Gold is mixed while silver is higher in all currencies today,
especially in the weaker US dollar. European sovereign bond
yields are higher and the UK 10-year has risen to 3.66% and is
close to breaking out after inflation figures surprised the
majority of analysts who remain complacent about
Gold is currently trading at $1,370.75/oz, €1,022.11/oz and
Equities in Asia were higher as are those in Europe so far
today. US equity index futures are mixed with Apple leading to
weakness in the Nasdaq; the S&P 500 is flat.
Silver is currently trading $28.81/oz, €21.48/oz and
Reports of shortages of silver bullion continue to grow. While
there are no widespread shortages in this area and dealers with
extensive supplier networks (mints and large refiners) are not
experiencing difficulties sourcing bullion inventory, it would be
wise to keep an eye on this.
Silver in USD - 35 Years - (Weekly)
. Click for full size
Reuters reported shortages of 1 kilo gold bars in Asia last
week. Sprott Asset Management reported that it was experiencing
difficulty sourcing 1,000 oz silver bars. Sprott said they were
concerned about the "illiquidity in the physical silver market"
and said delays in being able to source physical silver
highlights the "disconnect that exists between the paper and
physical markets for silver."
Zero Hedge reported that Bullion Vault, the digital gold
provider, had run out physical silver inventories in Germany (and
possibly elsewhere) and was advising clients to buy silver from
Zero Hedge also reported yesterday that some smaller bullion
dealers in the UK were having difficulty sourcing all silver bars
and had delayed delivery of silver bars (including 1 kilo silver
bars) until February.
This comes at a time when the US Mint has reported huge demand
in the first two weeks of January for their very popular US
Silver Eagle 1 oz bullion coins.
Click for full size
At about $33, €25 or £20 a coin, collectors and those seeking
financial insurance have been buying silver in very significant
quantities. The 2011 minted coins were first issued on January 3
and in just the first two weeks, 3.5 million coins were sold,
according to numismatic web site Coin News.
In January 2009, the silver coins first topped the 3 million
sales mark, with record sales totaling 3.59 million for the
If sales continue at these levels, that record should be
surpassed this week. The all time monthly record of 4.26 million
silver coins, which was set last November, is clearly in
A recent report by analyst Adrian Douglas of GATA warns of
forthcoming shortages of gold and silver bullion coins and bars,
and that a "tipping point" will soon be reached that could lead
to a COMEX default and a short squeeze which leads to much higher
prices. Douglas himself has shown in Le Metropole Café how Comex
silver inventories are shrinking and are not far from ten year
The "bear raids" by the large concentrated shorts being
investigated by the CFTC, are only leading to increased physical
off-take. Indeed, the selling raids may be leading some
participants on the COMEX (including large hedge funds) to take
delivery or sell futures and buy bullion in allocated
None of the factors, in and of themselves, suggest that
widespread shortages of silver (or gold) bullion are imminent in
the immediate future. However, much circumstantial evidence
suggests, especially the bona fide reports of difficulty in
sourcing large silver bars, that the supply and demand balance in
the silver market is very tight.
The more than 80% increase in the silver price seen in 2010 is
not leading to an increased supply of silver but rather to a
continuing and possibly increasing demand.
This is not surprising as silver is a byproduct of base metals
and therefore its price increase will not have led to any
material increase in silver mine production. This fact is known
by most buyers of silver coins and bars and many of them continue
to hold and add to their silver holdings in anticipation of much
Silver at $50 per ounce and the 1980 adjusted for inflation
price of $130 per ounce are conservative estimates for some
silver enthusiasts. They have been proved right in recent years
and the extremely delicate supply and demand equation in silver
could see them proved right again in the coming months.
Since 2003, GoldCore have written research articles pointing
out that the very small size of the silver bullion market would
likely see its inflation adjusted high of $130/oz reached in the
Interestingly, were gold to reach its adjusted for inflation
1980 price of $2,300 per ounce, and silver revert to its long
term gold/silver ratio of 15:1 (geologically there are 15 parts
of silver to every one part of gold in the Earth's crust) then
silver would reach over $150 per ounce.
While this seems über bullish to those who know little about
the silver market, some silver enthusiasts - and there are many -
believe that in time, silver will be valued at the same price as
gold as huge quantities of silver have been used up in industrial
applications since the Industrial Revolution of the 19th Century
and throughout the 20th Century and into this
In these unprecedented financial and economic times, it is
important to have a long term perspective.
