About Perth Mint Bullion Blog

This blog discusses The Perth Mint's bullion coins and bars, providing information about our latest designs, mintages, sales volumes and sell outs. On a broader front, we share relevant research and opinions for anyone interested in gold and silver bullion investing.

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What a difference $200 makes

The mood this morning in Perth was bullish to say the least, with one client buying $1 million first thing Friday. That is what a price move of $200 per ounce or nearly 20% does in the space of a month and a half.

After touching $1,050 and wallowing below $1,100 for much of December, “goldbugs” felt they may be getting some long overdue reward for their patience during January as gold broke through the $1,100 level. So far February has exceeded expectations with gold first running up to touch $1,200 and then last staging a significant move of just under 5% to $1,260 before settling down to just under $1,240.

 

For The Perth Mint trading has been strong all this week, with more interest in gold than silver – gold sales are up 4 times compared to 2 times for silver, week-on-week. Our dealing desk says the mood is one of panic buying, primarily in response to falling stock markets. On the wholesale side, our German distributors are seeing continuing interest in silver and willing to take any silver they can get across our range.

Even if gold’s recent move has been too fast and it is due for a breather, it is clear market psychology towards gold and silver has changed. Confidence among many analysts is building that gold bottomed in December at $1,050. If gold can hold about $1,200 over the next week then the recent LBMA precious metal forecast survey average of $1,103 is looking very conservative indeed.



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Message From Perth Mint Analyst Bron Suchecki

Topics [ gold investing financial crisis gold bull market gold prices gold bear market ]

CONFERENCES

Hi, Bron Suchecki here, precious metal analyst for The Perth Mint.

Gold and silver are at a crucial inflection point right now and if you want to know what the future holds then the 2015 Precious Metals Investment Symposium is a must-attend event.

The Symposium will be held in Sydney on 26 and 27 October and features a great speaker line up including John Butler (Amphora Capital), Keith Weiner (Monetary Metals), Nick Giambruno (Casey Research), Greg Canavan (Daily Reckoning) - and me, explaining Why hasn't the bullion banking system failed?

 

See this podcast interview about my talk.


Now in its 8th year, the Precious Metals Investment Symposium is the largest precious metals event in the Southern Hemisphere, bringing together every aspect of the precious metals investment industry from mining explorers and producers, to bullion companies and other investment products. I look forward to seeing you there - register online here.

Regards,

Bron Suchecki
MANAGER, ANALYSIS AND STRATEGY
THE PERTH MINT



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China To Support Silver Market In 2015

Topics [ silver investing silver prices silver market ]

RESEARCH AND ANALYSIS

If you mention China, most people think of gold. However, China is also a big consumer of silver, net importing between 5% to 10% of global annual supply of 30,000 tonnes. A recent note by David Jollie of Mitsui Global Precious Metals focusing on the Chinese silver market concludes that it will provide support to the silver price in the short to medium term.

While net imports of refined silver into China peaked in 2010 at 3,475 tonnes, David’s analysis of other public and in-house data shows that China’s total silver demand actually peaked at 6,270 tonnes in 2013, with 2014’s figures only declining by 1.9%. For 2015, he expects imports of silver to rise sharply on the back of stable local mine production, low exchange stocks and 7% GDP growth driving positive growth in the solar, automotive and electronics sectors.

In addition, David believes that investor interest in silver that drove the price to its highs in 2011 has mostly been eliminated, based on an intriguing comparative analysis of silver and indium (which share similar mining and end-use market structures).

This means “that there is scope for silver to regain some of its [investor] premium. If gold rallies further, international investors can be expected to send silver higher”. Furthermore, David thinks that commodity financing deals using silver will return, resulting in further demand for silver out of China.



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Are Analysts Overly Pessimistic About Gold And Silver in 2015?

Topics [ gold prices silver prices ]

RESEARCH AND ANALYSIS

Following on from Thursday’s post on the LBMA Forecast Survey, below we look at how accurate the bullion market analysts as a group have been, as we did last year. Generally they are quite accurate when you take the range of their forecasts into consideration, with only two years where the actual yearly average was outside the forecasted range.

This year there is less consensus than 2014 on both the gold and silver outlook. The range between highest and lowest forecast is much wider for both metals, indicating a diversity of views and portending a volatile year ahead. The gold forecast sees little change in the yearly average with the most pessimistic seeing a low of $880. The most optimistic only sees a high of $1525, which I think will disappoint most gold investors after the last couple of years’ worth of declining prices.

Whereas gold’s lows and highs are evenly spread around the average, for silver the LBMA forecast tends to the pessimistic compared to 2014’s performance, with the yearly average forecast or $16.76, the lowest low forecast being seen at $10 and the most optimistic at $22.

So on average for the year the analysts see gold flat and silver as underperforming. While this is not encouraging for investors, they can take heart from 2013 where the analysts as a group were overly optimisic – maybe 2015 is where they are overly pessimistic and the monetary metals outperform to the upside.



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Monsoon - Better Late Than Never For Indian Gold Demand

Topics [ buy gold bullion online ]

RESEARCH AND ANALYSIS

Something that is not getting much coverage is the poor monsoon rainfall in India this year. This matters because poor agrarian Indian farmers are purported to buy over 60% of Indian gold. A contact of mine has provided the following update:

“Finally, some good rainfall in India, but it could be too little too late. Rains need to be above normal/normal from now until the end of July so that crops will come in okay. India has missed early crop growing season, and if July does not come in okay, then crop yields will be very poor this year. If we have a very poor crop season we will see farmers selling gold to finance next year’s crop. If we get good monsoon rains for rest of July, then Indian gold demand should be okay this fall when harvest begins. Some of the rainfall decline to date can be explained by 10+ day delay in onset of the monsoon. Monsoon is only now covering most all the country.”



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Perth Mint First Refinery Accredited By Shanghai Gold Exchange

Topics [ gold refining gold refinery ]

REFINERY


Last week The Perth Mint was the first refinery to be officially recognised by the Shanghai Gold Exchange. While The Perth Mint’s bars have been imported into China for many years, the accreditation provides assurance to Chinese firms that the Mint’s bars are “good delivery”.

The Shanghai Gold Exchange accreditation confirms The Perth Mint’s standing as one of the most widely accepted marks in the international gold market, which it has been servicing for over 115 years. In addition to the Shanghai Gold Exchange accreditation, he Perth Mint’s brand is recognised by other leading gold and silver markets, including:

  London Bullion Market Association - first listed circa 1928


  CME Group (COMEX) - listed here


  Tokyo Commodity Exchange – listed here


  Dubai Gold & Commodities Exchange – listed here


China has become a major destination for the approximately 300 tonnes ($12 billion) of gold The Perth Mint refines from Australian and other regional mines each year.


Clarification: The Perth Mint is the first non-Chinese refinery to be recognised. SGE has accredited domestic refineries for many years.




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