A-Mark Precious Metals Market News
Source: SeekingAlpha - May 21, 2013 7:34 AM
On Monday, May 13, 2013 we wrote that Gold Prices would Re-Test $1350/oz level and so they did, trading sub $1340/0z at one stage. Gold had fallen for 7 straight days from $1470/oz before the slide was arrested earlier today with a bounce that pushed gold up to $1391/oz. This move correlates inversely with the 7 day winning streak put in by the US$, which also came to an abrupt halt today when it fell 0.50% to close at 83.93 on the US$ Index. As far as we can ascertain there was a few frantic minutes of buying that moved gold higher by around $30.00. Such quick movement suggests that someone who was short wanted to close and close quickly, as gold was climbing slowly but surely at the time. The snap shot below depicts the day's action:
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This looks to us to be more of a
Source: SeekingAlpha - May 21, 2013 2:38 AM
By The Market Flash:
A generation of economists and students of macroeconomics were taught that the Quantity Theory of Money described the relationship between money and prices in the economy. The primary equation for the Quantity Theory of money is:
is the total amount of money in circulation on average in an economy during the period, say a year.
is the transactions velocity of money, that is the average frequency across all transactions with which a unit of money is spent. Velocity is derived from the Money Multiplier which arises from a fractional reserve banking system. When a bank lends money to a business from deposits its customers make, that money can be paid as salaries, re-deposited, and lent out again, and so on. So a given unit of money can change hands and take part in many more transactions than if all banks had to keep 100% of their deposits
Source: SeekingAlpha - May 21, 2013 6:22 AM
By Eric Parnell:
"Be fearful when others are greedy and greedy when others are fearful"
A major bubble is currently inflating in investment markets. Yet nobody is talking about it. It's not that the category in question isn't getting any attention. To the contrary, it is being talked about at length nearly every day. But what is missing from the discussion is the fact that all of the signs of a massive bubble are now falling into place.
For the purpose of this article, I have taken a different approach with the analysis. Instead of introducing the investment that is showing signs of a bubble, I will be exploring the evidence first in order to avoid any behavioral biases associated with the specific investment in question.
While the bull market for this investment has been underway for nearly two years, it has only recently entered into a parabolic advance over the
Source: SeekingAlpha - May 21, 2013 6:58 AM
By Jeb Handwerger:
I wrote nearly a month ago that "The Worse Things Were For The Mining Sector, The Better They Will Get". This was after the first downward plunge in gold (GLD) and silver (SLV) in April due to the Goldman short.
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Now four weeks later gold, silver and the miners (GDX) tested that April low and even fell below it only to reverse higher that the previous day's selling. Across the precious metals board, we witnessed bullish engulfing patterns. We witnessed a similar reversal back in October of 2011 in the S&P500 (SPY) when we called for a bullish upturn in equities. See the video update from back then by clicking here or watch below.
We saw today gold, silver and both the large and junior miners (GDXJ) dip lower at the open and close above Friday's high on more than triple average volume. This is
Source: SeekingAlpha - May 20, 2013 5:53 PM
Source: SeekingAlpha - May 20, 2013 5:56 PM
By Tracey Ryniec
With gold and silver prices falling off a cliff in 2013, it's not surprising that earnings estimates are being cut for the miners. Silver Wheaton Corporation (SLW), one of the largest streaming metals companies in the world, is no exception. 10 earnings estimates for 2013 have been cut in the last 2 months, sending the consensus plunging for the year.
Silver Wheaton is not a mining company, but streams precious metals. That means it enters agreements where it has the right to purchase all or part of the gold or silver production from mines around the world.
The payment is up front, which means its costs are mainly fixed. It doesn't actually do the exploration or have to deal with employee issues like union contracts. It looks for politically stable regions.
Based upon current agreements, the company has forecast 2013 production of 33.5 million silver equivalent
Source: SeekingAlpha - May 20, 2013 4:14 PM
By Sumit Roy
It doesn't take a rocket scientist to figure out that volatility in the precious metals markets has picked up in recent weeks. Gold, of course, saw a record decline on a dollar basis in April. Then today, silver plunged 7% only to rebound into positive territory later in the day.
But while gold and silver are currently volatile, traders don't necessarily think these outsized moves will last. The CBOE Gold ETF Volatility Index measures the market's
Source: SeekingAlpha - May 20, 2013 1:33 PM
In an earlier article, we discussed one of the most important metrics to analyze the silver industry, the actual cost of mining an ounce of silver, which can help an investor figure out whether it is time to buy SLV, PSLV, and/or the silver miners. In that analysis, I used the FY2012 financials to calculate the combined results of publicly traded silver companies and come up with a true all-in industry average cost of production to mine each ounce of silver.
