saveyourassetsfirst3 |
- Global Gold Production & the Australian Gold Sector
- Top in Stocks and Silver?
- Tuesday Options Brief: GG, LINE, IYR & YHOO
- Gold Back to New Highs?
- Endeavour Silver Expands Indicated and Inferred Silver-Gold-Zinc-Lead Resources at the Parral Project in Chihuahua State, Mexico
- Disasters Rocking the U.S. Dollar?
- Hafnium: Small Supply, Big Applications
- Dollar Losing Safe Haven Appeal
- Silver Rises to New Nominal 30-Year High of $34.44/oz…
- $34 Silver thread...
- Disasters Rocking U.S. Dollar?
- GLD gold ishares calls, already looking juicy this am
- Silver guru Morgan: Get ready for a major correction
- Paging Blythe, SLV $35 calls coming due soon, we have a problem, paging Blythe
- Silver and the New Decade
- Is there a number where you would stop buying?
- Dollar's safe-haven status hangs in the balance
- Silver Is The New Gold
- Today's Precious Metal Close Banging Moment Brought By The Fine People At The Comex
- Silver is the new gold: Prices double in a year
- Gold scrap scarcity hobbles Indian refineries
- Gold price loves a crisis
- Egypt Bans Export Of Gold "In Any Form"
| Global Gold Production & the Australian Gold Sector Posted: 01 Mar 2011 04:47 AM PST The production base of the emerging Australian gold stocks has been growing significantly of late. So have some of the share prices. Australia now boasts a number of new producers successfully ramping up their operations here and abroad, in the process posting strong capital growth for investors. Having covered this sector since early 2006 and been invested since 2001 I have been able to watch this sector more closely than most. Mines take years to bring through discovery, development, commissioning, ramp up and finally to full production. Therefore the response to higher metal prices is delayed considerably. At the same time the exploration expenditure that has been stimulated by higher gold prices is starting to result in some interesting new discoveries that can impact the growth of emerging producers significantly. These emerging producers also offer exploration upside from Greenfield and Brownfield targets due to increasing cash flows and increasing exploration budgets. Before we can analyse forward projections for gold and gold stocks we have to understand the past and the present in some detail. The lack of world class discoveries points to an increasing supply deficit in addition to resource replacement issues for the majors over coming years. New gold deposits of any decent scale (+10M oz) have become harder to identify in recent years. These large scale discoveries have been in steep decline since the late 80's. Even smaller 1-10M oz deposits are also being discovered less and less since that time. At the same time the massive debt overhang (still growing – read money printing) in the "first world" and strongly increasing investment demand over recent years is expected to provide additional demand for gold. Now add decreasing production as a factor. This is partly due to the cut-off grade response as larger companies feed lower grade ore into production in order to lengthen mine life. Average mined ore grades have decreased by 30% since 1999. Just to balance this analysis – you would also have expected mines still operating at US$250 per ounce gold to have been increasing their grade back in 1999 just to stay afloat. This 30% grade reduction equates to a rise in cash costs of around $150 per ounce. Cash costs are a very important indicator however this metric should not be our fixation here because this does not reflect the total cost. Total cost of gold production was up at US$690 across the industry in 2008 and at $717 in 2009. These figures reflect a more accurate view of the real cost of developing and maintaining production. As large new discoveries become scarcer this cost will rise further. Of course this is an average and the larger mines that are developed at large scale deposits tend to produce at lower cost. The lowered incidence of finding these large scale deposits means that larger mines are slowly losing their over dominance of total production. Now we face the necessity to mine smaller and smaller deposits to meet rising global demand. Should mine profit margins fall into negative territory we would once again lose incentive to explore and develop these smaller mines. This would exacerbate the supply imbalance further. It seems likely that if massive deposits remain difficult to find the majors will be forces to scale down and be willing to bring smaller deposits into production. As we are forced to go deeper (e.g. South Africa) or to lower and lower grades, to smaller and smaller deposits then the price of gold has to continue to rise. A look back over historic gold production is both interesting and necessary at this point if we are to consider the