Price Corrections Are Healthy

Every market is due for a pullback in order to have a healthy adjustment. The uncertainty about the economy’s strength and the fears about rising prices, not to mention worries over global instability, will continue gold’s growth to super heights. Another wild card would be the newly “liberated” Arab nations’ anti-Israeli protests that could ignite turmoil and could send the price of oil and commodities much higher. Markets cannot continue to peak without a correction said President Ron Fricke of Regal Assets.It’s all about perspectives. Smart investors don’t need to second guess that inflation is here and that the world is in turmoil. Besides, you can’t get a handle on US economy issue, because there is no handle.

Specialist gold analyst, Jeffrey Nichols, has continually been ratcheting up the number of reasons he sees for being bullish on gold, however, as he told Mineweb on the sidelines of the New York Hard Assets Conference last week, some of these are expansions of the multitude of factors among them: The U.S. Fed’s policy of an unprecedented level of money creation coupled with zero (or effectively negative) interest rates, the difficulties in reaching agreement on the U.S. budget coupled with enormous U.S. sovereign debt and eroding creditworthiness, the move by Central Banks to become buyers of gold rather than sellers, the onset of vehicles like ETFs which make it easier for the investor to buy gold, plus the increasing acceptance of gold as an investment class amongst major investing institutions, and finally, the limited growth in global mine production of gold .

He reckons gold’s fortunes remain very bright. With all the supportive price drivers ready to burst forth, “look for new all-time highs in the months ahead.” He does stick his neck out on a specific price prediction and reckons “gold has every chance of reaching $1700 by the year end, $2000 in 2012 and “possibly $3000 or even $5000″ before a time when he feels the cycle may eventually reverse later in the decade.”

Source: http://goldcoinblogger.com

Chinese set new standard in buying gold

China overtook India to become the largest market for gold bars and coins in the first quarter of this year, as rising inflation inspired a surge in bullion investment.

Chinese investors bought 93.5 tonnes of gold between ­January and March in the form of coins, bars and medallions, a 55 per cent increase from the previous quarter and more than double the level of a year earlier, according to data released by the World Gold Council on Thursday.

The surge in Chinese buying has supported prices, even as some investors in the west were cutting exposure to gold amid expectations that improving economic conditions and rising interest rates would mark an end to the gold rally.

George Soros’s hedge fund sold almost all its holdings in the largest gold exchange-traded fund, SPDR Gold Shares, in the first quarter, according to a regulatory filing this week.

“You’re seeing eastern demand picking up any of the gold coming out of the hands of western investors,” said Marcus Grubb, managing director for investment at the World Gold Council, a lobby group backed by the gold mining industry.

India, the top buyer of gold jewellery, remains the largest overall consumer of the yellow metal, although Chinese jewellery consumption is rising rapidly.

Philip Klapwijk, executive chairman of GFMS, the consultancy that produces the statistics on gold supply and demand, said it would be “a close call” which of China and India was the largest buyer this year.

The apparent willingness of Chinese and Indian consumers to step in when prices fall could provide a floor for the market around $1,450 a troy ounce, he said, and underpin a rally to more than $1,600.

On Thursday, spot bullion was trading at $1,495, down from a nominal record high of $1,575.79 three weeks ago.

The rise in Chinese gold consumption has been stimulated by the deregulation of the country’s gold market, which has led to an increase in the number of banks importing gold and the number of specialist shops that sell it.

Imports of gold into China – the world’s top miner of gold – have risen more than fourfold to 245 tonnes last year, according to GFMS. In the first four months of this year, imports had exceeded 200 tonnes, Mr Grubb estimated.
Source: http://www.ft.com

Silver to Soar as the Gold to Silver Ratio Stabilizes

During precious metal bull markets, gold usually gets all the media attention. But as investors are quickly learning, the biggest gains go to silver.

Truth is, silver prices have consistently outperformed gold during bull markets — doubling, tripling, even quadrupling the price of the yellow metal.

In the past 12 months, for instance, the price of gold has increased 27%; silver has climbed 164% over the same time.

Yet despite the recent swell in prices, silver should continue increasing, doubling within the next few weeks and vaulting the price of the white metal over $100 an ounce.

Here's exactly how that's going to happen...

4,500-year-old Ratio Shows Silver Will Catch Up to Gold

For gold bugs and other hard-asset investors, the gold-to-silver price ratio is well known. But most investors are unfamiliar with this metric.