GoldNomics - Cash or Gold Bullion?
The 'GoldNomics' educational video about gold can be
viewed by clicking on the image above or on our YouTube
Platinum Group Metals
Platinum is currently trading at $1,817.25, palladium at $802/oz
and rhodium at $2,375/oz.
-- Gold dropped for a third day in London as gains in equity
markets and the dollar may be eroding demand for precious metals
as an alternative investment.
Assets in 10 gold exchange-traded products including
exchange-traded funds have dropped for four weeks to about 2,078
metric tons, the lowest since Sept. 15, according to data
compiled by Bloomberg. The dollar has climbed 0.7 percent against
the euro this year and the MSCI World Index of shares advanced
2.1 percent. Gold is down 4.2 percent, heading for the first
monthly drop since July.
"For some people, the stock market has done well and that may
have attracted some people out of gold and the dollar is higher,"
said Mark O'Byrne, executive director of brokerage GoldCore Ltd.
in Dublin. "While there could be liquidation in ETFs, I don't
think you're going to see massive wholesale liquidation that
would result in prices falling sharply because most of the ETF
investors are in there for the long-term
Gold for immediate delivery declined 22 cents to $1,361.50 an
ounce by 4:51 p.m. in London. Prices have dropped 1.9 percent in
three sessions. The futures for February delivery gained 40 cents
to $1,360.90 an ounce on the Comex in New York.
A decline in ETF holdings may be a sign of investors taking
delivery of the gold instead of liquidating their holdings. More
than 100 customers at GoldCore have taken advantage of a service
offered in the last three months to store gold in a separate
allocated account at Via Mat Management AG, O'Byrne
"They want to own the bullion themselves, and avoid any
counterparty risk," he said. "A few hedge fund managers sold
their ETFs and put the gold in an allocated account."
-- Silver to Outperform Gold in 2011 on Real Demand, UBS
Silver is likely to outperform gold in 2011, supported by
industrial demand, according to UBS Securities Co.
As the real economy continues improving, silver has the
advantage as 30 percent of consumption is from industrial use,
whereas in gold it only accounts for 10 percent to 20 percent of
consumption, said Lin Haoxiang, associate director of China
The average cash copper price on the London Metal Exchange may
rise 23 percent to $9,149 a metric ton, Lin said at a media
-- Morgan Stanley raised its copper and gold forecasts
through 2015, the bank said in a report today. It expects copper
to average $4.45 a pound in 2011, up 24 percent from an earlier
estimate. It expects gold to average $1,400 an ounce this year,
up 6 percent from a previous forecast.
-- Estonia signed an agreement that limits how much gold
European central banks can sell until 2014, according to the
European Central Bank.
The five-year agreement announced August 2009 that was signed
by the ECB and 18 other countries will remain unchanged over the
period of the agreement, the ECB said in a statement on its
website today. That agreement started Sept. 27, 2009 and limited
gold sales to 400 tons a year for five years.
Estonia owned 0.2 metric ton of gold as of last month,
according to the World Gold Council. As of Nov. 30, the gold
sales under the agreement for 2010-11 total 0.9 ton by an
unidentified country in the eurozone, according to the World Gold
-- Makishi Rokugawa says he's installing the first gold
vending machines in central Tokyo so Japanese consumers can
invest in "something real."
Space International Ltd., a company started by Rokugawa with
funds from selling novelty USB flash drives, is offering gold or
silver to the world's biggest vending machine market, where
consumers can buy anything from drinks and candy to lingerie and
In a nation where deflation has cut consumer prices for 21
straight months through November, salaries are the smallest since
1990, bond yields are the world's lowest, and the stock market is
40 percent below its December 1989 peak, "ordinary Japanese need
a way to invest in something they can touch," Rokugawa, 35, said
yesterday at a media conference.
"What if you wake up one day and your money is just a piece of
paper?" Rokugawa asked reporters at the $410-a-night Imperial
Hotel, where he plans to place a second gold vending machine
after one in his Tokyo office building. Rokugawa plans to take
his business "nationwide" next year and is considering entering
the Hong Kong market, he said.
The machine offered 1 gram of gold for 6,800 yen ($82.30)
yesterday. Gold traded at $1,362.45 per troy ounce at 10:52 a.m.
in Tokyo, or about $44 a gram. The vending machine sells the
precious metal in the form of coins and ingots, with weights
ranging from a gram to a quarter of an ounce.