big (production) picture a little better. Production has changed greatly since 1970, back then South Africa produced 2/3 (about 30M oz) of the world's measured gold production of 47M ounces per annum (PA). By 1985 this had increased to around 50M oz PA and production in South Africa had dropped off to around 21.5M oz. Global production was rising particularly in Canada, the USA, Brazil, China and Australia. By 1990 heap leaching technology had been introduced liberating gold from lower grade ore bodies and assisting global production to around 75M oz PA. The US and Australia raced ahead to about 12.8M oz and 10.6M oz respectively as the Soviet Union broke up. Bulk mining methods allowed huge low grade oxidised deposits in dry climates to be exploited and new areas were opening up to explorers in Russia, Latin America and Africa. This trend continued into 2000 before the effect on new global production started to reduce. By 1995 South Africa produced just 16.75M oz, the US approached the level of the former USSR at over 10M oz and Australian production was rising sharply at 8.2M oz hitting over 10M oz PA by 1997. Countries like Ghana, Indonesia, Chile and Peru saw production levels of around 2M oz PA increasing their share of the total world production, which was around the 1990 level. By the turn of the century gold production was truly global as miners had searched the world for several years looking for higher grade mines and lower production costs. The lag effect from discovery to production had reached a crescendo. The top three national producers were still South Africa, the USA and Australia however these three now produced just 41.8% of global production. This is also when gold production peaked at over 2,570 metric tonnes PA, which is over 82M oz PA. Then things began to change dramatically once again. The demand for and price of gold started to rise and production started to fall. Exploration had dropped off dramatically due to the shocking economics of gold production. By 2005 global production was back to 2518 metric tonnes and Australia was the second largest national producer. International investors may note that the weakness in the AUD worked for gold miners back around 2000 as the AUD gold price was still up over $500 per ounce. This may account for an extra strong showing by producers in Australia at the time. The US was back to number three and China was launching their gold production up over 220 metric tonnes PA. South Africa was back under 12% of global production after being up at over 16% five years earlier. Demand was soaring with new demand from China as they opened up their retail infrastructure. There were other changes afoot,that were soon to escalate the price of gold to new levels, capable of stimulating production. The Australian dollar price of gold only took off near the end of the first half of 2005. So did our gold sector with a vengeance as all gold stock investors that were around at the time remember vividly. By 2008 gold production was still falling as South Africa continued to produce less and less. China was number 1, the USA number 2, Australia number 3 and South Africa number 4. Production is now much more evenly spread with Peru, Russia, Canada, Indonesia, Uzbekistan and Ghana all contributing strongly to global production – which was reduced to just 2350 metric tonnes. In 2009 global gold production finally rose slightly back up to 2570 metric tonnes on the back of rising Chinese production and even wider participation on a global basis. That also meant production was falling in other leading nations due to the reasons above; mining of lower grades and failure to bring on new large discoveries. Demand from risk adverse investors was still soaring and Central Banks became net buyers. Central Bank sales almost halved in 2008 and fell to 30 metric tonnes PA in 2009 after running at 400 – 500 metric tonnes a year between 1989 and 2007. This was a significant shift in the fundamental picture for gold and it was expected by those investors that had done their homework. We know the Central Banks selling was not sustainable and that gold was a valuable component for the Central Banking system as a hedge against currency volatility. The global financial system was in dire need of stability mechanisms due to systemic imbalances across the board. This reduction in supply from the Central Banks was equivalent to a 16% fall in global production by itself. Total global production circa 2500 metric tonnes and Central bank sales of 500 metric tonnes comes to a total of 3000 metric tonnes. 