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[stonedyou] 02/4/2024 10:42

Western Investors Bank Record Profits on Gold

Tuesday, 4/02/2024 09:30

"With the People's Bank of China seemingly happy to buy gold at any price."


WESTERN INVESTORS just banked record profits from gold, selling more than twice the quantity that they bought as a group in March using world-leading marketplace BullionVault, as speculative betting by hedge funds, plus China's relentless central-bank demand, drove the price of gold up to new record highs in all major currencies.

But record-heavy selling by a record number of customers still left client holdings at BullionVault worth fresh record high above $3.2 billion (£2.5bn, €3.0bn).

"Previous peaks in the number of people selling gold also came as bullion prices jumped," says BullionVault director of research Adrian Ash. "But they all coincided with moments of acute political or financial stress, spurring stronger investor demand.

"In contrast, gold's new all-time highs have come without any external trigger. That speaks to the underlying strength of this uptrend, with relentless demand for physical bullion from emerging-market nations led by China more than offsetting the record-heavy profit taking by Western investors."

The price of gold jumped by 8.1% last month – its fastest gain in a year – to finish at a new record of $2214 per Troy ounce (+8.5% to £1752, +8.7% to €2050) after setting a fresh all-time high on 9 of the global wholesale market's 20 trading days across March.

In response, the number of private investors buying gold on BullionVault – almost 9-in-10 of whose users live in Western Europe or North America – slipped 3.4% to the fewest since December.

The number of sellers in contrast rose 95.1% to beat the number of sellers in March 2023 (the 'mini crisis' in US regional banking), August 2011 (US debt downgrade, Euro debt crisis, English riots), March 2022 (Russia's all-out invasion of Ukraine) and June 2016 (the UK's Brexit referendum shock).

Together, that took the Gold Investor Index – a unique measure of trading decisions among the world's largest single pool of private investors in physical bullion – down to a new series low of 47.5, down 4.0 points from February with its steepest drop since July 2016.

Tracking gold investor actions since October 2009, the index would read 50.0 if the number of buyers exactly equalled the number of sellers across the month. It reached 65.9 as the Covid Crisis took hold in March 2020, and it set a series high of 71.7 when gold prices hit their global-financial-crisis peak in September 2011.

The Gold Investor Index has recorded more gold sellers than buyers only twice before (48.8 in Feb 2010, 49.1 in June 2019).

By weight, total demand to buy gold on BullionVault – now open 24/7 since April 2005 – rose 4.5% in March from the previous 12-month average to reach 0.7 tonnes. But selling more than doubled, rising 100.3% to total more than 1.6 tonnes.

Net-net, that saw private investors liquidate 992 kilograms of gold – 28.0% more than the previous record outflow of June 2019 – worth a record $68.8 million (£54.1m, €63.3m).

That took investor gold holdings at BullionVault down to 45.5 tonnes, the smallest since 2020 and down by 5.5% from the record high holdings of last August. By value, however, those investor holdings have risen 7.7% in Dollar terms over the past 7 months to finish March at a record $3.2 billion (+8.1% in GBP to £2.5bn, +8.3% in Euros to €3.0bn).

"With central banks led by China paying record-high prices for gold, Western investors are increasingly happy to sell, taking profit at the highest prices in history. But this is rebalancing, not a rush for the exits, because their remaining holdings have also risen in value to new record highs, and gold's appeal as a form of investment insurance is undimmed, ready for whatever political or financial crises 2024's highly uncertain outlook could bring."

Like gold, silver jumped in price last month, rising 9.8% to its highest monthly close in four at $24.54 per Troy ounce (+10.2% to £19.46, +10.3% to 22.76).

That saw the number of silver sellers on BullionVault double in March from the month before, up 108.7% to the most since February 2021, when the #silversqueeze ramp on social media sent silver prices towards an 8-year high 1 cent shy of $30.

Back then, the number of silver buyers across the month was 4.7 times larger than March 2024, putting the Silver Investor Index at 61.0, its 8th highest reading since the series began at New Year 2012. But last month the index sank to a new all-time low, down 5.1 points to 45.0 and signalling more sellers than buyers for the 4th time in the past 12 months.

By weight, silver selling outran buying by a record 29.8 tonnes, taking the total stock of silver bullion still held down 2.4% to 1,199.8 tonnes, the lowest since April 2021 and 5.3% smaller from the record high of October 2022.

By value, in contrast, BullionVault users' silver holdings have grown by 11.8% to $878 million (+11.0% in GBP to £750m, +11.8% in Euros to €878m).

