11 September 2014 - CME Enters Race For Gold Pricing Benchmark After Winning Silver Fix Bid |
- 11 September 2014 - CME Enters Race For Gold Pricing Benchmark After Winning Silver Fix Bid
- 11 September 2014 - Gold at $1,500 by Christmas?
- 11 September 2014 - India ‘not to slash’ gold import duty
- 11 September 2014 - 黄金避险地位不容动摇 年底前金价料涨至1500美元
| 11 September 2014 - CME Enters Race For Gold Pricing Benchmark After Winning Silver Fix Bid Posted: 11 Sep 2014 02:47 AM PDT Back in April, the London Bullion Market Association announced that the London Silver Fixing Market, the 117-year-old benchmark, would stop administrating silver prices in August. LBMA received proposals from the London Metals Exchange, CME Group and IntercontinentalExchange Group to provide an electronic solution, eventually choosing CME and Thomson Reuters. The partners went live with the new mechanism, LBMA Silver Price, on August 15. The price-setting mechanism is transaction-based and fully electronic as compared to the previous method of fixing prices over the telephone. Member banks and the LBMA announced their intent to start a similar electronic pricing system for Gold starting in October this year, and have asked interested firms to send in proposals to replace the current telephone-based system. CME and Thomson Reuters made their interest known last week, and will likely be competing with similar parties as for the silver bid including LME-Autilla partnership and the ICE Group. After successfully winning the bid for silver pricing, CME and Reuters seem to be frontrunners to win the gold bid as well. We have a $66 price estimate for CME's stock, which is about 10% lower than the current market price. Gold And Silver Price Fixing Gold prices are currently fixed by London Gold Market Fixing Limited, the company working on behalf of member banks. The number of member banks that set gold prices declined from five to four banks when Deutsche Bank resigned from its seats on the London silver and gold price-fix back in April. At that time, a number of U.S.-based investors and traders had filed up to 20 different antitrust claims against Deutsche Bank, HSBC, Barclays, Société Générale and Bank of Nova Scotia for collaborating to manipulate gold prices. London Gold Market Fixing along with the LBMA issued a statement looking for a new administrator starting in October, also mentioning that the implementation of the new system is expected to be completed by the end of 2014. As precious metal fixing has come under increased scrutiny over the last few years, especially after the LIBOR scandal that involved the rigging of interest rates, open global benchmarks should help improve investor confidence in silver and gold trading. If CME is chosen to administer gold prices in addition to the silver price fix, it could have a multiplying effect on metal trading on CME's platform, which has suffered due to low volumes in recent quarters. Moreover, it could have a negative impact on LME, the world's largest trading venue for metals. According to our estimates, metals and commodities trading constitutes about 18% of CME's value, with over 20 million metal contracts traded in the June quarter. The rate per contract charged by CME for metal contract trading is the highest among all derivative classes at over $1.70 per contract. A boost in metals trading should help CME increase its average RPC which currently stands at about $0.75 per contract. |
| 11 September 2014 - Gold at $1,500 by Christmas? Posted: 11 Sep 2014 02:44 AM PDT From:http://www.mineweb.com/mineweb/content/en/mineweb-gold-news?oid=252592&sn=Detail Author: Kevin Michael Grace (THE GOLD REPORT) - The Gold Report: Gold continues to languish under $1,300 per ounce ($1,300/oz), even as full economic recoveries in the U.S. and the European Union (EU) have yet to occur, despite trillions in new debt and stimulus. Meanwhile, we have two wars in the Middle East that could escalate, as well as reports that Russian troops are in Ukraine. With all that in mind, do you think that gold's fundamentals are less important than they once were, or is the price of gold being held back by other factors? Charles Oliver: Gold is just as valuable today as it was 100 years ago. There was an orchestrated takedown of gold in April 2013. It has since traded between $1,200/oz and $1,400/oz, and this flies in the face of the conditions you mentioned. We're going to have to be patient. We have gone through a bottoming process. We've had similar conditions before. In 1974, after the oil embargo, U.S. inflation was increasing dramatically, yet gold fell from about $200/oz to about $100/oz in 1976. Then over the next four years gold subsequently rallied to over $800/oz. In this decade, gold has fallen from $1,921/oz to $1,180/oz, but the fundamentals