500 tonnes from 3000 tonnes is about 16% which is massive. Mining companies have reduced forward sales, called hedges, as well. Hedging created forward paper sales of massive amounts of unmined production in the mid to late 90's. Some analysts claim that this, combined with Central Banks sales created a false low in the price of gold. I am one of these analysts as I am always looking for price distortions that can be exploited. In my view gold would never have gone below US$400 an ounce without Central Bank selling and forced hedging by financial institutions. In this case the miners were also exploited however and many were lucky to survive at all. Having lived and run mining businesses through such rough times these gold miners are very well justified to be angry about any talk of any super profits tax. They, like farmers for instance are entitled to enjoy some good years when they finally arrive, reap the benefits and put something away for the lean years in future. The thing to remember is that, if some of us are right, that gold would not have fallen below US$400 per ounce without Central bank selling and the sale of paper gold hedges (unmined gold) then this Gold Bull is younger than you might think. Bubble propaganda states that we are up over 5x from US$250 however this is barely over 3x from US$400 to US$1400. In Australia we bottomed at around AUD$550 around the year 2000 are at $1400 now for a rise of under 3x. So what? This gold run is just getting started and the mania stage is still far enough away for us to accumulate a larger and larger portfolio with the right strategy. When you factor in the rising demand for gold, which surpassed 3,800 metric tonnes in 2010, you get a compelling argument for a substantial upside for gold price – and China is just getting started. They are importing ever larger volumes of gold and silver creating a sustainable demand curve. When China's disposable income class recognises rising inflation and economic risk to a greater degree this can rise rapidly and significantly. The official sector, governments and Central Banks will continue to hold gold as a valuable part of their reserves. They are probably more risk adverse than the average investor because they understand the challenges in the financial system better. So where does this all leave us? Rising demand from several sources, rising need and awareness, stuck production levels and higher production costs has to equal a steadily rising gold (and silver) price. Our analysis indicates that, correctly managed, we still have greater upside from investing in the mining companies. We do recommend some physical metal as part of your strategy however not to hold the metal at home. There have already been some home invasions and theft of precious metals so even a safe is not safe. Store the metal in safety and spread it around different institutions no matter what the cost, it is worth it for the sake of your own personal safety. Predictive analysis The gold stocks are extremely fluid in that take overs, mergers, mishaps, new projects and discoveries make the sector more difficult to follow. The rewards for doing so however far outweigh the time consumed by the process. If you are busy this ongoing work can be purchased for as little as $1 per day. Due to the nature of the industry and how the index components change on a regular basis I am rapidly giving up on any index analysis of this type. We are just not measuring apples against apples in the indexes any more due to de-listings from the ASX (such as Centamin), major mergers (such as Newcrest and Lihir) and new entrants to the indices. This market has become one where you have to play stocks on an individual basis and I view this as a good thing. It makes it much harder for novice investors however the good news is that despite the strong run in gold in AUD terms since 2005 there is still some low hanging fruit. We can still identify stocks that represent major upside for investors, stocks I expect to go up five to tenfold over the coming three years purely due to organic growth. We are monitoring a number of the more promising stocks (at current prices) in an Ideal Portfolio to show the gains in real time. We also include investment rationale and timing theory as put to the test. We are also monitoring the sector by individual stocks and have added a few new producers, developers and explorers of value lately. I believe this is the best approach for capital growth. We measure the performance of these stocks quarter on quarter in our Ratings Tables and have therefore followed the progress of the producers and developers very closely. High gold and silver prices are driving the industry to perform and they are meeting the challenge to the delight of shareholders. There is much talk of a gold mania and I do believe that the banking and political systems make this inevitable over the coming years. The optimum way to protect yourself and grow your wealth is to hold on for the ride and to constantly do your due diligence on these companies to follow their progress. Good trading / investing.
