Archives of “precious metal” Tag

MARC FABER Global Economic Outlook in 2015 -Video

has warned that 2015 is set to be very volatile, urged international diversification and owning “physical precious metals stored outside the U.S.” 

The London Silver Fix Is Officially Dead

The 117-year-old London silver fix, the global benchmark for the price of the precious metal, will be shut down on August 14 

The move follows increased regulatory scrutiny into bullion market price-setting, which is controlled by a handful of banks.

Deutsche Bank last month resigned its seats on the silver and gold fixes, after failing to find buyers. That left just two banks on the silver fix, HSBC and Bank of Nova Scotia.

In a statement the London Silver Market Fixing Limited said:

The period to 14 August 2014 will provide an opportunity for market-led adjustment with consultation between clients and market participants.

The London Bullion Market Association has expressed its willingness to assist with discussions among market participants with a view to exploring whether the market wishes to develop an alternative to the London Silver Fixing.

Gold rush in Japan as tax rise looms

A landmark increase in Japan’s sales tax has led to a rush for small gold bars as retail investors pile into the precious metal to avoid next week’s rate rise.

Tanaka Kikinzoku Jewelry, a precious metals specialist, reported that sales of gold ingots across seven of its shops are up more than 500 per cent this month, as customers rush to take advantage of the current 5 per cent rate of consumption tax before it rises to 8 per cent on 1 April.

At the company’s flagship store in Ginza on Thursday, people queued for up to three hours to buy 500g bars worth about Y2.3m ($22,500). March has been the busiest month in Tanaka’s 120-year history.

Prime Minister Shinzo Abe has embarked on a series of radical reforms dubbed Abenomics in an attempt to weaken the yen and boost the ailing Japanese economy, prompting investors to buy gold as a hedge against the spectre of higher inflation.

Investors are being drawn to the metal not just because of higher taxes, said Itsuo Toshima, an adviser to pension funds.“Slowly and steadily, people are preparing for the worst, which is the failure of Abenomics.” Read More  

Gold mine measure ‘to reflect true costs’

Gold is being mined by some of the world’s biggest producers at costs that are higher than the price of the precious metal, according to a new measure that may become a benchmark of industry efficiency for companies and investors.

Several miners reporting earnings in recent weeks have revealed “all-in sustaining costs” of production of more than $1,200 per troy ounce, the price to which gold dropped this year. Some have shown an AISC of more than $1,400. Gold ended last week at $1,314 per ounce, having fallen more than 5 per cent during the week.

The AISC measure intends to show more clearly the full costs of getting gold out of the ground. Its adoption comes as this year’s sharp fall in the price of the precious metal has put the industry under more pressure than it has known for almost a decade and heightened investors’ interest in miners’ true profitability. Read More  

Citi: “No Gold Company… Will Generate Free Cash Flow At Current Gold Prices”


Via Citi,


Companies are trying to adjust by cutting capex, exploration and corporate costs. But we also notice that most of the global gold cost curve is burning cash at spot levels. Further cuts are needed in the coming 12 months to make ends meet.


We view this as a return to normal for global gold equities. Given the ‘price taker’ nature of the industry, the next decade will see high-cost asset disposals, reduced capital budgets, lower exploration expenditure and balance sheet recapitalisation as companies try to survive in a lower gold price environment…


…as China seems to be showing the world, we will see supply reductions occurring at the same time as the rolling over of ‘peak suppression’ of the gold price and the precious metal will realize its real fiat-numeraire-based value.

There Are Sell-Orders Lurking That Could Send Gold All The Way To $850

Gold first entered a bear market in April, and the recent rout has seen the precious metal break below the $1,200 level this week.GOLD-MELTING-ASR

 Adam Grimes, CIO at Waverly Advisors told Business Insider that market participants have stop orders beyond visible support points in the market.

“[The sell off in mid-April] was quite likely driven by a cluster of these orders, and we believe that more are probably lurking lower,” he said.

A stop order is an order to sell a position if price fall to a certain level.

Here’s more from our conversation with Grimes. Read More  

Paulson Gold Fund Down 27% In April

Curious who the biggest casualty of last month’s forced precious metal take down is? It may very well be John Paulson, who has systematically been blown out of all his concentrated positions in the past few years, and who, according to Bloomberg, just lost a record 27% in one month in his gold fund, and down 47% so far in 2013. If anything, it may explain the ongoing collapse in GLD holdings as he (among others) is forced to continue liquidating. The good news is that one levered players such as Paulson are finally blown out, there is hope that only far more rational, “non-weak handed” players remain at the table.

And some more news on the ongoing physical stampede out of Reuters:

  • India, the world’s biggest buyer of the metal, will celebrate Akshaya Tritiya next week, the second-biggest gold buying festival after Dhanteras. Weddings have also started and will continue until July.
  • At 0934 GMT, the actively traded gold for June delivery on the Multi Commodity Exchange (MCX) was 0.54 percent lower at 26,950 Indian rupees per 10 grams, after gaining more than a percent in the previous two sessions.
  • A stronger rupee kept the upside in prices limited. The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal.
  • Premiums charged on London prices were at $7-8 an ounce on Tuesday.
  • The RBI could restrict the import of gold on consignment basis by banks only to meet the genuine needs of exporters of gold jewellery in late May, governor D. Subbarao said in the monetary policy statement on May 3.