Precious Metals Archives
Gold's Demise: Another False Alarm.
Saw this article today on YahooNews.com from so-called "experts" who are once again predicting the demise of Gold.
Here's the link:
This is the proverbial "Boy Who Cried Wolf".
Worldwide sales of gold jewelry remain robust and this past Holiday Season saw very strong sales of Gold Jewelry. In particular two-tone gold jewelry is now extremely popular especially in 18 Karat configurations.
If you read the comments by the so-called expert and analyst, Jessica Cross, you will clearly note that for every one of her alarmist predictions for Gold's imminent downfall she provides a counterbalancing hedge comment. Sum result: Much ado about nothing.
If anything, there are pervasive arguments to show that Gold's price will remain strong and increase in the near term:
1. Gold's price has risen 60% since 2001.
2. Price is increasing at the rate of 2-4% a year.
3. Weak dollar which shows no signs of reversing.
4. Political instability and economic inflation in many parts of the
world.
5. Traded Gold funds which use physical gold as backing.
6. Increasing consumer demand...3rd Quarter 2004 showed an increase
of 8% over same period 2003.
Less Platinum Volatitility in 2005
Johnson Mathey, leading supplier of platinum to the jewelry industry, forecasts more stable platinum prices over the next 6 months after a year which saw prices for this precious metal rise dramatically.
Globally, platinum supply is expected to grow by 4 percent, against a rise in demand of 1 percent, as platinum supplies move into surplus for the first time in 6 years.
Precious Metals: What You Should Know.
Make sure that jewelry containing precious metal(s) is marked in compliance with the law.
The item's karatage must be identified to you in some way (verbally, through signage, etc.) e.g.; 14K, 18K.
___ If an item is stamped to indicate the quality of metal it contains, it must have a trademark in close proximity to the quality mark. (A trademark is a symbol stamped next to the quality mark and may be initials or a logo to identity the make of the item.)
Platinum
Items containing 950 parts per thousand (95%) may be marked as platinum.
Items that are 85% or 95% platinum must be marked with the platinum content. Examples: 900Pt, 850Pt.
Items containing less than 85% platinum must detail the platinum group metal. Example: 750Pt200Irid. Total parts must equal 950 (95%).
Note: Platinum group metals are: Platinum, Palladium, Rhodium, Iridium, Ruthenium and Osmium.
Gold
10 karat gold is the minimum fineness of gold that may be sold in the U.S. Jewelry under 10kt fineness may not be sold as gold.
Jewelry is made of many different types of gold: solid gold, gold plate, gold filled, gold overlay, gold electroplate, gold flashed/washed or rolled gold plated.
Silver
Silver/Sterling Silver means that 925 parts per thousand (or 92.5%) of the item is made of pure silver.
Silverplate describes a product made of base metal and layered (or plated) with silver.
Silver coins contain 900 parts per thousand (or 90%) pure silver.
Fine jewelry is made of either Gold or Platinum. For a more detailed description of the differences between Gold and Platinum, click on this informative link:
Titanium Jewelry: What is it?
Fine Jewelry crafted from Titanium metal has become more popular in recent years and found a market niche.
3 grades of titanium are used to manufacture jewelry.
Ti-6/4 - Aircraft grade titanium alloy (6Al/4V)
Ti-6/6/2 - Extra-hard titanium (6Al/6V/2Sn)
CP 4 - Commercial Pure Titanium, grade 4
The increasing popularity of Titanium is due to it's superiority because it will never tarnish, is 100% compatible with the human body, does not produce allergic reactions, skin irritations or discoloration of any sort, as some forms of Platinum (with cobalt as the alloy)or Gold, making it the ideal metal for those with sensitive skin. This is true for all grades of titanium, including CP, 6/4, and 6/6/2.
Ti-6/4 Aircraft Grade Titanium is used primarily in jewelry because
it has greater hardness than basic grade Titanium (CP.)
This Aircraft Grade Titanium alloy is about 3 times stronger than basic grade (CP) and resists wearing to a much greater extent.
Titanium 6/4 consists of 90% titanium, 6% aluminum, 4% vanadium. This alloy has a tensile strength of up to 150,000 psi and a Brinell hardness value of 330.
This alloy combination offers the highest resistance to denting and bending.
Titanium 6/6/2 consists of 86% titanium, 6% aluminum, 6% vanadium, 2% tin. It has a tensile strength of up to 180,000 psi and a Brinell hardness value of 389.
Aircraft Grade vs. Pure Titanium:
Aircraft Grade Titanium requires more labor to create an outstanding piece of jewelry as opposed to the basic grades (CP). In themselves 6/4 and 6/6/2 are costlier, tougher, and take more time to machine, finish, and polish, accounting for their increased value.
Using the Ti-6/6/2 alloy is extremely difficult to work with, which is why not many jewelers offer it as an option for rings. But this grade is the ultimate in strength. It is increasingly resistant to demanding wear, retaining its form long-term.
Titanium Jewelry
Precious Gold Taking a Little Bit of a Nose Dive Today.
Fri Jan 28, 2005 11:16 AM ET
NEW YORK, Jan 28 (Reuters) - Gold futures retreated early Friday, tracking a weaker euro, after financial markets digested slower-than-expected U.S. economic growth, which at first boosted metals prices, dealers said.
Read More Here.
New Gold Fund Starts Trading on AMEX.
Barclays Global Investors iSHARES COMEX Gold Trust, the second U.S. gold ETF, was launched this past Friday, trading on AMEX under the symbol "IAU".
The trustee is The Bank of New York and the custodian is The Bank of Nova Scotia, according to documents filed with the SEC.
SEC filings reveal that the shares will be sold in blocks of 50,000. iShares will be offered at prices that will reflect, among other things, the price of gold and the trading price of the iShares on the AMEX at the time of the offer. The objective of the trust is for the value of the iShares to reflect price of gold owned by the trust at that time, less the trust's expenses and liabilities.
On January 21, 2005, Barclays Capital Inc deposited into the trust 15,000 fine ounces of gold as consideration for three initial baskets comprising 150,000 iShares with a per-iShare purchase price of 1/10th of a fine ounce of gold. As of the close of business on January 21, 2005, the net asset value of the trust was $6,400,500 and the NAV was $42.67.
The Barclays product will compete with the streetTracks Gold Trust (GLD) which was launched in November 2004 on the NYSE. The first day of trading for GLD attracted $550 million into the fund. StreetTracks is the brand new of several ETFs managed by State Street Global Advisors.
Gold ETF shares are aimed at overcoming the logistics of buying, story and insuring gold. Institutional and retail investors, including pension funds, which were not allowed to participate in the gold market are allowed to buy gold-backed shares from the trust.
Gold Price.
Fix at $427.30
Platinum Surges.
A weaker yen this morning has triggered a rally by platinum during Asian trade, taking the metal to $882 after starting the day at $870. Yesterday the metal traded $865-72. Despite this mornings gains the less favourable fundamentals are likely to mean this is a blip with the metal quickly working back into the recent $825-75 range seen since August.
Gold Price.
Ask Price: $421.35
Holding steady.
Women Want Platinum Part 1
Saw a great research piece by Modern Jeweler; here are some excerpts.
Extensive consumer research, both by Platinum Guild International and by other organizations, shows that most women prefer Platinum for their engagement ring. "When we have done focus groups, Platinum spontaneously comes up as the metal most desired," says Huw Daniel, president of Platinum Guild International USA. "When we hired Hall & Partners to do some quantitative research, we were blown away by how passionately women felt about Platinum."
The Hall & Partners study asked women in the 18-34 age group with relatively modest household incomes of $30,000 and above who were shopping for engagement rings which metal they prefer. A staggering 71 percent of women said they are committed to buying platinum. An even more surprising 78 percent said that platinum was worth paying more for. And 89 percent agreed that platinum the highest quality precious metal. "Most women said that platinum was the only metal or the metal they would consider above all others for their engagement ring," Daniel says. "But it wasn't just on a pedestal as the best. When we asked them to think of Platinum as a person, most agreed that that they really liked it and had something in common with it, much more than other metals. This means that they connect emotionally with platinum, it's approachable and within reach."
Gold Demand Increasing
The Bullion Desk this morning reports that world gold consumption grew for the first year in four in 2004 as economic growth in India, the US and China spurred demand and as investors sought to hedge against a declining dollar. Consumption grew as much as 8 percent to 2,725 tons from 2,524 tons in 2003 after three years of decline.
Gold Fix
London Gold Fix steady at $421.60. Support at $420.00.
Smugglers Haul Gold and Fake Viagra!!
South Korean Press reports this morning that S. Korean Prosecutors indicted six people on charges of smuggling fake Viagra and gold bars.
Prosecutors say a man identified as Lim, 67, and five accomplices purchased 160,000 counterfeit tablets of impotence cures Viagra and Cialis and 40 kg of gold bars worth W650 million (US$640,000) in Hong Kong on Jan 11. The gang smuggled the drugs and gold bars from Tianjin, China to Incheon concealed in the restroom of a ferry.
The smugglers then hid the goods in garbage bags and brought them into Korea in a delivery van. The smugglers bought the fake Viagra at W18,000 per bottle in China and sold them for W50,000 to W100,000 in Korea. Prosecutors said the fake pills constitute the single largest haul in history.
Fake Viagra is similar to the genuine product but can cause more severe side effects like blurred vision and dizziness.
"Not tonight, Honey, I've got a headache," now takes on a new meaning.
Gold Down Today
Bloomberg today reports that Gold prices in New York fell to the lowest in more than three months as a gain in the value of the dollar eroded the appeal of the metal as a hedge against U.S. stocks and bonds.
Gold, sold in dollars, has dropped 4.8 percent this year on concern that rising interest rates will boost demand for the U.S. currency. The metal also fell after U.K. Chancellor of the Exchequer Gordon Brown said he hopes the Group of Seven will agree in the next few weeks to have the International Monetary Fund's gold reserves revalued.
Gold futures for April delivery fell $5.80, to $417.20 an ounce at 10 a.m. on the Comex division of the New York Mercantile Exchange. Prices fell earlier to $416.20, the lowest for a most-active contract since Oct. 19.
The dollar rose today on expectations a government report tomorrow will show the U.S. economy created the most jobs in three months in January. Economists expect the economy will have added 200,000 workers.
Gold Steady, Platinum Up.
Gold is holding steady this morning at $416.00. Platinum is up four dollars to $870.00.
G-7 nations meeting this week and indications are that the dollar may be dissociated from Gold Pricing.
Gold: Using It In Imaginative Ways.
Reuters News service reports this morning that Gold producers aim to boost industrial demand for the precious metal by more than 50 percent within a decade through developing new uses in gas masks, air-cleaning devices and as a superconductor in electrical gadgets.
Currently the bulk of gold is used for jewelery, accounting for 80 percent of the 4,142 tons consumed in 2003, with industrial applications such as electronics and dental fillings taking up only 12 percent or 500 tons.
New uses for gold discovered by South African research group Autek are expected to lead to an extra demand of 280 tons in 10 years, Thompson said.
The first new commercial product developed by Autek, formed by South Africa's AngloGold Ashanti in 2000, is a catalyst to be used in gas masks.
Gold can be used as a catalyst at room temperatures, unlike other substances such as platinum, widely used in auto catalysts to clean pollution in exhaust fumes.
Currently gas masks use carbon, but a canister with a gold catalyst to filter out carbon monoxide would be lighter and smaller.
Autek, which has 52 researchers and collaborates with 19 universities, started discussions with catalyst manufacturers about the gas mask product late last year.
The product is expected on the market in the first half of 2007.
The new product is expected initially to need around 10 tons of gold per year, but there is good potential to develop other catalytic devices using gold for cleaning air in homes and public areas such as restaurants.
Total use of gold in catalysts is expected to boost gold consumption by 200 tons within 10 years.
SUPERCONDUCTORS
The other main new industrial use for gold would be in as a layer in high-temperature superconductors for use in electricity transmission and electrical devices.
Autek is also busy working on a host of other applications for gold, including biomedical uses as an anti-cancer treatment.
One research project in cooperation with the universities of Liverpool in the UK and Parma in Italy is developing medical uses based on nanotechnology. A nanometre is one millionth of a millimetre.
Applications would include a highly sensitive biosensor, to do multiple tests on a single droplet of blood.
Autek also gets funding from South Africa's two other main gold producers, Gold Fields and Harmony Gold.
Ramifications of these Industrial uses for Gold is for Gold Jewelry Prices to go significantly higher over the next few years.
U.S. Lawmakers Oppose Sale of IMF Gold Stocks.
Reauters this morning reports that a dozen U.S. lawmakers have told U.S. Treasury Secretary John Snow to oppose proposals for the sale of some of the International Monetary Fund's gold stockpile to pay for debt relief for the world's poor nations.
These 12 senators from U.S. mining states said sales of the IMF's 103 million ounces of gold reserves, the world's third-largest, would hurt gold producers and cause job losses, including in impoverished countries like Peru and Tanzania.
The U.S. Treasury is likely to march in lockstep with the senators' arguments.
"We do not believe it is necessary to sell IMF gold to achieve debt relief for the poorest countries. We will review the IMF report on proposals to fund debt relief when it is released," Treasury spokesman Rob Nichols said.
The letter is signed by senators from the U.S. gold-rich states of Nevada, Colorado, Montana, South Dakota, Idaho, Utah, Alaska, New Mexico, California and Washington.
"We believe that careful consideration must be given to any proposal that could have such adverse effects on this important commodity market, and the businesses and communities in the U.S. and around the world that are affected by it," the senators wrote in the Jan. 31 letter.
The U.S. executive board member to the IMF is barred from voting to sell IMF gold reserves unless the U.S. Congress has approved the move first.
Finance chiefs of the rich Group of Seven nations asked IMF Managing Director Rodrigo Rato last weekend in London to report back by April on proposals for using IMF gold reserves to write off debts of the fund's poorest borrowers.
In the letter, which preceded the G7 London meeting, the senators noted it was the second time in five years that "serious proposals have surfaced that would effectively raid a core reserve asset of the IMF."
The lawmakers said the threat of gold sales in 1999 pushed gold prices to 20-year lows, caused unemployment, while several mines had to close in western U.S. mining states.
The senators said they did not oppose debt relief and urged the U.S. Treasury and IMF to develop "more viable and less disruptive alternatives to IMF gold reserve sales."
"We doubt that IMF gold sales -- which were soundly rejected as a policy matter just five years ago -- will make any more sense today," they added.
Gold traders in anticipation of an IMF move to sell Gold reserves, sold Gold earlier this week to the point where Gold tested it's support level at $411.00. With the liklihood that Gold reserves will not be sold by the IMF in response to the Senators' letter, the metal has strongly rebounded in the last two days to it's current $418.00.
Platinum 585 Disclosures: JVC and FTC Consider Guidelines.
The US-Federal Trade Commission (FTC) stated that jewelry products
using 585 Plat.O PGM, is neither prohibited nor allowed, and warned
the proposed product description is insufficient disclosure. In a
letter to the Jewelers Vigilance Committee (JVC,) the FTC said
additional information must be included when selling the product to
distinguish this metal from other platinum products.
FTC's response follows a request made by the JVC on behalf of
platinum jewelry designers, manufacturers, and retailers to include
an industry-wide comment along with the staff opinion letter regarding
lower purity platinum and trademarks.
Present guides state that in order for a product to be marked or
described as "platinum," the product must contain a minimum of 500 ppt
pure platinum and the mark or description must disclose the amount in
ppt of the platinum group metals in the product. The FTC will publish
a Federal Register Notice soliciting comment from the industry to
gauge whether or not the guides should be amended.
585 Platinum can be easily detected because it is noticeably lighter than 900 and 950 Platinum. Platinum products must be stamped and be clearly visible.
Gold, Platinum Up!
With the Chinese New Year celebrations, over, Chinese and Hong Kong Gold traders are back in the market in full force.
Gold is up this morning over $7 to $423.00 and Platinum is up $5 to $877.00.
China Looks To Push Ahead With Palladium
Because of the recent increases in price for precious platinum (Plat= $850 vs. Palladium = $183 as of 2.15.05), China will look to switch much of its manufacturing to Palladium (one of the family of precious metals) as a cheaper alternative.
Read about it here.
Activists Protest Against Precious Gold On Valentines Day
If you did some last minute jewelry shopping in the New York City Diamond District this past weekend, you would have met some very loud protesters (literally right outside our diamond headquarters) who oppose some of the gold mining practices.
The "No Dirty Gold" campaign, launched by nongovernmental organizations Oxfam and Earthworks a year ago this week, claims that U.S. Valentine's Day sales of gold jewelry leave 34 million metric tons of waste worldwide. Campaign organizers claim Valentine's Day is the number one day for gold jewelry sales in the United States.
Protesters stood in front of jewelry stores throughout the United States, handing out cards with the message "Don't tarnish your love with dirty gold." One protester, dubbed "Ms. Godzilla" stood on New York's Fifth Avenue shopping district wearing a skull mask.
"Gold loses its luster when it is produced at the expense of healthy communities, clean water and human rights," Payal Sampat, international campaign director of environmental group Earthworks, said in a statement.
Gold and Platinum Surge!
Gold is up to $431.45 and Platinum to $875.00.
Gold Surging!
Reuters reports this morning that Consumer demand for gold jumped seven percent in 2004 -- the first rise in four years -- with sharp price rises failing to deter buyers, the industry-backed World Gold Council (WGC) said on Thursday. Analysts polled by Reuters in January expect the price to extend gains in 2005.
On a regional basis consumer demand, including jewellery and retail investment, rose 17 percent in 2004 in India -- the world's largest gold market.
Demand in major consumer China was up 13 percent in 2004, with better designs and higher gold prices helping to brighten the metal's allure.
Platinum Day 2005 Comes To New York City
Platinum Guild International USA (PGI-USA) plans its 13th annual Platinum Day Symposium on March 5, 2005, at the Fashion Institute of Technology located in New York City.
Platinum Day is devoted to pure platinum education by top-ranking industry authorities in design, manufacturing, and distribution who will address a wide range of issue integral to current trends including; technical instruction, industry issues, and sales-building tactics.
For the 2005 event, opening key note presentation is titled: The Celebrity Impact on the Jewelry Industry by Carol Brodie-Gelles, global director of communications Harry Winston. Leon Hall, television fashion expert and co-host of E! Entertainment, and Michael O’Connor, senior vice president of PGI-USA will follow Brodie-Gelles.
Many programs devoted to platinum will run throughout the day offering overview information on the platinum market and the high consumer demand for platinum jewelry.
White Gold "Whiteness".
Manufacturing Jewelers and Suppliers of America (MJSA) and the World Gold Council released the White Gold Whiteness Index Monday, providing a standard of color identification for white gold.
The index was designed so that retailers, manufacturers and metals suppliers would have a common standard with which to describe white gold color. It consists of a template containing a seven-sample comparison chart that provides foil patches of controlled color, to help qualify white gold from pure white to off white.
The index, designed as a communication tool within the industry, is the fruit of 18 months of effort by the White Gold Task Force, a team of jewelers, smelters and manufacturers brought together to create a standard reference that can be applied to white gold description throughout the supply chain and around the world.
The Index allows white gold samples, either raw metal or finished jewelry, to be classified as: Grade 1, Good White, which measures less than 19 on the Yellowness Index and does not require rhodium plating; Grade 2, Reasonable White, measuring between 19 and 24.5 on the Yellowness Index, which makes rhodium plating optional; or Grade 3, Poor White, measuring from 24.5 to 32 on the Yellowness Index, and requiring rhodium plating.
While this index is interesting, the fact is that all worked Gold jewelery pieces, no matter how "white" requires some degree of rhodium-plating in the finishing process.
Gold Surging!
U.S. gold futures snapped back from an early downturn to reach a 2005 high on Friday morning after a report showed the U.S. trade deficit was wider than expected in January.
Gold is at $446 and a breakthrough past the critical level of $450.00
is expected in the near future.
Gold Production Down in South Africa.
South Africa’s gold production fell by 8.8 percent to 342.7 tons in 2004, the lowest level of gold production since 1931 according to the Chamber of Mines of South Africa.
The drop in production was in part caused by the falling dollar (against South Africa’s rand,) and by the continued rise in mining costs, which are paid in rand, and to aging mines.
Despite the spot gold price rising 12.6 percent to $409 per ounce in 2004, the 14.7 percent appreciation of the rand boosted the currency ahead of rising gold prices as they fell by 3.8 percent. The rand gold price had already fallen a notable 15.8 percent in 2003 compared with 2002.
Further complicating gold mining was an 18 percent increase in water fees, a 30 percent higher cost of steel used at the mines, and freight tariffs rose 51 percent from 2002.
Reduced Gold production should put upward pressure on prices as demand is increasing. Current Gold price is $429.55, having hit a high earlier this year 0f $441.00. The weak dollar and rising oil prices will continue to bolster Gold and serve to increase prices.
Gold Predicted To Rise To $725.00 an Ounce.
By the year 2010, as China becomes the leading jewelry consumer, Merrill Lynch & Co., predicts gold may increase to around $725 per ounce.
Graham Birch, fund manager for Merrill Lynch, told Bloomberg News that consumers in China are growing their wealth, and that they have high savings rates, which is all-ripe for driving jewelry sales.
In 2004 China's economy grew 9.5 percent to $1.65 trillion, and retail jewelry demand for gold rose 11 percent to 224 tonne, according to GFMS Ltd.
But another analyst didn't agree, Bloomberg reported that Barclays Capital expects gold to drop about 10 percent by year-end 2005. Gold was trading mid-day July 15 at around $420 per ounce.
Gold Shines Bright In Asia!
Reuters today reports that the fascination, importance and esteem of Gold among Asian peoples is on a much higher level than it is here in the United States or in Europe.
Villagers in Indonesia may wear one or two gold teeth to boost social status. In India, parents will not marry off their daughters without giving them some gold jewellery for financial security.
Ancient texts have talked about Indian merchants venturing on dangerous voyages to distant lands in search of gold. In China, gold inlay was applied to bronze objects by at least 1200 B.C.
Gold -- the Glowing Dawn -- has fascinated Asia for centuries and its demand is likely to only increase in the years ahead, led by China which is fast becoming the last gold-crazed nation in this region.
In Asia, the yellow metal is not only an item of adornment but also an investment -- something that holders in quake-prone Japan can sell back for cash in times of trouble.
“In a longer term, you ask people whether they have confidence in the US dollar? Not really, right?” asked Albert Cheng, Far East managing director of the World Gold Council.
“Gold is a good financial vehicle where you can put your money in,” he told Reuters in Singapore.
Several Asian countries have seen an increase in demand for gold for jewelery and investment in recent years, reflecting economic growth and the metal’s growing popularity.
The world’s biggest buyer, India, it is estimated will consume 600 tons of gold this year, up from around 590 tonnes in 2004. India’s gold demand surged 17 percent in 2004 from a year earlier.
China, another main buyer whose consumption may eventually match India’s, is likely to see demand rising by 10 percent this year as the country liberalzes both its bullion market and diamond and jewelery markets to the West and Europe.
Dealers and analysts say investors have diversified into hard assets such as gold because of the significantly high U.S.A. trade deficit and China’s revaluation of the yuan -- a move which will lead to stronger Asian currencies and a weaker dollar.
A weaker dollar means a more affordable price of gold, which is quoted in US dollars and currently stands at around $425 an ounce.
“In a country like India, we don’t have enough safe investment alternatives. People also have money in banks, but they want to create a portfolio and gold is an important part of the basket,” said Ranjeeth Rathore, a dealer in Madras.
“I have seen that when prices are low, people don’t listen to any investment advice. They say they want gold. That’s it.”
Indeed, gold prices have been volatile in recent months, touching a 3-month high of $443.60 in June, just a few dollars away from this year’s peak at $446.70, before profit-taking and a firming US currency erased some of the gains.
Gold hit a 16-1/2-year high of $456.75 in December.
But these choppy prices hav failed to dampen the demand in India, where jewelery forms an important part of Hindu marriages, with parents giving their daughter gold for financial security.
Hindus treat gold as an auspicious metal and like to buy and give it as a gift during religious festivals.
“The first choice of Indians is gold. It’s a sensible investment. They want to invest in something which is tangible,” said Rajesh Mehta, chairman of Rajesh Exports Ltd, India’s largest jewelery exporting firm.
