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Meltdown turns gold rush into a stampede

April 20th, 2013 No comments

Gold Graphic Societe General

 

Since hitting a record high of $US1900 an ounce two years ago, gold has now fallen 26 per cent. On Tuesday, the price fell by a stomach-churning 13 per cent, its biggest single-day decline in 30 years.

Retail investors saw the price crash as a chance to plunge into the market. Retailers from Sydney’s Australian Bullion Company to the Perth Mint reported packed sales rooms, with dozens of people waiting outside to snap up what they regard as bargain-priced gold.

Similar scenes were witnessed across China, Hong Kong, Thailand and India. Retailers said the demand for bullion and coins started picking up from last Saturday when gold jitters were sweeping the markets.

Peter August, the chief executive of the Melbourne Mint, which buys and sells gold bullion to the public, says a clear disconnection has occurred between the physical market and the ”paper” market of Wall Street.

”People are becoming a lot more savvy with prices going down, seeing this as being a buying opportunity. ”If this was a bubble as some people suggest, then you’d have people rushing out trying to sell at the same time.

”People remain concerned about counter-party risk in owning shares or bonds or even currencies, whereas gold has no counter-party risk.” Gold is scarce and remains a safe haven, he says.

Read more: Meltdown turns gold rush into a stampede

 

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World Gold Council: Price Decline Spurs Widespread Physical Gold Buying

April 19th, 2013 2 comments

Gold Buying

 

 

 

 

 

 

 

 

The World Gold Council said Thursday that a “massive wave” of physical buying is occurring around the world at lower prices following the huge decline in gold at the end of last week and beginning of this week.

“It has become increasingly clear over the course of the past week that the fall in the gold price was triggered by speculative traders operating in the futures markets. Their short-term view of generating a trading profit is in stark contrast to the views of long-term investors in gold, as evidenced by the massive wave of physical gold buying that began over the weekend and accelerated following Monday’s further decline. The surge in gold purchases is spanning markets from India and China to the U.S., Japan and Europe. Buyers are viewing this as an opportunity to purchase gold at prices not seen in the past couple of years.”

Excerpt – Source World Gold Council: Price Decline Spurs Widespread Physical Gold Buying

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Mike Maloney: Today’s Low Gold & Silver Prices Are Not Realistic

April 16th, 2013 No comments

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“If Bullion were not a threat, the government would not be attacking it” Dr Paul Craig Roberts

April 16th, 2013 No comments

 

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Gold Proves More Rewarding than Stocks Over the Past 10 Years

April 10th, 2013 No comments

As far as gold vs. stocks over the last decade, there’s been no contest. It’s been Lebron James vs. Mickey Rooney, Billy Slater vs. Ja’mie King and Gina Rinehart vs. Nathan Tinkler.

Here Are the Facts

Between 2000 and 2012, according to a report by Kitco, the DJIA went up by 17.04%. The NYSE increased by 22.25%. NASDAQ did better, having an increase of 117.73%

According to the Wall Street Journal though, in the roaring 2000s, stocks had their worst calendar decade performance in 200 years. Investors would have done better almost anywhere else, including stuffing their cash under a mattress.

But, during that same period, gold prices (USD/OZ) skyrocketed, increasing by 532.15%. Obviously, the smart money was invested in gold.

Of course, if you had your money in Apple stock, you would have done pretty well. Apple has been a phenomenon. But so was IBM back in the early eighties when PCs first became popular. Everyone thought IBM was going to own the world. Look what happened to them. So there’s no guarantee Apple will continue its dominance.

Even some of the richest men in the world lost billions of dollars from 2000 to 2010 as a result of the global financial crisis, the dot-com crash and not-so-smart business choices.

Bill Gates, for example, lost $50 billion, more than the GDP of Guatemala. Ted Turner lost $1.8 billion, Kirk Kerkorian $3.0 billion, Charles Schwab $4.0 billion and Summer Redstone $6.7 billion. So it doesn’t necessarily pay to be on the inside.

Why Did Gold Outperform Stocks?

The reasons why gold has done so well are pretty obvious. Times have been bad and precious metals, especially gold, have always done well in hard times.

