Jan 31

Estrella Gold (TSX-V:EST) Director Mark Brown on Gold and Copper in Peru

Gold Price Comments Off on Estrella Gold (TSX-V:EST) Director Mark Brown on Gold and Copper in Peru

Estrella Gold Corporation (TSXV:EST) Director Mark Brown spoke to Resource Investing News at the Vancouver Resource Investment Conference about the Company’s various projects in Peru, and working on them with partners such as Cliffs Natural Resources Exploration Inc., Lara Exploration Ltd., Mines Management Inc., and Esperanza Resources Corp. (now being taken over by Alamos Gold Inc.). Mr. Brown […]

Continue reading…

Tagged with:
Jan 31

NioGold Mining (TSXV:NOX) Dale Paruk Outlines Plans for the Marban Deposit in Quebec

Gold Price Comments Off on NioGold Mining (TSXV:NOX) Dale Paruk Outlines Plans for the Marban Deposit in Quebec

NioGold Mining Corporation (TSXV:NOX) VP Corporate Development, Dale Paruk, talks about their flagship property, the Marban deposit in Quebec, Canada.

Continue reading…

Tagged with:
Jan 31

Orefinders Resources Amends Option Agreement for Derlak Red Lake

Gold Price Comments Off on Orefinders Resources Amends Option Agreement for Derlak Red Lake

Orefinders Resources Inc. (TSXV:ORX) amended the terms of the Derlak Red Lake option agreement with Jubilee Gold Exploration Ltd., providing the Company with an additional year to satisfy its work commitment and earn a 100% interest in the Derlak Red Lake gold property in Ontario.

Continue reading…

Tagged with:
Jan 31

Silver Money’s Historic Problem

Gold Price Comments Off on Silver Money’s Historic Problem
How silver investing’s money motive got hamstrung 150 years ago in the US and India…
 

I’M CONSTANTLY reading books on the history of both gold and silver as money, writes Miguel Perez-Santalla at BullionVault.
 
A book I recently picked up on the history of silver currency in India relates more the actual operational use of money in their marketplace. The Indian peoples in the 19th century had no confidence in paper money. Though it was in use, it was not readily acceptable outside of the larger cities. Because of this silver was prominent in India.
 
Gold of course was of higher value than silver. Yet silver was the metal used more commonly for regular day-to-day business transactions than any other method in that time. The Indian people did love gold and esteemed it highly, but their preference to use silver for transactions outweighed the demand for gold.
 
Gold still came into the marketplace, just not at the same pace. Between 1836-1891 there would be 2.21 times mores silver than gold imported into India by value.
 
Back then, in the 19th century, the Indian subcontinent was still under British colonial control. In essence they did most of their business through Great Britain. The technology shared and developed by the British helped the country modernize, notably with the addition of train lines which would support India’s economic growth into the future. But the one complication in modernization was the country’s greater use of silver over gold. This caused trade deficits moving forward.
 
Why? Great Britain had been on a Gold Standard legally since 1816 and effectively since Sir Isaac Newton got his sums wrong 100 years earlier and cut the price of silver to 15.5 from 12 ounces per ounce of gold. So all accounts for Pounds in reality were denominated in gold. Invoices for the services provided by the rail developments were of course in Sterling, which although its name came from silver now meant being payable in gold, or gold-backed paper Pounds. Hence the Indians suffered when the value of silver fell versus gold. Because any debts to the colonial mother country were due in kind.
 
Oddly, India’s silver money trade balance problems really began with big trade surpluses. During the Civil War of the United States of America between 1861 and 1865, the Indian sub-continent – which was rich in natural resources – filled the gap of need for many of the products that traditionally were imported from the US into the United Kingdom. India enjoyed a tremendous boom in exports, and so its balance of currency, received in gold and silver, grew. But the traditionally greater demand for silver to use as money for domestic commerce would soon affect them negatively. Because silver money was slowly being devalued and then rejected by the world’s rising power, the United States of America.
 
Already, on 3 March 1849, Congress authorized America’s first $1 gold coin, and launched the $20 gold coin, making both “legal tender for all sum whatsoever”. This bill effectively de-monetized silver, but many people in the US were unaware of this change, and continued to use silver coins concurrently with paper money. There is no doubt however that the Bank of England in London had held sway over John Sherman, the politician behind the bill, in its goal of bringing other countries onto Great Britain’s mono-metallic standard.
 
Even though this bill had been passed, the next half-century would see new bills attempt to reintroduce silver as an acceptable form of payment and currency in the US. Firstly, because it was then (as now) a major producer of silver, the US had a big “silver lobby” active in Washington DC. Secondly, silver money continued in wide use amongst ordinary people.
 
