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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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Asian Demand For Gold To Keep Rising - WGC

Topics [ gold trading invest in gold ]

RESEARCH AND ANALYSIS

Demand for gold in Asia, already growing before the mid-April price fall, will increase sharply in Q2 2103, the World Gold Council (WGC) predicted this week.

Indian gold imports are expected to reach 350-400 tonnes in the second quarter, 200% higher than a year earlier and almost half of last year's total imports.

‘Extremely elevated levels’ of gold imports from Hong Kong into China, which reached 160-170 tonnes in April alone, could end well up on expectations at 880 tonnes for the year.

In Market Update for Second Quarter 2013, WGC said that research carried out in May indicated that sentiment towards gold in the world’s two largest markets remained extremely positive, with 70% of consumers in India and China anticipating a stable or increasing price in the next 12 months.

The response contrasts with US investment markets, which saw 350 tonnes flow out of gold-backed ETFs between the start of the year and the end of April.

“Even if ETF outflows continue in the US, it is quite likely that the gold previously held in ETFs will find a ready market among Indian, Chinese and Middle Eastern consumers who are taking a long-term view on the prospects for gold,” managing director of investment, Marcus Grubb said.



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Big ‘Aussie’ Still Going Strong

Topics [ Australian Kangaroo platinum bullion coin silver bullion coins Australian Koala gold bullion coins Australian Kookaburra ]

BULLION BARS AND COINS


The Aussie Diversified Precious Metals Portfolio pictured in 1994. 

Does anyone remember the ‘Aussie’? To give it its full title, the Aussie Diversified Precious Metals Portfolio, issued by The Perth Mint in 1994.

A giant of a set, it comprised two 1 kilogram Kookaburra silver bullion coins, a 2oz Kangaroo gold bullion coin and a 1oz Koala platinum bullion coin.

It’s still occasionally found for sale, as a correspondent who has just acquired one wrote in and confirmed to us today.



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Dubai Hotel Provides Guests With Golden iPads

Topics [ gold ]

ALL ABOUT GOLD

An extra treat is in store for the well-heeled staying at top-notch Dubai hotel, the Burj Al Arab. From now on they’ll be offered the use of 24-carat gold-plated iPads, the ultimate in luxury accessories, the hotel announced this week. 

 

The Apple tablets include ‘virtual concierge’ software, providing guests with access to restaurant menus and a raft of exclusive services.

Guests smitten with the shiny devices will be happy to know they’ll shortly be on sale at the Burj Al Arab’s bespoke boutique.



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Perth Mint Gold Rated Recommended Plus By Independent Investment Research

Topics [ gold investing ]

TREASURY VIEW

The Perth Mint recently engaged Independent Investment Research to undertake research coverage of the Mint’s ASX listed gold product (code: PMGOLD) to help increase its exposure to financial planners and retail clients.

Independent Investment Research have given Perth Mint Gold a Recommended Plus rating, noting that it:

“is the most cost effective gold backed ETP with an annual management fee of 0.15%, compared to 0.40% and 0.49% for GOLD and QAU, respectively. One of the advantages of PMGOLD over the other two ETPs is that the investment is guaranteed by the WA government, which is currently rated AAA by S&P. Each of the three ETPs are suited to different investors. Given the unhedged nature of the product and lower trading volume, PMGOLD is suited to the longer-term investor.”

Further information on Perth Mint Gold can be found on its webpage and the research report can be download here.



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Gold Connection Now A Disconnection

Topics [ invest in gold gold bullion prices ]

IN THE NEWS

By Cliona O'Dowd, Eureka Report

Gold’s rollercoaster ride since April has the market spooked. But, for small investors keen to hold physical gold, the lure of the precious metal is proving too tempting to resist.

Since gold futures prices plunged over $US200 a troy ounce in the space of two days in April, exchange-traded funds (ETFs) around the globe, including Australian-listed ETF Securities, have recorded massive outflows. At the same time, many small investors have pounced on the yellow metal to buy bullion, coins and jewellery, seemingly ignoring the market’s bearish sentiment and emphasising the growing disconnect between the paper gold market and the physical gold market.

Following gold’s dramatic flash crash, it has managed to claw some of its way back, recovering about half the value it lost mid-April. For small investors, it was an opportunity too good to miss. A surge in demand for gold bars and coins, and the increasingly higher premiums investors are willing to pay for physical gold, illustrates the unquenchable thirst consumers have for the precious metal.

