The Collapse Of Price Fixing Will Keep Silver Prices Rising

Reliable market estimates suggest that there around two billion ounces of gold held above ground in bullion, and only one billion ounces of silver.

Over time there has been far more silver mined than gold, say around 45 billion ounces, but it has almost all been consumed by industry. Much more of the five million ounces of gold mined by mankind remains.

Undervaluation

At current prices then the total silver market is worth $30.6 billion and gold $2.8 trillion. Any investor ought to spot the undervaluation there. That is what happens when a commodity trades at a lower price than three decades ago.

It is as though silver has been kept in some kind of communist, controlled economy. And indeed, that essentially is what happened after the 1980 silver price crash. Several banks colluded to keep the silver price locked down and in a world of its own, trading silver to profit their own books.

Earlier this year the bank’s position finally became untenable. Regulators began to publicly acknowledge a legion of complaints from investors and found them impossible to deny any longer. And the banks, fearing action largely liquidated their short positions over the quiet summer months.

Price fundamentals change

Silver prices have jumped from $17 to $30 since then. However, while this kind of price spike is always vulnerable to sudden corrections, there is a change in price fundamentals here.

The real lesson is that the artificial price fixing regime is over. Communism has collapsed and price controls are off. The logic is actually for very much higher market prices, not a retracement as some now expect.

History shows that once price fixing regimes collapse prices quickly inflate, and they then never go back to former levels. The gold rush of the 2000s is going to be nothing to the silver rush of the 2010s.

The silver market is incredibly small to absorb the scale of investment likely to come its way as other asset classes lose their appeal thanks to rising inflation and interest rates. For the gold-to-silver price ratio to get back to its historic average then silver prices must treble; and that will be on top of the rise to come by following the gold price up and up.

Market psychology

And while precious metals have been growing in investor appeal for the past decade, there has been nothing yet like the over confidence of the late phase of an investment bubble. We saw that in dot-com stocks and later in residential housing.

At the moment many investors in gold do so out of fear and with little enthusiasm, and they hardly touch silver. Only when the broad masses get the bug and greed over powers this market will it be time to get out. That hardly seems to be the case right now.

Source: http://news.silverseek.com

Gold, Dollar, Euro & China: Four to tango in 2011

 

Love of Gold – A Chinese Tradition The surge in China gold demand seems to have befuddled some including Richard Daughty (aka The Mogambo Guru) at The Daily Reckoning who wrote “…there is nothing about Chinese trusting gold for the last few thousand years or so.”

Well, let me set the record straight here. The Chinese, like many other Asian countries, have a tradition of reserving and investing in gold for thousands of years. Gold and real estate are typically the top two investment choices mainly due to a distrust of paper instruments resulting from much turmoil throughout the region’s history.

It is mostly this propensity, the clear present danger of an escalating inflation, and rising tensions at neighboring Korea, that are behind the rising gold demand in China

Gold = Financial Competitiveness
What’s more telling is that according to People’s Daily Online, in August, six China ministries, including the People's Bank of China, and the China Securities Regulatory Commission, jointly issued a notice to promote the gold market and positively connected the future development of the gold market with the competitiveness of financial markets.

China is already the world’s top gold producer, but has remained somewhat muted in the global gold market. Now, with the expanding of the Chinese gold market (China just approved its first gold mutual fund on Nov. 29), the increasing investment demand from the Chinese government and / or individual investors will become a major force influencing the world gold market.

China Can’t Save the Euro
According to data from the Bank for International Settlements (BIS), German and French banks have the largest debt exposure to Ireland and the southern rim of euro zone in the second quarter--so, the European debt crisis most likely will not evolve into a global contagion as many have feared.

Nevertheless, due to the single currency union’s inherent structural weakness, EU has not been able to agree on any meaningful system-wide measures to combat the debt crisis. As such, EU’s country-by-country, crisis-by-crisis approach is only adding market volatility, and further derailing the region. And not even China’s pledge of its $2.7trillion overseas investment fund as European debt rescue could thwart market’s pessimism about the euro.