"Gold's sudden jump to new all-time highs leaves the price looking stretched short term," says Ash, "and the market may struggle to absorb the huge quantity of bullion coming back from Western investors, especially as Asia's big consumer nations head towards the seasonal summer lull in household demand.

"While Asia's big gold buying markets can be very price-sensitive short term, consumers have repeatedly grown accustomed to higher gold prices over time. Short of peace and trust breaking out between the West and 'the rest', demand from emerging-market central banks looks set to continue, with the People's Bank of China seemingly happy to buy gold at any price."

[stonedyou] 01/4/2024 11:06

Gold Futures Soar to Historic Highs: Eyes on Inflation, GDP Data for Next Move.

Central Banks had a big impact on gold and silver last week.

Gold futures have made new highs - and traders should watch out for a potential correction because of PCE, GDP data.

Meanwhile, silver prices are holding steady near a key resistance level.

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On Thursday, gold futures soared to record levels, with the June contract breaking through the $2,200 per ounce mark and reaching an astonishing $2,233 per ounce at the time of publishing this article.

Currently, there's a 62% probability of the first interest rate cut happening in June.

If the pivot is postponed to the third quarter or the number of cuts is reduced to two or one instead of the expected three, it will trigger a correction in both silver and gold prices.

Gold, in particular, is vulnerable to a pullback toward key support levels after its steady rise.

Next up, after the dust settles from the Fed meeting, the market will shift its focus to upcoming macroeconomic data.

Today, we await the release of GDP growth figures from the US. If these figures confirm the initial estimates, we can expect a significant decline compared to recent quarters.

[jbravo2] 28/3/2024 22:26

Aware of the concept of karma Cinoib?

[justiceforthemany] 28/3/2024 17:15

The solar plant is reducing AISC closer to $1,300
Margin $900/ounce!
Gold price > $2,200
Production 190,000+ with another 50,000 to come

Pre-tax annual profit >$200 Million.

[justiceforthemany] 28/3/2024 17:13

It's possible as valuation is super low but upcoming elections end of May is a hindrance and would Cobus and the gang want to sell out with Mintails just round the corner?

[saint in exile] 27/3/2024 20:43

If we linger around these prices we will definitely attract an offer.

[cinoib] 27/3/2024 16:40

Just my luck, closed out and it rises, what a bloody b------ this one is.

[justiceforthemany] 27/3/2024 15:49

$2,200 - $1,325 AISC
x 190,000oz

= $166M profit PER YEAR!

[allesandro] 26/3/2024 12:56

Gold hit record levels abit earlier - surely this will get the brakes off soon , im in for another £100k after lunch today :-)

[cinoib] 26/3/2024 10:21

Gold going bananas again and this just sits there. Come on Paf get a move on and follow that golden rainbow.

[stonedyou] 25/3/2024 17:04

Crypto 'supervillain' who hoped to be reincarnated as a goddess and become a queen goes on the run after '£3billion bitcoin swindle'.

Zhimin Qian, 45, allegedly scammed more than 128,000 people in China.


A crypto 'supervillain' who hoped to be reincarnated as a goddess and become a queen has gone on the run after an alleged bitcoin swindle.

Zhimin Qian, 45, allegedly scammed more than 128,000 people in China out of a total £5billion in bitcoin - £3billion of which were seized by UK police.

She wanted to use the money to build Europe's biggest Buddhist temple in Liberland, an unrecognised micro-state on the Danube.


Qian hoped the unofficial country would then make her Queen and dreamt that the Dalai Lama would declare her to be a reincarnated goddess, the Financial Times reports.

But her dreams came crashing down when authorities discovered her alleged bitcoin swindle. Qian has been on the run since and is subject to an Interpol red notice.

Her 'carer and assistant', Jian Wen, was convicted in a money-laundering trial that concluded in London last week, during which Wen's lawyer Mark Harries KC called Qian an 'expert criminal supervillain' and 'master of deception'.

Mr Harries told Southwark Crown Court that Qian's 'spectre has haunted this trial from start to finish'.

Fugitive Qian, who was referred to in court under her stolen alias Yadi Zhang, fronted a Chinese company selling investment products that promised huge returns of up to 300 per cent and claimed to be bitcoin mining, according to court documents.

Qian - who fled Britain in 2020 and whose whereabouts are still unknown - allegedly used crypto exchange site Huobi to convert investor money into billions of pounds worth of bitcoin.

Wen allegedly helped hide the source of the money allegedly stolen from Chinese investors between 2014 and 2017, but she was not alleged to have been involved in the underlying fraud, which prosecutors said was masterminded by Qian, who was known to Wen as Yadi Zhang.