“It is the best saving investment available anywhere in the world. Gold is the only commodity in which you can invest and can also use,” he said.
The situation is be bit different in Indonesia, where consumption could fall this year because of a firm gold price and record-high oil prices, which cause prices of basic essentials to rise. Indonesia, Southeast Asia’s largest gold buyer, consumed 88.9 tons of gold in 2004, up from 82.7 tons in 2003.
“Consumption may be below 80 tons. The gold price stays high at above $400 while buying power is depressed,” said Leo Hadi Loe, an independent analyst in Jakarta.
But Indonesia may be a one-off case. Neighbouring Vietnam saw consumption picking up 10 percent last year to 65 tons as locals sought hard assets for protection against volatile dong currency. Demand is likely to stay firm this year, say dealers.
Analysts are also upbeat on Asia.
“Strength in both China’s economy and currency and heightened investor interest should support Asian gold demand over the next year. And with rivers of energy dollars flowing into the Middle East, demand there shouldn’t be too shabby either,” Commonwealth Bank of Australia said in a report.
Shine On!
Buying Gold and Platinum Jewelry: What You Need To Know.
Shopping for Gold or Platinum jewelry? Excited about getting her that special engagement ring? Blinded by the beauty of all those gorgeous rings in the jeweler's tray? A bit confused by all of the choices?
Don't blame you. It can be daunting.
Beyond the mesmerizing surface bling-bling, here is what you need to know about the correct composition of Gold and Platinum jewelry products:
1. Make sure that jewelry containing gold or platinum is correctly marked in compliance with the law.
2. The item's karatage must be identified to you in some way (verbally, through signage, etc.).
3. If an item is stamped to indicate the quality of metal it contains, it must have a trademark in close proximity to the quality mark. (A trademark is a symbol stamped next to the quality mark and may be initials or a logo to identity the make of the item.)
4. Items containing 950 parts per thousand (95%) may be marked as platinum.
5. Items that are 85% or 95% platinum must be marked with the platinum content. Examples: 900Pt, 850Pt.
6. Items containing less than 85% platinum must detail the platinum group metal. Example: 750Pt200Irid. Total parts must equal 950 (95%).
Note: Platinum group metals are: Platinum, Palladium, Rhodium, Iridium, Ruthenium and Osmium.
Gold
10 karat gold is the minimum fineness of gold that may be sold in the U.S. Jewelry under 10kt fineness may not be sold as gold.
Jewelry is made of many different types of gold: solid gold, gold plate, gold filled, gold overlay, gold electroplate, gold flashed/washed or rolled gold plated.
Platinum Rings
Platinum is a heavier and denser metal than white gold and is more expensive than gold which contains a combination of alloys. Platinum rings are extremely appealing for the following reasons:
* Platinum is incredibly durable (much more so than white gold.)
* Platinum will hold your loose diamond or gemstone more securely than white gold which is a softer, more pliable metal.
* Platinum develops a beautiful sheen or patina over time.
* Platinum rings are hypoallergenic and will resist tarnishing better than gold.
Gold Rings
Gold rings are much less expensive than platinum rings and have the following characteristics:
* Gold will not scratch as easy as platinum.
* Because gold also contains other alloys its color will fluctuate depending on the purity of the gold that is used.
* Gold will tend to fade eventually and will require repolishing.
In Depth Analysis
Platinum
Platinum is valued as the finest metal for jewelry. It is the strongest metal and weighs twice as much as its gold counterpart. Additionally, the exceptional weight and density of this precious metal make it extremely attractive and desirable, and will increase its value significantly. Platinum engagement rings, and platinum diamond rings, have taken the market by storm due to the fact that the sheen or patina of the metal does a better job than gold of highlighting/contrasting the beauty of the set diamonds. The platinum metal is part of a group of six metals including; platinum, iridium, ruthenium, rhodium, palladium, and osmium. These metals are all extremely similar to platinum in their chemistry, density, and weight. As a matter of fact, they are often difficult to distinguish from each other. Platinum jewelry is also unique in that it is the only metal that is of 90% to 95% purity.
Gold
Gold in its purest form is an extremely soft and pliable metal. Because it is so soft and malleable it cannot be used in jewelry since it would disfigure with normal wear. Because of this problem jewelers resort to an alloyed gold known as karat gold (different from "carat" measurement used to characterize diamond weight) Adding alloys to the gold will make the metal tougher and harder so that it may be used in jewelry applications. It will also result in different colors depending on the different combinations used. White gold contains approximately 10-20% nickel, with combinations of platinum, zinc, copper, and palladium. This combination makes white gold a tougher metal than yellow gold. The amount of gold in any given combination is described by karat number. Examples of these numbers would be 14k, 18k, or 24k. The number indicates how many components of pure gold are included in the 24 components that make up the alloy. The following chart illustrates these combinations:
10k = 10/24 = 41.67% purity of gold
14k = 14/24 = 58.33% purity of gold
18k = 18/24 = 75.00% purity of gold
24k = 24/24 = 100% pure gold
Gold Near 8 Month High As Oil Surges!
Gold traded near an eight-month high after rising yesterday as crude oil prices advanced to another record and the dollar weakened, boosting bullion's appeal as a hedge against inflation and an alternative investment.
Crude oil rose to a record $66.05 a barrel in Asian trade today, after a fire at a Sunoco Inc. pipeline heightened concern U.S. refineries may struggle to meet second-half fuel demand. Investors buy gold in times of inflation, which erodes the value of fixed-income assets such as bonds.
Gold for immediate delivery rose as much as $1.40, or 0.3 percent, to $447.30 a troy ounce. It traded 10 cents higher at $446.00 an ounce. It reached an intraday high of $447.42 an ounce yesterday, the highest since $450.95 was posted on Dec. 8, 2004.
Gold for December delivery rose 10 cents to $451 an ounce on the Comex division of the New York Mercantile Exchange in after- hours trading. Yesterday, it rose as much as 2.4 percent to $452.70, the highest in eight months.
How this will affect jewelery prices remains to be seen. Continued rise in Oil prices coupled with political instability in Iraq and Saudia Arabia over the next few months will surely translate into increased prices for Gold and Platinum jewlery as we head into the very important Christmas shopping season.
Stay tuned, folks.
Gold Poised for Major Takeoff!
Gold futures marked their seventh winning session in a row Friday, closing 1% above the week-ago level, as at least one analyst touted the possibility of $500-an-ounce gold by the end of the year.
Gold futures prices may climb as much as 10% by the end of 2005 "if the economic conditions show further momentum, such as more employment gains are above 192,000 on average per month for the next two consecutive months," said John Person, president of National Futures Advisory Service.
That would put gold at the $500 level, he said.
On Friday, gold for December delivery closed at $453 an ounce on the New York Mercantile Exchange, up $2.30 for the session and up $4.50 for the week. The contract, which has been on the rise since Aug. 31, closed at its highest level since March 11.
Federal deficits are expanding, concerns over rising inflation exist, fears that the Fed may be forced to keep interest rates in a more accommodative environment due to the effects from Hurricane Katrina are simply the more recent catalysts for gold's recent advance.
And global demand for gold has increased on expectations that holiday-related jewelry sales will also boost buying.
Gold is "primed for new highs thanks to a weakening U.S. dollar, continuing strong physical demand and simply because relative to most other investments, it remains 'dirt' cheap," said Peter Grandich, editor of the Grandich Letter.
Stay tuned.
Gold Is Red Hot!!
Bloomberg News Services reported today that Gold may rise to a 17-year high on increased demand from jewelry makers, the biggest users of the precious metal.
Twenty-four of 35 traders, investors and analysts surveyed Sept. 8 and Sept. 9 urged investors to buy gold, which rose 1 percent last week to $453 an ounce in New York and up 13 percent from a year ago. A rally above $458.70 would be the highest price since June 1988. Six respondents said gold will fall, and five forecast little change.
Jewelers bought a record $38 billion of gold in the 12 months ended in June as the global economy grew, the producer- funded World Gold council said Sept. 7. Jim DeNatale, part owner of a New York jewelry shop, said he increased inventory by 30 percent this year to meet demand and adjusted prices in his catalogue to reflect costs that are up $25 an ounce from 2004.
``Jewelers will pay these prices and pass them on to their customers,'' said Thomas Au, an analyst at financial consulting company R.W. Wentworth in New York.
Gold futures for December delivery rose $4.50 on the Comex division of the New York Mercantile Exchange last week, a gain anticipated by the majority of analysts surveyed Sept. 1 and Sept. 2. Bloomberg's survey has correctly forecast gold's direction in 40 of 72 weeks, or 56 percent of the time. A futures contract is an obligation to buy or sell a commodity at a set price by a specific date.
Gold futures for December delivery rose as much as A$2.80, or 0.6 percent, to $455.80 an ounce in after-hours electronic trading, and traded at $454.10 at 3:16 p.m. Sydney time.
Rising Demand
Jewelers accounted for 68 percent of world gold demand in 2004, said London-based GFMS Ltd. India, the largest market for gold, increased demand for gold jewelry by 42 percent in the second quarter, GFMS said. Taiwan's buying rose 27 percent, and Saudi Arabia jumped 18 percent. Gold is sold mostly in dollars.
Analysts expect gold demand to grow in the second half of the year as jewelers stock up this month and next for the wedding season in India and the year-end holidays in Europe and the Americas. Gold has risen from Sept. 1 to Oct. 31 every year since 2000, including 4.5 percent last year.
``At this point, there are no signs that prices are a deterrent,'' said George Milling-Stanley, New York-based manager of investment and market intelligence at the World Gold Council. ``Most people in the jewelry business believe prices will continue to go up.''
The record demand for the year through June is $3 billion higher than the previous record of $35 billion for the 12 months ending in June 1997, the World Council said.
`Very Hot'
``Gold is definitely becoming hot again,'' said Alexandra Nazarian, a gemologist with Denatale Jewelers Inc., the New York shop that Jim DeNatale owns with his three brothers. ``People are asking for yellow gold. Gold-toned bangles are very hot.''
Customers haven't been bothered by the price increase, DeNatale said. The most popular items are a $500 charm bracelet and a $1,000 14-karat necklace that wraps around the neck three times, he said.
Gold also may benefit from concern that inflation will accelerate as damage from Hurricane Katrina helps keep energy prices high, prompting some investors to buy bullion as a hedge, analysts said.
Gold is up 2.5 percent since Katrina swept through the Gulf of Mexico on Aug. 29, causing an estimated $200 billion in damage. Crude oil surged to a record $70.85 a barrel on Aug. 30. In a separate survey, analysts and strategists expect oil prices to rise next week on speculation output of crude and refined products, curtailed by the hurricane, may take months to recover. Oil prices, which fell 5.2 percent this week, have more than doubled in the past two years.
Gold hits 17-year high, ‘and going UP!
GOLD surged to 17-year highs yesterday,lifted by a combination of high oil prices, increased demand from Asia and a negative outlook on the US economy after Hurricane Katrina.
Analysts remained bullish on the metal, saying bullion could reach $500/oz by early next year.
Gold futures gained 1% to $459/oz yesterday, the highest level since June 1988, as the prospect of economic slowdown and signs of rising inflation drove US investors to the safety of gold.
Gold also rose yesterday after Argentina’s central bank said it might increase gold reserves as a hedge against inflation and protection against a financial crisis.
Wiphold Treasury Solutions’ chief economist, Craig Zaayman, said: “The current surge in gold prices is as a result of a culmination of a whole lot of factors, which have contributed to slowly driving the market up.”
Demand from Asia, particularly China and India, had increased ahead of the festival season.
Platinum is also rising, now selling at $922.00/oz
Anybody Remember What Silver Looks Like??
Do you remember Silver? That such a metal actually exists? I think the last time Silver was front and center on the Evening News was many years ago when the Hunt Brothers of Texas unsuccessfully tried to corner the Silver market and lost their pants.
Well, guess what. SILVER IS BACK with a vengeance!
Silver, which is used in a wide variety of applications in several industries, including the electronic, jewelry and photographic sectors, currently trades around $7 an ounce on the New York Mercantile Exchange.
That's a far cry from the peak level around $50 in the 1980s, but that may change soon enough.
"No other commodity exists in such short supply as silver" and "silver demand has exceeded production for 15 years now," says Ned Schmidt of the Value View Gold Report.
Indeed, the physical silver market operated in a deficit for the fifteenth-consecutive year in 2004, according to the CPM Group, a commodity research and consulting-services provider based in New York.
In its Silver Survey report released in late August, the group estimated that newly refined supplies of 750 million ounces fell short of industrial demand by 44.5 million in 2004. And the deficit, though not quite as high, will likely reach 31.4 million this year, with total supply estimated at 774.3 million.
The supply deficit could spell more gains for silver on the futures market, which posted a climb of around 40%, or $2 an ounce, over the past two years.
"As you analyze silver's potential, the fundamentals become powerfully bullish," said Paul Mladjenovic, a New Jersey-based certified financial planner at PM Financial Services.
The "chronic silver shortage ... is becoming more acute," he said.
Demand factor
Overall demand is growing as silver is used in cell phones, military technology and a range of new applications in the healthcare sector and alternative energy technology.
On the other hand, Peter Grandich, editor of the Grandich Letter, takes a contrarian view and believes that the poor man's gold will continue to "play second fiddle to its namesake and while it can have its own moments in the sun, it will continue to need a higher gold price to help lift it up."
But this appears to be a lone voice.
Indeed, Philip Klapwijk, executive chairman at precious metals consultancy GFMS Ltd., expects gold to climb toward the $480 mark before the year is over because of rising investor demand for the metal.
"A similar phenomenon is likely in silver, a metal that historically tends to follow gold," he said.
It's true that silver is an industrial metal and is affected by economic demand, but even during the depression of the 1970s, "silver tracked gold because the Fed was creating 'money' -- actually, banking system credit -- out of thin air," said John Stafford, editor of Stafford's Investment Strategy Letter.
"More 'money' and credit was created 'out of thin air' by the Fed and world central banks in the single decade of the 1970s than the entire cumulative total in all the world's previous history," he said, citing an academic study done in the early 1980s.
So it's no wonder that silver went to $50 from $1.29 an ounce, and gold to $850 from $35 in early 1980.
And in the framework of a rising gold price, silver is actually the "coiled spring," Schmidt said.
Traders "will move to silver for the unrealized opportunity it represents," he said, noting that the silver market simply "cannot take incremental demand without its price being moved materially higher."
Price outlook
Against this backdrop, there is valid sentiment that silver will end the year above the $7 mark.
The key levels for silver to watch are $7.25 and $7.50, Schmidt said. "As they are taken out, silver will move on to $9 this fall."
Klapwijk would only go as far to say that "another spike above the $7.50 mark is very likely before year-end."
"Long term, I believe that silver will easily exceed its all-time high of $50."
Analyst Stafford sees prices reaching $8 or more this year and maybe even trading in the $12 to $15 range in five years.
Given silver's growing uses, Mladjenovic expects prices to see a very strong upward movement during 2006 to 2008, with silver having an opportunity to top its recent April 2004 high of $8.50 by the end of 2005 or early 2006.
Expectations are for Silver to trade in the $8 to $10 range in the fourth quarter of this year, or no later than the first quarter of 2006 with $50 a reachable target within 2-5 years according to Analyst Mladjenovic.
Gold Rises for 5th Straight Day!
Gold rose for the fifth straight day as a surge in energy prices renewed concern the pace of inflation may accelerate.
Gold for immediate delivery yesterday touched $468.65 an ounce, the highest since January 1988, as oil prices jumped 7 percent on concern Tropical Storm Rita may strengthen into a hurricane before striking Texas. Investors buy gold to hedge against inflation, which erodes the value of other fixed-asset investments, such as bonds.
`Speculators continued to buy on the back of inflationary worries and uncertainty about the U.S. economy,' Darren Heathcote, head of trading at N.M. Rothschild & Sons (Australia) Ltd., said in a report e-mailed today.
$525 an Ounce?
Gold for immediate delivery may rise as high as $470 an ounce this quarter, from a previous forecast of $450, Barclays Capital said in a weekly report e-mailed yesterday from London.
Barclays Capital, the investment-banking arm of Barclays Plc, is one of the nine market-making members of the London Bullion Market Association.
Newmont Mining Corp. President Pierre Lassonde expects gold to rise to $525 an ounce by January, according to an interview published yesterday in Le Temps.
Gold prices will then stabilize within a range $25 higher or lower than $525, Lassonde told the Geneva-based newspaper. The surge in prices will be triggered by a depreciation in the dollar, the newspaper quoted him as saying.
Stay tuned.
Big Funds Push Gold To-18 Year High! Silver & Platinum UP!
Gold touched 18-year highs yesterday as surging commodity prices signalled accelerating inflation across the world.
Big funds drove the price of gold to modern records in all major currencies, reaching $471.40 an ounce in London before falling back slightly on profit-taking.
Ross Norman, head of TheBullionDesk, said gold had lagged base metals and energy resources in the current commodities boom but is now catching up as investors begin to suspect that the world's central banks are responding to the oil shock "the lazy man's way" - by yielding to creeping inflation.
"The mindset has changed. The big funds are buying into strength and holding. We've broken through very important chart points and there are now prospects of $600 next year," he said at a Dow Jones-AIG event.
Of great interest but little noticed is the fact that Copper and Nickel have increased over 200% over the past two years, driven by surging industrial demand in China and resilient US growth. Oil fell slightly yesterday to $64.32 a barrel for Brent crude in late trading after OPEC ministers pledged to raised output by 2million barrels a day, but it remains at levels viewed as unthinkable just five years ago.
Costly commodities have pushed US inflation to an annual rate of 3.6 %, reaching 5% over the past six months. Interest rates are barely keeping pace even after the US Federal Reserve's 1/4 point rise to 3-3/4% yesterday - an ultra-lax stance heavily criticised by the Bank of International Settlements.
In Britain, inflation reached 2.4% in August, the highest in eight years. With the M4 money supply still ballooning at 10.2% a year, there are concerns that inflation may burst through the Bank of England's upper limit of 3% this Autumn.
Analysts say the 13% rise in gold since May is different from earlier rallies in its four-year climb back into favor. Previous surges largely reflected weakness in the dollar, leaving gold almost static against the euro.
Almost unnoticed but of tremendous significance during this latest surge of Gold has been the very strong price increase of Platinum, now selling at $929/0Z.
Silver, the poor Man's Gold, is quietly moving up as well...now selling at $7.29/OZ.
As we have mentioned in the past days these price surges in the Precious Metals coupled with worldwide economic inflation, Oil, and the slow recovery from Katrina, will increase prices for consumers on diamonds and jewelry during the upcoming Holiday shopping season.
BREAKING NEWS! Gold at 18-year high, UP 1% on week!
Gold ended the week at $475.25, an 18 year high! Silver also touched a 7-month high, closing at $7.72, an increase of 3% over last week's close! Platinum was up to $938.00/oz.
Analysts attribute these increases to a weaker U.S. dollar and renewed concerns over potential terrorist acts.
Nex major resistance level for Golds $497-505 which should be tested very soon.
Platinum on The Rise.
Platinum surged in Europe today and was seen hitting a 25-1/2-year high as speculators continued to buy the metal, used mainly in jewelery and car catalytic converters. Spot platinum was quoted at $941/944 a troy ounce, just below the April 2004 peak.
Analysts believe Platinum will hit $950.00 in the near term as it has the strongest fundamentals of all the precious metals.
If these prices firm, look for price increases in Platinum jewelry this upcoming Holiday shopping season.
Platinum Headed for $1000!
Marketwatch reports today on Platinum prices having more than doubled over the past four years, and that's no surprise given that the white metal is more than 30 times rarer than gold.
Demand for it has kept pace with or outpaced supplies since 1999.
"Platinum is essential and precious," and its use is growing, said R. Michael Jones, president of Platinum Group Metals Ltd., whose Web site touts the metal as "vital to the production of 20% of the world's consumer goods."
Platinum is everywhere -- used in numerous applications for the auto, petroleum, and chemistry industries, and it's a highly sought-after metal for jewelry.
Its price reflects its many uses -- platinum costs twice as much as gold.
December gold finished at $463 an ounce Thursday, while January platinum futures closed at $925 an ounce -- near the record $951 touched Oct. 12.
In keeping with that double value, analysts predict that as gold prices head for $500 an ounce, platinum may set its sights on the $1,000-an-ounce mark.
Both gold and platinum "have some real upside potential in the short and medium term," said Paul Walker, chief executive of precious-metals consultancy GFMS Ltd. in London.
Ultimately, the best metals investment would be gold, in part because it's "still an alternative to paper money," said Peter Grandich, managing member of Grandich Publications, which publishes commentary on the mining and metals markets and other topics.
But "we've seen increased investment demand across the board in metals, and some of it finally spilled over into the platinum-group metals," he said.
A true rarity
Recently, platinum prices have been climbing on the back of "reasonably strong" market supply and demand fundamentals and dollar weakness, said Walker.
In 2004 total world platinum supplies stood at 6.5 million ounces, but demand was 6.58 million, according to data from platinum experts Johnson Matthey.
Compared with 1999, that's a nearly 34% rise in supply, but also an almost 18% climb in demand, Johnson Matthey data showed. See Johnson Matthey's "Platinum 2005" report.
The metal is "35 times rarer than gold and is geologically unlikely to be found in large amounts as a result of the 'freak of nature' process that concentrated it in the Bushveld Complex of South Africa," Jones said.
Indeed, 75% of the world's platinum is mined in South Africa, according to Sean Brodrick, the investment director for the Sovereign Society, a publisher of global investment opportunities.
The rest of the world's platinum is mined in Russia, the United States, Canada and Zimbabwe, according to Johnson Matthey. And, all in all, there are fewer than 10 significant platinum-group-metal-mining companies in the world.
Platinum is '35 times rarer than gold and is geologically unlikely to be found in large amounts as a result of the 'freak of nature' process that concentrated it in the Bushveld Complex of South Africa.'
The Bushveld Complex is the second most exclusive mineral real estate in the world -- second only to diamond pipes, and they are spread all over the world.
By far, the bulk of platinum's demand comes from the auto and jewelry industries, with about 40% of consumption originating from the manufacture of auto catalysts and 38% coming from the jewelry sector in 2004, according to a Johnson Matthey report.
Total demand in 2004 reached 6.58 million ounces, up 50,000 ounces from a year before, JM said.
Auto-catalyst consumption rose 7% in 2004 to 3.5 million ounces on the heels of growing European diesel-car production and by tightening emissions limits for cars in Europe and for heavy vehicles in Japan, JM reported.
"Diesel engines are becoming more popular due to higher energy prices," and platinum can't be replaced by palladium in those engines, said the Sovereign Society's Brodrick.
Demand for platinum, especially in bridal category, is at an all-time high.
Meanwhile, jewelry demand fell by 12% to 2.2 million ounces last year, its lowest point since the late 1990s, JM said, as high and volatile prices in the first half of last year led to a "significant" fall in purchases from the Chinese jewelry trade.
But Antonia Camaano, a New York-based spokeswoman for Platinum Guild International, pointed out that, overall, "demand for platinum, especially in the bridal category, is at an all-time high," with 81% of brides surveyed by the Fairchild Bridal Group indicating they wanted platinum engagement rings.
Platinum jewelry is 90% to 95% pure, compared with 18-karat gold's 75% purity, she said. Platinum is also hypoallergenic and the densest precious metal in the market -- well-suited to hold a diamond securely in place.
Do You Know What Palladium Is?
Palladium rose to its highest level in 11 months on Wednesday, while gold took a breather after a fund-led rally pushed the metal to a one-week high.
Platinum, a precious metal mainly used in jewellery and in car catalytic converters, moved closer to a recent 25-1/2 peak. Silver also gathered strength in line with other metals.
Spot gold was at $471.40/472.20 an ounce by 0934 GMT in European trade, down from $472.20/473.00 last quoted in New York on Tuesday, when it rose more than $7.
"There was a wave of new money coming into the commodities complex," said Jeremy East, global head of precious metals at Commerzbank. "This trend will probably continue."
He said relatively less liquid metals such as platinum and palladium could move dramatically higher with a comparatively lower investment, but noted a rise in physical demand.