Spain – Too Big To Bail?
Multiple rating agencies already put Portugal, Spain and Greece on future downgrade watch, while Italy is another highly indebted euro member persistently coming up in market chatters.

Deutsche Bank AG has pegged Portugal as the next seeking a bailout after Greece and Ireland, while Spain is a hidden debt bomb dubbed as “too big to bail” since the size of Spain’s economy (about $1.4 trillion, with 20% jobless rate) is twice that of Greece, Ireland and Portugal combined.

Moody's estimated Spain may have to raise €170 billion from the markets next year, not including the amount banks may need to recapitalize. Bank of England, meanwhile, is not instilling much confidence either by forecasting a possible return to recession in 2011, adding that further quantitative easing may be used, if an "external shock" hits the economy.

Expect A Full-on Assault on Euro
All this is not to say other EU members are in good financial and fiscal fitness either . So, if you think the series of down-grades and rising concerns on euro zone countries' debt has worked against the euro this year, expect a fresh new round of downgrades--over debt or growth prospect—to bring about a full-on assault on Euro next year, particularly when you see Spain come up in headlines.

Trouble in Euro should boost Gold while providing support to the Dollar (i.e. the dog with fewer fleas.), which is the scenario that would play out in 2011.

Global Inflation Spike
Inflation is already running rampant in countries like China, Russia and India, mostly driven by food shortages. In Beijing, for example, food costs soared nearly 12% year-on-year in November. Now, on the heel of U.S. Federal Reserve’s QE2 announcement in Nov, more monetary easing could be expected from central banks to stimulate their economies in 2011. This will only add fuel to the fire of the growing anxiety over rising inflation, and again bode well for gold.

Gold As a Reserve Currency
The shiny yellow metal is headed for a 10th straight annual gain. But with excess liquidity distorting everything, the typical trend and regression analysis will not work any more.

Nonetheless, combining the fundamental factors discussed here and technical signals, I believe Euro could break below $1.25 or even $1.20 sometimes next year, and could be as early as the first half. This could drive gold upwards towards the $1,600 levels. U.S. Dollar and Treasury would gain support as safe haven, which could push the bond yield down.

Furthermore, it is worth noting that Gold priced in Euros has risen more than 38% so far in 2010, reaching a new record high above €34,475 per kilo, far outpacing the Gold’s nominal price gain (in dollar) of around 28%.

So, in a way, gold is treated almost like a second reserve currency replacing the Euro, and you would have gotten a better return getting into gold via Euro. 

Source: www. commodityonline.com

Marc Faber: Gold, Silver prices to soar in 2011

LONDON (Commodity Online): Global investing legend Marc Faber says exposure of investors to gold and silver compared to other commodities is very low. Therefore, price of gold and silver can go to higher levels in 2011 thanks to the low investor base for these precious metals.

Faber who is the publisher and editor of the famous Gloom, Boom, and Doom report, says gold and silver continue to be under-owned, despite the fact that the prices of these two precious metals have been zooming in the last one year.

Here is Faber's outlook for 2011 on gold, silver, other commodities, emerging markets, bonds and equity markets:

Commodities: Faber likes energy companies since the long-term trend in oil is up, as supply fails to keep up with surging demand from emerging markets. Notes that emerging markets have surpassed the developed world in oil consumption and that this trend should keep demand strong for the foreseeable future. Faber likes the majors like Exxon, Hess, and even Chesapeake as natural gas is too cheap on an inflation adjusted basis. Continuing the energy theme, coal and uranium stocks should be gradually accumulated on weakness as the world looks for alternative sources of reliable energy. Peabody on the coal side and Cameco for uranium should outperform over the next few years.

Gold and Silver: Faber reiterates his favorable opinion on gold and silver. Doubts they are currently in a bubble as some analysts postulate. Faber notes that investor exposure is very low when you look you compare it to the world's financial wealth, meaning that gold and silver are still under-owned and have room to run.