remain intact, and gold will regain its reputation as a unique store of value. TGR: You used the phrase "orchestrated takedown." Do you agree with the thesis advanced by the Gold Anti-Trust Action Committee (GATA) that gold and silver prices are manipulated downward by central banks? CO: A decade ago I was on the sidelines. Then, after 2008, when the Federal Reserve gave us quantitative easing (QE) 1, 2 and 3 and increased its balance sheet by $4 trillion, effectively fixing the bond market and price, I became convinced that GATA was correct. All the price-fixing scandals we've seen are not isolated incidents. The gold market is a relatively small one. When 400 tons of gold rapidly came onto the market in April 2013, I was persuaded that this was definitely an orchestrated takedown. TGR: Can this gold repression be maintained, or is it a dam about to burst? CO: I like that metaphor. Eric Sprott did an analysis that suggested that a fair amount of the gold putatively held by the Federal Reserve may not actually be in its vaults. Footnotes in the Fed's records indicate possession of about 8,000 tons but also suggest that some of that might have been loaned out. We don't know how much, but supply-and-demand numbers suggest it could be a very significant amount. I believe that the gold exchange-trade funds (ETFs) were raided because gold could not be found where it was supposedly held, so it was taken from the ETFs instead. Much of the gold sold out of Western vaults has found its way into Asia, China in particular. To run a trading platform requires a certain amount of physical bullion to meet delivery demands. If deliveries cannot be met, confidence in the system will fail, and paper trading will dry up. I must say I was quite surprised that after Germany asked for its gold back from the U.S. and it was informed that delivery would take seven years, the market did not suddenly unravel. Nevertheless, I believe the central banks are running out of bullets, and when they do, we could see a very significant rise in the gold price. TGR: Is control of the gold bullion market shifting from London to Shanghai? CO: The amount of trading in Shanghai is increasing, and I would imagine that the gold bullion repositories in London are diminishing. Over time, control of many components of the world economic system will shift to Asia as it becomes a more powerful entity on the global stage. TGR: As mentioned earlier, central banks continue their attempts to force demand, yet economic recoveries remain elusive. How will this play out? CO: QE was a dirty word five years ago, but today governments tout it as a triumph, even though the economies are still not that healthy, while record-low interest rates and record-high stimulus will continue. The U.S. is currently winding down QE, but the EU looks as if it may start up. I do believe that the U.S. may once again ramp up QE because its interest rate policy hasn't worked. Countries are debasing their currencies, which leads to investors moving into hard assets, as confirmed by U.S. stock indexes reaching record levels. We saw this in the Weimar Republic in Germany, when stocks soared because they were inflation hedges. A collapse in confidence in paper money is not something I want to see. If that happens, all bets are off. In the meantime, currency debasement should lead to a recovery in the values of gold, silver and other precious metals. TGR: Do you anticipate higher gold and silver prices following the historic return of market interest in September? CO: I think there is a very real chance that gold might hit $1,500/oz by the end of the year. TGR: It is has been reported that higher tariffs on gold buying in India have resulted in the substitution of silver for gold there. Do you think this will spur a higher silver price and that the current gold/silver ratio of 1:66 will fall as a result? CO: We have seen in India an increase in silver purchases. That said, the gold purchase figures from India do not include smuggling, which soared in the 1990s and is rising again. At Sprott, we believe very strongly that the next decade will see the gold/silver ratio move toward its historic rate of 1:16. The last time this happened was in 1980, when the gold price was $800/oz and the silver price was $50/oz. Under this scenario when the gold prices rise to $1,600/oz, I could expect silver to hit $100/oz. That would be a 500% increase in the silver price, versus a 30% increase in the gold price. I have taken a fairly significant weighting in the silver sector. TGR: Gold equities outperformed bullion by a significant margin earlier this year. Can we expect more of this, or is the value of gold equities now constrained by the current gold price? CO: The gold price bottomed out in December 2013, and as a result, gold