Thursday, January 23, 2014

China Becomes Top Gold Consumer In 2013 TNR.v, MUX, GLD, GDX



 While the rest of the world is chasing Bubbles, China accumulates Gold and encourage its citizens to do the same. With more evidence that German Gold is long gone from the FED and there is less and less physical Gold left in the Gold Fractional Reserve System we are entering the blow off phase in the Gold market.
  Now the most important question will be - where the Gold will come from in the future?

There Is No German Gold Left At The New York FED GLD, MUX, TNR.v, GDX

"Die Welt has reported today the bombshell announcement for the Gold market. We have discussed before that only 37 t of Gold out of 674 t was delivered to Germany in 2013 and that the Gold bars were Melted. So not a single original German gold bar was returned to Germany so far! 
  ZeroHedge reports today that surprisingly only 5 t of gold has been delivered from the NY FED - the rest came from Paris. Now it is not the conspiracy theory any more that there is no German Gold left at the NY FED.
  Now all the manipulations in the Gold market and constant smashing down the price in 2013 are coming into another perspective. Germany is very serious about the investigation of the manipulations in the Gold market - it was already reported thatprecious metals manipulation is worse than LIBOR scandal.  This investigation has already claimed the first victim: Deutsche Bank to withdraw from Gold fix amid probe.
  With the highest on record leverage at COMEX of 112 owners for every single ounce of Gold and record low COMEX registered Gold at 11 t we have the set up for the major blow out phase in the Gold market. Who in their mind will continue to hold Gold at LBMA any more? According to Eric Sprott, we can expect a failure to deliver Gold and lawsuits with deliveries last February from COMEX of 40 t and China buying at least 100 t of Gold every month on average now.
  Once Gold will breach $1270 level Andrew Maguire's discussion about the massive short squeeze will become the reality and even if his predictions about $200 Up-days will not materialise, the move by Gold to the upside from the most oversold condition in history will be nothing less than spectacular."




McEwen Mining Receives Final Environmental Permit for Construction and Operation of El Gallo 2 Project MUX, TNR.v, GDX

 "Rob McEwen is on track with development of El Galo 2 and now, after the last main permit has been granted by Mexican authorities, the only question remains where the capital will come from. McEwen Mining had a very impressive run from December $1.65 low to the recent highs of $2.63. Los Azules Copper development remains the major catalyst for McEwen Mining in case of sale of this asset and it will make development of the existing pipeline of project feasible and further acquisitions will bring the dreams about S&P 500 back."

FT:

China becomes top gold consumer in 2013


By Xan Rice

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Its hungry factories and mushrooming cities have made China the number one global consumer of industrial metals such as copper, aluminium and zinc. Now, for the first time, gold has been added to that list.
In 2013, soaring purchases of jewellery, minted Panda coins and small gold bars helped China overtake India as the world’s biggest gold consumer, according to the Thomson Reuters GFMS gold survey – the most widely followed report on the industry. Chinese demand reached 1,189.8 tonnes last year, a 32 per cent year-on-year jump and a fivefold increase since 2003.

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This frenetic buying in China, which led to a temporary shortage of physical stocks, was sparked by the 28 per cent fall in the gold price last year, the worst performance in more than three decades. Following a 12-year bull run, the metal lost its lustre in Europe and North America as economic conditions improved and the prospects of inflation receded. Western investors dumped gold-backed exchange traded funds in 2013, with holdings falling by 880 tonnes.
A simultaneous “Asian-led buying frenzy”, with consumers chasing bargains, resulted in gold bars being removed from vaults in Europe and other markets, melted into smaller bars in Swiss refineries, and shipped to the East. GFMS described the flow as the “largest movement of gold, by value, in history”.
Indian consumption rose 5 per cent to 987.2 tonnes last year, but was held back by new import tariffs and restrictions. In China there were no brakes. Gold jewellery fabrication rose nearly a third to 724 tonnes, surpassing India for the first time, and the retail sector boomed. In July and August, more than 200 gold showrooms opened in the southern city of Shenzhen.
Because many Chinese buy jewellery for investment reasons rather than adornment, high purity 24 carat gold products dominated sales. Purchases of physical bars – mostly kilobars and smaller weights – rose 47 per cent to 366 tonnes, a new record. In terms of gold coins, only Turkey minted more than China in 2013.

FT Video

Dec 2013: With the global economy on the path to recovery, gold’s 12-year bull run has ended. Evy Hambro, chief investment officer of BlackRock’s natural resources equity team discusses the outlook for bullion in 2014.
“Gold has always been popular culturally in China and now it’s increasingly seen as an asset class for individuals,” said Andrew Leyland, manager of precious metals demand at GFMS. “Greater wealth and disposable incomes created pent-up demand when prices were high, so when they dropped there was this phenomenal surge in buying.”
Were it not for Chinese purchases, the gold price would have been at risk of further falls. Outside Asia, investor appetite for the metal has remained weak, and few analysts expect the gold price to recover this year. GFMS forecasts an average price for 2014 of $1,225 a troy ounce – around $20 below current level – with physical demand remaining solid “but without a repeat of the bargain hunting surge”.
In recent years, China has also become the world’s biggest gold producer, with estimated output of 437.3 tonnes last year. Although there are no official figures, some of that metal is thought to have been purchased by the People’s Bank of China. The central bank last reported holdings of 1,054 tonnes, in 2009."


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