"The fact that we are moving back to these levels again tells us the market wants to go up. I am still bullish and gold will soon re-test $475, maybe tomorrow," said one dealer in Singapore.
Some dealers said gold was gaining strength on worries about inflation and the U.S. economy. Gold rose to a near-18-year high at $480.25 two weeks ago before profit-taking kicked in.
"My concern would be that speculative position is getting very very long, but in the short term it does look that momentum is higher rather than lower," said a European metals analyst.
PALLADIUM, PLATINUM GAIN
Gains among other precious metals inspired fund buying in thinly traded palladium, a metal used in jewellery and auto catalysts. Spot palladium rose as high as $217 before easing to $216/219 an ounce.
It was traded at $213/217 an ounce late in New York on Tuesday.
Some dealers were bullish on palladium on the prospect of more demand in China, where many jewellers have abandoned pricey sister metal platinum in favour of palladium.
"Gains in Tokyo are supporting the price. We saw some buying in Asia because people think jewelers and auto makers are using more palladium," said one dealer in Tokyo, who pegged the upside target at around $220.
The benchmark palladium August contract on the Tokyo Commodity Exchange rose 26 yen per gram to 806 yen.
Platinum rose to $941 an ounce but declined to $939/943. It was quoted in the U.S. market at $936/939.
Silver rose to $7.80/7.83 an ounce from $7.78/7.81 in New York.
Platinum Hits 25 Year High!
Platinum ended today at $960/oz!
Platinum prices have hit highs not seen for more than 25 years, driven by growing demand for the metal in jewelry and catalytic converers.
Prices have risen nearly 130% over the past four years and
world demand for platinum is currently outstripping supply.
It is a key component for catalytic converters in diesel engines, which are growing more popular as oil prices rise and pollution rules are toughened.
Russia and South Africa are the two main producers of platinum.
The dramatic price increases in Precious Metals over the past several months has garnered the attention of Pension Funds who are increasing their allocations in this area.
Demand for a similar precious metal, palladium, is also rising because it is being used as a cheaper alternative for jewelery, particularly in China.
Prices for palladium, which can also be used in catalytic converters, now stand at about $240 per troy ounce.
Palladium: The Precious Metal Nobody Knows:
Palladium may rise 21% in 2006 as Chinese jewelery demand gains and carmakers use more in catalytic converters to replace platinum, said Beijing Antaike Information Development Co, an adviser to the Chinese government.
Palladium may average $230 an ounce next year, from $190 in 2005, Jin Xiangyun, an analyst at Antaike, said in an interview from Beijing on Nov. 9. The metal has averaged $192.80 an ounce this year and traded at $239 at 6:55 am in London, the highest intraday price since June 2004.
Platinum is trading at four times the price of palladium, fueling speculation demand may soar for the cheaper metal for catalytic converters used to cut tailpipe emissions. Demand for jewellery containing palladium may rise 43% in 2005, fuelled by Chinese consumption, according to consultancy GFMS Ltd.
“The huge potential for Chinese use of palladium in jewelery will give a strong boost to market confidence and we’ll see more hedge fund interest in the metal” said Jin, who has followed the palladium market since 2001 and who correctly forecast the platinum price in 2004.
Antaike is a research affiliate of the China Nonferrous Metals Industry Association. It advises the Chinese government on industry policy. Russia’s OAO GMKN Norilsk Nickel is the world’s biggest producer of palladium, used by jewelers in so-called white gold. About 60% of the precious metal is used to make catalytic converters, while some is also contained in electronics.
Jewelery containing palladium was first sold in China in late 2003 and imports of the precious metal may exceed platinum for the first time this year, said Jin.
Palladium prices may more than double by 2008, she said. The metal reached a record $1,125 an ounce in January 2001, more than four times current levels, amid a shortage of supplies from Russia.
Antaike’s forecast for an increase in prices contrasts with expectations for a decline by Barclays Capital. The company, the securities unit of Barclays Plc, estimates palladium will average $180 in 2006, from $189 in 2005.
Citigroup this month raised its forecast for palladium in 2006 to $265 an ounce. Umicore SA, the world’s third-largest maker of catalytic converters, last year said it developed a way to replace as much as one-quarter of the platinum in the devices in diesel cars with palladium.
Incidenally, Platinum closed this week with a surge to $970.00 and analysts expect Platinum to hit $1000 soon.
WOW!! Platinum!
Ends trading today at $980/oz!
Platinum Over the Last 3 months.
Platinum continues Surge!
Platinum now trading at $985/0z
What Is Happening To Gold?
Gold rose to a 17-year intraday high in trading yesterday as investors bought the precious metal as a hedge against inflation. Gold ended the day at $484.00/oz.
U.S. consumer prices are rising at a 4.9 percent annual pace compared with a 3.7 percent increase at the same time last year, figures from the Labor Department showed yesterday. Gold for immediate delivery yesterday rose 2.3 percent, its biggest one-day gain since July 2004.
``The market has moved higher following renewed interest from speculative investors looking for `safe haven' assets,'' Warwick Schneller, a commodities analyst at Commodity Warrants Australia, said today in an e-mailed report.
Gold for immediate delivery rose as much as $3.40, or 0.7 percent, to $482.70 an ounce, the highest since January 1988.
Gold for December delivery rose as much as $4.40, or 0.9 percent, to $483.50 an ounce in after-hours electronic trading on the Comex division of the New York Mercantile Exchange.
Gold Keeps Rising!
Gold in New York rose to the highest in almost 18 years on investor demand for alternatives to U.S. and European currencies, stocks and bonds, ending the day at $486.10.
Investment in gold rose 56 percent to 118 tons in the third quarter from a year earlier, the producer-funded World Gold Council said today. Investment in exchange-traded funds climbed to 38 tons, compared with a net decline of 2 tons a year earlier, the council said. Gold sold in dollars has rallied 3.6 percent this week, even as the U.S. currency approached a two-year high against the euro.
``Europe doesn't look terribly attractive and the U.S. still has the current account-deficit problem,'' said Tom Boustead, an analyst for Refco Inc. in New York. ``That forces interest in hard assets, and investors are gravitating toward gold.''
Gold for December delivery rose $7, or 1.5 percent, to $486.10 an ounce at 10:53 a.m. on the Comex division of the New York Mercantile Exchange. Prices earlier reached $487.80, the highest since January 1988. A futures contract is an obligation to sell or buy a commodity at a set price by a specific date.
Gold consumption by jewelers and investors was 838 metric tons in the third quarter, up 7.6 percent from a year earlier, the London-based World Gold Council said. Jewelry demand accounts for 73 percent of gold consumption.
Gold has gained 11 percent this year, and the Standard & Poor's 500 Index has climbed 1.9 percent. U.S. Treasuries have returned 1.7 percent, heading for the worst annual performance since 1999, according to Merrill Lynch & Co. data.
Investment-grade corporate bonds have gained 0.9 percent this year, including reinvested interest payments. They are also poised for the worst year since 1999, Merrill data showed. Junk bonds in the U.S. have risen 1 percent in 2005, the worst since 2002.
Gold & Precious Metals Update
Comex gold raised the bar again as the yellow metal
reached fresh 18-year highs Thursday at the New York Mercantile Exchange while gains in silver followed close behind.
The rest of the complex however, including platinum and palladium, took a pause after reaching record highs on Wednesday.
The benchmark December gold contract settled up $7.80 at $486.90 an ounce.During the session the contract traded to a $487.80 high - its highest level since Dec. 29, 1987.
Bill O'Neill, a principal at LOGIC Advisors, said several bullish factors have been underpinning the gold market including a breakout technically, strong European and Asian buying as well as inflation concerns "lurking in the market."
"We are seeing (buying) interest across the board and gold is moving higher
in all major currencies not just the dollar," O'Neill said.
Amid the boldness of the recent rally, O'Neill said he raised his medium-term target for gold to $520-525 an ounce,
up from $485-$490 an ounce.
"These price levels could happen quickly. There might be some resistance around the $500 level but any dips will be bought," O'Neill said.
As gold has broken away from the dollar, O'Neill said tensions in France from recent riots and interest rate differentials are hitting the euro but lending support to gold and the dollar.
Other market sources said the World Gold Council's third quarter 2005 review on gold, released early Thursday, was also supportive to the market.
The Council said investment demand for gold rose by 56% in the third quarter and is on target to move higher in coming months.
The momentum in gold led the way for silver to settle higher.
The December contract reached an $8.140 an ounce high before settling at $8.102, up 10.0 cents on the day.
The platinum market took a pause from its recent record highs seen Wednesday and settled lower on the day. The most-active January contract closed the session down $7.30 at $982.40 an
ounce. During the session, traders said the market was taking a "pause" but would likely continue its climb towards the $1,000 psychological level. Despite the pull-back, traders said the technical chart remains positive and more upside momentum should be seen.
The Palladium December contract dipped to a $252.00 session low but later settled up 60 cents at $262.10 an ounce.
All indicators point to the Precious Metals continuing to move up.
Gold on The March! Extends Rally!
Gold futures set a fresh 18-year high Monday, adding to recent gains on continued strong physical demand, central bank buying and inflation concern.
Gold for December delivery closed up $3.30 at $489.50 an ounce, having earlier touched a high of $490.50 an ounce, its highest level since December 1987.
"The primary factors driving gold today include the threat of inflation, jewelry demand and central government (primarily Russia) buying," said Oscar Nelson, gold trader at U.S. Global Investors. "In addition, gold is increasingly becoming a viable investment alternative in times of choppy stock and bond market action."
Peter Grandich, editor of The Grandich Letter, agreed and added one more factor -- major players caught with short positions.
"I believe groups who have tried to artificially depress gold prices are in serious trouble and can cause a far greater rise than most assume today," said Grandich.
Gold futures added almost $17 an ounce last week with many analysts expecting the metal to surpass the $500 an ounce level before the end of the year and trade above that heading into 2006.
Silver futures ended up $6.60 cents at $8.133 an ounce. Platinum futures closed down $4.50 at $981.60 in a continued pullback from last week's $1,000 an ounce peak. Its sister metal palladium closed up $1.75 at $268.75 an ounce.
Gold on the Way to $500
Gold is up to $493.00 this morning in Asian trading.
We'll see what happens when New York markets open later this morning.
Gold and Platinum now at Record Highs!
Gold now in Asian trading is at $502.15 and Platinum at $1004!
Gold Highest Since 1983!
Gold prices have surged past the $500-an-ounce mark, and more gains are predicted as investors look to protect themselves against inflation fears.
Gold hit $502.30 in Asian trading today, its highest level since February 1983.
Other commodity prices also have been climbing, and platinum topped the $1,000-an-ounce level.
Demand from jewelery makers is helping to boost prices, as is speculation that some central banks want to cut US dollar holdings and boost gold stores.
"The expectations of inflation in the coming year are very high," said Albert Cheng of the World Gold Council.
People are looking for an alternative investment to products such as US dollar-based bonds", he said.
A number of factors have come together to create what analysts are calling a commodities boom.
As well as the worries that inflation will erode the value of bonds and shares, strong demand from Asian economies for metals has been squeezing supply at a time when producers are finding it difficult to boost output.
This time of year also normally sees demand for gold pick up as jewelers prepare for the Christmas holiday period and Indian wedding season, analysts said.
Prices are likely to climb - even though there may be some short-term profit taking - because $500 is an important psychological level which acts as a deterrent until it is broken through.
"Once they are comfortable with this level, it will not deter people from buying jewelery," said the World Gold Council's Mr Cheng.
People tend to buy more when the price of gold is actually upward."
The gold price hit a record of $873 an ounce in January 1980, and hit $502 for one day in December 1987.
Since then it has recovered from lows of about $250 an ounce in 2001 and has surged almost 15% this year alone.
Platinum prices have also climbed in recent months, hitting their highest levels in 25 years, driven by strong jewelery demand and the metal's important role in catalytic converter car exhausts.
Update on Surging Gold & Platinum Prices.
Gold rose above $500 and platinum above $1,000 an ounce on Tuesday when investment funds diversified their portfolios on worries about inflation and geopolitics.
Prices then dipped after breaking through the psychological barriers to touch multi-decade highs.
The metals were vulnerable to further downward correction as huge speculative positions could spark profit-booking, but growing demand, supply constraints and plans by some central banks to buy more gold were expected to support, dealers said.
Gold topped $500 an ounce in Asia for the first time in 18 years, while platinum breached $1,000 an ounce, hitting its highest since 1980, as it tracked gold's gains.
"The investors want to buy and they continue to buy. I see no reason for them to stop. So any pull back will be a buying opportunity," said Peter Hillyard, head of metals sales, at ANZ Investment Bank.
"The investors are diversifying portfolios. There is a feeling that currencies and equities are not necessarily reliable and they are adding to commodities because they see the returns are greater there."
Spot gold retreated to $496.80/497.60 an ounce from as high as $502.30 an ounce in Asia. It closed in New York on Monday at $498.20/499.00.
"People are looking for an alternative investment to U.S. dollar-based instruments. The expectations of inflation in the coming year are very high," said Albert Cheng, Far East managing director for the industry-backed World Gold Council.
But jewelery manufacturers and buyers may need time to adjust to the high prices, Cheng said, as bullion has risen more than 14 percent in value so far this year.
The council said this month that global demand for gold in the third quarter totalled 838 tons, a rise of 7 percent from the same quarter a year earlier, as surging investment demand helped offset a slowdown from the jewelery sector.
Some analysts said gold prices could fall to as low as $475 an ounce on liquidation by investment funds to book profits.
The latest weekly Commitments of Traders report issued by the Commodity Futures Trading Commission on Monday showed a further rise in the speculative net long position in New York's COMEX gold.
But the rally was also helped by reports that Russia, Argentina and South Africa had decided to increase the amount of gold in their reserves, reversing a six-year trend of central bank sales, mainly from Europe.
Platinum stood at $990/995 an ounce after spiking earlier to $1,002. It closed in New York at $989/993.
This year, not enough platinum is being mined and recycled to meet demand for catalytic converters and jewelery, so fundamentals have factored into the buoyant market.
Refining and chemical company Johnson Matthey, which provides fundamental analysis of platinum group metals, said in a recent report that 6.71 million ounces of platinum would be used in 2005, exceeding supply of 6.59 million ounces as demand rises from the auto sector and other industries.
It predicted that output from South Africa, the world's top producer, would be lower than planned and the shortfall would continue to support prices.
Silver inched down to $8.27/8.30 an ounce from $8.35 on Tuesday. A breach of $8.43 would make the price highest in 18 years. Silver finished in New York at $8.35/8.37.
Palladium fell to $260/264 from $261/264.
Gold Hits 23 Year High!
Gold futures in New York raced to their highest level in almost 23 years on Thursday morning, powered by investment fund buying following the breakout above the key $500 an ounce level earlier this week.
The market's recent robust rally also hoisted the other precious metals, pushing silver to an 18-year high and lifting platinum and palladium prices sharply.
At the COMEX division of the New York Mercantile Exchange, February delivery gold was up $6.30 at $505 an ounce by 10:51 a.m., trading from $494.30 to $505.70, which marked the highest price for an actively traded futures contract since February 1983.
At that time, gold reached a high of around $514 an ounce.
"It's fund buying right here," a COMEX floor trader said.
Gold has found favor with hedge funds diversifying into commodities to enhance returns, along with its classic role as a hedge amid economic uncertainty and geopolitical unease.
Also fueling gains were investors' worries about inflation, as well as expectations that Russia, Argentina and South Africa are friendly to boosting the amount of gold in their reserves, analysts said.
The latest peak in February gold surpassed the 18-year peak scaled on Tuesday in then-benchmark December gold, at $502.30.
"The $500 level was a psychological point and we broke through that," said Emanuel Balarie, senior market strategist at Wisdom Financial Inc. "With gold still rising today, I think we are going to crack $600 sometime in 2006."
Balarie felt that one reason gold had room to rise further was that bullion's high of $850, touched in 1980, after being adjusted for inflation today, would be now worth around $2,150 in current dollars.
"Gold is still very cheap when you look at it in that perspective," he said.
However, the COMEX floor trader noted that trade selling and some speculative profit taking had emerged at higher prices this week.
Next resistance was pegged above $505 and then at $506.70 -- its life-of-contract high from Tuesday, before it became the most actively traded month.
Chart support was viewed at $500, $498.40 and $497, traders said.
Dealers said the market was awaiting the U.S. November unemployment report on Friday for a potential reaction in trading.
Brokerage firm UBS said it raised its average per ounce gold price forecast for 2005 to $441 from $434, for 2006 to $520 from $455, and for 2007 to $500 from $435.
Spot gold was quoted at $500.50/501.30, against $494.10/4.90 at Wednesday's New York close. Thursday's afternoon fix in London was at $499.75.
March silver futures rose 15 cents to $8.535 an ounce, dealing from $8.29 to $8.555 -- the highest price since October 1987.
Spot silver fetched $8.42/44 an ounce, from $8.27/29 previously. The fix was at $8.315.
NYMEX January platinum gained $14.10 to $994.50 an ounce. On Monday, futures shot up to $1,011 -- their highest price since March 1980.
Spot platinum firmed to $988/992.
March palladium futures rose $12 to $272 an ounce -- a fresh 19-month high. Spot palladium was worth $265/268.
Stay tuned.
Gold Up $11 This Week!
Gold futures climbed Friday to close at an 18-year high above $500 an ounce, logging a gain of 2.2% for the week, while copper futures finished lower for the first time in six sessions.
Gold for December delivery rose 80 cents to close at $503.30 an ounce on the New York Mercantile Exchange, after climbing as high as $505.50. Prices haven't traded at levels this high since December of 1987.
The contract was up $11 from Nov. 23, which was the final trading day of the Thanksgiving week. February gold closed up 70 cents at $507.
Gains in the precious metal came as the U.S. dollar eased off its highs against the Japanese yen. Treasury Secretary John Snow reportedly said finance ministers of the Group of Seven most industrialized nations will discuss yen weakness at their weekend meeting.
"The dollar sold of against yen after Snow's comments on the G7," said Charles Nedoss, an analyst at PeakTradingGroup.com. Weakness in the greenback oftn spurs investment demand for gold.
But a Treasury spokesman said Snow made no comment on the yen Friday. See Currencies.
At the same time, December copper reached a record $2.183 a pound before closing at $2.1525, down 1.55 cents. Prices for the industrial metal had been climbing since Nov. 23 so it still ended the week 9.6% higher.
Overall, inflationary concerns appear to be growing "with copper exploding and energy prices regaining their footing," said Nell Sloane, an analyst at NSFutures.com.
"Therefore, the gold market appears to be benefiting from a number of bullish factors again, and that should help the market grind out even more gains on the charts," she said in a note to clients.
December silver strengthened Friday, taking on 4.5 cents to finish at $8.544 an ounce. It hit an intraday high of $8.575, that's the highest futures price since 1987. See also Commodities Corner.
Elsewhere in the metals market, January platinum added $13.20 to end at $1,007.90 an ounce. It climbed as high as $1,008.90 earlier, its highest since March 1980. The contract was up 2.4% for the week.
Sister metal palladium saw its December contract added $4.70 cents to close at $269.10 an ounce -- up 2.7% for the week. On Nov. 21, prices tapped $270, their highest level since April 2004.
Inventories of copper, silver and gold were unchanged as of late Thursday, according to Nymex. Copper supplies were at 3,681 short tons, silver at 117.6 million troy ounces and gold at 6.61 million troy ounces.
Gold Hits Another High!
Closed today at $509.20.
Strong demand, stagnating supply, a recent shortage of forward selling by gold miners and more orderly sales from central banks have all facilitated the rally. Heavy buying began in 2004 as investors turned away from a (largely) stagnate stock market and instead purchased commodities, which outperformed traditional stocks and bonds.
Speculators have bought spot gold and futures, specialist investment products and shares in mining firms, radically bringing up the prices due to the relatively small supply of commodities compared with other asset classes.
Other precious metals have also followed gold's lead. Platinum reached $1,003 an ounce in New York after touching $1,006, the highest since March 1980. Palladium was at a 19-month high of $270/274 an ounce, up from $264/268. Silver was unchanged at $8.54/8.57, but off an earlier peak of $8.64, the highest since August 1987.
Crystal Ball Says: Gold Is In Your Future!
The current gold bull run should continue and possibly breach $900/oz based on history, said Jim Rogers, co-founder of the Quantum Fund with George Soros. Rogers was speaking on Classic Business, a week nightly business radio program which is aired in South Africa.
Gold this morning in New York is up to $514.00.
Gold traded at a 24 month high in Asia moving to $512.72/oz, the highest since April 1981, Bloomberg News said. Gold has risen 17% this year, heading for a fifth straight annual climb, outperforming a 4.3% gain by the Standard & Poor's 500 Index, the news wire service said. Jewelery demand and signals of potential Central Bank gold purchases were supporting the metal, it said.
In every bull market, commodity and precious metal prices always record a higher spot price than in the previous cycle, Rogers said. On this basis, gold would have to push through its last historic high. “That means gold has to go to at least $900, and silver has to go much higher if history is any guide to how bull markets have always worked.”
Gold recorded a record high of $873/oz in intraday trade during January, 1980. It has however attempted similar rallies and not breached this level. It pushed through $500/oz in December 1987 while in early February, 1983, it managed a few attempts at $500/oz, peaking at $509/oz before falling to $340/oz by the end of that year.
Nonetheless, Rogers told Classic Business that under-exploration and weakness of the dollar would continue to underpin precious metal and commodity prices. Moreover, a special incentive for American companies to bring their money back to the US expires this year. “So you will see the dollar resume its decline,” Rogers said.
“The dollar is fundamentally flawed, and it’s going to be a serious problem in the next five or 10 years. However, that’s not the main reason commodities will be going up. The main reason is supply and demand are out of whack, but a weak currency like the dollar is going to help commodities.”
Rogers put his weight behind commodities in the midst of the dot.com bubble and produced a book, ‘Hot Commodities’ in 2004 claiming the world was entering a major bull run in resources. His Rogers International Commodities Index, which is a compendium of agricultural products, energy and minerals and metals, recorded monthly growth of between 184% to 234% to November this year.
If the outlook for gold was promising, there was even better news for commodities such as oil and base metals. This was again owing to under investment in the sector but also because demand would remain sharp.
“Most Chinese still don’t have electricity, most Indians still don’t have electricity. Demand will continue to grow,” he said.
The copper price was likely to correct in the short-term, but the recent declines in the oil price would be reversed. “Oil will be well over $100/barrel before it’s [the commodities bull run] over.
“If history is any guide this bull market is going to last until around 2018, sometime between 2014 and 2022, and everything is going to go much higher. There has been no major oil discovery anywhere in the world in over 35 years, every oil field you know is in decline,” he said.
$5 gallon gas at the pump? $10? Where are those electric cars?
Gold Is Going Crazy. Update.
Gold hit a new long term record for the seventh consecutive session on Friday as Japanese private investors were once again prominent buyers and any dips in the price have provided investors with fresh impetus to buy bullion and therefore underpin prices.
Gold hit a high of $525.25 a troy ounce in European trade, up more than $5 on the late quote in New York on Thursday. A strong intra-day gain that underlines the recent acceleration in the gold price, which has risen more than 6 per cent so far this month, which is more than the amount it rose for the whole of November.
The bullion price rose by more than 7 per cent between September and October, having spent the first eight months of the year relatively flat. The next target for gold is breaking the March 1981 high of $540.50.
“The activity in the bullion market remains very impressive, with aggressive buying of any dips and a dearth of selling in the rallies helping to create a bullish chart pattern of higher lows, and higher highs, thereby attracting more momentum-based fund buying,” said Alan Williamson, metals analyst at HSBC.
Mr Williamson said both London and New York have lagged the rally in Tokyo, which has been the real driver behind the most recent surge higher in prices, with the Tokyo Commodity Exchange closing limit up on the day.
He said the Tocom October contract closed up the daily limit of ¥50/g at ¥2,105/g ($542/oz), the highest close for the benchmark contract since March 1990.
Tocom trading rules do not allow daily price movements of ¥50/g above or below the previous day’s close. “Although Tocom data is opaque at best, some estimates have put open interest in the market at 501,000 lots, up around 67 per cent from about 300,000 lots in early October,” Mr Williamson said.
