Tag Archives: Precious Metals

Gold Demand in Dubai Now Running at 10x Normal Levels

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The disconnect between the massive physical buying of gold versus the falling paper derivatives price has now become nothing short of extraordinary.  While we have all seen the figures describing the gold buying frenzy in China and India, now we have some more detailed information about what is happening on the ground in Dubai.  Incredibly, we find that since the April paper price crash, 50 tons of gold has been purchased, which is the equivalent of the entire amount of 51.8 tons purchased in all of 2012.

One of the most comprehensive looks at the massive physical versus paper disconnect I have read is courtesy of Goldbroker.com, a company that specializes in physical bullion stored in Switzerland.  I suggest checking out their latest Gold Market Report.

Now from Emirates 24/7 we find that:

Dubai demand for gold has been witnessing a massive surge since the price collapse of last month, with demand far outstripping supply.

Various estimates suggest that demand in the past few weeks has been nothing short of astronomical, surging by 10 times the normal demand.

According to the latest precious metals weekly report by Gerhard Schubert, Head of Precious Metals at local bank Emirates NBD, “Participants of the physical industry in Dubai believe that an additional 50 tonnes have been bought since the price crash in April. These sales figures are in addition to the ‘usual’ numbers and put a little perspective on the derivative side of the market.”

The usual numbers that Schubert refers to are the same as the demand seen since April. According to World Gold Council data, total consumer demand for gold in the UAE (not just Dubai) stood at 51.8 tonnes for the entire year 2012, which means that demand was about 4.31 tonnes per month during last year.

Compared with that, as Schubert mentions, Dubai demand in the past few weeks has been 50 tonnes plus ‘usual’ numbers, in effect reflecting the massive surge in interest that gold has seen in this past few weeks.

“We have been running out of gold coins and bars even before they reach our stores,” he added. “There are people who are ‘pre-booking’ gold bars with us, and they collect it once new supply arrives,” he said. 

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Chinese Gold & Silver Exchange Society Runs Out of Gold…Importing from Switzerland and London

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Hong Kong’s Chinese Gold & Silver Exchange Society has been in operations for over a century, and it’s President Haywood Cheung was interviewed by Bloomberg news earlier today.  Whoever orchestrated the attack on gold and silver in the last week or so has gravely miscalculated, since the response to the drop has been surging demand for physical gold and silver.  While I tend to be skeptical when I hear about silver shortages since these reports have been so exaggerated in the past, the lack of silver coin availability and premiums are the most extreme I have seen since the financial and economic meltdown of 2008.  Now we discover that the Chinese Gold & Silver Exchange Society has essentially sold out of gold bullion, and must wait until Wednesday for shipments to arrive from Switzerland and London.

Gold and Silver Update: Interview with David Morgan and Amir Adnani

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In this interview, we are fortunate enough to get detailed perspectives on what is going on in the precious metals markets from two experts in the field.  Wearing the analyst’s hat, we have the highly respected David Morgan who fills us in on his latest observations as well as how he thinks investors should split capital between physical metals and the mining shares.  From the mining industry, we have Amir Adnani, CEO of Uranium Energy Corp and Chairman of Brazil Resources.  He explains how both of these companies have been aggressive in making acquisitions over the past couple of years in this depressed market, moves that will set them up for outsized performance once the market turns around and prices begin to reflect fundamentals.  A really great two-part interview.  Enjoy!

Texas Moves to Repatriate its Gold from the Federal Reserve

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This is one of the most interesting stories I have read regarding the precious metals market in quite some time.  It appears that Texas Rep. Giovanni Capriglione has a bill in play that would move the state’s gold from New York (where its under the “safekeeping” of the ultra shady Federal Reserve) to a depository within the state of Texas itself.  The reason this would be such a big deal if it happens, is because a lot of the gold bought and sold globally is very likely not actually owned by those that “buy” it.  From my perspective, pretty much the only countries that actually buy gold and bring it within their borders are China, Russia and Iran.  Most other nations that claim they “bought” gold, most likely hold a certificate that states they have gold in London or New York.  So in other words, they have no gold.  It looks like Texas is wising up.  From the Star-Telegram:

Freshman Rep. Giovanni Capriglione, R-Southlake, is carrying a bill that would establish the Texas Bullion Depository, a secure state-based bank to house $1 billion worth of gold bars owned by the University of Texas Investment Management Co., or UTIMCO, and stored by the Federal Reserve.

“If you think gold is a hedge, or a protection, you always want it as close to the individual and the entity as possible,” Paul told The Texas Tribune on Thursday.” Texas is better served if it knows exactly where the gold is rather than depending on the security of the Federal Reserve.”

You’ve gotta love Ron Paul.  The guy is still raising hell even after he left Congress.

The highly political Governor also appears to be on board…

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Bitcoin Goes Parabolic: My Updated Thoughts

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Bitcoin is the beginning of something great: a currency without a government, something necessary and imperative.

- Nassim Taleb on Reddit yesterday

So Bitcoin has finally dipped its electronic toe into the fringes of mainstream consciousness. The results have been, to put it mildly, explosive, divisive and highly emotional.  I can see why.

While I had been aware of it prior, I never truly became curious about Bitcoin until I read an excellent six page article about it in the New Yorker on October 10, 2011.  I had no clue how the technology worked, but it intrigued me to such a degree that I sent it to my email list of close contacts.  What really struck me was the rationale for creating Bitcoin by its creator, the anonymous “Satoshi Nakamoto.”  This cryptographer was well aware of the cancerous nature of the world’s monetary system and the key role of Central Banking in that system.  This wasn’t just some technology geek playing games with virtual currency, this was a well thought out monetary revolution.

