December 11, 2018 

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Gold Enters Major Bull Market


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 By Michael Miller

09/14/2018  10:42AM

Argentina’s New Export Tax Could Hurt Yamana’s Cashflow

Less than two weeks ago, Argentina proposed a 12 percent tax on all exports out of the country as part of a plan to correct economic turmoil that has sent the peso to record lows. The tax will be capped at four peso for each US dollar of bullion and unrefined gold and at three peso for each dollar of unrefined metals.

“While the company’s favorable positioning relative to production and costs bodes well for the near and medium term, Argentina’s export tax has the potential to offset a portion of these benefits,” said Daniel Racine, president and CEO.
Racine notes that the company will work to seek a constructive resolution for both parties by determining if and how the tax will be applied. Unfortunately for Yamana, its share price was negatively affected by the September 3rd announcement and its stock lost approximately 17 percent of its value as result.
 By Michael Miller

05/03/2018  10:10AM

Published 3rd May 2018 World Gold council

Gold demand of 973.5t was the lowest Q1 since 2008. The main cause was a fall in investment demand for gold bars and gold-backed ETFs, partly due to range-bound gold prices.

Jewelry demand was steady at 487.7t, as growth in China and the US compensated for weaker Indian demand. Technology demand extended its recent upward trend. The total supply of gold increased by 3% to 1,063.5t, primarily due to a modest increase in producer hedging. Mine production was fractionally higher at 770t.

China, Germany and the US drove weakness in bar and coin investment. Global demand fell 15% to 254.9t as range-bound gold prices undermined investor interest.

ETFs saw a fifth consecutive quarter of inflows. Holdings grew 32.4t, due to growth in US-listed funds. Q1 investment was mixed, with rising interest rates on the one hand and a sharp spike in stock market volatility on the other.

Global jewelry demand was roughly flat at 487.7t. China was buoyed by holiday spending and the supportive economic backdrop improved US demand. By contrast, Indian consumers were discouraged by rising local gold prices.

Central banks added 116.5t to global official reserves in Q1. This was the highest Q1 total for four years and in line with long-term average quarterly purchases of 114.9t since Q1 2010.

Demand for gold in the technology sector continued to improve. The wireless sector was a key area of growth as facial recognition is increasingly deployed in smartphones, gaming consoles and security systems.
 By Michael Miller

04/03/2018  12:25PM

Why I spend little time guessing, speculating, charting or recording data regarding the historical hydra of the gold spot price market. Some believe it to be an evil. Not I. Some believe it to be great value. Either way pundits or intelligent analysts are celebrating a positive first quarter while others are sending up a warning signal as they see significant risks to the downside because of rising real bond yields. Yawn.

In a report Tuesday, one wrote that the growing divergence between gold prices and rising real interest rates is becoming “increasingly precipitous.” Traditionally, higher real interest rates weigh on gold prices, increasing the precious metal’s opportunity costs as a non-yielding asset. Okay.

Fear over global trade negotiations and recent softer than expected economic data have weakened the long end of the U.S. treasury curve, which should be a positive for gold prices. Okay. Historically as the long-end of the U.S. treasury curve declines, relative to European and Japanese yields, the dollar moves lower which paves the way for higher gold bullion and silver bar prices. So what?

Continuing from various reports: yields have been under pressure since pushing up to the 2.95% level, following the Fed’s decision to increase interest rates by 25-basis points following their March monetary policy meeting. Investors appear to be unsure of the Fed’s forecast that yields will accelerate higher in 2019 and 2020. A declining 10-year treasury yield is the markets way of telling the Fed that your forecast for growth and inflation are too rosy. I’ve had enough and will stick to Lee Erdahl’s guidance years ago: “Mike, when asked about the price of gold, I say one thing is for certain. It will go up or go down.”

I like to read about those actual gold producing companies and how the life of a miner is going. I also study patterns of the exploration dreamers and how they present their case for eventual production. I do like to read about the political upheavals where armed guards are required for protecting the miners or when a regime decides to take a bigger chunk of production. The writers that really blow my mind (and have for years) are those predicting $5,000 an ounce or more. My greatest curiosities are the gold bulls and bears that baffle and manipulate the direction of spot towards their financial benefit. At times a gold bull wants to bring the price down for acquisition. A gold bear may favor an increase in order to short the commodity. Nothing new here but the game is much more expensive to play than dealing in cotton, corn or even oil.



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