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Archive for August, 2013

Gold surges 2%, enters bull market on Comex : Syria concerns, debt ceiling worries send investors to safety

August 28th, 2013 No comments

Gold is back in bull market territory

SAN FRANCISCO (MarketWatch) — Gold futures finished 2% higher on Tuesday, moving into a bull market as charted by the Comex contracts, as fears over possible U.S. military action against Syria and concerns over the U.S. debt ceiling drew investors into the perceived safety of the precious metal. “Gold will be a beneficiary of any military action in Syria,” said Paul Herber, portfolio manager of the Forward Commodity Long/Short Strategy Fund

Gold is now at least 20% above the intraday lows hit by Comex gold futures of around $1,180 reached June 28, officially putting it into a bull market. Technically, a bull market definition is a rise in value of any market by at least 20%, while a bear market works in the opposite direction. Gold prices, however, are still down more than 15% this year.

“Among the factors for the gains in gold is the threat to Middle East stability as a result of the U.S. increasing tensions with Syria,” said Michael Haynes, chief executive officer at online precious-metals dealer APMEX Inc.

There’s also the “rhetoric around the increase in the debt ceiling and the implied threat that this debate will erupt into,” he said. On Monday, Treasury Secretary Jacob Lew said the U.S. government will hit the debt ceiling and be unable to borrow money to pay its bills in the middle of October unless Congress votes to increase the federal debt ceiling.

“The gold markets appear to be looking for reasons to go higher and we have these ‘ignition points’ at the moment,” said Haynes. “As we move past the Syrian threat and into the U.S. debt/budget discussion in September, which has longer term impact, the call on the bull market will be more evident.”

Gold above 1400 on Syria concerns & taper debate

 

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The Gold is Gone – Germanys’ access to its gold denied

August 21st, 2013 No comments

Published on 15 Aug 2013

The world is losing trust in the dollar as a safe haven. A major blow came after Germany’s Bundesbank demanded the repatriation of a big chunk of its gold being held in the US. Because as RT’s Gayane Chichakyan reports, some are concerned the assets of foreign nations in the Federal Reserve are not secure or even there. The Germans were infuriated when the US Federal reserve didn’t even let them examine their own assets properly. Peter Boehringer, the founder and chairman of ‘German Precious Metal Association’, says that’s a bad sign.

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It’s a fickle affair investing in gold

August 20th, 2013 No comments

worth it's weight

If one considers the fundamentals of gold and the fact that they haven’t changed – industry needs are growing regardless of price, and jewellery continues to demand at least 55 per cent of global production – then surely the future is not that bleak?

Physical gold cannot be printed, made or inflated, and is still a liquid, divisible and portable store of wealth that has been deemed precious since civilisation began. We got an inkling that there are plenty of investors who share this view in April when the gold price really tanked. There were all sorts of conspiracy theories doing the rounds after the “take-down”, but the “hot money” from hedge funds is believed to have been largely responsible by ramping up the price before taking quick profits.

Melbourne Mint chief executive Peter August says he and other physical gold dealers were bracing for a flurry of panic selling in the wake of the paper sell-down. “But the opposite occurred, with people queuing up to buy gold wherever they could buy it.”

Even though gold is about 36 per cent off its top price, its long-term history shows a fairly compelling investment story, especially when its track record is compared with other asset classes over the past 10 years.

The only difference with the gold story now is that it continues at a time when central banks around the world are printing money at a faster rate than ever. It’s anyone’s guess how all that’s going to work out.

That’s why August suggests portfolio insurance, with a hefty 25 per cent weighting towards gold via dollar-cost-averaging into the commodity, and “buying the dips”.

It’s a fickle affair investing in gold

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India turns screw again on gold imports

August 16th, 2013 No comments

India

India turned the screw on gold buying again on Wednesday, banning imports of coins and medallions and making domestic buyers pay cash, a day after hiking bullion import duty to a record 10 percent.

The government is trying to curb apparently insatiable demand from Indians for gold which sent its current account deficit to a record in 2012/13, but although buying slowed in June it revived in July, triggering the latest restraints.

All imports of gold will now need a licence from the foreign trade office and will have to be brought into a customs bonded warehouse, Economic Affairs Secretary Arvind Mayaram said.

Imports by the world’s biggest bullion buyer hit a record 162 tonnes in May as global prices fell, prompting a duty increase to 8 percent. Imports dropped to about 31 tonnes in June but revived to 47.6 tonnes in July, according to the finance ministry.

With the rupee touching a record low last week, domestic prices are high and premiums paid for bullion over London prices are near $45 an ounce, up from $30 an ounce last week.

The curbs on gold come as India imposed restrictions on foreign exchange outflows in its latest attempt to prop up the rupee.