Equity Markets: Faber believes a correction is imminent for the stock market as bullish sentiment (AAII sentiment) nears record levels and mutual fund cash positions remain very low. Furthermore, the latest upward move in stocks has occurred on declining volume, which is usually bearish from a technical point of view. The correction should occur in January. That being said, you should be buying into the correction as it represents a good buying opportunity. Faber prefers energy companies and speculative stocks such as home builders and even AIG. He goes on to say that the third year of a Presidential cycle is very good for speculative stocks versus traditional blue chip value plays.

Emerging Markets: While he is very bullish long-term on emerging markets, investors should avoid (or at least lighten up on) emerging market stocks right now. They should only be bought on corrections which would represent favorable entry levels. Overall, Faber thinks the SP 500 will outperform emerging markets in 2011. The only emerging market that looks attractive right now is Vietnam (VNM).

Bond Market: Reiterates his bearish long-term view on US Treasuries, but notes that they are currently oversold and could be a good trade at this point (TLT). But this would only be a short-term bounce as rates have likely bottomed and higher inflation will erode future returns.

Japan Equities: While everyone is still bearish on Japan, Faber likes Japanese equities and thinks they have the potential for more upside. In particular, he likes Japanese financials such as Nomura and Mizuho Financial.

 

Source: http://www.commodityonline.com

Silver Will Shine Again: Astrological Prediction

AHMEDABAD (Commodity Online): Year 2011 is the year for Bullion and Base Metals according to to Lt Col Ajay Jain, Financial Astrologer who makes daily predictions. At the same time he also bets for Agri Commodities which can give better returns, if handled well without political interferences.

Stars suggest that Silver is supposed to best investment in 2011. 32 year target for silver is Rs 80000 per kg while Silver may fluctuate between 48000 to 49000 levels by end of year 2011.

He elaborates that year 2011 is represented by planet Moon. Referring to astro economics he predicts high volatility in Currencies and Bullion.

He forecasts dismal outlook for European stocks while US and Asian markets are in for a major upsurge.

But post May 2011, there are high chances of geo-political flare up, especially in the Middle-East. Saturn, Mars ,Sun and Mercury are making special astrological yoga which may bring tension at Global levels, according to Jain.

Around 26th Jan, Saturn will turn retrograded in Virgo. This will create lots of confusion and misunderstanding among world leaders. Last week of Jan 2011 to March 2011 will be most difficult for world peace specially UK, USA, Middle East, India, Pakistan.

India, Japan and US are the three countries that will steal the limelight for the year 2011.

Year 2011 will be very important for India and Asia since as per star India will play major roll in world politics with help of USA and Japan. However, Euro will loose its shine against USD.

While in the Indian capital market, most positive sectors wil be banking, infrastructure, cement, education, health and pharma, heavy engineering, metal, automobile, tyre.

India's GDP is expected to between 9% to 9.5 during year 2011. Astro-Economics suggests that India is going to bring great revolutions in field of power, infrastructure, educations, technical educations, health and sports. Rajasthan, West Bengal, Bihar, Gujarat and Tamil Nadu tops the list of states that will benefit immensely in 2011.

Bad news is that India may have more television channels much to the surprise of already fed up audience and loss making investors.

 

Source: http://www.commodityonline.com

Stock Collection Notice - January 2011

Note :

i) Customers MUST call our branch for stock reservation before any collection.

ii) Due to the security reason, Stock Collection only allowed during office hours, all collection after 7pm will not be entertained.

iii) To make the process faster and smoother, customers are encouraged to make full payment through bank before stock collection.

iv) Original bank-in slip MUST be provided upon stock collection.

v) New Dealers are advised to get familiar with the stock collection method and don’t hesitate to seek for the assistance from their Master Dealer if they have any doubt.

Peratusan Kenaikan Harga Perak 2010

Harga perak pada 01.01.2010 = US16.85 per ounce

Harga penutup perak pada 31.12.2010 - USD30.91 per ounce

Peratusan Kenaikan bagi tahun 2010 =  83.44%!

Peratusan Kenaikan Harga Emas 2010

Harga emas pada 01.01.2010 = USD1096.50 per ounce

Harga emas pada 31.12.2010 - USD1421.60 per ounce 

Peratusan Kenaikan 2010 =  29.65%!