), the World Gold Council (WGC) said on Wednesday.Gold prices fell to their lowest in more than two years at $1,321.35 an ounce in mid-April on signs of economic improvement in main markets and fears that central banks around the world could start to curtail their bullion-friendly policy measures. The council expects Indian gold imports to reach 350-400 tonnes in the second quarter, 200 percent higher than a year earlier and almost half of last year's total imports. This also compares to imports of 256 tonnes in the first quarter of 2013."We now definitely expect Indian demand to come in at the upper end of the 865 tonnes to 965 tonnes range that we had previously forecast for 2013 because of the effect of what happened in April," Grubb said.Grubb said as net imports of gold into China reached around 160-170 tonnes in April alone and physical demand shows no sign of abating, total offtake this year could reach more than 880 tonnes. This compares to a previous forecast of 780-880 tonnes.
Swiss PGM trade data: Russian palladium shipments revert to trend
The latest Swiss trade data for palladium revealed a reversion to the trend seen over the past year. Following the 295koz shipment in March, the largest since January 2010, palladium shipments from Russia in April were just 2% of the previous month’s release at 6.495koz, in keeping with the average release over the past 12 months at 6.8koz. Although the March data highlighted that an element of surprise still exists, consecutive months of elevated shipments would have weakened our constructive view on palladium. Russian shipments to other major ports have not revealed a surge in imports; Trade data for Hong Kong and the UK currently cover Q1 13, and although Hong Kong shipments are stronger y/y, they remain relatively subdued at 53koz. Russian palladium shipments to the UK over Q1 13 have fallen by 67% y/y to 28koz, although broad based shipments into the UK have doubled over Q1 13, which has more than offset the decline from Russia. China’s trade data run to April, and show a pick up in shipments from Russia; however, overall palladium imports are down 6% for the year to April, and the decline in shipments y/y from Germany, the UK and the US have been offset by an increase in palladium from Russia and South Africa.
Palladium Nears Eight-Week Highs On Brighter Demand Outlook
NEW YORK--Palladium futures rallied more than 5% Tuesday before retreating as gains in U.S. equities and stronger consumer confidence data bolstered the outlook for industrial demand for the metal. Palladium for June delivery, the most actively traded contract, was recently up $34.30, or 4.7%, at $760.75 a troy ounce on the New York Mercantile Exchange. The contract touched an intraday high of $764.90 a troy ounce, its highest traded price since April 3. "The better economic numbers show there's more recovery occurring and that there's going to be more demand for palladium and that helps to drive the price up," said Thomas Capalbo, a precious metals broker with Newedge.
Source: Wall Street Journal
Somebody Is Messing With The Gold Market
“Zero Hour” is what I call the moment when the price of real, physical gold starts to break away from the quoted price on the commodities exchanges. That is, the “physical price” becomes much higher than the “paper price” on CNBC’s ticker. The catalyst would likely be when a major metals exchange defaults on a gold or silver contract, settling in cash, instead of metal. To be clear, this did not take place when gold’s paper price plunged $150 in only two trading days, Friday, April 12, and Monday, April 15. What happened after that plunge hints at what the aftermath of Zero Hour would look like. The Chinese Gold and Silver Exchange nearly ran out of bullion on Friday, April 19. There were reports of a “massive wave of physical gold buying” in Dubai, and monthly sales of U.S. Gold Eagles fell just short of a 26-year high during April.
Govt looking at gold, platinum 'rescue plan': mines minister
South Africa may take unspecified "interventions" in the gold and platinum sectors as part of a state plan to maintain the viability of the industries, mines minister Susan Shabangu said on Tuesday."I have directed my officials to urgently explore all available avenues and develop a rescue plan," she said in a speech to parliament.There would be a "particular focus on both supply and demand-side interventions," she said.The world's top platinum producers, South Africa and Russia, agreed to attempt to cope with excess supplies of the metal through a memorandum of understanding signed in March during the BRICS emerging market powers meeting in Durban.Shabangu gave no other details as to what the interventions might involve.However, concerns about job cuts would likely prevent Pretoria from radically manipulating the platinum supply.
Austerity About-Face: German Government to Gamble on Stimulus
With the euro crisis refusing to relent, the German government is backing away from its austerity mandates and planning to spend billions to stimulate ailing economies in Southern European. But can the program succeed? The government's change of heart isn't just a sign of selflessness and compassion. More than ever, the chancellor and the finance minister are worried that Berlin's tightfisted, heartless, austerity-obsessed image could solidify throughout Europe and do irreparable political damage. An exporting nation that sells two-thirds of its exports to other European countries cannot be unconcerned about its image abroad, they reason, especially when its government fears that constant criticism from the center-left Social Democratic Party (SPD) and the Green Party, claiming that it is acting as the gravedigger of the euro and dividing the EU, could hurt it in the upcoming election campaign.
Russia, Kazakhstan Extend Gold Purchases as Prices Tumble
Russia and Kazakhstan expanded their gold reserves for a seventh straight month in April, buying the metal to diversify assets even as prices slumped the most in three decades.Russian holdings, the seventh-largest by country, climbed 8.4 metric tons to 990 tons, taking gains this year to 3.4 percent after expanding by 8.5 percent in 2012, International Monetary Fund data show. Kazakhstan’s hoard grew 2.6 tons to 125.5 tons, taking the increase to 8.9 percent this year after a 41 percent expansion in 2012, data on the website showed.
Sprott Is Bullish on Silver—and Gold—Equities
Sprott Silver Equities Class Co-Manager Maria Smirnova understands the power of leverage. She has seen the big impact even a slight increase in the silver price can have on silver producers. Every cent is multiplied and goes right to the investor's bottom line, giving the equities more upside than possible in a coin. That is why Eric Sprott increased holdings of silver equities in certain Sprott funds. Smirnova discusses five of these companies in this interview with The Gold Report.
A Divided Fed: FOMC Minutes Reveal Hawks Calling For QE Taper In June
It's a mad house. The FOMC appears utterly divided over key issues that seem to pull in different directions, giving arguments to both hawks and doves. "One participant preferred to begin decreasing the rate of purchases immediately, while another participant preferred to add more monetary accommodation at the current meeting," read the release, in a perfect example of what the debate must have been like. Another bearish comment had to do with the current market rally, which continues to break records and has made investors like David Tepper nervous. Noting that certain U.S. financial markets "were becoming too buoyant," a few Fed officials indicated they acknowledged the risk of creating an asset bubble. Fed Chairman Bernanke spoke of this in Congress on Wednesday as well, calling "financial instability concerns" the most significant possible cost of the Fed's ultra-accommodative monetary policy. While Bernanke acknowledged they risked "overheating the economy," he said it was worth it, as lower economic growth was even more dangerous.
Gold bar premiums in Asia hit record highs on China demand
Gold bar premiums hit new records highs in Asia on demand-driven shortages "Unless we see more supply coming into the market ... premiums will stay relatively high" Premiums for gold bars hit a record high in Asia on Wednesday as lower spot prices lured more buyers, mainly in China, the world's second biggest consumer of the precious metal, amid tight physical supplies.Premiums for gold bars in Hong Kong touched a new all-time high of $6 an ounce over spot London prices, up from $5 last week. Singapore premiums rose to $5. Banks in China were quoting up to $7 in premiums, two traders in Singapore said."China premiums remain high because of a shortage in supply of the physical metal," said a Hong Kong-based trader. "Unless we see more supply coming into the market, or spot prices trading much above the current level, premiums will stay relatively high."
China Flash PMI back into recession
China's May Flash PMI is out and the bad news keeps rolling with it sliding back into recessionary territory at 49.6 versus expected of 50.4. As you can see the internals are pretty lousy: Not disastrous but not great either.
Gene Arensberg's Got Gold Report
Big silver shorts cover madly Gene Arensberg's latest edition of the Got Gold Report has been posted in video format and it finds the big commercial traders unloading their short positions in silver to the lowest point in 13 years.
Japan’s mini crash: Blame China, not just Ben
The Nikkei 225 was clearly over-cooked. But just how over-cooked, we found out on Thursday when it fell 7.3 per cent. Paul notes that falls in the Nikkei >7 per cent are few and far between. There was the Tsunami, of course. And before that you have to go back to the big 1998 correction, and before that the full-on 1987 crash. But it also needs to be seen in context: Japan had seemingly been on an unstoppable roll.And, as the FT noted, it was apparently the small guys leading the charge. Unlike the rout of two years ago, which was led by institutional investors fearing a nuclear meltdown, brokers said that Thursday's dash for the exits was led by retail - or smaller - investors. Amari, Japan's economy minister, tried to calm everybody down: "Stock prices and the exchange rate are correlated, so it's natural that such a big fall in stocks brings about a swing to a stronger yen," Amari said. "We will continue to calmly proceed with pragmatic policies."
Source: Financial Times
Blockbuster in Gold
One of the key considerations in gold has been the redemption of more than 10 million ounces (over $15 billion) since year end from the world's largest gold Exchange Traded Fund, GLD. That is a major amount of gold and represents around 25% of the entire holdings in GLD (at year end). The gold ETF holds the largest privately held stockpiles of the metal. Consequently it has a pronounced influence on gold prices.It is widely reported that the 10 million ounces of gold that came out of the GLD have been bought by India or China, even though substantiating data is lacking. Let's only consider the facts that we know. The 10 million gold ounces that came out of the GLD equals roughly 100 million shares of GLD (one-tenth ounce per share). The 10 million ounces that are no longer in the GLD still exist and, therefore, must be owned by someone. We know that the reason the shares were liquidated in GLD was due to the rotten price performance that weighs on metals investors' minds. This tends to eliminate China as the big buyer; as such buying would cause gold prices to rise, not fall. The shares were sold and metal redeemed because the price went down, largely a self-reinforcing spiral. We know how much was sold and who the sellers were. What we don't know is the identity of the buyers. There is a good reason for that. The buyers have tried mightily to hide their identity.
Is the platinum sector imploding?
CAPE TOWN - Investors in platinum stocks have dumped their shares in a panic over the last six weeks, fearing that the platinum sector is in terminal decline. Since April the sector has fallen by 20%, bringing the cumulative decline for the year to 30%.
Treasury to take ‘extraordinary measures’ as U.S. hits debt limit again
On Sunday, the United States federal government yet again hit the debt ceiling. The Treasury Department has already confirmed that it will take "extraordinary measures" to make sure the government continues to pay its bills.In a letter to Congressional leaders Monday, Treasury Secretary Jack Lew told lawmakers that he will begin to use the civil service retirement and disability fund and a similar retirement fund for postal workers - otherwise known as the Thrift Savings Plan (TSP) - in order to generate more borrowing funds until Washington votes to raise the debt limit. The Treasury will also cease the sales of State and Local Government Series non-marketable securities until further notice.
Gold ETF Sellers Facing Tax Surprises at 28% Capital-Gains Rate
Investors who dumped shares in gold exchange-traded funds amid the biggest selloff in the metal in four years may be in for a shock: capital-gains taxes are higher than for stocks and bonds. "The ideal place to hold something like that is in an individual retirement account or other non-taxable account," Padula said. "That can save a lot of headaches." For taxable accounts, he prefers diversified commodities funds that carry the same capital gains rates as stocks and bonds. Commodities such as oil and agricultural products aren't deemed collectibles. Investors reach the top capital-gains tax rate if they make $400,000 or more annually, or $450,000 for married couples. Individuals earning more than $200,000, or $250,000 for couples, must also pay a 3.8 percent investment income tax as a result of the 2010 health-care law. For the highest earners, that may mean capital gains on gold ETFs are taxed at 31.8 percent.
Fed’s Bullard recommends euro zone consider quantitative easing
A top U.S. Federal Reserve official urged the European Central Bank on Tuesday to consider employing a U.S.-style quantitative easing programme to counter slowing inflation and recession in the euro zone. Instead, he recommended the ECB pursue an asset purchase programme. He expected this could be as effective as that employed by the Fed, which is currently purchasing $85 billon worth of bonds every month."For the euro area, I think you might want to consider the GDP-weighted quantitative easing programme", Bullard said, summing up his presentation.
Palladium Ready to Roar Again
With strong car markets in the U.S. and China, demand for the metal is up as supplies come under pressure.Palladium's bull market is about to get supercharged, as demand for the metal is set to exceed supply for a second year in a row in 2013.Almost 90% of the palladium produced last year went into catalytic converters for gasoline-burning vehicles; the metal scrubs pollution from exhaust gases. Demand from this segment rose 7.5% to a record level in 2012 amid strong car sales and stricter pollution controls, according to Johnson Matthey (ticker: JMAT.U.K.), the world's largest palladium processor. Unlike platinum and rhodium, palladium faces little threat from substitutes because it is the cheapest catalyst used by auto makers.The good news is set to continue in 2013, as car sales rev up in the U.S. and China, two countries that dominate the gasoline-engine car market. After a slow start hampered by February's Lunar New Year celebrations, Chinese car sales have kicked into high gear, posting double-digit gains in March and April. Meanwhile, U.S. auto sales continue to exceed expectations, with April's coming in at 11% above the year-earlier total.
South African mines cannot afford pay rises - Implats
South Africa's mining industry can ill afford to offer wage rises during talks that are about to start with a new and unpredictable union, so it may well face fresh strikes, Impala Platinum said on Friday. The AMCU leader, Joseph Mathunjwa, on Friday threatened to bring Africa's biggest economy to a standstill and the rand extended its slide after tumbling to a four-year low against the dollar on Thursday on fears of a strike at Anglo American Platinum (Amplats).More than 50 people have been killed in more than 12 months of unrest stemming from a turf war between the two unions."We are now going into uncharted territory," Engelbrecht said. "We are going to negotiate with a new union that we have never dealt with before on wages, so trying to predict the outcome would be foolhardy."
Silver Has Now Had An Insane Day, And Is Actually Higher After Plunging 9%
Silver got slammed last night when futures markets re-opened to begin the week.At its lowest level, the precious metal had fallen nearly 9% to $20.25 an ounce.Remarkably, it's already staged a big comeback, and it just turned positive on the day.In the past few minutes, it's screamed higher, and is now trading around $23.00, up 2.7%.Miller Tabak's Jonathan Krinsky offers some commentary on why the details of the sell-off may actually be positive for those bullish on gold and silver: The other interesting action, which started last night, has been the precious metals. After being down over 8% at one point, Silver has nearly recovered the entire decline. Gold has actually gone into positive territory. If you are a Bull on precious metals, there are some positives in that type of action. First, Gold did NOT make a new low with Silver overnight. The low of 1338 was slightly higher than the April 16th low of 1322. That could be considered a non-confirmation and “potential” bullish divergence. Also note that even as Silver made a new low by a wide margin, RSI does not appear to be doing so, another non-confirmation. Of course none of this means the medium or long-term trends have changed, they are still quite bearish. It does, however, open up the potential for a short-term bounce.
Why Silver Prices Fell Today then Recovered in Wild Trading
If you're wondering why silver prices fell sharply Monday, it looks like the answers lie in Asia.Silver prices staged a sharp recovery Monday after volatile trading that took the white metal tumbling 9% in 10 minutes to $20.25 an ounce, a level not seen since 2010.The steep selloff followed a spike in the Japanese yen against the dollar. Precious metals traders surmise investors were forced to sell silver to cover losses in the currency market. The result was a rash of automated sell orders.Indeed, the effect has so extreme and rapid, the Chicago Mercantile Exchange halted silver futures trading four times to restrain volatility and rein in excessive price movements, a move known as Stop Logic. Because volumes for silver are lower than for gold, they are more prone to sharp swings, up and down.Data shows more than 3,000 contracts in Comex silver futures sold in just 20 minutes during early Asian trading. Standard Bank in Tokyo confirmed an unidentified investor sold a sizable position of silver Monday morning.