India turns screw again on gold imports

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EU makes bank creditors bear losses as Cyprus bail-in becomes blue-print for rescues

August 14th, 2013 No comments

european_union

New European Union “bail-in” rules to impose the losses of failed banks on shareholders, bondholders and some large depositors were agreed early this morning by Europe’s finance ministers.

Jeroen Dijsselbloem, the chairman of the Eurogroup of finance ministers, hailed the agreement as a major step towards a “banking union” and away from state funded aid to recapitalise or bailout troubled banks across Europe.

“This is a clear signal to the markets and citizens, and another major step forward towards a banking union. If a bank gets in trouble we will now, throughout Europe, have one set of rules on who pays the bill. The financial sector itself will now to a very, very large extent become responsible for dealing with its own problems.”

In March, he said that the heavy losses inflicted on depositors in Cyprus would be the template for future baking crises across Europe.

EU makes bank creditors bear losses as Cyprus bail-in becomes blueprint for rescue

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China H1 gold consumption soars, set to surpass India as top user

August 12th, 2013 No comments

Gold Dragon jpg

China’s consumption of gold in the first six months of the year surged by more than half as sliding prices of the metal lured buyers, data showed, reinforcing expectations that the nation will overtake India as the world’s top gold consumer this year. 

Gold prices have lost about a fifth of their value this year after 12 years of gains, releasing pent-up demand across the world and particularly in India and China, where gold is an essential part of weddings and gift-giving. 

China consumed 706.36 tonnes of gold in the first half of 2013, up 54 percent from the year-ago period, the China Gold Association (CGA) said in a statement on its website on Monday. It consumed 832.18 tonnes in all of 2012 and about 460 tonnes in the first half of 2012. 

In April, gold witnessed its biggest two-day fall in 30 years. “China’s demand in April and May was unmatched,” said one Shanghai-based trader. “They bought more than anyone and were consistent buyers even after prices recovered a little.”

China’s gold demand could hit a record 1,000 tonnes this year and will overtake India, the World Gold Council said last month.

China H1 Gold consumption soars set to surpass India as top user

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Newcrest posts record $5.78bn FY loss

August 12th, 2013 No comments

Newcrest

AUSTRALIA’S largest gold miner Newcrest Mining has reported an annual net loss of $5.78 billion for the 12 months to June 30.

The large loss relates to asset impairments and write-downs of $6.23 billion.

The miner reported an underlying profit of $451 million, less than half of the $1.08 billion figure posted last year.

The company blamed the heavy falls in the gold price in 2013 and subsequent falls in valuations for the asset write-downs.

The company has responded to the gold price slump by curtailing gold production at its high cost mines, and it expects all its mines will be profitable in the 2014 financial year at a gold price of $A1450 per ounce.

Newcrest also released its production guidance for 2014 today, predicting gold production would rest between 2 million ounces and 2.3 million ounces.

While the company would traditionally provide guidance for up to five years ahead, it has decided not to comment on its production profile beyond 2014 because of market volatility.

Newcrest Mining Posts Record Loss

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Hidden Secrets Of Money – Ep1 ‘Currency Vs Money’ Mike Maloney

August 12th, 2013 No comments

Winston Churchill once said, “The further you look into the past, the further you can see into the future.”

This video expertly summarizes the basics on the history of money, finance and the fundamentals for Gold and Silver.

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RBA cuts interest rates to record-low 2.5%

August 6th, 2013 No comments

359158-rba

The Reserve Bank of Australia has cut official interest rates to a record low 2.5 per cent from 2.75 per cent to spur moribund sectors such as housing construction.

“The board has previously noted that the inflation outlook could provide some scope to ease policy further, should that be required to support demand,” RBA governor Glenn Stevens said in the bank’s monetary policy statement.

The Reserve Bank has cut the official cash rate by a total of 2.25 percentage points since November 2011 to help rebalance the economy as the China-driven resources investment boom crests.

Tuesday’s interest rate cut suggests policy makers have become increasingly uneasy at the sluggishness of non-mining drivers of economic growth, mainly the construction of houses and apartments.

Consumer and business sentiment is weak, while retail sales posted their weakest fiscal year in more than half a century in 2012-13, figures published by the ABS showed this week.

There is growing evidence the economy is slowing, potentially pushing the jobless rate above global financial crisis highs, as forecast by the government last week.

Economists expect the Reserve Bank to revise down its own economic forecasts on Friday, when the central bank publishes its quarter Statement on Monetary Policy.

RBA cuts rates to record low

 

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Gold and Silver: Load the Boat-Back Up the Truck-Peter Schiff

August 5th, 2013 No comments

For anyone who sold physical gold in the current precious metal downturn, money manager Peter Schiff says, “There’s going to be a big problem because the gold they sold on the way down isn’t going to be available on the way back up because the people who own it aren’t going to sell it at any price. . . . This is the time to load the boat, to back up the truck.”

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