He said Tocom’s market management committee met to discuss the possibility of intervening in the precious metals market, but concluded that no measure was needed at this stage. Nevertheless, the exchange will continue to monitor market activity.
Mr Williamson said there are a number of reasons for the surge in demand, not least the continued weakness in the Yen which has fallen by more than 10 per cent since the beginning of September to current levels of ¥120 against the dollar.
“In turn this has helped create a virtuous circle in the gold market of rising (dollar-denominated) prices, local currency weakness, increased retail demand (in Japan), higher (dollar denominated) prices, more fund buying etc, etc,” he said.
Gold has remained above the $500 level for the past seven sessions, and is on track to exceed the 10 day period it remained above this level in 1983. The last time it was trading at $525 was when it was sliding from the all time record of $850 in January 1980. During this period gold remained above $500 for a period of 13 months.
The price of gold bullion has been rising since 1999, marking its longest upward run since it was freely floated in 1968.
Silver rose to a fresh 18 year high of $8.99 a troy ounce.
New York Trading still going on.
Gold Fever Rages! Hits $530 on Friday.
Gold fever took prices as high as $530.40 an ounce for the first time in nearly a quarter of a century on Friday as investors, particularly in Asia, rushed to buy an asset that has gained over 16 percent in the past month.
"This buying is just more of the same of what we have been seeing. I suspect also that it may be central bank buying that is supporting it on the dips," Paul Merrick of RBC Capital Markets said.
Spot gold was at $529.70/530.50 an ounce by 1604 GMT, up two percent from $519.50/520.30 last quoted in New York on Thursday. The metal has soared $75, or 16.4 percent, since November 7.
Gold's tight supply, strong global demand, worries about inflation and growing fund interest in precious metals and other commodities have unleashed a wave of speculative buying, defying warnings that the market was overbought.
"The activity in the bullion market remains very impressive, with aggressive buying of any dips and a dearth of selling in the rallies helping to create a bullish chart pattern of higher lows and higher highs, thereby attracting more momentum-based fund buying," Alan Williamson of HSBC said.
Fund managers were buying as part of a strategy to diversify portfolios, while some investors were speculating about potential purchases from some of the word's central banks -- previously long-time sellers
"I strongly believe that Asia and China are buying -- but we will not know until they've finished buying or are close to it, for sure," said Juerg Kiener, chief investment officer at Singapore-based hedge fund Swiss Asia Capital, referring to central banks in the region.
A spokesman at the China Gold Exchange said: "We have encouraged the Bank of China to buy more gold, or if not, to relax the barriers and allow more Chinese people to do so."
Gold finished Friday Trading in New York at $529.85, Platinum at $1004, and Silver at $9.04
Gold Surging!
Gold advanced as investors bought the precious metal on expectations price gains will extend into this year and on demand from Asian jewelers.
The precious metal last year had its fifth annual increase in 2005 after reaching a 24-year high of $541 an ounce on Dec. 12 as investors diversified from stocks, bonds and currencies amid concern inflation may rise crimp returns. Jewelry demand is ``at its highest ever,'' the World Gold Council said Dec. 8.
``The overall trend continues to remain bullish. A few people seem to have gone long on gold and pushed prices up,'' Si Kannan, an analyst at Sharekhan Commodities Pvt., said by phone from Mumbai today.
Gold for immediate delivery rose as much as $8.60, or 1.7 percent, to $520.60 an ounce. That's the biggest intraday percentage gain since Dec. 28. It traded at $520.26 at 2:44 p.m. Singapore time.
The bullion may rise to $600 an ounce by mid-year, when Indian farmers cash in their crops and buy gold, Gavin Wendt, a resources analyst at Fat Prophets Fund Management in Sydney, said by phone today.
Commodity prices, led by energy and metals, reached a 25- year high in early September as pension funds, hedge funds and investors poured more money into raw materials. The Reuters- Jefferies CRB Index of 19 commodities gained 17 percent in 2005, and the energy-weighted Goldman Sachs Commodity Index gained 39 percent.
Gold for delivery in February rose as much as $3.30, or 0.6 percent, to $522.20 an ounce in after-hours trading on the Comex division of the New York Mercantile Exchange. It traded at $522 at 2:44 p.m. Singapore time.
This morning Gold is surging and rose to its highest in three weeks on Tuesday, the first trading day of 2006 in the key bullion trading cities of Singapore and Hong Kong, extending year-end gains as investors poured money into precious metals.
Spot gold rose to $519.40, its highest since December 13, on fund buying. It later eased to $519.00/519.75 in afternoon trade, but was still higher than $517.20/518.00 late in New York on Friday when the metal rose around $1.5 an ounce.
With Gold Prices Soaring, Gold producers Must be Cleaning Up! Right? Wrong!
The London Financial Times has an interesting report today on the Gold producing companies.
The price of gold has doubled over the past five years, so it stands to reason that companies that dig the precious metal out of the ground must be laughing all the way to the bank.
They are not. Even with gold at more than $500 an ounce, “the margins are not great”, says Bruce Alway, a senior analyst at GFMS, a London-based research group.
That paradox helps explain Barrick Gold’s pursuit of its Vancouver-based rival Placer Dome, and a drive throughout the industry to grow in ways that improve profitability and replenish reserves.
Placer agreed to an improved $10.4bill offer last week, setting the stage for Barrick to overtake Newmont Mining of Denver as the world’s largest gold producer.
While Barrick CE Greg Wilkins exudes confidence on the gold price, he says that the challenges facing the industry “are only going to get harder, not easier”.
Wilkins says building a new mine costs at least $500m, with most projects now in the pipeline running at $1billion-$1.5billion.
Regulatory approvals have become more complex and time-consuming. Environmental safeguards are more costly.
“We need to have a company that has the strength, breadth and scale to capitalise on the opportunities,” Wilkins says.
But strength requires more than sheer size. Even the industry’s giants are struggling to lift profits at a pace close to the gold price.
Newmont reported virtually unchanged third-quarter earnings. Profit at AngloGold Ashanti, the number-two producer, were almost 40% lower in the first nine months, measured in US dollars.
The same inflationary pressures that have helped lift the gold price are also pushing up costs. Newmont blamed a shortage of underground labour and higher diesel and other commodity prices for a 24% jump in third-quarter costs at its Nevada operations.
“There’s a limit to what you can achieve by synergies,” says Alway. “You’ve still got to drive trucks and shift soil.”
The strength of the Australian, Canadian and South African currencies has eroded margins of mines in those countries, eating into local currency revenues.
Hedging, popular when gold was in the doldrums in the 1990s, has now become a drag on profits.
According to GFMS, Barrick and Placer combined would have the largest hedge book in the industry, accounting for about 40% of the global hedged position. Both companies have significantly reduced their positions this year.
Perhaps the biggest benefit of mergers and acquisitions is the ability to replenish reserves, a crucial measure of a gold producer’s long-term growth prospects. As one executive puts it: “The bigger you get, the more you need to replenish reserves.”
Barrick mined 5-million ounces last year, but expanded its reserves by only 3-million ounces. While Placer has increased reserves 60% over the past five years, Barrick’s reserves have expanded only 8%.
The soaring gold price has fuelled a global exploration boom.
Metals Economics Group, a Nova Scotia-based consultancy, estimates that spending on gold exploration has trebled in the past three years, with gold making up 47% of the $4,9bn spent on mineral exploration this year.
But Jason Goulden, a Metal Economics analyst, notes that “when you take over a junior exploration company without proven resources, you’re taking over a fair amount of risk”.
By acquiring Placer, Barrick will boost its reserves from 89-million to 150-million ounces. As Barrick sees it, the Vancouver company will give it “an unrivalled pipeline” of projects on four continents and exploration holdings in 16 states.
Given the importance of reserve replenishment, one of the toughest decisions facing Barrick will be whether or not to hold on to Placer’s 50% stake in the South Deep mine in SA. South Deep accounts for a 10th of Placer’s proven reserves and more than a half of its ”probable” reserves.
Barrick’s founder and chairman, Peter Munk, has been lukewarm towards investing in SA. South Deep has barely broken even this year due to high costs and lower-than-expected output.
Some analysts believe that South Deep’s performance could be enhanced by merging it with Gold Fields’ adjoining Kloof mine. South Deep’s shareholder “could sell the reserves to someone who could do a better job at developing them”, says one industry executive.
Wilkins says that Barrick needs time to consider its options: “We’ll be approaching that with an open mind,” he said.
Gold Keeps On Truckin'!
Gold futures finished Monday above $550 an ounce for the first time since early 1981, as weakness in the dollar helped spark investment demand for the metal.
"Gold continues to rally on continued U.S. dollar weakness, a trend I expect to continue over the next week," said Matthew Parry, an economist at Moody's Economy.com.
He added that he remains "reasonably bullish on gold over the medium term," forecasting that gold is headed for the $575 mark on further expectations for a lower dollar.
Gold for February delivery climbed as high as $551.40 an ounce on the New York Mercantile Exchange, an intraday level not see since March 1981. It closed at $550.50, up $9.30, or 1.6%, at its highest closing level since January 1981, according to weekly charts.
Prices have since pulled back slightly in after-hours electronic trading, falling as low as $548.60.
Overall, "gold bulls have been out in force across most of [Monday's] trade activity, driving the yellow metal to its highest level in a quarter century amid speculation of Asian Central Bank purchases, fund/investor portfolio diversification and concerns over the spread of bird flu," said James Moore, an analyst at TheBullionDesk.com in London, in a Monday report.
Looking ahead, "the path of least resistance in gold is still pointing upward," said Nell Sloane, an analyst at NSFutures.com, in daily commentary. "The gold market continues to climb as long as the global economy is positively positioned."
But "certainly at some price point above the current market, gold will need some type of increased inflationary threat or a sharply lower dollar to extend to the upside," she warned.
Gold futures racked up gains of more than $22 an ounce last week, finding support from a weaker dollar and China's announcement that it will diversify its holdings of foreign reserves.
Although Chinese authorities didn't provide a timetable for any change -- nor specify that it would increase its emphasis on gold as a reserve -- "it comes at a time when there appears to be a strong consensus for further gains in gold prices over a medium- to longer-term view," said research firm Action Economics.
"Forecasts for rising demand in major emerging countries in 2006, coupled with constrained supply, underpin the longer-term outlook," Action added.
Analysts at Dundee Securities also expects gold to benefit from a weaker dollar.
The dollar has come under pressure in the past week from expectations that the Federal Reserve is approaching the end of its rate-raising cycle. At the same time, high energy prices have stoked inflation fears, bolstering demand for gold. See Currencies.
"We expect continuing record U.S. budget and trade deficits to weigh on the greenback," said P. Mark Smith, analyst with Dundee. "The greenback could weaken further and faster if Greenspan's replacement takes the chair and eliminates rate hikes or reduces rates."
Ben Bernanke is scheduled to take over as chairman of the Fed from Alan Greenspan at the end of January.
As gold prices rise, investment and jewelry demand is likely to grow, according to Smith. Meanwhile, the supply picture is weak with few discoveries despite record exploration spending.
"This implies future mine-supply declines, which could accelerate if producers take advantage of the price rise to process lower grades at constant throughput rates, thereby reducing gold production," he said.
Dundee expects gold to breach the $600-an-ounce level next year. Along these lines, the research firm raised its 2006 price target to $540 an ounce from $500 an ounce.
The company also raised its target for silver to $9 an ounce in 2006 and said that it expects the metal to breach $10 an ounce next year.
March silver closed up 11 cents at $9.283 an ounce, well above the contract's intraday low of $9.015. April platinum finished up $13.70 at $1,018.30 an ounce, its highest close since mid-December, and March palladium tacked on $7.20 to end at $280.60 an ounce.
Look for jewelers to significantly increase their prices for gold and platinum jewelry within the coming month.
Can - ANYTHING - Slow Down Gold & Platinum?
Both metals are surging. Gold closed trading on Friday at $556.40. Platinum at $1036.00.
Gold rose as high as $558 an ounce before edging to $557.10 -- still up $7.8 or 1.4 percent -- by 11:20 a.m. EST on the New York Mercantile Exchange's COMEX division. The high mark was the loftiest price for benchmark futures since January 1981.
Gold rallied as investors who are bullish on the market for 2006 increased their stakes before an early close on Friday and a market holiday on Monday.
"The funds are coming back to buy it to new highs on a weak dollar and strong euro," said James Quinn, a market commentator at AG Edwards & Sons, at the floor of the COMEX.
With the strength of the buying, gold prices were able to break past chart resistance at $550.50 and surpass Tuesday's quarter-century peak, at $553.10.
Money managers and investors have increased their exposure to gold and commodities as they diversify away from currencies, equities and bonds in hopes of boosting returns. Concerns about the economy, geopolitics and a weaker dollar in 2006 also have attracted investors to the precious metal.
"Spot metal also is very strong, and I think you have a very strong cash market with some physical activity," added Quinn.
Platinum Running Wild!
Up $15.00 this morning to $1052.00
Gold up another $5.00 to $561.55
Those of you planning on buying engagement rings or jewlery, time to buy is now before the retailers raise their prices.
Silver, Gold, Platinum continue Zooming UP!
Silver prices spiked to fresh 18-1/2-year highs in Europe on Wednesday as talk of setting up a new exchange-traded fund spurred fund buying, while platinum hit a new record high. Gold also picked up and moved closer to last week's 25-year high after consolidating in previous trading sessions, with the market tone remaining bullish on worries about inflation and economic growth, dealers said.
"I think there has been buying ahead of any solid news on whether or not the exchange-traded funds will be approved," said Yingxi Yu, precious metals analyst at Barclays Capital.
Spot silver
The Securities and Exchange Commission is considering a proposal to allow setting up of a silver exchange-traded fund (ETF), Barclays said in note.
Gold ETFs are already functioning and have generated good interest. These products, traded on some of the world's major stock exchanges, give investors a share of a bar of gold. Analysts say the five gold ETFs now hold 400 tonnes of gold.
"Silver has lagged gold this year so some sort of catch up was inevitable," said John Reade, analyst at UBS Investment Bank.
Base metals also raced higher during Wednesday London Metal Exchange (LME) pre-market trading, as relentless fund buying lifted the complex's star performers to fresh cycle highs. [nL25707291]
PLATINUM AT RECORD HIGHS
Platinum surged to its highest ever level of $1,054/1,058 an ounce from $1,047/1,051 in New York as positive fundamentals lifted fund buying.
Demand for the metal, mainly used in autocatalysts to filter out carbon monoxide and harmful particles from exhausts, has been growing because of tighter emission standards worldwide, dealers said.
Supplies of platinum are expected to rise in South Africa, the biggest producer, but a strong local currency has raised operating cost and threatened new projects, analysts said.
"Whilst the market is so incredibly bullish towards metals and speculators and investors are basically buying anything which is shiny, then I think platinum can keep grinding higher," Reade said.
Spot gold
Gold has risen nearly 10 percent since the start of 2006. Palladium
We have already been hit with price increases on our Gold and Platinum purchases and have had no choice but to raise the prices on our Gold and Platinum Gold diamond rings, wedding, rings, and engagement rings.
Vatche, for whom we are an Authorized Dealer will be significantly increasing their prices as of February 1, 2006.
Those of you interested in placing an order should do so now before the price increase.
Silver Hits 19 Year High!
New York precious metals advanced on speculator and fund buying Monday, with silver hitting a 19-year high on excitement over a proposed U.S. silver-backed investment and gold also extending its rally.
Dealers said positive technical factors and an absence of speculative liquidation in the complex, despite a firmer U.S. dollar during the session, supported prices.
Platinum also was well-bid, hitting another 26-year high, up $7.00 mid-day to $1074/OZ.
"Precious metals are up across the board on commodity-index buying," said a dealer at precious metals desk in New York.
"Silver's up, and it is all on rumors about the ETF, and as technical breakouts are continuing," he said. "The market looks great and it should hit $10 soon."
COMEX March silver climbed 18.5 cents, or 1.8 percent, to $9.79 an ounce by 10:17 a.m. EST, in a session range from $9.575 to $9.81, which put prices at their loftiest level since at least April 1987.
The market has been abuzz over Barclays Global Investors' plan to launch iShares Silver Trust, which on Wednesday appeared to move closer to approval after the U.S. Securities and Exchange Commission issued a filing about its potential listing on the American Stock Exchange.
Each share would be worth 10 ounces of silver. The security would require the purchase of silver bullion to guarantee it.
UBS analyst John Reade also viewed silver as ripe for a trade above $10 an ounce in the near term, after it moved to the fore of the metals during the past week.
Reade said the odds of the SEC approving the ETF looked to have increased to 75 to 80 percent, from about 50 percent, and the silver markets -- spot, forwards and options -- were adjusting to that.
"But the timing on any further announcement is impossible to forecast, and there is a risk that the move higher (and tighter) in silver may run out of steam, if there is no fresh news on the ETF," Reade said in a daily note.
Timing in life is everything, ain't that right , Hunt Brothers?
Fool's Gold?
JPMorgan Chase & Co. said the price of gold could surge to $800 (U.S.) an ounce in the next two years, as central banks curb their selling of the metal.
The forecast came as gold shot to a 25-year high Tuesday, with investors piling into the precious metal as a refuge from escalating concerns over Iran's nuclear program. The JPMorgan analysts said gold will rise to $600 an ounce by the end of 2006.
“While we expect gold prices to be increasingly volatile, we believe that the primary risk is to the upside, and our commodity group has already pointed to the potential for slowing Central Bank sales to drive gold higher towards $800 an ounce,” JPMorgan Chase analyst John Bergtheil wrote in a note to clients.
The JPMorgan team cited falling supplies, strong demand from India, the deregulation of China's gold market, market uncertainty in the wake of the retirement of long-time U.S. Federal Reserve chairman Alan Greenspan, a gold market that has room to grow and the risk of a terrorist attack, among others, as factors that will keep gold prices elevated.
Chinese demand could spike this year as the number of weddings are likely to “rise significantly in the lucky year of the dog” that began on January 29, 2006, the report said.
In a distinctly less bullish call, UBS Securities analysts in Toronto are calling for gold to closed 2006 at $560 an ounce, and 2007 at $600 an ounce.
Geopolitical worries, combined with Tuesday's widely-expected U.S. interest rate hike, sent gold futures for April delivery up $3.50 to $574.10 an ounce on the Comex division of the New York Mercantile Exchange. Earlier it traded as high as $575.10, the highest price since January, 1981.
Gold has been flirting with 25-year highs for several months now, a run that shows no sign of slowing down.
Silver futures for March delivery gained 11.5 cents to $9.89 an ounce on the Comex. It hit an intraday high of $9.915 an ounce, a level not seen since April, 1984. Silver prices have risen 40 per cent in the past 12 months and 11 per cent this month.
Tensions between Iran and the U.S. and Europe have provided the latest boost to gold prices. Iran edged closer to a run-in with the United Nations' Security Council, with the U.S., the U.K., France, Russia and China all agreed that the United Nations Security Council should consider Iran's situation at a Feb. 2 meeting of the International Atomic Energy Agency.
Iran, the world's fourth-biggest oil producer, denies U.S. assertions that it is gearing up to create nuclear weapons, arguing that its research is solely aimed at generating energy for civilian purposes.
Iran and the European Union are scheduled to resume talks on the nuclear program in Brussels today.
The Fed, meanwhile, raised its key interest-rate target by another a quarter basis point to 4.5 per cent on Tuesday, its 14th straight increase. It is was expected to be one of the last U.S. interest rate hikes, a move that could undermine the greenback and make gold — priced in U.S. dollars — even more attractive to overseas buyers. The Fed, however, signalled Tuesday that further rate hikes could be necessary to keep inflation at bay.
Gold, which tends to trade inversely to the U.S. dollar, often rises in times of economic or geopolitical uncertainty. Investors have traditionally seen the precious metal seen as a safe haven in times of crisis.
In addition to Iran-related concern, the unexpected election of a majority Hamas government in last week's Palestinian elections also boosted demand for gold.
Increased demand for the metal — particularly from jewellery makers in India and China — as well as speculative demand from investors, and persistent worry that soaring energy costs will stir inflation in the world's largest economies, have contributed to gold's rally.
The gold sector was the biggest gainer on the S&P/TSX composite index Tuesday. Agnico-Eagle Mines Ltd. had the biggest rise, climbing $1.96 (Canadian) or 7.25 per cent to $28.98, its highest level in at least five years.
Case of jumping on a hot bandwagon? If you're going to play futures contracts, have a good exit strategy.
Gold for Investment Portfolios?
Bloomberg today reports that Gold gained in London as investors sought to diversify their portfolios and get higher returns.
Investors are buying gold because it's outperforming stocks and bonds. Gold rose 90 percent in the five years to the end of 2005, while the Standard & Poor's 500 Index returned 2.7 percent with dividends reinvested. An index of Treasuries maturing in two years or more returned about 30 percent including interest reinvested, Merrill Lynch & Co. indexes show.
``There is still some fund money waiting to find a destination in commodities,'' Michael Widmer, an analyst with Macquarie Bank Ltd. in London, said in an interview today. ``Gold is an anti-cyclical commodity, and the funds want to own it to diversify their portfolios.''
Gold for immediate delivery gained as much as $2.01, or 0.4 percent, to $541.96. It was trading at $540.10 as of 12:44 p.m. in London.
The metal reached $575.35 on Feb. 2, a 25-year high, partly as investors bought the metal as a hedge against inflation amid rising oil prices and increased tension between the international community and Iran over the country's nuclear program.
The metal on Feb. 7 had its biggest drop in London since 1997 after a decline in the cost of oil eased speculation that inflation will accelerate and erode the value of assets including equities.
Fund investments in commodities will soar almost 50 percent to $120 billion this year, Standard Bank in London said in a report Feb. 2.
In other metals, platinum for immediate delivery fell as much as $21.50, or 2 percent, to $992.50 an ounce, the lowest since Jan. 6. Palladium fell $2, or 0.7 percent, to $277.50 while silver was unchanged at $9.22.
Gold Vanishing In China!
Kyle Bradisher reports in yesterdays New York Times that China has such a huge stash of other countries' money that it could, in theory, give bonuses equaling half a year's wages to all 770 million of its famously low-paid workers.
China will soon release statistics showing that it has passed Japan as the biggest holder of foreign currency the world has ever seen. Its reserves already exceed $800 billion and are on track to reach $1 trillion by the end of the year, up from just under $4 billion in 1989. But China has held a similar position before.
The current pile, much of it invested in U.S. Treasury securities or mortgages on American homes, is a result of China's selling more goods than it buys and of foreign money pouring in for the building of factories, apartment towers, office buildings and shopping malls.
China is not alone; oil exporters are also piling up cash and trying to figure out what to do with it, leading to disputes like the current one over the Dubai company DP World's designation to run cargo terminals at U.S. ports.
History offers parallels to the yawning U.S. trade deficit and the resulting accumulation of dollars in China. China sells to American companies almost six times as much as it buys from them, but this is not the first time China has been an export powerhouse. Ancient Rome, for example, found that it had little except glass that China wanted to buy. Nearly 2,000 years ago, Pliny complained about the eastward flow of Roman gold along the Silk Road in exchange for Chinese silk.
Long-distance trade collapsed during the early years of the Dark Ages. But through the next several periods of rapid growth in international commerce - from 600 to 750, from 1000 to 1300 and from 1500 to 1800 - China again tended to run very large trade surpluses. By 1700, Europe was paying with silver for as much as four-fifths of its imports from China because China was interested in little that Europe manufactured.
A longstanding mystery for economic historians lies in how so much silver and gold flowed to China for centuries for the purchase of Chinese goods yet caused little inflation in China. Many of China's manufactured goods remained much cheaper than those from other countries until the early 1800s, despite the rapidly growing supply of silver in the Chinese economy. One theory is that Chinese output was expanding as fast as the supply of precious metal. Another is that the Chinese were saving the silver and gold, not spending it.
The same phenomenon has appeared today, as dollars inundating China have resulted in practically no increase in prices for most goods and services - although real estate prices have jumped in most cities. China has an even easier time preventing domestic prices from rising now because modern banking techniques let its central bank buy up the dollars and take them out of everyday circulation. The central bank has accumulated the country's immense foreign-currency reserves in the process.