Global economies are slowing down. Some are coming to a standstill. The global debt crisis is at an emergency level, and too many governments have responded by printing more paper money to service their debt. Investors have responded by taking action to buy gold as a protection against losing the value of their cash as inflation looms in the future.

Another factor driving gold prices and bullion prices ever higher during the 2000s was inflation caused by an ever increasing global demand for crude oil while global production of oil was falling off. As more global economies became dependent on oil as an energy source, more investors turned to gold as a hedge against inflation and as a way to preserve their money,

What’s in the Future for Gold?

Most large economies have only three ways to service their enormous debt – reduce spending, raise taxes and/or print more money. They seem to be totally unwilling to reduce costs and believe raising taxes to be political suicide, so they’re left with only one option – putting more money into circulation.

Very few, if any, economists see prosperity in the future. That’s why buying gold remains a better investment than stocks now and in the future. Gold is always the best thing to have in your possession in an economic crisis.

ABN Amro Ceases Precious-Metals Delivery Service for Dutch Clients

April 5th, 2013 No comments

ABN AMRO Bank NV

 

 

 

ABN Amro had previously offered its Dutch clients the option to receive their physical gold, silver, platinum and palladium holdings as part of an agreement with Deutsche Bank Netherlands, a ABN Amro spokesman told Dow Jones via email. However, Deutsche Bank Netherlands opted to suspend this service as of April 1.

Read more: ABN Amro Ceases Precious Metals Delivery for Dutch Clients

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The History of Silver

April 3rd, 2013 No comments

Silver Production B.C.

Silver mining first began around 5,000 years ago and many ancient civilizations would have never made it had they not had great deposits of the highly prized metal. In the sixth century, B.C., Lydia, an ancient country of Asia Minor became the first kingdom to use minted coins, made from gold and silver. Around 482 B.C. a large deposit of silver was discovered near Athens, Greece. Enemy soldiers were enslaved and forced to mine the silver since it was contained within toxic lead ore. At the height of production, there were 20,000 slaves working in the mines.

Silver in the Old World

Around 100 A.D., Spanish mines became the primary supplier of wealth for the Roman Empire with Spain becoming the silver production capital. Silver quickly became a vital trading component along the spice routes of Asia.  Soon thereafter, silver mining spread throughout Central Europe and the region. There were numerous large silver mine discoveries in Europe from 750 to 1200 A.D., and the Saxon kingdoms of Britain began issuing silver coins known as Sterlings around 775 A.D. This increase in the number of mines as well as improvements in production and technology led to significant growth in silver production between the 11th and 16th centuries.

New World Discoveries

The discovery of the New World and the Spanish conquests that followed literally reinvented the role that silver would play throughout the world from that point forward. Massive silver deposits in Peru, Bolivia and Mexico dramatically eclipsed all silver mines found prior to that. Silver production from these three countries accounted for over 85 percent of production and trade worldwide during the 16th through 18th centuries. During the 17th century, Holland had become a world trade power using silver coins called “thalers”. When they founded “New Amsterdam” (later named New York) on Manhatten Island they brought their thalers with them, which locals began to refer to as “dollars”. When the United States of America was founded, they based their currency on the value of silver. In 1859 the famous Comstock Lode was discovered in Nevada and was reportedly so massive that silver ore could literally be shoveled off of the surface of the ground.

Increased Production

By the 1870′s the U.S. had become the world’s largest producer of silver. The next fifty years saw an explosion in technological innovations and exploitation throughout the new world regions. Production in the latter part of the 19th century quadrupled that of the turn of the century, reaching nearly 120 million troy ounces produced annually. Also, new discoveries in Central America, Europe and Australia greatly enhanced world silver production, which grew another 50% in the first twenty years of the 20th century. Even though many of the world’s high-grade ore deposits were depleted by the end of the 19th century, improved technologies and new discoveries have enabled production to continue to increase to today’s rate of over 600 million troy ounces per year.

The most amazing aspect of silver production, historically, is actually on the other side of the equation. Regardless of the rate of production or the civilization involved, demand has always kept up with, and often exceeded, the supply. This phenomenon of demand exceeding supply is expected to increase exponentially as industrial uses and investment demand continue to grow and the world’s deposits continue to dwindle. This current situation that the economy is in makes it a much more lucrative decision to buy silver. For more information on the types of silver to invest in, contact Australian Bullion Company.