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Gold Q2, 2012 - Investment Statistics And Commentary

Tyler Durden's picture




 

Submitted by GoldCore

Gold Q2, 2012 - Investment Statistics And Commentary

Today's AM fix was USD 1,583.00, EUR 1,291.30, and GBP 1,007.83 per ounce.
Yesterday’s AM fix was USD 1,580.00, EUR 1,287.06 and GBP 1,009.33 per ounce.

Silver is trading at $27.07/oz, €22.22/oz and £17.32/oz. Platinum is trading at $1,418.25/oz, palladium at $577.80/oz and rhodium at $1,190/oz.

Gold rose $3.70 or 0.23% in New York yesterday and closed at $1,581.00/oz. It rose as high as $1,590/oz prior to determined selling which saw gold fall. Gold ticked higher in Asia prior to falling soon after the European open.

Gold has been trading in a range between $1,530/oz and $1,630/oz for nearly 2 months despite the Eurozone debt crisis entering its 3rd year and looking set to escalate and despite signs that the US economy is on the verge of a sharp recession.

These two factors alone mean that gold will likely resume its upward march due to continuing safe haven demand. The likelihood of further QE from the Fed will be icing on the cake for gold and silver.

US data yesterday showed factory activity shrunk in July for a 3rd consecutive month and the jobless claims rose last week.

Those who continue to put “lipstick on the pig” that is the US economy are lulling themselves and other unfortunates into another false sense of security.

“Blue skies thinking” regarding individual economies and the global economy got us into this mess and it will not get us out.

The World Gold Council have just published their commentary on gold’s price performance in various currencies, its volatility statistics and correlation to other assets in the quarter -

Gold Q2, 2012 - Investment Statistics and Commentary.

It provides macroeconomic context to the investment statistics published at the end of each quarter and highlights emerging themes relevant to gold’s future development.

One of their key findings is that gold will act as hedge against possible coming dollar weakness and gold will act as a "currency hedge in the international monetary system."

Key findings of the World Gold Council’s report:

Review: Key Macroeconomic Themes During Q2 2012

Gold prices declined in most currencies during the second quarter with the exception of the euro, Swiss franc and Indian rupee, in part due to a strong US dollar. Despite a 3.8% decline in Q2 to US$1,598.50/oz on the London PM fix, gold was up 4.4% during the first half of the year. Volatility remained elevated amidst a busy event-risk period. However, gold generally outperformed risk assets.

Global inflation eases but underlying trends supportive for gold: A substantial drop in energy and some agricultural commodities during the period has eased inflation pressures in many parts of the world and put downward pressure on gold prices.

Reassessing “risk-free” assets: Even assets traditionally considered safe are under pressure. German Bunds interest rates climbed in June. The Swiss franc, yen and US Treasuries are also facing issues – challenging their role as assets of last resort. Despite pressures on the price of gold, its lack of credit risk, its liquidity and hedging characteristics has made gold an attractive vehicle for long-term wealth preservation.

Correlation between gold and risk assets approaches long-term averages: Gold’s correlation to equities and other risk assets fell towards long-run average levels in Q2 helping portfolio diversification. Gold’s increased correlation to equities in Q1 was an indirect effect related to a weaker global economy coupled with a stronger US dollar.

Outlook: Emerging Macroeconomic Themes In H2 2012

Deflationary concerns in some countries provide room for further fiscal and monetary stimulus. This may lead to a further debasement of currencies through unconventional monetary policy and an increased risk of future inflation. These factors should provide support for future gold investment.

The underlying structural issues that affect the euro zone remain unresolved, despite advances in the formation of more comprehensive burden-sharing mechanisms. In such an environment of uncertainty and higher market volatility, gold will continue to be an asset that investors use to diversify risk and preserve capital.

The flight to the US dollar as a safe-haven in the first half of 2012 could be reversed. The US debt ceiling debate in Q3 and federal elections in November, followed by the necessity to confront a US$1.3tn budget deficit will prove challenging to the US dollar. With most currencies under pressure in one form or another, gold is likely to provide a hedging mechanism for investors


Cross Currency Table – (Bloomberg)

Dr. Constantin Gurdgiev, a non Executive member of the GoldCore Investment Committee, has analysed the Q2, 2012 World Gold Council data and has written a blog post that can be read here or see commentary.

He finds that the report is worth a read as it shows how gold generally outperformed risk assets and helped portfolio diversification.

He warns that safe haven government debt markets have all the hallmarks of “return-free risks” rather than “risk-free returns.”