In the year 1873 however, another currency law – the Fourth Coinage Act – reaffirmed gold’s place as the monetary standard, by ending the ability of silver owners to have their metal turned into coins by the Mint. Again, John Sherman was closely involved. Major uproar followed from the silver lobbyists, who called it the “Crime of 73”.
 
A bill finally passed in 1891 was again unsuccessful in reintroducing silver as the main money standard, but the Sherman Silver Act (yes, him again) did add government support for the silver industry. Because it set the official price of silver at 15.988 ounces per ounce of gold, and confirmed that the US government would continue to buy silver at that ratio to use for payment of debts. Five years later, however, the US would officially and irrevocably join the gold standard. By government order, silver perpetually lost its place as money on the books of the United States in 1896.
 
Since the US was a still a major silver mining producer, a surplus of silver developed, as it was no longer needed for payment of government debts. This lowered the price of silver against gold, and back in India – as US manufacturers and commodity producers also rejoined the international markets after the Civil War – traders suffered losses in exchanging their silver for gold.
 
Looking back, it’s interesting to note that, time and again, as European and then the US nations came to stop using gold as their monetary standards in the 20th century, their central banks continued to hold large quantities in reserve. But silver had already been demonetized a century earlier, while gold ruled as money. And just as central banks coordinated to end the use of silver money in the late 19th century, so they have since coordinated to use only gold as their reserve commodity today, reflecting ideals which have now become permanent in our modern monetary structure.
 
Because of this deep history and practice, there will always be a monetary uptake on gold that is missing in the silver market. Currently central banks hold over a trillion dollars in gold reserves basis today’s $1250 per ounce price. None holds any sizeable or strategic silver reserves.
 
This missing volume of official purchases in silver precipitates the much higher gold-to-silver price ratios we are now accustomed to in this modern age. Currently around 64 ounces of silver per ounce of gold, over the last twenty years the ratio has traded primarily between the ratio of 30 to 90, a wide berth with opportunities to profit from short term imbalances in price moves.
 
Can silver once again regain a place in the fabric of the global monetary system? Is there any mechanism even remotely considered to put such an action in place? At this time it does not appear to be in the cards for silver.
 
Though many in the Western world still view silver as having a quasi-monetary value, its core value right now lies in its demand for industry and personal consumption as jewelry. Yet on the continent of India, where people today continue to have a high regard for both gold and silver over paper money, the question is not even viewed as a concern. Just because the central banks don’t hold any investment silver bars does not mean it is not a good vehicle as an alternative asset. Indeed, from my vantage point, it may be beneficial. Because unlike gold, which suffered from heavy central-bank selling in the late 1990s, silver cannot face the same concerns about government’s interfering in price action by reducing stockpiles.
  • Reddit
  • Facebook
  • Twitter
  • Google
  • Yahoo
  • LinkedIn
  • Digg
  • StumbleUpon
  • Technorati
  • del.icio.us
Tagged with:
Jan 31

Gold Investing a Safe Haven Again. Like, Surprise!

Gold Price Comments Off on Gold Investing a Safe Haven Again. Like, Surprise!
Risk off, gold investing on for Western funds and Asia’s rich… 
 

GOLD INVESTING died last year, right? Y’know, back when “Gold loses safe haven status” was the only headline gold got, says Adrian Ash at BullionVault.
 
Yet 2013 in fact proved that claim wrong, even as it was being splashed everywhere. Because gold investing prices fell hard as world stock markets and other “risk” investments rose. Meaning that safe havens were less urgent…but not undoing one jot of the “anti-crisis” tendency in gold prices. 
 
Here now in 2014, gold has risen some 4% this month in Dollars, and better again in Sterling and Euros, never mind emerging-market currencies like the Turkish Lira. 
 
World stock markets, in contrast, have gone the other way. So have “risk” assets led by emerging-market bonds and currencies. 
 
Shades of 1997 perhaps? So the financial media say, clawing around for a narrative. And it’s true that emerging-markets (especially Asia) account for the lion’s share of world gold demand. That was also true during the Asian Crisis of 16 years ago. And back then, when a rise in the returns offered by US Dollar investments sucked foreign cash out of Asia, it dented first their stock markets and currencies, and then their economic growth. 
 
Yet gold didn’t rise. It lost 20% across the year. Because with Western investor interest still missing (as it had been for a decade and more by the late 1990s) all that Asian demand could do was support prices. And that support weakened as Asian economies shrank. The US stock market, in contrast, rose 22% as if it didn’t have a care in the world. 
 