equity valuations were destroyed. To some extent, the outperformance we've seen in 2014 is a return to more normal valuations, but a continuation of this trend will require higher bullion prices. TGR: When the Sprott Gold & Precious Minerals Fund considers the companies it holds, which qualities are paramount? CO: We look first to management. We want management teams with track records of performance, teams with share ownership of their companies. A deposit's geology is just as important. Without the geology there is no mine, there is no cash flow, there are no profits. We evaluate ore bodies by all the various parameters: quality, strip ratios, underground versus open pit, access to water and power, ease of permitting and local taxation regimes. Finally, we examine a company's valuation and how it compares to its peer groups. That includes dividends, cash flow, cash-flow growth and many other aspects. TGR: Which gold and silver companies are your favorites? CO: Within my top 10, I have Osisko Gold Royalties Ltd. (OR:TSX) and Tahoe Resources Inc. (THO:TSX; TAHO:NYSE). They both have great management. Tahoe is run by Kevin McArthur, the ex-CEO ofGoldcorp Inc. (G:TSX; GG:NYSE) and Glamis. Osisko is run by Sean Roosen, who discovered and built the Canadian Malartic mine in Québec. Among explorers, other companies in my top 10 include Guyana Goldfields Inc. (GUY:TSX), run by Scott Caldwell, whose CV includes Kinross Gold Corp. (K:TSX; KGC:NYSE) and Freeport-McMoRan Copper & Gold Inc. (FCX:NYSE), and Dalradian Resources Inc. (DNA:TSX), run by Patrick Anderson, who built up Aurelian Resources, which was sold to Kinross. TGR: Why do you like Tahoe and its Escobal silver mine in Guatemala? CO: I visited the mine in March and was very impressed. The company has ramped it up over the last year, and the process has been almost flawless. Tahoe has delivered what it promised and is exceeding guidance. It looks to produce 20 million ounces (20 Moz) silver equivalent at below $5/oz for over a decade. This is one of the largest producing silver mines on the planet, and to accomplish that in the first year of operations is outstanding. TGR: How does Tahoe's balance sheet look? CO: Tahoe is going to be paying down the debt it took on to build Escobal. It should announce a dividend sometime this year. TGR: Does operating in Guatemala negatively affect Tahoe's valuation? CO: There is a discount, no question about it. There was local opposition to Escobal, and there are still holdouts, but I think the company has done a good job with community relations and brought most of the population to its side. TGR: Guyana is another burgeoning mining jurisdiction. What impresses you about Guyana Goldfields and its Aurora gold project? CO: I've been a shareholder for many years. The management and board of directors are large shareholders and have participated in the most recent round of financing to a large degree. Guyana Goldfields has a nice asset in Aurora: 6.54 Moz Measured and Indicated, and 1.8 Moz Inferred. The after-tax internal rate of return (IRR) is great at 31%, as is the net present value (NPV) at $735 million ($735M). Aurora is fully funded, and the engineering, procurement and construction management contracts are complete. Guyana Goldfields is building the mine. TGR: When will mining begin, and how much gold will be produced annually? CO: Commercial production is scheduled for mid-2015. The number of ounces per year will depend to a certain extent on whether they go underground or not, but first-year production is estimated at 126,000 oz (126 Koz), ramping up to about 300 Koz by year six or seven. Aurora has a 17-year mine life, and all-in sustaining costs will be lower than $700/oz. TGR: If Guatemala and Guyana are burgeoning jurisdictions, then Northern Ireland is virgin territory. What impresses you about Dalradian's Curraghinalt gold project there? CO: The management has been buying into the company, and Curraghinalt is an exceptionally high-grade underground deposit. The after-tax IRR and NPV are exceptional as well. Based on $1,378/oz gold, they are 41.9% and $467M, respectively. There is some concern about opening a mine in Northern Ireland, but they are gaining the goodwill of the people, and permitting is moving forward. TGR: The company closed a $27M financing at the end of July. How does it stand for cash? CO: That placement gives Dalradian the cash and permits it needs to fund its current underground exploration bulk sample program. I think this stock is extremely undervalued. TGR: Let's talk about some of your fund's other holdings. CO: Asanko Gold Inc. (AKG:TSX; AKG:NYSE.MKT) is in my top 15 companies. It features top-notch management, including much of the ex-team of LionOre Mining International Ltd., which was bought out by