In this analysis we will calculate the real costs of production of Silver Standard Resources (SSRI), a primary silver miner with a large producing mine in Argentina (the Pirquitas Mine) and two major development projects in Peru and Mexico.
Calculating the True Mining Cost of Silver - Our Methodology
In the previously mentioned article, we gave a thorough overview of the current way mining companies report
Source: SeekingAlpha - May 20, 2013 12:51 PM
Gold and silver, as wells as the stocks that mine these metals have seen historic levels of selling in 2013. The most popular gold and silver ETFs, the SPDR Gold Trust (GLD) and the iShares Silver Trust (SLV) are down 19.1% and 27.2% year to date, respectively. The ETFs that track the miners of these metals such as the Market Vectors Gold Miners ETF (GDX) and the Market Vectors Junior Gold Miners ETF (GDXJ), are down even further in the last three months compared to the metals they produce, losing 43.1% and 47.1%, respectively, while the Global X Silver Miners ETF (SIL) is down 43.3% year to date. Given this sell-off, I have opined that a buying opportunity has arisen for the long-term investor. At present levels, all of these represent great long-term buys that will do well when gold and silver make their way higher.
In the present article
Source: SeekingAlpha - May 20, 2013 12:53 PM
By Gary Bourgeault:
With over a decade of straight positive gains for the price of gold, it was inevitable that there would be a correction, and we're in the middle of that right now. But the latest report from the World Gold Council concludes the fundamentals supporting the price of gold remain in place.
Marcus Grubb, Managing Director, Investment, at the World Gold Council, said this in the report:
Overall, the long-term appetite for investment remains strong, demonstrated by the continued demand for bars and coins."
As to the reason behind the outflow in gold-back ETFs, Grubb added, "Gold-backed ETFs, which made up 6% of gold demand in 2012, have seen some holders, primarily in the US, collect profits and move into equities. While gold ETF holdings are down, this has been balanced by 378t of investment in bars and coins, an increase of 10% on the same period last year, and
Source: SeekingAlpha - May 20, 2013 11:32 AM
Gold just finished its worst week in more than 4 years, and the one time hibernating gold bears were out in full force. The media was full of talking heads talking down gold. What I like about gold is that its value is based upon the greater fool theory, so there are almost infinite ways to value it. There is no way to run a dividend discount model on gold because gold doesn't pay a dividend, gold doesn't have earnings, gold doesn't have a growth rate, it simply has a price and a price history. Because gold isn't a company with cash flows, technical analysis dominates its analysis. Basically if gold is going higher buy, if it is going lower sell. Others try to establish a supply and demand model, trying to forecast the future demand in China and India, and the cost of production for the miners. Just
Source: SeekingAlpha - May 20, 2013 10:21 AM
Leading on from an article on country risk exposure of silver mining companies, which was based on 2011 data, we are now updating our study using current 2012 year-end data. The present article will evaluate country risk associated with PanAmerican Silver (PAAS).
We have collated country risk ratings for numerous countries from eight different sources and averaged these ratings into compounded country risk scores. Our compounded country risk ratings range from 0 to 100 with low numbers indicating low risk and high numbers indicating high risk. The most recent results from this work can be found in this article. Most definitions of country risk include factors such as political risk, exchange rate risk, economic risk, sovereign risk, transfer risk, socio-economic risk and others. Depending on the source, various contributing factors of country risk are weighted differently. Readers interested in the specific definitions are encouraged to follow
Source: SeekingAlpha - May 20, 2013 9:22 AM
In an earlier article, we discussed one of the most important metrics to analyze the silver industry, the actual cost of mining an ounce of silver, which can help an investor figure out whether it is time to buy SLV and/or the silver miners. In that analysis, we used the FY2012 financials to calculate the combined results of publicly traded silver companies and come up with a true all-in industry average cost of production to mine each ounce of silver.
In this analysis we will calculate the real costs of production of Pan American Silver (PAAS). Pan American Silver is one of the largest primary silver producers in the world and they have operations that span North and South America. Their countries of operation include Argentina, Mexico, Peru, Bolivia, Canada, and the United States.
Calculating the True Mining Cost of Silver - Our Methodology
Source: SeekingAlpha - May 20, 2013 9:38 AM
About a month ago the price of gold dropped sharply through several chart support levels, and the bounce that followed is already looking anemic as Peter Hug of kitco.com put it so well today. This mid-April drop follows a multi-month downtrend that has taken the spot price for one ounce of gold from $1795 in October 2012 to $1360 as this text is composed. It is the opinion of your humble scribe that we haven't seen the end of this trend yet and more pain is in store for investors snagged long in a gold-related trade.