He had thought this entire thing out like a chess grandmaster.  He knew he had to be anonymous and that Bitcoin had to be decentralized, because he knew the Central Bank overlords would fight to the death to protect their money monopoly.  He created a currency that central planners could not naked short to infinity and manipulate with derivatives as they do with the precious metals markets.  It was this foresight that has led to its tremendous success today.

It wasn’t until I started accepting Bitcoin donations in September of last year (donate here) that I truly started gaining a small understanding of the technology and who the major players in the “Bitcoin Economy” are.  It was at 10 back then, it is 73 as I write this today.

BTC

A chart like the one above is nothing short of parabolic, and parabolic charts beget parabolic emotions.  From my end, I have received some complaints from “gold bugs” who seems annoyed that I am highlighting Bitcoin seemingly in preference to precious metals.  To them I have a few things to say.

First, I spent four years writing about gold and silver non-stop.  Sorry, it just gets repetitive and boring.  Never once have I wavered in my conviction on the need to buy and hold these metals; however, the world is dynamic and when new things enter the picture I will formulate new thoughts.  Some of the complaints against Bitcoin are valid, others are not.  The one I hear the most, which is completely untrue, is that Bitcoin is another “fiat currency.”  I’m often shocked that people make this error, as the definition of fiat is: 1. A formal authorization or proposition; a decree and 2. An arbitrary order.  Synonyms include: decree, diktat, directive, edict, rescript, ruling.  Bitcoin is 100% voluntary.  No one is declaring it the “money of the land,” forcing you to pay taxes in it, or invading the Middle East to protect the pricing of oil in it.  So let’s move on.

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Jay Taylor Talks Gold and Miners: What Happens in a Recession?

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What stands before us is one of the most interesting setups in gold and silver I have ever seen.  Not only is sentiment by far the worst I have witnessed in the past several years, but positioning is also the most favorable according to the latest CFTC Commitment of Traders Report (COT).  So we have a very bullish setup; the best since the crisis in my view.  On that note, here’s an update from Jay Taylor!

Interview Two with Wall Street for Main Street: Look for Capitulation

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Everyone is talking about the bloodbath in the miners, but if you’ve stayed in the space this long, or are just waiting on the sidelines, this seems to be the time for a clear head and to be on the lookout for capitulation.  While I don’t spend as much time on the markets these days, today’s action felt panicky and sentiment is close to what you’d expect to see near lows.  I recorded this interview yesterday and we discussed all of the above and more.  Enjoy!

The Number One Reason to Buy Gold: An Interview with Marin Katusa

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In a world where many gold investors are suffering from confusion and frustration, and where mining investors are almost at the breaking point, my friend Dan Ameduri has brought to us an interview with Casey Research’s Marin Katusa.  For those interested in separating the winners from the losers in junior mining, Marin also offers one of his favorite names in the space.  Enjoy!

Is Gold and Silver Registration Coming to Illinois?

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So let me get this straight.  First they want gun registration and now precious metal registration?  I’m sure the government would only use such information in our best interests, because as we all know: Your Government Loves You.  Sounds reasonable, after all, only “terrorists” buy guns and gold anyway.

Meet the ” Precious Metal Purchasing Act” or SB3341, brought to you by the lovely folks at the Illinois 97th General Assembly:

Synopsis As Introduced
Creates the Precious Metal Purchasing Act. Provides that a person who is in the business of purchasing precious metal shall obtain a proof of ownership, create a record of the sale, and verify the identity of the seller. Provides that a person who is in the business of purchasing precious metal shall not pay for the precious metal in cash and shall record the method of payment. Requires the purchaser to keep a record of the sale for one year or, if the purchase amount is over $500, for 5 years.

Read more on the bill here.

In Liberty,
Mike

 

Fed Statement is Laughable: The Precious Metals Consolidation is Over

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I haven’t written anything about the markets in a very long time due to the experience in extreme boredom that they have become as of late.  The election came and went and now that we are just ahead of the Holiday Season the apathy has hit monumental proportions.  More significantly, what was the point of doing anything ahead of today’s Fed meeting?  There wasn’t any and so nobody did.

Now that the announcement is out, I think in retrospect today will turn out to be a meaningful turning point.  Not so much because of what they said, but because of where certain markets are and because of what they didn’t say.  Let’s start with the latter point.

From the statement, we found out that the Fed is set to launch an unsterilized buying program of $85 billion per month ($40 billion in mortgage backed securities and $45 billion in treasuries).  This part was widely flagged already.  The more interesting part is the language in the text discussing how the Fed will essentially link their low rates to unemployment, with 6.5% being the threshold.

This is all within a text that attempts to portray a very benign and healthy economy, one described as having an improving labor market, a housing recovery and anchored inflation expectations.  Sounds pretty good to me; so then why accelerate the aggressiveness of their radical money printing policy?

The answer is that the Fed realizes its policies haven’t worked and are convinced they need to do more and more to prove an academic point that man is indeed more powerful than nature.  At first, they said a stock market rally would set a fire under the economy.  That hasn’t worked.  Then they said a new housing recovery would do it.  Once again, nein.  So now their answer is just print money like crazy and eventually it will work.  Yes, they are insane, but we already knew that didn’t we.

Actions always speak louder than words and their actions demonstrate a deep concern for the real economy and an unspoken understanding that things are not going well underneath the layers of propaganda.

Now onto the second point.  I think today will mark an important turning point in the markets not just because of what I wrote above, but because of where things stand.

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