Gold & Silver Digest: 1/14/13
The Gold & Silver Digest contains headlines of stories that members of this group deem relevant and/or interesting to precious metals enthusiasts.
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1/14/13 5:26 PM EST US close metals price quotes from Finviz
NEW YORK, Jan 14 (Reuters) - Platinum rose to a three-month high on Monday, and is on the brink of being on parity with gold, as the prospect of further supply outages in South Africa
triggered strong buying by commodity funds.
Gold edged up, but trailed platinum's rise, helped by gains in agricultural and energy prices.
Platinum prices received a boost on news that South Africa's Anglo American Platinum is likely to sell or shut its Union mine as part of a review of its platinum business by parent Anglo American.
NEW YORK--Gold rose on Monday in quiet trade as investors bet that upcoming remarks from the Federal Reserve chief would signal a continuation of current U.S. monetary policy.
The most-actively traded contract, for February delivery, rose $8.80, or 0.5%, to settle at $1,669.40 a troy ounce on the Comex division of the New York Mercantile Exchange.
The euro rose to a 10-month high against the U.S. dollar early Monday as a European Central Bank economist was quoted saying there is a "good chance" that the worst of the euro zone's debt crisis was over. Dollar-denominated gold and the U.S. currency tend to move inversely. Europe's debt woes, and the resulting flight into U.S.-dollar-denominated assets, has pressured gold prices at times during the debt crisis.
Today, at 2100 U.S. Federal Reserve Chairman Ben Bernanke speaks and answers audience and online questions at the University of Michigan regarding monetary policy, recovery from the global financial crisis and the many long term challenges facing the American economy.
A poll of London Bullion Market Association members said gold prices will rise between 5.1% and 14% this year, continuing the yellow metal’s bull run into the 13th year.
The euro rose to its highest against the dollar since April 2012, after ECB head Mario Draghi set a bullish tone by not giving any indication the bank would ease monetary policy. Although with ultra loose monetary policies set to continue gold looks set to continue eking out gains in the “single currency”.
The Gold Anti-Trust Action Committee (GATA) and other advocates--who argue the quantity of gold held by the world’s central banks, international bullion banks, and future exchanges is overstated--are backing a petition demanding an assayed public audit of the U.S. gold reserve, published Wednesday on the White House petitions website.
(MoneyWatch) Last July, Merrill Lynch predicted gold would hit $2,000 an ounce by the end of the year. Money manager Peter Schiff has predicted gold will hit $2,300 by next year and within a few years hit $5,000. These kinds of predictions seem to be driving investor interest in gold.
It's no surprise that so many investors pay attention to such forecasts, despite all the evidence that there are no good forecasters. It's also no surprise that gold seems to defy one of the basic laws of economics as the investment demand for gold has increased along with its price. Prior to 2003, when gold was under $300 an ounce, I don't recall any investors asking if they should include an allocation to gold in their investment plan. Yet today, after a more than five-fold increase, it's one of the most frequent questions I get. In fact, a CNBC survey from last year showed that gold was most often cited by investors as the "best investment," topping even real estate and stocks.
It was no surprise that a deliberate threat at the start of this year by Palaniappan Chidambaram, Indian finance minister, to make gold “a little more expensive to import” sent shudders through the international gold market.
India is the world’s largest gold importer and accounts for more than a fifth of global demand. Last year, a drop in Indian gold imports of about 20-25 per cent – due perhaps to a previous increase in import duty but also to the slowdown of the domestic economy – was one of the main reasons for gold’s relatively lacklustre performance.
No question that gold has had a nice run. It has been up 12 consecutive years and during this period gold prices are up around 500%. This is probably why in 2012, 84% of new cash invested in commodities went into gold funds. But these investors would have done far better if they had invested in another commodity that we use every day and that beat gold by 567% in 2012. While gold was up 6.6% last year - timber was up 37.4% and timber future prices were up 49%.
I’m not surprised. I grew up around a lot of trees and vividly remember our annual family camping trips in the north woods of Wisconsin. It seemed that millions of towering trees – some more than 200 feet tall – closed in on us from all sides for hours on end. But the best part of these trips by a long shot was the pancake breakfast specials and all the stories about the lumberjacks and timber barons.
Silver Investment has so far been one of the most popular market moves of 2013. Silver seems set to achieve a new all-time price record in 2013 on a relentless and historic climb reaching as high as $55 to $64 an ounce. The out-of-proportion Gold to Silver ratio which should move back down is one of the best reasons why Silver will rise faster than Gold. Higher investment demand as paper money loses value & at the same time Gold Prices lose their biggest support – the Ultra loose monetary policy of many central Banks, especially the US Federal Reserve, namely the QE. Higher industrial demand will give Silver a double sided edge as it’s used for solar panels, lighting, electronics and much more.
These topics included: the sustained delivery of “financial heroin” into global markets, the “rigged” environment of government growth, and the utility of gold as a weapon during dark financial times.
Starting out with, Don spoke to the growing symptoms which one could interpret as the death of capitalism, in saying, “When you’ve got a situation of governments that are running monstrous deficits, are able to borrow at zero…the basic bloodstream mechanisms of capitalism are seriously at risk.” He further added, “The basic system is being rigged in favor of expanding [the] size of government. If you expand the size of government at a time when the economy is not growing, what that means is, that the socialist forces are gaining strength. There’s something that’s got to happen to change that.”
This entire 'platinum coin' discussion was a bit surreal. I was entirely disappointed with many of the arguments in favor of it.
Be prepared to hear very conflicting views of the economy and the monetary system from various and so-called 'authoratative' sources. Especially unsupported assertions and somewhat hysterical forecasts of doom and gloom, and just blatant talking of books.
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