The World Gold Council’s ‘Quarterly statistics commentary Q2 2012’ can be read here.

Dr Constantin Gurdgiev’s blog on the report including charts can be read here.

NEWSWIRE

(Bloomberg) -- China Plans to Start Interbank Gold Trading on Local Market
China is preparing to introduce an interbank gold-trading system, a move that may enable domestic banks to treat the precious metal as a more liquid asset and increase holdings.

The Shanghai Gold Exchange, the country’s biggest spot market, has been working with the China Foreign Exchange Trade System since the start of the year, Gu Wenshuo, an exchange spokesman, said today. The original plan was for the new system to be running at the end of August, Gu said by phone, adding that details are unavailable as banks are giving feedback.

China has been the largest producer since 2007, and was the biggest user after India last year. An interbank gold-trading system is part of broader reforms that Beijing aims to introduce to make the financial sector more market-driven, according to Jiang Shu, a senior analyst at Industrial Bank Co. Ltd.

“China is already very important in terms of gold production and consumption,” said Jeffrey Rhodes, global head of precious metals in Dubai at INTL FCStone Inc., a New York- based trading and brokerage firm. “If a new interbank market really does flourish, it could put the Chinese market in the mainstream and become world-class.”

Spot gold was 0.2 percent higher at $1,584.65 an ounce at 3:38 p.m. in Shanghai. The metal, which reached a record $1,921.15 in September, has rallied for 11 years on emerging- market and investment demand, as well as central-bank purchases.

Gold imports by mainland China from Hong Kong reached 314,810 kilograms in the first five months, compared with 39,607.4 kilograms a year ago, according to Bloomberg calculations based on data from the Hong Kong government.

For breaking news and commentary on financial markets and gold, follow us on Twitter.

NEWS
Gold steady on weak U.S. data; dollar weighs – Reuters

Gold advances for second day - MarketWatch

Asia Stocks Drop With Oil on Global Growth Concern as Euro Falls - Bloomberg

UK housing slump will deepen, warns IMF – The Telegraph

COMMENTARY
Dr Gurdgiev: Q2 Report From The World Gold Council – True Economics

China’s Coming Assault on the Western Financial System – The Daily Reckoning

It's a fine line between gold manipulation and intervention - Mineweb

GoldSeek Radio - Ron Paul: U.S. probably manipulates gold through ESF - GoldSeek

World economy now effectively a multitrillion-dollar game of chicken – Resource Clips

Ray Dalio's Bridgewater On The "Self Re-Inforcing Global Decline" – Zero Hedge

 

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Fri, 07/20/2012 - 12:12 | 2636457 francis_sawyer
francis_sawyer's picture

... and China moves forward... methodically, while western fucknuts continue their folly of trying to plug the dike with paper...

Fri, 07/20/2012 - 12:18 | 2636497 malikai
malikai's picture

QSN is currently running gold on the public gateway. For a realtime intraday quant view on gold, check it out.

https://www.quantsig.net

You'll need a recent Chrome or Firefox browser to view it.

Fri, 07/20/2012 - 12:46 | 2636611 BaBaBouy
BaBaBouy's picture

GOLD WAS and IS The Purest form Of Money, Bitchies...

The WGC and GFMS should get that straight.

 

The Asians and Chinee know this very well.

Even Ben Shalom knows this fact, but can't ever admit it while he peddles the Fiat Dollers...

Fri, 07/20/2012 - 13:02 | 2636684 Quinvarius
Quinvarius's picture

The thing that is the most weird about that papering of gold prices is that if the Western Governments' have gold, they should welcome higher prices to balance out their debt.  They cling to some ridiculous Volcker dogma about gold being bad and insulting to their paper, when it actually makes their paper possible.  If gold were 10k an ounce already, a lot of governments would be solvent right now and half this crisis would be over with.  That is how we fixed the system in the late 70's.  The only thing I can discern from their willingness to flame out is that the bankers' carry trade on gold is too massive, and that is what is being protected.  Higher gold prices 100% benefit sovereign nations.

Fri, 07/20/2012 - 13:59 | 2636971 youngman
youngman's picture

I have a feeling there is an under the table agreement right now to not touch gold and silver....its at an agreed upon price by TPTB....so it can flow to China and they will not sell our bonds...its just way to flat for me with all the crap going on...right now the Euro drops more than gold does....and stocks do too...and I just will not believe that everyone is running to bonds...the crooks that run the show are much smarter than that.....Comex is dead...volume wise...the dealer side has to be laying off employees as they are doing nothing...and still the London market sale scares me....just does not seem right...I am holding strong....as everything I see and read is making PM´s look bettter every day....TPTB will still try to steal it...by a law or by a tax...but that is my line in the sand

Sat, 07/21/2012 - 02:53 | 2638455 Bananamerican
Bananamerican's picture

aye, the heavy hand hath lain upon it, lo these many weeks....