The British Empire in the 19th century worked out a way to maintain a large long-term trade surplus with China. So far, however, nobody has suggested that the United States also try getting millions of Chinese people addicted to imported opium.
What would Confucious say? Probably too busy counting.
Gold Price Supported by Indian Marriages.
With Indian wedding season imminent, recent high volatility in gold prices has not prevented physical buying, rather it has deferred it as many families agree to wait for purchase of gold for dowries until market stabilizes, says Societe Generale. "The postponed purchasing is unlikely to prompt a rally of any note but will certainly help to cushion the market as prices stabilize."
Purchase of gold for weddings can vary between 50%-70% of total gold demand in any one year, dependent on monsoon season which governs rural incomes and gold price.
This dowry payment delay might be enough to give the Groom a "headache" on the Wedding Night.
Precious Palladium Metal Gaining favor Among Jewelers.
Jewelery makers in Asia shrugged off platinum's falls from record highs as they struggled to use up inventories, and dealers said today more carmakers were turning to sister metal palladium as a substitute.
"Over US$1000 you should get less interest, certainly less demand," said Alastair McIntyre, head of marketing at ScotiaMocata in Hong Kong.
"After US$1000, you should start to see, you have either perceived or actual substitution in palladium," he said.
Platinum increased to US$1,055 an ounce on today mainly due to gains in gold as investors diversified into precious metals on worries about inflation, the US dollar's outlook and tensions in the West Asia over Iran's nuclear ambitions.
The metal, which rallied as much as 18 per cent in 2005, has since dropped as funds booked profits, but dealers said the declines failed to stir up interest from main consumers such as China and Japan.
Customs data from China showed declines in platinum imports in January, when the metal used in jewelery and to clean car exhaust fumes began its steady climb. China is the world's largest consumer of platinum jewellery.
China's imports from Switzerland, South Africa and Japan fell to 952 tons in January, down 41.3 per cent from the same month in 2005.
Spot platinum was quoted around US$1,044 an ounce while its much-cheaper sister metal, palladium, was at US$300.
"Consumers don't react much to prices but if you talk to the manufacturers, they are very sceptical about continuing their production," said a dealer in Shanghai.
"The margins are very low. Because of the price fluctuations in the international market, manufacturers are not really keen to stock up. They only make jewellery when they receive orders," he said.
Precious metals refiner Johnson Matthey said China's purchases of platinum for jewelery manufacture was expected to fall about 10 per ent to 910,000 ounces in 2005 as high prices scared off buyers.
Talk that more carmakers would shift to palladium had triggered fund buying, propelling the metal to its highest in nearly two years at US$320 in February, but dealers said the increase may not deter demand.
"The thing is that when people are waiting for a price level to enter, they tend to make mistakes," said a precious metals dealer in Hong Kong.
"If you look at the gold price, it has gone up from US$250 to almost to almost US$600. Every time they waited for the price to fall, they'd been burned because the price continues to go higher," he said.
Some Hong Kong dealers said they saw demand for palladium from jewelery makers in China since the price fell from highs.
Because of poor margins, China's platinum jewellers have turned to palladium and white gold - an alloy of gold and other light-coloured metals such as silver and palladium.
"Selling pressure increased when palladium reached US$320. I am still bullish on palladium but it must consolidate," said another Hong Kong dealer.
Look for Palladium to become more prominent if Platinum maintains and increases it's price strength.
Precious Metal Silver Exploding Up In Price! Why?
Silver futures closed at a fresh 22-year high Friday, up more than 4% for the week with the gains tied to expectations that an exchange-traded fund based on the metal will soon be launched.
The May contract for silver closed at $10.235 an ounce on the New York Mercantile Exchange, up 2.7 cents, following an earlier rise to $10.31, a level not seen since at least 1984.
The contract climbed by more than 4% on Thursday as traders bet that the silver ETF in registration from Barclays Global Investors may soon begin trading. Silver's prices closed last Friday at $9.825 an ounce.
"Conditions are set to remain volatile in silver for some time to come as traders await the SEC's decision on Barclay's ETF application," said James Moore, an analyst at TheBullionDesk.com in London.
But "a positive outcome and subsequent launch is likely to generate plenty of upside with $12.50 remaining my price target," he said.
Although there was no official confirmation that the ETF has gained regulatory approval, the Securities and Exchange Commission recently closed a 21-day public comment period on the fund.
Lance Berg, a spokesman for Barclays Global Investors, said Friday he was unable to comment on the iShares Silver Trust, which is still subject to an SEC-imposed quiet period.
Analysts said silver's rise may reflect buying on speculation the silver ETF would soon get the green light. Gold experienced a similar pop in the weeks leading up to the launch of StreetTracks Gold Trust.
"The 130 million ounces of silver needed for the launch of securitized silver are not going to be easy to come by, nor will they leave much available for investors who have been just starting to chase after the white metal as soon as gold reached new highs," according to Jon Nadler, an investment products analyst at bullion dealers Kitco.com.
Gold Going to $800 Dollars?!
Blanchard and Co., a precious commodities and rare coin brokerage in the Central Business District, New Orleans, has bullishly forecast gold prices climbing steadily to $300 an ounce, then $400 and $500.
With gold futures for April delivery topping $560 Feb. 24, Blanchard’s new prediction still raises eyebrows — $800 before year’s end.
Blanchard CEO and President Donald Doyle Jr. said the precious metals market is on the cusp of an upswing.
“We’re in the middle of a cycle. The whole commodity complex has declined by two-thirds over a period of 20 years,” Doyle said. “The price of gold and the price of oil in the latter part of the ’90s hit 20-year lows so you had an oversold market that was ready for a recovery. And then you add to that the fact there’s a tremendous amount of demand coming from countries like India, China and throughout Asia.
“It’s obvious no market goes up forever but it appears we’re just at the beginning of a long bull market. Most analysts predict the market probably has a decade to run before it turns in the other direction.”
Doyle said lengthy cycles are the norm in the precious commodities market because production rises to meet the increased demand when prices go up. As supply increases, the market and prices stabilize and then go down.
Neal Ryan, Blanchard director of research, said hedge funds created some false increases in gold prices through speculative buying, but he sees an upside to the tumult.
“There’s a lot of volatility in the market but at the same time that’s good because it brings a lot of interest in the market,” Ryan said. “The prospects for precious metals moving forward ... even though they are decade highs is potentially up to 50 to 100 percent on the upside.
“This year we’re putting our target at $750 for gold by the end of the year, possibly above that if we see some certain things happen.”
Doyle was more bullish, forecasting $800 by year’s end.
Ryan also expects increased commodities investment to drive prices. With just one-tenth of 1 percent of the money in the stock market, he said, demand for precious metals would increase exponentially. Private investment and government portfolio diversification — like foreign countries choosing to back their currency with gold versus the U.S. dollar — should lead to a “massive increase” of funds into the metals market, said Ryan.
Fool's Gold or do we get off the train now?
About Precious Platinum. All You Need To Know
Pure
Platinum jewellery is generally 95% pure, unlike 18 carat gold, which is 75% pure. No metal is completely pure and all have alloys - blends of other metals. Platinum has few alloys, making it so pure it doesn't fade or change colour and it retains its shine for years. The pure white lustre of the metal reflects the true brilliance of diamonds; provides the best setting for precious jewels and complements gold's natural yellow shade. Platinum's purity also makes it kind to the skin because, unlike some alloys in other metals, it does not cause allergic reactions.
Rare
Platinum
Platinum is 35 times rarer than gold and is found in very few places in the world, mainly South Africa and Russia, and to a lesser extent in Zimbabwe, Canada and South America. Every year only 88 tonnes of platinum are made into jewellery, compared with 2,700 tonnes of gold. It takes eight weeks and 10 tonnes of ore to produce one single ounce (31.1 grams) of platinum, whereas only three tonnes are mined to produce the same amount of gold. There are also fewer platinum mines. For every 10 gold mines there is just one platinum mine.
Eternal
Platinum's density and weight make it more durable than other jewellery metals. A six-inch (15 cm) cube of platinum weighs 165 lbs (75 kg), the same as an average man. Platinum is also resistant to heat and acids and has a high melting point - 3,223ºF (1,768ºC). Platinum doesn't wear away and holds precious stones firmly and securely. Some of the world's most famous gems are set in platinum, such as the Koh-I-Nor diamond, part of the British crown jewels. All precious metals can scratch, and platinum is no exception. However, the scratch on a platinum piece is merely a displacement of the metal and none of its volume is lost, whereas scratching gold wears it away and decreases its volume. If visible scratches do appear on a platinum piece, a qualified jeweller can re-polish it.
Versatile
In addition to its strength and density, platinum has another remarkable quality - pliability. Platinum is so pliable, that just one gram of the metal can be drawn to produce a fine wire over one mile (almost 2 km) long. This quality has enabled jewellers to create some amazing versatile platinum mesh accessories, which could not be fashioned from other precious metals. Platinum is also in demand in other fields - it is used in industry, most notably in catalytic converters. Platinum also plays an important role in medicine. It is not affected by the oxidisation reaction of blood, has excellent conductivity, and is compatible with living tissue. Because of these properties, platinum is used for pacemakers. At present, more than 50,000 people are living healthily on pacemakers. Platinum is a life-saving metal for these people.
71% of Women Desire Platinum Jewelry
Desire vs. Aquisition
U.S. bridal aquisition is up to 44%
Conde Nast 2003
71% of women seeking engagement rings want platinum.
BASE: All women aged 18-34 shopping for their engagement ring (125)
QUESTION: Thinking about an engagement ring. Which of the following phrases best describes how you feel about each of these precious metals?
Turn desire into acquisition
Closing the gap between the consumer's desire for platinum and the actual sale of platinum jewelry requires sales staff armed with knowledge and confidence. You can increase your bottom line immensely by ensuring your sales associates understand and communicate platinum's value.
PGI's new training program, which uses the brand line 'Pure. Rare. Eternal.' as a basis for talking points, will help sales associates capitalize on the rapidly growing interest in platinum. Using clear, simple, easy to remember sales tips that distinguish platinum from all other metals, our method educates and reassures customers of the value, wisdom and appropriateness of a platinum purchase.
Pilot Programs of the PGI training program have proven enormously successful. Not to mention profitable.
Sell more effectively to women
A large scale research effort that monitored 20 jewelry retailers revealed critical insights. Stores are often losing sales by underestimating the seriousness of the female shopper, her ability to purchase and her influence on the purchase decision when a man buys the ring. By assuming that only couples or a man shopping for jewelry are your primary targets, you may be alienating a critical factor in platinum sales.
Women shop differently:
- less inclined to online research. Use retailers as the prime source of information.
- usually shop alone or with women friends.
- clear labeling of jewelry and visible signage is crucial.
- touching, handling, trying on are key factors in making a sale. If it stays behind glass, she's likely to pass.
Acknolwledge women in the store:
- take them seriously, whether they are shopping alone, with a man or friends.
- pay attention, answer questions, make jewelry available for trying on.
- women who feel ignored lose the desire to shop in your store and will tell their fiancé so.
- positive attention has a tremendous impact on sales.
- treating the women as a desired customer often turns her into a paying customer.
Women want information about platinum:
- women want to understand platinum's superiority. Demonstrating the difference between white gold and platinum (such as wear factor) is a proven sales technique.
- sales associates who communicate platinum as a superior product, discuss its value and introduce it as a better symbol of a couple's relationship, make a highly positive impression on consumers which reflects on sales.
- information about platinum's purity is a very compelling reason for customers to buy it.
- you must stock it to sell it. Lack of selection and/or styles is a leading drawback cited by women.
Silver Hits 22 Year High!
U.S. silver prices reached their highest level in more than 22 years early Wednesday, before pulling back somewhat, boosted by rising mining shares and market hopes of a launch of a new U.S. silver investment product.
Buying spilled over into the other precious metals, with gold scampering above key chart resistance at $555 to $556 an ounce and platinum and palladium also gaining.
Silver for May delivery on the COMEX division of the New York Mercantile Exchange hit $10.3950 an ounce, the loftiest level for futures since October 1983. By 10:35 a.m., it was up 6.5 cents, or 0.63 percent, at $10.31 an ounce.
"It is basically a technical move, and the specs are also following the silver stocks up," said a COMEX floor silver trader.
Futures in New York have surged 15 percent this year as investors await possible approval from the U.S. Securities and Exchange Commission of a proposed silver exchange-traded fund from leading ETF provider Barclay Global Investors.
Barclays' IShares Silver Trust was designed to mimic investment in physical silver, while trading on an exchange like a listed stock. If approved, it would be backed by silver held in vaults in England.
There has been no word from U.S. regulators on the ETF since a public comment period ended last month.
Dealers said prices on Wednesday also got a lift from rising silver shares like those of Coeur d'Alene Mines Corp. (CDE.N: Quote, Profile, Research) and Pan American Silver Corp. (PAA.TO: Quote, Profile, Research), which climbed 3 percent and 3.5 percent, respectively.
Independent analyst Greg Weldon said recent new investment inflow in the sector seemed to suggest that the bull move was still in the early stages for silver.
"... Capital flow into the precious metals from longer term stock portfolio-type investors has only just begun," he said in a daily note.
"This would be particularly true if the Federal Reserve were to signal an end to their rate hike campaign, an event that would likely cause the dollar to depreciate, which could in turn provide the next big upside catalyst for the entire precious metals sector," said Weldon.
Market players also eyed a declining gold/silver ratio, which traders often take as a bullish signal for the gray metal.
Gold: Ready To Break Out.
Experts are calling more upside in the gold price, short term, as the metal seems to have consolidated at the $550/oz level and appears ready to set some new 25-year records.
Jeffrey Christian, head of the CPM Group, a New York based precious metals consultancy, is one of those expecting a near term jump in the yellow metal.
“We are going into the April Comex gold and Nymex platinum delivery period and you have a high open interest in both of those contracts right now which suggests to us that we could see $580 or even higher between now and early April,” said Christian at the offices of South African based institutional brokerage, Noah Financial on Thursday morning.
Futures contracts, traded on the New York Commodities Exchange (Comex) are an agreement to buy or sell a commodity at a specific price and date. The delivery date is the day the metal is transferred from buyer to seller or that the contract is paid out.
Christian says it is usually in the five-month period between December and April, that commodities tend to peak at new highs.
“One of the reasons why prices tend to peak in that period is because there is a very strong seasonality to precious metals and copper prices and that seasonality grows on fabrication demand trends and investment demand trends.”
Christian describes the upcoming peak as seasonal and not cyclical, implying even higher prices in the future.
However, do not get over-excited just yet. The price could fall before it gets there, according to Christian.
“We think the price is going to fall off and move into a consolidation phase second and third quarters (2006) and then possibly rise to new peaks in December and April next year,” says Christian.
And while he talks of a price between $580/oz and $600/oz coming up, he says the eventual cyclical peak is not as clear and will be driven by investor demand rather than jewellery demand.
“Where those peaks are and how graciously the markets get to them will depend on currency market developments, stock markets, interest rates, international politics and domestic politics,” he says.
It is for gold’s safe-haven appeal that others are seeing future upside in the price. Uncertainty over what Iran is up to in its uranium enrichment programme is just one of the recent headline events leaving investors uneasy.
“These issues are not going to go away quickly and hence we expect to see gold prices average $555 per ounce in 2006, rising to $575 average in 2007,” said Helen Henton, Head of Commodity Research at Standard Chartered Bank in a note on Monday.
Christian agrees that geopolitical events are still pushing the gold price. “The factors that have been stimulating higher gold prices and have been stimulating higher investment demand for gold, primarily have not changed,” he says, “They may have gotten better and we may have seen that investors have moderated their bullishness, but we have not really seen a sea change in the economic and political environment.”
GFMS, the London based precious metals consultancy also released its quarterly newsletter, looking at the outlook for gold investment.
In the note, Philip Klapwijk, GFMS’s chairman, says that the current bull rally is driven by a variety of motives, which can all be summarised under the traditional headings of “greed” or “fear.” He adds that we are still some way off of the peak.
“There is increasing media coverage of gold’s performance, with anecdotal evidence that this is beginning to encourage ordinary investors to look at gold,” says Klapwijk, “Of course once the retail bandwagon really starts to roll this would indicate that the rally is entering its final phase, although that point is still some way off.”
Christian described a typical global scene that would signal the top of the gold price’s bull run: “If peace broke out in the world and a lot of the problems in financial markets were resolved, corporate earnings were very strong, stock markets start rising higher and interest rates stabilise then we can say, maybe we have seen it (the peak).”
Chicago Board of Trade Moving to be #1 In Gold Trading.
The Chicago Board of Trade, pleased with growth in its gold and silver contracts, might pursue a broader presence in metals derivatives, company executives said on Thursday.
The No. 2 U.S. futures exchange has built market share with its electronically traded gold contracts by siphoning some volume away from New York's Comex.
"We've had good success and are focusing on broadening that success," Bernard Dan, CBOT's president, said at the Futures Industry Association meeting in Boca Raton, Florida.
The exchange would pursue a "stair-step approach" to expansion to avoid diluting users who have shifted to CBOT or are new to metals trading, he said.
CBOT's gold and silver futures are electronically traded, in contrast to the open-outcry that still rules at the New York exchange, long the dominant force in U.S. precious metals markets.
The electronic platform gives CBOT "a distinct competitive advantage versus Comex," Dan said.
Officials from the New York Mercantile Exchange, parent of Comex, said there were no immediate plans to offer electronic trading in metals during the core U.S. business day.
Volume in the CBOT's metals complex, which includes full-sized and "mini" gold and silver futures, averaged 20,716 contracts a day in February, having started electronic trade near zero in 2003.
In February CBOT gold futures accounted for about 23 percent of listed gold futures traded in North America. Options on CBOT 100-oz gold futures were added this month, a move typically done by exchanges once futures liquidity has reached a critical mass.
Dan said he would not say that the CBOT was close to a "tipping point" in terms of market share, but that the users of its gold contracts were getting "more diverse, much broader."
NYMEX officials expressed little panic. "They're getting a little slice of our pie," Richard Schaeffer, NYMEX vice-chairman, told Reuters. Still, he said, NYMEX was "watching it carefully."
China: Major Precious Metal Silver Holder.
China currently owns 116,500 tons of silver reserves, the sixth largest in the world, following the United
States, Canada, Mexico, Australia, and Peru, according to the China Gold
Association.
There are 569 silver mines in China, and eastern China's Jiangxi Province owns the largest reserves, contributing 15.5% to the country's total. Other major silver mines are located in Yunnan, Inner Mongolia, Guangxi, Hubei and Gansu.
In China, 80% silver ores occur as associated mineral material in
copper, lead and zinc mines.
Precious Metal Silver Turns "Golden"!
Silver surged to its highest in more than 22 years on Wednesday on strong speculative buying after U.S. regulators took a big step towards finally approving the market's first exchange-traded fund (ETF).
The Silver Surfer
The fund, to be backed by physical metal, has the potential to bring fresh investment to the market and soak up supply, dealers said.
"Of course you have had the good news about the silver ETF. It's not the final approval but is pretty close to it," said John Reade, precious metals analyst at UBS Investment Bank.
"If you get 50 million ounces of silver for the ETF, it will have a big impact on the market."
Spot silver
Silver, used in jewelry, electronics and photography, has risen nearly 20 percent since the start of 2006 in anticipation of the fund launch.
Dealers said the market might have about 600 million ounces of silver available for delivery, including holdings by central banks, dealers and other banks.
But the figure excluded billions of ounces in the form of jewelry accumulated by consumers over generations but not available for immediate delivery.
The Securities and Exchange Commission said on Tuesday it approved rule changes that would allow the American Stock Exchange to list shares in Barclays Plc's
Before the Silver Trust shares can begin trading, the commission would have to approve a registration statement allowing the shares to be publicly issued.
The fund would be backed by silver bullion held in vaults in London, with each share worth about 10 ounces of silver.
"With the scale of fund interest already expressed, I still believe the actual launch of the ETF will drive silver prices towards $12," James Moore, analyst at TheBullionDesk.com, said in a daily report.
Zales COO Resigns.
Management shifts continue at Zale Corp. as the company announced the departure of another top executive, Sue Gove, executive vice president, chief operating officer and member of Zale's board of directors.
Gove resigned as an officer and director effective immediately, according to a Zale release issued Thursday. She follows former CEO Mary Forte and former Zales Jewelers' president Paul Leonard, both of whom left the company earlier this year.
"The company would like to thank Sue for her many contributions over the last 25 years, and we wish her well in her future endeavors," Richard Marcus, chairman of Zale's board of directors, said in the statement. "We are very appreciative of the talent, dedication and passion she brought to the business."
Zale is currently operating with an interim CEO, Betsy Burton, and has not named a successor to Forte.
Expect a continued Management shake-up at Zales who have been losing money at a rapid rate as we have chronicled here: Zales Loss . Increased competition from the Internet and the flight to diamond and jewelry quality by consumers are a few of the reasons for Zales downward spiral.
I hope the Zales Board of Directors at least gave her a Gold Watch on her way out the door.
WOW!! Look At Precious Metal Silver!
U.S. silver futures rallied to a new 22-year high on speculative buying early Monday amid expectations of rising silver demand, pushing the other precious metal higher as well, dealers said
Riding silver's coattails, palladium jumped to a two-year high, platinum scaled a six-week peak and gold rose to a three-week high.
Record copper prices and a shaky dollar were also supportive to the complex, while investors awaited clues on the Federal Reserve's policy outlook after an expected rate increase at a two-day meeting that ends on Tuesday afternoon.
By 10:27 a.m. EST, May delivery silver
"Will $11 prove a correction pivot? More likely, the next stiff resistance lies somewhere above $12," Greg Weldon, independent analyst and publisher of the Metal Monitor, said.
Silver surged for a fifth straight session on hopes that a silver-backed investment vehicle will soon launch and create greater investment interest in the gray metal.
The U.S. Securities and Exchange Commission last week seemed to clear the way for final approval of the first exchange-traded fund that tracks the metal's price.
Credit Suisse said the price could climb further in the medium term, to $15, hoisted by increased consumer and investment demand due to the ETF.
Monday's fresh buying held down the gold/silver ratio, the number of ounces of silver needed to buy one of gold, which is a bullish technical signal for silver.
The ratio remains below 52 to 1, versus 58:1 at the end of February and 60:1 late last year.
Fund positioning in COMEX silver futures has increased in the latest week, according to closely watched U.S. Commitments of Traders data from the Commodity Futures Trading Commission.
Where are the Hunt Brothers?
David Yurman Jewelry: Evolution of a Jewelry Designer.
The Orlando Sentinel has an interesting feature on David Yurman today.
David Yurman jewelry is like your favorite blue jeans -- only much more expensive. The jewelry is "comfortable," says Yurman, 63, who recently visited his new boutique, which rubs shoulders with Cartier and Tiffany in Orlando's Mall at Millenia.
The jewelry is also versatile, he says. "You can wear it anywhere, day to evening." Just like blue jeans.
It wasn't always that way with jewelry. Before the 1980s, when Yurman's now-iconic cable bracelets became the most coveted, and copied, arm candy in the United States, there were two kinds of jewelry: Costume for everyday wear, and fine jewelry for special occasions.
The relaxed elegance of Yurman's designs bridged the divide. The jewelry is classic but with a modern twist that gives it go-anywhere elan.
Fashioned from gold and silver, many pieces also feature coral and turquoise, a sparkling array of gemstones and Yurman's current favorite, South Seas pearls. Signature motifs include a squared "cushion" shape, a hook-and-eye closure and the widely recognized twisting "cable" pattern.
The designs are "a combination of art, fine jewelry and fashion," says Yurman, who wears several of his creations: A ring, a bracelet and a square-faced watch.
Dressed all in black, his thick white hair swept straight back, his chin fashionably stubbled, he looks every inch the artist from Tribeca, the New York neighborhood where he and his artist wife, Sylvia, live and work.
Before designing jewelry, Yurman was a sculptor, hanging out with prominent Beat artists of the 1960s; writer Norman Mailer, painter Franz Kline, sculptor Ron Boise.
"I did these funny little silver angels," he says.
It was one of those angels, fashioned into a belt buckle, that sparked his career as a jewelry designer.
The buckle was a gift to Sybil, his girlfriend at the time. She wore it to an art opening, where it caught the eye of the gallery owner. He asked if it was for sale. Yurman said no, but Sybil said yes -- and within weeks they found themselves in the jewelry business.