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| Posted: 01 Mar 2011 04:46 AM PST
Based on the Feb 25th, 2011 Premium Update. Visit our archives for more gold & silver analysis. High volatility seen in commodities market in the past week attributes toward ongoing social and economical developments in the Middle East. There are ominous reports of thousands of people killed in Tripoli as anti-government protests reached the Libyan capital for the first time. The Libyan government attacked protesters, and rebels claimed control of the second-biggest city, Benghazi. Tens of thousands of Bahraini protesters marched in the capital demanding democracy. Commodity markets react to the changed outlook for the region and the global economy. Higher commodity prices will be seen along with greater risk aversion in the equity and credit markets. The latest rumors on attacking oil pipelines induce massive speculations in energy commodity markets. These, coupled with the currency market uncertainties impact current gold and silver market sentiment. At this juncture of commodities markets react to the social and economic disturbances heavily, let's have some talk on the relationship between general stock market and precious metals. Backed by the strong historical correlation between silver and stock market, forecasts in stock market would be a gauge to measure the strength in silver moves. Let's start this week's technical part with the analysis of the S&P 500 Index (charts courtesy by http://stockcharts.com.) On the above chart we see some volatility; however it is important to note that the downturn has not moved to levels below the mid-2008 highs. It seems at this point to be nothing more than a form of verification of the breakout above these highs. The RSI is not severely overbought any longer. It's still relatively high compared to its historical average, but it's definitely not above the 70 level. This is one of the positive results of the recent slight decline and a few more days of sideways price action could cause further reduction in the RSI. This could be a gathering of strength for a subsequent rally. Overall, the situation in the general stock market still appears bullish even though some declines have been seen last week. It is quite probable that we have simply seen a slight correction – a verification of the breakout above the mid-2008 highs. Amid the short-term volatile stock market fluctuations, let's have a look into inter- as well as intra market correlation exhibited by precious metals in the recent past. The implications continue to show stocks moving more or less in tune with silver. Note the high correlation coefficients in the medium-term columns. The general stock market is still above mid-2008 highs and this is bullish for silver and thus also indirectly for the rest of the precious metals sector. Mining stocks have moved above their mid-2008 highs and are verifying this breakout. The same situation also applies to the white metal. No other significant correlations of the US dollar or stocks are seen here in the short run. Both gold and silver have been highly negatively correlated with the dollar but only in the 10-day column. This is simply a situation to watch at this point, not to draw significant conclusions based on that column. Let's leave silver for a few seconds and have a look at the ratio between the price of gold and corporate bonds. This will allow us to keep the proper perspective. The recent breakout has been verified and the rally continues. Notice that the Gold: Corporate Bonds ratio moved sharply higher after reaching a local bottom a few weeks ago. It now appears about ready to take out its previous highs and it seems this is likely to happen soon. If so, a significant upswing throughout the precious metals sector is likely to follow – just like it was the case in 2005/6 and 2007/8. Although there is always a possibility that such a trend could be invalidated, it seems more likely that the ratio will continue to move upwards. For this reason, we believe the medium-term outlook for gold, silver and mining stocks is bullish at this time. So, now let's take a look at the very long-term chart for gold On the above chart we clearly see that the price of gold is once again moving close to the rising resistance line (upper border of the very long-term trading channel). Several months ago, the upper border of the rising trend channel was approached but not broken. In the October 1st, 2010 Premium Update, we wrote the following: Before the lower, less steep line is surpassed, it is likely that gold will first reach a local top and then go through a quick consolidation. This will most likely result in a greater strength and increase the odds of a further rally being sustained. Since that time gold moved considerably lower and bounced. This action is clearly visible from the very long-term perspective, so the gold market appears ready to move above the aforementioned resistance level. The higher light blue line will then likely become the next resistance level. It seems that this is the most probable outcome going forward and target level of $1,600 or higher would then be valid. Before summarizing, let's take a look at the recent developments in gold stocks. In the HUI Index (HUI