Thursday, November 10, 2011
The price of gold edged up this morning but worries about the restructuring in Greece and a deepening debt crisis in Italy weighed on commodities. The dollar extended losses against the euro after better than expected job data from the United States,
Supporting gold, the euro briefly extended gains versus the dollar after U.S. data showed new claims for unemployment benefits declined for a second straight week.
A weaker U.S. currency makes dollar-priced commodities such as precious metals more affordable for holders of other units.
Gains however were capped by worries about the deepening Euro debt crisis, which pushed investors to sell commodities, including precious metals, reducing the bullion safe haven allure.
Italy moved closer to a national unity government on Thursday, with outgoing Prime Minister Silvio Berlusconi reversing a call for early elections, as EU policymakers dithered over an accelerating debt crisis. Some fear that a deepening euro zone crisis will continue to weigh on gold.
Italy, now firmly at the heart of the euro zone crisis, paid a 6.087 percent yield, the most in 14 years, at a one-year debt auction on Thursday but placed the full planned amount of 5 billion euros.
Greek political leaders resumed their search for a deal on a new prime minister after one agreement collapsed.
Emphasising worries, the European Commission said the euro zone economic growth will slow sharply next year as weak confidence undermines investment and consumption and tighter fiscal policies reduce domestic demand.
Gold fundamentals however, remained supportive.
New York's SPDR Gold Trust, the biggest gold-backed ETF, said its holdings rose 0.24 percent on Wednesday from Tuesday, while that of the largest silver-backed ETF, New York's iShares Silver Trust gained 0.26 percent.
Silver rose 0.29 percent to $34.14 an ounce while platinum rose 0.25 percent to $1,627 an ounce and palladium rose 0.15 percent to $645.47 per ounce.
Monday, November 07, 2011
Gold climbed to a six-week high in New York as concerns about Europe’s debt crisis spurred demand for the metal as a protection of wealth.
Italian Prime Minister Silvio Berlusconi’s allies pressured him to step aside after contagion from the region’s sovereign debt crisis pushed Italy’s borrowing costs to euro-era records. That overshadowed Greek Prime Minister George Papandreou’s agreement to step down, sending European equities lower.
Gold for December delivery gained as much as $25.20, or 1.4 percent, to $1,781.30 an ounce, the highest price since Sept. 22, and was at $1,777.70 by 8 a.m. on the Comex in New York. Immediate-delivery gold was 1.2 percent higher at $1,776.10 in London.
Bullion is in the 11th year of a bull market and futures reached a record $1,923.70 an ounce on Sept. 6 as investors sought to diversify away from equities and some currencies. The metal is up 25 percent this year.
Holdings in exchange-traded products backed by gold gained 3.1 metric tons to 2,284.6 tons on Nov. 4, the highest level since Aug. 23, data compiled by Bloomberg.
Silver for December delivery gained 1.5 percent to $34.605 an ounce in New York. Palladium for December delivery was 1.1 percent higher at $662.55 an ounce. Platinum for January delivery rose 0.8 percent to $1,642.90 an ounce.
Saturday, November 05, 2011
Gold eased at the end of the week with a surge in the US dollar, but the precious metal still managed to post weekly gains. After Thursday’s rally on the announcement of the cancellation of the proposed referendum in Greece, the markets seem to calm.
Greek Prime Minister George Papandreou drew criticism during the week after announcing plans to hold a referendum to approve the latest bailout package for the debt-laden country.
The announcement pushed the euro lower as traders feared that the bailout would be rejected by Greek voters, forcing a default and potentially triggering a financial meltdown in Europe. Meanwhile, demand for the safe haven US dollar was high, while gold, which is seen as an alternative asset to the American currency, was in decline.
The markets breathed a sigh of relief on Thursday when Papandreou agreed to cancel plans to hold a referendum following emergency talks with German Chancellor Angela Merkel and her French counterpart Nicolas Sarkozy.
As a result the euro and gold surged, while demand for the US dollar faltered.
Friday, November 04, 2011
A large gold coin which had displaced an Australian coin as the world's biggest, but recently lost the title, was on display this week in Canada's largest city.
The coin, measuring 50 centimeters across, took over two years to make from design to final product. When it was introduced in 2007 by the Royal Canadian Mint, it set a Guinness World Record.
But the Perth Mint reclaimed the record for the world's biggest bullion coin last week when it unveiled a 1,000-kilogram coin. It previously held the title with a 10kg coin until 2007, when the Canadian mint launched its 100kg coin.
Although it is now only the second biggest gold coin in the world, the Royal Canadian Mint's huge gold coin is still the purest, according to the mint, and it has traveled the world.
"It's been to the Middle East, it's been to China, it's been to Europe," said Royal Canadian Mint spokesperson Alex Reeves, noting that the coin has a face value of $1 million and the gold is 99.999% pure.
One side of the coin features a maple leaf design, while the head of Queen Elizabeth II is on the other side.
Thursday, November 03, 2011
The price of gold rose again this morning, helped by a resurgent euro. The turmoil overseas has been hitting the financial markets due to political chaos in Greece as European leaders contemplated the country's exit from the euro zone.
Gold has been easing higher in the past week. With the threat of a potentially disastrous Greek financial collapse, gold’s safe-haven appeals to those who fear a liquidity crunch in case of a default.
Gold's rise off the earlier losses was echoed in other financial markets. Early losses in stocks and the euro turned to gains on hopes that Greece might ditch a plan to hold a referendum which will test its resolve to stay in the currency bloc.
France and Germany, angered at Greece's shock move to call for a referendum on its latest bailout plan, have issued statements to Prime Minister George Papandreou that Athens would not receive EU aid until it decides whether it wants to stay in the euro zone.
Spot gold was up 0.8 percent at $1,752.29 at 1222 GMT, off an intraday high of $1,758.63, from $1,737.70 on Wednesday. U.S. gold was up 1.3 percent at $1,752.70.
The prospect of a hard Greek default and euro exit hung over a meeting of G20 leaders beginning in Cannes on Thursday. Eyes are also on the European Central Bank, which will meet on Thursday and is expected to hold interest rates steady.
Wednesday, November 02, 2011
The Royal Canadian Mint is pleased to announce its initial public offering of Exchange Traded Receipts (ETRs) under the Mint's new Canadian Gold Reserves program. Each ETR provides evidence of ownership in physical gold bullion held in the custody of the Mint at its facilities in Ottawa, Ontario. The Canadian Gold Reserves program marks the expansion of the Mint's successful core bullion and refinery business.
"We believe that this new program will build on our reputation and continued success as a world-class custodian of precious metals," said Ian E. Bennett, President and CEO of the Royal Canadian Mint. "With the introduction of the Canadian Gold Reserves ETR program we hope that investors will see this as a convenient, efficient and secure method for investing in and owning physical gold."
Unlike other gold investment products, the purchaser of an ETR owns the actual gold rather than a unit or share in an entity that owns the gold. The net proceeds of the offering will be used to purchase gold on behalf of the initial purchasers of ETRs at the London pm fix price on the closing date of the offering (Closing Date). Subject to certain restrictions, ETR holders will be entitled to redeem their ETRs for physical gold products in the form of 99.99 per cent pure gold bars or coins, or for cash based on the future gold price or market price of the ETRs.
Subject to market conditions, the initial offering of ETRs is targeting an issue size of approximately CAD$250 million. The issue price per ETR will be CAD$20.00 or the USD equivalent and the Per ETR Entitlement to Gold will be determined on the Closing Date and will be reduced daily by an annual service fee of 0.35 per cent.
Subject to the satisfaction of certain conditions, the ETRs will be listed on the Toronto Stock Exchange and commence trading on the Closing Date. ETRs will be listed in both Canadian and U.S. dollars and may be traded in either currency.
Through a competitive process, the Mint has selected a syndicate of investment dealers led by TD Securities Inc. and National Bank Financial Inc., and including BMO Nesbitt Burns Inc., CIBC World Markets Inc., RBC Dominion Securities Inc., Canaccord Genuity Corp., Cormark Securities Inc., MGI Securities Inc. and Raymond James Ltd. to distribute the ETRs on a best efforts agency basis.
Closing is expected to occur in late November 2011. The offering is being made on a prospectus-exempt basis pursuant to the terms of an order of the Ontario Securities Commission dated August 30, 2011.
The ETRs have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States. This media release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any offer, solicitation or sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Tuesday, November 01, 2011
The demand for gold fell in India during the peak festival season over the past one month as high inflation and tight household budgets dented consumer spending according to the World Gold Council. The council also said that sales of bars and coins maintained the same volume both in the organized sector--sold through banks and post office outlets--and the unorganized sector, such as jewelers.
The shift towards the purchase of more coins and bars, traditionally smaller in quantity than jewelry could be an indication that more consumers wanted to buy at least some of the precious metal as a long term investment.
Traditionally, gold sales in the world's largest consuming nation are strongest during this period as it is considered auspicious for purchases. This year, the festival season began in the first week of October and culminated with Diwali, the festival of lights, on Oct. 26. The largest purchases during this period usually happen on Guru Pushya Nakshatra, or the day of auspicious ventures, which fell on Oct. 20, and on Dhanteras, celebrated on Oct. 24.
"Overall, the market reported a reduction in demand compared to last year," the World Gold Council said in an issued statement.
The council didn't specify gold sales volume for the period, but is likely to give the detailed statistics in late November as well as its outlook for the year ahead.
"Large jewelers who we spoke to reported similar or slightly lower levels of sales than the previous year. The overall market though reported a fall in jewelry in volume terms," the council said.
The council said that buying sentiment was muted because of tighter household budgets, high inflation as well as expectation that gold prices could fall post the festival season if the Indian rupee strengthens against the U.S. dollar.
India imports nearly all its annual gold requirement and, therefore, local prices are heavily influenced by the currency exchange rate. The rupee has depreciated about 11% against the dollar since April and was quoting at 48.87 to the dollar Monday.
Sunday, October 30, 2011
Gold is one of the most popularly traded metals on an international basis and now more than ever, eyes are focused on the precious metal. While other investments have incurred losses due to the uncertainty and upheavals in the market, gold has remained fairly stable. Gold has become one of the most reliable investments available today. It has become the top choice of investors because of its ability to make money. People opt to invest in gold when they come to know and understand the unique facts about gold. But there are times when one finds that they have bought a fake metal when it is tested for authenticity. This is a risk associated with gold as an investment and can lead to huge losses.
A gold buyer can check gold purity at home without much trouble. The acid test is the most popular of the several methods used for gold testing. A number of acids are used in this test but the most common are nitric acid and hydrochloric acid. When acid methodology is used, the sample will change colour to green if it contains copper and will not react at all if it’s pure gold.
A local chemical lab or a chemical supplier can be used to procure the ingredients to perform this test. In addition, people can also buy a dropper along with the acids to make their handling easier. The dropper is very useful during the testing because the acids are corrosive and hazardous in nature. For safety reasons, people should utilize protective clothing. In order to perform the test, people need to make a scratch on the gold sample which has to be tested.
Ten seconds should be given to allow the sample to react to the acids after they have been applied. The sample should be cleaned properly to remove the chemicals remains of the acids. When people have to do a retest, this should be done immediately. Otherwise, the leftover residue might create confusion and not give discernible results. The sample can be washed with water for proper cleaning.
Professionals who offer gold assay services to the public make use of this particular method for gold testing. Both, a gold buyer and refiner can use this acid testing method for checking their gold purchases. When people wish to test authenticity of gold which they are purchasing, it is better to use the services of a well reputed refiner or tester. Premixed acid kits are also available for people who wish to avoid handling acids. These kits are available on the internet and can be used by amateurs. When you apply it on your gold, you will discover how accurate the gold acid test can be.
Friday, October 28, 2011
Gold stocks pushed the Toronto stock market slightly higher Friday while commodity prices stepped back as relief over an agreement to deal with the European debt crisis faded.
The S&P/TSX composite index was 25.87 points higher to 12,491.31 while the TSX Venture Exchange was off 2.27 points to 1,612.53.
The Canadian dollar was down 0.52 of a cent to 100.36 cents US after closing above parity with the American currency Thursday for the first time since Sept. 20.
U.S. markets were also weak as the Dow Jones industrial index stepped back 18.61 points to 12,189.94. The Nasdaq composite index was down 8.8 points to 2,729.83 and the S&P 500 index lost 4.41 points to 1,280.18.
Global stock markets racked up solid advances Thursday after eurozone leaders unveiled a plan to cut Greece’s debt, increase the firepower of the continent’s bailout fund to €1 trillion euros and strengthen the region’s banks, partially so they can sustain deeper losses on Greek bonds.
The TSX jumped 279 points while the Dow industrials surged 339 points.
However, investors stepped back Friday after analysts raised questions about the lack of detail in the plan.
Confidence was further undermined after Italy saw its borrowing costs rise in a sale of €7.9 billion in sovereign debt. The interest rate demanded by investors to lend the Italian government 10-year money topped six per cent, surpassing the 5.86 per cent rates paid a month ago.
Italy has seen its borrowing costs rise under pressure from Europe’s sovereign debt crisis. The European Central bank for weeks has been buying Italian bonds to keep rates at manageable levels.
The gold sector was ahead 0.74 per cent while December gold was $5.70 lower to US$1,742 an ounce. Goldcorp Inc. improved by 95 cents to C$48.80 while Barrick Gold Corp. fell 99 cents to $49.60.
Tuesday, October 25, 2011
The growing optimism over the ability of European to step in and address the overseas debt crisis has gold poised for a third consecutive daily rise.
European leaders are set to meet on Wednesday with plans in place for Greece's debt to be reduced, bail-out packages for the European banks, and the euro zone's EFSF rescue fund to be increased to provide partial insurance for the sovereign bond markets.
Uncertainty about just how close European Union leaders will come to solving the debt crisis kept many markets trading quietly and gold was no exception.
Spot gold was last up 0.4 percent on the day at $1,658.40 an ounce, having risen by 2.5 percent over the last three trading days, its best three-day performance in a month, although this month, it has underperformed most major markets.
Silver rose by 0.3 percent to $31.75 an ounce, on course for its third straight daily rise.
Options on U.S. silver futures expire on COMEX on Wednesday. Most open interest centers on put options -- which give the holder the right, but not the obligation to sell metal at a pre-determined price by that date -- at $32.00 an ounce and on call options -- which give the holder the right but not the obligation to buy metal -- at $31.00.
Platinum was up by 0.8 percent at $1,550.49 an ounce, also having risen for three days in a row, marking its largest three-day gain since mid-August.
Platinum has fallen by more than 12 percent this year, as concern has grown about the impact to car demand, particularly in Europe, from the euro zone debt crisis. Europe is home to the world's largest market for diesel-fueled vehicles, which require a higher loading of platinum in their catalytic converters.
Monday, October 24, 2011
Gold rose for a second day on concerns about the European debt crisis and monetary policy in the U.S. has increased the demand for the metal as a protection of wealth and safe haven investment.
European leaders have ruled out tapping the European Central Bank’s balance sheet to boost the region’s rescue fund and outlined plans to aid banks. Federal Reserve Vice Chairman Janet Yellen said on Oct. 21 that a third round of large-scale securities purchases may become warranted to boost the U.S. economy.
Gold for December delivery gained $21.60, or 1.3 percent, to $1,657.70 an ounce by 8 a.m. on the Comex in New York. Prices slipped 2.8 percent last week. Immediate-delivery gold was 0.9 percent higher at $1,657.13 in London.
Bullion is in the 11th year of a bull market and futures reached a record $1,923.70 an ounce on Sept. 6 as investors sought to diversify away from equities and some currencies. The metal is up 17 percent this year.
Europe’s 13th crisis-management summit in 21 months also explored how to strengthen the International Monetary Fund’s role. The leaders excluded a forced restructuring of Greek debt, sticking with the tactic of enticing bondholders to accept losses to help restore the country’s finances. Another summit will be held in two days.
Gold imports by India, the world’s largest bullion consumer, may decline by as much as 30 percent this month as higher prices weaken demand, Prithviraj Kothari, president of the Bombay Bullion Association, said in a recent interview from Mumbai. Imports may be 70 metric tons to 80 tons in October, compared with 100 tons a year earlier, he said.
Silver for December delivery rose 1.2 percent to $31.555 an ounce. Palladium for December delivery was up 1.9 percent at $629.95 an ounce. Platinum for January delivery gained 1.9 percent to $1,538.60 an ounce.
Saturday, October 22, 2011
A weaker dollar and the growing optimism over the debt crisis in Europe drew some investors into the market, the price of gold and the precious metals focus climbed. On Friday, gold rose for the first day this week.
Some investors buy gold on the philosophy that the metal holds its value better than most other assets during economic turmoil including the dollar. For years gold has been considered the safe haven currency. But some market participants are still wary of gold after a sell off last month but the overall history of gold has always been positive. They forecast a price of $1,800 per ounce by the year's end.
Gold futures for December delivery gained 1.4 per cent to settle at $1,636.10 an ounce at 1:46 p.m. on the Comex in New York, the biggest advance since Oct. 10. Still, the metal dropped 2.8 per cent this week, the first weekly loss in three.
Bullion slipped to $1,604.70 yesterday, the lowest since Oct. 5.
Bullion is in the 11th year of a bull market and futures reached a record $1,923.70 on Sept. 6 as investors sought to diversify away from equities and some currencies.
The metal has advanced 15 per cent this year.
Silver futures for December delivery rose 3 per cent to $31.193 an ounce, the biggest gain since Oct. 10. The metal has gained 3.7 per cent this month.
On the New York Mercantile Exchange, platinum futures for January delivery advanced 1.3 per cent to $1,509.20 an ounce, rising for the first time this week. Palladium futures for December delivery jumped 5.8 per cent to $618.25 an ounce, the biggest gain since Nov. 18.
Friday, October 21, 2011
Most people in the industry know that gold has been on a decade-long hot streak, but it’s interesting to understand how great and sustained the increase has been.
The price of gold itself quintupled in value against the dollar from April 2001 to its all-time high in August of $1,913 per ounce. Even though prices have cooled to around $1,600 per ounce, gold is still priced much higher than 10 years ago, when gold prices stood at just $280 an ounce.
Unlike other precious metals like platinum, silver and copper, which have industrial uses, gold is used only for accumulation and investment. Gold has been criticized by billionaire investor Warren Buffett in the past: "You can fondle [gold], you can polish it, you can stare at it. But it isn't going to do anything... I'd bet on a good producing business to outperform something that doesn't do anything."
So why is gold considered so valuable?
The main reason: It's been recognized for centuries as a limited form of currency, able to withstand economic pressures that paper currency cannot.
Gold is typically used as a safe haven during times of inflation, weak currency, economic instability and uncertainty or war. While we don’t have high levels of inflation right now, it is a looming threat that many fear is unavoidable.
With that said, let's look at some of the main reasons why gold prices have been so high lately:
When the dollar is weak (as it has been for almost a decade), many investors trade their dollars for gold as it better preserves its intrinsic value. That's because it's a limited resource and a medium of exchange that can't be replicated or reprinted like paper money..
Because gold is valued in dollars, a declining dollar value actually means the price of gold goes up. For example, let's say for illustration purposes gold is worth $1 per ounce. If the dollar falls 10% in value, you'll need $1.10 to buy the same ounce of gold because your dollar has less purchasing power; thus gold would then be worth $1.10 per ounce.
Thursday, October 20, 2011
The spot gold price was down slightly in Europe as uncertainty over the euro-zone continues to weigh on investor sentiment ahead of an eagerly awaited summit in the region at the weekend. The spot price of gold was $1,651.40 a troy ounce, down 0.2% on the day.
"The price of gold has not really profited from the growing uncertainty," instead moving lower with assets seen as relatively risky and trading inversely to the dollar, seen as a refuge in times of uncertainty, Commerzbank said in a press release.