Prosecutor Gillian Jones said at the start of the trial that Qian had arrived in Britain on a false St. Kitts and Nevis passport in 2017, shortly after Chinese authorities began to investigate the fraud.

[stonedyou] 25/3/2024 16:08

Is it a golden era for gold?



Executive summary

The price of gold is often driven by a complex interplay of factors, including the U.S. dollar exchange rate, real yields, supply/demand dynamics and sentiment. In recent years gold has exhibited a tendency to react to real yields in an asymmetric manner, supported by strong central bank purchases.

We are constructive on gold given peaking real yields, elevated geopolitical uncertainties, robust central bank demand, and strong retail jewelry demand.
For long term investors, gold merits a position in a diversified portfolio, potentially serving as short-term protection against risk events, a reliable longer-term store of value, and most importantly as a portfolio risk diversifier.

Gold has been a sought-after commodity for centuries, and a popular component in investment portfolios in modern times. The metal has historically delivered attractive long-term returns, appreciating ~8% on an annual basis over the past 20 years. That said, its price has exhibited significant volatility – with prices tumbling around 40% from 2011 to 2015, before it fully recovered in 2020. At the time of writing, the metal is making new all-time highs, breaking $2,180/oz on Mar 11, 2024.

The price of gold is influenced by a complex interplay of macro factors as well as supply/demand dynamics. Understanding its unique characteristics and benefits is crucial for investors who look to establish portfolios that endure through cycles. This article aims to identify and analyze the key drivers of gold prices, how they evolved in recent years, and how an appropriately sized gold investment can add value to a portfolio from an asset allocation perspective.


What drives gold prices?

1. The level of the U.S. dollar

Historically, it would be fair to say that the value of the U.S. dollar is often negatively correlated with gold prices, as the metal is priced in dollars. When the USD weakens, gold becomes relatively cheaper for holders of other currencies, leading to increased demand. And the opposite is often true, with gold weakening as the dollar strengthens. However, there can be extended periods when this relationship breaks down. In 2012-13, for example, gold lost -18% of its value when the USD was fairly stable – rising less than 1%.

Looking ahead, we think the dollar environment should be relatively supportive for gold prices. After a significant rally in 2022 and a flattish 2023, the dollar is currently trading 10-15% higher than its fair value, implied by interest rate differentials and its own long-term average. Over the medium term, we think the dollar will likely revert to mean, and its overvaluation should be ultimately unwound. This process could take some time, as the dollar could be supported over the near term by cyclical growth outperformance in the U.S. relative to other major economies. That said, further strength from current levels should be limited. We expect U.S. economic growth and interest rates to gradually “catch down” to the rest of the world as the labor market wage increases cool down and the Federal reserve begins cutting rates, likely starting in the 2H.

U.S. DOLLAR STILL SCREENS ~10% OVERVALUED AGAINST INTEREST RATE DIFFERENTIALS

[stonedyou] 25/3/2024 16:03

Turkish Citizens Seek Refuge in Gold and Stablecoins Amid Surging 67% Inflation
Rate.


According to February 2024’s latest inflation data, Turkey faces an inflation rate
exceeding 67%, amid ongoing currency devaluation and a declining lira against the
U.S.dollar. Recent findings suggest that in an effort to safeguard their wealth,
Turks area ssets, particularly those stablecoins tied to the greenback.


Record Gold Smuggling in Turkey Reflects Deepening Currency Crisis; Lira
Tightens Bonds With Stablecoin Assets
This week unveiled a report highlighting that gold smuggling in Turkey has hit new highs, with authorities confiscating 350 kilograms of gold this year. Due to quotas set by the Turkish government on gold imports, there’s a soaring demand for this valuable metal as the nation’s currency, the lira, continues its steep decline.
This heightened quest for gold and secure assets, aimed at preserving the diminishing wealth of Turks, has catapulted gold prices to a 7% premium over the global weighted average, according to the report.
Amidst a substantial economic shortfall, Turkey grapples with escalating import expenses,leading to inflated prices for commodities and services. Furthermore, an exceptionally lax monetary strategy coupled with alleged interest rate suppression has further diminished the value of the Turkish lira.
“These days there are almost no [gold] sellers,” Mehmet Ali Yildirimturk, the vice-president of Istanbul Jewelers, Goldsmiths and Moneychangers Association remarked
in the report published Thursday.

The Jewelry executive added


When there’s lots of these small-scale buyers it creates demand and the price explodes.


In a trend mirroring bitcoin (BTC), gold prices have approached their peak levels earlier this month. As of March 24, 2024, the going rate for an ounce of gold
hovers around $2,165. In search of financial stability, Turkish citizens are increasingly turning to cryptocurrencies, especially stable coins.