index indicates a portfolio of 14 major un-hedged gold mining companies), chart we see the index level is above both resistance levels marked with black lines and the breakout is in the process of being verified. The head-and-shoulders pattern which was under development last week has nearly been invalidated. This would of course be a bullish development. It is our opinion that the breakout will likely be verified and it is therefore probable that the head-and-shoulders pattern will not be completed. Summing up, the general stock market is verifying a breakout above previous highs and the same situation is also seen for silver. We mentioned the possibility of small consolidation periods in the precious metals markets our recent commentary, so seeing this now leads to us to refrain from any serious bearish sentiment. Conversely, the situation remains bullish. To make sure that you are notified once the new features are implemented, and get immediate access to my free thoughts on the market, including information not available publicly, we urge you to sign up for our free e-mail list. Sign up for our gold & silver mailing list today and you'll also get free, 7-day access to the Premium Sections on my website, including valuable tools and charts dedicated to serious precious metals Investors and Speculators. It's free and you may unsubscribe at any time. Thank you for reading. Have a great and profitable week! P. Radomski Sunshine Profits provides professional support for Gold & Silver Investors and Traders. All essays, research and information found above represent analyses and opinions of Mr. Radomski and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Mr. Radomski and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above belong to Mr. Radomski or respective associates and are neither an offer nor a recommendation to purchase or sell securities. Mr. Radomski is not a Registered Securities Advisor. Mr. Radomski does not recommend services, products, business or investment in any company mentioned in any of his essays or reports. Materials published above have been prepared for your private use and their sole purpose is to educate readers about various investments. By reading Mr. Radomski's essays or reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these essays or reports. Investing, trading and speculation in any financial markets may involve high risk of loss. We strongly advise that you consult a certified investment advisor and we encourage you to do your own research before making any investment decision. Mr. Radomski, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
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| Tuesday Options Brief: GG, LINE, IYR & YHOO Posted: 01 Mar 2011 04:35 AM PST Andrew Wilkinson submits: Goldcorp, Inc. (GG) – Shares of the gold mining company are trading up at their highest in more than 2 years, and a number of options traders are betting Goldcorp's shares have more room to run in the near term. Call options on GG are in high demand, with more than 3.1 calls changing hands on the stock for each single put option in action today. Shares in the name are currently up 3.5% at an intraday- and new 2-year high of $49.50. Investors expecting the price of the underlying to continue to move higher picked up more than 1,750 calls at the March $50 strike for an average premium of $0.84 apiece. Traders exchanged more than 6,600 calls up at the March $52.5 strike versus previously existing open interest of just 537 contracts. The majority of the calls, or roughly 4,500 contracts, were purchased at the March $52.5 strike Complete Story » | ||
| Posted: 01 Mar 2011 04:33 AM PST | ||
| Posted: 01 Mar 2011 04:13 AM PST Endeavour Silver Corp. (TSX: EDR, NYSE-Amex: EXK, DB-Frankfurt: EJD) released today an NI 43-101 resource estimate for its Parral Project located adjacent to the city of Hidalgo de Parral in Chihuahua State, Mexico. The indicated and inferred resources were expanded significantly as a result of Endeavour's exploration drilling program in 2010. | ||
| Disasters Rocking the U.S. Dollar? Posted: 01 Mar 2011 03:48 AM PST Axel Merk submits: From earthquakes in New Zealand to revolutions in the Middle East, natural and man-made disasters are rocking the world. We are all too often made to believe that in times of crisis there's a flight to the U.S. dollar. However, the U.S. dollar has instead had a rocky ride of its own thus allowing the crisis-ridden Eurozone to shine. What's going on? Is there no crisis, or has the U.S. dollar lost its appeal as a safe haven? Over longer periods there is little correlation between the U.S. dollar and other assets. In the past two years, however, a mentality has arisen that whenever there is a crisis the U.S. dollar benefits; as the crisis abates money flows out of the U.S. dollar and once again into currencies and markets overseas that may be deemed riskier. That may well be a skewed pendulum, however, as the U.S. dollar may have Complete Story » | ||