The bank's analysts argued, though, that there "would certainly be grounds for a rise in price; it is becoming increasingly clear that a fast and comprehensive solution to the euro zone debt crisis will not be found at the EU summit this weekend."
They forecast a price of $1,800 per ounce by the year's end.
Dennis Gartman, an independent market consultant pointed to the metal's slow recovery from the late September lows as a sign that prices may continue to struggle. Since toppling 20% from an all-time high at $1,920.94 on Sept. 6 to a two-and-a-half month low at $1,533.23 on Sept. 26, the metal has only risen around 8%.
"Given the severity of the break in mid-September, if the gold market was still technically healthy it should have bounced sharply back, regaining that which it had lost rather swiftly," said Mr. Gartman.
"Taking twice or three times as long to regain only a third or so of what had been lost seemed at least awkward and at worst bearish," he added.
In other metals, spot silver was down 1.0% at $31.702 per ounce, spot platinum was flat at $1,527.20 and spot palladium fell 0.3% to $616.75 per ounce.
Wednesday, October 19, 2011
Fortunately, we live in a world where many people like to give with an open heart to help others in need. But unfortunately, that also means we've created a climate that's ripe for fake charity scams and scam artists to step in and take advantage of good intentions. They know they can tug at our heartstrings and walk away with the cash. But doing the right thing with the wrong motives will only turn out bad.
In the aftermath of a natural disaster or as we draw close to the holiday season, donating to a charity can sometimes bring much needed relief to victims in need. But not every charitable opportunity is on the up and up. Scammers preying on people's emotions and desire to help are so plentiful that its difficult to determine what is real and what isn't. And, this is the big one, what will benefit the one’s in need the most.
Too often, especially during this time of the year, we see businesses and organizations offering a portion or proceeds of their business if you use their service or buy their product. In some cases the “charitable” portion has been quietly hidden in the price.
We have to ask ourselves, would the organization give to the charity even if we didn’t participate? Is my business support really going to go towards making a difference? The whole concept of charitable giving is to, well give without some type of limitations placed.
Some businesses will raise their price to cover their so called gift, while others will lower their service level to make up the difference.
Sometimes you have to ask yourself if dealing with a particular organization that claims to give is really going to follow through with their promise or is it a just a way to grab more business. Don’t get drawn in by letting these operations pull on your heartstrings.
When it comes to selling precious metals, one has to take good hard look at the offer they receive from an organization. Is the amount being offered fair? Is that amount with a charitable donation the best use of the item you are considering?
As an example, if a gold ring is worth $100 in metal value and the organization is offering to purchase it for $30 plus expecting a $10 donation that leaves you with a total of $40 less the donation amount. You still walking away with only $30.
If another organization offers $70 for the same ring, you can make still more substantial donation and have more money in your pocket.
In precious metals like gold, silver and platinum, If possible, get several quotes to ensure you are getting the best deal possible and the organization is true to their word.
There's always going to be unscrupulous people that try to get in the middle of the flow of money to charities. Making sure it's an actual charity still doesn't always mean they are going to do great things, but at least make sure it's not an individual walking away with your money and your good intentions.
Tuesday, October 18, 2011
by Rachel Man
The Royal Canadian Mint has capped off the celebration of Parks Canada's centennial year by unveiling five new commemorative circulation coins which immortalize Canadians' pride in their legendary natural heritage and capture their trademark passion for the great outdoors. The commemorative circulation coins unveiled by
Canadian government officials and representatives of Parks Canada and the Mint, at a public ceremony hosted at the Canadian Museum of Civilization in Gatineau, Quebec. The collection includes: the 2011 Parks Canada Centennial one-dollar circulation coin; the 2011 Boreal Forest two-dollar circulation coin; and three new 25-cent circulation coins (half of which will be coloured) featuring the Orca, Peregrine Falcon and Wood Bison. The 2011 Parks Canada Centennial one-dollar coin will begin circulating in the coming weeks, followed by the remaining 2011 commemorative circulation coins later this year, and in early 2012.
"The Royal Canadian Mint is proud to help Canadians celebrate their country's legendary natural heritage with five new commemorative circulation coins honouring our great outdoors and a century of nature conservation by Parks Canada," said Ian E. Bennett, President and CEO of the Royal Canadian Mint. "I am very pleased that Canadians of all ages will be able to collect these coins as keepsakes of their fondest memories of our national parks, our forests, and our precious wildlife."
"This new series of commemorative circulation coins from the Royal Canadian Mint captures the essence of Canada's natural, historical and cultural treasures," said the Honourable Peter Kent, Canada's Environment Minister and Minister responsible for Parks Canada. "By creating the world's first national parks service, Canada has made nature conservation a prized Canadian value and inspired countries around the world to protect their unique wilderness regions."
The Mint will invite the public to trade their loose change to obtain the one-dollar Parks Canada centennial circulation coin at its boutiques in Ottawa, Winnipeg and Vancouver. Parks Canada will also offer it in a face value coin exchange at many national park and historic site locations across Canada. For more details, visit www.pc.gc.ca.
Monday, October 17, 2011
Gold was steady on overseas early Monday, after posting its biggest weekly gain since early September, as investors await concrete steps to tackle the euro zone debt crisis that could come out of a European Union summit this weekend.
Finance ministers and central bank governors of the Group of 20 major economies said they expected the Oct. 23 summit to "decisively address the current challenges through a comprehensive plan".
Many investors have stayed away from gold given market turbulence in the past few months caused by the deepening euro zone debt crisis, the fight over raising the US debt ceiling and fears that the global economy would plunge into another recession.
Spot gold edged up 0.2 per cent to $1,682.39 an ounce by 0320 GMT, after rising around 2.5 per cent in the previous week.
US gold inched up 0.1 per cent to $1,684.70. "Gold has not been showing its safe haven property in the past few weeks," said Ong Yi Ling, an analyst at Phillip Futures in Singapore.
"If we see risk assets continue to rally with concrete steps in Europe in place, gold will have the potential to break the $1,700 resistance."
Managed money in US gold futures and options raised their net long positions for the second time in the past 10 weeks in the week ended on Oct. 11, data from the US Commodity Futures Trading Commission showed.
Gold bar premiums in Hong Kong eased slightly from last week, as shipments ordered over the past week or so started to arrive.
The buying interest softened as prices have rebounded from the end of September when prices dipped well below $1,600.
"People are waiting for more information from Europe by the end of the month," said a Hong Kong-based dealer, "The shipments have released the pressure on supply, and the premium has fallen to about $2."
A second dealer reported premiums between $2.50 to $3.50 above spot prices, from $3 to $4 last week.
"On the Asian side, $1,650 is an attractive level for physical buyers," he said.
Monday, October 17, 2011
Today, Hong Kong’s Chinese Gold & Silver Exchange Society, a century-old bullion house, started trading gold quoted in yuan, boosting the city’s status as an offshore hub for the currency.
The contract may generate as much as HK$6 billion ($770 million) in trades a day, exchange President Haywood Cheung said in an Oct. 14 interview. Daily bullion trading volume at the society, which has 171 active members, has jumped to HK$136 billion this year from last year’s HK$31 billion on appetite for gold as a haven from stock declines, he said.
“There’s triple demand for this yuan product,” said Cheung on Oct. 14. “Investors can enjoy the bull market in gold, the yuan’s appreciation and hedge gold denominated in other currencies against the yuan.”
Chinese Vice Premier Li Keqiang pledged the nation’s support for yuan business in Hong Kong two months ago. The city’s richest man, Li Ka-shing, sold Hong Kong’s first renminbi shares in April and the city’s bond sales in the currency have more than tripled this year. Yuan deposits in the former British colony rose 93 percent this year to a record 609 billion yuan ($96 billion) in August.
“It’s part of a larger trend in Hong Kong to increase investments priced in renminbi,” said Zhang Qiang, an analyst in Shanghai at Haitong Futures Co., China’s largest futures brokerage by registered capital. “It’s a good proposition for investors who want exposure to both gold and renminbi, however, this would depend largely on the two moving in tandem.”
Saturday, October 15, 2011
A weekly gold survey by Bloomberg revealed that traders have turned the most positive on the yellow metal in three months. The latest results showed that 88% of respondents expect the price of gold to rise next week – the highest level since mid-July.
The positive sentiment was attributed to ongoing concerns over “Europe’s debt crisis, slowing growth and a bear market in equities,” according to Bloomberg.
Twenty-two of 25 people surveyed by Bloomberg expect the metal to rise next week, the highest proportion since mid-July. Prices rebounded 9.2 percent since reaching a two-month low at the end of September and investors are adding to their holdings in gold-backed exchange-traded products for the first time in a month, according to data compiled by Bloomberg. Traders also expect gains in copper, sugar, corn and soybeans, surveys show.
Gold slumped as much as 20 percent since reaching a record $1,923.70 an ounce on Sept. 6 as investors sold the metal to cover losses in other markets. As much as $4.2 trillion was erased from the value of global equities in the past month on mounting concern that economies will tip back into recession and European lawmakers will fail to prevent sovereign defaults. The last time traders and analysts were this bullish, bullion surged 21 percent to an all-time high within eight weeks.
"Like always, the big picture remains positive,” said Michael Gupton, founder and president of KMG Gold. “The supply-demand fundamentals are in place and everything still looks good.”
COMEX gold futures, per the December 2011 contract, pared their gains as morning trading progressed on Friday. The yellow metal hit an intra-day high of $1,685.50 earlier, but was up just $3.00 at $1,671.50 per ounce as of 10:55am ET
Friday, October 14, 2011
In the opening markets, gold rose on track to post its biggest weekly gain in more than a month. There is still uncertainty in the markets with the anticipated G20 meeting whose agenda will be dominated by the euro zone debt crisis and steps to tackle spreading issues.
Spot gold rose 0.4 percent to $1,671.99 an ounce at 1139 GMT, from $1,666.20 late in New York on Thursday.
Reflecting growing concern about the region's debt crisis, ratings agency Standard and Poor's downgraded the long-term credit rating of Spain by one notch, just as policymakers get ready to pressure Europe to act swiftly to tackle its financial woes at a weekend meeting.
Although investors are not expecting any concrete resolutions to the debt crisis, they hope it will provide an opportunity for officials to agree on the outlines of a plan in time for a European Union summit on October 23.
"Like always, the big picture remains positive,” said Michael Gupton, founder and president of KMG Gold. “The supply-demand fundamentals are in place and everything still looks good.”
Also helping boost gold was a fall in the dollar, which dipped against a basket of currencies. A weak dollar makes commodities priced in the U.S. unit cheaper for holders of other currencies.
Gold prices are up 2.3 percent so far this week, on track to post its strongest weekly gain since early September.
U.S. gold gained 0.4 percent to $1,674.80 an ounce, while spot silver rose 0.2 percent to $31.85 an ounce.
Thursday, October 13, 2011
Physical purchases in China and India, ahead of the key gold-buying wedding and festival season, have been in decent volumes, and are expected to continue to escalate, traders and analysts said.
As of this morning, spot gold fell slightly in Europe as the dollar came back in a rebound. According to the London Price Fix, the spot price of gold was $1,672.20 a troy ounce, down from bid levels of $1,674.50 late in New York on Wednesday.
Some insiders in the market feel the precious metal has found its comfort level around the key $1,700 per ounce region in recent days. The current price has been helped by renewed physical interest from Asia ahead of the festival season in India.
Still, bullion also continues to trade with riskier assets, while it moves against the U.S. dollar. Gold is priced in dollars, so it tends to fall when the dollar gains, making it more expensive to purchase in other currencies.
The dollar gained against the euro Thursday as concerns lingered about Europe's debt problems and slowing global growth, despite recent signs of progress on tackling the European crisis.
Analysts said minutes of the Sept. 20-21 U.S. Federal Reserve Open Market Committee meeting, which revealed a long discussion of what steps could be taken to give the economy further support, should help to provide some support to prices.
In other metals, spot silver had fallen to $32.110 per ounce from about 432.60 late in New York. The market, which is thinly traded and therefore tends to record wider intraday moves than its sister metals, has been range-trading between $31.130 per ounce and $33.050 since Monday.
Meanwhile, spot platinum was at $1,534.25 per ounce, from $1,550 and spot palladium was at $601.25 per ounce, from $613.00.
One London-based trader said the platinum-group metals, which tend to trade in tandem with base metals because of their industrial applications, have held up well given a sharp slide across markets on the London Metal Exchange. In mid morning, LME three-month copper traded down 1.7% at $7,397 a metric ton.
Wednesday, October 12, 2011
Gold gained to a two-week high in New York as concern over Europe’s debt woes spurred demand for the metal as a protection of wealth.
Slovakia, the only country in the 17-nation euro area that hasn’t approved a planned reinforcement of the European Financial Stability Facility rescue fund, is headed for a second vote after failing to approve the package. Physical gold demand was “decent” yesterday, UBS AG said today in a report.
Gold for December delivery gained as much as $28.90, or 1.7 percent, to $1,689.90 an ounce, the highest price since Sept. 23, and was at $1,685 by 8:02 a.m. on the Comex in New York. Immediate-delivery gold was 1.3 percent higher at $1,684.03 in London.
The Diwali religious festival later this month in India, the biggest bullion buyer, and then the traditional wedding season, may increase demand.
Gold is in the 11th year of a bull market, the longest winning streak since at least 1920 in London. Futures reached a record $1,923.70 on Sept. 6 as investors sought to diversify away from equities and some currencies. The metal is up 19 percent this year.
The Slovakian rejection also triggered the fall of Prime Minister Iveta Radicova’s government, as the vote yesterday was tied with a no-confidence motion. European Union and International Monetary Fund officials indicated Greece will get an 8 billion-euro ($11 billion) loan next month, saying the nation has made “important progress.”
Silver for December delivery rose 2.6 percent to $32.83 an ounce. Palladium for December delivery was up 0.4 percent at $607 an ounce. Platinum for January delivery gained 2 percent to $1,549.90 an ounce.
Tuesday, October 11, 2011
Gold declined from a two-week high as investors awaited a vote in Slovakia to approve the European bailout fund.
Bullion for immediate delivery shed as much as 0.6 percent to $1,666.65 an ounce, after climbing to $1,684.63 an ounce, the highest level since Sept. 23. It traded at $1,668.25 at 4:10 p.m. in Singapore. The metal jumped 2.4 percent yesterday, the most since Sept. 8. Futures for December were little changed at $1,669.90 an ounce.
Slovakia is the only country in the 17-nation euro area that hasn’t ratified a planned reinforcement of the European Financial Stability Facility. The nation’s four-part coalition yesterday failed to resolve a dispute with rebel lawmakers, threatening to delay measures to stem Europe’s debt crisis.
U.S. stock futures declined and the euro was little changed after reaching a three-week high against the dollar yesterday as Slovakia’s parliament prepared to vote. German Chancellor Angela Merkel and French President Nicolas Sarkozy pledged at the weekend to deliver a plan by Nov. 3 to stem the debt crisis.
“We’re in the peak seasonal demand period now and that should also help buoy gold prices,” said Wang, who was ranked fifth in a Futures Daily and Securities Times poll of China gold analysts.
In India, the world’s largest consumer, the peak-demand period began in August with Eid, continues in October with Diwali, and is followed by the traditional wedding season. In China, the second-biggest buyer, demand typically picks up during the National Day holidays at the start of October through till the Lunar New Year in January.
Cash silver lost 0.9 percent to $31.8237 an ounce after climbing 1.5 percent to $32.565 an ounce. Spot platinum was little changed at $1,521.75 an ounce, while palladium dropped 0.9 percent to $610.13 an ounce.
Saturday, October 08, 2011
Gold prices rose over $100 an ounce for the third-quarter settling the other day at $1,622.30. I’ll be honest, the 6.5% gain was by no means a cakewalk for anyone interested in the precious metals market and investors. Remember last month? Some of us still have the taste of that $1900 price from just last month.
The uncertainty in the markets has once again refueled the age long debate over the precious metal's position as a safe haven investment. I sometimes laugh when people bring up the doom and gloom of September 10% sell-off, claiming that as the sign the bubble burst. But I couldn’t disagree more.
Gold has been coveted since Biblical times and a few days of down prices will not affect its real value. Even the last quarter’s price increase was better than most equities out on the open market.
To be honest, I don’t believe there will be a huge rally either in the early days of this next quarter but I’m still hearing talk from some market insiders that we’ll see gold rebounding by year-end up to levels between $1,800 - $2,000 an ounce.
The demand driving the precious metal higher is not Western centric. We see gold activity influenced more by technical levels, whereby a consolidation move could be easily fueled into a major correction or crash. But what's easily forgotten is the strength in Asian demand. And of course there's China, a key demand player that has gone from net neutral to a positive demand effect of 300 tons per years according the World Gold Council. China accounted for 6% of total global demand in 2000 and rose to 18% in 2010.
According to the World Gold Council, central banks imported 198.4 tons of gold in the first half of 2011 versus two years ago, they were selling 450 tons a year.
Of course, any gold outlook that doesn't address currency would be remiss. As Europe continues to sort through it's debt crisis, we'll likely see more currency fluctuations. The more instability in the EU, the faster the flight to safety into the US dollar becomes.
The only real advice we can give is to watch the market price, educate yourself and check around at the prices different operations are offering. Right now there is a huge gap in what businesses are paying for used gold and it pays to do your homework.
Friday, October 07, 2011
On several days recently gold shops in Hanoi and Ho Chi Minh City have sold out their supplies of the precious metal, according to state media reports, as anxious consumers have rushed to protect themselves against Asia’s highest inflation rate.
Vietnam’s Communist government is keen to tackle inflation, restore confidence to the currency and stabilize the shaky banking sector. But it is also concerned that too much tightening may hit economic growth in this export-dependent country.
Officials must find a delicate balance between growth and inflation at a time when their room for maneuver has been severely limited by the global slowdown and their own policy mis-steps and about-turns, which have seriously undermined investor confidence.
Part of the problem is communication, or the lack thereof. Thursday’s move by the central bank to increase a key inter-bank lending rate from 14 per cent to 15 per cent should have been a reassuring signal of the government’s commitment to the stay the course when it comes to tight monetary policy.
But, as usual, the decision was published with minimal explanation to either bankers or the wider public, leaving many scratching their heads again as they tried to divine the motive behind the latest decree from Vietnam’s less-than-transparent rulers.
Friday, October 07, 2011
Gold will probably stay strong due to a lack of alternative “safe havens” for investors operating in a slowing global economy, top performing commodity fund managers said in a recent interview.
"We consider the current weakness in gold as temporary and also the slump in commodity prices should come to an end soon," said Kurt Hug, an investment adviser for the Antares Precious Metals Fund.
The gold price has risen by nearly 17 percent so far this year, having hit a record $1,920.20 an ounce in early September before correcting sharply downwards. It was around $1,655 an ounce on Friday.
The fund came third in the Lipper Global commodity sector rankings in the third quarter of 2011 by keeping a high percentage of "strategic liquidity" in Swiss francs in anticipation of "a severe, but short-lived commodity shock."
Fund research and analysis organization Lipper, a Thomson Reuters company, covers more than 108,000 funds. The commodity segment covers funds investing in both commodities futures and natural resources-related equities.
Also staying defensive was Paula Bujia, manager of the $330 million Schroders Gold and Precious Metals Fund, which came fourth. Steering clear of precious metals other than gold, and investing in mid-cap gold miners rather than seniors and juniors, helped her outperform, she said.
Those who are not worried about this type of inflation are petrified of deflation. But even in such a scenario, gold is still a better bet than any currency, according to the gold bugs.
If consumer prices were to fall by some 4 or 5 per cent, stock markets could plummet and the global banking system would be placed under great stain.
The price of gold could also fall, but probably not nearly as much, thereby preserving wealth and purchasing power.