Two big differences today. First, Western investor interest has only recently gone AWOL from gold. So buying bullion remains front-of-mind for anxious money managers. Second, emerging Asia is now plumbed into rich world economies far deeper. 
 
Yes, as we keep saying…and like specialist analyst Philip Newman notes in this great new interview…it’s investor allocations that drive gold prices. Household coin or jewellery demand doesn’t count, no matter how large in sum. People who buy gold because it is gold don’t move the needle. What matters is new demand (or selling) from people who buy gold (or sell it) because it isn’t anything else. 
 
So looking at the money that counts, Western hedge funds today are now positioned for range-bound gold, if not lower prices. The so-called “net spec long” of money managers betting on gold futures and options started 2014 at just 30% of its size at New Year’s 2013. So where it took ever-more new betting on gold  to move prices higher as the weight of money-managers’ cash built up during the bull-market’s peak in 2011, a much smaller amount would shift the balance dramatically today.
 
More than that, Asia’s richest investors are now very much richer than in 1997. There are many more of them, too. Nearly matching the US with almost 3.7 millionaires by end-2012 according to one PR puff-piece, Asia is also the fastest-growing region for new billionaires in 2013, says another. And they all have very much more to lose if other, so-called “risk” asset classes fall hard. 
 
So rather than pulling the rug from beneath gold investing prices, Asian crisis alone may spark a surprise rally in bullion. Contagion to Western assets would only add to that rise. Because it never stopped being the ultimate “safe haven” for money fleeing trouble elsewhere. It’s simply that, in 2013 at least, that trouble ended. Or maybe just took a pause.
  • Reddit
  • Facebook
  • Twitter
  • Google
  • Yahoo
  • LinkedIn
  • Digg
  • StumbleUpon
  • Technorati
  • del.icio.us
Tagged with:
Jan 31

Infographic: Gold May Sink to $1,000 in 2014, Says Credit Suisse

Gold Price Comments Off on Infographic: Gold May Sink to $1,000 in 2014, Says Credit Suisse

Earlier this week, The Financialist published an infographic that states that according to Credit Suisse Group AG (NYSE:CS) analysts, gold may fall as low as $1,000 per ounce in 2014.

Continue reading…

Tagged with:
Jan 31

CPM Group’s Christian Sees Gold at $1,320 in Coming Months

Gold Price Comments Off on CPM Group’s Christian Sees Gold at $1,320 in Coming Months

Mineweb reported that CPM Group’s Jeffrey Christian believes gold may hit $1,320 in February or March and could rise as high as $1,900 in the next eight to 10 years.

Continue reading…

Tagged with:
Jan 31

Goldcorp Exec Says Takeover Supported by Osisko Shareholders

Gold Price Comments Off on Goldcorp Exec Says Takeover Supported by Osisko Shareholders

Reuters reported that on Thursday Goldcorp Inc. (TSX:G,NYSE:GG) said it has received an advance ruling certificate from Canada’s Competition Bureau, eliminating one of the “hurdles it faces” in its hostile takeover bid for Osisko Mining Corp. (TSX:OSK).

Continue reading…

Tagged with:
Jan 31

Gold Investment Driving Prices, Not Chinese Jewelry

Gold Price Comments Off on Gold Investment Driving Prices, Not Chinese Jewelry
Gold investment news & insight for 2014, plus silver, from globe-trotting analyst…
 

PHILIP NEWMAN, co-founder of the Metals Focus consultancy and one of the world’s leading precious metals analysts, heads a team of specialists in Asia, the US and Europe.
 
In this talk with Miguel Perez-Santalla, vice president of precious-metals exchange BullionVault, Newman gives an on-the-ground perspective from a recent trip to Turkey. He also shares intelligence from other emerging-market consumer countries, including India and China, as well as mining news from former world No.1 producer South Africa.
 
A good friend of Miguel’s for many years, Philip Newman talks here about gold investment in the form of bullion and coins as well as jewelry, plus the currency pressures which could impact gold prices worldwide.
 
Consumer demand for gold and silver ahead of the Chinese New Year, starting this weekend, is strong says the Metals Focus director.
 
Listen To Business Internet Radio Stations with New York Markets Live on BlogTalkRadio
 
Although central banks will remain net buyers of gold in 2014, Perez-Santalla and Newman also discuss the recent controversial report from Bloomberg, seeking to double Beijing’s “official” statement of how much investment gold the People’s Bank currently holds.
 