| Hafnium: Small Supply, Big Applications Posted: 01 Mar 2011 03:36 AM PST Hard Assets Investor submits: By Tom Vulcan With an average crustal abundance of 3 ppm (parts per million), hafnium — a shiny, silver-gray metal often used in alloys and nuclear science — certainly isn't rare. The metal is more abundant in the Earth's crust than gold, silver, the PGMs, a number of the rare earths and the likes of germanium, tantalum and molybdenum. But as a metal, hafnium is only produced in quite small quantities, currently probably not much more than 70 tonnes a year. There are two main reasons for this. First, hafnium is only ever produced as a byproduct of refining zirconium for use in nuclear-related applications, especially in nuclear power plants. Second, it is extremely difficult to separate the metal from zirconium, the element with which it is most often found. Indeed, because of this, only two significant producers of the metal exist worldwide at present: ATI Wah Chang [part of Complete Story » | ||
| Dollar Losing Safe Haven Appeal Posted: 01 Mar 2011 02:42 AM PST Long seen as a place of safety in times of turmoil, the dollar may be losing its haven appeal. Soaring oil prices, driven by upheaval in the Middle East, falling equities and elevated volatility have all made investors uneasy... Read | ||
| Silver Rises to New Nominal 30-Year High of $34.44/oz… Posted: 01 Mar 2011 01:32 AM PST gold.ie | ||
| Posted: 01 Mar 2011 01:28 AM PST Thought I'd go ahead and kick it off. :five:  | ||
| Disasters Rocking U.S. Dollar? Posted: 01 Mar 2011 01:25 AM PST | ||
| GLD gold ishares calls, already looking juicy this am Posted: 01 Mar 2011 12:56 AM PST typetext | ||
| Silver guru Morgan: Get ready for a major correction Posted: 01 Mar 2011 12:07 AM PST From Mineweb: Silver continues to hit new highs and headlines as investors look to it as, among other things, a safe haven. But there are some that think caution is warranted in the short term. Speaking to Mineweb.com's Metals Weekly podcast, silver guru and author of the Morgan Report, David Morgan said although he is still very bullish about silver in the long term, "with everybody screaming that silver can only go up from this point onward" he is beginning to get cautious. First, he says, "sentiment is too high. And second, gold hasn't really confirmed this move yet – it's very close to breaking out, it has a triple top around the US$1,424 level... and it hasn't broken through there significantly yet." Morgan says if gold does... Read full article... More on silver: The No. 1 reason you must own gold and silver now Why every hard-working American should be loading up on silver An unexpected development could send silver higher than anyone imagines | ||
| Paging Blythe, SLV $35 calls coming due soon, we have a problem, paging Blythe Posted: 28 Feb 2011 11:42 PM PST A pre market chart that has 1000 stories. But really its just one BIG story. Share with me today your story, and the elation you felt the first time you held a shiny little piece of silver in your hand, and what it meant for you. Raid to commence. | ||
| Posted: 28 Feb 2011 11:00 PM PST | ||
| Is there a number where you would stop buying? Posted: 28 Feb 2011 10:59 PM PST I think I am already at that point for silver, at least in bulk. Having bought rolls of eagles for between $200 and $300, I can't seem to get excited about the prospect of buying the same rolls at $600+. I will still buy individual numismatic silver at this price. As for gold, I feel similar, but I am sure there is a number I wouldn't be comfortable paying. Is that number $2,000, $2,500? Certainly $5,000 would be absurd. | ||
| Dollar's safe-haven status hangs in the balance Posted: 28 Feb 2011 08:26 PM PST Image:  My first story today is a GATA release of an article out of yesterday's Financial Times. Long seen as a place of safety in times of turmoil, the dollar may be losing its haven appeal. This time, though, while the traditional havens of the Swiss franc and the yen have benefited, the US currency has suffered. "It seems the dollar's haven status has vanished," says Steve Barrow at Standard Bank. "And even for long-term dollar bears like ourselves, this is a worry." Link here. | ||
| Posted: 28 Feb 2011 08:26 PM PST Gold scrap scarcity hobbles Indian refineries. Egypt Bans Export Of Gold "In Any Form". Vietnam to outlaw the gold market? An interview with Ted Butler...and much, much more. ¤ Yesterday in Gold and SilverGold spent most of the Monday trading day attempting to break above the $1,415 spot level, but never quite made it...as there always appeared to be an eager seller around when the price got above that level. And, once gain, the gold price got hit after Comex trading was done for the day...and the thinly-traded electronic market began. But despite that kick in the teeth, the gold price recovered and closed up a couple of bucks on the day.
The silver price traded within twenty cents either side of $33.50 for most of the Monday trading day...and only took off at 10:00 a.m. Eastern time on the button...which is the London p.m. gold fix. [The gold price also popped a bit at 10:00 a.m. Eastern...but it doesn't stand out on the chart...but it is there] Silver spent the rest of the Comex trading session in New York trying to get above $34 spot price...but never quite made it either...and right at the Comex close, sellers hit the price for about fifty cents before it recovered and finished the electronic trading session just under the $34 mark. The high tick around 11:15 a.m. Eastern was $34.04 spot.