Draft law to bail-in large depositors approved
Europe has moved a step closer to bailing in large depositors in future bank rescues, as happened in Cyprus this year.Last night, the European Parliament's economics committee approved draft legislation under which customers with more than €100,000 would be liable to fund a rescue package. Smaller savers, though, would still be protected.This new bank recovery and resolution mechanism is meant to end the era of taxpayer-funded bank rescues. Bank of England Deputy Governor Paul Tucker called it a milestone towards a world where governments were no longer willing to rescue banks that are “too big to fail”.Under the EU proposal, a bank would dip into large deposits of over €100,000 once it had exhausted other avenues such as shareholders and bondholders, Reuters explains.
Platinum industry faces a new time bomb
ANGLO American Platinum's (Amplats's) plan to retrench 6,000 workers, and the determination by the mining unions to fight it, would seem to cap what has been an appalling year for South Africa's platinum producers. But there is another time bomb ticking in the industry. Some of the mining houses', including Amplats's, best assets are on properties whose original owners are still waiting for restitution for land they were driven off during the colonial and apartheid eras.
Gold bar premiums hit record in Asia on supply constraints
Premiums for gold bars rallied to all-time highs in Hong Kong and Singapore on Thursday after bullion's steepest drop since its April sell-off fuelled another round of buying, constricting supply. Gold bars in Hong Kong fetched premiums of up to $5 an ounce over spot London prices, driven by tight supply and strong demand from China, the world's second-largest consumer after India. Premiums stood at $3 an ounce last week.
Gold Demand Trends First Quarter 2013
Total jewellery demand was up 12% year-on-year in Q1 2013, driven in the main by Asian markets. Jewellery demand in China was up 19% on the same period last year and stood at a record 185 tonnes(t). Demand in both India and the Middle East was up 15% respectively and in the US, demand showed a significant increase, 6%, for the first time since 2005.
So Much for Position Limits on COMEX Gold
Flash back to Friday, April 12, when the paper gold futures market was slammed with an enormous sell order in the early going of New York trading, following a “tenderizing” of the market right at the New York open. We have read and heard various descriptions of the initial sell order being as little as 124 tonnes and as much as 400 tonnes of gold equivalent – sold by a single source or by a group all at once – with the express intent to break the gold market.
Eurozone recession extends into 6th quarter
The recession across the economy of the 17 European Union countries that use the euro extended into its sixth quarter — longer than the calamitous slump that hit the euro area during the financial crisis of 2008-9. Eurostat, the EU's statistics office, said Wednesday that nine of the 17 eurozone countries are in recession, with France a notable addition to the list.
Is The South African Mint Short Of Gold?
Examining US trade data, we were surprised to see that South Africa’s $402 million trade surplus with the United States in January had turned into a $689 million deficit by March. Why? It turns out the $1.1 billion swing is entirely due to unusual shipments of gold from the US to South Africa in February and March.
JPM Eligible Gold Plunges To New Record Low, And Why It Could Have Been Much Worse
Back on April 25, in the aftermath of the latest epic precious metals takedown, we reported that something odd had happened: overnight, total Eligible gold held in the vaults of JPM dropped by 65%, or 260.8k ounces in one day, to a record low of only 141.6K ounces. Contrast that with the 2 million Eligible ounces the JPM vault at the basement of 1 CMP held when it reopened.
U.S. Banks Buy Gold Futures in Dramatic Position Change
As gold fell down to test the $1,300s U.S. banks very strongly reduced their collective net short positioning and came within a whisker of becoming actually net long for the first time since the 2008 panic. Clearly the U.S. banks, presumably including U.S. bullion banks, are not, that's not, positioning as though they believe there is a great deal more downside left in gold futures.
Record High Gold Bullion Sales at the Perth Mint
BullionThe Perth Mint of Australia achieved record breaking sales for gold bullion products in April, as lower precious metals prices spurred a huge leap in demand. Silver bullion sales also jumped to the highest level in six months.
Thinking in the same old way will not rescue the platinum industry
We would like to take a step back and assess how profitable platinum miners are, and calculate the expectations embedded in their market prices. Once we understand those expectations, we can focus on the best way forward.
Palladium Supply Deficit Likely To Continue Until 2017
South Africa is currently responsible for approximately 38 percent of world mine production. Norilsk Nickel's mines in Russia account for approximately 41 percent of world mine production and North America contributes approximately 14 percent to the world's supply. Palladium is currently trading at the highest levels since 2001 and is projected to remain strong through 2017 as the supply deficit is expected to persist in the future. The outlook for palladium over the next ten years predicts a return to historically high prices, strong fabrication and investment demand, and constrained supply.
Lonmin Sees Annual Shortfall of 200,000 Oz PGMs after Anglo Cuts
Lonmin PLC (LMI.LN), the world's third-largest primary platinum producer, said Monday it expects a "deepening market deficit" to emerge in platinum group metals after production cuts announced last week by Anglo American Platinum PLC (AMS.JO).
PGM Prices to Rise as Deficits Grow, Norilsk
Top world palladium producer Norilsk Nickel expects the global palladium deficit to rise by 25% in 2013 as supplies fall, according to the deputy head of sales arm Normetimpex. "We expect a significant deficit in the palladium market this year -- at about 1Moz," Anton Berlin said. Last year, the deficit was about 800,000oz.
Gold ETF Sees Its Biggest And First Inflow In 2 Months
The largest gold exchange-traded fund in the world, the SPDR Gold Trust (GLD), garnered investor inflows of $127 million on Thursday, the largest since March 19. It was also the first time investors added to their positions since that date, ending a remarkable string of redemptions spanning almost two months.
Miners won't stand for Amplats job cuts
Miners have vowed to halt operations at Anglo Platinum ‒ the world’s biggest platinum producer ‒ even if retrenchments are scaled back to 5,000 from the initial 14,000 previously announced, according to a worker affiliated with mining union AMCU. Amplats planned to axe 14,000 jobs and mothball two mines to return to profit, but industry sources said the final plan would be pared back, with as few as 5,000 jobs cut and an announcement expected by today, reports Fin24, citing Reuters. Workers have signalled that they will launch protest strikes even if the job cuts fall far short of the initial target. Amplats has been in talks with the government for months to hammer out a restructuring plan.
Gundlach: Have An Inflation Hedge, But Make It Silver, Not Gold
DoubleLine bond guru Jeff Gundlach‘s been talking bonds on CNBC this afternoon, and as he’s wont to to he’s wading into some other markets too like MLPs and, of course, Apple (AAPL) stock. Notably he says (somewhat begrudgingly) that in this “wacky” era of quantitative easing you need to have some sort of inflation hedge in your portfolio, but that it should be silver, not gold.
Silver Struggles to Stay Above $24 Despite Thriving Physical Demand
Demand for physical gold has surged since the yellow metal’s abrupt mid-April price drop, and physical silver demand has risen along with it. In fact, MarketWatch notes in a recent article that the US Mint has sold over 19 million 1-ounce American Eagle silver bullion coins so far this year, nearly 5 million more than were sold in the same period last year. The articles quotes Anthem Blanchard of Anthem Vault as saying that this increased buying has made physical silver harder to obtain than physical gold because “there is less above ground supply of physical silver than there is of gold.”
JPM Eligible Vault Gold Drops To Fresh Record
Two weeks ago we reported about one of the biggest daily withdrawals of eligible gold from the JPM gold vault, it not on an absolute basis, then certainly on a relative, when in one day over 260k ounces of gold were withdrawn, leaving a record low 141.6k ounces, or just over 4 tons of gold in the vault. Subsequently, we tracked the daily additions and withdrawals of gold from the vault to see if any other major withdrawal request would come, instead discovering instance after instance of JPM reclassifying Registered gold into Eligible, which is how the vault saw its eligible inventory rish back to 195K ounces as of yesterday, without any actual net additions or more importantly withdrawals. It seems the pause of withdrawals has ended, and as of yesterday, another delivery led to a withdrawal of 53,658 ounces, or 28.5% of the total, leaving a fresh record low inventory of only 137,377 eligible ounces in the vault.
South Korea Joins India-to-Europe Rate Cuts for Growth: Economy
Governor Kim Choong Soo and his board lowered the benchmark seven-day repurchase rate to 2.5 percent from 2.75 percent, the central bank said in a statement in Seoul today. Six of 20 economists surveyed by Bloomberg News predicted the move while the remainder forecast no change. Kim supported a cut after opposing one last month.
Mine Sales in Bear Market Brings Private Equity on Prowl
Mining companies led by BHP Billiton Ltd. (BHP) are holding the biggest ever sale of assets this year just as commodity prices head into a bear market. What's bad timing for the miners might be the opposite for private equity.About $48 billion of mines and assets are on the block, almost double last year's $23 billion of completed and pending deals, according to data compiled by Bloomberg."I haven't seen anything like it in more than 20 years," said Tim Schroeders, who helps manage about $1 billion in equities, including BHP and Rio Tinto (RIO) Group, at Pengana Capital Ltd. in Melbourne. "Mining companies have done pretty well buying assets at the bottom of the cycle and turning some over near the top, but this is completely the other way around."BHP, the world's biggest mining company, and London-based Rio Tinto are leading the global asset disposal and may sell businesses or stakes in mines for as much as $35 billion, according to Deutsche Bank AG. Private-equity firms are finding that tempting, raising almost $9 billion in 16 months for mine investment, more than the previous four years combined, according to data compiled by Bloomberg.
Tensions high as Amplats to unveil plan to cut jobs
Anglo American's platinum arm, under pressure from South Africa's government, could announce a restructuring plan as early as Thursday that will sharply scale back job losses as it tries to balance out cost cuts and the threat of labour unrest.Anglo American Platinum had planned to slash 14 000 jobs and mothball two mines to pull back to profit but industry sources have told Reuters that the final plan would be pared back, with as few as 5 000 jobs cut.
NY Fed Warns of Continued Risk to Financial System
The Federal Reserve Bank of New York said in a paper released Tuesday that a key short-term funding market remains vulnerable to destabilizing runs that can threaten the broader health of the financial system. "Limited tools are available to mitigate the risk of pre-default fire sales," the paper's authors warned. What's more, "no established tools currently exist to mitigate the risk of post-default sales."
China produces 90 tons, consumes 320 tons in Q1-2013
China's total gold usage reached 320.54 metric tonnes in the first quarter, China Gold Association said. According to CGA, purchases of gold bars surged 49% to 120.39 tonnes, while jewelry gained 16% to 178.59 tonnes. Gold consumption in China soared 26% in the first three months of 2013 from a year ago amid strong bullion sales and rising jewelry demand.
U.S. Mint Sales For April: Most Gold Sold In Mint History
the U.S. Mint's gold sales numbers show that April was the strongest month in the Mint's history. The U.S. Mint sold a staggering $311 million worth of gold in the month! Though an increase in sales was expected since the gold price dropped, these numbers blew away even the most optimistic estimates. Silver sales also were very strong and again breached the $100 million level and, as we mentioned in our previous article, are on pace to surpass total U.S. silver mine production by a significant amount.
Slovenian bank crisis could require $10.5-billion bailout
Investors and economists fear Slovenia will become the next victim of a bank blow-up, the latest in a string of banking woes in small European countries that have had a nasty habit of spinning out of control.Slovenia is not Cyprus – the assets of its banking sector are only 140 per cent of GDP, compared to 700 per cent for the Cypriot banks, which were rescued in March by a €10-billion bailout and a haircut on depositors’ bank accounts that may reach 60 per cent. But the Slovenian banks could still pose a grave risk to the economy and deliver another blow the tentative euro zone recovery if the rescue goes wrong.
Royal Canadian Mint Achieves Record Numismatic Revenue
The Royal Canadian Mint recorded revenue of $2.6 billion and pre-tax profits of $40.7 million for 2012. Both figures represented declines from the prior year, when revenue was $3.2 billion and pre-tax profits were $43.8 million. The highlight for 2012 was the numismatic segment which saw revenue surge by 56% to a record $145.1 million.
China’s Gold Consumption Jumps 26% in First Quarter Before Rout
Gold consumption in China, the world's largest user after India, jumped 26 percent in the first three months of 2013 from a year ago amid strong bullion sales and rising jewelry demand, an association said.Total consumption reached 320.54 metric tons in the first quarter, the China Gold Association said today in an e-mailed report. Purchases of gold bars surged 49 percent to 120.39 tons, while jewelry gained 16 percent to 178.59 tons, it said. Gold output in China, the world's largest producer, gained 11 percent in the same period to 89.91 tons, according to the association.
American Eagle Silver Coins Sales Soar in April
Mineweb reported that April sales for American Eagle coins leaped by 169 percent. Meanwhile American Eagle silver bullion coins sales for the month of April shot up nearly 169% over than last year from 1,520,000 silver ounces in April 2012 to 4,087,00 ounces. "Year-to-date sales of 18,310,000 have never been achieved so soon in a year," Coin News observed Tuesday. "Last year sales did not top 18.3 million until July 16."
Ex-Barrick CEO seeks mining assets with new firm
According to two people familiar with the matter, former Barrick CEO Aaron Regent has started a company to invest in mining assets, mainly in the Americas. Regent, 47, joins other prominent figures in the mining industry who are setting up, or plan to establish, companies to buy assets. They're doing so at the same time as some of the world's largest miners are selling off unwanted operations. Former Xstrata Plc Chief Executive Officer Mick Davis and Chief Financial Officer Trevor Reid are weighing plans to set up a privately backed mining fund, people familiar with the matter said last month.
This Is What Could Drive Platinum Higher, Very Soon
The likelihood of strikes this May and June by workers in South Africa's strategic mining sector may curb output from the world's largest supplier of platinum, presenting an upside risk for the precious metal, analysts said. The catalyst for any upswing may come as early as this week when Anglo American Platinum (Amplats) - the world's top platinum producer and a unit of Anglo American - reveals the outcome of talks with the government and unions about restructuring plans that may involve cutting up to 14,000 jobs and mothballing two mines in South Africa.
RBI move may deal a blow to gold jewellery business
On Friday, in the annual monetary policy for fiscal year 2014, the Reserve Bank of India (RBI) said banks can import gold only to meet the genuine needs of exporters of gold jewellery, implying that imported gold cannot be used to make ornaments for consumption in the domestic market. The central bank also restricted the facility of loans against gold coins per customer to gold coins weighing up to 50 gm. India is the largest importer of gold and more than half of the imported gold is used for wedding ornaments, according to WGC. Only 20% of the ornaments are exported, gold industry officials and bankers said. Unlike other countries, India has a liking for the yellow metal more due to its linkages with tradition rather than for mere investment.