Gold to $8000?-$10,000?  

plenty of time to catch it then.....Buy the Rip

Fri, 07/20/2012 - 15:52 | 2637515 DosZap
DosZap's picture

Quinvarius

Bro, when are you going to figure out things are EXACTLY like they want them?.

Irf you want to create jobs, and improve the economy,you do not institute policies designed to destroy same.

Which is exactly what is/has been done.

Fri, 07/20/2012 - 13:00 | 2636693 MillionDollarBoner_
MillionDollarBoner_'s picture

...and don't mention the yawning gap between "paper" and "physical".

Fucknuts!

Fri, 07/20/2012 - 19:22 | 2637983 orangegeek
orangegeek's picture

China is mastering the art of building entire cities for no one to live in.

 

http://www.youtube.com/watch?v=E9msCpYbyPs

Fri, 07/20/2012 - 12:16 | 2636476 Canadian Dirtlump
Canadian Dirtlump's picture

I'll settle on 10 silver maples today.. imo a screaming bargain.

Fri, 07/20/2012 - 12:45 | 2636619 Svendblaaskaeg
Svendblaaskaeg's picture

Come to Daddy..

"unser Vertriebszentrum hat soeben folgende Artikel versand:

 50   American Silver Eagle 1 oz Silber"

Fri, 07/20/2012 - 12:57 | 2636672 magpie
magpie's picture

Argh...bullion outflow from the Eurozone ? Wie können Sie es wagen ?

Fri, 07/20/2012 - 13:18 | 2636784 MillionDollarBoner_
MillionDollarBoner_'s picture

Don't you find that Maples are a bit of a let-down in terms of quality-of-finish?

Same goes for Grizzlys, Timber Wolves etc. The Cannucks should really get some help in the artwork department.

Now, 1oz Silver Pandas - they're in a class of their own :O)

Fri, 07/20/2012 - 13:33 | 2636834 Broomer
Broomer's picture

The Pandas are beautiful, but I think they are not worth the premium.

You are practically giving 1.5oz to Chinese when you buy a Panda.

Personally I prefer the Philharmonics. Disregarding the premium (I know I was bitching about it just above) I love the 1/10oz Au Philharmonics. It is the only coin that has a little over 1/10oz and I don't mind paying a little more for them.

The bigger gold coins would never get past through Brazilian customs (and then getting 100% taxes, that if they were not confiscated because we need special permission to import items that cost over 500USD).

I could buy gold somewhat near spot here, but I want to avoid confiscation. I know about boats and all, but government lists have a bad habit of leaking on internet here. And like hell I want my name as a gold owner in a 'public' list.

Edit: I heard somewhere Maples have a manufacturing problem and they tend to develop dark spots - some dealers don't work with them because of this problem. Is this true?

Fri, 07/20/2012 - 14:01 | 2636991 youngman
youngman's picture

Colombia too.....they mine a lot of gold here...but they do not sell it....and they tax it if you bring it in...I would think a Central bank would mint coins to make money...the premiums are high......

Fri, 07/20/2012 - 12:16 | 2636478 fuu
fuu's picture

Spot price starting to look like yesterdays IBM tape.

Fri, 07/20/2012 - 12:24 | 2636530 paulbain
paulbain's picture

Although gold is an excellent hedge against the foolish, current monetary policies of the various governments of developed nations (e.g., the USA, EU, or Japan), silver is almost certainly the better hedge, at least in the long run. It is all but certain that the silver-to-gold price will reach 10:1 in the next 10 years. IOW, during the hyperinflationary era, silver shall appreciate far more than  gold. But remember to buy physical silver, not the fake, "paper silver" that is traded on, e.g., the COMEX or other, fraudulent markets for silver futures contracts. As for myself, I prefer so-called "junk silver," which is anything but junk.

-- Paul D. Bain

paulbain@PObox.com

 

 

 

Fri, 07/20/2012 - 12:25 | 2636537 Segestan
Segestan's picture

Become an Internet warrior for Jim Sinclair.... stop  the manipulation.

Fri, 07/20/2012 - 12:28 | 2636544 Bay of Pigs
Bay of Pigs's picture

WGC? Rubbish...