Yet, others argue that a better strategy in a deflationary scenario is to invest in fast-growing industries. “People are very persuaded by crash and doom scenarios, and gold offers a cure for it. But there are other, more positive solutions. Invest in electric cars, recycling, renewable energy – these sectors are growing, and they hold massive potential,” says Chris Eibl, co-founder and head of trading of Tiberius Asset Management.
Thursday, October 06, 2011
Gold firmed in Europe on Thursday as a strong recovery in equity markets cut selling of the precious metal to cover losses elsewhere, and as physical buyers took advantage of lower prices to stock up. Keep checking the KMG Gold websites for updates on the price.
Spot gold was up 0.7 percent at $1,651.49 an ounce at 0910 GMT, extending the previous session's 1 percent gains. Trade is expected to be choppy ahead of a policy meeting and press conference from the European Central Bank later.
Concerns over the outlook for the euro zone, as the bloc wrestles with its stubborn debt crisis, were a key factor pushing gold to a record $1,920.30 an ounce last month.
"It is extremely hard to see where the solution will come from," said VM Group analyst Carl Firman. "I think (the euro zone authorities) will be forced into a solution, but the volatility is based around whether it will be sufficient, or another stop-gap."
"We need to see some more definitive news, and in the meantime, we will have a hell of a lot of volatility across the markets," he said.
Gold saw its biggest decline in nearly three years last month as pressurized selling to cover heavy stock market losses pulled prices more than 20 percent from record highs and prompted a period of intense volatility.
European equities extended the previous day's strong gains on Thursday on hopes officials will succeed in their efforts to support Europe's financial sector, while data raised optimism the U.S. economy might avoid slipping into recession.
ECB President Jean-Claude Trichet is expected to prepare the ground for a pre-Christmas interest rate cut at his final policy meeting and offer banks further protection against the euro zone's worsening debt storm.
The euro rose against the dollar and German government bonds fell on optimism over Europe's efforts to aid the financial sector, ahead of the ECB meeting.
ECB President Jean-Claude Trichet is expected to prepare the ground for a pre-Christmas interest rate cut at his final policy meeting and offer banks further protection against the euro zone's worsening debt storm.
Tuesday, October 04, 2011
Gold prices rose in Europe on Tuesday as fears that Greece could be heading for a default, potentially sparking a banking crisis in Europe, hurt stock markets and prompted investors to seek out assets seen as lower risk.
European shares fell 2.7 percent in early afternoon trade, while the STOXX Europe 600 Banking Index tumbled as much as 4 percent. World stocks hit a fresh 15-month low.
Spot gold was up 0.3 percent at $1,660.70 an ounce at 1117 GMT. German bunds, which are also seen as a relatively safe store of value, climbed along with gold.
Investors are still wary towards gold after it was caught up in a broad-based financial market rout in late September, which saw heavy selling of the metal to cover losses on other markets. Prices fell 20 percent from the record $1,920.30 an ounce hit early in the month.
"There is still potential for further slides should profit taking again set in. I'm not really convinced gold weakness is over," said Commerzbank analyst Eugen Weinberg.
"But gold is definitely living up to its status as a safe haven at the moment. That is very reassuring for investors."
Despite putting in its weakest performance in nearly three years in September, gold still managed to deliver its biggest quarterly gain of 2011 in the third quarter, and is up more than 15 percent so far this year.
This is even after some gains in the dollar, which has inched up 1.4 percent this year versus the euro. Gold is usually pressured by a stronger dollar, which makes it more expensive for other currency holders.
That traditional relationship has broken down since the credit crunch of 2008 as both the dollar and gold were targeted as stores of value. The dollar rose 0.2 percent against a currency basket on Tuesday, in line with gold.
Monday, October 03, 2011
The old Chinese proverb ‘Honesty is the best policy’ is often ridiculed in today’s business environment, but it’s crucial in ours. In some fields of business, it’s a worthless and extinct virtue. At KMG Gold, we know there is a close relationship between sincerity and truth and people can expect higher revenues in the business world if we combine them in reality.
A business that follows ethical practices is aware of the advantages that honesty can bring to the bottom line. After years of experience in the gold business, we know that customers want to know they have found an honest gold buyer.
You’ll find that people you conduct business with will show you far more respect if you employ the virtue of honesty. Any business must develop a healthy reputation and a strong foundation. With the aid of ethical and honest practices, a business can prosper and succeed in any competitive environment. In this particular field, having a good reputation is valuable and can only be developed if people trust the the entire organization. This provides confidence and a boost to the business which can lead to building strong personal and business relationships.
A business can expect prosperity and success if it complies with honesty, sincerity and truth. If, instead of duping people,current gold dealers chose to carry out open and honest transactions, they could expect success in the long run, but few do.
Honesty holds a lot of benefits. If personnel practice honesty, we will all see a sense of pride. This sense of pride can lead to earning greater revenues because it offers a mental boost to the organization.
Furthermore, a vibrant, strong goodwill can be developed by any honest business. This is especially true in the case of precious metals. Word travels fast in this industry and it doesn’t take long for the public to see who is on the right side of their transaction.
This is and always will be the backbone of KMG Gold.
Sunday, October 02, 2011
Watching the price of gold dive in recent weeks as the eurozone crisis worsened and economic indicators turned particularly gloomy has led some to question the yellow metal’s status as a haven asset.
Investors may disagree on what its price should be or what portion, if any, of a balanced portfolio it should make up, but on one issue there is consensus – gold is all about fear.
With central bankers making good use of their printing presses over the past three years, many investors are increasingly concerned about uncontrollable inflation eating into their cash piles. “Governments do not really understand the long-term effects of printing so much money,” says Dylan Grice, a global strategist at Société Générale Cross Research Alternative View.
“Inflation will be OK if central banks can remove the excess emergency money at just the right time and in the right quantities. I just worry that they are massively overconfident in their ability to do this.” Gold, on the other hand, was created billions of years ago when stars collided in outer space. There is no more where it came from. “Gold may be a mere lump of dense, useless shiny metal, but it’s one which crackpot central bankers can’t print,” Mr Grice notes.
“Fiat currency is a store of value to the extent that people have faith in politicians and central banks. The problem is that trust has been eroded. Central banks are under tremendous pressure to print,” says Tim Price, director of investment at PFP Wealth Management.
This was evident recently when the Swiss National Bank announced it was prepared to buy unlimited amounts of foreign exchange to stop the Swiss franc appreciating further or, in other words, to print unlimited amounts of the franc and debase its currency. With the Swiss having resisted printing money during the crisis, while competitors expanded their monetary bases with abandon, investors have been selling their own currency for the stronger franc.
But Switzerland ended up with an overvalued currency, which was harming its economy and action had to be taken. The bank’s move will boost gold, argues Mr Grice, as it “merely narrow[s] the universe of honest destinations for flight capital with which gold has historically competed.”
Those who are not worried about this type of inflation are petrified of deflation. But even in such a scenario, gold is still a better bet than any currency, according to the gold bugs.
If consumer prices were to fall by some 4 or 5 per cent, stock markets could plummet and the global banking system would be placed under great stain.
The price of gold could also fall, but probably not nearly as much, thereby preserving wealth and purchasing power.
Yet, others argue that a better strategy in a deflationary scenario is to invest in fast-growing industries. “People are very persuaded by crash and doom scenarios, and gold offers a cure for it. But there are other, more positive solutions. Invest in electric cars, recycling, renewable energy – these sectors are growing, and they hold massive potential,” says Chris Eibl, co-founder and head of trading of Tiberius Asset Management.
The recent sharp fall in the price of gold – prompted by declining fears of a surge in inflation in the US and of a collapse in the US dollar – took many analysts by surprise, yet it has done little to alter the fundamentals behind gold’s appeal versus cash today.
Gold may be disliked by some for paying no income, but with the Federal Reserve promising interest rates of close to zero per cent for the foreseeable future, cash deposits are earning no interest either.
“With bank deposits, you’re also fully exposed to the creditworthiness of the bank. It seems unfair especially as in real terms you’re actually losing some 5 per cent per year due to inflation,” says Mr Price.
His portfolio is almost 30 per cent in “real assets”, mostly gold and silver bullion vehicles. But it is not enough, he says, and he is building up the positions. “Fiat money is being printed faster than we can try to protect its value. We’re trapped in an Alice of Wonderland situation, where we’re running just to stay still.”
While no one knows exactly how a Greek default would affect the euro and the other currencies, or quite what would have happened if the US Congress had failed to agree on a debt ceiling deal, the price of the yellow metal works in a different way. “Above all, its value does not depend on the creditworthiness of any government or financial institution, and that may yet prove very significant in the weeks and months ahead,” notes Julian Jessop, chief global economist at Capital Economics, a research group.
Unlike the value of sterling or the dollar, the gold price is not limited by economic and policy considerations. Should Greece default or the eurozone break up, the dollar is expected to be the currency that benefits most given its status as the world’s reserve currency, but even it would be seriously undermined by fears that the US economy would suffer from the fall-out. The ensuing scramble for gold would be likely to boost its price significantly.
An example from the 1930s is often cited by gold bugs as an illustration of gold’s superiority to fiat money. In the midst of the Great Depression, an increasingly desperate president Franklin D. Roosevelt took advantage of a wartime statute that had not been repealed to outlaw “the hoarding of gold coin, gold bullion, and gold certificates within the continental United States”. The possession of monetary gold by individuals or companies became illegal, with some minor exceptions. Those who owned gold had the choice of exchanging it for $20.67 per troy ounce at the Federal Reserve or face a fine of up to $10,000 or up to 10 years in prison.
The order had limited effect as most people could simply hide or take their gold abroad. But to some investors it is a telling example of the arbitrary measures governments can take in a crisis. And it is clear, they argue, that an investor would want to hold gold over cash in such a situation. Gold will retain value even if the entire monetary system collapses. Who knows which currencies will still be around?
Saturday, October 01, 2011
Gold rose Friday on worries of a global economic slowdown, and the price of bullion notched its biggest quarterly gain of this year even after a sharp pullback from a record hit this month.
Gold posted a quarterly gain of 8 per cent – its biggest this year, despite a drop of 11 per cent for September – its largest monthly decline in three years.
For the day, gold finished higher as safe-haven buying resumed despite a rising dollar. Equities and industrial commodities fell after data showed manufacturing in China contracted for a third consecutive month in September.
“I think the correction has run its course. For the first time in quite some time, we actually bought some gold and platinum exchange-traded funds today,” said James Dailey, portfolio manager of the TEAM Financial Asset Management.
Spot gold was up 0.4 per cent at $1,620.60 (U.S.) an ounce by 2:55 PM ET.
U.S. gold futures for December delivery settled up 30 cents at $1,622.30 an ounce, with trading volume sharply below this week’s average as some bullion traders were away for the Jewish New Year holiday.
Gold, which fell this month during a broad selloff of riskier assets as investors worried about euro zone debt and a sluggish U.S. economy, remained 15 per cent below its record of $1,920.30 an ounce set Sept. 6.
Trade has been extremely volatile this month. The wide $400 trading range after the record on Sept. 6 has kept investors wary even as the correction from that high has lifted physical demand.
“In markets that have been shaken as badly as gold market has been shaken, it will take days, perhaps even weeks, before the bullish trend clearly reasserts itself, but we do believe that the margin clerk liquidation has probably run its course,” said independent investor Dennis Gartman.
Friday, September 30, 2011
Everyone has heard the term karat but few know the meaning or the original of the word. In the gold industry, karats is used to describe the purity of the gold used to make the piece. The word dates back to ancient Mediterranean and Middle Eastern civilizations that used carob seeds to measure the weight of gold.
The word carat is derived from the Greek word kerátion , which means “fruit of the carob.” Carob seeds were used as weights on precision scales because of their reputation for having a uniform weight. The other reason for the seeds use was that it was in order to keep regional buyers and sellers of gold honest, potential customers could retrieve their own carob seeds on their way to the market, to check the tolerances of the seeds used by the merchant. If this precaution was not taken, the potential customers would be at the mercy of "2 sets of carob seeds". One set of "heavier" carob seeds would be used when buying from a customer (making the seller's gold appear to be less). Another, lighter set of carob seeds would be used when the merchant wanted to sell to a customer.
As the softest metal in existence, pure gold is not the best for creating jewelry. Because of its softnesss. gold is often strengthened with zinc, copper, or silver. Rarely is pure gold used in the manufacturing of jewelry and the karat system is used to determine the concentration of its content.
Most gold jewelry in the U.S. is 10, 14, or 18k. A piece that is 18k is 75 percent pure gold, making it the most valuable of the three. Even when pieces have equal weight, the item with the higher number of karats will be more valuable. An 18k gold item will contain more yellow in the colored tint. Though 14k is more popular in the U.S., 18k gold is purchased by most European consumers.
Just because jewelry is stamped 18K does not mean it is. Laws vary between countries in terms of ensuring that these stamps are accurate. The U.S. is just one country that may not pursue a manufacturer for using a misleading stamp. Some countries mandate that gold purity be verified by a third party before a piece of jewelry may be stamped.
Those who buy gold coins are familiar with 24k gold because it is often used to make modern bullion coins. However, since it is often too soft for jewelry-making purposes, 18k is usually the highest number found on jewelry, though 22k is also available.
Wednesday, September 28, 2011
Gold futures gained the most in seven weeks as commodities and equities rallied amid optimism that European leaders will take steps to resolve the region's debt crisis.
The Standard & Poor's GSCI index of 24 raw materials surged as much as 3.6 percent, while the MSCI All-Country World Index jumped as much as 4 percent. In the previous three sessions, gold tumbled 12 percent, the most since 1983, on sales by investors to cover losses in other markets amid mounting concern that the global economy would slump.
"Gold is behaving like a classic commodity and is moving in tandem with the equity market," Adam Klopfenstein, a senior market strategist at MF Global Holdings Inc. in Chicago, said in a recently published interview. "The selloff was overdone."
Gold futures for December delivery gained $57.70, or 3.6 percent, to settle at $1,652.50 an ounce at 1:33 p.m. on the Comex in New York, rising the most since Aug. 8. Yesterday, the metal tumbled as much as $104.80 to $1,535, the lowest since July 8.
The precious metal has gained 16 percent this year, surging to a record $1,923.70 on Sept. 6.
"There is a small but growing group who believe this pullback will prove to be a good buying opportunity," Edel Tully, a London-based analyst at UBS AG, said in a report. "Gold needs to stabilize after suffering a good deal of reputational damage with recent wild moves."
Silver futures for December delivery advanced $1.56, or 5.2 percent, to $31.536 an ounce, the biggest gain since July 13. In the previous three sessions, the price tumbled 26 percent, touching a 10-month low of $26.15.
Tuesday, September 27, 2011
There has been a lot of turmoil in the financial markets in the markets these days, but if there’s one investment that should be going up according to the experts, it’s gold.
Gold has always been charged as the ultimate investment because it has been a "store of value." But the majority of the experts agree that gold is bound to keep going up as volatility rises, the gold bugs pronounce.
But the question floating around the investment atmosphere is, “Now that markets are struggling, why is gold on a slide?”
Several economists and market watchers seem to the answer. The word on the street is that people prefer to be holding cash as panic spreads across Europe. To get cash, they need to sell their investments including their gold holdings. If we go back to simple supply and demand concepts that explains the temporary price drop on gold.
“It shows you that at times of extreme stress, there is not a suitable substitute to liquidity and although gold is liquid by metal standards, in comparison to Treasurys, when you get this kind of flight to cash, then it really is cash that counts and that means U.S. dollars,” Credit Suisse analyst Tom Kendall said in a recent interview..
His point is quite valid, but he fails to mention any profit-making these investors may have cashed in on. It has been well documented that in recent years gold has been traded as an investment opportunity, rather than a store of value. So while investors were buying into the long-term strategy, big hedge funds and commodity traders were simply waiting for gold to hit a breaking point, just as they waited for metals such as silver to hit a breaking point back in April. As soon as one fund starts to sell, many more do.
It’s situations like this that prove, yet again, that gold is a safe bet. The current market situation demonstrates why some people keep buying and selling the precious metal over the long term. To make the most of any investment strategy you have to understand how or why the value moves.
Monday, September 26, 2011
The price of gold was down again on Monday as investors traded the metal for the perceived safety of cash. "Essentially gold is a victim of its own success," said Edel Tully, a precious-metals strategist at UBS in London.
The price of spot gold fell to its lowest in two and a half months, and is now down 9% from the record high of $1,920.94 a troy ounce that it notched on Sept. 6. The price of spot gold was recently at $1,615.0/oz, down 2.4% from its close in New York on Friday.
“It’s a good time to sell,” said Michael Gupton of KMG Gold in Winnipeg. “It always is if you apply my Dollar Averaging concept,” Gupton explained referring to his upcoming publication, As Good As Gold.
Analysts said gold is suffering at the hands of investors who are cashing in on gold's recent bull run to shore up their books and cover losses elsewhere. Gold was one of the main beneficiaries during the turbulence in financial markets this summer and the growing aversion among investors toward risky investments.
Mr. Gupton added that the extent of the selloff was not surprising, and reflected the strong demand for cash amid a strengthening dollar. “Gold is a safe alternative and this action just proves my point.”
The price of silver was recently down 7.7% at $28.56/oz. It had earlier traded as low as $26.100/oz.
The price of spot platinum was 3.8% lower at $1,543.70/oz, while the price of spot palladium was down 1% at $625.50/oz.
Sunday, September 25, 2011
China has installed the country’s first gold vending machine in a busy shopping district in Beijing. Largest Gold producer and second largest to India in consuming, China becomes the sixth nation to open a gold vending machine for its people.
Gold vending machines are now operating in the US, UAE, Germany, Spain and Italy. According to reports, China is set to open vending machines, made by the same German company TG Gold Super Market that supplied machines to other countries.
Shoppers in the popular Wangfujing Street can insert cash or use a bank card to withdraw gold bars or coins of various weights based on market prices. The machine was launched Saturday by the Beijing Agricultural Commercial Bank and a gold trading company, the report said.
The machines will dispense gold bars weighing up to 2.5 kilograms and work just like the normal automatic teller machines (ATMs), cnr.cn reported, and citing sources close to the matter.
The machines can accept both cash and credit cards. The cash-for-gold machines will be on trial at Beijing’s upscale clubs and private banks during the initial period for security reasons. They plan to install an unspecified number of machines in secure locations such as gold shops and up market private clubs.
Gold is often used as a hedge against inflation and the machines could prove popular among Chinese consumers looking for a convenient way to safeguard their cash amid rising prices.
Chinese consumer demand for gold soared 27% year-on-year to 579.5 tonnes in 2010, according to the World Gold Council. India, the world’s top consumer, saw a 66% increase to 963.1 tonnes.
Saturday, September 24, 2011
One of the most important traits which is argued about and discussed in the gold industry is ethics. What’s more is that it’s on the pillars and basis of ethics that the gold industry is dependent. It has been witnessed that most gold dealings are conducted dishonestly. It is a very common activity of people to amalgamate gold with other substances. Therefore, a particular set of ethics have to be followed by gold dealers for avoiding different problems.
It is vital that the individuals which are being served should be offered complete dedication by all members of the gold industry. From the client’s point of view, it becomes a very constructive and faith building activity. There are several dealers in the industry which are dishonest so people do not know how to find an honest gold buyer. Even if a single member of the industry is dishonest, the reputation of the entire industry goes down the drain. In fact, if this happens, people will never revert to the same dealer if he is dishonest.
When dealing with the shareholders of the gold mining company, ethics again play a very important role. If there is even a small inkling that the company is conducting fraudulent activities, the government will have to interfere. The credibility and the reputation of the company will be destroyed in the occurrence of a scam. It is vital to lay importance of ethics in the event of a company wishing to carry out expansion.