Implats losing battle against costs, softer metal prices
A growing number of Impala Platinum’s (Implats’) shafts are making losses, or barely scraping by, because of the weak platinum prices, and the company warned on Thursday it was assessing the viability of these shafts. Implats, the world’s second-biggest platinum producer, said costs at its mines had ballooned by 23% to R15,957 per platinum ounce in the nine months to end-March 2013. Costs were pushed higher by inflation and the effect of last year’s debilitating strike that stripped 140,000oz out of the company’s output. "The steep drop in PGM (platinum group metal) prices has had a further significant impact on group profitability with a growing number of shafts either marginal or loss-making," the producer said on Thursday. "These units are being monitored on a continuous basis to determine their ongoing viability,"
Palladium Shortage Surged to 11 Year-High in 2012, GFMS Says
Palladium’s deficit rose to the biggest in 11 years in 2012 as strike action in South African mines curbed supply and demand expanded, Thomson Reuters GFMS said. Platinum slipped into a deficit for the first time since 2004.Palladium supply fell 4 percent to 8.19 million ounces as usage expanded 5 percent to 9.32 million ounces, the highest on record, the London-based researcher said today in a report. Excluding sales from Russian state stocks and investor selling, demand outstripped supply by 1.12 million ounces, the biggest gap since the 1.3 million-ounce shortfall in 2001, GFMS said.
What is Platinum Week?
During the third week in May each year, representatives of the platinum industry gather in London, England for what has become known as Platinum Week. London is a historically significant trading centre for PGM where many of the properties and technical applications of PGM were first developed. Platinum Week centres on an industry dinner sponsored by the London Platinum and Palladium Market (LPPM) which marks the anniversary of the inauguration of the London Platinum Quotation (the forerunner of the present London Fixings) in 1973.
WGC: Gold-Backed Bonds an Alternative to Italian Austerity
Gold-backed sovereign debt presents a good opportunity for Italy and other states facing significant financial challenges to regain the confidence of bond markets and lower funding costs, the World Gold Council said Thursday. Gold-backed bonds are underpinned by gold collateral. This could be bonds partially backed by gold, or a tranche-based structure developed to appeal to different types of investors. According to the WGC, while the outright sale of national gold reserves wouldn't meet the required level of funding for Italy, using gold-backed bonds could help the country raise around 80% of its two-year refinancing needs. "We are already seeing this use of gold develop in the private sector--two large clearing houses, LCH.Clearnet and ICE Clear Europe, now accept gold as collateral for the clearing of derivatives contracts. As a real asset, the use of national gold reserves as collateral is not inflationary," the WGC said in Thursday's report. "To a great extent, this is gold's purpose [and] gold's lack of credit risk and counter cyclical tendencies makes it an ideal asset to be used as collateral."
SA gold producers on wafer thin margins
South Africa’s high cost gold producers have very little margin for output mishaps at price levels around $1,400 per ounce for the metal; a dilemma exacerbated by the limited number of options at their disposal to rightsize operations in a tense labour and political climate. Company results for the fourth quarter of 2012 show a number of mines and shafts that would not break even at a gold price of $1,400/oz on a notional cost basis (NCE, which includes cash costs, capital expenditure and near mine exploration).
Gold Helps China May Day Sales Rise 20%
China’s recent manufacturing data might suggest a slow down, but one thing is for sure, the consumer story in the country is still firmly in place. This past May Day weekend saw retail sales rise by as much as 20%, most of it thanks to people shopping for gold jewelry. According to the Shanghai Commission of Commerce, retailers in the city reported total sales of 3.37 billion yuan ($539 million) between Monday and yesterday, up 18.8% from the same period of last year. Sales of gold jewelry and even gold bars rose as gold prices fell and started to look more affordable. This is also the start of wedding season in China. Sales of gold and jewelry jumped 108% from a year earlier, leading all other categories, the Shanghai Commission of Commerce said on Thursday.
Junior mining stocks see record insider buying
Those looking for even more evidence that corporate executives are smelling bargains in the junior mining sector should consider this: Insider buying on the TMX Venture exchange is near a record high. INK Research’s Venture indicator is at 715 per cent today, just 20 percentage points below its record peak of 735 per cent set on Oct. 27, 2008. That means there are more than seven stocks listed on the exchange with insider buying for every one seeing selling. It also marks a steep increase since early March, when the indicator was near 400 per cent. Such a high level of buying interest among officers and directors within their own businesses in the resource sector has correctly foreshadowed a recovery in share prices in the past: That high point of nearly five years ago came about six weeks before the Venture market bottomed on Dec. 5, 2008.
CME Chairman On Gold: “People Don’t Want Gold Certificates, They Want the Real Product”
"What’s interesting about gold, when we had that big break two weeks ago we saw all the gold stocks trade down significantly, we saw all the gold products trade down significantly, but one thing that did not trade down, was gold coins, tangible real gold. That’s going to show you, people don’t want certificates, they don’t want anything else. They want the real product ."
U.S. Mint Sales of Gold Coins Jump to Highest in Three Years
Sales of gold coins by the U.S. Mint rose to the highest since December 2009 after the price of the metal in April fell the most in 16 months. Last month, sales totaled 209,500 ounces, up from 62,000 ounces in March, data on the mint’s website show. The amount for December 2009 was 231,500 ounces. Silver-coin sales rose to 4.2 million ounces from 3.36 million in March. Demand surged at mints from Australia to the U.K... Perth Mint, which refines almost all of the nation’s bullion, said that demand jumped to the highest in five years after prices plunged, with the factory kept open through the weekend to meet orders. In Australia, buyers were waiting in lines half a kilometer (0.3 mile) long to get minted coins, and jewelry shops in India and China ran out of gold in a single day, Jason Toussaint, the managing director of investments at the London-based World Gold Council, said in an interview. Trading for the benchmark contract on the Shanghai Gold Exchange surged to a record last week, while premiums to secure supplies in India jumped to five times the level before the slump.
Perth Mint testifies to exploding demand for gold after price fall
Australia's Perth Mint, which refines nearly all of the nation's bullion, said that demand has jumped to the highest level in five years after prices plunged, with the factory kept open through the weekend to meet orders. There's been strong interest, including from the U.S., with buyers speculating that the metal will rebound from the decline, Ron Currie, sales and marketing director, said in a phone interview from Perth. Bullion fell 14 percent in the two days to April 15, the most since 1983, spurring buyers to increase physical holdings. Billionaire John Paulson, the biggest investor in the largest exchange-traded product backed by bullion, reiterated his bullish view on prices. Coin sales by the U.S. Mint are set for the highest month since December 2009, while premiums to secure supplies in India rose to five times the level before the slump. "We haven't seen levels like this since the 2008 global financial crisis," Currie said yesterday. "Compared to March sales, April sales have doubled or tripled," he said, without providing figures. Gold for immediate delivery traded at $1,473.05 an ounce at 8:01 a.m. in Singapore after losing 0.2 percent. While prices have gained 11 percent from a two-year low on April 16, they are still 5.7 percent below the April 11 close before the rout. Increased physical purchases may help to offset declining holdings in ETPs, which are on course for a record contraction in tonnage terms this month, according to data compiled by Bloomberg. Holdings have lost 168 tons in April, the data show.
Eric Sprott - Silver To Skyrocket Hundreds Of Dollars in Price
Eric King: “Eric, where do you see silver headed? Give me a number.” Sprott: “If gold goes to a new high this year, I think silver is going to a now high, which means above $50. Where is it ultimately going to go? I think it will be in the hundreds of dollars. If gold goes to $3,000, silver is (already) going to be (trading) $150 to $250. That’s a big, big gain from here. You are not going to get those kinds of gains in other instruments. You are not going to get that owning bonds or (general) stocks. The metals are the place to be. It’s so unfortunate that we’ve had this ridiculous selldown here in the face of all things that are great for gold. But there are reasons that people, the central planners, may have wanted to have it down. If it was the central planners that knocked it down, man did they lose that game because it just ignited the interest in (physical) gold and silver. I just think we are going to be many times higher than we are today. It’s going to be a long-run, we are going to have this bull market go on for another 5 to 7 years. I just don’t know how high the price is going to be (for silver). There is total insanity going on amongst the central planners right now. You tell me how desperate central banks are going to be and I can tell you how high the price is going to go.”
Gold Bears Defy Rally as Goldman Sachs Closes Short Wager
Commodities Hedge funds accumulated their second-biggest bet against gold on record just as prices rallied the most in 15 months on surging demand for coins and jewelry and Goldman Sachs Group Inc. ended a recommendation to sell. The funds and other large speculators held 69,726 so-called short contracts on April 23, within 0.6 percent of the all-time high reached six weeks earlier, U.S. Commodity Futures Trading Commission data show. The net-long position dropped 25 percent to 46,168 futures and options. Gold futures jumped 4.2 percent to $1,453.60 an ounce on the Comex in New York last week, the most since January 2012. Analysts are the most bullish in a month, with 15 anticipating higher prices this week. Eleven are bearish and three neutral, according to a Bloomberg survey. Holdings in global ETPs slumped 13 percent to 2,283.57 tons this year, the lowest since October 2011. Hedge funds expanded short wagers 17 percent to more than quadruple the average since 2006, when the CFTC data begins.
China Goes Gold Crazy. Why Now?
Mainland Chinese purchasers have been ferocious. First, they emptied stores in their own country. Caibai, Beijing’s largest gold merchant, had a queue 30 feet out the door on the morning of the 19th. “So many people in line,” remarked a customer in Nanjing, where one person splashed out 2.9 million yuan on ten gold bars each weighing a kilogram. Retailers ran out of stock in Guangzhou. The China Gold Association reported that on the 15th and 16th retail sales of gold tripled across China. Daily sales soared to five times the usual level at one retail chain. Volume on the Shanghai Gold Exchange, considered a proxy for the metal’s demand in China, surged, setting consecutive records of 30.4 metric tons on the 19th and 43.3 tons on the 22nd. The previous record was 22.0 tons on February 18 of this year. As Chinese emptied the shelves in their own country, they also went south and swarmed shops in Hong Kong, sometimes in groups. Chow Tai Fook, the world’s largest jeweler by market capitalization, said some stores popular with Mainland Chinese ran out of gold bars and that demand had not been as strong since the late 1980s.
JPMorgan's Eligible Gold Plummets 65% In 24 Hours To All Time Low
According to the Comex, JPM's eligible gold plunged from 402.4K ounces to just 141.6K ounces, a drop of 65% in 24 hours,and the lowest amount of eligible gold held at the vault on record, since its reopening in October 2010!...
Gold futures logs biggest one-day gain of the year
Gold futures jumped by nearly $40 an ounce on Thursday to log the biggest one-day gain of the year, supported by physical demand for the precious metal, prospects for easier global monetary policies and a weaker U.S. dollar.Thursday's rally has brought gold back to roughly 50% of the massive recent sell off, said Phil Storer, director of trading at Dillion Gage Inc., a precious-metals dealer and refiner.
Fed Debate Moves From Tapering to Extending Bond Buying
Debate among Federal Reserve policy makers is shifting away from the timing of a reduction in bond buying to the need to extend record stimulus. At their meeting last month, several members of the Federal Open Market Committee advocated slowing purchases and stopping them by year-end. Since then, seven have voiced support for maintaining the current pace, including five who vote on the policy making panel: Governor Daniel Tarullo, New York Fed President William C. Dudley, James Bullard of St. Louis, Chicago's Charles Evans and Boston's Eric Rosengren.
U.K. Royal Mint Gold Coin Sales More Than Tripled in April
Britain’s Royal Mint, establishedin the 13th century, sold more than three times more gold coinsthis month than a year earlier as prices declined. Sales are more than 150 percent higher than last month,according to Shane Bissett, director of bullion andcommemorative coin at the Royal Mint. Gold is down 11 percentthis month, heading for the biggest drop since September 2011. “Since the dip in the price of gold we have seen increaseddemand for our gold bullion coins from the major coin markets,and this presently shows no sign of abating,” Bissett said bye-mail in response to questions from Bloomberg. “The Royal Mintcontinues to supply to its customers and is increasingproduction to accommodate the higher demand.”
Continued Strong Silver Investment Demand Drove Annual Average Price to Second Highest on Record
Robust global silver investor demand was the dominant driver of silver prices last year, accounting for almost a quarter of total silver demand. Averaging $31.15 per ounce, 2012’s price level was the second highest on record, behind the average reached in 2011. While last year was a volatile year for most precious metals, globally, silver investment rose to a total of 252.7 million troy ounces (Moz). That figure represents approximately $8 billion on a net basis, substantially above the annual average of $1.2 billion over the 2001-10 timeframe, according to “World Silver Survey 2013,” released here today by the Silver Institute.Investors remained significant net buyers of silver in 2012, as evidenced by the 21 percent increase in implied net silver investment (which includes physical bar investment, exchange traded funds and fund activity on Comex) to set an all-time high of 160.0 Moz. By comparison, in 2004, the level of implied net silver investment was 5.4 Moz.
Central banks buy gold ahead of crash
Russia and Turkey raised their gold reserves in March, the International Monetary Fund said on Wednesday, increasing their holdings ahead of a spectacular plunge in prices this month which sent gold to its lowest in more than two years.But ahead of this turbulence some central banks increased their reserves. The Russian Federation, the world's 8th largest holder, lifted its gold reserve for a fifth straight month in March, adding 4.7 tonnes of gold to its reserves, which stood at 981.648 tonnes by the end of last month, the IMF data showed.Turkey raised its holdings by 33 tonnes to 408.874 tonnes, and South Korea increased its holdings by 20 tonnes in February to 104 tonnes.
Gold Rout for Central Banks Buying Most Since 1964: Commodities
Central banks bought the most gold since 1964 last year just before the collapse in prices into a bear market underscored investors’ weakening faith in the world’s traditional store of value. Nations from Colombia to Greece to South Africa bought gold as prices rose for an 11th year in 2011, highlighting the reversal of a three-decade-long bout of selling that diminished the world’s biggest bullion hoard by 19 percent. The World Gold Council says they added 534.6 metric tons to reserves in 2012, the most in almost a half century, and expects purchases of 450 to 550 tons this year, valued now at as much as $25.3 billion.
Worldwide Silver Shortage As Premiums On Silver Eagles Reach 40%
Not one to give up so easily, I proceeded to call a friend and colleague that runs Cornerstone Bullion out of Denver, Colorado. I have purchased bullion from Chad in person several times and have recommended his services to my readers. He has always been able to find supply for me and while the premiums have fluctuated, they have consistently remained within a few percentage points of the lowest-priced online dealers. This was his reply: Most everything is shipping early June from the Mint. Premiums are $4.99-5.50 right now, depending on quantity. It's pretty crazy out there right now. Junk silver is $5-6 over spot!I then went online to Tulving.com to see if they had replenished stocks, but all of their popular silver bullion products remain 'Sold Out' including silver eagles. APMEX appears to have inventory, but they are asking around $31 per silver eagle or roughly $8 over spot price. That is a premium of 36% to the spot price.eBay (EBAY) prices are even higher at around $32 per ounce for silver eagles or $9 over spot price. This is a premium of roughly 40%! Silver eagles from a few years back are selling for $700 or more per roll of 20, which is $12 over the spot price and a premium of more than 50%.
And Goldman closes its gold short recommendation
Following their absolutely stellar advice to short gold on April 10, Goldman Sachs announces on Tuesday it is now time to take profit on that position:We have closed our recommendation to short COMEX Gold, as prices moved above the stop at $1,400/toz. We have exited the trade significantly below our original target of $1,450/toz, for a potential gain of 10.4%. The move since initiation was surprisingly rapid, likely exacerbated by the break of well-flagged technical support levels. Our bias is to expect further declines in gold prices on the combination of continued ETF outflows as conviction in holding gold continues to wane as well as our economists’ forecast for a reacceleration in US growth later this year.
