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