The fact that gold prices held steady in the wake of the Fed on Wednesday is relatively good news, said Newman, but the so-far orderly scale-back of the US bond-buying program remains a risk. Investors are exceptionally cautious. We’re not seeing a return to the gold bull days of the past few years yet, he adds.
 
Last year was a good year for silver imports into India, says Philip. But now countries like Turkey, Brazil and Argentina are facing currency pressures that could impact precious metals prices.
 
As for gold, however, physical jewelry and coin demand is never going to drive prices higher. The investment market drives prices, Philip Newman concludes.
  • Reddit
  • Facebook
  • Twitter
  • Google
  • Yahoo
  • LinkedIn
  • Digg
  • StumbleUpon
  • Technorati
  • del.icio.us
Tagged with:
Jan 31

EM Crash? Blame Argentina!

Gold Price Comments Off on EM Crash? Blame Argentina!
Emerging markets are slumping. Argentina makes a good stooge…
 

SOME PEOPLE think it was the 15% drop in the Peso that triggered the recent selloff in the emerging markets…and back in the US of A, writes Bill Bonner in his Diary of a Rogue Economist.
 
On the last two days of last week, the Dow lost nearly 500 points. And on Saturday, after-hours trading signaled worse to come. It looked as though the Dow would drop more than 300 points when the doors opened on Monday.
 
That didn’t happen. Instead, the Dow fell just 40 points…and recovered more midweek, before edging back for that same tepid loss as the week ends.
 
So, we sit tight, wondering if the beginning of the end is coming now…or later. And when it happens, we won’t blame Argentina.
 
Argentina seems much too quirky and particular to be a leader of anything. For example, it’s the only place we know where you get better banking services out on the sidewalk than in the bank. Every time we go we take a big wad of green pieces of paper with Ben Franklin’s picture on them. Driving directly to the town square in Salta (close to the family ranch), we then simply stop the truck and beckon over one of the many black-market moneychangers standing in front of the bank.
 
This time a year ago, one Ben Franklin would bring you nine pieces of paper with former Argentine president Julio Argentino Roca’s picture, in purple.
 
Roca was no match for Franklin. Reports from Salta tell us that the rate has gone over 13.
 
The official rate changes, too. It was only five Rocas to a Franklin a year ago. As of last Friday, it is 8. But wait…There are more official rates. There’s one for savers, now 9.2. And one for travelers, currently 10.8.
 
Why so complicated?
 
It’s a long story. But the simple version is that the city of Buenos Aires is big and sophisticated. And like New York or San Francisco, it has socialist tendencies.
 
Here’s how it works: The urban intelligentsia provides the ideas. The urban proletariat provides the votes. And farm exports provide the money.
 
But the rural productive sector can never quite provide enough money to satisfy Buenos Aires’ longings. Farmers and other producers labor under such binding restraints – such as import/export restrictions – that even in a roaring bull market, such as we had three years ago, Argentina lost agricultural market share.
 
Now, without much money coming in, the government prints money to pay its bills and lies about inflation. The money supply in Argentina has been increasing at a rate of about 40% a year. And yet, the keepers of Argentina’s official numbers maintain that consumer prices have been rising less than 10% a year.
 
When everyone had caught on that prices were obviously rising much faster than a 10% annual clip, the Argentine feds tried to control prices…as well as the statistics that measure them. Last year, they enacted a ‘voluntary’ price control measure at the supermarkets.
 
This was the work of Argentina’s 42-year-old minister of the economy, Axel Kicillof. He is probably a decent guy. He taught economics at the University of Buenos Aires. The papers say he “reinterpreted Keynes from a Marxist perspective.” With this intellectual toolkit, he says he has the leaks under control.
 
Most likely, our man on the scene, Miguel, has a clearer picture. He reports:
“I dropped my Kindle reader and broke it,” he reports. “I wanted to order another one from Amazon. But the government just announced a 50% import tax. That’s in addition to the 35% penalty I would pay on credit card purchases from overseas. You also have to go to [an office of the tax collector] and wait for hours to do the paperwork. It’s not worth that much.”
So, Amazon lost a sale. And the Argentine economy lost a connection to sanity.
“This is just the beginning,” Miguel continues. “We’re headed into another real crisis. The people are restless and the government is desperate. We’ve got major union negotiations coming up. It wouldn’t be at all surprising to see riots…looting…and some kind of bankruptcy or default.”
 
  • Reddit
  • Facebook
  • Twitter
  • Google
  • Yahoo
  • LinkedIn
  • Digg
  • StumbleUpon
  • Technorati
  • del.icio.us
Tagged with:
preload preload preload
Get Adobe Flash player