Ever since, they've had good-luck angels perched on their shoulders. Their collections are in more than 450 stores around the world, and David Yurman is one of the best-known luxury brands on the planet.
Gwyneth Paltrow and Barbra Streisand wear the jewelry; Steven Spielberg and Kevin Spacey the watches; hip-hop moguls Jay-Z and Damon Dash the men's designs. Their ad campaigns have featured models Amber Valetta and Kate Moss, and the company's newest "face" is Naomi Watts -- who recently flashed Yurman earrings of rose quartz and diamonds at the Oscars.
Orlando real estate agent Virginia Morales, 49, collects Yurman bracelets. "I wear three, four at a time," she says. "My husband always knows what to give me for my birthday, anything David Yurman."
Since founding their company in 1980, the Yurmans have worked as a team.
"I have the vision; I design the collections," explains Yurman. "My wife does the styling and merchandising."
Their son, Evan, is part of their ever-expanding creative team. And let's not forget the lawyers.
The couple's designs, which range from about $300 for a simple bracelet to more than $7,000 for a multistrand couture necklace, are among the most copied in the world. Yurman is not flattered by imitators and spends $1 million a year protecting his brand.
"Copying is stealing," he says. People who wear copies are deceptive. "And that's not cool."
Worse, he says, they are supporting counterfeiters who may pay no taxes, have ties to illegal operations or use child labor.
As his company grows, Yurman finds himself more in the role of executive than artist.
"It's less like playing an instrument, more like being the leader of the band," he says. "I'm about ready to do more art work."
But that is not likely to happen anytime soon. First, he plans to introduce a line of Yurman eyewear and a Yurman fragrance, followed by Yurman handbags and luggage.
No wonder he believes in angels.
Tiffany Sales Up, Profits Down.
Tiffany & Co.’s overall net sales in fiscal 2005 rose 9 percent to $2.4 billion, and profits fell 16.3 percent to $254.7 million.
Tiffany’s attributed the decline in profit to a one time gain in December 2004. In fiscal 2004, earnings in the fourth quarter and year benefited from a pre-tax gain of $194 million as a result of the company's sale of its shares in Aber Diamond Corporation.
Retail sales in the United States rose 9 percent to $1.2 billion during the fiscal year, same-store sales rose 7 percent (branch store sales rose 7 percent and New York flagship store sales rose 5 percent.) Tiffany’s attributed comparable store sales growth to higher spending per transaction. Tiffany’s opened four stores stateside in 2005 and operated 59 Tiffany & Co. stores by year-end 2005.
Silver Hits 23 Year High!
The price of silver shot to a 22-year high above $11 per ounce on Wednesday, as funds continued a recent buying spree on excitement over a proposed U.S. silver-backed security, trading sources said.
Gold raced to a seven-week peak on spillover interest from silver and other supportive factors, with the price holding just shy of last month's 25 year peak near $575 an ounce.
"Silver's still being driven by the expectations of the ETF (exchange-traded fund) and I think gold's more following," said David Rinehimer, head of futures research at Citigroup Global Markets in New York.
Spot silver bolted to $11.10/11.13 an ounce late in New York, versus Tuesday's late quote at $10.84/10.87. On Wednesday, London bullion dealers fixed the daily spot reference rate at $10.8750.
Fund buying took the price up 2.7 percent, helping silver surpassing a short-term technical of $11, on hopes that an ETF that is expected to boost consumer and speculative demand will launch soon.
Silver has risen almost 8 percent since last Tuesday when the U.S. Securities and Exchange Commission cleared the way for final approval of the first ETF to be backed by bullion.
Gold Price Knocking at $600 Door.
In spite of some profit taking on Friday, Gold is on the verge of hitting $600/oz.
U.S. precious metals futures fell slightly on Friday morning as commodity funds and speculators cashed in on gains after a blistering rally on Thursday, market sources said.
Gold hit a 25-year high before retreating, and silver also slipped back, though it still was close to a fresh 22-year high and within sight of the $12-an-ounce mark.
Palladium, the most illiquid of the metals group, sank nearly 6 percent before steadying and platinum slid 2 percent, retreating from an all-time peak atop $1,105 an ounce.
Investors have piled into gold and other hard assets to benefit from booming commodities markets and also as a store of value amid worries over the economy and geopolitics.
"Precious metals registered further gains in Asian trading overnight, but profit taking and selling from investors and macro funds has made inroads," analysts at UBS investment bank said. "A volatile day appears likely, given it's quarter and month end."
Gold to Go To $600 As Investor Switch from Bonds.
Gold may top $600 an ounce this week for the first time in 25 years as investors buy bullion instead of U.S. bonds, a Bloomberg News survey shows.
Nineteen of 30 traders, investors and analysts surveyed from Sydney to Chicago on March 30 and March 31 advised buying gold, which gained $21.20 to $586.70 an ounce last week in New York and rose again today. Seven advised selling and four were neutral.
Gold rallied 13 percent since Dec. 31, outperforming the 3.7 percent gain in the Standard & Poor's 500 Index. Holders of the benchmark 10-year U.S. treasury lost 2.8 percent. Gold held for exchange-traded funds linked to the price of the metal grew about 28 percent in the first quarter, reaching 14 million ounces, said the producer-funded World Gold Council in London.
``It's going to $600,'' said Duncan Cruickshank, an analyst at Commodity Warrants Australia Pty in Sydney. ``People are piling in. People will make money even if they buy at these levels.''
The 3.7 percent gain in gold last week on the Comex division of the New York Mercantile Exchange was predicted by a majority of analysts surveyed March 23 and March 24. The Bloomberg survey has forecast the direction of prices accurately in 61 of 101 weeks, or 60 percent of the time.
Predict Gold To Become Scarcer.
Financial Times of London quotes Bobby Godsell, chief executive of AngloGold Ashanti, predicting that worldwide gold production will stagnate, then fall in the coming years as large deposits of the precious metal become scarce.
He said this would support the rally in the gold price, which last week hit a 25-year high of $588 per ounce.
The South African company, the world’s third biggest gold producer, mined 6.2m ounces of gold in 2005 but expects production to be lower this year, between 5.8m and 6.1m ounces, and then increase again in 2007 as new projects come on stream.
But in an interview with the FT, Mr Godsell warned that the gold industry will find it hard to keep up current levels of production. “All of the gold majors are finding it difficult to replace their reserves. New mine production will be flat-to-declining.”
RBC Capital Markets in London estimated that total gold production would rise slightly in 2006 and 2007, be flat in 2008 and start to fall in 2009. “There hasn’t been a big gold discovery for years,” said an analyst.
Mr Godsell said: “Gold is precious because it is scarce. Twenty years ago the majority of gold was produced by four old world countries: South Africa, Australia, Canada and the US. In the future it will be anything but. Tomorrow’s ounces of gold are going to be in interesting countries.”
AngloGold, which has expanded away from its base in South Africa as the country’s reserves of gold dwindle, is focusing on exploration in high potential but high risk areas such as the Democratic Republic of Congo, Colombia, Mongolia and Russia.
The high gold price has stimulated exploration activity by smaller mining companies, but Mr Godsell is sceptical about whether this will lead to increased gold supplies as rising costs threaten to kill off these projects. “The juniors have a better track record of finding ore bodies [than major gold companies], but to build a mine now you are talking about $500m for an open pit and at least $1bn for an underground mine,” he said.
Speculation that AngloGold would try to grow by takeover has increased since Anglo American, a UK-listed mining group, said it would cut its stake in the company from 51 per cent to 41 per cent. After Anglo American cedes direct control AngloGold would be “more fleet of foot” in making decisions on mergers and acquisitions, said Mr Godsell. “We look at everything and we have exploratory discussions, but we have no announceable deals.”
Rumors have suggested AngloGold may buy Gold Fields of South Africa, the fourth biggest gold miner, to form the world’s largest gold company. “There are some synergies, we both have mines in South Africa, Ghana and Australia. If we could put together a good deal that would be in the interests of shareholders that would be a great thing to do.”
But he added: “Most M&A activity is value-destructive and this may be particularly true in the gold sector as gold shares trade at a premium.”
Scare tactics or accurate? Time will tell.
Is Surging Gold Price Affecting Jewlery Sales?
Asks the London Financial Times this morning?
The high price of gold could reduce jewelry demand by a fifth this year, according to The Yellow Book, a bi-annual analysis published by Virtual Metals Research & Consulting and Fortis Bank.
The analysis also predicted that the gold market would swing into surplus this year if prices remained at current levels, leaving the market increasingly dependent on support from hedge funds, pension funds and retail investors.
Physical demand has been badly affected by gold’s surge towards $600 a troy ounce this year and total jewelry demand is forecast to fall by 21 per cent this year to 2,341 tons.
Jewlery accounts for about 75 per cent of the demand for gold, which has very few industrial applications.
VM Group also forecasts that the amount of gold scrap being recycled will rise 19 per cent to 998 tons this year.
Demand for gold through Exchange Traded Funds is expected to decline by 10 per cent to 173 tons, although this forecast does not include the potential launch of a gold ETF in India or the Far East.
The combination of weaker physical demand and higher scrap supply will swing the market from a deficit of 310 tons last year to a surplus of 422 tons in 2006, according to VM.
“There is no doubt that the price activity of the past six months has disrupted the physical markets and we have yet to see at what trading range an equilibrium will be re-established,” said Jessica Cross, VM’s chief executive.
VM said it would be three years before the increase in new mine supplies – resulting from the rise in gold prices over the past six years – had any market impact.
Gold hit a 25-year peak at $591.50 a troy ounce during trading on Monday.
The trigger for hedge funds and pension funds to reassess the allocation of their portfolios to gold and the price implications of such a shift remained unclear. However, the importance of the physical market in providing a base for the price should not be under-estimated. VM said that a correction down to the $520/$540 range could trigger a resumption of physical buying. But if prices persisted at current elevated levels, there would be a greater acceptance of these higher trading ranges by more price-sensitive sectors such as jewelry.
Gary Mead, a VM analyst, said the impact of greater Chinese demand for gold jewelry and talk of China buying gold to help diversify its huge foreign exchange reserves had been overstated.
He said China could be expected to have a deficit of just 78 tons a year by the end of the decade if current supply and demand trends were maintained.
Interesting outlook; To date, we have not seen a drop-off in Gold Jewelry sales in our business. Stay tuned.
Diamond & Jewlery at Retail: How Much Money Is Involved?
The US jewelry retail industry generates annual revenues of about $44 billion from 28,000 specialty, department, and discount stores. Specialty retailers hold about 50 percent of the market. Wal-Mart is the biggest jewelry retailer in the country, followed by Zale, the biggest specialty jeweler with over 2,000 stores and kiosks. The industry is highly fragmented: the top 10 jewelry chains hold less than 25 percent of the market. Other large specialty retailers are Tiffany and Sterling, the US branch of British jeweler Signet Group.
Jewelry sales depend partly on consumer income. Small jewelers can effectively compete with large chains because price isn't the main factor determining retail sales. Profitability depends on the volume of sales because sales costs are high and fixed. Because gross margins are very high, often 50 percent, mass merchants like Wal-Mart have taken market share by controlling costs and cutting prices.
Jewelry is often classified as bridal merchandise (engagement, bridal and anniversary rings - about 35 percent of the market); fashion jewelry (rings, bracelets, earrings, pins, gold chains); and watches, silver flatware, and other giftware. Diamond jewelry and loose diamonds account for the largest share of total jewelry store sales (46 percent); gold jewelry for 11 percent; colored gemstone jewelry (rubies, sapphires, emeralds, etc.) 9 percent; and watches 4 percent.
Silver ETF Set Up To Take Advantage of Higher Prices May Spell It's Slide.
MarketWatch today asks a very interesting and intriguing question: Will special Exchange Traded Funds designed to take advantage of Silver's rising price eventually be the catalyst for it's downward slide?
A highly anticipated exchange-traded fund tracking silver prices may usher in a correction from multidecade commodity highs if it follows the pattern of gold ETFs.
Although the silver ETF has yet to gain final regulatory clearance, precious-metal traders are eagerly awaiting the fund in registration from Barclays Global Investors. Some are speculating it could launch as early as this week on the American Stock Exchange after silver prices reached a 22-year high of $11.815 an ounce Monday.
Analysts, though, say the introduction of the silver ETF could actually set up a price pullback in the days and weeks following the start of trading.
The introduction of commodity-oriented ETFs quite often occurs at market tops.
There are already seven ETF-like products listed on exchanges in the U.S., the U.K., Australia and South Africa that track gold prices, and the launches have been marked by an interesting trend, according to J.P. Morgan analyst Anindya Mohinta in London.
The most successful gold ETF launches were Gold Bullion Securities (GBS) on the London Stock Exchange in December 2003, and StreetTracks Gold Trust (GLD ).
Mohinta found gold prices rose by up to 12% in the 90-day periods leading up to the ETF launch dates, only to fall between 7% and 10% in the corresponding period after the listing date.
So far in 2006, through Monday's close, silver futures are up more than 32%, fueled in part by the ETF talk.
If approved by regulators, the silver ETF would be backed by silver held in a vault, which matches the set-up of existing gold ETFs. Barclays has filed to issue 13 million shares of the silver ETF, with each share representing 10 ounces of the metal. This requires a physical backing of 130 million ounces of silver, or 12% of the global physical demand and equal to the silver inventory on the New York Mercantile Exchange, according to J.P. Morgan.
Mohinta said he doubts that the entire 13 million-share allocation will immediately sell out, pointing to the common practice of using mining stocks such as Pan American Silver Corp. (PAAS )
PAAS25.61, +0.61, +2.4% ) to get exposure to silver without holding the physical metal.
"Larger, more sophisticated players already have an abundance of investment alternatives" such as futures and options contracts to invest in silver and other commodities, noted Tim Evans, senior analyst at IFR Markets in New York.
Precious-metals prices are also notoriously volatile and given to wide performance swings.
Evans said the rush of commodity ETFs such as the silver fund does have a tendency to trigger euphoria, but "their introduction quite often occurs at market tops, bringing small investors into markets they don't fully understand at just the wrong moment."
"While silver can get to $15 or $20 before it's all said and done, the actual launching of the silver ETF could mark a short-term top for silver," added Peter Grandich, editor of the Grandich Letter, noting that the silver ETF could represent a "buy the rumor, sell the news" trade.
Analysts are also warning about potential confusion over the tax structure of precious-metals ETFs. Under current tax law, long-term gains from the sale of silver are taxed as "collectibles" like artwork. Therefore, if held for more than a year, gains on the silver ETF would be taxed at a maximum rate of 28%, compared with 15% for so-called long-term gains on stocks. If sold in less than a year, gains are taxed as ordinary income.
Check out this Siver Exchange Traded Fund carefully before you invest.
Gold Breaks $600! Silver sets New Highs!
Gold futures powered higher early Thursday, setting a fresh 25-year high at $600 an ounce, pulling other metals to multiyear levels and helping copper to a new all-time high.
"Gold is exploding and silver isn't far behind," said Kevin Kerr, trader and editor of Global Resources Trader.
Gold for June delivery rose to $600 an ounce in official trade on the New York Mercantile Exchange, having earlier hit a high of $601.90 in electronic trade.
Silver traded at a new 22-year high of $12.01 an ounce, after peaking at $12.08 in electronic trade.
The metal has rallied sharply in recent weeks as excitement has built about the pending launch of a silver exchange-traded fund, that's expected to boost physical demand for the metal.
Platinum rose $17.40 to $1,098 an ounce and palladium was up $13.35 at $356 an ounce.
"Key resistance was broken overnight and as we have been building support and healthy consolidation over the last week or so now we have a firm base to move higher," said Kerr, who noted that today's rally has come without any real news to drive it.
Analysts at Action Economics said metals are finding strong support from continued buying by funds, seeking out asset classes with a potential for strong returns.
Now that gold has hit the psychologically key $600 an ounce level, some nearer-term funds may take the opportunity to lock in some profits, they said.
On the other hand, the break through $600 will also trigger a range of stops and key hedge-fund buy levels, said Kerr.
Silver Hits Another Record Price
Gold rose on Monday but remained below a 25-year peak of $598 an ounce hit last week, while silver gained more than 2 percent to hit new highs not seen in more than 22 years.
Spot gold rose to $592.75/593.50 an ounce from $588.00/588.90 an ounce late in New York on Friday, when the metal hit another multi-year high on buying from funds and investors.
The upside target was pegged around $600 an ounce, a level last seen in December 1980.
"It's certainly looking to test that area," said Darren Heathcote, head of trading at N M Rothschild in Sydney.
The price dips attracted buying from investors but it may not be strong enough to push up gold to $600 during Asian trading, said Heathcote, adding that the metal could find stiff resistance at $596.
Investors have turned to the booming commodities markets for investment alternatives to lagging equity, bond and foreign exchange markets, said dealers.
Tensions in the Middle East, uncertainty about the dollar's outlook, worries about rising energy costs and speculation that central banks would diversify into metals have also boosted gold's appeal, they said.
Gold Hits $600. What's Next?
Gold bullion nudged through the $600 per ounce barrier for the first time in a quarter century on Tuesday, prompting investors to ask: can $800, or even $1,000 gold, be far behind?
Most analysts agreed that once the precious metal broke the psychological mark, it would likely keep going. But they were divided over whether gold mining company stocks would be as attractive as owning bullion.
They noted that the big gold miners, like Newmont Mining (NEM.N: Quote, Profile, Research) and Barrick Gold (ABX.TO: Quote, Profile, Research) (ABX.N: Quote, Profile, Research), have failed to see their share prices keep pace with the steady rise in gold. Instead, investors are flocking to smaller, so-called "junior" gold companies that are involved in exploration,
"Gold will go dramatically higher, it's still early," said Peter Schiff, chief executive of Euro Pacific Capital, a brokerage based in Newport Beach, California.
"Will it reach $800? Yes, $1,000? yes, $2,000? yes. it has nowhere to go but up, but it depends on how far the dollar and other currencies will be devalued."
"The momentum for the commodity is going up and if spot prices break the $600 mark, they will probably continue to go up," said Victor Flores, an analyst with HSBC Securities.
Peter Spina, who operates an investor web site, goldseek.com, said in the short-term there was likely to be correction as the market was a little over-extended, with physical demand from India, the world's top consumer of gold, mostly for jewelry, "drying up at these prices.
"But long-term, fundamentals for gold are more as an investment vehicle." He anticipated the price would rise to $800 within the next two years and possibly hit $1,000.
Gold And Silver Riding The Bull: Are We At The Beginning Or End?
Commodities have been breaking new records for six months now, and this week reached another milestone when gold, copper, zinc, silver and Brent crude all moved through key levels.
Few observers are brave enough to call this latest rally the top of the market, and futures prices are suggesting that further gains might be seen.
Gold peaked at a high of $604.00 a troy ounce on Tuesday, the first time it has moved through the $600 point since December 1980. The latest GFMS survey suggested that the price could push beyond the $850 record reached in January 1980.
Silver moved through $13 an ounce on the same day, for the first time in 23 years, with buying encouraged by the proposed launch of a silver exchange-traded fund that is expected to attract new investors. Platinum also hit a record this week when it touched $1,095 an ounce.
Gold, Platinum, Silver Bulling UP.
Gold closed today at $614.05 UP $15.40
Platinum at $1104, UP $22.
Silver at $13.58, UP $.65
Gold And Platinum Are RED HOT!!
Gold is up today by $6.65 to $620.65
Platinum up $13 to $1116.00
Silver up .38 to $13.93
Iran Affecting Diamond & Jewelry Prices.
Commodities prices roared to new peaks on Tuesday as fund buying restarted, triggered by fears over the nuclear stand-off in Iran and the impact of surging economic growth in China, investors said.
The oil market hit a new record peak, taking key industrial metals prices with it and propelling precious metals to their highest since the early 1980s.
"The fundamental factors are the intensifying of the political situation in the Mideast Gulf and the Chinese GDP figures, which got everyone back to thinking China is eating up global natural resources," a fund manager said.
China's economy is on course for growth of at least nine percent this year signalling accelerating imports of energy and raw materials.
Fears about Iran's row with the West over the country's nuclear program sparked oil's latest rise.
IPE Brent crude set a fresh high of $72.20 per barrel before falling to $72.03 at 0847 GMT.
Brent has rallied from below $60 in December, buoyed by a fresh flow of fund investment amid mounting concern over Iran and the possibility of U.S. military action against the world's fourth largest oil producer.
"If we look forward it's continued economic growth and a potentially disastrous situation in the Mideast Gulf," the fund source said.
Most commodity indexes, which between them have attracted around $80 billion of speculative investment into the markets, are weighted heavily towards oil.
Fasten Your seatbelts!
Gold to go to $3000, Analyst Predicts!
GOLD is going to go to $3,000/oz as more geo-political problems arise and US investors start to take interest in the yellow metal, forecasts Gold Anti-trust Action Committee (GATA) chairperson, Bill Murphy.
“Even though we’re at $620/oz now we expect it to go to $3,000/oz… there has been no real interest from the people in the US yet as the stock market there is still fine.
“We believe that with the other problems that are going to surface, the US deficit problems and the dollar, gold is going to be the place to be… the fireworks are just beginning,” said Murphy.
He was speaking on the week nightly business show, the Moneyweb Power Hour, broadcast on Radio 2000.
The fireworks are just beginning.
He was commenting on the recent plunge in the gold price from 25-year highs. The gold price climbed as high as $644/oz in early morning trade on Thursday but later plunged back down to $610/oz. Murphy described this as a “healthy correction”.
“This correction won’t last too long… It’s expected. It’s healthy. I think we’ll be back up again in the near future.”
Unlike many gold analysts Murphy believes that this current gold market is not speculative, as open interest in the gold price has not gone up as it has done in the past.
Gold has rebounded today to $630/oz.
Gold & Silver Continue Upwards
Gold headed for its second consecutive monthly gain, spurred by investment fund buying and speculation the U.S. dollar will decline.
Gold has gained 24 percent this year, partly on increased investment by funds seeking to diversify their portfolios. The dollar is poised for its biggest monthly drop in a year-and-a- half against the euro and yen on speculation interest rates will rise faster in Europe and Japan than the U.S. Some investors buy gold as a hedge against declines in the dollar.
``Remorseless buying of precious metals by investors has pushed prices higher,'' Stephen Briggs, an analyst at Societe Generale in London, said in a telephone interview today. ``Quietly behind in the background is dollar weakness.''
Gold for immediate delivery was $4.95, or 0.8 percent, higher at $638.58 an ounce as of 11:17 a.m. in London. Gold has gained 9.4 percent this month, after adding 3.9 percent in March.
Silver for immediate delivery was 1 cent higher at $12.66 an ounce. The metal has added 10 percent this month, also its second consecutive gain.
The dollar has slumped as U.S. Federal Reserve policy makers including Chairman Ben S. Bernanke signaled a pause in their 22- month cycle of rate increases.
Gold Soars to $655 on Iranian Nuclear Fears.
Gold futures rose Friday to a level they haven't seen since late 1980, rebounding from the previous session's loss of almost $655 an ounce, while silver prices climbed as much as 4% as the first U.S. silver exchanged-traded fund began trading.
"Physical interest in Asia overnight has lifted [gold] back above the $635 level, and with most of Asia and Europe closed Monday for May Day holidays, traders are likely to be reluctant to go home short given the current geopolitical picture," said James Moore, an analyst at TheBullionDesk.com.
Gold for June delivery was last up $10.70 at $647 an ounce on the New York Mercantile Exchange after rising to $647.50, a more than 25-year high. The contract closed down almost $6 on Thursday after China boosted interest rates, raising the prospect of lower metals demand from the world's most populous country.
"The precious-metals markets are experiencing significantly higher volatility than we've seen in quite some time, and that can signal that a retracement may be in the offing," said Dale Doelling, chief market technician at Trends In Commodities.
"But it's looking more like a consolidation at this point and, barring an all-out collapse, the trends in all of the metals markets remain favorable," he said. June gold has strong support at its recent low of $610.50, he added.
UBS raised its 2006 and 2007 gold price forecast earlier, predicting that continued investment-fund demand for commodities will support price gains.