Source: Financial Times
U.S. Mint Runs Out of Smallest American Eagle Gold Coin
The U.S. Mint ran out of its smallest American Eagle gold coin after demand surged following the biggest drop in futures in three decades.Sales of the coins weighing a 10th of an ounce were suspended after demand more than doubled in 2013 from a year earlier, the Mint said yesterday in a statement. Total sales of American Eagles in April have almost tripled from a month earlier, according to its website.
Hedge Funds Plowed Into Gold as Market Looked Vulnerable
Hedge funds and other big speculators plowed new money into gold even after the precious metal posted a record loss in dollar terms this week, according to trading data on Friday [April 19] that also showed inflows for many other commodities.The net long money held by money managers across 22 U.S.-traded commodities rose nearly $950 million, or 6 percent, to $56.5 billion in the week ended April 16, according to Reuters calculations of data released by the U.S. Commodity Futures Trading Commission.The data surprised traders and analysts who had been expecting a huge outflow of money from gold and many other commodities this week after prices tumbled across markets on April 15, triggered by global economic worries."I think most people would be stunned looking at these numbers, particularly for gold, where there are still so many long even as the market sank like a stone," said Adam Sarhan, founder of Sarhan Capital in New York.The net long position in gold futures on New York's COMEX held by money managers, including hedge funds, rose by 5,495 contracts to 61,579, the CFTC Commitment of Traders data showed.Open interest in gold, a measure of market liquidity, rose by a staggering 24 percent.
Gold sale not a priority: Cyprus finance minister
Cyprus is not giving priority to a sale of gold reserves under the international bailout agreed this month and is still exploring all options to meet its side of the deal, Georgiades said in an interview. Georgiades also said he anticipated currency controls, imposed after a chaotic bailout last month and which led to a lockdown of the banking system for 15 days would be eased in "days or weeks".
Hedge funds add to bets that gold prices will rise: CFTC data
Data from the Commodity Futures Trading Commission's Commitments of Traders report released Friday showed that managed money, which include hedge funds and commodity trading advisors, took advantage of the recent, steep drop in gold prices to cut down their "short" bets - bets that prices will go lower.Managed money traders raised their net "long" positioning, or bets prices will go higher, by 21,675 contracts to 68,662 contracts net long, according to Gene Arensberg, editor of the Got Gold Report. Managed money, which had recently built up a record short position in gold, covered 12,411 shorts to show a "still high" 54,025 contracts of short gold futures, he said."Managed money covered a goodly portion of their huge short position and they increased their net long position, but they still hold a very large gross short position," said Arensberg.
Ignore COMEX Pricing – Silver Eagles Sold Out at Dealers, $33 on Ebay
The silver price has taken a beating over the past week, dropping 18% from $28 to $23. Or at least that is what the COMEX is telling us. In reality, the price of silver is nowhere close to $23. Don't believe me? Try to find silver coins for sale anywhere in the free market at that price. Supply shortages and rising premiums for silver coins are not isolated to just one dealer. APMEX is another large online bullion dealer that has sold out of monster boxes of 2013 silver eagles. They only list individual rolls for sale at around $630, which comes out to $31.50 per ounce.
Shortage of gold bars and coins in Dubai, says World Gold Council
World Gold Council, which has been tracking the global gold market pattern, has found that there is a shortage for bars and coins in Dubai which is creating a supply shortage.
Switzerland to Hold Referendum Banning its Central Bank from Selling Gold Reserves
Switzerland is to hold a referendum on a popular measure that would ban the central bank from selling its gold reserves and force it to keep at least 20 per cent of its assets in the metal. Under the terms of "Save our Swiss Gold", which is led by members of the ultra-conservative Swiss People's party, the Swiss National Bank would have to repatriate gold reserves held abroad and keep them at home.Governments in the eurozone's beleaguered southern periphery tend to hold a large part of their total foreign reserves in gold - the Italian central bank holds 2,451 tonnes, more than 70 per cent of its total reserves, while Portugal's holding of 383 tonnes accounts for 90 per cent.However, proponents of the Swiss measure flatly reject the idea of sales, arguing that disposals of gold reserves at low prices between 2001 and 2006, as well as more recently, have cost Switzerland billions of Swiss francs.They insist that the SNB's gold reserves, which stood at SFr49.5bn at the end of February, accounting for about 10 per cent of its balance sheet, are the best store of value available to the central bank.
Has gold hit bottom? As big investors rush out, consumers rush in
Gold traders are divided on whether bullion will extend declines after the biggest plunge in three decades generated ‘extraordinary’ buying from investors and jewellers. Fifteen analysts surveyed by Bloomberg expect prices to rise next week, 14 were bearish and a further five were neutral. Gold tumbled 13% in the two sessions through April 15, the biggest drop in 33 years, on concern European governments would follow Cyprus in selling off reserves, while an unanticipated slowdown in Chinese growth sparked declines across commodities. In the past four days, bullion has rebounded about 3.7% on the Comex in New York.
Speculators in futures markets caused gold price crash, says WGC
WGC: "It has become increasingly clear over the course of the past week that the fall in the gold price was triggered by speculative traders operating in the futures markets. Their short-term view of generating a trading profit is in stark contrast to the views of long term investors in gold, as evidenced by the massive wave of physical gold buying that began over the weekend and accelerated following Monday’s further decline. The surge in gold purchases is spanning markets from India and China to the US, Japan and Europe. Buyers are viewing this as an opportunity to purchase gold at prices not seen in the past couple of years."
Rule - More Evidence Of A Massive Run On Physical Gold
“We allocated about $5 million to the market yesterday to juniors. Ben Graham also famously said, ‘You shouldn’t buy a stock if you wouldn’t be delighted to see it fall 20% of 30% further in the next week so you can buy more cheaper.’ I’ve been tested by that at least 100 times in my career, Eric, and I’m probably going to be tested by it now. But the truth is that it has done me well over time to exercise that discipline. If you understand the absolute values of things relative to the expressed market values, buying extremely undervalued stocks works out well for investors, and that’s what I am trying to do... “I've been taking this opportunity to stock up on some yellow metal. Went to Hang Seng bullion counter yesterday. The line was out the door. It took an hour wait to see a teller. When I asked if people were buying in the dip or selling in panic, she told me that they haven't had one ounce of gold sold back to them all day. She told me they have sold more gold in 24 hrs than they normally do in 3 months. Yes, there was a lot of extra security. The guy in front of me bought over $1 million in gold. He paid in cash and walked out of the door with the (gold) bullion in a nike bag. Amazing.”
U.S. Mint’s Sales of Gold Coins Soar After Futures Slump
The U.S. Mint in April has sold 153,000 ounces of American Eagle gold coins, the highest in almost three years. Sales have more than doubled from March and surged sevenfold from a year earlier, data on the Mint’s website showed. The amount for all of May 2010 was 190,000 ounce. The China Gold Association said that retail sales soared on April 15 and April 16, and the All India Gems & Jewellery Trade Federation said that demand climbed to the highest this year. Sales surged from Australia’s Perth Mint, which refines almost all of the nation’s bullion, Treasurer Nigel Moffatt said. He didn’t provide precise figures.
Gold Gaining as Physical Demand Said to Be ‘Extraordinary’
Gold extended gains above $1,400 an ounce on signs that jewelers and other users of the precious metal are taking advantage of the biggest slump in prices in three decades. The premium for metal on the Shanghai Gold Exchange is up to as much as $10, in Turkey it’s almost $20 and in Asia it’s about $5, Bernard Sin, head of currency and metal trading at bullion refiner MKS (Switzerland) SA in Geneva, said today by e- mail. Last week, the premium was about $1 in Asia and Dubai, he said. “Physical demand is extraordinary”
The Secret World of Gold
Thursday, April 18, 2013 at 9:00 p.m. on CBC-TV The Secret World of Gold is a documentary exploring the power and politics of gold, a precious metal with more allure and fascination than any other. Valued for its permanence, beauty and scarcity, people will lie, cheat, steal and kill in the name of gold.
Gold coin sales in January totaled 150,000 ounces, the highest since mid-2010. If the current sales pickup holds, April's total will be the most since the frenzied three months after the mint's bullion sales program was launched in 1986. Sales in October 1986 totaled a record 692,000 ounces.
Source: Wall Street Journal
US Mint Sells Record 63,500 Ounces Of Gold In One Day
According to today's data from the US Mint, a record 63,500 ounces, or a whopping 2 tons, of gold were reported sold on April 17th alone, bringing the total sales for the month to a whopping 147,000 ounces or more than the previous two months combined with just half of the month gone.
Japanese See Gold as Hedge Against Stocks and Yen
When he woke up to the news of a collapse in gold prices, Yujiro Yamashita, 63, made his way to the posh Ginza district of Tokyo to make his first purchase of the metal in 20 years.Mr. Yamashita and other contrarian, individual Japanese investors understand that gold is a volatile investment, but they say it is better than the alternatives.They cite worries that the new high-octane economic policies of Prime Minister Shinzo Abe, designed to shock the Japanese economy out of nearly two decades of deflation, might prompt a collapse in the yen, or that the recent rally in stock prices might fizzle; they also point to heightened tensions on the Korean Peninsula."Bank deposits generate virtually zero interest," Mr. Yamashita said as he bought two gold coins worth almost $5,000 on Tuesday with some of the money he had made from the recent sale of his house. "Stock prices have jumped like crazy, but there are concerns about the risk of war," he added. "So I try to buy gold when I can."
Eric Sprott: Why a gold bug won’t throw in the towel
“I’ve always imagined that gold would hit a new high by the end of this year, over $1,900, so that is what I think,” Mr. Sprott said in an interview Tuesday, with gold bobbing below $1,400 (U.S.) an ounce. He compared the current pullback to 2008, when the price of gold fell 30 per cent in eight months amid the financial crisis to $712 an ounce, only to rally to $873 by the end of the year and more than $1,900 by September 2011.
Golden times for Perth Mint
Gold sales from Perth Mint, which refines nearly all of the nation’s bullion, have surged after prices plunged, adding to signs that the metal’s slump to a two-year low is spurring increased demand. “The volume of business that we’re putting through is way in excess of double what we did last week,” Treasurer Nigel Moffatt said, without giving precise figures. “There’s been people running through the gate.”
Cyprus Finance Minister Sees Gold Sale Within Next Months
The Cypriot government plans to sell part of its gold reserves within the next months, a decision that needs to be approved by the country’s central bank, Finance Minister Haris Georgiades said. “The exact details of it will be formulated in due course primarily by the board of the central bank.”
The Golden Ratio: Using Gold To Price Market Data
Gold Record High in Yen - Rush to Sell Jewelery, Buy Coins and Bars
Soros’ yen “avalanche” would appear to have begun with the yen having fallen by 9.5% against gold in 5 trading days since last Thursday leading to record nominal highs in the yen at over 0.1577 million yen per ounce this morning.The higher gold prices have led to a curious anomaly in Japan where the public has again been selling gold in cash for gold schemes, often due to being under financial pressure, while some Japanese investors and savers have diversified into gold coins and bars both of which have seen an increase in demand in recent days.“We are seeing buyback from the general public," a physical dealer in Tokyo told Reuters and there are reports of shortages of coins and bars and premiums increasing on bullion coins.There are also reports of shortages of bullion coins and bars in Thailand and in Singapore where premiums on certain bullion coins which are legal tender and have favourable tax treatment, such as American gold and silver eagles, have risen due to tightness in the market and delays of three to four weeks for delivery. Ms. Nakamura, a 50-year-old mother of two, told the Wall Street Journal that she is considering buying some new gold, even as she is cashing in her old holdings due to financial needs. She said she has been roaming department stores checking the price of gold jewelry and surfing online to compare prices. "I didn't think the [store] prices now are that expensive.
TD Securities: Data Shows Chinese Saw Gold Pullback As Buying Opportunity
The data show that 72 metric tons of the metal that came into Hong Kong was re-exported directly to China without altering or processing. "This is just below the December record high of 89 tons, bringing the total tonnage to 272 tons in just the four months from November 2012 to February 2013, and corresponds to a slide in prices from $1,740/oz to $1,560/oz," says Mike Dragosits, commodity strategist. "The pattern certainly displays an even greater demand for gold by China during price pullbacks, aside from the general uptrend in demand following the 2011 major rally in gold prices. It appears to us that China's demand for gold has not wavered in the face of all the negativity in the market surrounding the end to the gold bull run and continues unabated during price pullbacks."
Cyprus Central Bank Denies Plan to Sell Gold
The Central Bank of Cyprus denied that it will sell 400 million euros ($525 million) worth of its gold reserves as part of the conditions to Europe's bailout of the island state. Aliki Stylianou, a spokesperson at the central bank told CNBC on Thursday that there was "no such thing being discussed." "The decision to sell the gold is a decision to be taken by the board of the Central Bank of Cyprus (CBC). No such thing has been discussed or is in the process of being discussed. There are so many rumors flying about and this is just one of them," she said.
China Gold Imports From Hong Kong Rebound on Decline in Prices
Gold imports by China from Hong Kong jumped 89 percent in February, rebounding from a decline the month before, as lower prices lured buyers seeking the metal for a protection of wealth.Mainland buyers purchased 97,106 kilograms (97 metric tons), including scrap, from 51,303 kilograms in January, according to figures from the Hong Kong government yesterday. That's the fourth highest monthly total on record, according to data compiled by Bloomberg. Net imports, after deducting flows from China into Hong Kong, were 60,947 kilograms, from 19,580 kilograms a month earlier, and the highest since December.
Silver ETFs King of Q1 2013
Silver ETFs saw the strongest inflows of any single commodity in the first quarter of 2013, a recently released quarterly commodities report from ETF Securities reveals. Specifically, net new buying of silver products totaled $875 million as investors rotated into cyclical assets. North Americans were the top investors in silver ETFs in Q1, spending $732 million compared to Europe's $126 million. However, both regions clearly preferred the white metal over gold. But the data reveals that sentiment toward silver had not cooled off by the end of the quarter. "What's interesting is that the trend [of outflows from gold, inflows into silver] was really for the first 10 weeks of the year. But in the middle of March, once the Cyprus situation blew up and we started to see inflows back into the gold ETFs, we started to see outflows from the more cyclically oriented commodities, including silver," Brooks said.
Comex Gold Inventories Collapse By Largest Amount Ever On Record
A stunning piece of information was brought to my attention yesterday. Amid all the mainstream talk of the end of the gold bull market (and the end of the gold mining industry), something has been discretely happening behind the scenes.Over the last 90 days without any announcement, stocks of gold held at Comex warehouses plunged by the largest figure ever on record during a single quarter since eligible record keeping began in 2001 (roughly the beginning of the bull market). See chart below. Total drainage of physical inventories reached nearly 2 million oz.'s of gold, which at today's prices represent roughly $3,000,000,000 dollars. According to chart sage Nick Laird, this data indicates that, "Eligible stocks which are owned in LBMA/Comex good delivery form are being drawn down-which means they are being removed from the warehouses. As to how and why they are [being] removed, that is a mystery. [Up until now], eligible stocks were on the continual increase throughout the bull market. Now that trend has changed."
