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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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How Accurate Is The LBMA Precious Metals Forecast Survey?

Topics [ silver bullion prices gold bullion prices ]

RESEARCH AND ANALYSIS

At the beginning of each year the London Bullion Market Association (LBMA) polls a range of respected precious metals analysts in the large banks and independent consultancies for their forecasts for metal prices for the coming year.

The recent LBMA price forecast has just been released, with contributors “predicting gold and silver prices to remain broadly flat during 2014”. Their average forecasts for the price during 2014 are:

Gold - $1,219, ranging from $1,067 to $1,379
Silver - $19.95, ranging from $16.37  to $23.94
Platinum - $1,490, ranging from $1,300 to $1,650
Palladium - $775, ranging from $660 to $863

Historically, the LBMA forecast has been quite accurate. The charts below show the actual average gold price each year against the lowest and highest forecast for the average annual price, as well as the average of the forecasts.

For both gold and silver the actual average price has fallen within the range of the lowest and highest, except for 2013. With gold the contributors appear to be more accurate as the forecast is quite close to the actual average price.

There is less accuracy in the case of silver, particularly over the past three years.

This year the low/high range is quite tight for both metals, leaving little room for error. Precious metal investors can only hope that the contributors repeat their poor 2013 forecast accuracy – to the upside that is!



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Year Of The Horse 5oz Silver Bullion Coin Available Now

Topics [ buy silver online 2014 Year of the Horse silver bullion coins Australian Lunar ]

BULLION BARS AND COINS

We’re pleased to announce that the 2014 Australian Lunar 5oz Silver Bullion Coin is available now.

The scheduled release was delayed due to a surge in demand for our large bullion coins.

We’d like to thank all those who have enquired about the availability of the 5oz silver bullion Horse in recent weeks for their patience.

Click here to buy now.



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1 Tonne Coin Road Show Starts Euro-Tour In Vienna

Topics [ Australian Kangaroo gold bullion coins ]

BULLION BARS AND COINS

A fabulous evening in Vienna saw hundreds flock to the unveiling of our 1 Tonne Gold Coin at the Kunsthistorisches Museum in Vienna. Sales & Marketing Director Ron Currie proudly introduced the golden Australian masterpiece and informed the captivated audience about the availability of the new 2014 Australian Kangaroo Gold Bullion Tribute Coin, which bears the same iconic kangaroo design.

Win a 1oz Tribute Coin on Facebook.

Visit www.1tonnegoldcoin.com for more information.



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Is The Bottom In For Gold Prices?

Topics [ gold market gold prices ]

IN THE NEWS

During his latest appearance on the the Korelin Economics Report, Bron Suchecki considers the question: is the bottom in for gold prices? Listen here:



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World’s Largest Coin Embarks On European Tour

Topics [ buy gold online Australian Kangaroo gold coins ]

BULLION BARS AND COINS

Clients in Austria and Germany will have the rare privilege of experiencing the world’s largest gold coin up close and personal in coming weeks.

The Perth Mint’s Guinness World Record holding 1 Tonne Gold Coin is travelling from Australia to Europe as part of a promotional tour to celebrate the 25th anniversary of the Australian Kangaroo Gold Coin Program.

The colossal Australian legal tender coin, which is made from 99.99% pure gold, will appear at four city venues – each providing the public with a stunning opportunity to marvel at its impressive dimensions.



Perth Mint Chief Executive Officer, Ed Harbuz, said Europe was the Mint’s number one market for bullion and a natural choice for the promotional tour. “Working with some of our leading distributors, we’re delighted to showcase the centrepiece of the Australian Kangaroo Gold Bullion Coin Program across the region,” he said.

The schedule* of appearances runs as follows:

VIENNA - 21 to 24 January 2014
Kunsthistorisches Museum
Burgring 5, A-1010 Vienna

MUNICH - 27 and 28 January 2014
Pro Aurum
Joseph-Wild-Str.12, 81825 Munich

STUTTGART - 29 January to 4 February
Baden-Württembergische Bank
2014 Konigstr. 3, 70173 Stuttgart

BERLIN - 7 to 9 February 2014
Estrel Hotel & Convention Centre     
Sonnenallee 225, 12057 Berlin

(Updated 23.01.14)

To mark these exclusive appearances, The Perth Mint has released a limited edition 2014 Australian Kangaroo 1oz Gold Bullion Tribute Coin, replicating the design of its supersized companion.

Struck from 1oz of 99.99% pure gold in bullion quality, the tribute coin is issued as legal tender under the Australian Currency Act 1965, and is restricted to a mintage of only 65,000.

Investors and collectors in Australia and Asia can purchase this historic piece from www.perthmintbullion.com, while purchasers in Europe and American can secure the coin from selected coin dealers. Visit www.1tonnegoldcoin.com for further details.



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Why Gold Can Never Be In A Bubble

Topics [ gold market gold prices ]

TREASURY VIEW

In a Harvard Business Review blog titled What’s That You’re Calling a Bubble?, Justin Fox attempts to get to the bottom of what constitutes a bubble. He rejects Nobelist Eugene Fama’s view that bubbles cannot exist because markets are basically rational and at any given moment prices reflect the collective wisdom of the market, reviewing various academic thoughts on the issue to come up with the following:

“Bubbles arise if the price far exceeds the asset’s fundamental value, to the point that no plausible future income scenario can justify the price.”

Many would consider this a reasonable definition and wonder how one could argue gold can never be in a bubble. Well, mainstream financial commentators often attack gold by saying, as wealth manager Barry Ritholtz does in 10 Reasons the Gold Bugs Lost Their Shirts, that it “has no fundamentals. What is traditionally called fundamental analysis involves determining a company’s cash flow, revenue and earnings. Commodities have none of these things.”

Now if gold doesn’t have a fundamental value, then its price doesn’t have anything to exceed. Hence it can never be in a bubble.

OK, that is a somewhat flippant argument. So consider that both quotes from Fox and Ritholtz refer to “income” or “cash flow” from an asset. Gold is often derided as having no income, from which it follows you can’t establish its fundamentals.

However, gold does earn an income – via the gold leasing market. While this market is only accessible by those who hold gold in the thousands of ounces, individuals can also earn an income on gold by futures basis trades (see here for an explanation) or selling options against their gold.

In this respect gold is similar to a government bond, which doesn’t have “revenue and earnings” either, but it doesn’t stop people from considering it a valid asset class to include in their portfolios. Interest rates are not considered something to which fundamental analysis is applied, they are the fundamental risk-free rate against which assets are valued.

In the case of gold, I would argue along the same lines, in that many investors look at gold as the risk-free bond-like asset against which they value other assets. On that basis, you cannot have a bubble in your unit of measure.

The above statement is probably not seen as very practical to those not using gold as a unit of measure. In that case, consider Eugene Fama’s argument that

“During the dot-com era … the high prices of startups like Amazon.com and Pets.com could be justified as rational gambles in the face of great uncertainty. It wasn’t crazy to think that a couple of these companies might end up as big and as profitable as Microsoft, and since it was hard to tell which ones it would be, high prices across the board made some sense.”

Ultimately, gold is just a “rational gamble in the face of great uncertainty” about whether a country (or the world) can get itself out of its financial mess without unintended inflation or some other economic blow up.

To argue that gold is in a bubble is therefore to just argue that people are paying too much for this gamble, for the insurance against uncertainty as they see it. That, as Fox says, “is a judgment call”, and who can claim they know their judgment is right and another’s is not?



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