Gold & Silver Digest: 1/16/13
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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1/16/13 5:56 PM EST US close metals price quotes from Finviz
SAN FRANCISCO (MarketWatch) — Gold futures settled with a small loss Wednesday, pulling back after a two-session climb, but a consultancy predicted that investment demand will drive average prices to a record in the first half of the year.
Separately Wednesday, an investment bank said its betting on copper and palladium for 2013 and Germany’s central bank confirmed plans to repatriate its gold holdings.
Metals consultancy GFMS remains firmly in the bull camp for gold.
In an update to its Gold Survey 2012, GFMS said it expects gold to extend its more than a decade-long bull run in 2013, with prices potentially testing $1,900/oz in the first half of the year as solid demand for the metal from central banks and from opportunistic buyers in India and China outweighs a “sizeable bearish contingent” in the market.
“We strongly expect the rise in the annual average [gold price] to be greater than 2102′s 6% lift,” said GFMS, forecasting an average gold price of $1,775/oz in the first half of this year. In Europe Wednesday, spot gold was trading at around $1,677/oz.
FRANKFURT — For the great many Germans who still rue the day they had to trade their deutsche marks for euros, there has been at least one consolation. If the common currency didn’t work out, Germany still had huge reserves of the hardest currency of all — gold.
Except, many people learned for the first time last year, it didn’t.
More than two-thirds of Germany’s gold reserves, valued at €137 billion, or $182 billion, is abroad, stored in vaults in Paris, London and above all New York. In fact, there is considerably more German gold in Manhattan than in Frankfurt.
NEW YORK, Jan 16 (Reuters) - Platinum rose for a seventh consecutive session on Wednesday, driven by strong hedge fund buying after a mine labor crisis at the world's largest platinum producer in South Africa stirred fears of a supply shortage.
The price of platinum also stayed above that of gold for a second straight day when Anglo American Platinum in South Africa said it would shut two mines and cut 14,000 jobs. The move is expected to widen the platinum market's deficit in 2013 in an already tight market due to strong autocatalyst demand.
Germany is reportedly repatriating gold it has stashed with the New York Fed and the Bank of France, and some policymakers want to bring back all their gold in case the financial crisis worsens.
People continue to debate whether gold is or should be considered money.
However, this hasn't kept the world's central banks from increasing their gold reserves.
When the gold price rises past a certain point, especially new highs, the bond markets start to fear. It's not just because there is inflation out there, because they can price in inflation. Even tho the bean counters (bond - guys) who never create anything but just base loans on others assets, can price in inflation, if gold rises too fast they end up with a real pickle.
Humans have been hoarding shiny flecks of gold for ages, but investors are beginning to shift from physically stashing away gold under their mattress to gold-related exchange traded funds.
U.S. Mint’s gold-coin sales have fallen to 753,000 an ounce, or 25% lower from 2011, reports Myra P. Saefong for MarketWatch. It was the third straight year of declines.
In contrast, golds in global gold exchange traded products rose about 44% over the past three years as investors sought an easy way to hedge against inflation, the falling dollar or even a breakdown in the financial system.
Gold will surge to new highs this year, a push upward that will cause a big rally in the depressed shares of precious metals miners, says John Hathaway, portfolio manager at New-York based Tocqueville gold fund.
How good might it get for gold miners? Pretty stupendous, in his view. Mr. Hathaway believes that when gold starts to trade sustainably above the $2,000 U.S an ounce level, shares could run up by 60 per cent to 90 per cent.
A long time subscriber asked a question this week that I would imagine may be on many minds: “Ted, you have frequently stated that all manipulations must end. Why is that? After 25 years it still appears to be going strong. Why can't it go on for another 25 years, or for infinity?”
That's a great question. First, let me define all manipulations as being commodity price manipulations, as opposed to manipulations of other things. We have documented experience in such commodity market manipulations over the past decades, including copper, soybeans, potatoes and even silver in 1980, to the upside. All these previous manipulations did end and ended dramatically, but I admit that doesn't prove conclusively, by itself, that such manipulations must end.
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