Gold & Silver Digest: 1/21/13
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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1/21/13 5:32 PM EST US close metals price quotes from Finviz
The Pacific Group Ltd., founded by a former PaineWebber Inc. trader, is converting one-third of its hedge-fund assets into physical gold, betting that prices will go up as governments print more money to pay off debt.
The Hong Kong-based asset manager plans to take delivery of $35 million worth of gold bars that can be traded on the London Bullion Market Association and other international markets, William Kaye, its founder and chief investment officer, said in a telephone interview on Jan. 18. It has secured vault space at Hong Kong International Airport to store the gold, he said.
Citi Monday cut its outlook on gold prices for the year ahead, but raised its view on the price prospects of the platinum group metals.
The bank cut its 2013 average gold price forecast by 4% to $1,675 a troy ounce. It raised its 2013 platinum price forecast, meanwhile, by 1.5% to $1,700/oz and its palladium outlook by 4.2% to $775/oz.
Citi expects demand for platinum to outstrip supply by 94,000 ounces in 2013, with the market returning to balance between 2014 and 2017.
Jan 21 (Reuters) - India has raised the import tax on gold by 2 percentage points to 6 percent to curb purchases and rein in a ballooning fiscal deficit but industry officials expect only a moderate drop in demand.
India's passion for gold, seen by many as a hedge against persistently high inflation, has led to a rise in its current account deficit, which reached an all-time high of 5.4 percent of gross domestic product in the July-September quarter.
Gold may climb over the next three months as U.S. lawmakers attempt to tackle the country’s debt ceiling and the world’s largest economy slows, Goldman Sachs Group Inc. said, advising investors to place bets on advances.
“We see current prices as a good entry point to re- establish fresh longs,” analysts Damien Courvalin and Alec Phillips wrote in a Jan. 18 report. The bank reiterated a three- month target of $1,825 an ounce, as well as a forecast for prices to weaken in the second half as the U.S. economy rebounds.
Gold fell 5.5 percent last quarter, the worst performance since 2008, on expectations for a recovery and potential end to central bank stimulus in the U.S. An advance to $1,825 would be consistent with rallies into debt-ceiling decisions, the analysts wrote. Since 1960, Congress has raised or revised the debt limit 79 times, according to the Treasury Department.
Expectations for gold prices just grew brighter due to a recent outlook on production numbers.
Gold producer Iamgold Corp. (NYSE: IMG), which has mines in Canada and Mali, forecasts gold prices will soar to a record $2,500 an ounce as global output peaks and ore grades decline.
Grade is the relationship between quality, tons, geometry and depth that indicates if a gold find can be extracted at a cost that makes doing so profitable. High grade is key in a gold deposit.
Germany has announced that it plans to take home all 374 tonnes of its gold stored at the Banque de France, and 300 out of 1,500 tonnes held at the Federal Reserve Bank of New York (http://www.ft.com/intl/cms/s/0/97970542-5fd2-11e2-b128-00144feab49a.html#axzz2I9UZ7iGA).
Some investors are disappointed as gold only went up 7% in USD in 2012. After having compounded at over 19% p.a. over 11 years, gold certainly should be allowed to just gain 7% without some people calling an end to the bull market. Those who believe the bull market is over are mainly the investors who have missed gold going up almost 7 times in since 1999.
Let me be very clear, the real move in gold hasn't started yet, it is still to come.
History does not necessarily repeat itself but when the US Mint last ran out of silver American eagle coins within a couple of weeks the price of silver sprinted from $34 to $49 in a mini-spike that quickly proved unsustainable.
It never quite broke through the all-time high of $50 and change that silver hit in 1980 when our old friend Gerhard Schubert, now head of precious metals at Emirates NBD made that trade. Thirty-two years later we are all a lot older but the silver price has never been that high since then. Last week the US Mint again ran out of silver eagles.
Up to this point, no major or big money has entered the silver market or stood for delivery in a significant way outside of outspoken Toronto-based silver ETF manager Eric Sprott.
Yet it is rather hard to imagine why they would not be joining Sprott, with QE's stretching to infinity, Fiscal Cliffs, Debt Ceilings, European Financial Crises, and now Germany no longer trusting its precious metal "custodians" as it repatriates its gold.
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