Norilsk Nickel (GMKN:RTS; NILSY:NASDAQ; MNOD:LSE) after a bidding war with Xstrata Plc (XTA:LSE). Asanko's team paid about $30M to take over Keegan Resources, which merged with PMI Ventures and now owns two Ghana deposits within 10 kilometers of each other. They can be processed by the same plant. The company has begun construction of its first phase of the Asanko gold mine at Obotan. This is a very cheap stock. In fact, before the merger with PMI, Keegan was trading very close to cash. It has great assets, and I have a big position in it. TGR: Asanko announced Aug. 27 it has eliminated a 2% net smelter royalty (NSR) on the Asanko gold mine. Is this good news? CO: I am always happy when companies can buy back royalties at a reasonable price, because NSRs skim the cream off the top. TGR: Your fund holds Pretium Resources Inc. (PVG:TSX; PVG:NYSE). In June, the Supreme Court of Canada awarded substantial, yet undefined, rights to native Indians on British Columbia's Crown Lands. This was followed in August by the tailings spill at Imperial Metals Corp.'s (III:TSX) Mount Polley mine. What implications do these two events have for mining in British Columbia? CO: They are very negative. It will be more costly, time consuming and challenging to build mines in British Columbia. That said, Pretium's Brucejack has a great many positive attributes. It is a very small, very high-grade gold-silver mine with a very small environmental footprint. So tailings will be a relatively smaller issue for Pretium. Indeed, it is so high grade that dry-stack tailings may be possible. On permitting, Brucejack was a historic mine as recently as the 1980s, which will make approvals easier to get. The project is going underground, so Brucejack will not have one of those big open pits that some people do not like. TGR: Pretium's gold and silver assays have been spectacular for several years, but many people point to this resource as being nuggety. Could you speak to this issue? CO: They're absolutely correct, but many nuggety gold deposits have been produced successfully in the past, and they will continue to be produced successfully in the future. Brucejack has the advantage that it has seen a surprisingly large number of high-grade nugget hits. The resources are there. Mining this project may result in some lumpy quarters, but I do believe that the mine will be permitted and will be very profitable. TGR: Let's discuss gold explorers in your portfolio. CO: Unigold Inc. (UGD:TSX.V) is one of them. The company is drilling a very prospective land package, the Neita concession, in the Dominican Republic. Unfortunately, there is not much financing available to the small-cap sector. For companies like this to recover, we'll need higher gold and silver prices. TGR: The company announced in November 2013 an initial Inferred resource of 2 Moz. Yet shares are trading at $0.04. Can this be attributed to the specifics of Neita? CO: No, it's the market, which currently is paying nothing for ounces in the ground. TGR: This bear market in junior precious metals companies is now 3.5 years old. How long will it continue? CO: As I said at the beginning, we could have $1,500/oz gold by Christmas. Should gold reach that price, interest in juniors will revive, and valuations will come up quite dramatically. TGR: Do you see any potential takeover targets among the companies we've discussed so far? CO: Dalradian, Guyana and Asanko could all be targets. TGR: The gold and silver royalty/streaming sector has done quite well compared to the general market. Will this continue? CO: This sector will continue to grow and prosper but is somewhat countercyclical. The best time for such companies is when the general market dries up, when companies cannot access capital and are forced to sell royalties or streams. And so the last two to three years have been very good for royalty streaming companies. Higher gold prices will result in higher profits for this sector, but I expect the mid- and small-cap mining companies will do better in relative terms. TGR: Pierre Lassonde of the World Gold Council told The Gold Report in May he believes that the relatively small size of its market will compel silver streamers to move into gold contracts. Do you agree? CO: I do. I have long thought that limiting a company to gold or silver is not completely logical, although I don't believe it's in the interest of gold and silver companies to move into base metals. I would expect that over time we will see companies such as Silver Wheaton Corp. (SLW:TSX; SLW:NYSE) take on more gold transactions. TGR: What's your opinion of Silver Wheaton? CO: It has been one of the best performers over the last few years. Silver streamers do not run much risk of operating overruns and higher costs. It's a nice business when you know