Both gold and silver look like they want to move higher to me. The dollar didn't do much yesterday, but it did end up finishing lower...and closed below 77 cents for the first time since way back in November, which I consider to be a rather ominous sign. The long-term dollar chart doesn't look any happier today than it did late last week when I posted the 2-year chart. Here's Monday's action.
And here's the 2-year US$ chart once again.
The gold stocks gapped up at the open...and stayed up until 11:15 a.m. before rolling over. The HUI hit its nadir shortly before 3:00 p.m...and then began to rally along with gold price itself. By the time the trading day was over at 4:00 p.m...the HUI was up 1.59%. The silver stocks did much better, of course, as the gold/silver spread narrowed in to a new low for this move.
And here's the 3-year gold/silver ratio graph. It points out the obvious...silver is outperforming gold...and has been for a couple of years. That's why I'm 75%/25% in silver equities.
The CME's Daily Delivery Report shows that 120 gold, along with 42 silver contracts were posted for delivery tomorrow. This is the second delivery day in the March silver contract...and to only have 294 contracts posted for delivery out of the current 4,250 contracts still open in March, is truly incredible. Silver analyst Ted Butler had this to say about it in his weekly review to clients on Saturday..."Offsetting the relatively small number of open contracts in March [4,250] is an even smaller number of contracts offered on the first notice day of 252 contracts. [Of special note is that JPMorgan didn't issue any silver deliveries, unlike their pattern over the past two years.] This is about the smallest number of contracts tendered in my memory for what is usually the heaviest day for deliveries in any physical commodity, including silver...as it makes little economic sense for those shorts intending to make delivery to delay beyond the first delivery day...this is another indication of wholesale physical tightness." Yesterday's CME Delivery Report is here...and it's worth checking out. There was a small decline in GLD yesterday...only 19,510 ounces...but another decline nonetheless. There was no report from SLV. The U.S. Mint posted its last sales report for February. They sold another 5,000 ounces of gold eagles...along with 575,000 silver eagles. For the entire month, the mint sold 92,500 ounces of gold eagles...along with 3,240,000 silver eagles. In the first two months of 2001, the mint has sold 9,662,000 silver eagles...and that, dear reader, is a lot! 300.5 tonnes of silver to be exact. The Comex-approved depositories reported receiving no silver last Friday...but did ship 378,386 troy ounces of it out the door. The link to that action is here. Nick Laird over at sharelynx.com is one of the great mind readers of this century...and just knew that I was thinking about his "Silver Seven Stock Index" chart. Here it is, in all its glory.
¤ Critical ReadsSubscribeDollar's safe-haven status hangs in the balanceMy first story today is a GATA release of an article out of yesterday's Financial Times. Long seen as a place of safety in times of turmoil, the dollar may be losing its haven appeal. This time, though, while the traditional havens of the Swiss franc and the yen have benefited, the US currency has suffered. "It seems the dollar's haven status has vanished," says Steve Barrow at Standard Bank. "And even for long-term dollar bears like ourselves, this is a worry." Link here.  Ireland Gets a New Prime Minister: With New Government, EU Could Become Next BattlegroundToday's next story is courtesy of Roy Stephens and was posted over at the German website spiegel.de yesterday. Ireland's future prime minister has a tough job ahead of him: Voters who backed Enda Kenny expect him to take a tough line and renegotiate the terms of the country's EU bailout. Some are hoping that his ties with German Chancellor Angela Merkel will lend a helping hand. Link here.  'I won't pay' movement spreads across GreeceReader Steve Pierce sent me the following AP story that was posted over at msbnc.com a week ago.They blockade highway toll booths to give drivers free passage. They cover subway ticket machines with plastic bags so commuters can't pay. Even doctors are joining in, preventing patients from paying fees at state hospitals. Many see the "I Won't Pay" movement as something much simpler: the people's refusal to pay for the mistakes of a series of governments accused of squandering the nation's future through corruption and cronyism. Link here.  