In case of inter business dealings, ethics are also crucial. This is because if any competitor gets even a minor hint of any fraudulent activities, they will destroy the reputation of the company by disclosing the matter to higher authorities. In this case, legal action can also be taken by a company. In this manner, both the shareholders and the public will lose their trust in the company. Hence, business ethics should be followed in order to avoid such a situation.
The backbone of a company is its employees. Without the contribution of the employees, the company will cease to exist. Business ethics play a very vital role in the benefit of not only the company as a whole but also the employees because it leads to more productivity. In addition, the employees will work harder and with more dedication for achieving their aims in target as their confidence will be boosted.
KMG Gold Recycling which is a precious metal refinery in Canada is a perfect example of business ethics. It complies with all rules and regulations and work to maintain the faith and trust which people have placed in them. All business ethics are followed by it.
Friday, September 23, 2011
The world economic scenario has undergone a lot of turbulence and uncertainty in the past few decades. Therefore, it is a secure alternative to make long term investments. The retirement accounts are decreasing, the stock exchange is also subject to huge fluctuations and the value of all currencies is on a decline. Gold has become a prized investment in such these circumstances. Gold has emerged as a winner because it has been able to withstand all the lashes of recession. Apart from being used in ornaments, gold also possesses immense historical value and importance. What’s more is that by buying gold at a lower price and selling it at a higher price, one can make money.
To ensure that gold proves to be a secure and reliable investment, people should understand some simple steps to buy gold. To gain a full understanding of the ins and outs of the market, people should thoroughly analyze the gold market. If one wants to know the potential value of gold holdings, people should understand the value of the metal and have complete knowledge of its historical relevance. Moreover, people should be aware that gold investment is not restricted to one specific option. People can buy metal futures, certificates, stocks of mining companies, wafers, physical bars and coins and mutual funds of precious metals amongst others.
Before settling on one form of investment, people should have a thorough understanding of the gold industry. In addition, the mode of investment which is selected should enable people to make money and should also be within means. Those investors should look for gold coins that have a limited allocation. Not only these coins have immense historical value, but are easy to transport and convenient to store and hold.
Finding a reliable gold dealer is the next step which has to be followed. It is essential to find a dealer who is honest, trustworthy and follows all business ethics from the ones which are available locally as well as online. All Canadian cities like Toronto, Calgary, Kamloops, Vancouver, Winnipeg, Victoria etc have their own gold dealers.
There are several gold dealers located in each city. It can be seen that people can save on the transportation and shipping costs can be saved if one opts to use a local dealer. On several occasions, people can gain confidence by investing in smaller items.
People can choose any gold refinery in Canada for confirming gold authenticity of gold with the help of gold assay services. KMG Gold Recycling is a suitable choice when looking for a precious metal refinery in Canada. People can make a decision once the refinery has analyzed the gold. KMG would be the ideal choice as it conducts all its transactions with honesty.
Thursday, September 22, 2011
The Royal Canadian Mint is on track to raise sales of its silver bullion coins by around 30 percent to 25 million ounces this year and to match last year's record gold sales of around 1 million ounces, an executive from the Mint said.
Speaking on the sidelines of the London Bullion Market Association annual conference, John Moore, executive director of bullion and refinery services at the Mint, told Reuters investors believed silver had more room to rise than gold.
"In terms of our sales this year, year to date we're tracking to the same volumes as we had last year in gold, which were record volumes for us. heading toward a million ounces," he said.
"In silver, we are 30 percent ahead of where we were last year," he said. "We finished last year with 18 million ounces of silver (sales). We are looking at increasing those sales by about 30 percent to the end of this year, to around 25 million ounces."
While silver sales have been strong, very few scrap coins are being returned to the market despite a rally in silver prices to record highs near $50 an ounce in late April.
The metal dropped sharply from that high, however, falling by around a third in just six sessions after its record high, unsettling some investors.
"Analysts are still calling for silver to follow gold and go back up to $50," Moore said. "If you believe gold is going to $2,000, you will probably believe that silver will follow it and go to $50."
Wednesday, September 21, 2011
Gold climbed to a record $1,921.15 an ounce on Sept. 6. Prices more than doubled since the end of 2007 as stock markets slumped, economies contracted and central banks and governments pumped more than $2 trillion into the global financial system. It all sounds perfect but there are issues involved.
Deep in the 7.4-acre Singapore Freeport next to Changi International Airport’s runways is the bullion vault of Swiss Precious Metals, behind seven-metric-ton steel doors built to survive a plane crash or earthquake.
The rooms are almost full after demand rose fivefold in the year since the Geneva-based company opened the facility. The firm is planning on an expansion to cope with the surge of investors willing to pay as much as 1 percent of the value of their holdings each year to keep them secure.
“The European debt crisis and its impact on the solvency of European financial players are driving European customers to find safe investment opportunities like physical gold and other precious metals,” a representative said.
Barclays Capital is building a new vault, The Brink’s Co.and Deutsche Bank may add more space to there facilities, and the Perth Mint may expand for the first time since 2003. It’s a sign they expect demand to keep increasing after the 11-year rally during which prices increased sevenfold. Investors in exchange-traded products backed by gold bought 2,198 tons of bullion since 2003, exceeding all except four countries’ official stockpiles.
Gold rose 28 percent to $1,813.15 this year. The metal will exceed $2,000 this year, according to the average estimate of 16 respondents in a Bloomberg survey at the London Bullion Market Association’s conference in Montreal. The metal will peak at $2,268 next year, the survey showed.
Storage companies are responding. The 112-year-old Perth Mint, which refines more than 8 percent of all supply and is owned by the Western Australian state government, may add a new vault within the next year, according to Treasurer Nigel Moffatt. The mint sells everything from gold coins to 400-ounce (12.4-kilogram) bars.
Brink’s, the largest bullion carrier in the U.K., is considering adding more storage after opening a new London vault earlier this year. Barclays, based in London, is building a vault in the city that will open next year, the bank said in a statement last week.
“With gold prices where they are, we encourage people to keep it in safety-deposit boxes at banks or vaults, which gives that sense of security,” said Scott Carter, chief executive officer of Goldline International Inc., a Santa Monica, California-based precious-metals retailer established a half-century ago.
“Many vaults are hitting the insurance limit as prices of gold have surged and even if space is available, the full replacement insurance may not be available,” said Savneet Singh, the CEO of New-York based Gold Bullion International, which offers precious-metals storage to wealthy individuals, hedge funds and financial institutions. “The smaller customers are already getting squeezed.”
Tuesday, September 20, 2011
Jewellers scale are a must have for people who deal in precious metal items. Such items include diamonds, semi-precious stones, silver and gold.
What Is A Jewellers Scale?
This is a weighing machine that can measure very minute objects. The scales are digital and are available in stores that stock jewellery and precious metals. Resellers are also popular users of these scales. They weigh carats either for gold or diamond, and help in determining the value of the underlying precious metal.
How Gold Is Weighed
Currently, gold is weighed as:
1 ounce - 31.1 grams
1 kilogram - 32.2 ounces
One buying a scale must be careful so as to get the best scale. Reputable makers of these scales have evenly distributed their products in the market. There are some guidelines that can help a buyer know exactly what to look for in a scale. These are mainly requirements that have been set by the industry in regard to the ideal scales. These are:
A jewellers’ scale must have a digital display that gives accurate measurements. The scales are convenient because they give quick results, in seconds! Whether a person is seeking to buy or to sell precious metal items, a jewellers scale offers more efficiency than other weighing methods. Accurate measurements lead to accurate transactions which are necessary for business efficiency.
b)Source of power
Jewellers scale are very convenient for use. For people who are always on the move, battery run scales are available. They are also portable hence ideal for field studies.
Uses Of Jewellers Scales
Though the word jewellery is used in its name, jewellers scale can be used by just about anyone. Insurance firms use them use them to ascertain the inherent values of items such as rings, bracelets, gold items and other precious metal items. They do these tests so as to determine the amount of insurance cover that is payable for the precious metal items.
Auction houses also have these scales for establishing the values of items from diamonds, silver, gold or semi-precious metals.
Individuals are also users of these scales. They use them to determine the value of the jewellery they buy. It is important to know that the item one is buying is genuine and that the value stated is indeed the true value.
Modern systems weigh gold in grams though the price of gold is quoted in ounces. Knowing the ounce equivalents of these grams helps an individual get the correct price for gold items.
Therefore, one should invest in a jewellers scale that is properly calibrated as this is the first step to determinig the true value of a precious metal item. Consider your options carefully!
Monday, September 19, 2011
Earning top dollar for a stash of scrap gold begins by selling directly to the refinery. The biggest mistake you can ever make is selling gold, silver, platinum or palladium to local middlemen. Middlemen will rip you off by paying peanuts for scrap gold items. There are as many reputable gold buyers as there are fly-by-night firms run by middlemen.
How to identify reputable refineries
A number of factors can come in handy when looking for reputable refineries. Look out for the following;
Honesty and Integrity
Honesty and integrity will be embodied in accreditations such as Better Business Bureau (BBB), McAfee, VeriSign and TRUSTe. Honesty and integrity are two important cornerstones of any successful business. The Better Business Bureau is a consumer watchdog that fosters trust between customers and companies. A company that lacks accreditations cannot be trusted. It’s too great a risk and chances are you will be paid peanuts for your stash of scrap gold.
High Payout Rates
Refineries pay more money than local middlemen gold buyers, pawn shops or pawn brokers. Refineries will pay an average six times more money than local middlemen. Rather than sell gold, silver, platinum or palladium items to middlemen, deal directly with refineries for the most money. Local middlemen simply collect gold, silver, platinum and palladium items and sell to refineries for top dollar. Middlemen or pawn shops and pawn brokers can never offer top dollar. They are also looking to make top dollar from refineries and will thus pay peanuts for your gold.
Refineries offer faster turnaround, with faster services and payments. Beware of gold buyers who hire summer students or minimum wage workers to test and analyze your gold. All gold, silver, platinum, palladium and rhodium at KMG Gold is professionally tested and analyzed by a KMG Gold Certified Engineering Technologist, Certified Engineering Technician, or Applied Science Technologist. This in turn, results in faster turnaround and payments.
Only the best gold buyers and gold refineries offer real, claimable insurance for your precious metal. UPS, FedEx, Purolator, Canada Post, the US Postal service etc will all sell you insurance, but it is not claimable for precious metals, gems, jewelery, gold bars, silver bars coins wafers etc.
Only KMG Gold Recycling offers genuine, claimable shipping insurance for your gold at one half the costs of the other carriers insurance.
Saturday, September 17, 2011
Silver is a soft, white, lustrous transition metal. The metal occurs naturally as an alloy with gold and other metals. It is also available in minerals such as argentite and chlorargyrite. However, most of the silver is a byproduct of copper, gold, lead and zinc refining.
Silver is a valued precious metal used to make ornaments, jewellery, high-value tableware and currency coins. Today, silver has found an array of use as conductors, catalysts, disinfectants as well as in photography.
Silver In Photography
Photography has been around since the early 1800’s. Silver was used in photography for making silver based films. Its popularity grew steadily over the years. However, the recent introduction of digital cameras has reduced the use of silver in photography.
Silver halide crystals were used to cover a film. The crystals, once exposed to light would set. Due to their stability, they produced high definition photos and was therefore the best photographic method.
In the medical and industrial fields, X-rays use silver based films. Industrial inspections involve routine tests of cast metals. Scanning of machinery parts to display hidden flaws is done using these silver based X-ray films.
However, the use of digital cameras has greatly reduced the demand of silver in photography. In 2007, the demand for silver in photography was about 12 – 15% of the years’ total production. This was approximately half the silver that was demanded ten years before. With this large decline, silver is still significant in the industry.
Crime Scene Cameras
Silver based films are widely used and are the recommended technology for evidentiary photography and other field applications. These cameras are preferred because they offer high resolution and the highest dynamic range. Of the available camera technology options, these cameras possess the best colour range.
Compared to digital storage media, silver based films have a more lasting storage medium which is readily available.
Advantages Of Silver Based Films
1.They have a high resolution quality that gives a sharp image. The small sized silver crystals are the ones that give the cameras this high resolution.
2.The films are readily available and are manufactured by many reputable companies.
Disadvantages Of Silver Based Films
1.The films require separate processing and printing facilities.
2.They use up a lot of time in processing.
3.Processing this films produces environmentally hazardous byproducts.
4.The film needs a lot of care in handling before it is processed. This is because exposure to humidity and temperature destroys the content.
5.The images taken can not be viewed immediately like in digital cameras, unless an instant film was used.
6.They do not have provisions for editing the images taken hence all faults are processed with the images.
Tuesday, September 13, 2011
A crown is a form of dental restoration which is used on a tooth or a dental implant. They are used when a cavity develops on a tooth and are applied on the tooth using dental cement. Their purpose is to improve the appearance and strength of a tooth. Different materials are used for making the crowns. Gold is the most common.
Full Gold Crowns
These are the most common gold crowns used by dentists. Though they are called gold crowns, they are made up of a number of elements: the noble metals (gold, platinum and palladium) and the base metals (silver, copper and tin). Gold crowns that have a high noble content are of better quality.
Technique For Making Gold Crowns
Gold crowns are made through a process known as the Lost-wax technique. A dentist takes the impression of the tooth to be replaced, those adjacent and those opposite. The dimensions of the cast crown are then done in three dimensions, that is, the height, width and depth.
The measurements are recorded on an impression material and send to a dental lab. Dental stone or plaster is used to make the models of the tooth. The models are then ditched, died and articulated so that their arches meet properly.
To this tooth analog, known as a die, is applied wax. The wax is carefully moulded to gain the shape and exact dimensions of the tooth being replaced. Before the wax is applied, a die spacer is applied. This helps provide a space between the actual tooth and the gold crown.
A lubricant is also applied to ease in removal of the wax pattern once preparation is complete. The wax pattern is then invested in a plaster like material. It is then placed in a furnace which burns off all the wax and plastic that was in the wax pattern, hence the name Lost-wax technique. A hollow is left which is known as the investment pattern.
To this hollow is shot pennyweights of melted gold. Once it has cooled, the crown is polished to high shine. Touching up is done at the place of attachment as the dentist checks to see if fits in with the adjacent teeth.
Advantages Of Gold Crowns
•Gold is very strong and resistant to corrosion. It is mostly applied on the back teeth that have biting forces.
•It adapts and fits well as a crown.
•Preparing a tooth for a gold crown is easy as no healthy tooth structure is tampered with.
•It provides longevity in service.
Disadvantage Of Gold Crowns
Full Gold Crowns have one major disadvantage. This is the fact that they are cosmetic and hence not suitable for front teeth.
Saturday, September 10, 2011
This is a technique that has been in use for quite a few years. It is used in the analysis of gold and platinum group elements. The process aids in the separation of minerals from ores. It is by far the most common and widely used process in metals analysis.
Whether the application is applied with large or small samples, the procedure is generally the same. It involves addition of a lead based flux that has been added to the test sample. The resulting mixture is then fused at temperatures of 1650 F. Silver is usually added to this mixture as it helps in the collection of gold. For samples that have trace amounts of gold, the addition of silver collects the traces therefore enhancing gold collection.
The material obtained from the fusion is poured onto a mould and cools into a lead button. This contains all the precious metal that was in the sample. A silica glass slag is placed at the bottom of the mould which is removed later.
The next step is the separation of the precious metal from lead. This is done through a process known as cupellation. It uses a porous crucible known as a cupel which is made of magnesium oxide and bone ash. Heating the cupel and the lead button in the same furnace leads to oxidation of the lead. It is absorbed into the cupel, leaving only the precious metal which has may have traces of silver.
The addition of nitric acid separates the gold from silver. This possible because silver is soluble in acid. The gold then undergoes a procedure known as gravimetric finish, which is the determination of the golds’ original grade. However, the gravimetric finish is only applicable on large gold samples. For gold that has small particles, they are dissolved in hydrochloric acid and the resulting concentrate measured using AAS.
For platinum group elements, the final measurements, unlike for gold, are done using ICP.
Advantages of fire assay
Fire assay can be used on samples that have tiny particles.
Factors within the precious metals make the method viable. These are:
a)The solubility of these metals in molten metallic lead and insolubility in other molten metals.
b)The metals are easily separated from the lead.
Fire assay is the most accurate method of assaying precious metals and is widely used by refiners. Though it is time consuming and labour intensive, it is the best method for assaying. However, caution must be observed in the process to avoid accidents. It is mostly commonly used by professionals but individuals can do the test for themselves by apply strict guidelines to ensure the right results are obtained.
Wednesday, September 07, 2011
Of all asset classes in today’s markets, gold is unique. And for a number of reasons.
Firstly it acts as a long-term hedge and a short-term flight to safety instrument against virtually all other asset classes. Secondly, it supports a wide range of instruments, including physical delivery (bullions, coins and jewellery), gold-linked legal tender, gold-based savings accounts, plain vanilla and synthetic ETFs, derivatives and producers-linked equities and funds. All of these are subject to diverse behavioural drivers of demand. Thirdly, gold is psychologically and analytically divisive, with media coverage oscillating between those who see gold as either a long-term risk management tool, or a speculative “bubble”.
In the latter context, it is interesting to look closer at the less-publicized instrument -- gold coins, traditionally held by retail investors as portable units to store wealth. Due to this, plus demand from collectors, gold coins are less liquid and represent more of a pure ‘store of value’ than a speculative instrument.
Classical bubbles arise when speculative motives (bets on continued accelerating price appreciation) exceed fundamentals-driven motives for holding gold. In later stages of the “bubble”, we should, therefore, expect demand for gold coins to fall compared to the demand for financially instrumented gold.
The U.S. Mint data on sales of gold coins suggests that we are not in the last days of the “bubble”. But there are warning signs to watch into the future.
August sales by the U.S. Mint were up a whooping 170 per cent year on year in terms of total number of coins sold, while the weight of coins sold is up 194 per cent. On the surface, this gives some support to the theory of gold becoming overbought by retail investors. However, monthly comparatives reflect a huge degree of volatility in U.S. Mint sales and August results comfortably fit within statistical normals for the crisis period since January, 2008. August results also fall within the historical mean (1987 through Monday).
At 112,000 oz of gold coins sold, August, 2011 is only the 19th busiest month in sales since January, 2008. Since 1988 there were 87 months in which average gold content per coin sold by the U.S. Mint exceeded the August, 2011 average and on 38 occasions, volumes of gold sold exceeded last month’s. In other words, current gold coinage sales do not represent a dramatic uptick in demand.
Tuesday, September 06, 2011
The London Gold Fixing is the most common benchmark for the price of gold. The London Gold Fix refers to a twice daily telephone meeting of committee members from five bullion trading companies on the London Bullion market.
Representatives from the five firms meet twice daily to set the price of gold bullion. However, gold trading goes on world over based on the intra-day spot price, which is typically taken from over-the-counter gold-trading markets globally.
Recent Price Increases
The recent increase in the price of gold can perhaps be traced back to 2008, when the gold price went above US$1,000 to peak at US$1,004.38. However, after the March 2008 increase, Gold prices once again fell to a low of US$712.30 per ounce.
But it wasn’t long before the prices begun to rise again in late February 2009. Towards this time, the gold price provisionally went above US$1000 but later experienced a slight decline towards the end of the first quarter of 2009. By the end of 2009, the earlier March intra-day spot price record of US$1,033.90 was surpassed numerous times in October.
The price of gold effectively began climbing new highs in late 2009, peaking at about US$1226 before a sudden slight decline. However, as of August 19, 2011, the price of gold had peaked at a new all time high of US$1852.00 at the London Gold Fix.
A number of factors account for the fluctuating price of Gold.
