Friday, November 7, 2014
GOLD IS LISTED BELOW COST OF PRODUCTION!
This week we're dedicated to recount how the induced price collapse in the money-the gold and silver precious metals, has caused a real "tsunami" of demand from the investing public . Evidence multiply not only on the testimony of suppliers around the globe who have seen their sales of coins, bars and ingots soar, but also indicators such as Base and COBASE -of New Austrian School of Economics, which show a situation of "backwardation" on the market for both metals.
That is nothing but a sign of the "shortage" of gold and silver, which is also expressed at high "awards" (premiums), which customers are having to pay to be made ??of these metals in physical form. This means on one hand that determined in the futures market and forward prices are unreal, but also that the sellers are not willing to undersell their products . Were it not for this circumstance, there would be plenty of supply and futures curve would be in contango (the opposite of backwardation), because all commodities, gold and silver are, thanks to their value the most abundant from the standpoint of stocks / flow ratio (production).
Another example of the growing "shortage" of gold was presented yesterday, registering the highest negative rate has been taken since 2001 , in what is known as rate GOFO (Gold Forward Offered Rate) a month: -0.1850% . This is the rate at which two market players agree a loan of gold on a swap against US dollars. Normally the person requesting the loan against your gold greenbacks pays interest, but when the rate is negative indicates that it is he who receives the interest in providing their precious metal. He who pays gold to give it does because this allows you to trade it and achieve profitability. Again, a clear sign of excessive physical demand and lack of supply.
Also, the US Mint, house US currency, said Wednesday that it was suspending the sale of silver coins "American Eagle" because of "tremendous" demand in recent weeks. The suspension will last indefinitely until you have additional inventory sufficient.
Reuters reports that distributors in Asia and the US are struggling to find suppliers of silver coins as "maple leaf". The Royal Canadian Mint began rationing sales to wholesale customers in the global response to the high demand filed since September.
Moreover, the specialist Koos Jansen has presented its latest estimates for Chinese gold demand during the last week of October, when occurred the most recent price crashes in gold and silver. Jansen says that physical withdrawals Shanghai Gold Exchange (SGE, for its acronym in English), the most accurate indicator of China's gold demand totaled 60 tons, nearly 30 percent more than a week above. That's 50 percent of the total gold reserves of the imaginary Central Bank, bought in just one week.
The Dutch analyst criticizes in his blog notes the media itself as Reuters and The Wall Street Journal, published a few days ago that there was an alleged decline in Chinese demand for gold. This information, as reflected in the most recent issues of the SSG is incorrect .
The only certainty is that prices are drawn from below, continue shooting investing public's appetite for the precious metal. Gold and silver are not "losing luster" as it spreads.
The bad news for mining companies, because there are reports that some of them-seven of a total of 19 reviewed by Bloomberg Intelligence- at current price levels around $ 1.140 an ounce companies are selling below cost production . Of course, each mine has its own costs, but the reality is that many, the higher costs are close to the limit and more even in Mexico, are beginning to suspend operations indefinitely. The businessmen are preferring to do this rather than continue losing by removing the metal from the earth.
This situation is just beginning, worsen the lack of supply of gold and silver in the future , reinforcing our view that, once you finish this long and manipulated downward correction, prices will have to resume its upward trend throughout term. Since the most important thing is purchasing for its value as a protection against the coming crisis , rather than speculate on prices. As is clear, the foundations of monetary precious metals are stronger than ever.
AI