Hulbert Gold Sentiment at Record Lows
If you are sick and tired of reading Precious Metals sentiment updates on this blog, I do not blame you. As an author of a contrarian blog, my job is to report as an objective view as possible of sentiment indicators developing within the various asset classes. Right now, it seems that Gold is one of the few assets experiencing negative extremes worthy of attention, from a contrarian point of view. As I analyse the current market conditions, one of the only asset classes I tend to prefer today is the Precious Metals sector. I recent weeks I have hinted at the extremely depressed sentiment including the following important indicators: In early March COT reported Gold short positions reached the highest level in over a decade In early March Gold's Public Opinion reached one of the lowest levels in at least a decade Last week COT reported Silver short positions reached the highest level in almost two decades Last week Silver's Public Opinion reached one of the lowest levels in at least a decade. The latest development worthy of "decade extreme" or "record extreme" within the Precious Metals sector, comes to us thanks to Mark Hulbert Financial Digest. According to Mark's latest WSJ column, there has been a huge plunge in exposure of various Gold newsletter advisors.
Volcker: Central banks are too aggressive
Former Federal Reserve chairman Paul Volcker warned Monday about potential dangers from what he calls "unorthodox" and aggressive moves by central banks around the world.Central banks, including the Fed, could eventually inflict more harm by "what they're doing with their portfolio to save the world economy…Central banks are no longer central banks," said Volcker. "I think it gets dangerous when they lose sight of the basic function of the central bank." Volcker said that rather than trying to stay out of the market as much as possible and simply tinker from the sidelines, central banks have been aggressively trying to influence economic growth and even inflation…
US Mint Sells Nearly 1 Million Silver Eagles Monday, Begins Rationing Sales!
US Mint has updated April sales statistics for the first time since last week, and to no surprise, the Mint again reported more massive sales, with another 833,000 silver eagles reported sold Monday! The April total through 6 business days is now 1.645 million ounces, bringing the 2013 total to a massive 15.868 million ounces.In response to the continued massive demand for silver eagles, the mint also has begun rationing sales of silver eagles to primary dealers resulting in supply delays!Just as was seen in January, tight physical supplies have seen premiums on ASE’s skyrocketing over the weekend and throughout the day, as ASE’s are rapidly becoming as scarce as 90%!
Chart of the Day: Silver Shorts Surge
Today’s chart refocuses on the precious metal sector and in particular investor positioning towards Silver. Hedge funds and other speculators are now so negative on the metal, that the short positions have reached the highest level in the last 17 years (possibly even longer).So what does this mean?Judging by the historical price action over the last two decades, whenever speculators have held such enormous bearish positions, the price of Silver was either at or near a major low. Consider the following: As short bets reached 44,790 in 1997, a huge short squeeze doubled the price in coming months In 2000 and 2001 short bets reached over 44,000 triggering the start of a secular bull market Finally, short bets reached 45,163 in 2005 as Silver broke out, rallying for almost three years.
Jobs Report Reinforces Fed Wariness About Premature End to QE3
Friday’s jobs report shows that talk of an early end to the Federal Reserve’s bond-buying programs might have been premature.Fed officials have said they would continue buying long-term Treasury and mortgage bonds until the employment outlook improves substantially. One Fed official this week raised the possibility of a job market strong enough by summer to begin pulling back from the program. But the Labor Department report released Friday could raise doubts inside the Fed about how quickly the job market is healing and deflate that hope.
South Africa, Russia working on platinum 'task team'
South Africa and Russia, the world 's largest producers of platinum and palladium, are working together on a "technical task team" to ensure future demand for the platinum group metals."We are very worried about the future of the platinum industry. This cooperation will look at research and market development," a spokesman for South Africa's mineral department was reported as saying by the Wall Street Journal.South Africa accounts for around 80% of the world's mined platinum and Russia about 40% of mined palladium.
Fed Is Weighing a Reaction to Stirrings of Recovery
Some Fed officials have suggested in recent weeks that if economic growth continues on its present trajectory, the central bank should begin to roll back its economic stimulus campaign by the middle of the year, ahead of expectations. But the Fed’s chairman, Ben S. Bernanke, and his allies remain wary that another surprising spring will be followed by another disappointing summer. Janet L. Yellen, the Fed’s vice chairwoman, who is viewed as a potential successor to Mr. Bernanke, reflected that caution in a speech on Thursday. “I am encouraged by recent signs that the economy is improving and healing from the trauma of the crisis, and I expect that, at some point, the F.O.M.C. will return to a more normal approach to monetary policy,” she said, referring to the Federal Open Market Committee, which sets policy for the central bank. For now, she said, the Fed needs to remain focused on reducing unemployment.“In my view,” Ms. Yellen said, “adjusting the pace of asset purchases in response to the evolution of the outlook for the labor market will provide the public with information regarding the committee’s intentions and should reduce the risk of misunderstanding and market disruption as the conclusion of the program draws closer.”
Japan’s Debt Problem Visualized
Bank Of Japan Gives 'Perfect Answer' With Its New Massive Monetary Easing Plan
The Bank of Japan shocked markets on Thursday with a radical overhaul of its policymaking, adopting a new balance sheet target and pledging to double its government bond holdings in two years as it seeks to end nearly two decades of deflation. At Governor Haruhiko Kuroda's first policy-setting meeting, the central bank shifted its policy target to the monetary base -- the total size of cash and bank deposits -- from the overnight call rate, which is at zero to 0.1 percent. The decision marks a return to the BOJ's five-year quantitative easing policy that ended in 2006, when it flooded markets with cash targeting excess reserves that financial institutions parked with the central bank. To meet its new 2 percent inflation target, the central bank will boost asset purchases to double its holdings of government bonds and exchange-traded funds(ETF) in two years. In doing so, it will revert to open-ended asset purchases and buy over 7 trillion yen ($75 billion) of long-term government bonds per month, so that the balance of its bond holdings increase at an annual pace of 50 trillion yen. "The BOJ will conduct money-market operations so that the monetary base will increase at an annual pace of about 60 trillion yen to 70 trillion yen," the BOJ said in a statement announcing the decision. The monetary base is expected to expand to 200 trillion yen this year and to 270 trillion yen by the end of 2014, almost doubling from 2012 when it was 138 trillion yen, the BOJ said.
Why the PGM space is like uranium 10 years ago - Rule
Rick Rule believes the combination of lower grades, labor strife and inefficient mines with the relentless demand could pay off for platinum and palladium investors. An interview with The Metals Report.
Q1 2013 US Silver Eagle Sales Beats All Records
Only a week ago, we wrote how the physical silver investment demand is historically high. We got to that conclusion based on the physical holdings of all silver ETF’s combined, as well as the 2013 US Silver Eagle coin sales.Today’s US Mint figures show an astonishing increase of almost a million ounces over the past week. March 2013 stands now at 3,356,500 silver ounces sold. Replace the latest figure in the above table with the most actual one, and it becomes clear how this is the best first quarter ever (the figures before 2008 were consistently lower). Now we did an easy but interesting exercise. The first quarter of 2013 saw sales of 14,2 million ounces of US Silver Eagles. We compared this Q1 2013 figure with the total of each year since this giant gold & silver bull market started in 2001. The comparison needs no additional comment (but readers should feel free though to comment in the section below).
Getting Socked By Gold Fund Taxes? Consider These CEFs
Around this time each year, investors who own commodity funds without doing the (admittedly non-trivial) tax homework get a rude surprise.Gold exchange-traded funds are one example. An investment held for more than a year is treated as a collectible — as if you’re selling some prized coins. The applicable tax rate on a gain in the SPDR Gold Trust (GLD) in such cases is 28%.Morningstar’s Samuel Lee takes a look at this subject and others in connection with the SPDR gold fund today, offering a few alternatives for the tax-averse. Specifically, closed-end funds.First, on the GLD tax issue: As far as U.S. federal taxes go, the trust is treated as a “grantor trust,” meaning your ownership is taxed as if you owned the gold bullion directly. If you sell within a year of buying, your gains are taxed at ordinary income rates. Beyond a year, bullion, alas, is taxed at a special collectibles rate, which as of writing is 28%.And here are those CEFs:Intriguingly, U.S. investors in Canadian gold closed-end funds may be able to sidestep the 28% collectibles tax rate. The two biggest such funds are Sprott Physical Gold Trust Common (PHYS) and Central GoldTrust Common (GTU). Both funds are “Passive Foreign Investment Companies” for U.S. tax purposes, allowing unitholders to make a “Qualified Electing Fund” election each year. Under this tax treatment, the CEFs are taxed as if they were U.S.-based mutual funds, according to Moskowitz LLP, meaning capital gains on shares held for longer than a year are taxed as long-term capital gains. Of course, you should consult your tax advisor before you pursue this path.
Central Banks Bought More Than $3B In Gold In 2013: UBS
Data compiled by UBS shows central banks bought about 54 metric tons of gold in the first two months of the year; that’s more than 1.9 million ounces, or more than $3 billion at Wednesday’s prices (bullion stood at $1,606.30 an ounce by 3:36 PM in New York). South Korea, for example, announced it a purchase for 20 metric tons in February, while Russia is 19.2 metric tons deep in 2013. Other buyers include Kazakhstan (6.6 metric tons), Indonesia (1.9 metric tons), Bosnia and Herzegovina (1 metric ton), and Azerbaijan, which bought 2 metric tons after having zero gold reserves in over a decade.
Santelli On The End Of Paper Gold's Reign
Central Banks remain aggressive accumulators of the precious metal as we noted last night, as their actions outweigh their words; but as CNBC's Rick Santelli notes today, there is a big difference between the physical bullion they are buying and the 'gold bug' trading currently going on in our markets: I don't even look at gold as gold anymore since they securitized it. If things [went] badly in the world that I used to observe (as a gold bug); the gold would end up in the hands of the gold bugs. If things go badly now, they're going to end up with checks from ETFs! Sorry, it's not the same. The reign of [paper] gold as the Ayn Rand endgame, to me, that's over. Game, Set, Match.Which likely explains the incessant demand for precious metals from the US Mint over the past few months - as the other great rotation (from paper to physical) proceeds.
Rick Rule draws three profound lessons from the Cyprus debacle
"1) That ultimately, given the leveraged nature of the system, deposit insurance is just another social promise that won't be able to be kept.
"2) That the regulators are completely incapable of balancing their own budgets, never mind managing a business as complex as banking.
"3) You need to have some of your assets outside of the system. You need to own some things that they can't print and regulate. And my nominations for those things would be bullion -- gold, silver, platinum, or palladium."
Americans Start New Gold Rush: CNBC Survey
Gold fever continues to grip the nation. The CNBC All-America Economic Survey finds that Americans once again chose gold as the top investment choice, beating out real estate, stocks, savings accounts and bonds. The poll of 800 Americans finds that 35 percent picked gold as their best investment choice, down from 37 percent a year ago, but still beating real estate, which was the top pick of 27 percent of the public. That was followed by 21 percent who chose stocks.
Russia, South Africa Seek to Create OPEC-Style Platinum Bloc
Russia and South Africa, which together control about 80 percent of the world’s reserves of platinum group metals, plan to create a trading bloc similar to OPEC to control the flow of exports. “Our goal is to coordinate our actions accordingly to expand the markets for realization of these metals,” Russian Natural Resources Minister Sergey Donskoy said yesterday in an interview at a summit of leaders from Brazil, Russia, India and South Africa in Durban. South African Mines Minister Susan Shabangu confirmed that the two countries aimed to counter oversupply of platinum, and said possible measures could include taxes and incentives.“We’re not really controlling the market,” she said in an interview in Durban. “We want to contribute without creating a cartel, but we want to influence the markets.”Other platinum producers will be invited to join the bloc, which will be similar to the Organization of Petroleum Exporting Countries, Donskoy said. The aim will be to open up new markets rather than limit exports, he said.
USMint Sells Another 1 Million Silver Eagles, Set to Place 3rd Consecutive Monthly Sales Record!
Russia raises gold holdings for 4th month in February: IMF
SINGAPORE: The Russian Federation raised its gold reserve for a fourth straight month in February and Turkey added to its holdings for a third month, data from the International Monetary Fund showed on Tuesday.Russia added 6.998 tonnes of gold to its reserve, which stood at 976.952 tonnes by the end of February, reinforcing its ranking of holding the world's eighth largest official gold reserve."The continuous increase in gold holdings of central banks, especially those in developing countries, has been giving some support to gold, which is under pressure from the improving economic outlook," said Li Ning, an analyst at Shanghai CIFCO Futures.Gold, Besides Russia and Turkey, Kazakhstan, Azerbaijan, Belarus, Kyrgyz Republic, Mongolia and Ukraine also bought gold for their official reserves in February.
Insider buying of gold stocks surges to multi-year highs
According to INK Research, there are now seven precious metals stocks on the TSX with insider buying for every one with selling. That’s a near doubling of the ratio since mid-January – and represents a level of lopsided transactions that is usually only seen during major market peaks or valleys. “That is the type of insider buying we saw in the broad market during the height of the great financial crisis in late 2008 and early 2009,” points out Ted Dixon, CEO of INK Research. “A similar situation now seems to be in place among gold and silver miners.”
11 Billion Reasons to Expect a 200% Move in Gold Stocks Within Months
How does the prospect of making 200% in twelve months sound to you? Far-fetched? Well this is exactly what happened for gold stock investors between 2008 and 2009. The HUI gold stock index was intensely oversold in October 2008, and went on to soar 200% over the next year. That was back then, of course. But right at this very moment we’re looking at a near identical set up in the markets. Gold stocks are just as unloved and oversold. They’re at similar relative valuations. It won’t take much of a catalyst to see a serious move from here. And it’s certainly not just me banging the golden drum today… Last week in Hong Kong for the Mines and Money conference, I was extremely lucky to score a meeting with and interview keynote speaker and legendary precious metals expert, Eric Sprott… An Investing Legend. Eric Sprott is the CEO and Senior Portfolio Manager of Sprott Asset Management, currently managing $11 billion in the precious metals markets.
Bernanke: QE is an ‘enhance-thy-neighbor’ policy
The Federal Reserve’s bond-buying program is an “enhance-thy-neighbor” policy and not designed to spark a competitive devaluation of the dollar, Fed Chairman Ben Bernanke told an international audience on Monday.Finance ministers of many emerging market economies have complained about the easy policy stance in the U.S., saying it could was a modern-day equivalent of the “beggar-thy-neighbor” policies of the 1930s.But in a speech at the London School of Economics, Bernanke said that almost all G-7 industrial countries have similar easy monetary policy stances, which should mute any currency moves.“To the contrary, because monetary policy is accommodative in the great majority of advanced industrial economies, one would not expect large and persistent changes in the configuration of exchange rates among these countries,” Bernanke said.“Moreover, because stronger growth in each economy confers beneficial spillovers to trading partners, these policies are not “beggar-thy-neighbor” but rather are positive-sum, “enrich-thy-neighbor” actions,” Bernanke said.
FOCUS: Swiss Feb. Palladium Exports Most In 4 Years; Some Describe Trade Data As Bullish
Switzerland’s exports of palladium in February were the highest in four years and dwarfed imports, with much of the metal headed to the U.K. and presumably into vaults for investment demand, analysts said. One firm, TD Securities, said the data on balance points to “quite a tight supply picture” and supports its bullish call for the metal. “There is not as much metal coming into Switzerland as we’re used to seeing,” said Afshin Nabavi, head of trading with MKS (Switzerland) SA. “To me, that is more bullish news than bearish news. Imports did pick up. It’s still low, if you compare it to the numbers of last year and the year before.” Converting to ounces, Standard said that net exports in February were 489,383 ounces in February, compared to 44,696 in January. “By far the largest share of these exports went to the U.K., with 498,185 ounces moving to London vaults — as a consequence of investor-related flows,” said Marc Ground, commodities strategist with Standard. “On the import side, metal coming into Switzerland remains virtually non-existent as the historic supplier, Russia, has all but disappeared and speculation continues to mount that state stockpiles have diminished to near nothing, lending further support to prices into 2013,” Dragosits said. “TDS continues to favor palladium as the metal most likely to outperform all others.”
