Gold & Silver Digest: 9/11/13

By jasonw on Thu, Sep 12, 2013 - 12:35am

The Gold & Silver Digest contains headlines of stories that members of this group deem relevant and/or interesting to precious metals enthusiasts.

If you have articles to submit for the next digest, please email them to me by clicking here.

9/11/13 10:09 PM EST US close metals price quotes from Finviz

Reuters: Gold slips, holds near 3-wk low on easing Syrian tensions


Gold fell on Thursday to hold near its weakest level in three weeks, as tensions eased over a possible military strike on Syria and amid expectations the U.S. Federal Reserve will start to unwind its monetary stimulus.

Gold prices are likely to contract further in 2014, after tumbling for the first time in more than a decade this year, due to confidence in a stabilising global economy, metals consultancy Thomson Reuters GFMS said. 

Business Insider: This Chart Will Have You Rethinking What You Know About Gold And Home Prices

Some have attributed the gold price rally to the Federal Reserve's expanding balance sheet. Other have argued that it was driven by increasing investor accessibility thanks to the advent of commodity ETFs.

Jeffrey Gundlach, the bond king behind DoubleLine Funds, offered an alternative take.

During his webcast on Tuesday night, Gundlach presented this interesting chart overlaying gold prices and home prices.

King World News: Amazing - GLD ETF Tells Customers You Can’t Have The Gold

Today one of the most highly respected fund managers in Singapore shocked King World News when he said that custodians of the ETF GLD have refused to give people physical gold in exchange for the shares.  Grant Williams, who is portfolio manager of the Vulpes Precious Metals Fund, also warned that the massive and escalating paper claims on physical gold at the COMEX warehouse are going to create an explosion in the price of gold.  Below is what Williams had to say as KWN readers around the world take another trip down the rabbit hole.

Eric King:  “Grant, I wanted to ask you about paper claims on gold.  They have reached another new all-time high.  I think when you wrote (on KWN) about this initially it was around 42 to 1 (42 claims for every ounce of physical gold that exists).  I think we have now surged all the way up to 54 to 1.”

Williams:  “Yes, we’re up around 55 now, Eric.  We’ve seen the gold being drained out of the COMEX almost non-stop this year, certainly since the Bundesbank repatriation request.  So, to see the claims mounting is no real surprise....

Jesse's Café Américain: NAV Premiums Of Certain Precious Metal Trusts and Funds - Physical Gold Demand Provokes Another Bullion Redemption - A Murder of Black Swans

The short term demand for gold bullion provoked another exchange of units for bullion from the Sprott Physical Gold Trust.

The fund saw 1,500,000 units exchanged for 12,460 ounces of gold bullion at the rate of .008 ounces per unit.   That is about a $17,000,000 transaction.

GoldSeek: Gold & Oil, Where to Go if the Middle East Explodes! (Part 1)

This is a two part article that paints the current Middle East conflict issues as they affect both oil and gold. The first part covers the religious background at play there and the location and importance of oil in that scene. You will see how the issues at play there can affect every single person on this planet. In the second part we discuss what happens to the oil market and its price and the gold market and its price.

When following events in the Middle East, we have been struck by an omission of emphasis by the global media that hides the potential extent of what is happening there. It is an important omission that covers our immediate future and one that will affect the entire globe! In a small attempt to clarify a more complex picture of today’s events, ahead of their unfolding next week and beyond, we take a look at three facets of the future –the religious foundation for the conflict, the involvement of the commercial oil world and the political involvement of the developed world, followed by its potential impact on precious metals and your investments there.

Silver Bear Cafe: The Energy Factor to Push Gold to New Highs

One of the most misunderstood factors that will impact the price of gold is energy.  Many analysts forecast the future value of gold relative to the amount of fiat money circulating in the system as well as total government treasury and bond debt.  However, the world may not have the available energy supply in the future to satisfy these massive debts.

Gold and silver are monetary metals because they function as a store of “Economic Energy”, a term coined my Mike Maloney.  Basically, the precious metals are batteries that store this trade-able energy value.

In the past when a country would print too much fiat money (not backed by gold), economic upheaval would occur as the public lost faith in the currency.  To restore faith back in the system, the government(s) would revalue the price of gold relative the amount of fiat currency in circulation.

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