"Fund flows into commodities have been more vigorous than anticipated; supply response remains anemic," said analyst Daniel Brebner.
UBS is raising its 2006 gold price forecast 12% to $630 an ounce and its 2007 forecast 25% to $750 an ounce.
Traders are also awaiting news from Iran today, with the United Nations nuclear watchdog due to present a report on that country's nuclear-research program to the Security Council.
Iranian President Mahmoud Ahmadinejad said his country "does not give a damn" about U.N. resolutions that seek to stop it from enriching uranium because of fears the country is planning to develop nuclear weapons, the BBC reported.
Look for Gold to keep going up.
New Silver Fund Gets Go-Ahead.
The long-awaited go-ahead for the listing of the world's first silver-backed exchange-traded fund came on Thursday after the Securities and Exchange Commission, the US regulator, approved plans by Barclays Global Investors to list its iShares silver trust on the American Stock Exchange.
Barclays said it would list the new tracker fund on Friday. The iShares silver trust is designed to attract more investors to the silver market, without them having to worry about buying the physical metal or buying silver mining shares.
Gold Continues Up!
$665.61
$1000 Gold?
Martin Spring thinks so, here: $1000 Gold
Gold is up another $4 today to $673.
Gold Continues Up On Political Tensions.
U.S. gold futures rose toward session highs by midmorning on Thursday, bolstered by ongoing investment buying due to bullishness on gold's long-term prospects after prices hit a 25-year peak Wednesday. Gold closed at $679 on Thursday.
Silver prices rebounded after falling as much as 8 percent in the previous session's bout of profit taking, while
Gold market players said they were keeping a close eye on energy markets, currencies and U.S. economic data for inspiration.
Even though precious metals values technically are sharply overbought, geopolitical tensions including worries over Iran's standoff with the West are still helping to underpin prices.
Gold up Again! No end In sight?
Gold is up again today to $684 and Platinum is up another $12 to $1185.00!
What's Happening To Platinum?
Platinum rose to a record on the spot market for a second straight day amid buying by investors such as hedge funds.
Fund managers are pouring money into commodities such as copper, gold and oil in search of better returns than from stocks and bonds. Hedge funds and other large speculators increased their net-long position in New York platinum futures in the week ended May 2 to the highest in almost three months, according to US Commodity Futures Trading Commission data.
"Funds are still bullish on metals" and are betting that platinum prices may rise further, William Leung, precious metals trader at Standard Bank Asia in Hong Kong, said.
Platinum for immediate delivery rose as much as $4, or 0.3 percent, to a record $1199.50, having gained 37 percent in the past year. The metal traded at $1199 at 12.55pm Singapore time.
Platinum for delivery in July rose as much as $7.10, or 0.6 percent, to $1 209 an ounce, on the Comex division of the New York Mercantile Exchange. It traded at that level in after-hours trade at 12.57pm Singapore time.
Speculative long positions, or bets prices will rise, outnumbered short positions by 4 517 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. That's the highest since the week ended February 10.
Platinum, used in jewelry and devices to reduce toxic emissions from autos, may trade between $980 and $1 250 an ounce this year, London-based precious metals research group GFMS said last month.
Plans by Anglo Platinum, the world's biggest platinum producer, to develop a mine in South Africa may be stalled by a community's petition to stop the development.
A South African court held a hearing yesterday on the petition to stop Anglo Platinum from developing a mine in Limpopo province, a lawyer said. Simon Tebele, head of corporate communications at Anglo Platinum, declined to give details of the company's defence when contacted before the hearing. - Bloomberg, with reporting by Antony Sguazzin in Johannesburg.
Platinum right now is at $1227.
Gold and Platinum at Record Highs This Morning.
Gold futures struck a fresh 26-year high above $690 an ounce early Tuesday, propelled higher by a falling dollar and renewed concerns about Iran's nuclear standoff with the West. Gold was last up $11.10 at $691 an ounce on the New York Mercantile Exchange, having risen to as high as $692.50, its highest level since 1980. Platinum set a record at $1,236 an ounce and was last up $30.60 at $1,232.50
$700 Gold Is HERE!
Gold rose to $700 an ounce in New York for the first time since October 1980 as tensions increased over Iran's nuclear-research program.
The U.S. government said a letter from Iran's president hasn't reduced its determination to halt the Islamic republic's nuclear research. Geopolitical turmoil can spur investors to buy precious metals as a store of value. Gold touched a record $850 in January 1980 after a 1979 Iranian revolution slashed oil exports and spurred 12 percent inflation in the U.S.
``No one is buying Iran's overtures,'' said Frank McGhee, head metals trader at Integrated Brokerage Services LLC in Chicago. ``This is purely a geopolitical move for gold. We've been here before. The difference is that this time, there are nukes involved.''
Gold futures for June delivery gained $20.10, or 3 percent, to $700 an ounce at 11:24 a.m on the Comex division of the New York Mercantile Exchange. A close at that price would be the highest since October 1980. Prices are up 63 percent in the past year.
Palladium Engagement Rings: Excellent and Affordable Alternative to Platinum?
Scott Kay, the renowned jewelry designer and owner of Scott Kay, Inc. definitely thinks so and is not shy about making his opinion on this topic known. With the price of platinum going through the roof (it closed at $1240 today, up $40 !) Kay believes that Palladium provides an affordable as well as an affordable alternative. Indeed, Kay points out that Palladium has qualities and attributes that Platinum does not have.
The prices of Gold and Platinum have surged over the past five months and expert analysts are convinced that for a variety of reasons, they will continue to do so for the forseeable future. Retailers have already increased prices and will no doubt continue to do so if these metals continue their upward price climb.
Thus, Palladium provides an excellent alternative not only to Platinum but to white gold as well. White gold is not white per se but is really yellow gold that has been made white via rhodium plating. The rhodium plating is not permanent and therefore the "whiteness" will fade over time necessitating more rhodium plating. Palladium is pure white, even whiter than Platinum and sturdier, thanks to the special alloys used in it's processing.
Folks, Scott Kay may be on to something. It certainly deserves your serious consideration. More information is HERE:
Palladium Jewelry: Consider It!
Is China Pushing Gold's Price Explosion?
Gold has surged to $700 an ounce for the first time in 26 years after Chinese economists suggested the country should quadruple its bullion reserves to protect against a falling dollar.
Speculators have been alert to any sign that Beijing may be planning to switch a portion of its massive $875 billion reserves into gold, a move that would electrify the market.
They seized on comments yesterday by Liu Shanen, an official at the Beijing Gold Economy Development Research Centre, who said China should raise the portion of gold in its reserves from 1.3pc today to between 3pc and 5pc. Such a move would entail the purchase of 1,900 tonnes of gold, equivalent to gobbling up nine months of global mine production.
Washington's cold response to Iran's move to defuse nuclear tension also helped fuel yesterday's rally. "No one is buying Iran's overtures," said Frank McGhee, a metals trader at Integrated Brokerage Services. "This is a purely geo-political move for gold. We've been here before. The difference is that this time, there are nukes involved."
June gold futures jumped $20.10 an ounce in New York, briefly touching the $700 line before falling back slightly.
Fly Me To The Moon: Gold & Platinum Prices on Steroids!
Gold for immediate delivery reached a 26-year high as investors bought the metal as a hedge against inflation after the U.S. Federal Reserve signaled concern about rising prices. Platinum rose to a record.
The Federal Reserve yesterday raised interest rates and said higher energy prices and raw material consumption ``have the potential to add to inflation pressures.'' Bullion for immediate delivery has jumped 37 percent this year on inflation and rising tension over Iran's nuclear program.
``Comments by the Fed which hinted at possible further rate rises signaled to the market that inflation concerns are still present,'' Tsuyoshi Furukawa, a commodity strategist at Taiheiyo Bussan Co. in Tokyo, said by phone today. ``Investors decided they'd have to buy gold as an inflation hedge.''
Gold for immediate delivery rose as much as $5.60, or 0.8 percent, to $713.50 an ounce, the highest since it traded at $717 on January 24, 1980. It traded at $711.83 at 4:20 p.m. Tokyo time.
Platinum rose to a record for a fourth day. There's speculation Johnson Matthey Plc., the world's largest distributor of platinum-group metals, ``will produce a bullish report on the market next week,'' according to an e-mail report from N.M. Rothschild & Sons (Australia) Ltd. today.
Platinum for immediate delivery rose as much as $21, or 1.7 percent, to $1,277.50 an ounce, having gained 44 percent in the past year. It traded at $1,271.50 an ounce at 4:21 p.m. in Tokyo.
Iran Tension
The U.S. government and other United Nations council members want Iran to stop its nuclear research, sparking concern supplies of oil from the world's fourth-largest oil producer may be disrupted. That led to record oil prices last month.
``Inflationary fears, geopolitical tensions regarding Iran, the pure weight of funds going into commodities'' are driving gold, said Darren Heathcote, head of trading at N.M. Rothschild & Sons (Australia) Ltd., in Sydney.
Fund investments in commodities may exceed $120 billion by 2008, up from $80 billion last year, according to Barclays Plc.
Goldman Sachs JBWere Pty raised its gold price estimates yesterday to $675 an ounce for 2006, from $575 an ounce, and expects gold to trade between $630 and $850 an ounce for the rest of the year.
Inflation erodes the value of assets such as bonds, and makes precious metals more attractive as hedges.
Supply Concern
Gold for June delivery on the Comex division of the New York Mercantile Exchange rose as much as $9.20, or 1.3 percent, to $714.90 an ounce in after-hours electronic trading, the highest since September 24, 1980, when the contract reached $716.00. The contract traded at $713.60 at 4:23 p.m. Tokyo time.
Some investors buy gold as inflation increases to preserve purchasing power. The precious metal surged to $873 an ounce in 1980, when consumer prices jumped more than 12 percent.
Gold production from the world's largest deposit, a mine run by Barrick Gold Corp., will be 50 percent lower than forecast this year because of damage to the main shaft, a partner in the project said yesterday.
``That may have some people worrying about supply going forward,'' said David Thurtell, a commodity strategist at Commonwealth Bank of Australia Ltd., said in Sydney. ``There's a lot reasons to buy gold now, and not much in the other way.''
Contrarian View On Gold & Silver Prices: "The Bubble Will Burst".
The bubble-like levels of gold and silver prices cannot be sustained, according to the head of the world's largest precious metals trader, as bullion surged through the $700 a troy ounce mark for the first time in 25 years.
But Helmut Eschwey, chief executive of Heraeus, a family-owned German trading and technology group, said prices in platinum and some rarer precious metals, all at or near record highs, were justified by demand and low stock levels.
"The rally has been enormous [but] it can't go on forever," he told the Financial Times. "Silver will be the first to fall. Gold will not last at this level. It is different with platinum because there is industrial need."
His comments carry weight because Heraeus, based just outside Frankfurt, has been in the precious metals business for more than 150 years and makes annual revenues of about 7 billion from trading.
It is also unusual in that it has positions in all parts of the metal cycle, fromrefining and recycling to making products for industries such as automotive, semiconductors and telecommunications.
The group also has divisions making sensors for the steel industry, dental products, optical fibres and specialist lighting.
Gold prices have risen from $600 an ounce inthe past month and bymore than 250 per cent in the past five years, whilesilver and platinum have recorded strong gains.
Speculators such as hedge funds have been blamed for a large part of the risesand Mr Eschwey said he thought, by jumping on a bandwagon, that they had had an effect.
He said it was "impossible to predict" when the bubble would burst for silver and gold but that it would take place. The situation is clouded because industrial buyers are trying to put back their purchases of precious metals but cannot do so forever and are starting to buy at the record levels.
The easiest way to prick the bubble would be for central banks to release some of their huge holdings in gold, Mr Eschwey said.
"There is a big stock in gold; there is none in platinum," he added, justifying his belief that platinum prices will stay strong. "I believe in the long run there will be a shortage of platinum."
The metal is predominantly used in the production of catalysts for cars and other devices as well asjewellery.
As a privately-owned company with 188 family shareholders, Heraeus, which trades from Hanau in Germany, New York and Hong Kong, is careful to monitor risks when it trades and closes each of its positions every night.
"Our business model is defined in a way that we have no price risk and a high stability in earnings," Mr Eschwey said.
Tulip Craze Hits Gold and Platinum: Madness Continues.
Gold is up another $16 dollars to $730.00 and Platinum is up another $47 to $1342 in today's early trading.
Fasten your seatbelts.
Gold And Platinum Profit Taking.
Investors took profits on their Gold and Platinum positions today.
Gold is at $ 683.35, down $31 and Platinum is at $1284, down $34.
Gold Bites Man!
Nothing stays up forever, not even with Viagra.
The Gold balloon which saw it's price up and over $700 just two weeks ago burst with a loud pop today as Gold sustained heavy losses as a wave of investor selling dragged down gold prices by four percent and silver by five percent.
Gold's failure to break key levels prompted players to take profits despite earlier weakness in the dollar, which generally makes the metal cheaper for holders of other currencies. The dollar later ticked higher.
"Investors are extremely jittery. Overall, the market is going to do some consolidation work here before we make the next attempts on the high side," a dealer in London said.
"Prices are going to bottom out around $635-$640 an ounce," he added.
Gold traded in a broad range, extending the volatile moves that saw prices hit a 26-year high of $730 on May 12, which compared with the record peak of $850 in early 1980.
Gold was quoted at $647.50/649.00 by 1429 GMT after falling as low as $645, against $672.10/672.90 late in the U.S. market on Tuesday.
The metal tried to break Tuesday's high of $673.60, touching $670.50 before it retreated.
Interesting to note that the Oracle of Omaha, Warren Buffett, one of the worlds shrewdest investors divested his Silver holdings a short time ago before the bubble burst today. In the immortal words of Kenny Rodgers, "ya got to know when to hold 'em and when to fold 'em".
Gold Jewelry Sales Are Up.
National Jeweler reports that despite rapidly rising gold prices, U.S. gold jewelry sales grew in terms of both dollar and unit sales for 2005, according to new statistics from a survey commissioned by the World Gold Council (WGC).
Dollar sales grew 4.4 percent for the year to a record $17.7 billion, the strongest growth for the category since 1999, according to the study, conducted for WGC by GfK Audits & Surveys. In the fourth quarter of 2005, gold jewelry sales rose 5 percent in dollar sales.
For 2005, gold unit sales grew 4.4 percent over 2004, while the average price per unit remained constant at $76.01.
Gold bracelets appeared the strongest category, with unit sales increasing 6.6 percent and dollar sales up 6.5 percent. Gold neckwear posted a 4.1 percent increase in dollar sales, the strongest growth since 1995. Gold earrings continued their 10-year growth streak, with a 5.5 percent boost in dollar sales.
Accounting for 9 percent of market share, non-store retailers showed the highest percentage increase in gold jewelry sales, with a 7.1 percent increase in sales volume (totaling $1.7 billion) and a 6.7 percent rise in unit sales.
With 49 percent of market share, traditional jewelry stores saw a 3.9 percent increase in gold jewelry sales (totaling $8.63 billion) and a unit sales increase of 3.2 percent.
Mass merchants grew their gold business 5.1 percent for the year in dollar terms to $4.07 billion and 4.9 percent in terms of unit sales. For department stores, dollar sales volume rose by 3.7 percent to $3.36 billion and unit volume increased by 3.1 percent.
Gold, Silver Tumble.
The price correction for Precious Metals is in full swing, friends.
U.S. gold futures plunged to a six-week low and silver hit a two-month nadir in a cross-metals sell-off on Thursday, as a steady dollar made the hard assets less attractive to investors.
Gold has fallen $100 in a three-week correction from a 26-year high reached in mid-May atop $730 an ounce.
Traders said the break below $640 sparked further stop-loss selling on Thursday.
Gold is currently trading at $629.75 and Silver at $12.01
Look for more volatility in the near-term.
High Platinum Prices Not Affecting Sales
The popularity of luxury platinum wedding bands will not be affected by the high price of platinum, according to a senior industry figure.
Francoise Izaute, managing director of Platinum Guild International (PGI) Italy, said that although the bridal sector may see a change in demand owing to the price of platinum, the high end of the market would be immune.
She estimated that ten per cent of bridal jewellery sale's in Italy's retail sector were platinum, including both wedding rings and engagement rings, according to Reuters.
Dario Raerini, who runs the family-owned Ititoli company, told the news organisation that she agreed that people who have a taste for platinum jewellery would be resistant to price rises.
"They want high quality and the best product so they are ready to pay more to get the best," she said, adding that the luxury end of the market would be particularly unaffected.
"For luxury, one-off pieces, there is no problem. If someone is going to spend 80,000 or more on a piece of jewelery, their margins are totally different."
Yap Yap, Palladium! What's the Scoop?
Palladium has gotten much attention in recent months as the cost of Platinum and Gold have skyrocketed.
We talked about Palladium recently here on DiamondVues and highlighted the point of view of Scott Kay, an internationally acclaimed jewelry designer. What the heck is a Palladium Engagement Ring?
At this weeks major jewelry show in Las Vegas, Palladium was a hot topic for discussion. Susan Posnick covered the Seminar. Here's her Report:
"With metal prices through the roof, palladium has been a hot topic at the Las Vegas jewelry shows. So hot that around 500 show attendees got up early Monday morning to get briefed on "The Palladium Facts" in a seminar designed to alter perceptions about the metal.
The program, organized by the Palladium Alliance International (PAI), included a panel of experts pushing the palladium agenda from different perspectives. The speakers were Frank McAllister, CEO of Stillwater Mining Co., the only U.S. producer of both platinum and palladium; designer Scott Kay, CEO and lead designer of Scott Kay Inc.; Daniel Ballard, national sales manager, Precious Metals West; and Stewart Grice, mill and refining director, Hoover & Strong. The session was moderated by Dave Federman, contributing editor of Modern Jeweler magazine.
Palladium, a platinum group metal (PGM) has the fine properties of platinum, but PAI touts it as "whiter than platinum" and "the least dense of all the PGMs." At the same time, it is significantly lower in cost than platinum and gold, with current prices ranging from $300 to $400 per ounce. That said, the panelists insisted that the benefit is not as a cheaper alternative to other precious metals but a high-quality equal that is rare, 95 percent pure and easy to work with.
"It's definitely not a replacement for white gold and it's definitely not a replacement for platinum, but it is a new metal," said Grice.
Well, not new in terms of it being around, but new in terms of awareness, said McAllister.
"It's been jewelry's best-kept secret," McAllister said.
Kay—who started using palladium in his fine jewelry line and touted the metal in a letter to his clients this past March—was adamant that palladium should not be considered a cheaper alternative metal to platinum.
"This word 'alternative' drives me nuts," Kay said. "Palladium is not an alternative to white gold. Palladium is not an asset to our jewelry industry because it trades at somewhere around $350 an ounce. Palladium is not an asset because platinum is at $1,250 or $1,300 or $1,400 an ounce."
Rather, he said it is parallel to platinum in terms of quality, but actually superior in the design flexibility it allows jewelers because while it's a substantial metal, it is lighter in weight.
"It's not light, it's right," Kay said. "The fact is it has the right density because we make things to wear." For instance, it is a better choice for things like earrings, which are too heavy with platinum.
The only real advantage he says platinum has is "perception and history." The designer said he's particularly incensed by media stories—such as an article published in USA Today—that he claims inaccurately compartmentalizes the metal with less precious ones like steel and titanium. He also doesn't believe it should be compared to white gold, because it's naturally white."
In our opinion, caution is warranted at this time.
Gold Falls.
Gold fell to $627 on Wednesday as a robust dollar underlined the growing belief that US interest rates will rise again later this month, tarnishing the precious metals's role as a hedge against a fall in the US currency. The dollar was hovering near Tuesday's one-month highs against the yen and six day peaks versus the euro.
Monetary policy as enunciated by Ben Bernanke, Fed Chairman, earlier this week is turning progressively against the precious metals. In the last two days, three central bank chiefs have alo smade statements concerning the need to monitor tackle inflationary pressures.
Current technical support is at $620. A break below would trigger a retreat to the $575 level according to analysts.
Gold Free Fall.
Gold is down to $614 this morning, near it's 6-week low on fears of more Interest rate hikes by the Federal Reserve.
Where Is Gold Going?
What goes up must come down, and so it has been for Gold prices.
Gold fell again today, closing at $613, extending a slump to almost four weeks, as rising interest rates and declining oil prices eroded the appeal of precious metals as an alternative investments and inflation hedge. Palladium tumbled to a 10-week low.
Gold has dropped 16 percent since reaching a 26-year high of $730.40 on May 12. Oil dropped today after the al-Qaeda leader in Iraq was killed, prompting speculation that disruptions of exports will ease. The European Central Bank and the Bank of Korea raised key lending rates, and U.S. Federal Reserve officials have indicated they may follow.
With U.S. consumer borrowing reported to be at a 10 month high for the month of April, The fed may very well increase interest rates further in order to put a clamp on inflationary pressures and to prevent the economy from overheating.
Stay on the sidelines for now.
Gold Bloodbath!
Gold plunged 6.2 percent, the most in 15 years, on concern that rising U.S. interest rates will strengthen the dollar and curb inflation, diminishing the appeal of the precious metal as an alternative investment.
Gold has dropped 21 percent from a 26-year high last month and fell below $600 an ounce for the first time in two months. Producer prices rose more than expected in May, compounding inflation concerns and the chances that the Fed will raise interest rates a 17th straight time when policy makers meet June 29. Higher rates make holding gold less attractive.
Gold now trading at $562, down $42! Platinum is at $1121, down $49.
Gold and Platinum Prices.
Short-term direction of both Gold and Platinum prices await the next Federal Reserve meeting to be held on June. 28-29th.
Current trading range for Gold is $560-590.
Special Jewelry Tribute to 9/11.
As a tribute to the citizens of New York City and the 100th Anniversary of JA New York, Indian designer Nayna Mehta has built a special monument as a tribute to the victims of the Sept. 11 terrorist attacks.
Mehta, a graduate of the Gemological Institute of America, designed and created a statue of the Twin Towers, set in 18-karat gold. The endeavor took 25 weeks, 38 artists, designers and technicians. The iconic structure is created of 14,080 diamonds and over 3 kilograms of gold. It will be on display at the JA New York Summer Show this July 30-Aug. 2 at the Jacob K. Javits Convention Center in Manhattan.
Checking The latest Gold Prices.
Now that hostilities along the Lebanese-Israeli border have been halted by a cease fire, the effect on Gold has been dramatic.
Gold futures fell Friday by nearly $23 an ounce for the week as easing Middle East tensions and inflation concerns tamped down demand for the metal as a safe-haven investment and inflation hedge. Gold bullion came to within 1% of touching the $600 mark on Friday.
Gold for December delivery closed at $621.70 an ounce on the New York Mercantile Exchange, down $3.60 for the session and at its worst closing level since late June. Prices finished $22.70, or 3.5%, below the week-ago close of $644.40.
The benchmark contract closed nearly $14 lower Thursday, pressured by weak oil prices and a late-day dollar rally following a stronger-than-expected survey of manufacturing activity in the Philadelphia area.
Gold Prices: Up Or Down?
Analysts and traders are offering mixed views on where cash and futures prices in gold may be heading.
Bulls cite seasonal strength, the belief world tensions will continue because of factors such as Iran's nuclear program and the potential for the dollar to continue its recent softening.
Bears wonder whether historically high commodity prices in general might start to wane and whether central banks will curtail inflation enough that some investors will stop using the metal as an inflation hedge.
Gold closed yesterday at $622 and has been in a tight trading range for the last few months.
Guys, Make sure your Crystal Balls have fresh batteries.
Hi-Yo SILVER! Up and Away!
Silver, the poor Man's Gold, stormed to a three-month peak today, hitting $13 an ounce before pulling back slightly, driven by continued investment buying and rising prices for other metals.
A burst of speculative buying, an upbeat technical picture in silver vis-a-vis gold and growth in a new U.S. silver-backed security helped drive prices up more than 2 percent, dealers said, before profit-taking trimmed gains.
Speculative fund buying for a second day running and renewed interest from the trade powered silver initially, dealers said. Talk of a large trend-following Commodity Trading Advisor buying silver also circulated in the market, although several floor traders could not confirm the rumor.
Gold Bulls Are On The Run.