Walker's World: Arab spring turns chillRoy Stephens sent me the following UPI story that was filed from Paris yesterday. It took a while, but it's becoming ever more clear that the North African revolutions are unlikely to unfold like a morality play in which good defeats evil, not like a fairy tale in which all live happily ever after. Those concerned that the "Arab Spring" isn't turning out quite as happily as hoped should brace themselves. It can get a great deal worse. This is well worth the read...and the link is here.  Confessions of an Economic Hit Man: John PerkinsI've mentioned John's book on many occasions in this column over the years. It's how the American Empire subverts entire nations and bends them to her will. This longish interview was originally posted over at The Daily Bell...but has been reprinted at the lewrockwell.com website...and I thank reader U.D. for sharing it with us. This is a must read...and so is his book. The link is here.  Today's Precious Metal Close Banging Moment Brought By The Fine People At The ComexThe rest of my stories today are all precious metals related in one form or another. Today's first item is from Washington state reader S.A...and is a posting over at zerohedge.com. As you can tell from Monday's silver chart, the silver price got hit once again in the thinly-traded electronic market after the Comex close...and T.D. wants to know "who is banging the close in your silver?" It's a short read, with a neat graph...and it's linked here.  Gold scrap scarcity hobbles Indian refineriesThis next story showed up in a GATA release yesterday...and Chris Powell's headline is much better than the one that the story actually carries. It reads "Gold Refineries' Operating Capacity Declines"....and is posted over at the Indian website business-standard.com. It's not overly long, but definitely worth your time...and the link is here.  Egypt Bans Export Of Gold "In Any Form"Reader Tariq Khan kindly provided our next reading material today. It's another posting over at zerohedge.com. According to Reuters..."Egypt has issued a ministerial decree immediately banning the export of gold in all its forms, including jewellery and ornaments, until June 30, the official news agency MENA said on Sunday. "This decision, which comes in light of the exceptional circumstances the country is passing through ..., is to preserve the country's wealth until the situation stabilizes,". Not too many shades of grey in that...and the link is here. Today's Precious Metal Close Banging Moment Brought By The Fine People At The Comex Posted: 28 Feb 2011 08:26 PM PST Image:  The rest of my stories today are all precious metals related in one form or another. Today's first item is from Washington state reader S.A...and is a posting over at zerohedge.com. As you can tell from Monday's silver chart, the silver price got hit once again in the thinly-traded electronic market after the Comex close...and T.D. | ||
| Silver is the new gold: Prices double in a year Posted: 28 Feb 2011 08:26 PM PST Image:  Here's a story that was sent to me by reader Ray Wiberg...and posted over at the emirates247.com website on Sunday. Silver is now up 16.77 per cent in the past 30 days and according to traders, has more than doubled in the last one year, trading as it was at $16.24/oz on February 27, 2010. This is now leading precious metal analysts to argue that silver will see much more appreciation in the months to come, especially since the extent of global silver reserves are debatable. Ted Butler's work is getting around...even over in the Middle East. T | ||
| Gold scrap scarcity hobbles Indian refineries Posted: 28 Feb 2011 08:26 PM PST Image:  This next story showed up in a GATA release yesterday...and Chris Powell's headline is much better than the one that the story actually carries. It reads "Gold Refineries' Operating Capacity Declines"....and is posted over at the Indian website business-standard.com. It's not overly long, but definitely worth your time...and the link is here. | ||
| Posted: 28 Feb 2011 08:26 PM PST Image:  This gold story was posted in The Telegraph very early on Monday morning...and is courtesy of reader Nick Laird of sharelynx.com fame. "Gold is a form of crisis insurance, one that just keeps paying," Bullion Vault's Adrian Ash said. "If you bought when Northern Rock started to crumble you would have doubled your money by now. | ||
| Egypt Bans Export Of Gold "In Any Form" Posted: 28 Feb 2011 08:26 PM PST Image:  Reader Tariq Khan kindly provided our next reading material today. It's another posting over at zerohedge.com. According to Reuters..."Egypt has issued a ministerial decree immediately banning the export of gold in all its forms, including jewellery and ornaments, until June 30, the official news agency MENA said on Sunday. |
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