Like any other goods, the price of gold is largely determined by speculation, supply and demand. On the one hand though, saving and disposal also affect greatly the price of gold more than its consumption. The fact is, most of the world’s gold ever mined can be found in bullion bars or jewelry, but with minimal value in terms of gold’s fine weight. As of the end of 2006, estimates indicate that all gold ever mined globally summed up to 158,000 tons.
Considering the fact that vast amounts of gold are stored above ground than annual gold production, the gold price is mainly driven by alternating sentiment (demand), as opposed to annual production (supply).
Estimates from the World Gold Council indicate that annual mine production of gold in recent years has been around 2,500 tons. Out of this amount, about 2,000 tons goes into the jewelry and dental industry and a further 500 tons is used by retail investors and exchange traded gold funds.
There has never been a better time to sell gold given the high price of gold currently in the international bullion market. Generally, the price of gold has also historically gone up in uncertain economic situations, such as inflation, as investors rush to hedge against financial losses.
Friday, September 02, 2011
Gold prices held steady on Friday as investors stood on the sidelines ahead of a key US payrolls report due later in the day, after recent data sent mixed signals about the status of the world's largest economy.
Caution is likely to prevail before the key US August employment report is released at 1230 GMT. Nonfarm payrolls are expected to have increased 75,000, slowing from July's 117,000 rise, according to a Reuters survey.
A big surprise in the jobs data could move gold prices up or down. Short of a huge discrepancy with forecasts, however, many players will continue to try to ride the middle ground.
"Gold seems to have a trading band of $1,810 and $1,840, and is unlikely to break the range ahead of the payrolls data," said David Thurtell, a Citigroup analyst.
Spot gold edged up 0.3 per cent to $1,829.21 an ounce by 0634 GMT, little changed from a week earlier.
US gold inched up 0.2 per cent to $1,832.30, headed for a weekly gain of 1.9 per cent.
Investors will keep an eye on inflation figures from China next week to gauge the progress of Beijing's battle against rapidly rising prices, while a two-day policy meeting of the US Federal Reserve starting Sept. 20 will also be in the spotlight.
Gold up on safe haven buying Gold rose to a 1-1/2 week high on
Friday, benefiting from caution about the euro zone debt crisis and ahead of the key U.S. non-farm payrolls data which is likely to underscore the frail state of the world's largest economy.
Growing worries about Greece's ability to meet its deficit targets fuelled a pullback in risky assets, with European stock markets falling sharply, prompting investors to seek refuge in
safe haven assets such as gold.
In the latest twist in Greece's debt saga, talks between Athens and international inspectors on whether it has met conditions for a new aid tranche have been put on hold, a day after Greece said it would miss its budget deficit targets this year.
Spot gold rose 1.5 percent to $1,851.14 an ounce at 0954 GMT, from $1,824.55 late in New York on Thursday. It earlier rose to a high of $1,855.30, its highest level since hitting a record high above $1,910 on August 23.
"We're seeing a new round of flight into so-called safe haven assets. The debt problems in the euro zone are still a worry and it offers an opportunity for market speculators to buy gold," said Peter Fertig, a consultant at Quantitative Commodity Research.
The metal rose 12 percent in August, its strongest monthly gain since Nov. 2009 as a run of soft economic data fuelled speculation the Federal Reserve would print more money to shore up the flagging U.S. economy.
Friday, August 26, 2011
Goldsmiths struggle in soaring market for precious metals
Demand for jewellery dries up as people become sellers of gold rather than buyers
With its genteel Georgian square and cobbled pavements, Birmingham's 250-year-old jewellery quarter is a world away from the high-octane trading desks of the Square Mile in London.
But investors in the City and elsewhere are playing God with the district's 400 manufacturers and goldsmiths, whose livelihoods are threatened by the unprecedented march of the gold price, which has surged nearly 500% in the last decade and touched a record high of $1,911 (£1,176) this month.
This dramatic rise has not gone unnoticed by the general public, who have been shrewdly digging out their jewellery boxes. The handwritten sign outside one store promises "£12 per gram" for nine-carat gold rings and chains, while nearby windows scream "we buy gold, best prices paid". The people peering in the windows are now as likely to be selling family heirlooms as shopping for them.
Gold Ends Up 2% As Hopes Of Stimulus Remain
NEW YORK (Dow Jones)--Gold ended 2% higher on demand for a store of value after Federal Reserve Chairman Ben Bernanke gave markets no hints that another liquidity injection was imminent.
The chairman said the central bank is ready to provide more support to a weak U.S. economy and the Fed would extend its mid-September meeting to two days to discuss options possible policy options.
"The Committee will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate to promote a stronger economic recovery in a context of price stability," Bernanke said.
Gold prices whipsawed throughout Bernanke's speech, slumping $20 to graze session lows then recovering to touch a high of $1,800.
But while the chairman gave no indications of more quantitative easing, many market watchers took the September meeting extension as a sign that help was on its way.
"The market is looking for more easing at the September meeting and gold is driven higher by that," said Matt Zeman, head of trading at Kingsview Financial.
Gold for December delivery, the most actively traded contract, settled up $34.10, or 1.9%, at $1,797.30 a troy ounce on the Comex division of the New York Mercantile Exchange. The contract marched even higher after floor trading closed, touching $1,810.60 recently.
Gold Price Plunges 5.6%, Tarnishing Safe-Haven Image
Maybe gold isn’t so safe after all.After months of setting record after record, the price of gold plunged $104, or 5.6 percent, Wednesday to finish at $1,757 per ounce. That was the biggest percentage drop in nearly 3 1/2 years and a blow to investors who thought the metal could go only one way – up.
“Gold was considered a safe haven for years because it wasn’t popular, but now it’s popular,” said Cetin Ciner, a professor of finance at the University of North Carolina-Wilmington. “You can’t have a fad and a safe haven at the same time.”
Investors may have been selling on news of new rules in China requiring traders to set aside more collateral when borrowing money to buy gold. After gold settled in the U.S. Wednesday, exchange operator CME Group announced it was raising its collateral requirements, too.
Thursday, August 18, 2011
There has been a drastic increase in gold investment in the city of Winnipeg. People often chose to invest the spare cash they have into gold and then liquidate it when prices rise. Like other cities in Canada such as Calgary, Vancouver, Montreal, Victoria etc, Winnipeg is also becoming the hub of gold trading. Buying Canadian gold bullions can lead to a variety of options for people in regard to investment. As there is no lock period for the purpose of liquidating your investment, you can sell your gold when you want.
People reap certain benefits when they purchase gold:
• It is said to be the safest and most reliable form of investment, because the gold bullion
is offered to people by the government. A variety of options are offered by the Canadian Mint for to invest in gold bullion. When you want to buy gold, you have the option of public or private parties. Trading is conducting with the help of spot prices but premium may also be charged. A Winnipeg gold buyer should remember that for gold investment, there are numerous ways. There are different ways to invest in gold so it is not necessary to purchase gold bullion.
• People can make use of the internet to make an online purchase and thus make an investment in gold. In this manner, people can use gold as a means of trading as they will not get their hands on tangible gold but it will instead be available in the form of stock or a commodity. But this is only applicable in situations where gold is bought for investment purposes.
• For people who are newcomers in the market and are making gold investments for the first time, there are literature and magazines which can offer all the necessary information about the gold market and explain its trends which can lead to better decision making. Reading them will be helpful in comprehending the moods and trends of the market and will help people in deciding the correct time for making or selling investments.
To earn top dollar as a buyer, one needs to spend time in educating oneself about the trends of the market and the different trading strategies which are used and will eventually allow you to get higher returns from your investment. If one wants good results, then for starters, small investments should be used and once people have analyzed and understood the market conditions and trends, huge investments can be made. To make a great profit in a short time, people can make large investments once they have gained confidence. The most liquid and highly paying investment is gold. But it requires large investments so one should be cautious. Before investing in private parties, people should get feedback from old clients and research it thoroughly. Before entering the market, one should be aware of the trends and political conditions.
Tuesday, July 26, 2011
Gold and silver are some of the oldest rare metals known to man and have been used for varying purposes throughout history. Today, Gold and Silver are used widely in industry amongst other applications.
Gold is increasingly finding usage in industry due to its range of favorable properties. Gold has been used in dentistry, jewelry as well as in the manufacture of industrial applications. The use of Gold has been necessitated by favorable properties such as:
•Its resistance to corrosion
•Efficient electrical conductivity.
•Gold has suitable Thermal Conductivity
•High Ductile and Malleable
Today, Gold is used in a variety of industrial applications such as manufacture of electronics components, equipment such as computers, mobile phones and home appliances. These applications have been made possible by Gold’s superior electrical conductivity, high malleability and resistance to wear and corrosion.
With a high infrared reflectivity, Gold has found suitable usage in the manufacture of shielding used to protect spacecrafts and satellites from the effects of solar radiation. In addition, industrial and medical lasers also make use of a Gold coated reflector that focuses light energy. In medical research, Gold is extensively being used as it portends no harm to the body. Gold has traditionally been used in the treatment and management of arthritis amounts others intractable diseases.
There has been a steady growth in industrial demand for Gold. Currently, most of the world’s gold supply goes into the Jewellery industry.
Silver has been used historically for various purposes, ranging from medicine, coinage to industry. Silver has the best electrical conductivity properties of all metals and does not corrode. Silver has widely been used in the production of coins and silverware. However, recent years have witnessed a fall in global silver supply, as demand from industry continues to grow.
Silver use in industry has also been made possible by the metal’s favorable properties. Today, the US leads in overall global silver consumption. The photography industry also takes a considerable amount of the overall silver supply globally. Silver is used in the manufacture if color film used in shutter cameras.
However, the advent of the digital camera has somewhat affected the uptake of silver in the photography industry. Silver demand is also driven by the electronics industry. Electronics manufacturers prefer silver due to its high electrical conductivity per unit volume. However, its high price and unavailability has seen silver replaced by Copper.
Silver is also used in the manufacture of switch and relay contacts for vehicles and automotive window heating systems. Today, a very small amount of silver is used in coinage. Major silver miners in the world include Peru, the US, Canada, Spain, Australia and Mexico.
Wednesday, July 20, 2011
Scrap gold buyer online in Victoria, KMG gold is where you can sell your gold from gold parties for the best price as a part of your work at home plan. You can sell silver, sell platinum, sell rhodium and sell palladium with KMG gold. Being a refinery they assay the scrap precious metal you want to sell and you get paid for the pure metal content in the scrap.
Gold was forever viewed as a metal with great significance. Almost every culture in the world viewed gold as a metal that means wealth and indeed this indicated some signs of prosperity as well. This is the case since the first time gold was identified, probably due to its shiny appearance and durability. People destroyed kingdoms and people to acquire gold because of their passion towards gold and the fascination they had towards possessing gold. Gold for all reasons whether it was obtained as a gift or as a result of war represented status.
Egyptians were of view that gold is the flesh of their god Ra. Ra is the term they use to denote the sun God. This idea was probably because the sun is golden in color. Most of the royals of the Egypt, popularly known as the Pharaohs treasured vast reserves of gold and they firmly believed that will be of great value in their after lives. Priests and people who were religious leaders as well were buried in caskets that were made of gold or that which had gold articles in them.
Celtic gods were central to the culture of Ireland and they made gold bracelets and gold collars for their gods. They were treasured secretly in rivers and marshland as an offering to their gods. A similar practice was prevalent among the people from the Central American civilization where they threw gold in to the holy lakes or holy rivers.
Gold artifacts are very famous among the African people as well. Special craftsmen and gold smiths were employed to design the gold objects that were used to adore the leaders and religious leaders. As well gold was used to decorate the royal residence and royal courts. There has been a long standing history of gold exported from different regions of Africa to different parts of the world.
Gold has widespread use in China in the Buddhist culture. It is a belief that the Romans were the first of the cultures to have brought the practice of using gold rings in holy matrimony. Ceremonial cups and other articles were made of gold in various cultures from around the world. Even in the modern era, the presence of gold at home is considered auspicious as an omen of prosperity in most cultures. No wonder investment in gold is continuing despite the all time high price for gold. Perhaps, the love for gold is embedded in the human DNA.
Friday, July 15, 2011
Panning for gold became a famous gold mining method during the gold rush. The Gold Pan was widely used to extract gold from sediments and gravel along river banks and streams. To date, panning for gold is still being done in small scale mining operations throughout remote locations in the world. The Gold pan was an effective mining technique of its time, used in the extraction of gold from placer deposits.
Gold Panning Procedure
The Gold Panning procedure is a simple undertaking, at least in name, in which gold containing material is placed in the pan and shaken under water to remove sediments and gravel. Naturally, gold being denser than sand or gravel settles at the bottom of the Pan. Today, placer deposits have greatly been depleted. Most of the world’s supply of gold is mined from deep underground. When gold was first discovered in North America, miners would extract considerable amounts of gold using the Gold Pan. Placer deposits were abundant.
Once the placer deposits have been placed in the pan, the miner places the Pan under water and shakes with varying movements, from left to right or vice versa. Shaking movements will vary considerably from one miner to the other. The shaking movements are repeated until all sand and gravel has been washed away.
However, the gold has its own advantages and disadvantages;
Merits of the Gold Pan
The Gold Pan is an effective method of gold mining in remote locations where commercial operations are impossible to set up and there aren’t significant gold deposits. Commercial miners use the Gold Pan as a sampling technique when surveying an area for potential gold deposits. Most of the world’s remaining individual gold prospectors use the gold pan in remote locations, with insignificant placer deposits.
Demerits of the gold pan
One chief demerit of the gold pan is the amount of material it can hold at any one time. Miners would only recover little amounts of gold at the end of a day’s work. The invention of the sluice box perhaps proved to be an effective technique than the gold pan. The process is also tiring, as panning is either done kneeling or bending. For effectiveness, a miner has to find a suitable place to sit, such as a stone on the river bank etc.
The Gold Pan through history
The Gold Pan was an effective mining technique during the early discoveries of gold. Records indicate that at the peak of the Gold rush, a miner could recover an estimated 96 ounces of gold per day! That, obviously, was a fortune, plus modern commercial mining techniques were yet unknown. The gold pan has its place in history and remains one the most used methods of gold extraction throughout history.
Thursday, July 14, 2011
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When we talk about buying precious metal bullion
, we mean to talk about buying gold bullion, buying silver bullion, buying platinum bullion, buying palladium bullion, and buying rhodium bullion. It can be either one or more of these bullion types based on your affordability. These metals are precious because they are rare. Whether you are buying gold bullion or selling gold bullion it is very important you understand the reputation of the buyer and then go about the buying process.
Ensure that the dealer from whom you are buying the bullion is providing you with a consistently better price than the rest of the dealers. Since the prices for precious metals are transparently displayed in online gold selling sites you can safely compare the rates from different gold buying and gold selling sites about the price you can pay to buy for your gold or the price you can get for your gold, in case you are selling your gold.
When you set out to buy precious metal bullions you will find a mix of them in different weights, shapes and sizes:
• Gold coins, gold wafers, gold coins of different weights, gold bars, gold kilo bars
• Silver coins, silver wafers, silver coins of different weights, silver bars, silver kilo bars
• Platinum coins, platinum wafers, platinum coins of different weights, platinum bars, platinum kilo bars
• Palladium coins, palladium wafers, palladium coins of different weights, palladium bars, palladium kilo bars
• Rhodium coins, rhodium wafers, rhodium coins of different weights, rhodium bars, rhodium kilo bars
From the assortment of available choices you have to decide the form of bullion you would like to posses and you should make your purchase accordingly. If you want to buy precious metals in Canada whether you are looking to buy gold in Canada, buy silver in Canada, buy platinum in Canada, buy palladium in Canada, or buy palladium in Canada deal with a company who has a stable customer service in case you might want to deal with them after sale. A good dealer will answer your concerns even long after you have completed the purchase.
There are online gold buying websites that allow you to continue with the gold buying
and gold selling round the clock. You can take your time and shop at your convenience to reach the best price possible for your purchase.
Tuesday, July 12, 2011
Scrap gold buyer online in Calgary, KMG gold also buys thermocouple wire for the precious metal platinum content in it. When it is about the best place to sell your gold
jewellery, silver jewelry or other precious metals jewelery, KMG Gold Recycling
is the trusted authority, they provide the tradition of excellence with high quality and unparalleled service.
If you think gold will hedge all your other investments you are probably not thinking right. You need to sell your gold and buy gold within decent gold buying prices and gold selling prices and enjoy the periodic profits. The major idea of holding gold and investing in gold is centered round the idea that gold is the principal hedge in investment and to inflation. The common advertisement is that it is a great hedge against inflation.
It is quite significant to understand in practical terms that that gold might not be ideal as a hedging instrument at all times. You need to know that there are some times there are better inflation hedges from the other commodities list that exist and therefore there are people who do not trust just gold and they diversify their investment to all those assets.
There are several National Savings and other investment patterns that one can consider as well. These certificates as well come with a promise of an interest return on a monthly basis. Some of the returns from gold are taxable while in the case of specific nationalized savings it is not taxable and it is permitted tax free.
When considered in terms of other kind of standard investment idea, gold
a highly volatile investment idea and the value of the metal can go down when inflation peaks high as well. There is a distinct inter-relationship between Inflation and the price of gold. However, in real time market trends the actual price of gold tends to deviate from its natural trend in quite an unexpected and unpredictable manner that it cannot be termed as the best of the effective hedge.
Several accounting regulators tend to view hedging your investment from a different point of view. From their angle, they say gold
is not an as effective hedge. According to principles of hedge accounting, it is very important to choose hedging instruments that fulfills the characteristics needed for hedging. Hedging involves the idea of offsetting the gains and losses that has been incurred on foreign currency that can be with respect to the overall accounting of loans and assets possessed by the individual or company. The end effect of this treatment is that the gains and loss can be posted in terms of the hedging instrument and the eventual result should show up as null if it is a true hedge. Therefore, for gold
to play an effective hedge it should qualify in terms of the proportion of investment you allot to gold to precisely see it an effective hedge.
Friday, June 10, 2011
Dental crowns are made from gold or alloys of gold; porcelain or a combination of gold, porcelain and other metals. Dental crowns are also called dental caps or tooth caps. There are other ceramic materials other than porcelain that can be used in creating crowns. However, both types of crowns have their own merits and demerits.
Dentists will sometimes create dental crown from pure metal, for instance the gold crown. Gold crowns will either be made entirely from gold or a gold alloy. Experimentation and new inventions over the years have enabled the use of varying metal alloys to create dental crowns. Other metals used in the past three decades to create dental crowns include silver, palladium and platinum.
Whereas gold crowns were originally used for restorative and treatment purposes, a trend emerged in the US from the 1960s in which stars and hip hop artistes would don gold crowns as a fashion statement.
Why gold is used in making crowns
The use of gold in creating crowns is necessitated mostly by gold’s physical and chemical properties. To begin with, gold has favorable physical attributes that make it easier to use as a dental metal. Dentists prefer gold because it is easily workable, and can be adopted into any specific crown shapes. This is because gold is ductile and highly malleable. Other than ductility and malleability, gold also has strength and can therefore withstand biting for a long time. When used as crowns, gold is able to survive chewing and biting for considerably longer periods of time.
As such, gold crowns don’t clip or break and can therefore cause no real damage to the body. In fact, it is believed that gold treats metal allergies in some people, if not cure them entirely. Gold crowns have just about the same wear rate as natural tooth enamel. In this regard, the use of gold crowns does not affect other opposite teeth, in terms of wear or damage. Dentists will normally put metal crowns on the back teeth.
But other than gold crowns, there are other dental crowns that are created from ceramic materials like porcelain. Unlike gold crowns, porcelain or ceramic crowns can almost look like natural teeth if well created. However, the only major weakness with porcelain crowns has to do with their strength. On average, gold crowns are stronger than porcelain crowns. Porcelain crowns are mostly used for creating front teeth. Porcelain crowns are not good for back teeth, given the heavy chewing and grinding.