Gold on Monday plunged below $600 an ounce for the first time in more than two months, as investors weighed bullion's longer-term prospects in the face of a declining oil price.
Gold last sold for under $600 an ounce on June 30., when it cost as little as $596.85 an ounce.
Oil prices slipped under $66 on Monday, adding to last week's slide on an improved U.S. supply picture and signs of easing tension over Iran's nuclear programme.
Rising crude prices tend to spark inflationary concerns, sending some investors into safe-haven commodities, including gold.
Gold In Major Correction.
Down $15.00 today to $575.00.
Gold Bulls are getting their "shorts" handed to them.
Gold Keeps Dropping
Reports Bloomberg News.
Gold in New York fell for the third time in four sessions after a U.S. government report showed inflation is easing, reducing the appeal of the precious metal as a hedge against accelerating consumer costs.
The price of gold has fallen 20 percent from a 26-year high of $732 an ounce in mid-May after the U.S. Federal Reserve raised interest rates 17 times in two years to head off inflation. Core prices paid to U.S. producers fell 0.4 percent in August after a 0.3 percent drop in July, the Labor Department said today. It was the first back-to back-decline since the end of 2002.
``Lately, inflation is less of a concern,'' said Matt McKinney, a commodity broker at Infinity Brokerage Services Inc. in Chicago. ``That's a clear indication by the price of gold coming down $50 in the last few weeks.''
Gold futures for December delivery fell $6.80, or 1.2 percent, to $586 an ounce at 10:35 a.m. on the Comex division of the New York Mercantile Exchange. The metal gained 1.6 percent yesterday after dropping 5.6 percent last week and losing 2.4 percent the previous week.
Prices have climbed each year since 2001 and are up 13 percent in 2006.
No sign of the Gold Bulls.
Palladium Gaining Popularity.
Says Barclay Capital.
Barclays has identified the sector that has shown most promise in palladium demand as holding the key to price performance in the short to medium term. "We expect demand for palladium to continue to grow robustly in the jewelery sector, led by strong gains in China. Chinese jewelery demand for palladium rose by 71.4% last year, accounting for more than 16% of global demand compared to levels close to virtually zero in 2003," it suggested.
We recently blogged on the merits and characteristics of Palladium here:
Folks, keep an eye on this metal. Currently at $300/oz, prices will surge if the Big Boys like Stuller get into the market and start manufacturing and promoting Palladium jewelry pieces on a large scale.
Our High Tech Jewelry Engraving Process
Every piece of jewelry or precious metal sold on the market, is required by law to be stamped with its precious metal content. Whether it is made of 14kt, 18kt gold, or platinum, a proper designation and stamp must be placed on the jewelry item. Similarly, all sterling silver giftware gets stamped with the appropriate precious metal content.
Many high end jewelry companies like Tiffany, Van Cleef, and Harry Winston (just to name a few) will also brand their jewelry designs with their unique, trademarked company logo in addition to the precious metal content.
The Tiffany Etoile wedding band is stamped with their unique "T&CO" logo.
Obvioulsy this is done to highlight the quality and beauty of the design, as well as to distinguish and protect the trademarked brand of the company.
The process of actually engraving a piece of jewelry is quite complicated and involves the use of specially designed equipment. While some companies use the older method of stamping jewelry with a hot iron that brands a mark into the hot (pliable) metal, this has become antiquated with the advent of newer laser inscription and engraving technologies.
Iron Jewelry Stamp
There are many problems with the older jewelry stamps, including poor visibility and legibility, fonts that are too large, lack of flexibility in design and execution, and often the negitive way it can impact on the precious metal itself.
Newer technologies for inscribing jewelry, involves the use of specialized computer systems that hallmark and inscribe jewelry by means of a highly efficient laser beam.
Laser marking is the new frontier for inscribing jewelry and is more efficient and effective than traditional jewelry stamping in the following ways:
1. Permanent. It is an indelible process which cannot be easily removed.
2. Non Contact Type. It does not produce any deformation in product unlike in punching, stamping, pneumatic pin, vibratory pencil etc.
3. Flexibility. It can mark any images and fonts without changing any punch, die, stencil etc. unlike other conventional process.
4. Aesthetic/Accuracy. Since the laser can produce a very fine beam with accuracy in microns, many accurate and micro details with precision can be marked with laser inscribing.
5. Low Operating Cost. Laser marking helps significantly, in cutting operating costs by reducing labor cost, tool cost, consumable cost, set up time, rejection, and improved cycle time.
High Tech Jewelry Laser Marker
This kind of high tech jewelry engraving process is what we use to engrave and stamp all of our unique and custom jewelry pieces.
For Example; our hand made, Tiffany inspired diamond engagement ring, which is the most popular solitaire engagement ring that we exclusively manufacture, is laser engraved with its 950 platinum designation as well as our "SC" (SuperbCert) trademarked brand logo.
Famous Tiffany Replica by Excel Diamonds
This beautiful logo would never get done to this kind of specification in microns, with the aesthetic beauty and enduring quality, if not for the fact that we use a high tech laser similar to the one pictured above.
Yellow Gold Is Back!
We've seen it this past year with our customers going for yellow gold settings and wedding bands.
Two-tone rings comprised of 18 karat yellow gold shanks and Platinum baskets are extremely poplular.
London Financial Times reports today on this latest Jewelry trend:
Platinum Wins Golden Globe Award for Best Precious Metal!
National Jeweler reports that At Monday night's 64th Annual Golden Globe Awards, fashion faux pas were notably few, and platinum proved to be the metal of choice as celeb after celeb showed up on the red carpet accessorizing with the gray-white metal.
While stars such as Angelina Jolie and Jennifer Lopez chose yellow-gold designs for a more bohemian look, platinum offered stars such as Mary Louise Parker, Edie Falco and Patricia Arquette a classic, glamorous accent to both diamonds and colored gemstones.
"A-listers choose platinum jewelry because it holds their gemstones more securely than any other metal and makes their jewelry sparkle from afar," Platinum Guild International USA (PGI-USA) Senior Vice President Michael O'Connor said in a statement.
One notable standout was famous mom Kathy Hilton, who stunned in a platinum evening jacket with 2,000 diamonds totaling 300 carats by Lazare Kaplan. Perhaps even more impressive is the jacket's cost: $1,000,000.
Another platinum fan was MTV host and current Nick Lachey-squeeze Vanessa Minnillo, who arrived decked out in $400,000 worth of platinum and diamonds. From earrings by Lazare Kaplan to a necklace by Jacob and Co. to a cocktail ring and bracelet by Ricardo Basta, Minnillo showed no loyalty to any one brand, but a definite affinity for platinum and diamonds.
Despite a bevy of diamond designs, colored gemstones weren't at all ignored: Grey's Anatomy's Sandra Oh chose Neil Lane platinum earrings and a ring, both set with diamonds and sapphires; Dreamgirls' Sharon Leal chose a platinum and Tahitian pearl necklace, earrings, ring and bracelet by Mikimoto; and Wedding Crashers' Isla Fisher, fiancée of funnyman Sasha Baron Cohen, donned a platinum ring with diamonds, moonstones and sapphires.
Edie Falco
Men were no strangers to the platinum craze, either, with best actor winner Forest Whitaker, Dancing with the Stars' Mario Lopez and Entourage's Jeremy Piven choosing platinum cuff links from the likes of Neil Lane and Kwiat.
Prior to the ceremony, celebrities were invited to attend an envy-inducing event, the PGI-USA Golden Globe Awards Red Carpet Jewelry Preview at the Luxe Hotel on Rodeo Drive. Attendees were able to indulge in a complete platinum experience, including over $10 million dollars worth of platinum jewelry to wear on the red carpet; gift bags valued at $1,700, filled with goodies from Core Pilates, Redken, Neutrogena, Aldo and more; limited-edition Platinum Guild-engraved iPod Nanos; and spa services provided by Spa 415 Beverly Hills and Chocolate Sun.
What Is Palladium?
What is Palladium?
We get asked this question every day.
The short description is as follows:
Palladium is a natural white pure precious metal of 95% purity. It enahances the beauty of diamonds (similar to platinum), is hypo-allergenic, nickel free and needs no rhodium plating (which makes it slightly more desireable than white gold, albeit more expensive as well).
Palladium is 30 times more rare than gold, while sharing a similar patina and luster as precious platinum.
Palladium is also a very strong and durable metal and will last a lifetime.
It is less expensive than platinum, but more expensive than gold.
Now, for the long explanation, click here.
Go Platinum For Valentine's Day!
GO.....................
Valentine's Day proposals are sure to translate into June weddings or marriage ceremonies later this year. To help make the jewelry portion of the wedding go easier, the Platinum Guild has created the 2007 Platinum Bridal Toolkit.
This 10 page booklet has a number of helpful features, including ways to budget for mens platinum jewelry and womens platinum jewelry. There is even a section on wedding jewelry trends and a celebrity styls section.
For more information go to www.preciousplatinum.com
Click on the the Bridal Guide option from the menu.
Gold Is Rising!
You've probably been too busy to notice but Gold is rising.
After hitting $700/oz. in mid-late 2006, Gold retrenched to the low 600's.
Gold is moving up slowly, quietly and closed today at $656/oz. Analysts are turning bullish and forecasting a breakthrough through $700+ in the near term.
Your Diamond Engagement Rings, Wedding Rings, and Wedding Bands Will Get More Expensive.
That's right.
Buying your gal a diamond engagement ring, wedding ring, and wedding band will become more expensive if present trends in the precious metals sector continue.
Due to the falling dollar, Precious metal prices are climbing. Gold is at $675/oz, Platinum is up 11 dollars today at $1211/oz, and Silver is up to $14/oz.
Analysts predict continued increases in Precious metals pricing as the Dollar continues being weak. As a result, Jewelry manufacturers will have no recourse but to increase their prices. Indeed, Jewelry designer Vatche Diamond Engagement Rings has already increased their prices by 4% as of February 1st.
Gold Soars in 2006.
According to the World Gold Council (WGC) worldwide demand for gold in 2006 hit a record $65 billion, despite a 13 percent supply decrease.
Gold-jewelry sales increased 14 percent to a record $44 billion, although it dropped 16 percent by volume to 2,267 tons. The WGC attributed the drop in volume to the volatile gold price in the first half of 2006.
Industrial demand for gold increased 45 percent to $8.9 billion and 7 percent by volume to 458 tons.
Investment demand increased 45 percent to $12.3 billion and 7 percent by volume to 636.7 tons. A 27 percent year-on-year boost in tonnage holdings of gold Exchange Traded Funds and similar products helped fuel the growth in investment.
The WGC said that so far in 2007 there has been a brisk demand for gold in most jewelry markets and continued positive interest from investors.
Ruthenium Prices Explode!
Ruthenium prices have soared to record highs above of $800 an ounce this month, buoyed by an explosive growth in demand for hard disc drives and news that a new generation of chip from Intel may involve the metal.
The minor member of the platinum group metals saw its price surge by 40 percent this year and hit an all-time high of $885 an ounce on February 7th 2007.
Since then, prices have eased to around $795/835 on Tuesday, but ruthenium remains much more expensive than it was a year ago, when it changed hands at less than $100 an ounce.
"Ruthenium met a bit of resistance in the last days after traders started to offload some of their holdings," refiner Heraeus said in a recent report. But the uptrend is likely to continue on a combination of industrial as well as speculative buying, it added.
Praised for its great resistance and ability to harden platinum and palladium, ruthenium has seen its industrial applications widen recently. It is now used in the chemical, electrical and aviation sectors, but the strongest utilisation growth has been recorded in magnetic data storage (hard disc drives).
Platinum is up $13 dollars today. If this continues, and it very well may, due to the weak dollar and Iran, Platinum jewelry prices will increase.
Bury Yourself In Gold...Literally!
With our affluent tastes, standards, culture, and the general need to "live up to the Jones family", it is no surprise to me that fashion and jewelry has seemingly caught up with death itself!
Simply "living in style" is no longer in-vogue. "Dying in style" is now equally important.
Indeed death has now become a venue for which to promote fashion, pomp, and the finest tastes in diamonds and jewelry. That people are buried in their finest jewelry pieces is assuredly old news.
However, now you can even order the casket itself in solid gold!!
This internet mortuary company sells this 24kt. gold coated casket for only.......well.......$10,000 dollars!!
Some might argue that there is no better way to accord a final honor to a loved one than by burying that person in gold...literally. Certainly, if this person lived the same way in life, it would be poignant and touching to recognize this in death......
They will make the case that this has nothing to do with asserting a "style" or being "over the top" in any way...that it is purely about giving a final honor to a loved one.
I personally, could not disagree more...on so many different levels....
Indeed I will never understand this motivation at all...
Then again, this is not the purpose of this blog entry at all....
Gold Is In The Dumps! Help Me!!
Johannesburg, South Africa is known as for its Gold Mining.
But you'll be very surprised to learn where else in this town you can find this Precious Metal.
The story is here:
Platinum and Gold Engagement Rings: Are Prices Going Up?
Certainly a very distinct possibility with both precious metals surging over the past two months.
Gold is at $690/oz and Platinum has really taken off closing today at $1296, an increase of $24.00.
The spot price of gold has risen 8.4 percent this year, while the euro gained 2.9 percent against the dollar. The U.S. currency today touched the lowest against the euro since December 2004. Gold generally moves counter to the dollar.
``The long position in gold is hedging against weakness in the dollar,'' said Nick Ruggiero, a trader at Eagle Futures Inc. in New York. ``Any time there's a sell-off in gold, the buying has come in.''
Gold for immediate delivery rose $3.70, or 0.5 percent, to $690.25 an ounce at 4:03 p.m. New York time bringing this year's gain to 8.7 percent.
``The undercurrent support for gold is weakness in the dollar,'' said Carlos Perez-Santalla, a gold trader at Hudson River Futures in New York.
The euro has gained 1 percent against the dollar in the past four sessions on speculation that growth in the European economy will outpace the U.S. The euro traded today as high as $1.3616.
Platinum rose to the highest price in almost 11 months on speculation an exchange-traded fund for the metal will help fuel demand.
Zuercher Kantonalbank of Switzerland's will introduce ETFs for silver, platinum and palladium on May 10, the bank said on April 13. ETFs already exist for silver and gold.
Jewelry Designer and Manufacturer VATCHE for whom we are an Authorized Dealer just raised their prices on Platinum and Gold Engagement Rings on February 4th of this year and with these consistent almost daily increases tied to the weak dollar, further price increases may be imminent.
Stay tuned.
Platinum Soaring!
Platinum prices were up $32.00 on Friday.
Why?
Because:
A second platinum-backed financial instrument of about 77,000 oz is coming to the market, and producers fret about the possible impact of higher prices on the sensitive jewelery sector in a finely balanced market.
ETF Securities is listing five new exchange-traded commodities (ETCs) on the London Stock Exchange from 24 April, including a precious metal basket ETC.
The announcement comes hard on the heels of Zurich Cantonal Bank (ZKB) saying they would launch a platinum, palladium and silver ETF to join their gold ETF.
ZKB said it has 70,000 oz of platinum safely stored in a vault to back its ETF instrument.
“We will list five products and there will probably be $100m across each product in the first 12 months,” ETF Securities head of listings and research Nick Bienkowski told Miningmx. The products are platinum, palladium, gold, silver and a mixed precious metals.
At today’s prices, that would equate to 77,000 oz of platinum.
“The way this product works is that when metal is delivered to the vault we will issue the equivalent shares,” Bienkowski said. Each share represents a tenth of an ounce.
“It depends on what metal can be acquired or what is available,” he said. The investment banks will acquire the metal from where they can find it.
Bienkowski would not say if the investment banks had acquired any metal or how much was held.
Anglo Platinum, the world’s largest platinum producer, which has no mechanism to supply metal for such a product, has most of its production tied up in offtake agreements.
“We are opposed to the ETF concept, but there’s not much we can do about it,” said Anglo Platinum spokesman Trevor Raymond. “Most of our product is accounted for by metal offtake contracts and whatever is surplus goes to the spot market. We don’t have a mechanism to specifically supply these products.”
The investment banks will have to compete on the open market, which trades a small 5,000 to 10,000 ounces a day.
“The real concern is that other banks who don’t want to be left behind will jump on the band wagon, which means more metal coming off the market and putting tremendous pressure on prices,” said Bob Gilmour, investor relations manager for Impala Platinum, world number two platinum producer.
The only segment in the platinum market that has flexibility is the jewelery market.
Jewelery accounts for roughly a quarter of the annual global demand of seven million ounces.
“If these products are successful, it will mean more metal coming off the market and prices rising. The only segment that can give in this situation is jewelery, and that’s not an ideal situation,” Gilmour said.
John Reade from UBS Investment Research said in a note shortly after the ZKB announcement that platinum prices could rise $50 over the next three months to $1,350/oz.
“We believe the market has underestimated the potential impact of the ETFs on platinum and palladium prices,” Reade said.
The platinum and palladium ETCs will gradually build up the amounts of metal they take off the market as demand for the products grow, Bienkowski said.
“It’s too early to say what we expect until we see how it’s been running for a few months and speak to investors to gauge their reaction to these products,” he said.
Investors of these products are generally “buy and hold” investors, who gradually accumulate more, he said.
“What will damage the market is a hedge fund buying all the available platinum and then dumping it on the market three months later. That’s not how these products work,” he said.
Pension funds are likely to take some time before investing in these products because of internal restrictions on adding new products to their portfolios. “We think they may invest in these over time.”
Our prediction: Platinum and Gold Engagement Rings will be going up in price soon.
Platinum Pulsating
We've commented the last few days at the relentless rise in Platinum and Gold prices over the past several months and whether Jewelers will be able to hold their pricing on Engagement Rings.
Marketwatch has picked up on this with an article today on rising Platinum prices.
Good Old Gold
With the pricing for precious platinum jewelry skyrocketing, a sure and rock solid value has been the relative stability of precious gold.
We have seen a spike in sales for gold jewelry and engagement rings as a result of the increase in platinum costs.
With the price increases for precious platinum showing so signs of slowing down anytime soon, it seems that gold jewelry sales are going to surge in the coming months.
Palladium Jewelry Starting To Surge
Due to the rise in prices of precious platinum, many customers are now turning to palladium as an alternative to platinum and white gold.
Unlike white gold, palladium is a naturally white, precious metal that does not yellow or tarnish over time and requires no rhodium plating.
It is less dense and heavy than platinum, but entirely comparable to white gold.
The price point makes it less expensive than platinum and comparable to 18kt. white gold.
We will be featuring palladium jewelry on our website, very shortly.
What Is Palladium? How Does It Compare With Platinum & Gold?
Given that we now offer all of our engagement rings in precious palladium, I thought it would be appropriate to briefly outline the properties of this metal in relation to gold and platinum.
Purity
Palladium is from the same precious metal family as platinum at significantly lower prices.
Palladium is 95% pure.
White
Palladium, (unlike yellow gold which has been rhodium plated to create "white gold") is actually a naturally white metal (similar to platinum). It is hypo-allergenic, nickel free, and requires no rhodium plating.
Precious
Palladium is 30 times more rare than gold and shares the lustre of platinum (at a fraction of the price).
Strong
Palladium wears exceptionally well and does not suffer from porosity and prong failure.
Platinum Prices Soaring, Palladium A Great Alternative.
With the prices for platinum going higher and higher every day (currently $1432 an ounce in raw metal), we have begun to offer most of our engagement rings in Palladium (in addition to gold and platinum) as a much cheaper and beautiful alternative.
As a result, sales of palladium engagement rings and jewelry have been surging!
Gold & Platinum Prices Scorching Highs! Will Diamond Engagement Ring Prices Follow?
Gold and platinum prices struck fresh record highs this morning as investors rushed once more to invest in commodities amid a very weak Dollar, rising Oil prices, and uncertain political conditions around the World.
On the London Bullion Market, gold surged to an historic $919.80 per ounce. Platinum reached an all-time peak of $1,634.50 an ounce on the London Platinum and Palladium Market.
The precious metals beat their previous record highs, of more than $900 for gold and just under $1,600 for platinum, achieved earlier this month.
At this pace, increases in the cost of gold and platinum engagement rings is inevitable.
The Rising Price of Platinum. WOW!
The price of Platinum, the metal of choice by Consumers for their engagement rings, wedding rings, and wedding bands has risen meteorically over the past year and on a daily basis especially in the last few weeks. Look at the graph below:
From mid-December 2007 until today the price of Platinum has risen by $800.00 an ounce!
The weak dollar, rising Oil prices, and power and electricity shortages in South Africa which mines the bulk of the worlds Platinum have all contributed to the this price increase.
Manufacturers of Platinum Jewelry have no option but to raise prices and pass on these price increases to their retail jewelers. As a consequence your Gold and Platinum Jewelry is becoming dramatically more expensive and costly.
Precious Metals Analysts expect these price increases to continue in the forseable future.
Precious Metals Going Through The Roof!
Prices of Gold, Platinum, Silver, and Palladium are surging today amid world-wide political turmoil, the weak dollar, rising Oil prices, and the impending recession here in the United States as well as the sub-prime Mortgage mess.
Here is a snapshot of today's Trading prices at 1 P.M. EST New York.
Prices on Engagement rings, wedding rings and Bands have been already increased by manufacturers and if this craziness continues, no doubt more price increases will be forthcoming.
What Will Happen To Gold and Platinum Prices?
Is a question we are asked every day by consumers in the market to purchase diamond engagement rings, wedding bands, and diamond rings. Will the meteoric rise in prices of these metals continue in 2008 and make our Jewelry more expensive?
To illustrate the price explosion of the Precious Metals here are 1 Year graphs for both Platinum and Gold.
Current indications are that Precious Metals Prices will continue to increase in 2008. Some contributing reasons are:
1. Emerging and surging economies in China and India with increased demand in the consumer, medical, and jewelery industries.
2. Political unrest, the weak dollar, rising Oil prices make the Precious Metals a safe haven.
Ken Gassman has an excellent overview and analysis on the current and future price trends for both Gold and Platinum. How High Is High For Gold And Platinum?
High Price of Gold Can Make Your Mouth Worth Mucho Money!
The Associated Press reports that people are digging through drawers for old dental caps, fillings and bridgework they saved years ago and selling them at prices that would make the tooth fairy blush.
Instead of hanging on to the pieces as souvenirs, many are turning them over to pawnbrokers, coin shops and specialized firms that buy "dental gold," hoping to take a bite out of the metal's historic run to $1,000 an ounce.
"People are really cashing in. If a dentist passes away, their kids come in with a big pile of good teeth," said Scott Taber, owner of Taber Coins, a Shrewsbury, Mass., coin dealer that buys dental gold and then resells it to a gold smelter.
He said he used to see only a few customers a month selling gold teeth but now gets that many each week. "People are digging up the gold and starting to sell it," he said.
A gold crown typically uses about one-tenth of an ounce of 16-karat gold, which would fetch around $40 to $50 at today's prices, Taber said. Heavier pieces of dental gold can command prices of several hundred dollars, he said.
That deal sounds pretty good to people like Ann Davis, a 63-year-old retiree in Rock Island, Ill., who had gold caps and a bridge removed nearly 40 years ago and has held on to them ever since.
"You don't want to throw it away because it might be worth something," she said. "Now that gold's going up it's time to think about selling."
Gold prices have been surging since late last year as the weak dollar, record crude-oil prices and fears of a U.S. recession have enhanced its appeal as a haven for investors.
Gold set a record of $1,038.60 an ounce on March 17 and has since fallen to about $920, but experts say it could soon resume its upward climb. Several precious metals analysts have even predicted $2,000 gold ahead as a global commodities boom pushes the price of raw materials further into record territory.
Gold crowns, fillings and bridgework are usually made of 16-karat gold, an alloy that contains other metals such as silver, zinc and copper. That made gold dental work soft enough to shape but hard enough to form a biting surface.
But don't expect to get rich hawking gold fillings and crowns.
And replacing a gold crown isn't cheap. Newer porcelain and gold crowns can cost $500 to $3,000 apiece, and not all insurance companies will pay for the procedure.
Besides the financial benefit, Taber says people don't mind selling dental gold because it's far less emotional than parting with heirlooms like grandma's wedding ring or the family silverware.
"I haven't seen anybody with sentimental teeth," Taber said.
$MILE!! You may chomping on big Money!