New platinum CEOs to navigate choppy waters
“Their best bet would be to cut output and re-establish profitability. However, they would need to get buy-in from government and labour — both of which seemed almost impossible to get in the year preceding the national election.“We’ve seen a lot of talk, but none of the desperately needed walk. Less output will be the first positive sign that the platinum group metals market is turning. Until then don’t expect any good metal price moves,” said the London analyst.Share prices of platinum companies took a pounding over the past two years, according to data supplied by Cadiz Mining Consultants.Amplats saw its share price drop by 43% since the start of January 2011 from R69.40 to R39.49 this week. Similarly, Implats lost 41.2% of its share price value from R23.49 at the start of 2011 to R13.69.The biggest losers were Lonmin and Aquarius, losing 61.3% and 86.45% of their share price value respectively over the same period.
Biggest Crisis Since 2008 Looms for South African Mines: Energy
South Africa’s mining industry, backbone of the continent’s biggest economy, is heading for its worst electricity shortage in five years in a threat to platinum and gold production and to the rand currency. State-owned Eskom Holdings SOC Ltd. is straining to meet demand from a growing economy as consumption is set to swell when the Southern Hemisphere winter drives the need for heat. Faults at a nuclear power plant near Cape Town are crimping supply, while imports are reduced because of flooding in Mozambique. “We do see a significant risk of power shortages,” Shaun Nel, director at the Energy Intensive User Group of Southern Africa, whose 32 members include the local units of BHP Billiton Ltd. (BHP) and ArcelorMittal. (MT) “We are seeing a significant number of factors that point to a system in distress.” A repeat of the January 2008 blackouts that halted Anglo American Plc (AAL) mines for five days and paralyzed factories would imperil South Africa’s 2013 growth forecast of 2.7 percent. The rand dropped to a four-year low this week, partly on concern that disruptions to mining will cut exports from the holder of the biggest-known reserves of platinum and chrome and fifth- largest gold producer.
Tarrant lawmaker seeks to create Texas Bullion Depository
Call it the Rick Perry gold rush: The governor wants to bring the state's gold reserves back from a New York vault to Texas. And he may have legislative support to do it. Freshman Rep. Giovanni Capriglione, R-Southlake, is carrying a bill that would establish the Texas Bullion Depository, a secure state-based bank to house $1 billion worth of gold bars owned by the University of Texas Investment Management Co., or UTIMCO, and stored by the Federal Reserve.
Swiss To Vote On Gold Repatriation
The Swiss National Bank (SNB) ... currently holds about 1,040 tons of gold reserves after gradually selling off at least 1,550 tons and now members of the Swiss People's Party, the far-right Swiss Democrats and the Lega dei Ticinesi movement, is confident a nationwide vote will be called (after they gathered 106,000 signatures) on stopping the sale of gold reserves held by the SNB. It also wants gold bars stored in the US to be returned.
Swiss PGM Data Suggest Russian Shipments Rise In Feb – Barclays
Switzerland trade data released Thursday show Russian palladium shipments of around 9,600 ounces in February, higher than the 6,400-ounce average seen during the fourth quarter of 2012 and the absence of shipments in January, says Barclays. They caution on reading too much into the stronger February data, saying that the “subdued shipments over the past year still suggest a much tighter supply picture for palladium.” Total palladium shipments to Switzerland more than doubled month-over-month, rising by 6% year-over-year, to 46,000 ounces, they say. The country remained a net exporter of palladium; exports jumped to 552,000 ounces in February, with nearly 514,000 ounces shipped to the United Kingdom. Total platinum shipments to Switzerland rose by 9% year-over-year to 107,000 ounces, almost doubling month-over-month. Switzerland remained a net importer of platinum, as platinum exports fell by 2% month-over-month and 53% year-over-year to 94,000 ounces, they say.
U.S. Fed keeps firm on aggressive stimulus even as job market improves
The Federal Reserve on Wednesday pressed forward with its aggressive efforts to stimulate the U.S. economy, saying it would take into account risks posed by its policies but also how much progress it was making lowering unemployment. Meeting just as turmoil in Europe took another turn for the worse, the central bank nodded to brighter economic signs in the United States but dropped a reference from its last policy statement that global financial strains were easing.“The committee will continue to take appropriate account of the likely efficacy and costs of such purchases as well as the extent of progress toward its economic objectives,” the Fed said in a statement after a two-day meeting.
India central bank may ban Gold coin sales by banks
The move is a clear indication that the central bank extending it's fight against gold to another level and likely to prevent banks from selling gold coins in near future . RBI early this week said it has undertaken a thematic study in respect of banks that are active in selling gold coins or wealth management products to examine whether there are systemic issues and to plug deficiencies and legal loop-holes, if any.
Gold Use in India Gaining May Weaken Attempt to Curb Deficit
Consumption may total 865 metric tons to 960 tons this year, compared with 864.2 tons in 2012, Somasundaram P.R., managing director of the World Gold Council for India, said in an interview in Mumbai. The gain in imports will match the increase in demand, he said. The country imported 860 tons last year, according to data from the council.
Platinum May Retest High After Double Bottom: Technical Analysis
Platinum may rise 4 percent to challenge this year’s high reached in February after forming a “double bottom,” according to Hiroyuki Kikukawa of Nihon Unicom Inc.
Do Western Central Banks Have Any Gold Left??? Part II
The past few months have been difficult for the gold investor as selling pressure in the gold futures market has set a decidedly negative direction for the price of the yellow metal. As fundamental investors, we always pay special attention to the supply and demand dynamics of gold and, recently, we have found it very difficult to reconcile lower prices with continued strong demand for physical gold. While the supply of gold has remained largely static, we have seen a steady increase in demand for the yellow metal. India and China have emerged as strong buyers, consuming over half of the mine supply in recent years. Central banks have switched from being sellers of gold to being net buyers, with their gold purchases in 2012 increasing by 17% to almost 535 tonnes. Exchange traded products (ETPs) around the world have continued to add to their gold hoards, as have institutions and private investors. Furthermore, central banks, such as South Korea and Russia, have added to their bullion reserves early in 2013, which points to sustained strength in demand. These facts are important because, over the past decade, the annual supply of gold has stayed flat at approximately 4,000 tonnes.
SPDR gold fund reports first net inflow in 6 weeks
The world's largest gold-backed exchange-traded fund, SPDR Gold Shares, said its holdings rose 0.22 percent to 1,222.16 tonnes on Tuesday, its first one-day net inflow in nearly six weeks. In volume terms, its holdings rose to 39.293 million ounces from 39.207 million ounces the previous day, their lowest level since July 2011.
Credit Growth Imperiled as Gold Lures Deposits: Corporate India
Indian banks are struggling to attract deposits to fund credit growth amid the slowest economic growth in a decade as customers buy assets such as gold and real estate to protect themselves against inflation. The credit-to-deposit ratio at lenders led by State Bank of India widened at the end of last month to almost 79 percent, or the highest since the central bank began reporting the data in 1998. Meanwhile, physical savings including gold imports, which slumped to 45 percent of household assets in the 1990s, may end this month at about 66 percent, Vishal Narnolia, a Mumbai-based analyst at SMC Global Securities Ltd. (GLBS), estimated.Indians have stashed 18,000 tons of gold in jewelry, coins and other forms, according to the website of Manappuram Finance Ltd. (MGFL), which extends loans secured by gold. Such a hoard would be worth about $923 billion at current international prices, compared with India’s $1.35 trillion banking system. ICICI Bank estimates the nation’s households hold $1.1 trillion of gold.
BIS concerned markets getting hooked on stimulus
"The fact that market dynamics have become ever more dependent on central bank and government stimulus is a cause for concern," Stephen Cecchetti, BIS economic adviser and head of the monetary and economic department, said in a conference call, presenting the BIS quarterly report on Sunday.
SA mining output rises
South African mining production rose 7.3% in January' marking the sector's first month reflecting a year-on-year increase since September 2012' although Nedbank - one of the country's "big five" banks - warns of a tough road ahead. Iron ore was the main contributor to the overall 7.3% production increase' accounting for 4.8 percentage points of the rise' with diamonds and coal each contributing 1.1 percentage points. On the down side' gold pulled the number down by 1.3 percentage points' with the "other metallic minerals" category was the only other negative contributor' at 0.7 percentage points.
Mechanisation for SA platinum mines a distant prospect
Rising wage costs and strikes have revived the arguments in favour of automating South Africa's loss-making platinum mines, but weak prices for the metal and tough conditions underground mean mechanisation remains a distant prospect. The rest of the mining industry, from copper to coal, has been transformed in recent decades by automation, unmanned trucks and remotely controlled equipment. That is in large part thanks to geology. In the cramped mines where platinum is found, the rock is still drilled, blasted and cleared by men. The platinum seams are damp, sweltering and claustrophobic places to work: men often drill in shafts so constricted that it is like mining under a table.
Recycling, not mining the future for PGMS - Lifton, King
According to Jack Lifton, and Byron King, the biggest new source for platinum group metals just might be what Jack Lifton calls "the rubber tire mine." An interview with The Metals Report. The Metals Report: Jack, what is behind the predictions that the platinum supply surplus will become a 400,000-ounce (400-Koz) deficit?Jack Lifton: The world's largest platinum and rhodium producer, has taken 400,000 Koz of platinum out of its 2013 schedule for its South African mines. While people might not think 400 Koz is very much, you have to keep in mind that in 2012, the total production of all of the platinum group metals (PGMs) was less than 700 tons. One ton of precious metal has 30,000 or 31,000 troy ounces of material, troy ounces being the traditional measurement in precious metals. That 400-Koz reduction equals 10–13 tons and represents as much as 2% of world production. Global production has been declining from its peak of 320 tons in 2006, and in 2012 was down to 300 tons. This is a serious reduction in a metal that is extremely rare.
U.S. dollar’s share of central bank reserves falls to 54% in 2012: World Gold Council
As the world’s central banks look to diversify their reserve portfolios, they’re cutting back on U.S. dollars and the euro and buying more gold, Japanese yen and Chinese yuan, according to a report released Wednesday from the World Gold Council.The U.S. dollar’s share of total reserves fell from 62% in 2000 to 54% in 2012, according to the report.Official reserves of global central banks grew to more than $12 trillion in 2012, from $2 trillion in 2000, the WGC said. Data showed a significant shift away from the U.S. dollar over that 12-year period, and the share of “other” currencies in reserves has tripled in absolute terms since 2008, it said. Central bank gold buying in the fourth quarter of 2012 marked the eighth straight quarter of net purchases by the official sector and the highest level since 1964, the WGC said. Gold’s percentage of total central reserve holdings remained constant at 13% between 2000 and 2012.“Building gold reserves in tandem with new alternatives is an optimal strategy as central banks remain under-allocated to gold and many attractive alternatives are either too small or, as is the case with the renminbi [also known as the yuan], not yet open to broader international participation,” said Ashish Bhatia, manager for government affairs at the WGC.
China May Limit Gold to 2% of Foreign Reserves, PBOC’s Yi Says
“If the Chinese government were to buy too much gold, gold prices would surge, a scenario that will hurt Chinese consumers,” Yi said today in a press briefing in Beijing. “We can only invest about 1-2 percent of the foreign exchange reserves into gold because the market is too small.”The nation’s reserves, which have surged more than 700 percent since 2004, surpassed the value of all official bullion holdings in January 2004 and rose to $3.3 trillion at the end of 2012, data compiled by Bloomberg show.
China's gold reserves stand at 1,054 tonnes
Vice governor of the People's Bank of China (PBOC) Yi Gang said Wednesday that the country's gold reserves now stand at 1,054 tonnes, adding that a massive increase is unlikely in the future."We need to take into account both the stability of the market and gold prices," Yi said when asked about whether China will increase the size of its gold reserves at a press conference held on the sidelines of the legislature's ongoing annual session.As the world's largest gold producer and importer, China produces about 400 tonnes of gold annually, as well as imports 500 to 600 tonnes of gold every year, according to Yi.
What, If Anything, Do Rising Silver Coin Premiums Foretell?
Silver dealers with a national reach are less affected by local market conditions, but they too have seen rising silver coin premiums, the latest evidence of such coming from USAGold in an email yesterday: Greetings clients and friends, Supply shortages continue in the physical silver market. Junk silver bags ($1000 face value combinations of silver quarters, dimes and half dollars) have all but disappeared. What was once the 'cheap way' to buy bulk silver has seen premiums jump to over 10% over melt. Meanwhile, the U.S. mint is rationing silver Eagles, pushing delivery times out to a month+ for all orders...
German Central Bank Doubles Reserves
FRANKFURT — In a profound signal of uneasiness about the health of the euro zone, the German central bank said Tuesday that it had nearly doubled the reserves it held to cover possible losses.The Bundesbank said it had raised its risk provisions, or the money it sets aside to cover losses like a default on euro zone bond holdings, to €14.4 billion, or $18.7 billion, from €7.7 billion a year ago. The bank’s profit for the year, which it transfers to the German government, was little changed, rising to €664 million from €643 million. “The crisis is not yet over despite the interim calm on financial markets,” Jens Weidmann, the Bundesbank president, said during a news conference.
Silver Investment Demand Surges 30% As Silver ETF Holdings Robust
Silver is outshining gold in the market for exchange-traded products as global demand for the white metal gets a boost from industrial consumption amid signs of an economic recovery, CPM Group Inc. said.The Bloomberg Chart of the Day shows silver tonnage in exchange- traded funds backed by the metal rose for four straight months, while holdings for gold ETPs dropped in January and February. Silver futures may jump 20 percent this year to $34.50 an ounce from yesterday's settlement of $28.808 in New York on investment demand and industrial use, said Rohit Savant, a senior commodity analyst at the New York-based research company."People have been buying silver both as a base and precious metal," Savant said in a telephone interview with Bloomberg. "Economic demand will push prices higher." Holdings in silver ETPs rose 3.6 percent in the two months ended Feb. 28, reaching a record 19,699 metric tons on Jan. 18, data compiled by Bloomberg show. Last month, assets in gold ETPs fell 4.1%. Sales of American Eagle silver coins by the U.S. Mint jumped to a record in January and more than doubled in February from a year earlier, the Mint's website showed. China's imports of the metal surged 14% in January, the biggest monthly gain since July.
Gold bar sales in China jump twofold during Spring Festival
Sales of gold, silver and jewellery pieces at the monitored establishments increased 38.1%. Though the Ministry did not identify bullion sales in value terms, it said the gold, silver and jewellery market reached a high consumption peak during the period.
Market Nuggets: UBS: Palladium Benefits From Prospects For China Emissions Control
Palladium has been boosted by calls at the National People's Congress to address air pollution in China, says UBS. "The emphasis on environmental issues bodes well for PGMs (platinum group metals), particularly palladium, as this translates into tighter emissions standards, which would in turn require auto catalysts with higher PGM loadings," the bank says. There is upside potential for palladium in the coming years since the gap between China's current standards and those of the developed world remains large, UBS says. Further, Chinese auto sales have been strong so far this year, the bank adds.