To make porcelain crowns stronger, dentists will typically fuse them with other metals. When combined with other metals, porcelain can be comfortably used for both front and back teeth. Typically,dentists
prepare a shell of metal that covers the tooth being treated, and a veneer of porcelain fused over the metal.
Tuesday, May 31, 2011
: Gold legal currency in Utah, with other states considering the move
NEW YORK (MarketWatch) — Gold futures on Monday rose to a three-week high as ongoing concern about Greek sovereign debt heightened the safe-haven appeal of the metal.
Gold for August delivery GCQ11 -0.05% , the most-active contract, rose $2.50, or 0.2%, to $1,539.8 an ounce in electronic trade on the Comex division of the New York Mercantile Exchange.
Silver also moved higher, with the July contract SIN11 +0.38% rising 23 cents, or 0.6%, to $38.09.
In Athens, Greece’s government on Monday readied to unveil billions of euros worth of new spending cuts and tax hikes, to be unveiled in coming days, as public demonstrations against the new measures continued.
Late Sunday, the Financial Times reported European leaders are trying to negotiate a new bailout for Greece that would bring wider outside intervention in the country’s financials.
Last week, gold prices gained 1.8%, with buying supported by concerns about euro-zone debt levels and a weaker dollar, which can encourage investment in dollar-priced commodities such as metals.
U.S. floor trading was closed Monday for the Memorial Day holiday.
The dollar index DXY -0.22% , which measures the greenback against a basket of six other major currencies, stood at 74.954 versus 74.911 late Friday.
And, in a move viewed largely as symbolic, Utah recently passed a first-of-its-kind law intended to encourage the use of gold and silver coins as cash.
The legislation, which legalizes gold and silver coins as currency, also eliminates state capital gains taxes on the sale of gold and silver, although federal capital gains taxes would still apply.
Tuesday, May 31, 2011
Commentary: Gold bugs cite lack of faith in paper money
NEW YORK (MarketWatch) — Another fabulous Friday for gold has the bugs bugalooing.
With two distinct surges, early and late in the New York morning, gold as represented by the CME June contract closed at a high for the week, up $13.50 on the day at $1,536.30, and up $27.40 (1.8%) since last Friday.
This was in fact gold’s fourth-highest close ever — only three days around the last weekend of April this year were higher.
Gold in euro- and British-pound terms actually reached record highs during the week, very gratifying for The Gartman Letter, which holds most of its substantial model portfolio’s gold position hedged into various currencies, including these.
Technically oriented observers were impressed. Trader Dan’s Market Views (see website ) remarked of the gold chart: “First of all, from a trend-following perspective, it is trading above all the major moving averages once again. … Secondly, the 10-day moving average, which had been moving down until last Friday, has now turned up and is trending higher. It is also getting ready to make a bullish upside crossover of the 20-day moving average.”
The author, Dan Nrocini, offered the conclusion: “Based on what I can see here, gold looks as if it wants to make a try at $1,550.”
The anonymous Technical Commentary, carried by Bullion dealer ScotiaMocatta, was even more positive (and more arcane): “Gold is closing the week at $1,536. This is the second consecutive up week off $1,536. It is interesting to note that both these up sessions have closed at their highs. Gold’s move above 61.8% Fibo level at $1,533 … puts the $1,577 all-time record high back in sight. Looking of the price action off the 2011 low of $1,308 … we could see another leg up toward $1,600.”
(“Fibo” of course refers to the Fibonacci quasi-numerological approach to chart analysis).
Gold stocks also did well, with the ARCA Gold Bugs Index HUI +0.39% gaining 3.9% on the week. Even before Friday’s gain (of 1.53%), gold shares had caught the attention of the Aden Report.
In its Wednesday evening Update, it commented: “Gold shares appear to be leading the way up for the other metals. … But most impressive is our in-house Advance/Decline Line, which is based on the action of 26 gold shares. … It tends to lead the shares … [and] the fact that it’s now hitting new highs for the year is significant. … Keep your metals positions, and if you want to add to them, then buy some Gammon Gold Inc. GRS +1.35% or Silver Wheaton Corp. SLW +0.05% .”
“Trader Dan” makes an important point about gold’s strength: “This is occurring late in May, a time frame during which gold tends to show seasonal weakness. The festival seasons from Asia and India are over. However, gold is not deriving the bulk of its strength from that source, but rather from currency-related matters.”
“By currency-related matters I mean investor concerns over the stability of paper currencies,” he said.
This sense of financial crisis is widespread. On Friday, The Gartman Letter uncharacteristically engaged in a blistering denunciation of the Fed for letting the “adjusted monetary base” surge: “In only five months, the base has risen 30%. ... Where are the adults, we ask?”
Friday, May 20, 2011
Gold coin premiums shoot up...
WHILE precious metals are currently in correction mode, the long-term concerns with supply won't disappear anytime soon, reckons Jeff Clark, editor of Casey Research's Big Gold newsletter.
In attempt to get a handle on the Bullion market, I spoke to Andy Schectman of Miles Franklin, who has contacts that run deep in the industry. What he sees everyday – especially the shortages in gold and silver coins – might just compel you to count how many ounces you own…
Jeff Clark: Andy, tell us about your industry contacts and how you get the information you're privy to.
Andy Schectman: We source our product from three of the largest six primary US mint distributors. Having 20 years of experience with these sources, as well as the dealers in the secondary market, we're as tied into the industry as anyone.
Jeff: You made some interesting comments to me about supply and premiums. Tell us what you're hearing and seeing in the Bullion market right now.
Andy Schectman: I feel as though I'm the boy who cries wolf or that I've been beating the same drum for too long. But in reality, it has been my feeling since late 2007 that ultimately this market will be defined less by the price going parabolic – which I think ultimately will happen – and more by a lack of supply. You see occasional reports that state it's just a lack of refined silver or lack of silver in investable form. But as far as I'm concerned, there is a major supply deficit issue, and it's getting worse.
Take the US Mint, for example. Right now, as we talk, you can barely get silver Eagles. We're seeing delivery delays of three to four weeks, and premium hikes of a Dollar or more in the last three weeks. Most of the suppliers in the country are reluctant to take large orders on silver Eagles because they don't know (a) when they'll get them, and (b) what the premiums will be when they arrive.
I was talking to the head of Prudential Bache and asked him about silver Eagles. He said, "You know, as soon as the allocations come in, they're sold out. We can't keep them in." This is coming from one of the largest distributors of US Mint products in the country.
And this is all occurring in an environment that has only minimal participation by the masses. Few people in this country have ever even held a Gold Coin or a silver coin. So, if it's this difficult to get Bullion now, what's it going to be like when it becomes evident to the masses they need to buy? This is what keeps me up at night.
Jeff: Some analysts say it's a bottleneck issue, that the mints have enough stock but just need more time or more workers to fabricate the metal into the bars and coins customers want.
Andy Schectman: No, I don't believe that. What business do you know that if they had that much profit potential wouldn't increase production and hire more workers to meet demand? To me, the "inefficient model" argument is an excuse.
Look at what the US Mint alone has done: they haven't made the platinum Eagle since 2008. They make maybe one-tenth as many gold Buffalos as they do gold Eagles. They've made hardly any fractional-ounce gold Eagles. Heck, they can't even keep up with the demand for the products they do offer. Does that sound like a bottleneck to you? Or is it because there is far more demand than there is available supply? It's pretty clear to me it's the latter.
Jeff: What are you seeing in the secondary market; are investors selling Bullion?
Andy Schectman: There is no secondary market. Absolutely none. Nobody is selling back anything, at least not to us. Think about that: if this was a traditional investment and your portfolio went up 100% in the last year, like silver has, you'd think some investors would take some profits and ride the rest out – but nobody's selling anything.
This is why I think the lack of supply is the single biggest issue in this market. And in time, I think it will become much more obvious.
There are only five major mints – US, Canada, South Africa, Austria and Australia. Yes, there is a Chinese Mint and a couple Swiss Mints and some private refiners, but they amount to very little in the overall scheme of things. We're in a situation where the mints are limiting the selection and raising the premiums, and this is occurring at a time when most people own no Bullion. As it becomes more apparent that people want Bullion instead of paper Dollars, I think you'll see premiums go parabolic and supply get even tighter.
Jeff: Are you getting a lot of new buyers to the Bullion market?
Andy Schectman: More than ever. One of the interesting things we're seeing is a lot of younger people dipping a toe in the water, buying little bits of silver here and there. We're also seeing bigger orders, as well as more frequent phone calls from financial advisers asking us if we can help their clients. So yes, the base is broadening.
Jeff: That's very interesting. So are you seeing more demand for gold or Silver Bullion right now?
Andy Schectman: 90% of the new business is in silver. And I think that's indicative of the state of the economy. People are trying to get into precious metals, but they think gold is too high. I think they're Buying Silver because they realize the fundamentals for owning gold also apply to silver. They think the profit potential is better in silver, too. This has actually made the supply for gold better than it is for silver right now, and a lot of that has to do with price.
Jeff: Why are premiums fluctuating so frequently?
Andy Schectman: Premiums are almost impossible to gauge right now. Because the availability of product is getting smaller and smaller and the demand is getting stronger and stronger, premiums are changing literally overnight. And it doesn't take many large investors around the country to force premiums higher.
The net of this is that it's really hard for us to be able to say what the premium for a specific product will be two weeks out.
Jeff: You mentioned increased interest from fund managers. Tell us the kind of comments you're hearing and why they're buying Bullion.
Andy Schectman: I think it's coming from their clients. It's my impression that people are taking it upon themselves to study a little bit more, to be more accountable for their assets, and I think they're telling their financial advisors to Buy Gold. And in some cases it's because they don't want a paper derivative.
It's no secret that financial advisors don't like gold and silver. Once money goes to a Bullion dealer, it's not coming back to a stock portfolio anytime soon, so they discredit it. But now it's my impression they're being asked by their clients to buy it. So it's not necessarily because the financial advisor wants gold as much as it is the client requesting it.
Here's a good example. There's a firm here in Minneapolis that represents the Pillsbury fortune, and they asked me to talk to their partners about precious metals a few months ago. At the end of the conversation they said, "Okay, we're going to place an order for one of our clients." Upon hearing it was for one client, I thought it would be in the range of $50,000 to $100,000. Well, the order was for $5 million.
There are two astonishing things about this. First, that's twice as big as the largest order I've ever had. It was one order, for one client, who's brand new to the market. How many more potential buyers are out there like that?
Second, they made it abundantly clear to me that it was out of pressure from one of their clients that they sought me out. So clients are increasingly demanding Bullion, regardless of what their financial advisers say.
Jeff: Hearing about all this new buying might make some think we're near a top in the market. Could that be the case?
Andy Schectman: No, no. I think Richard Russell says it best: "Bull markets die of exhaustion and overparticipation." Well, we're nowhere near that point when so few people in this country own gold and silver. Heck, I'm a Bullion dealer, and most of my peers don't own any gold and silver! Yes, you're seeing more commercials, but there are just as many commercials to Buy Gold as there are to sell it. I think that's an indication this market is not exhausted.
Remember that in the year 2000 everyone and his brother had some NASDAQ shares. That's an example of an exhausted or overparticipated market. We're nowhere near that.
Jeff: Where are the best premiums for silver?
Andy Schectman: The very best buy in silver right now is junk silver. And by the way, I think the term "junk" is unfair. It isn't junk anymore. It used to be junk in the ‘90s when silver was 3 or 4 bucks an ounce and it was sold basically at melt value and carried no premium. So I'd call it "90% dimes and quarters." Anyway, junk silver has the lowest premium right now and, in my opinion, offers the best upside potential.
Next would be 10- and 100-ounce Silver Bars. And then one-ounce silver coins – but the Eagles are very expensive at the moment, if you can get them. The Austrian Philharmonic has the best value in a one-ounce silver coin right now, and they're available. But again, premiums for all silver coins are escalating.
Jeff: What about gold?
Andy Schectman: Gold is not as bad. In fact, I would say that gold availability is decent right now for one-ounce coins and bars. There isn't much available in fractionals. And Buffalos are still kind of hard to get. Other than that, the one-ounce coins with decent availability are Canadian Maple Leafs, Australian Kangaroos, and Krugerrands. And they all have decent premiums.
Jeff: So the take-away message is what?
Andy Schectman: First, I think you said it best with your recommendation to "accumulate." Not only will it smooth out the volatility in price and premiums you pay, it will also give you a bird in the hand. If I'm right about this market, and I really believe I am, it will be defined by lack of availability of refined product. To combat that, just accumulate month in and month out, and be thankful when you're able to get what you want.
Second, it's about the number of ounces you own. You want to get as many ounces as you can without being penny wise and pound foolish. Stick with the most recognized products – don't buy 1,000-ounce bars, for example, because they're illiquid. You want to maximize your liquidity, and you do that by buying the most common forms of Bullion – one-ounce coins, bars, and rounds; 10- and 100-ounce products; and junk silver.
Last, keep in mind that premium and commission are two different animals. Commission is what the dealers make on top of the premium. Premium is what the industry bears. So if the US Mint is selling silver Eagles for $3 over spot to the distributors, that's before they're marked up to the public. So even though the "premium" is high, you're actually going to get most of that back when you sell.
So, Buy Gold and silver while it's available, even if you don't buy it from me, because if I'm right, getting it at all could soon be your biggest challenge.
Jeff: Thanks for your insights, Andy.
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Tuesday, May 17, 2011
Published : May 17th, 2011
A growing number of market participants think that the commodities bull market is running out of steam. These estimates are based partially on the recent developments in futures and options markets, where many hedge funds have recently been liquidating their long positions. But Chuck Jeannes, CEO of the world’s fifth-largest gold producer, Goldcorp, argued at the weekend that the upward trend in the precious metals sector still has a long way to go.
Data from the Commodity Futures Trading Commission (CFTC) show that major investors trimmed their net-long commodities positions in the week ending May 10, with hedge funds and speculators among the largest sellers. According to Reuters, professional money management funds dumped about 222,000 long contracts in 22 US Futures markets within only five trading days. Net long positions declined by 13% compared with the previous week. Many investors were caught on the hop by sudden and unexpected margin hikes on futures contracts, something that hit the silver sector especially hard.
The number of outstanding Comex long contracts in the gold sector has declined by almost 20,000 in comparison with the previous reporting period. This corresponds to a setback of 10%, or a nominal decline amounting to $3 billion. The situation is even worse in the silver sector, where investors cut their net-long positions by about 25%, which led to a nominal decline of $1.1billion. The total number of positions held by global funds decreased to $116.8 billion. However, the total number of outstanding long contracts is still at very high levels, and precious metals did manage to stage a partial recovery last week.
Famous investor Jim Rogers for one remains unconcerned by the correction, and stated in an interview last week that commodities will continue to appreciate over the coming years. In his view volatility will remain high, but the fundamentals underpinning this bull market remain intact. Continuing dovish policies by the world’s central banks – and in particular, the US Federal Reserve – are a particularly important fundamental factor. As the renowned fund manager Eric Sprott pointed out at a conference in Las Vegas last week, the markets have once again chosen gold as the world’s reserve currency.
Goldcorp’s Chuck Jeannes argues that the supply and demand dynamic remains bullish as far as precious metals are concerned. He notes that while mining production in the gold sector has steadily declined over the last ten years, demand for the metal has dramatically risen. In contrast to the recent announcement from Goldman Sachs, which called on gold producers to start hedging against potential price set backs, Jeannes said that Goldcorp was not planning on following Goldman´s advice.
Wednesday, May 11, 2011
Bloomberg: May 11, 2011. Gold fell in New York, halting a three-session rally, as a stronger dollar eroded the appeal of the precious metal as an alternative asset. Silver also declined.
The dollar rose against the euro on speculation that European leaders may not grant Greece additional aid, forcing the nation to restructure its debt. Gold touched a record $1,577.40 an ounce on May 2 before dropping 4.2 percent last week as the greenback climbed.
“The correction in the dollar will have more room on the upside, and that’s going to pressure precious metals,” said Matt Zeman, a strategist at Kingsview Financial in Chicago. “Too many people were short the dollar and long gold. There will be additional unwinding of that trade.”
Gold futures for June delivery fell $15.50, or 1 percent, to settle at $1,501.40 at 1:49 p.m. on the Comex in New York. The metal has gained 23 percent in the past year.
The euro has dropped 2.5 percent in a measure of 10 developed-nation currencies since May 4, the day before European Central Bank President Jean-Claude Trichet signaled the bank may wait until after June to raise borrowing costs again, according to Bloomberg Correlation-Weighted Currency Indexes. The bank raised the main interest rate 25 basis points to 1.25 percent in April.
“The falling euro is going to drag gold down with it,” said Zeman of Kingsview.
Gold Trust Holdings
Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, were unchanged yesterday at 1,201.95 metric tons, after declining 2 percent last week. The last gain in holdings was April 15.
“We would’ve expected that they’d have risen a bit in the last day or two, given the sharp bounce” in gold prices, said Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter. “That suggests to us that the worst of the liquidation is not yet over.”
Gartman has recommended holding gold in other currencies to hedge against the relative strength of the dollar.
Silver, which has wider industrial applications than gold, also fell on speculation that China will raise interest rates to stem inflation. The Asian nation’s consumer prices rose 5.3 percent in April, the statistics bureau said today in Beijing. The country’s target inflation rate is 4 percent for this year.
“There’s chatter about China raising rates to curb growth, and that’s made copper and silver vulnerable,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago.
Silver futures for July delivery fell $2.971, or 7.7 percent, to $35.515 an ounce on the Comex. The metal gained 9.1 percent in the previous two days after shedding 27 percent last week.
Palladium futures for June delivery declined $17.25, or 2.4 percent, to $715.40 an ounce on the New York Mercantile Exchange. Platinum futures for July delivery dropped $23.10, or 1.3 percent, to $1,777.80 an ounce on the Nymex.
Tuesday, May 10, 2011
SAN FRANCISCO (MarketWatch) — Gold and silver have lost some luster with investors; the price of oil and other natural resources is lower, and speculation in many agriculture sectors has dried up. So why are three veteran money managers who can put money anywhere still holding on to commodities?
Because they believe that emerging markets will live up to their promise. They’re convinced that the growth of the world’s nascent economies will create a bold new consumer class, whose desire for more and better will feed demand for raw materials, industrial and precious metals, and — perhaps most critically — food and water.
“The world is growing and using more commodities,” said Marshall Berol, co-manager with Malcolm Gissen of Encompass Fund ENCPX +0.62% , which has been heavily invested in various resource stocks for several years.
“China, the Far East, the Middle East, India, Latin America, South America, Brazil, Argentina, Chile — these economies are growing,” Berol noted. “There are setbacks from time to time, but they’re growing, and as they grow, more people are employed, at better jobs; they have money and they want what we’re accustomed to in this country — houses and cars and cell phones and refrigerators.”
Berol is also a confirmed gold bug. “It’s going higher,” he predicted for gold. “It’s not at a top yet.”
Values and trades
Berol addressed his comments to MarketWatch’s Investing Insights live event held in San Francisco last month. The theme of the event was “Global Investing in a Post-Crisis World.” In addition to Berol, attendees heard views about precious metals and commodities from Michael Cuggino, manager of Permanent Portfolio PRPFX +0.58% , a mutual fund focused on capital preservation, and Cody Willard, principal of CL Willard Capital, who writes the Revolution Investing newsletter and an online blog called The Cody Word for MarketWatch.
Willard, the panel’s lone trader, differed with Berol and Cuggino on the bullish prospects for gold, silver and precious metals, but he shared their optimism about commodities.