Fri, 07/20/2012 - 12:30 | 2636559 Bay of Pigs
Bay of Pigs's picture

I get a junk in less than a minute for pointing the WGC is mostly MSM propaganda?

LOL.

Fri, 07/20/2012 - 12:39 | 2636587 covert
covert's picture

the region with the greatest freedom of enterprize will win the game.

http://expose2.wordpress.com/2011/11/20/a-voice-from-the-dark/

 

Fri, 07/20/2012 - 12:44 | 2636614 MrBoompi
MrBoompi's picture

I've seen every possible factor which might explain the supply, demand, and price siutation for gold and silver except the most important reason.

The fucking prices are manipulated by a goddamn cartel.

Fri, 07/20/2012 - 12:50 | 2636645 Bay of Pigs
Bay of Pigs's picture

Yeah, and why doesn't the World Gold Coucil address that?

You junkers are comical. I've followed the WGC for over ten years. Do I really need to state the facts on this? 

Fri, 07/20/2012 - 14:01 | 2636984 Bay of Pigs
Bay of Pigs's picture

Okay, here's one from 2000 with Reg Howe who completely demolishes the WGC. There are dozens of stories like this for those who care to look.

http://www.gata.org/node/879

 

Fri, 07/20/2012 - 12:46 | 2636624 dukeness
dukeness's picture

I think the weather has placed the inflation into food... for now. PMs will get their turn.

Fri, 07/20/2012 - 13:11 | 2636745 ParkAveFlasher
ParkAveFlasher's picture

how many deep-sea robots does JP Morgan employ?  better get on that, Hymie!!!

Fri, 07/20/2012 - 13:17 | 2636775 ZippyBananaPants
ZippyBananaPants's picture

Love ZeroHedge and read it every day, even donated money (can't run a site for free).  But I have a question,

If the entire system fails and Gold doubles from here, it will be great holding Gold, but at $3,000 an ounce, what am I going to do with the Gold?  I would be trading it in for $3,000 of worthless dollars.  

I guess I am not seeing the benefit (other than the overnight doubling of my gold price) if the dollar falls the other way.

Any help with my thinking would be appreciated.

zip

Fri, 07/20/2012 - 13:24 | 2636812 Tinky
Tinky's picture

Two possibilities come to mind. 

First, it is possible that there will be relatively sound curriencies (e.g.Swiss Francs) for which you could exchange. Under more dire circumstances, you could use it directly for commerce. Buy some land with the gold, etc.

Fri, 07/20/2012 - 13:30 | 2636831 magpie
magpie's picture

In such a scenario gold will be money; however since its value is too great most everyday transactions will be replaced by barter and/or a 'consumable' currency e.g. cigarettes (yes, i know they are politically incorrect), whiskey and Tide.

Fri, 07/20/2012 - 13:35 | 2636872 MrBoompi
MrBoompi's picture

First of all, the dollars would not be worthless, they would be worth half as much as before.  (What would make the dollar worthless is if nobody would except it in trade.)

Also, gold or silver could be used to purchase goods and services directly from suppliers, skipping the step of converting the metal into dollars.

This all seems to be highly unlikely in the near future, as there seems to be no end in sight to the global market management schemes in operation today.

Fri, 07/20/2012 - 13:37 | 2636884 Broomer
Broomer's picture

Eh... you use gold to store your savings.

You should have also some silver. At least one ounce of silver for each ounce of gold. Depending on your gut you might want to have up to 10 or 20 ounces of silver to each ounce of gold. Personally I think, out of my ass of course, that 10:1 is the ideal ratio.

Fri, 07/20/2012 - 14:57 | 2637241 johny2
johny2's picture

+1 for your strategy, even though I think even 10-1 is too liitle silver at these prices. What is the best price you get per ounce in Brazil?

Fri, 07/20/2012 - 15:43 | 2637499 Broomer
Broomer's picture

About 60USD. Yes, because of taxes the price of everything imported and commodities doubles.

Fri, 07/20/2012 - 16:32 | 2637666 johny2
johny2's picture

I thought the taxes for importing silver coins to Brazil are about 33%, including a postage and insurance it probably goes to 40%, but still cheaper than $60.

Fri, 07/20/2012 - 17:06 | 2637760 Broomer
Broomer's picture

Let's see...

Silver is not considered an investment metal by Brazilian government, it is not sold at banks, though our nice government sells 28g .999 silver for about 60USD (120BRL).