Private gold investors less bearish than funds in Feb -survey
London-based BullionVault, an online physical gold and silver market for individual investors, said its Gold Investor Index dipped to 54.4 in February from 54.9 in January. February's figure marked the lowest reading since September 2012. A number above 50 indicates more buyers than sellers.
Barron's: How to Play the Battered Gold-Mining Stocks
The gold-miner selloff, meanwhile, has left many looking cheap—but for good reasons, considering the uncertain outcome of their transformation. Investors willing to take risks should focus on the ones that have low costs, free cash flow—or will have it soon—and operate in more stable countries, says Avy Hirshman, a portfolio manager at Newgate Capital Management. His favorite: Canada's Yamana Gold (AUY), which operates in Brazil, Chile, Mexico, and Argentina. The company's cost of production is about $500 an ounce, well below South African miners' $800-plus, and it has been cutting its capital expenditures. Yamana had free cash flow from operations of $509 million during 2012's third quarter.
American Gold Eagle Bullion Coins Continue Winning Streak
Although sales of the United States Mint's American Gold and Silver Eagle bullion coins showed declines from the seasonal spikes seen in January, monthly sales levels were significantly higher compared to the year ago period. For the month of February 2013, American Gold Eagle bullion sales reached 80,500 ounces, across the four different sizes available. While this was down from the prior month when 150,000 ounces were sold, the amount is nearly quadruple the sales of 21,000 ounces recorded in February 2012. This also marks the fifth consecutive month that Gold Eagle bullion sales have exceeded the level of the year ago period.For February 2013, Silver Eagle bullion sales reached 3,368,500 coins. This amount was more than double the sales total of 1,490,000 which had been recorded in the year ago period. The latest monthly sales figure is down form the prior month total when a record breaking 7,498,000 coins were sold.
Silver Demand Surges To Record For February
We noted the strange divergence between the surge in physical demand for precious metals and the falling price of gold and silver yesterday and today; sure enough, just as they give back some short-term gains, we find that with one day left in the month, the US Mint has seen the largest demand for physical silver coins ever for a February at 3.37mm ounces. We are sure this all makes perfect sense somewhere in the leasing, backwardation, securitization, paper world of precious metals pricing but one thing appears sure, more than just Russia is backing up the truck for physical bullion.
Gold sales went "insane" on price dip, Coin Week tells Fox Business
Physical buying exploded on "buying opportunity" under $1,600, says exec David Lisot "The United States government sells the American gold Eagle and they release monthly numbers," David Lisot of Coin Week tells Fox Business in a Feb. 26 interview. "The numbers dropped off in the sales in December, which is typical during the holidays. January they were up over a 150,000 ounces. February's only halfway though -- they have over 60,000 ounces sold so far.
Mexico's audit office tells Bank of Mexico to verify gold held at Bank of England
Mexican financial journalist and agitator for accountability in government Guillermo Barba reports today that the Mexican government audit office has reprimanded the Bank of Mexico for failing to verify its supposed purchase of $4.5 billion of gold vaulted at the Bank of England. The audit office confirms Barba's complaint last year that the Bank of Mexico had purchased only "paper gold" at the Bank of England and had no idea of the number of bars it had supposedly purchased, nor of the purity of the bars.Barba writes that the audit office has recommended that the Bank of Mexico "make a physical inspection with the counterparty that has the gold under its custody, in order to be able to verify and validate its physical wholeness and the compliance with the terms and conditions of dealing with this asset." Barba adds that the Bank of Mexico does not want to do this but wants to trust the Bank of England not to play games with Mexico's gold.
Corrected-Commodities-Gold jumps as Fed Chief defends stimulus; oil slips
Bullion price jumps 1.8% as Fed chief defends stimulus program in Senate testimony.Gold's biggest rally in months stretched into a second day on Tuesday after the U.S. Federal Reserve chief defended the stimulus program that has stoked gold buying on inflation worries, but oil fell on concern about Italy's elections. ...Gold jumped 1.8 percent for its sharpest one-day gain since Nov. 6. In Monday's session, it rose nearly 1 percent for its biggest advance since Oct. 1.
Traders Bet Silver Will Shine
Silver has been weak for a long time, but yesterday the bulls were jumping in.The option paper hit in the ProShares Ultra Silver fund, which is double-leveraged to the price of the metal. More than 2,300 March 42 calls traded in a heavy buying pattern for $0.95 and $1 in volume well above the strike's previous open interest of 678 contracts, indicating new activity, according to OptionMonster's tracking systems.
Market Nuggets: ETF Securities: Investor Interest Persists In PGMs Despite Price Retreat
Investor interest for platinum group metals still appears strong, says ETF Securities. Despite a retreat in prices last week, platinum exchange-traded-product holdings remain at an all-time high, the firm says. "The fundamental outlook for PGMs remains solid, particularly palladium," the ETF provider says. "With South African supply disruptions a persistent threat and auto-catalyst demand showing signs of recovery, palladium appears well placed for gains. The latest Swiss statistics confirmed market suspicions that Russian palladium stocks might be close to exhaustion, as Russian exports of the metal were zero last month."
Huge gold short position detailed in Commitments of Traders
Analysts pointed out some interesting developments in the Commitments of Traders report released by the U.S. Commodity Futures Trading Commission. “The producer merchants, the category that includes the natural hedgers, are at their lowest net short position since 2008 at the same time that the managed money traders, the funds, are record short and at their lowest net long position since November 18, 2008,” said Gene Arensberg, editor of the Got Gold Report. “I have not seen the COT ‘rubber bands’ so over-stretched in opposite directions as they are now.”
US Bullion Coin Sales in February
U.S. Mint bullion sales on Monday were limited to American Silver Eagle coins. The 99.9% pure silver coins advanced 485,000 on the day to top 3 million for the month to date. In contrast, 1.49 million sold in February 2012.
Eric Sprott: Is the West Dishoarding Its Sovereign Treasure?
We are well into the financial crisis. Everyone’s trying to keep it together, even though it would appear from the reading of the economy things are not going well at all here. And everyone's ignoring things. But I think, in their hearts, the Central Bankers must know what they’re doing is totally irresponsible. And the tell of that irresponsibility – which is the debasing of the currencies – is the fact that real things will go up in value. This should be reflected in the price of gold and silver.
Russia, Turkey add gold holdings again in January -IMF NEW YORK
Russia and Turkey both raised their gold holdings for a second consecutive month in January, data from the International Monetary Fund showed on Friday, highlighting central banks' interest in diversifying part of their reserves into bullion.The IMF's monthly statistics report showed Russia added 12.2 tonnes to increase its gold reserves to 970 tonnes, solidifying the country's position as the ninth largest holder of gold in the official sector.Turkey raised its holding by 10.3 tonnes to 370 tonnes in January, propelling the country o 15th in the world gold-holding rankings, surpassing Venezuela.Ankara allows its commercial banks to use gold as collateral for loans, and changes to its balance sheet are often connected to such activity.In December, Russia added 19.9 tonnes to its gold reserves and Turkey added 45.6 tonnes.
Barclays: Swiss Trade Data Show No Palladium Shipments From Russia In January
Swiss trade data Thursday reveal that Russia did not ship any palladium to Switzerland in the first month of the year, says Barclays Capital. “January shipments have been as high as 572koz in 2006, but this year also contrasts with previous years where reduced shipments at year-end tended to be followed with a sharp increase in January, such as in 2008 and 2009,” Barclays says. “Shipments have picked up historically at the end of the year to meet quotas and although this is no longer an issue, the subdued shipments over the past year suggests a much tighter supply picture for palladium... We retain our conservative estimates for state stock releases from Russia at 200koz this year and our market balance forecast remains in a sizeable deficit at 681koz."
Gold’s Death Cross May Not Be So Bearish
Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research, points out gold prices have historically held up fairly well after the notoriously bearish formation takes place. Gold has averaged short-term gains up to six months following the 22 death crosses that have taken place since 1972, Detrick says. The 1.3% one-month average gain for gold following a death cross is better than the 0.9% average increase for the precious metal during any given one-month period. Throughout two-, three- and six-month time frames, gold gains following death crosses have slightly underperformed their typical returns. The biggest divergence has taken place over a six-month time horizon, when gold has averaged a 3.2% increase following death crosses, compared to a 5.7% average gain. What’s more, gold has historically had a more negative reaction to so-called “golden crosses.”
India bans gold jewellery from Thailand
In a fresh clampdown, India has officially banned the import of gold jewellery from Thailand. The government has announced that unless it is satisfied that gold jewellery imports from Thailand had received 20% value addition in that country, they would be banned. The authorities suspect that Indian importers are misusing the duty free pact with Thailand to import bullion from the South East Asian nation.
Traders rush to buy gold ahead of budget
Indian traders rushed to buy gold on worries the government may take more steps to curb soaring imports of the precious metal when it presents its budget later this month (Feb 28), while Chinese buying eased from levels seen earlier in the week."Most people in the market are concerned about policy changes in the budget," said a Mumbai-based dealer."Some sort of measures to curb gold imports can be there, that's why bullion players, especially jewellers, are increasing their stock levels."China, the world's second-largest gold consumer after India, has been actively buying since its markets reopened on Monday after a week-long Lunar New Year holiday during which gold dropped more than 3 percent. But buying interest has cooled since then even as gold has failed to rebound far from the six-month low."We still see physical demand coming in, but it's not very strong as the trend in gold is still bearish and people are more interested in other markets," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.
Market Nuggets: UBS Looks For Platinum To Slide Short Term But Lists 3-Month Target Of $1,850
850 "Given that our previous one-month PGM price targets were reached this month, they are now due for an update,” the firm says. “The PGM rally is starting to falter, although the underlying positive story remains intact. The combination of extended market length and potential downside risks to sentiment surrounding the U.S. automatic budget sequestration due in March could weigh on PGM prices in the short term. We therefore scale back our one-month platinum forecast to $1,650 from $1,720 previously. But we keep our one-month palladium target at $720, as this also indicates downside expectations given current price at $760. Three-month forecasts are maintained, at $1,850 for platinum and at $800 for palladium, on the back of expectations that investor interest should resume, and the correction is used as a buying opportunity.”
China's gold consumption up 9.35 pct in 2012
China's gold consumption amounted to 832.18 tonnes in 2012, an increase of 9.35 percent from a year earlier, data from China Gold Association showed Saturday. Consumption of gold jewelry rose 10.09 percent year on year to 502.75 tonnes, while those of gold bars and gold coins gained 12.22 percent and 21.63 percent, respectively, to 239.98 tonnes and 25.3 tonnes. But consumption for industrial and other uses saw a drop last year, the association said.
200 Million Ounces of Paper Silver Traded in 1 Minute Friday During Cartel Silver Raid!
Over a 5 minute period from 10:32-10:37 AM Friday, a massive volume spike (approximately 40,000 contracts) coincided with silver’s waterfall to $29.75- a fairly common occurrence during major cartel silver raids. Astonishingly however, 2 minutes after silver marked it’s low at $29.75, approximately the same volume traded over the next minute- spiking silver .15 off it’s low. It appears that a major buyer stepped in and took on the cartel at exactly 10:39 am on Friday 2/15 as nearly 40% of the day’s volume traded over a single minute.
German Automaker Reportedly Hoarding As Much Physical Silver As it Can Acquire
New signs of an extremely tight wholesale physical silver market have now emerged, as a first-hand account has revealed that one of the largest and most famous German automakers is hoarding massive amounts of physical silver inside one of the most secure vaults in Zurich, Switzerland.
Platinum Spikes Following Report Of People Shot Outside Amplats South African Mine
The tender (and doomed to fail) truce obtained several months ago between miners and platinum mining companies is formally over, following reports from Johanesburg that at least five workers have been shot outside of the the Rusetenberg mine by security officials during a standoff between rival unions.
How Long Can QE Continue?
Bullard discussed four considerations for QE3 going forward. First, while substantial labor market improvement is a condition for ending the program, Bullard said that "the Committee could consider many different aspects of labor market performance when evaluating whether there has been 'substantial improvement.'" These include the unemployment rate, employment, hours worked, and Job Openings and Labor Turnover Survey (JOLTS) data. Second, "Without an end date, the Committee may have to alter the pace of purchases as news arrives concerning U.S. macroeconomic performance," Bullard said, noting that "substantial labor market improvement" does not arrive suddenly.
China likely to launch gold ETF this year
China is likely to launch its first exchange traded funds backed by physical gold this year, boosting demand for the metal, according to the World Gold Council. "We do expect that you will see potentially more than one physical gold ETF in 2013," said Marcus Grubb, managing director for investment at the WGC, a lobby group backed by the mining industry.
Source: Financial Times
S.Africa's gold output falls 21.2 pct y/y in December
Refined gold is poured into moulds to be made into gold bars at South Africa's Rand Refinery in Germiston JOHANNESBURG (Reuters) - South Africa's gold output fell by 21.2 percent in volume terms in December, while total mineral production fell 7.5 percent compared with the same month last year, data showed on Thursday. Production of non-gold minerals was 5 percent lower, Statistics South Africa said. Production of platinum group metals plunged 23.2 percent in December.
Central banks last year bought most gold since 64
The world s central banks last year bought 534.6 tons of gold in 2012, the most since 1964, as global gold demand hit a record value level, the World Gold Council said Thursday in a quarterly report. Purchases by central banks for the full year rose 17% compared with 2011, while fourth-quarter purchases of 145 tons marked a 29% rise from the same period a year earlier. "Central banks move from net sellers of gold to net buyers that we have seen in recent years has continued apace," with official sector purchases across the world now at their highest level for almost half a century, said Marcus Grubb, managing director for investment at the World Gold Council. In value terms, total gold demand in 2012 was $236.4 billion, an all-time high, the council said.
India Remains Biggest Gold Buyer as Gap Between China Narrows
India remained last year’s biggest gold buyer, with the gap between second-largest consumer China narrowing to the smallest ever, the World Gold Council said.Indian usage jumped 41 percent in the fourth quarter, leaving the full-year total down 12 percent at 864.2 metric tons, the London-based industry group said today in a report. China’s consumption fell 0.5 percent to 776.1 tons, lagging India by 88.1 tons. The gap was 206.5 tons in 2011.The council said in November that China would probably overtake India as the biggest buyer on an annual basis. China’s economic growth slowed to a three-year low of 7.4 percent in the third quarter, before accelerating for the first time in two years in the three months through December. The two nations together account for about 52 percent of global consumer bullion demand, according to the council.
Zimbabwe gives producers two years to refine platinum locally
Zimbabwe's government told platinum producers on Tuesday to start refining the metal locally within two years, placing a further requirement on an industry already forced to surrender majority shares to locals. Producers would probably struggle to meet the new goal as refineries are very costly and can take several years to build, especially as Zimbabwe is suffering from a skills shortage. Mpofu also announced the government would reclaim some ground from mining companies, to be given to new investors in the sector. He said this move was meant to curb the holding of mining rights for speculative purposes and would start with the repossession of nearly 28,000 hectares of land from Implats' subsidiary Zimplats. "Following protracted discussions on the release of excess ground, my ministry is taking a step forward to repossess excess ground from Zimplats, measuring 27,948 hectares," Mpofu said.