In short, the gold-to-silver ratio represents the number of silver ounces it takes to buy a single ounce of gold.

Since silver is approximately 16 times more abundant than gold on Earth, markets have set silver prices at 1/16th of the price of gold in the past. And that gives us the historic gold-to-silver ratio of 1:16.

To calculate the current gold-to-silver price ratio, simply divide the current price of gold by the current price of silver.

Markets have used this 1:16 ratio to price silver for over 4,500 years. But there are periods when the gold-to-silver ratio gets thrown out of whack and rises or falls to extreme levels.

For example, at the beginning of the current precious metal bull market, the gold-to-silver ratio was over 1:60.

But these periods of statistically extreme gold-to-silver ratio levels don't last. And sooner or later, the time-tested ratio returns to the historic 1:16 level.

Just last summer, the gold-to-silver ratio expanded to 1:66. Gold was over $1,200/oz; silver sat at $18/oz.

However, the gap between gold and silver prices has rapidly begun to close...

Silver to Soar as the Gold-to-Silver Ratio Stabilizes

By the beginning of the year, the gold-to-silver price ratio had narrowed to 1:48.

Today, the ratio sits at 1:32, with gold at $1,534/oz and silver trading at $48.25/oz. But the metric is rapidly approaching its historic 1:16 level.

If the price of silver would catch up to the historic gold-to-silver ratio today, the price of silver would be $95.87/oz. And as gold prices continue to rise, the price of silver would easily exceed $100/oz.

Before this secular bull market for precious metals is all said and done, I think the ratio will not only return to its historic 1:16 level; but it will actually move toward 1:10 or even 1:5.

That would push the price of silver toward $200 or $300 an ounce.

Think I am crazy?

That’s okay. I’ve gotten used to it over the years...

But I've also been proven right time and time again on most (not all) of my calls for precious metals prices, going back 12 years.

The hard truth is the world is about to face an unprecedented period in its history as it relates to fiat currencies.

There are oceans of fiat money across the planet that will suddenly be rendered worthless... As the fiat currency dominoes begin to fall, it is not difficult to imagine the pandemonium that will take place as investors attempt to flood into the only currency known to protect one’s savings at such a time: gold and silver.

~~SIGNUP_WD~~

Be Prepared

The amount of fiat money in existence is absolutely staggering. Yet the precious metals markets are tiny. There simply aren't enough of these metals for everyone.

A major upheaval is already underway. But it's about to get much, much worse.

It's going to be a difficult time for all of us. Those who are prepared will not suffer as much as those who are not. And I need to remind everyone not to listen to the constant media buzz that silver and gold are in a bubble.

They are not in a bubble.

This is just another attempt by the deceptive media, doing what they always do to keep you from what you should be doing — which, in this case, is buying gold and silver.

From what I have seen in the markets since the beginning of the year, it appears both gold and silver have been given a green light because the worldwide economic plight has suddenly accelerated.

The slight downside market action in precious metal prices is short and very brief, so I continue my mantra to buy on the dip days or dip mornings.

By afternoon in many cases, the metals are already in recovery mode as major physical buying comes into the market.

I expect we will be pushing for higher highs for all precious metals, with the occasional pullback for the balance of the year if the fiat currencies don’t implode in 2011...

When they do implode, it will be off to the races for gold and silver.

Good Investing,

Greg McCoach
Analyst, Wealth Daily
Investment Director, Mining Speculator and Insider Alert

Source: http://www.wealthwire.com

Physical Silver Shortage Worsens Due To Mint Rationing and Surging Investment Demand

The inability of the US Mint to meet public demand for gold and silver bullion products was discussed at a recent House Financial Services Subcommittee hearing.  Testimony by industry experts revealed that the US Mint was losing an estimated one-third of potential bullion sales because they cannot meet demand.

For the past several weeks the US Mint sales figures for Silver Eagle bullion coins have been essentially flat. The US Mint sells its bullion products in bulk to authorized purchasers (AP's).  The AP's resell the bullion coins to dealers who then sell the products to the public.  The US Mint has been rationing the 2011 Silver Eagle bullion coins to AP's, leaving one to conclude that the flat sales of Silver Eagles have been the result of Mint production constraints or supply shortages, rather than flat or reduced market demand.

On past occasions, the US Mint has cited the lack of adequate supplies of silver planchets as the cause for the continuing rationing of silver bullion coin sales. Earlier this year, the Royal Canadian Mint admitted that they were having significant problems in sourcing silver since huge demand was outpacing silver supply.