Japan has a vending machine for every 32 people, according to
Bloomberg calculations. The nation posted 5.15 trillion yen in
vending machine sales in 2009, about 45 percent more than the
$42.9 billion revenue in the U.S., according to the Japan Vending
Machine Manufacturers Association.
Germany's Ex Oriente Lux AG, which says it was the first to
install a gold-vending machine, operates 11 machines domestically
and five abroad, including in Spain and Italy. TG-
Gold-Super-Markt in June 2009 installed its first gold bar
vending machine at Frankfurt airport, while a similar machine was
unveiled at Abu Dhabi's Emirates Palace hotel in May
The most expensive item available in Rokugawa's machine
yesterday was a quarter-ounce gold coin issued by the Canadian
central bank, retailing for about $410. Rokugawa declined to say
how much gold will be kept in the machine at any one
Prices will be updated once a day and relate to the gold market
price, Rokugawa said. Gold for immediate delivery has gained in
each of the last 10 years, rising 30 percent in 2010. The metal's
biggest one-day jump in the last 12 months was 3.3 percent and
the biggest decline was 4.1 percent.
Silver coins will range from 15.5 grams to 62.2 grams, or 2
troy ounces, in weight, according to the company's catalog
distributed at the opening event. Precious metal coins from the
central banks of China, Australia, and Canada will be on offer,
the catalog showed.
Rokugawa may expand the business to platinum and other
precious metals in time, he said. The entrepreneur said he was
encouraged by the gold-vending business in Europe, which has seen
client numbers climb since introduction in 2009.
Ex Oriente Lux, which makes bullion vending machines under the
"Gold to Go" brand, said in September it plans to more than
triple the number of the devices in operation. The Reutlingen,
Germany-based company sells gold bars and coins weighing from 250
grams (8.8 ounces) to as little as 1 gram and updates the price
of bullion every 10 minutes.
(Bloomberg) -- Record Food Prices Causing Africa Riots
Stoke U.S. Farm Economy
The same record food prices causing riots in Algeria and export
bans in India are allowing President Barack Obama to combine the
biggest-ever U.S. farm exports with the tamest inflation since
(Bloomberg) -- Gold May Gain as Europe Debt Concern,
Price Drop Spur Demand
Gold may gain as concerns that the European sovereign-debt crisis
may linger boost demand for precious metals as a protector of
wealth, and as a price drop in the past two weeks spurs physical
buying. Platinum gained.
-- India's rupee fell for a third day, the longest streak
of losses since November, as gold traders bought dollars to cover
purchases of the metal following Greece's credit-rating
downgrade. Fitch Ratings on Jan. 14 cut its assessment for Greece
to below investment grade of BB+ as European finance ministers
meet this week to discuss the euro-area debt crisis. The rupee
declined to the lowest level in almost a week. "Traders bought
gold late Friday in New York trade and they are now covering
those positions," said Paresh Nayar, Mumbai-based head of
currency and money markets at the Indian unit of FirstRand Ltd.
"This led to demand for the rupee in the morning
) -- Former Tunisian Prez's wife 'flees country with 1.5 ton
Tunisia's ousted President Zine al-Abidine Ben Ali's wife has
fled the riot-torn country with 1.5 tons of gold worth more than
45 million Euros, according to a French media report.
Leila Trabelsi, the wife of the 74-year-old former president
now in exile in Saudi Arabia, went to the Central Bank of Tunisia
to fetch the gold bars, France's 'Le Monde' newspaper quoted the
French secret service as saying.
The governor of the bank is reported to have refused to give
them to her, so 53-year-old Trabelsi rang her husband who
personally intervened, and she flew out with the bullion as she
joined him in exile in Saudi Arabia, the daily said.
"It seems that the wife of Ben Ali left with some gold, 1.5
tons or 45 million euros worth," the British media quoted a
French politician as telling the French newspaper.
But a central bank official denied receiving verbal or written
orders for gold withdrawals, adding that the country's gold
reserves "have not moved", 'Le Monde' said.
However, an official from the Elys e Palace told 'Le Monde'
that "this information comes directly from Tunisia, in particular
the Central Bank. It seems to be pretty much
After 23 years of dictatorship, the former President Ben Ali
fell to a wave of student protests on Friday, fleeing into exile
from the Arab nation that had descended into blood -soaked chaos
The French government also believes that the Libyan secret
service may have helped Ben Ali flee in order to avoid violence,
the newspaper said.