But the action in the market tells a completely different story. ETFs are bleeding holdings at an astounding rate, with traders taking an increasingly bearish stance on the precious metal. The world’s largest gold-backed ETF, SPDR Gold Trust, saw record outflows of almost $US12 billion in April, or 143 tonnes. The outflows have continued into May and show no signs of abating. ETF Securities, which listed the world’s first physical gold ETF on the ASX in 2003, saw global outflows of $US323 million in the week before last, the largest weekly outflow in three and a half years. Danny Laidler, head of ETF Securities Australia and New Zealand, says that most of the selling has been by short-term tactical traders, with long-term investors continuing to hold onto the commodity.

Even before the April sell-off, gold ETF holdings were in a state of decline. Since December, total ETF holdings of gold are estimated to have dropped 13% in the biggest, most prolonged fall since their introduction 10 years ago. ETF Securities has seen global net outflows of $US1.4 billion year-to-date. In Australia, the net outflow year-to-date from ASX-listed GOLD has been a relatively modest $US18 million

At the same time, demand for physical gold from India and China shows no sign of slowing. Chinese imports of gold account for almost 20% of total annual demand. This compares with less than 3% 10 years ago. The trend for increased gold consumption in China is reflected in the first quarter data, rising 26% in the three months to March, to 320.54 tonnes. Gold flowing from Hong Kong to China has increased sharply, surging to 223.52 tonnes in March from 97.11 tonnes in February. The previous monthly record of 114.37 tonnes, reached in December, pales in comparison. Similarly, demand has jumped in India, the world’s number one gold consumer ahead of the country’s wedding season and Akshaya Tritiya festival starting this month.

China and India are without doubt the biggest buyers of physical gold right now, but in the West, demand for gold bars and coins has also surged. The US Mint recorded a 118% rise in demand for one of its gold coins in April, forcing it to suspend sales for a time. Back at home, it’s a similar story. Even before the April price drop, the Perth Mint had experienced a taste of consumers’ growing appetite for gold. In the first three months of the year, demand for gold coins jumped an impressive 49%. But the April figures illustrate that the consumer love affair with the yellow metal is far from over. Last month the mint recorded a 160% rise in gold coin sales and a 74% rise in gold bar sales. Combined bar and gold sales for the month beat all previous records, the Mint said.

What we’re seeing looks to be a growing disconnect between the physical gold market and the paper gold market, with small investors leading the rush to buy “the real thing”, increasingly at a premium to the paper price, despite the market remaining bearish on the yellow metal.

Essentially, the game has changed, in the short term at least. The speculators have taken a step back to reassess the prospects for gold, while small investors have been moving in, buying up physical gold as the attraction of holding a safe haven asset outside the banking system increases.

In the near term, there has been much speculation over the direction the gold price will take. Senior analyst at Thomson Reuters GFMS, Cameron Alexander, expects the gold price to rise back up toward the $US1,700-mark this year, in what he deems to be the yellow metal’s “last hurrah”, before the bullion spot price declines next year and the year after.

At the same time, the fundamental reasons for holding gold haven’t really changed. The Euro zone is still in crisis, the currency wars are heating up, the US recovery is still fragile and global economic growth remains agonisingly slow.

The many critics of gold argue that it has no real value because it doesn’t have the potential to deliver any income, like dividends from stocks or rental yields from property. But it nonetheless offers a hedge against inflation and currency devaluation, and is the go-to investment in times of financial uncertainty.

Historically it has a negative correlation to other investments, including stocks. In a diversified investment portfolio, gold certainly has a role to play. For investors seeking further diversification, a small exposure to gold, say, up to 5% still makes sense for long-term investors.

This article was first published in Eureka Report.

For more articles visit http://www.eurekareport.com.au



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Physical Gold Shines As Total Q1 Demand Falls

Topics [ gold coins gold prices gold bars ]

RESEARCH AND ANALYSIS

The World Gold Council today shed light on global demand for gold in the three months prior to April’s price plunge.

Between January and March 2013, demand for jewellery, bars and coins grew thanks largely to buyers in China and India. Central banks also remained significant acquirers of gold.

Nevertheless, total world gold demand for the period was down 13% from a year ago at 963 tonnes and 19% below the fourth quarter of 2012.

The culprit, according to the WGC’s latest Gold Demand Trends report, was an outflow from gold exchange-traded fund holdings amounting to 177 tonnes, mainly the result of US holders taking profits and moving into equities.

Download Gold Demand Trends Q1 2013



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