“There’s a good trade — a good opportunity — where you can short gold and silver, and buy against that a basket of oil, cotton, corn, soybeans, anything you actually have to consume,” Willard said. “Because it’s the poor people who are driving commodities, and I don’t think they’re going to buy gold when they’ve having to figure out how to feed the kids.”
The event was held several weeks before both precious metals and commodities suffered a sharp blow. The wave of selling in early May could have been the result of speculators exiting with their profits after a mammoth rally. Or, more ominously, the downturn could reflect traders’ fundamental concerns that global economic health is weakening, which would curb demand for materials brought out of the ground, scarce or not.
Yet big swings are to be expected with these investments. The panelists were well aware in April that prices for precious metals and commodities might have come too far, too fast. Indeed, over the following weeks investors in these alternative assets grappled with indications that U.S. economic growth is weaker than expected, and that soaring food and gasoline prices would quash demand — fears that ultimately did torpedo some of the momentum, especially for silver.
Berol and Cuggino acknowledged the potential for a correction in these markets at the April meeting, but noted that day-to-day or even quarter-to-quarter gyrations don’t concern them much. Instead, a long-term focus steers their portfolios through a sector’s booms and busts.
“We’re not looking to get in and out,” Berol said. “We’re looking for what is going to be worth more down the road.”
“I don’t get wrapped up in quarters,” Cuggino added. “You don’t have to worry about what the stock market is going to do every day, what’s the Fed’s going to do, what’s going to happen in the world.”
Cuggino’s mutual fund is unusual in that its constructed with an eye toward downside protection. Most of its assets are spread across gold, silver, natural resources stocks, Swiss francs and U.S. Treasurys.
“The way we go about the basic flaw in human nature of not being able to predict the future is by putting together a broad array of different asset classes in one portfolio that work at cross purposes,” Cuggino said.
The fund’s holdings individually might be highly risky, but together they work as a team to cover the bases and reduce overall portfolio volatility.
Gold, in particular, is Cuggino’s insurance policy against what he views as the ill-effects of the Federal Reserve’s policy of low interest rates and easy money — a stance, he said, that is stoking inflation, debasing the value of the U.S. dollar and putting a high floor under gold.
GLD 147.96, +0.06, +0.04%
SLV 37.69, +0.17, +0.45%
“Where [the price of gold and commodities] goes from here, I think, given that scenario where interest rates continue to be very low to negative after inflation, potentially that’s traditionally a very bullish sign,” Cuggino said.
“You have demand picking up not only with emerging markets and more disposable income, but you have demand picking up on the investment side — whether that’s mutual funds, hedge funds, institutional investors, sovereign wealth funds or governments potentially,” he said.
“Last time I checked,” Cuggino added, “there wasn’t a huge increase in supply coming out of the ground. And with less confidence in paper money around the world, gold will take on a lot more importance as a store of value.”
Monday, May 02, 2011
May 2, 2011
KMG Gold Recycling
"Gold really doesn't have utility."
The billionaire investor Warren Buffett has said he'd always bet on a good business to deliver better returns than gold over time, even as the precious metal sets fresh records.
"Gold really doesn't have utility," the 80-year old told shareholders at Berkshire Hathaway's annual general meeting. "I'd bet on a good producing business to outperform something that doesn't do anything."
Gold prices reached new highs 15 times in April as a weaker dollar and fears of inflation encouraged some investors to seek the metal as a store of value.
The financial crisis has helped propel gold higher as initial worries of deflation gave way to current concerns that very low interest rates in much of the developed world is helping to stoke inflation. Gold is already up 10pc this year after climbing for each of the last ten.
It isn't a rally that Buffett, whose investment skill has turned him into the world's third-richest man, will be joining in. Asked about gold at the annual meeting in Omaha, Nebraska, Buffett said, "If you take all of the gold in the world and put it into a cube, it would be about 67 feet on a side and you could get a ladder and get up on top of it. You can fondle it, you can polish it, you can stare at it. But it isn't going to do anything."
Gold's current rally has also found new momentum, as the world's central bankers become net buyers for the first time in two decades last year. According to the World Gold Council, central banks bought 87 metric tons of gold last year as many developing countries sought some diversification away from the dollar.
KMG Gold Recycling
Tuesday, April 19, 2011
Does gold look any different at $1,500 (U.S.) an ounce? Futures topped that level – briefly – on Tuesday, following any number of global concerns that have sent investors flocking to gold recently. Unrest in the Middle East: check. Concerns about inflation: check. European financial crisis: check. Rising concerns about the U.S. deficit: check. KMG Gold Recycling
All of these factors have been simmering for some time, which is why the actual gain in the price of gold – it rose a much as $8 an ounce, before settling back – is a relatively modest move. Indeed, focusing too much on gold’s steady march to record highs can distort the actual gains for investors.
Over the past five years, to the end of March, gold has made some impressive moves, of course, rising 145 per cent versus a rise of just 14 per cent for the S&P 500. But in recent months, the pace has slowed to a crawl and gold’s returns don’t shine so brightly next to various other assets.
In 2011, gold has risen 5.3 per cent, out-muscling the S&P 500 by a mere 0.7 percentage points. And in Canadian-dollar terms, gold has risen just 1.4 per cent this year, which is half the return of Canada’s S&P/TSX composite index.
Meanwhile, gold isn’t looking so great next to a broader basket of currencies either. The Reuters/Jefferies CRB index of 19 commodities – which includes commodities like lean hogs and wheat, which don’t exactly quicken the pulse – has pulled ahead of gold this year, with a gain of 8.6 per cent.
However, there is something to be said for the power of headlines (look above) and round numbers, and gold at $1,500 an ounce certainly has a nice ring to it that will no doubt be seized upon by gold bulls.
KMG Gold Recycling
Monday, April 18, 2011
"Regardless of your score, I'm sure you'll agree with the ramifications each point makes for the gold market."
? CPM Group recently released its 2011 Gold Yearbook, an invaluable resource for us gold analysts. As mostly a reference book, even a gold enthusiast might find it dry reading—but I loved it and, as I studied it on a plane, I kept finding data that made me perk up.
To have a little fun with it, I thought I'd summarize what I read in the form of a quiz. See how many you can get correct. Regardless of your score, I'm sure you'll agree with the ramifications each point makes for the gold market.
I'll start off easy. . .
1. The main driver behind rising gold prices over the past decade:
Increased jewelry demand in India;
greater industrial uses of the metal; and
Worldwide investment demand for gold totaled 44 million ounces (Moz.) in 2010. Because of the growing demand by investors, prices have been forced upward.
Five exchanges began trading gold contracts for the first time in 2010 and three more introduced mini contracts, collectively the largest number launched since the early '80s. There are now 24 gold vending machines in seven countries, with three more countries adding machines this year. Households in developing countries are now moving away from gold jewelry and buying coins and bars for their savings. I could go on, but suffice it to say that investment demand will continue to be very strong.
2. True or false: Recovery from gold scrap was lower in 2010 than 2009? Scrap rose three consecutive years in a row—until last year. Gold supply from scrap fell 2.1%, to 42.2 Moz.
This is significant because gold prices were higher, which would normally increase the amount of scrap coming to market. One of the primary reasons scrap dropped is because investors are holding on to their metal, reportedly because they believe prices are headed higher. Isn't that one reason you're holding on to your bullion?
3. There are many reasons investors have been buying gold over the past 10 years, but what's the #1 reason?
gold coins and bars have become more intricate, widespread and beautiful; and
supply and demand imbalance.
Global fears increasingly led investors to purchase large volumes of gold in 2010 for safe-haven purposes, despite record price levels. High levels of investment buying are expected to continue in 2011 because virtually none of the economic, political and monetary concerns have been resolved.
If you got all three answers correct, you're an investor who understands the basic reasons for owning gold and that those reasons are still in play.
Now let's step it up a little. . .
4. Gold represented what percent of global financial assets at the end of 2010?
The estimated value of investor gold holdings stood at $1.5 trillion at the end of last year, about 0.7% of global financial assets. While up nine years in a row and triple what it represented in 2001, gold is still a miniscule portion of the world's private wealth. It represented 2.8% of global assets in 1980, four times what it does today.
5. How many central banks increased their gold holdings in 2010?
Russia, Thailand, Belarus, Bangladesh, Venezuela, Tajikistan, Ukraine, Jordan, Philippines, South Africa, Sri Lanka, Germany, Kazakhstan, Mexico, Greece, Pakistan, Belgium, Czech Republic and Malta = 19. Central banks, as a group, are expected to continue to be net buyers of gold for the foreseeable future. It's interesting that most purchases were from developing countries, unsurprising when you consider they've accumulated over $5 trillion in foreign exchange reserves just since 2002.
6. Compared to 2009, U.S. Mint gold coin sales in 2010 were:
Up 5%; and
The U.S. Mint sold 1.43 Moz. last year, down 12% from the 1.62 Moz. sold in 2009. You might think this is negative until you realize that global coin sales rose 21% last year, reaching 6.3 Moz. Makes you wonder what other countries know that many North Americans don't. Supply problems continue to plague the U.S. Mint, evidenced by the fact that Buffalo sales were suspended for half the year. What happens when the greater population begins to clamor to buy gold? Bottleneck—meet desperation:
7. CPM estimates that the fiscal and monetary imbalances, especially in developed countries, could take how long to resolve?
5 years; or
Rigid social contracts are so deeply ingrained, especially in the developed world, that it will take decades to resolve the monetary imbalances. This sobering fact means gold will likely be in a bull market for many years to come. There are very few options to deal with the overwhelming debt burden in most of these countries: Raise taxes, cut spending, increase growth or print money. Guess which one is most likely? Inflation from currency dilution is baked in the cake and will spur further gold demand and light a fire under the price.
If you got these four questions correct, I think it means you're an astute investor who doesn't worry about day-to-day price fluctuations and instead focuses on owning enough ounces to protect your assets from the huge and intractable fiscal problems that still have to be faced.
Now, here are some questions for those of you who love gold stocks:
8. What was the industry-average cash cost to produce 1 ounce of gold last year?
Cash costs have tripled since 2002 and rang in at $544 last year. They will certainly be higher again this year. In spite of higher costs for the producers, margins actually rose due to higher gold prices. Margins in 2010 averaged $680 and were only $114 as recently as 2002.
We've got some of the most profitable companies in BIG GOLD, along with a number of producers that have big growth coming online over the next one and two years. Buy these stocks before that growth happens; if you shell out the bargain basement price of $79 now, I think your portfolio will be very happy when it comes time to renew.
9. The average grade of gold mined on a worldwide basis last year was how much?
2.96 g/t; or
The second lowest level on record—1.83 g/t—occurred in 2010. While not entirely negative because higher gold prices allow producers to go after lower-grade deposits, this leads to higher costs for both discovery and production. It is, undoubtedly, true, though, that one of the main reasons grades are lower is because the easy fruit has been picked in many regions around the world. This is bullish for those explorers that can find and develop higher-grade deposits and is where much of our speculative dollars should be focused. Our mining exploration advisory International Speculator tells you which companies are the best of the best, outperforming the S&P by 8.4 times last year. So, if you're not reading the International Speculator yet, you're missing out on some spectacular profits.
10. The most popular region for exploration spending is where?
Roughly 25% of all global exploration money is devoted to Latin America. The biggest beneficiaries are Peru, Mexico, Brazil, Chile and Argentina. If you're investing in gold and silver explorers, make sure you have exposure to this region, as odds are high there will be a number of major discoveries made here.
Sunday, April 03, 2011
According to The Concise Encyclopedia of Economics, the notion of a gold standard can be defined as: A commitment by participating countries to fix the prices of their domestic currencies in terms of a specified amount of gold...
National money and other forms of money (bank deposits and notes) were freely converted into gold at the fixed price. A country under the gold standard would set a price for gold and would buy and sell gold at that price. This effectively sets a value for the currency.
The "gold standard" executions might either be done fully or partially. For example, the Swiss franc was based on a partial 40% legal gold-reserve requirement between 1936 and 2000. On the separate subject of monetary supply, there are many terms to define and measure the money supply. While there are conflicting opinions as to their usefulness, many of us come across terms such as M1, M2, M3 etc. Despite running into the risk of oversimplifying and being wrong, one can simplistically explain these terms as follows.
The most restrictive, M1, only measures the most liquid forms of money; it is limited to currency actually in the hands of the public. This includes checking accounts travelers checks, and other deposits against which checks can be written. M2 includes all of M1, plus savings accounts, time deposits of under $100,000, and balances in retail money market mutual funds. Equally importantly, M3 includes all of M2 (which includes M1) plus large-denomination ($100,000 or more) time deposits, balances in institutional money funds, repurchase liabilities issued by depository institutions, and eurodollars held by U.S. residents at foreign branches of U.S. banks and at all banks in the United Kingdom and Canada.
It can be clearly seen that M3 is the broader measure than M1. For some reason (which I do not fully understand), US monetary authorities have been giving less importance to the tracking of M3 in recent years. However, in my opinion, M3 is a broad and comprehensive measure that gives a holistic sense of the overall money supply. Having said this, it is important to note that the M3 measure is not easily available for every economy; often times, it is estimated by private rather than public institutions.
In the context of a gold standard and money supply, it might be interesting to assess the current situation. Obviously, taking the ratio of money supply to available gold reserves can give us a feeling of how far we are from a theoretical gold standard.To be fair, at this juncture it is important to note that the world is now a much different place than it was thirty years ago. A couple of important things happened in the last thirty years: Since the beginning of the 2000s, many countries, such as the UK and Switzerland, have sold some of their gold holdings, quoting "the intrinsic laziness of gold". For this reason, UK gold reserves are currently much lower than the European reserves.
With the financial revolution and innovation in the Thatcher and Reagan years, money supply has substantially multiplied. Having covered enough of the historical developments and concepts, we can now make some observations on the current situation: As can be seen from the below table, the US currently holds around 261 million ounces of gold. The country's money supply (M3) to gold reserves ratio is around 28. This is significantly more than the 1980 ratio of around 8. A similar ratio is observed for eurozone countries. The ratio in their case is around 27. Switzerland seems to be the country with the most favourable money supply to gold reserves ratio. Its ratio approximately stands at 17.
This perhaps explains the present acceptance of the Swiss franc as a safe and reliable currency. With regards to the Asian countries: Despite their huge dollar reserves, China and Japan lag behind their Western counterparts in gold reserve holdings. As the holder of some 2.8 trillion dollars of reserve, China could well diversify its reserves into gold, strengthening the backing of its money supply with gold.
In sum, the current situation clearly shows that having a strict gold standard is no longer feasible. Given the huge increase in the money supply over recent decades, globally available gold would not be sufficient enough to have a full gold standard execution. Instead, a partial gold standard execution - coupled with strict fiscal and monetary policies - could re-establish the credibility of fiat currencies which were negatively impacted by the 2008 financial meltdown.
Saturday, March 19, 2011
The Royal Canadian Mint's bullion products are universal symbols of innovation, ingenuity and excellence. At the heart of our distinctive line of bullion products is our collection of Maple Leaf bullion coins in gold, silver, platinum and palladium - all guaranteed by the Government of Canada for weight and purity.
The Royal Canadian Mint also operates one of the most technically advanced and respected gold and silver refineries in the world. Our accredited ISO 9001 facility offers a variety of client services.
World Firsts. World Records.
To reach new heights of achievement for expertise, craftsmanship and can-do spirit, the Mint crafted the world's first 100-kg, 99999 pure gold bullion coin with a face value of $1 million. This coin was later recognized by Guinness World Records to be the world's largest gold coin.
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Wondering how to purchase bullion?
How to purchase bullion
Our bullion products can be purchased through banks, coin dealers, foreign currency exchange offices, and brokerage houses worldwide. Choosing your best purchasing avenue is a personal decision. Here are some points to consider prior to selling or buying bullion:
•Are you dealing with a reputable vendor/advisor that understands the bullion market?
•Is the vendor/advisor well established with a history of satisfied clients?
•Have you remembered the importance of looking at more than one vendor/advisor to get competitive quotes?
•What policies are in place to ensure your satisfaction for buying or selling bullion?
Prices of gold and silver bullion products are based on international market rates which vary daily, as well as supply and demand. Be prepared for a reasonable premium to be charged over the daily spot quotations to cover manufacturing, transportation and distribution costs.
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Universally recognized for quality and purity
Gold and other bullion products from the Royal Canadian Mint are universally recognized for their quality and purity. The Mint refines and produces Maple Leaf bullion coins, gold kilo bars, trade bars and gold wafers - all struck with their weight and purity. Our bullion coins are also recognized as legal tender in Canada.
Our Gold Maple Leaf coins are the world's most popular pure gold coin. Since their introduction in 1979, over 20 million troy ounces have been sold. As the first bullion coin to achieve the heightened standard of 9999 fine, the Gold Maple Leaf is available in five weights from one-twentieth of an ounce to one troy ounce. Also of special interest are the one ounce gold bullion coins celebrating the Vancouver 2010 Olympic Winter Games and our 99999 Gold Maple Leaf.
Encouraged by the success of the Gold Maple Leaf, the Mint introduced Silver Maple Leaf Coins in 1988. The Silver Maple Leaf is minted with one troy ounce of 9999 fine silver. The coin has a face value of $5, the highest face value of any comparable silver bullion coin. Also of special interest are the one ounce silver bullion coins celebrating the Vancouver 2010 Olympic Winter Games.
Introduced by popular demand in 1988 are the Mint's one troy ounce Platinum Maple Leaf coins with a face value of $50.
Introduced in 2005 the Palladium Maple Leaf coins with a face value of $50. This popular one troy ounce coin is made with 9995 pure palladium.
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Wednesday, March 16, 2011
Source: Jordan Roy-Byrne, The Daily Gold 03/15/2011
Relative gold is also known as the real price of gold. It's essentially a comparison of gold against various asset classes. Why is this important? There are two reasons. First, the real price of gold tends to lead leverage performance (e.g., the HUI:Gold ratio). Second, the real price of gold often provides hints of the future direction of the nominal price of gold.
Keep in mind that gold is the type of asset class that performs best when it's strongly outperforming the other asset classes. This seems like an obvious statement but it is an important one. If stocks and/or bonds are performing very well, money (usually mainstream) flows into those asset classes?not gold. If conventional asset classes perform well, there is little reason for the masses to go into gold.
In the chart below we show gold against various asset classes. gold has made a new high in nominal terms but hasn't held it. One reason could be the weak performance of gold against stocks, currencies and commodities. In recent months, money has flowed into those markets and not gold. Gold made marginal highs against both bonds, but with risk aversion increasing and a possible US Dollar rally, how long will that last?
Gold's real performance is mixed, which suggests a sustained breakout in nominal terms is unlikely at present. Gold has started to outperform stocks and commodities and we expect that to continue. However, there is a clear divergence with gold priced in other currencies, which suggests that recent U.S. dollar weakness has buoyed gold. While struggling, the USD has yet to break support. Sentimentrader's public opinion is only 31% bulls for the U.S. dollar.
When many markets are in flux, as is the current situation, intermarket analysis becomes all the more important. Comparing markets against each other helps us decipher the leaders, the winners and the laggards. The current picture for gold is mixed but could become clearer if/when the greenback confirms its bottom. We would welcome that, as it would clear out the last of the weak hands and position gold ready to move higher.
These are difficult times. When trends are shifting or changing, we need to analyze various markets and asset classes to get a better handle on what is going on. This analysis allowed us to foresee the lack of a true breakout in gold and gold shares while the gold permabulls continued to cheerlead onward.