Combine rationing and surging demand and the obvious result is a severe shortage of  physical gold and silver bullion products.  Confirming this situation, American Precious Metals Exchange (APMEX), announced yesterday that they were seeking to purchase US Mint bullion products from their customers in order to meet "recent incredible demand for gold and silver bullion products".

APMEX, one of the country's largest precious metals dealers, offered to purchase American Gold Eagles and American Silver Eagles at generous premiums over spot prices in order to secure inventory.  Despite the increase in the price of gold and silver, public demand obviously remains incredibly strong.

The American public has been provided with plenty of evidence that out of control deficit spending and money printing policies by the Federal Reserve are destroying the value of the paper dollar and they are acting accordingly (see Why There Is No Upside Limit To Gold and Silver Prices).  A loss of confidence in paper money is fueling the rise in gold and silver prices as people seek to protect their wealth.  Any pullbacks in precious metal prices should be viewed as another major buying opportunity.

source: http://goldandsilverblog.com

RHB Islamic sasar RM20 juta

KOTA BHARU 28 April - RHB Islamic Bank yakin produk pembiayaan pajak gadai Islamnya atau Ar-Rahnu mampu mencatatkan jumlah transaksi sehingga RM20 juta pada akhir tahun ini, selepas lapan bulan dilancarkan.

Ketua Pegawai Eksekutif merangkap Pengarah Urusannya, Abd. Rani Lebai Jaafar berkata, perkhidmatan Ar-Rahnu yang dimulakan di cawangan RHB Islamic Bank Kubang Kerian di sini, berpotensi besar untuk dikembangkan berikutan minat tinggi masyarakat tempatan menyimpan barangan kemas.

Beliau berkata, jumlah golongan yang bekerja sendiri, peniaga kecil dan usahawan wanita yang ramai di negeri ini juga menjadi faktor kepada produk ini diperkenalkan di sini bagi membolehkan mereka mendapatkan pembiayaan alternatif dan modal.

Katanya, pajak gadai Ar-Rahnu itu akan diperluaskan ke cawangan lain dengan sasaran awal ialah Kuala Terengganu, Terengganu; Bangi, Selangor dan Kuching, Sarawak.

"Kelantan dipilih sebagai tapak awal produk Ar-Rahnu kami kerana melihat kepada minat mendalam masyarakat negeri ini terutama golongan wanita yang gemar menyimpan barang kemas.

"Pembiayaan Ar-Rahnu kami memberi peluang kepada mereka yang kesempitan untuk mendapatkan keperluan tunai dan juga modal perniagaan dengan pembiayaan sekurang-kurangnya RM100 sehingga RM50,000.

"Produk ini terbuka kepada semua warganegara Malaysia berumur 18 tahun ke atas dengan tempoh gadaian antara enam bulan sehingga setahun," katanya selepas Majlis Pelancaran Produk Pembiayaan Pajak Gadai Islam (Ar-Rahnu) dan Fiesta Perbankan Islam 2011 bank itu di sini, hari ini.

Hadir sama, Ketua Perbankan Transaksi RHB Islamic Bank, Tengku Panglima Raja Tengku Mohamad Rizam Tengku Abdul Aziz; Pengarah Wilayah Timur Kumpulan Perbankan RHB, Nazri Othman; Ketua Perbankan Runcit RHB Islamic Bank, Zulkahairi Zabiri dan Pengurus RHB Islamic Bank Kubang Kerian, Norliza Abdul Shukor.

Abd. Rani berkata, urus niaga pajak gadai Islam itu akan menggunakan empat jenis konsep syariah iaitu Qardhul Hasan, Ar-Rahnu, Wadiah Yad Dhomanah serta Al-Ujrah dan mereka menerima emas jenis 999, 950, 916, 875, 835 dan 750 untuk digadai.

Jelasnya, RHB Islamic Bank sehingga kini mempunyai 12 cawangan di seluruh negara dengan lebih 250,000 pelanggan dan perkhidmatan perbankan berasaskan syariah itu turut disokong oleh 196 cawangan konvensional Kumpulan Perbankan RHB lain.

Beliau berkata, RHB Islamic Bank mengunjurkan penambahan cawangan-cawangan bank itu di negeri yang belum ditembusi seperti Kedah, Melaka, Perlis dan Pahang.

Source: http://www.utusanonline.com.my