60% import taxes, 25% of something similar to VAT, 6% for financial operations with foreign currency, 5% tax for industry-made products.

All these taxes are cascading, I mean... first you apply 60%, then 25% over the result, etc.

By the way, S&H value also is included in final price calculation because of fraud (long ago people shifted part of the price into S&H to avoid the taxes.

Isn't it nice? You can buy gold near the spot with some quite heavy paper trail, and you can't sell it without having the paper proving you bought it.

Of course you must declare gold when settling taxes with our government, so that they can monitor where everything is.

 

Fri, 07/20/2012 - 20:04 | 2638055 johny2
johny2's picture

http://thebrazilbusiness.com/import-tax-guide/silver-including-silver-plated-with-gold-platinum-unwrought/sp/71061000-1

here is something about the import of silver coins in Brazil. it looks like around 33% tax. 

of course, only way to find out if this is correct is to try it. And I HAVEN'T TRIED IT.

 

Fri, 07/20/2012 - 13:44 | 2636903 Bohm Squad
Bohm Squad's picture

If you don't buy gold, what would you be doing with $1600 of fiat in the same circumstance?  Personally, I plan on buying assets upon my exit from silver...assets which will provide a cash flow moving forward.

Fri, 07/20/2012 - 16:46 | 2637704 Harbanger
Harbanger's picture

Owning physical assets that produce income is what separates the bosses from the pee-ons. I view gold as portable physical capital. It won't just buy you the crops, it'll buy you the farm.  Productive and strategic land is what all wars were fought over. The winners become the lords and control it’s production and/or access. There is never of shortage of labor to make your asset productive.

Fri, 07/20/2012 - 14:05 | 2636999 Think for yourself
Think for yourself's picture

You don't sell it until you gain confidence in the currency again. Silver/gold is money, is wealth preservation; you don't need to convert it back to fiat just so you can write down a paper profit on your spreadsheets!

In the meantime, keep that metalclose, and you only trade it for goods that you immediately need. Preferably direct PM to goods exchange so it is off the record, but into cash and directly into goods if necessary. Especially in an hyperinflation scenario, turning in your PMs for a short-term paper profit can turn into a loss in a few days.

Remember some useful historical values - gold to silver ratio, for one, as well as the rationale for its a new equilibrium point closer to 1:1 according to modern uses of silver, gold to oil, gold to houses, gold to cars, silver to food, silver to wages, silver to spirits and so on. This will help you if barter is needed or if the paper price can not be used to determine the value of PM vs. goods (in case of hyperinflation and/or dissociation of paper and physical prices due to paper manipulation/fraud).

Fri, 07/20/2012 - 14:13 | 2637043 ebworthen
ebworthen's picture

Your "worthless" dollars, used to purchase an ounce of gold at $1,585, would now be worth $3,000 "worthless" dollars, allowing you to convert them to food, guns, ammo, gas, and other payments requiring dollars.

You could also barter with the gold; and exchange it for goods and services to those willing.

Or, you can pass it on to your progeny because in fifty years it will likely be worth more than $3,000 dollars or any other currency you care to convert it to because physical GOLD has been THE internationally recognized and valued currency for thousands of years.

Fri, 07/20/2012 - 13:30 | 2636838 Quinvarius
Fri, 07/20/2012 - 14:05 | 2637011 youngman
youngman's picture

ah si Grasshopper...the Chinese are very big scam artists....and cheats..and thiefs..and spys....beware Grasshopper...

Fri, 07/20/2012 - 14:08 | 2637021 ebworthen
ebworthen's picture

Best YTD performance of any solid, tangible, physical, unfungible asset.

Why would I put my money in the Corzine/LIEbor/Mozillo/FED equity casino?

Fri, 07/20/2012 - 14:38 | 2637155 smiler03
smiler03's picture

YTD is negative, hardly the best performance going.

Sat, 07/21/2012 - 01:58 | 2638426 ak_khanna
ak_khanna's picture

The prices of commodities are no longer determined by the age old mantra of demand and supply. It is determined by the futures and options outstanding on the global commodity exchange casino.

Hence even if there is a lack of demand or supply glut of any commodity in the real world, the price of it will be decided by the strongest player on the exchange.

www.letstalkmoney2012.in

Sat, 07/21/2012 - 12:02 | 2638868 Grand Supercycle
Grand Supercycle's picture

SP500 downleg expected to continue next week onwards.

http://www.zerohedge.com/news/2012-12-24/market-analysis

Do NOT follow this link or you will be banned from the site!