Thursday, March 10, 2011
Submitted by Tyler Durden on 01/18/2011 15:22 -0500
Our friends at GoldCore have summarized recent shortages in the silver market and provide some observations on what this could mean for future silver prices. Curiously, the lack of inventory has happened even as the spot price of silver has consistently declined over the past week (if nominally the decline has been very modest). Just as curiously after the US Mint reported a massive surge in buying, the number of January sales has been fixed flat at 3,407,000, where it was a week ago, and indicates that either buying interest has ceased overnight (unlikely), that the mint is not updating its numbers (likely), or, worse, that the Mint has now stopped selling any form of silver for reasons unknown. Although at the end of the day the only question worth asking is whether JPM feels lucky (again): as we posted last week, the firm has received "grandfathering" protection from position limits, arguably the biggest reason for the recent drop in the precious metal price.
Silver Bar Shortages to Lead to Price “Tipping Point”?
Gold is mixed while silver is higher in all currencies today, especially in the weaker US dollar. European sovereign bond yields are higher and the UK 10-year has risen to 3.66% and is close to breaking out after inflation figures surprised the majority of analysts who remain complacent about inflation.
Gold is currently trading at $1,370.75/oz, €1,022.11/oz and £856.57/oz.
Equities in Asia were higher as are those in Europe so far today. US equity index futures are mixed with Apple leading to weakness in the Nasdaq; the S&P 500 is flat.
Silver is currently trading $28.81/oz, €21.48/oz and £18.01/oz.
Reports of shortages of silver bullion continue to grow. While there are no widespread shortages in this area and dealers with extensive supplier networks (mints and large refiners) are not experiencing difficulties sourcing bullion inventory, it would be wise to keep an eye on this.
Silver in USD – 35 Years – (Weekly). Click for full size
Reuters reported shortages of 1 kilo gold bars in Asia last week. Sprott Asset Management reported that it was experiencing difficulty sourcing 1,000 oz silver bars. Sprott said they were concerned about the “illiquidity in the physical silver market" and said delays in being able to source physical silver highlights the “disconnect that exists between the paper and physical markets for silver."
Zero Hedge reported that Bullion Vault, the digital gold provider, had run out physical silver inventories in Germany (and possibly elsewhere) and was advising clients to buy silver from other sources.
Zero Hedge also reported yesterday that some smaller bullion dealers in the UK were having difficulty sourcing all silver bars and had delayed delivery of silver bars (including 1 kilo silver bars) until February.
This comes at a time when the US Mint has reported huge demand in the first two weeks of January for their very popular US Silver Eagle 1 oz bullion coins.
Click for full size
At about $33, €25 or £20 a coin, collectors and those seeking financial insurance have been buying silver in very significant quantities. The 2011 minted coins were first issued on January 3 and in just the first two weeks, 3.5 million coins were sold, according to numismatic web site Coin News.
In January 2009, the silver coins first topped the 3 million sales mark, with record sales totaling 3.59 million for the entire month.
If sales continue at these levels, that record should be surpassed this week. The all time monthly record of 4.26 million silver coins, which was set last November, is clearly in sight.
A recent report by analyst Adrian Douglas of GATA warns of forthcoming shortages of gold and silver bullion coins and bars, and that a “tipping point” will soon be reached that could lead to a COMEX default and a short squeeze which leads to much higher prices. Douglas himself has shown in Le Metropole Café how Comex silver inventories are shrinking and are not far from ten year lows.
The “bear raids” by the large concentrated shorts being investigated by the CFTC, are only leading to increased physical off-take. Indeed, the selling raids may be leading some participants on the COMEX (including large hedge funds) to take delivery or sell futures and buy bullion in allocated accounts.
None of the factors, in and of themselves, suggest that widespread shortages of silver (or gold) bullion are imminent in the immediate future. However, much circumstantial evidence suggests, especially the bona fide reports of difficulty in sourcing large silver bars, that the supply and demand balance in the silver market is very tight.
The more than 80% increase in the silver price seen in 2010 is not leading to an increased supply of silver but rather to a continuing and possibly increasing demand.
This is not surprising as silver is a byproduct of base metals and therefore its price increase will not have led to any material increase in silver mine production. This fact is known by most buyers of silver coins and bars and many of them continue to hold and add to their silver holdings in anticipation of much higher prices.
Silver at $50 per ounce and the 1980 adjusted for inflation price of $130 per ounce are conservative estimates for some silver enthusiasts. They have been proved right in recent years and the extremely delicate supply and demand equation in silver could see them proved right again in the coming months.
Since 2003, GoldCore have written research articles pointing out that the very small size of the silver bullion market would likely see its inflation adjusted high of $130/oz reached in the long term.
Interestingly, were gold to reach its adjusted for inflation 1980 price of $2,300 per ounce, and silver revert to its long term gold/silver ratio of 15:1 (geologically there are 15 parts of silver to every one part of gold in the Earth’s crust) then silver would reach over $150 per ounce.
While this seems über bullish to those who know little about the silver market, some silver enthusiasts - and there are many - believe that in time, silver will be valued at the same price as gold as huge quantities of silver have been used up in industrial applications since the Industrial Revolution of the 19th Century and throughout the 20th Century and into this millenium.
In these unprecedented financial and economic times, it is important to have a long term perspective.
KMG Gold Recycling saw a glut in the silver market in Decmber 2010. "We couldn't sell our silver to the secondary refineries." Said KMG president Michael Gupton, "We had to shop it around. That doesn't seem like a shortage of silver to me, that sounds like media manipulation".
Thursday, March 10, 2011
It was only logical that hours after Jim Cramer "Whitney Tilsoned" gold, China would come out and say it needs to buy more of the precious metal. After hitting an overnight low of $1,423/oz for some unknown reason, perhaps the latest overdue shakeout of the weakest holders, gold has since retraced half the distance to its all time highs, following a report from Reuters that "China should use some of its $2.85 trillion foreign exchange reserves to buy more gold, a government adviser was quoted as saying by local media reports on Wednesday. Li Yining, a senior economist at Peking University and member of the Chinese People's Political Consultative Committee, an advisory body to the national parliament, said that China should use the precious metal to hedge against risks of foreign currency devaluations. "China should increase its gold reserves appropriately, and China must take every chance to buy, especially when gold prices fall," Li was quoted by the official Xinhua news agency as saying." And so the immaculate record of all those calling for the "inevitable" correction in gold continues with a roughly 0% success rate.
GoldCore has more:
Renewed fears over eurozone debt have seen the euro fall against most currencies and precious metals today. The yield on Greek 10-year bonds is approaching an alarming 13% after jumping to a new record high of 12.89% today (see bond charts below). The Portuguese 10-year rose to a new record high of 7.7% ahead of today’s auction where they borrowed 1 billion euros in order to avoid a “bailout”.
The risk of contagion in the eurozone has clearly not gone away and this is another primary factor supporting gold above the $1,400/oz and the €1,000/oz level. The charts contradict those who simplistically call gold a bubble with gold having seen a period of correction and consolidation since November last year and looking like it is ready to break out and challenge new highs above $1,500/oz and EUR1,100/oz in the coming weeks.
Gold in Japanese yen has continued its gradual rise and has reached multi-year nominal highs at 119,000 yen per ounce. Gold in yen remains a long way from the nominal high of 160,000 yen per ounce seen in February 1980. This is likely a leading indicator that Japan’s deflation may be morphing into stagflation and the yen’s safe haven status is likely to be as questioned as the dollar’s in the months ahead.
While oil prices came off somewhat they remain near recent highs and uncertainty in Libya and in Saudi Arabia (where there are concerns about the coming ‘Day of Rage’ on Friday) will likely see oil remain robust with sell offs being shallow and short.
The likelihood that the People’s Bank of China is increasing and will continue to increase its gold reserves and the percentage of foreign exchange reserves held in gold, was seen in comments by Li Yining, an influential Chinese economic adviser, yesterday.
He said that China should use some of its close to $3 trillion foreign exchange reserves to buy more gold, and should use the precious metal to hedge against risks of foreign currency devaluations. Reuters reported the story this morning (Reuters Africa) and Bloomberg had a very brief news story yesterday.
"China should increase its gold reserves appropriately, and China must take every chance to buy, especially when gold prices fall," Li was quoted by the official Xinhua news agency as saying.
China does not disclose its gold reserves figures (neither on a monthly, quarterly or annual basis) but is likely quietly accumulating and will announce in the coming years that its reserves have risen from 1,054 tonnes, which is very low when compared to the Federal Reserve’s, to over 8,100 tonnes.
Gold’s recent and continuing robustness indicates that the ‘Beijing put’ is supporting the market on all sell offs and will likely continue to do so for the foreseeable future.
The Chinese are too shrewd to ‘telegraph’ their intentions to accumulate much larger gold reserves and will announce the ‘news’ when they are ready.
(Reuters) -- China adviser says Beijing should buy more gold
China should use some of its $2.85 trillion foreign exchange reserves to buy more gold XAU=, a government adviser was quoted as saying by local media reports on Wednesday.
Li Yining, a senior economist at Peking University and member of the Chinese People's Political Consultative Committee, an advisory body to the national parliament, said that China should use the precious metal to hedge against risks of foreign currency devaluations.
"China should increase its gold reserves appropriately, and China must take every chance to buy, especially when gold prices fall," Li was quoted by the official Xinhua news agency as saying.
His view that Beijing should diversify its foreign exchange reserves, the world's largest, into commodities is nothing new. Many other academics have publicly called on Beijing to do so.
But Li's views may carry more weight than most. Many of his former students are now high-ranking officials, including Chinese Vice Premier Li Keqiang, who is seen as Premier Wen Jiabao's likely successor in 2013.
However, Yi Gang, head of the State Administration of Foreign Exchange, which is responsible for managing most of the country's foreign currency holdings, said recently that it was not possible for China to make big purchases in the spot gold market.
"If China gets into these markets and pushes up prices to extremely high levels, the Chinese people will bear the cost at the end of the day as China is often the key buyer in these markets," Yi said.
He added that Chinese firms and households had purchased more than 300 tonnes of gold last year, and that it would have been hard for the government to buy any more with foreign reserve funds.
"The gold price shot up last year, and surging gold prices have forced Chinese people to pay more as there is strong demand for gold for those getting married and other events," he said. [ID:nTOE71P00H]
According to the central bank, China's state gold reserves have been held at 33.89 million ounces since April 2009.
Gold prices have risen about 10 percent in the last six weeks, as clashes in Libya and turbulence across the Arab world have encouraged investors to seek a safe haven, while oil has gained about 17 percent in the same period, increasing gold's inflation hedge appeal.
(Bloomberg) -- Li Yining Says China Should Raise Gold Reserves, Radio Reports
China should boost gold reserves “appropriately,” to secure the safety of the country’s foreign exchange reserves, Li Yining, an economist, was quoted as saying by China National Radio today.
(Bloomberg) -- Shanghai Gold Exchange to Extend Trading Time for Night Session
The Shanghai Gold Exchange plans to extend trading hours for the night session from late April, the bourse said in a statement posted on its website today.
The closing time for the night session will be 3:30 a.m., the statement said.
(Bloomberg) -- Merrill Lynch Says Brent May Break Through $140 in Three Months
North Sea Brent crude may trade at more than $140 a barrel in the next three months amid rising global demand and halts to production in Libya, Bank of America Merrill Lynch said.
“To reflect a tighter market, we upgrade our average second quarter 2011 Brent crude oil forecast to $122 a barrel from $86 a barrel,” the bank said in a note today. “On average for 2011, we now project Brent crude oil prices at $108 a barrel.” For West Texas Intermediate, the bank forecasts an average of $101 a barrel for this year, up from $87.
(Bloomberg) -- London Accounted for Two-Thirds of Global Gold Trading Last Year
More gold trading takes place in London than any other city, according to the latest commodities report by the financial industry-sponsored TheCityUK.
The U.K. capital captured 67 percent of the record $25.1 trillion in global gold trading last year, compared with 74 percent in 2009, according to TheCityUK. New York had 22 percent of the gold market, up from 16 percent in 2009, followed by Mumbai with 6 percent and Tokyo at 5 percent.
London kept its position as the center of the precious metals market that it established with the daily gold fixing in 1919. HSBC Holdings Plc, based in London, holds the gold on behalf of the SPDR Gold Trust, the biggest exchange-traded fund for the metal.
“London doesn’t have any competition when it comes to over-the-counter trading in gold,” said Marko Maslakovic, senior manager of economic research at TheCityUK in London. “OTC trading has been losing to exchange trading over the past five or six years because we’re getting more and more products traded on exchanges such as ETFs. It’s becoming easier to access the market through exchanges.”
London had 40 percent share of the $3.2 trillion silver market last year, down from 52 percent in 2009, according to the report. New York’s share climbed to 31 percent from 19 percent followed by Mumbai at 27 percent, down from 29 percent in 2009, according to Maslakovic.
The actual gold traded last year in London was 13.8 billion ounces of the global total of 20.48 billion ounces, according to TheCityUK. The silver total in London was 64.6 billion ounces, of a global 157.5 billion ounces, it said.
(Bloomberg) -- Gold Rises to 118,620 Yen an Ounce, Most Since Feb. 15, 1983
Gold for immediate delivery rose 0.4 percent to 118,620 yen an ounce, the highest price since Feb. 15, 1983.
Thursday, March 10, 2011
The dramatic change in the ratio of copper to gold, which moved at the highest rate of change since June of 2010. Today, the rate of change is even higher at 4.3%. And with copper starting to seriously take on water, a curious observation emerges: is the gold-copper ratio, which on an inverted basis was virtually a tick for tick correlation conjugate for the S&P, now simply a harbinger of where the stock market is headed.
All else equal, once the Chinese exuberance dynamics which appear to have stalled out in copper, move to equities (which as Finisair demonstrated yesterday is only a matter of time) we believe, as the attached chart shows, that the fair value of the stock market is about 120 points lower. Since this is a relative comparison, those who do not wish to trade a single series, can put on a pair trade of short the Gold/Copper ratio (predicting it will decline from the current 3.4 - it is shown inverted on the chart below) and short the S&P in expectation of a compression.
And for those who wish to have nothing to do with the Fed's third mandate in the form of the stock market (which is all), another even more convoluted way to play the current multi-asset mispricing, is to go long the Gold-Copper ratio (expect gold to stay flat while copper declines), while shorting the Gold Miner/Copper Miner ETFs (GDX, COPX).
Lastly, those who just want to play with gold, an interesting observation is that Gold has marginally outperformed Gold Miner stocks. An appropriate and simple compression trade here would be short gold and long gold miners for a few basis points compression.
Saturday, February 05, 2011
Selling unwanted jewellery and other objects made from precious metals has become a great way of making quick money. Online traders cut cost and trading is made easy.
KMG is willing to buy scrap gold, silver, platinum, broken jewellery and used silver for cash.. Recycling precious metals, such as cash for, gold, silver, platinum palladium and iridium are bountiful, as precious metals are in demand.
Where to Sell Unwanted Jewellery
The added advantage of selling precious metals to KMG is that the high street pawnbroker cannot compete since the middleman is cut out. This saves the customer money. Furthermore, the online trader can match or exceed any offer the high street pawnbroker or jeweller is willing to pay.
It doesn’t matter if the jewellery is broken or if the ornament has lost its lustre. Metal traders are interested only in the purity of the metal. Precious metals can be found in the most unexpected objects. Examples may be:
• Jewellery such as chains, bracelets, charms and rings
• Cufflinks, pins and broaches
• Dental crowns
• Cups, tankards and trophies
• Cigarette lighters
• Cigarette cases
• Electronic products
• Picture frames
• Mustard pots
• Cigarette lighters
• Salt and pepper pots
• Golf tees
• Letter openers
• Precious metal foil
Watch out for fake or costume jewellery, which will yield no value.
Things to Consider Before Proceeding to Take Cash for Precious Metals
• Obtaining a second opinion from a pawnshop or other specialist on the object's value, prior to dispatching the items means the customer can make informed decisions and understand that they are recieving the best payout when recycling KMG.
• Check out the reputation of the precious metal trader before dispatching the items. Reading customers’ forums is a good indicator of a particular firm’s reputation.
• Items will be valued on the quality of the object, not its ornamental value. If the object is an antique, getting it valued by an auctioneer or antique specialist is the better option
• The precious metal will be valued on its trading price on a particular day, and prices will fluctuate.
For more information on how to get the most for your precious metals visit:
Friday, February 04, 2011
In the last days we have seen the gold price hit $1,324 and yesterday spring to $1,355, (KMG Gold London Fix Prices)
, leaving it in a neutral zone technically speaking. More than 10% of the gold ETF, SPDR in the States has been sold as well as around 10% of the ishares Silver Trust. Investors need to know, “is this the time they should be selling their gold and silver investments?” Traders will look solely at the short-term charts, medium-term investors at the medium –term fundamentals and long-term investors before this checked to see if this was a sufficient correction to disinvest and when will be the right time to re-enter the market. With so much emotion creeping into these decisions, investors need to sweep that away and coldly assess the individual investment situation within their own investment criteria. We will stand back further and look only at, “Is it time to sell Gold & Silver” and leave you to make up your own minds.
In the dollar the gold price has moved into ‘neutral’ territory having halted the downward movement as it hit support between $1,324 and $1,330 after which it bounced to $1,355. The Fix in London was at $1,347.50 up almost $20 from yesterday afternoon’s Fix of $1,328.
Many of you will feel that the dollar gold price is what defines gold’s movements, but we would caution investors who think this way. Gold has fallen back from its recent peak of $1,425 to $1,324. Take a look at the euro price of gold. It has pulled back from its peak of €1,065 and fell back to €962, almost the same amount of fall. And yet we have seen the euro jumping back from its recent low of $1.32 to stand over $1.38 a 4% move. This complicates matters because if you see the relationship of gold reflecting the strength or weakness of the dollar, you would have been wrong-footed. After all, a 4% move in the $ gold price is $65 move from the recent peak.
Recently, the euro weakened, because of the sovereign debt crisis, more rapidly than the dollar fell. Now the euro is recovering because the EU leaders are supposed to come out with a plan that will remove the fear of a euro collapse, in March. With politics playing games with the raising of the borrowing limits of the U.S. fear is growing that confidence in the dollar is going to press it lower against the euro. So you, the investor, have to decide which is the currency that most accurately reflects the demand and supply factors dictating the gold price or which is the one through which to invest to maximize profits? We have our own opinion for sure.
The Fundamental picture
- The gold market has changed its shape since the last century, when it was at the mercy of the developed world’s central banks. Since the beginning of this century, the world’s central banks have completed the gold sales they had planned to make and halted this policy and that of accelerating the production of gold.
- We have seen the jewelry market recover recently in the developed world.
- We are seeing the rise of persistent Asian demand.
- Investment demand in the developed world looks undecided as to whether to invest more or to divest believing gold has had its day. On the other side of investment demand for gold, there is a school that is selling from the gold ETF’ and buying physical gold, to hold overseas.
- We are seeing producers just manage to replace the ounces they have mined with new discoveries, but at such a slow pace that, at best, we expect little to no growth in newly mined supplies, despite the rising gold price.
- In the silver market there is a far greater scope for newly mined supplies, except for those that come as a by-product of base metal production.
- There is also a far greater scope to reclaim silver. However, most new uses of silver do consume the silver used and are not reclaimable.
- Investment demand for silver tends to be more institutional despite silver being the ‘poor man’s’ gold.
- Asian demand for silver is growing as it is the next best investment to gold, so they believe.
However, the silver price moves with the gold price, with more extreme swings either way.
It’s a matter of Perspective
This makes it even more complicated for the investor, for Asian investors buy silver and gold for very different reasons than investors watching the level of interest rates in the U.S.A. The difficult task ahead of investors is to give the correct weighting to the different parts of global gold and silver markets: -
- How far will the east dominate gold & silver prices?
- To what extent will the developed world’s events dictate the direction of the precious metal prices?
- Will an economic recovery in the West lead to more or less demand for the precious metals?
- What are the different characteristics of global investors when it comes to buying and selling?
- What is the future of currencies and their values against gold?
- What effect will the shift in power from West to East have on the precious metals going forward?