Gold miners are caught between a rock and a hard place; with the rock being the described spot price scenario and the hard place being production costs which have been rising substantially along with the spot price in recent years, but have so far refused to replicate the drop. Fellow writer Hebba Investments
Source: SeekingAlpha - May 20, 2013 3:33 AM
By Pater Tenebrarum:
Commitments of Traders
Last week's commitments of traders report (cut-off date Tuesday May 21) showed little change (approx. 3,500 contracts net), but only about 83,000 contracts remain of the large speculator net long position in the 100 ounce COMEX contract. Since the price declines later in the week are not captured in this report, further changes have since then presumably occurred. Again, it is not bullish when the large speculator gross short position increases and it is still doing so (currently at 103,195 contracts). Gold has given a new MACD sell signal on the daily chart, so these short positions have probably increased further. That may change if the test of the April crash low is successful, which currently appears to have low probability due to gold stocks having reached lower lows late last week.
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Gold, commitments of traders. Small speculators are now neutral and the
Source: SeekingAlpha - May 20, 2013 3:40 AM
By Jason Hamlin:
Global gold demand for the first quarter of 2013 declined both in terms of tonnage (-13%) and dollars (-16%).
The volume decline was driven primarily by 177 tonnes of outflows from ETFs, versus inflows of 53 tonnes last year. If we remove this component from the mix, total global demand actually increased by 8% during the first quarter.
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It is somewhat odd to see that investment demand in the form of bars and coins climbed by a healthy 10.3%, while ETF investment demand turned negative and total holdings dropped by over 7%. Some of this divergence can be explained by investors exiting paper positions in precious metals in favor of taking possession of the physical metal. This decision stems from a growing distrust of the banks and financial institutions that act as custodians for the popular gold and silver ETFs. Many precious metals investors do not believe
Source: SeekingAlpha - May 20, 2013 4:47 AM
By Kevin Wilbur:
This past February, following gold's second leg down from the relatively lofty price levels it enjoyed in November 2012 (and after falling 15% lower), many analyst were suggesting the time had become ripe to re-enter gold. I was concerned that too many were ignoring gold's seasonal trading pattern, so I published an article titled "Gold Chart: Price May Be Right, But Is Timing?".
In this article I presented the chart below, highlighting gold's relative weakness from March through June the past four years, and I suggested that on a risk-reward basis this price history might not favor a February re-entry. This article was written on February 26th and published on SA the next day. I also suggested then that waiting until summer for re-entry seemed a more prudent strategy. Here is a copy of the chart I presented.
GLD ETF: 4-YEAR DAILY OHLC
(Click on chart to enlarge and continue
Source: SeekingAlpha - May 20, 2013 5:33 AM
This article considers the price action and prospects of PMs (precious metals) and PM miners. As a preface to investing strategy and sector outlook it reviews the opinion of an experienced financial professional on the process that adds to PM sector volatility and risk. Although valuations there now are compelling it is difficult to call a bottom based on fundamentals. Price action on Friday May 17 is a context for the following discussion. I hope this piece will help investors avoid big losses and panic selling.
Some people contend that the gold market is manipulated by major banks in a way similar to the rigging of LIBOR (London Interbank Offer Rate that sets interest rates worldwide) that earlier this year elicited billions of dollars in fines. By gaming daily spot prices, so goes one argument, some major players profit in ways that disorder markets and patterns of
Source: SeekingAlpha - May 20, 2013 6:55 AM
By The Gold Report:
Jurisdiction risk continues to grow as a result of countries attempting to capitalize on higher commodity prices. In this interview for The Gold Report, Thibaut Lepouttre, editor of Caesars Report, a newsletter and mining portal in Belgium, discusses which jurisdictions offer better value to investors and which countries to avoid. He also offers suggestions on where to look outside of North America for compelling values in junior mining.
The Gold Report: Thibaut, at your presentation at the Prospectors and Developers Association of Canada in March, you said that country risk was the second most important factor investors should look at when analyzing mining companies. Obviously, management is the most important factor, but how has country risk changed over the previous five years or so?
Thibaut Lepouttre: I think you will agree that there is a direct correlation between the rise in commodity prices and
Source: SeekingAlpha - May 19, 2013 2:45 PM
By Osman Gulseven:
By Dr. Osman Gulseven
The April 2013 crash of gold (GLD) and silver (SLV) prices triggered a wave of panic across the globe. As large institutional investors dumped holdings in gold ETFs, prices for both precious metals spiraled downward. Even bullish gold fanatics were forced to dissolve long-term positions due to margin calls and stop-loss orders coming into play.
Silver, with its affinity to gold prices, also saw its prices tumble down over the same period. The white metal had already entered a bear market in early April when prices reached 27.47 an ounce. By the time gold prices had crashed, silver dropped almost 40% to the $22 mark from its 2012 high. On the other hand, gold fell roughly 20% from its October 2012 peak, signaling perilous times ahead for the two commodities.
Those still holding onto gold and silver assets, including government reserves worldwide, saw