you're going to get a profit, and the only question is how big it will be. TGR: Are you bullish on Silver Wheaton going into the future? CO: I am, but given the higher bullion prices I'm expecting, my preference is for increasing my weights in some of the midtiers. TGR: Osisko Gold Royalties is a newcomer to the streaming sector. It has a 5% NSR on the Canadian Malartic mine and 2% NSRs on the Upper Beaver and Kirkland Lake properties and on the Hammond Reef project. Will it aggressively seek further streams? CO: The management team has significantly invested in the company, and I think they will take their time and do what they think is appropriate. I do expect, however, that significant assets will be acquired in the next year. TGR: Even before the takedown of the gold price, precious metals valuations collapsed, and the last few years have been dire for many investors in gold and silver companies. What are the reasons for investors to feel positive? CO: We've seen an awful lot of capitulation. Barrick Gold Corp. (ABX:TSX; ABX:NYSE) just announced it will eliminate its entire corporate development team. I've lost a lot of good friends and analysts who have left the industry. These are all signs of a bottom. I look around the world and see European Central Bank President Mario Draghi talking about rolling out QE. I see the continual debasement of currencies. And I see China buying gold left, right and center. I am convinced that gold and silver and precious metals equities will recover in the not-too-distant future. TGR: Charles, thank you for your time and your insights. Charles Oliver joined Sprott Asset Management in 2008. He is lead portfolio manager of the Sprott Gold and Precious Minerals Fund. Source:http://www.mineweb.com/mineweb/content/en/mineweb-gold-news?oid=252592&sn=Detail |
| 11 September 2014 - India ‘not to slash’ gold import duty Posted: 11 Sep 2014 02:43 AM PDT From:http://gulftoday.ae/portal/a79ab99c-27a5-46d9-838a-a86f76544894.aspx NEW DELHI: India is not considering an immediate cut in gold import duties, Trade Minister Nirmala Sitharaman said on Wednesday, extending a policy that has helped narrow the country's trade deficit but is believed to have led to an increase in smuggling. India's trade and current account deficits have narrowed sharply since New Delhi raised the duty on gold imports to 10 per cent from 2 per cent through a series of steps last year, helping revive confidence in the country's economy. But the duties have also fuelled a belief that smuggling has surged, causing some suspicions about distorted data and raising expectations the government will ease some of its restrictions. "Yes, the current account deficit has come down. But immediately, there is no plan to reduce import duty," Trade Minister Nirmala Sitharaman told reporters. "I cannot say whether gold smuggling has increased because of hike in import duty," she added in reply to a question. India will maintain the import duty just as the country is about to enter the key festival period, which traditionally leads to a surge in demand for gold that are given out as gifts. Although the move at first caused gold prices to rise, they have fallen this year due to a decline in global markets and a stronger rupee. Still, many suspect more gold is being imported illegally, even though the central bank has watered down some of the tough restrictions on gold shipments, including allowing more private agencies to import the gold. That has led to some doubt over whether India's trade data accurately reflects shipments. Recent data showed gold imports more than halved to $7 billion in the April-June quarter from $16.5 billion in the same quarter a year ago. Source:http://gulftoday.ae/portal/a79ab99c-27a5-46d9-838a-a86f76544894.aspx |
| 11 September 2014 - 黄金避险地位不容动摇 年底前金价料涨至1500美元 Posted: 11 Sep 2014 02:41 AM PDT From:http://gold.hexun.com/2014-09-10/168335989.html 汇通网9月10日讯— 周三(9月10日)Sprott Asset Management的Charles Oliver指出，黄金基本面仍完整，金价将重获独一无二的储藏价值声誉。各国使本国货币贬值，使投资者转硬资产。在不远的将来，黄金，白银和贵金属股票将复苏。 黄金和白银价格受到央行压制，但Oliver表示，近期需求压力将提升金银价格，预计近期金银价格将上涨，中小盘贵金属股票也将复苏。 目前金价仍交投于1300美元/盎司下方，日本央行和欧洲央行大举宽松，中东战争或进一步恶化，乌克兰和俄罗斯政局仍不稳。Oliver认为金价的地位和100年前一样。 前一段时间中东以及乌克兰局势动荡，通常认为会提振黄金，但是实际仅仅对金价产生一定支撑，价格提升并不明显，面对基本面消息是否不再重要的提问，Oliver回答，黄金的避险地位是不容动摇的，其价格波动缓慢主要是由于央行操控导致。 Oliver表示，金价操控论的说法最初由黄金反垄断委员会提出时，他并不完全赞同，但是自从目睹了2011年金价在美联储第三次QE之后的反常走势，他也成为了这一说法的支持者，尤其是2013年4月市场上突然出现400吨黄金之后。 Oliver还指出，经过三年多的熊市，央行对黄金市场的操控正在减弱，已经接近弹尽粮绝。而德国要求取回寄放在美国的黄金时，美国方面回应称需要7年才能完成送还工作，这也让美联储操纵金价的嫌疑扩大了。 但是Oliver着重指出，长久以来的压制会让价格爆发得更猛烈，今年年底前就有望回到1500美元/盎司上方。 当话题转移至金矿股时，Oliver认为经过一段时间的改革，中小矿商的生产成本得到一定的控制，从股价上也可以看出其前景有所回暖，但是影响金矿股表现的决定性因素仍然是黄金价格。 另外Oliver还预计，白银价格可能上涨至100美元/盎司以上，目前黄金与白银价格1/66的比例可能会被打破。 北京时间13:19，国际现货黄金报1256.80美元/盎司，基本持平；目前价格处在三个月低位附近。 |
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