G-7 Roils Currency Markets With Split on Concern Over Yen
Group of Seven policy makers roiled the currency markets they sought to calm amid conflicting messages on how much of an economic threat is posed by the weakening yen.The yen whipsawed as the G-7 appeared at first yesterday to signal joint acceptance of the Japanese currency’s recent drop, only to see its members offer contradictory interpretations of the group’s stance. One G-7 official said there’s concern about excessive moves in the yen, while the U.K. said the group wasn’t singling out an individual country or exchange rate. The yen initially fell, as the statement appeared to support Japan’s efforts to reinvigorate growth. But the currency later rebounded after a G7 official was quoted in Washington as saying the statement had been “misinterpreted” and was instead intended as a warning to Japan.The confusion will keep the spotlight on the threat of a so-called international currency war and Japan’s push for monetary stimulus when finance ministers from the Group of 20 gather this weekend in Moscow. Tensions may also constrain the type of stimulus that the Bank of Japan considers under its incoming leadership team, according to Barclays Plc.
U.S. gold bars and coins find new home overseas on Asian demand
Booming demand for gold as astore of wealth among Asian investors is driving physical goldbars and coins out of the United States and into Asia. A growing number of gold vaults for affluent Asians and newprecious metals investment products, particularlyexchange-traded funds, have led to an exodus of gold ownedprivately from the United States into emerging economic powerssuch as China. On Friday, Commerce Department data showed U.S. exports ofnonmonetary gold, which excludes central bank transactions,soared by 43 percent to $4 billion in December from the previousmonth. That's the highest total and the biggest month-on-month jumpin U.S. private gold exports since September 2011, when goldallied to a record high over $1,920 an ounce. Prices arecurrently about 14 percent below the peak at $1,643 per ounce.Hong Kong accounted for around $2 billion, or half of thenonmonetary gold exports for the month.
Gold smuggling soars in India
Gold smuggling incidents in the current fiscal year have zoomed over nine times as compared to the same period last year, with 250 tonnes coming in illegally. ``In 2011, India imported over 900 tonnes of gold and none of it came through smuggling. The hike in customs duty has not stopped the import of gold into the country. It has only changed the route as smugglers earn a profit of around $3,719 (Rs 200,000) on every kilogram of gold smuggled into the country,'' said Federation Chairman Bachhraj Bamalwa. Finance ministry data shows $175 million (Rs 9.4 billion) worth of gold was seized from more than 200 cases of smuggling during April to July 2012. This was a 272% rise from the level of the previous year. Moreover, between 2006-07 and 2010-11, gold seizure was almost nil, data from the directorate of revenue intelligence shows. They added that spot gold prices in India are 5.7% higher than in Dubai. Typically, gold is smuggled into India from neighbouring Dubai and Thailand. With every individual smuggling in an average of 5 kilo of gold per trip, the return on investment for each smuggler in one year amounts to almost 200%.
Impala Platinum: costs hit profits
Shares in Impala Platinum fell by as much as 3.4 per cent on Monday morning in Johannesburg following the release of a trading statement from the South African mining company detailing a fall in half-year profits. The statement, warning shareholders ahead of the company's half-year results on Thursday, says basic earnings per share for the six months ending December 31, 2012 are expected to be up to 79 per cent lower than the equivalent period in 2011, at 120-138 cents. In the statement, the company said the bulk of the expected decrease was caused by "a decrease in mine-to-market throughput [and] above inflation cost increases". A $68m writedown on payments owed to the company added to the losses. Implats, as Impala Platinum is known, is the world's second largest platinum miner, producing 1.45m ounces in the 2012 financial year, and was impacted heavily by industrial disputes across the South African mining sector over the past year. Another analyst, who also wished to remain anonymous, said: "Most people expected the results to be worse. But the key factor is that production is still weak. I think they may announce cuts on Thursday as a result of the cost increases and as a big, profitable producer that's a big message to government."
Putin Turns Black Gold to Bullion as Russia Outbuys World
When Vladimir Putin says the U.S. is endangering the global economy by abusing its dollar monopoly, he’s not just talking. He’s betting on it. Not only has Putin made Russia the world’s largest oil producer, he’s also made it the biggest gold buyer. His central bank has added 570 metric tons of the metal in the past decade, a quarter more than runner-up China, according to IMF data compiled by Bloomberg. The added gold is also almost triple the weight of the Statue of Liberty. For now, with more than five years left in Putin’s term, Russia plans to keep on buying. “The pace will be determined by the market,” First Deputy Chairman Alexei Ulyukayev said in an interview in Davos, Switzerland, on Jan. 25. “Whether to speed that up or slow it down is a market decision and I’m not going to discuss it.”
CME to cut margins on gold, precious metals, copper futures
CME Group Inc will broadly cut margins on precious metals including gold, silver and platinum as well as on copper, effective after close of business on Tuesday, Feb. 12.CME, the biggest operator of U.S. futures exchanges, said late Thursday it lowered initial margins on the benchmark COMEX 100-ounce gold futures contract by 10 percent to $5,940 per contract from $6,600.It also cut maintenance margins by 10 percent to $5,400 from $6,000.On Dec. 28, CME trimmed initial margins on gold futures by 11 percent.Futures exchanges often adjust margin requirements to protect themselves against the risk of participants defaulting in response to changing market volatility.CME also cut the margins on the COMEX 5,000-ounce silver contract by around 14 percent, and those of the NYMEX 50-ounce platinum futures contract by about 13 percent.In addition, CME lowered margins for COMEX 25,000-lb copper futures by around 11 percent.
China's 2012 gold output up 12 percent - paper
China's gold production rose for a sixth consecutive year and hit a record 403 tonnes in 2012, keeping its ranking as the world's largest bullion producer, the Shanghai Securities News said on Thursday. Hong Kong's net gold flow to mainland China jumped 47 percent in 2012 to a record high of 557.478 tonnes, indicating robust demand in China.
250 tonnes of gold smuggled into India in 2012: Jewellery body
In 2011, India had imported over 900 tonnes of gold and none of it came through smuggling, the representatives of the gems jewellery industry told a press conference. In 2012, the imports were 950 tonnes, out of which 250 tonnes came through smuggling. “The hike in customs duty did not stop gold imports into India, but only changed the route as smugglers earn a profit of around Rs 200,000 on every kilogram of gold smuggled into the country,” said GJF Chairman Bachhraj Bamalwa.
CME Cuts Gold, Silver Margins
CME once again cut margins in a slew of products, most notably gold and silver, by some 10% and 14%.
Platinum Extends Rally on Supply Concern Amid Cutifani Comments
Mark Cutifani, who’ll become chief executive officer of Anglo American Plc in April, said today there are “a number of issues” in the platinum industry, according to comments before a speech in Cape Town. “Platinum is at the forefront of precious metals investors’ minds because of supply issues in the world’s biggest producer,” said Gavin Wendt, a senior resource analyst and founder of Mine Life Pty in Sydney. “There’s sound reasoning for people to be putting their money into platinum.”
Swiss Palladium Imports From Russia Seen Lowest in 22 Years
Switzerland’s palladium imports from Russia, the biggest producer of the metal, dropped last year to the lowest level since 1990, according to Barclays Plc.Shipments fell by 72 percent to 154,600 ounces in 2012, the bank said today in an e-mailed statement. Switzerland imported 6,462 ounces from Russia in December, little changed from the previous month, the Swiss Federal Customs Adminiration said by e-mail today. The customs data showed only figures for last year.Sales from Russian inventories, a state secret, were 1,000 ounces in 2010, accounting for 14 percent of global supply, and probably totaled 250,000 ounces last year, London-based Johnson Matthey Plc estimated in November. The sales accounted for most of the remaining reserves, it said at the time. Palladium is mostly used in pollution-control devices in cars.
US Mint Sells 8.2 Million Silver Eagles Over First 17 Days of 2013 Production!
2013 Silver EagleAfter selling an all-time monthly record of 7.498 million Silver Eagles in January, the US Mint has picked up right where it left off in February once it began reporting sales figures again, announcing nearly 3/4 of a million silver eagles were sold Monday. The Mint has now sold a whopping 8,173,500 silver eagles during a mere 17 business days in operation during 2013, nearly 25% of the entire annual sales for 2012 of 33 million!
China Gold Imports From Hong Kong Gain to All-Time High in ‘12
Gold imports into mainland China from Hong Kong surged 94 percent to an all-time high last year as rising incomes in the world’s second-largest economy underpinned increased demand and helped the metal to post a 12th annual gain. Mainland China imported 834,502 kilograms (834.5 metric tons), including scrap and coins, compared with about 431,215 kilograms in 2011, according to Bloomberg calculations based on data from the Census and Statistics Department of the Hong Kong government. Imports in December rose to a monthly record of 114,405 kilograms, according to data from the department today.
Platinum Supply Falls to 13-Year Low as Mines Close: Commodities
Platinum supplies are falling to a 13-year low as mines in South Africa, the world’s biggest producer, close and automobile sales reach new highs.Production will drop 2.7 percent to 5.68 million ounces, the least since 2000, according to Barclays Plc, which raised its 2013 shortage estimate sixfold last month after Johannesburg-based Anglo American Platinum Ltd. (AMS) said it plans to idle shafts. At the same time, demand from carmakers, the biggest consumer of the metal, will increase 0.5 percent in 2013, Barclays says. Investors are buying platinum at the fastest pace in three years. “Supplies are very tight and it’s a serious situation,” said Mihir Worah, who manages $110 billion in real return strategy funds at Pacific Investment Management Co., in Newport Beach, California. “Not only are there issues on the supply side, we could see surprises on the demand side as well.”
CME Group: Open Interest in PGMs Hits Record High For Fifth Day In Row
Combined futures and options open interest in the platinum group metals has now hit a record high for the fifth day in a row, says CME Group. Open interest refers to the number of open positions at the end of the business day. As of Friday, platinum open interest stood at 101,023 for futures and options. The tally climbed steadily from a record that had stood at 96,967 as of Jan. 28. Meanwhile, open interest for palladium futures and options combined stood at 55,239 as of Friday. This had hit a record of 50,359 contracts as of Jan. 28 and then continued to climb for each day for the rest of last week.
The looming gold 'production cliff'
The gold supply-side story of the past decade is not encouraging. Big new deposits have been elusive. The number of "supergiant" discoveries has dwindled from two in the past five years to zero in the past two years. Comparing this to the impressive deposit discoveries of the 1970s and 1990s, one begins to get a sharper sense of the 'cliff'.Quality, too, is an issue. Ore grades have tumbled from an average of 12 grams per tonne in 1950 to roughly 3 grams in Australia, Canada and the US. In some cases, cutoff grades have dipped to 1 gram per tonne. "The next cutoff," claimed Lassonde, "is dirt."Add skyrocketing production costs to the mix, and the picture becomes even more grim.Lassonde's call to arms includes a concerted, industry-wide boost in research and development. "Where is the new technology?," he asked.Gold miners can buck the trend, according to Lassonde, by taking a page out of the petroleum industry's playbook: by pooling investment for scientific studies and by more aggressively securing access to land.
Jumping exports give silver impetus in India
To gold starved Indian consumers, silver has taken on a brighter hue at home, but it remains the silver export sector that is leading the charge.With the Indian government cracking down on gold, the metal's poor cousin, silver, has shot into the limelight. Silver jewellery exports are expected to lead this fiscal year, given the geographical expansion into the markets of CIS (Commonwealth Independent States) and eastern Europe, both of which have benefited silver jewellery. With the US and European market favouring white metal jewellery over gold items, silver jewellery pieces made in India are a big hit with the Westerners.As an official of the council pointed out, India's silver jewellery exports for FY12 stood at $691 million (Rs 36 billion) against $482 million (Rs 25 billion) in FY11."During 2011-12, silver jewellery exports grew 44% compared to gold jewellery exports growth of 30%. We will have to wait and see what the next two months bring in for silver retailers,'' the official said.Manubhai Shroff of the Bombay Bullion Association added, ``The Indian government is presently cracking down on the people's ability to buy gold through regulations and taxes. Given the insatiable appetite for the precious metal, people will naturally gravitate towards gold after buying silver items for some time.''
Platinum may be up for strategic State ownership
Platinum stands a good chance of being identified by South Africa's leading political party as a strategic national asset, which might require State ownership to increase development potential, says Pan-African advisory firm africapractice senior consultant Vukani Mde. Following a recommendation outlined in the African National Congress's (ANC's) 'State Intervention in the Minerals Sector' (Sims) report, the ruling party adopted the term 'strategic State ownership' at its five-yearly elective conference in Mangaung last year, as it rejected the idea of outright nationalisation. "The ANC dropped any reference to nationalisation in all its policy documentation to further emphasise that there would be no mandatory, ideology-driven State control of the sector," Mde says. He explains, however, that the State will be directed to intervene when social and industrial development goals need to be pursued.
US Mint Gold and Silver Bullion Coin Sales Surge in January
2013 Gold EagleThe United States Mint's gold and silver bullion coins have started the year in impressive fashion. The American Silver Eagle recorded the highest monthly sales figure in the history of the program. The American Gold Eagle reached the highest monthly sales in more than two years. American Silver Eagle bullion coins reached total sales of 7,498,000 during the month of January 2013. This exceeds the previous monthly sales record of 6,422,000 achieved in January 2011. The new monthly sales record is made even more impressive by the fact that the coins were not available for more than half the month. Authorized purchasers were able to place orders from the launch of the 2013-dated coins on January 7 until the temporary sell out announced on January 17. Sales were finally resumed on January 28 and have continued on a rationed basis.
Global Silver-Mining Trends
Over the course of silver's secular bull, the miners have steadily increased production in order to meet fast-growing demand. And in 2012 mine production exceeded 24k metric tons (770m+ ounces), an all-time production high and 28% increase over 2001. As an investor interested in silver's structural fundamentals, this rapid growth begs a question. Where in the world is this silver coming from? One major takeaway we can gather from this information is that total output and/or growth rates don't necessarily translate to opportunity for the miners. Some of these countries are host to geopolitical situations that all but block foreign investment. And some are producing silver solely as a byproduct, ultimately lacking geologically favorable primary silver deposits. These situations are not conducive to mining companies looking to directly leverage silver.
Platinum Market Seen Producing Deficit of up to 760,000 Ounces in 2013 -CEO
The global platinum industry is forecast to produce a deficit of anywhere between 80,000 troy ounces to 760,000 ounces, said the Chief Executive of South Africa's Royal Bafokeng Platinum Ltd. I (RBP.JO), a joint venture partner with Anglo American Platinum Ltd. (AGGPY, AMS.JO).Steve Phiri told an audience at the GMP Securities Mining Jamboree in South Africa, which accounts for some 80% of the world's platinum output, cash costs have been rising 18.1% year on year since 2007 with labor and energy being blamed as the culprits. At the same time strike action and safety stoppages coupled with the low price of platinum in rand terms have forced platinum producers to shutdown loss-making operations.
China's scramble goes platinum
As older and less profitable shafts face closure, Chinese money is bank rolling one of a handful of new platinum mines being built in South Africa, which sits on about 80 percent of known global resources of the white metal. Wesizwe Platinum's Bakubung mine, which aims to start production in 2018 and churn out 350,000 ounces of platinum group metals a year by 2023, is China's first direct investment in the sector and it likely won't be the last. A Chinese consortium headed by mining giant Jinchuan has a 45 percent stake in Wesizwe and the China Development Bank (CDB) last week provided a $650 million loan, providing the project with the capital needed to complete the mine.