Gold

Available Gold Supply Disappearing As Gold Price Plunges

King World News,

27 June, 2013

With gold breaking the $1,200 level, today a legend in the business warned King World News that continued manipulation by Western governments in the gold market is now destroying future gold supply. Keith Barron, who consults with major companies around the world and is responsible for one of the largest gold discoveries in the last quarter century, also warned KWN that available physical supplies of gold are disappearing as the plunge in the gold price intensifies to the downside.

Barron: “ETFs continue to be stripped of gold and the bullion banks continue selling the gold overseas when they can arbitrage the price. So investors just need to sit tight and ride this out because available physical supplies of gold are dwindling rapidly.

We are at or very near the bottom because gold has now tumbled below the cash cost of production for the mining industry. So almost nobody is making money mining gold at these prices. As gold falls below the average “cash cost” it begins to get very dire and we start to see mines close.

I have just seen two operations close without any notice in the last couple of days. Certainly the world is not out of the woods yet, and another crisis is just around the corner. A major crisis will emerge in Europe or the United States that will move the price of gold significantly to the upside.

In the meantime, if the bullion banks do not turn the price of gold higher we are going to see gold production plummet. I’m not sure that’s what Western governments want to see at this point. They (Western central banks) are already supplying gold, along with the ETFs being drained, in order to meet the massive global demand for gold. The last thing they need is to see a supply crunch.

If that’s the case, the gold simply won’t be there anymore and Western vaults will be drained at an ever greater pace. There have already been a lot of projects which have been canceled or deferred and this will definitely impact supply already in years to come.

It takes a long time to commission a mining project, and when they cancel it or defer it they stop work and it takes a long time to get going again on these projects. So supply will already be constrained in the marketplace going forward, now it’s just a question of what degree supply will be constrained.”

Eric King: “That collapse in production you are talking about, Keith, will it be fairly dramatic?”

Barron: “It’s already happening, but it’s only to get more and more severe if the gold price continues to weaken or does not rally significantly from current levels. We have already seen major shakeups inside the mining industry and many CEOs have been fired and replaced. So everyone is aware of costs.

The reality is that all of that fat is being trimmed away. A classic example of this was the Barrick announcement to let go of a large number of key personnel. We can expect to see more of this as additional projects get mothballed going forward. A lot of major companies have also halted exploration or cut their budgets for exploration way back. So they will not be finding new deposits in the short-term. The last thing that actually goes is production and that is what we are seeing right now.

This is what Western central planners and governments don’t consider when they are manipulating the price of gold. Right now they are destroying their source of supply to keep the manipulation going. The bottom line is Western governments simply will simply not be able to continue the manipulation of gold as the supply of gold collapses.”

Barron also added: “The world is in an extremely precarious position and I am shocked by the amount of complacency out there. This is what is really frightening. We are seeing a bond bubble which has just now begun to burst, and even though global stock markets have been strong for many years, it has not filtered down to their economies.

In the United States for example, there are still large numbers of people unemployed and totally dependent on the government for their survival. This is the sort of thing which is very, very troubling. None of the problems in Europe have been fixed, they have simply been papered over.

So the financial world is headed for disaster and yet complacency reigns. The reality is that those who move to protect themselves while prices for gold are cheap will be greatly rewarded as the financial world lurches into the next crisis.”

Gold Premiums Double in India as Demand Outstrips Supply

Liberty Blitzkrieg,

26 June, 2013

WAR IS PEACE.

FREEDOM IS SLAVERY.

IGNORANCE IS STRENGTH.

From Reuters:

MUMBAI (Reuters) – Gold premiums doubled in India on Wednesday as suppliers struggled to meet surging demand after a ban on consignment imports, but futures prices fell to their lowest in more than a month as international gold prices fell due to a strong dollar.

India, the world’s biggest buyer of gold, now requires importers to pay upfront for inventory, making it difficult for smaller jewelers with lower working capital to source supplies. The government also raised the import duty to 8 percent in May to keep a lid on the surging current account deficit.

“There may be some demand from jewelers for raw material,” said Bachhraj Bamalwa, former chairman of All India Gems and Jewellery Trade Federation, adding that premiums charged on London prices shot to $20 an ounce on Wednesday from $8-$10 on Tuesday.

“We are unable to supply, though there is demand … we give deliveries after 2-3 days,” said Harshad Ajmera, proprietor of wholesaler JJ Gold House in Kolkata.

Enjoy the gold crash comrades.

Full article here.

In Liberty,

Mike

Luster Gone: Gold Posts Worst Quarter on Record

CNBC,

28 June, 2013

Gold surged more than 2 percent on Friday on end-of-quarter short-covering, but bullion still posted its largest quarterly loss in at least 45 years due to selling amid fears the U.S. Federal Reserve may wind down its stimulus program.

Bullion's 2.3 percent rally was particularly impressive on a day that had little macroeconomic news and no dramatic movements in other commodities and financial markets. Silver jumped 6 percent for its biggest one-day jump since January 2012.

After Friday's rally, gold is still 23 percent lower for the second quarter, its biggest decline since at least 1968, Reuters data shows.

Some investors aggressively bought back their bearish bets on fears gold could rebound, while others squared their books on the last trading day of a dismal second quarter after Thursday's 2 percent drop as funds polished portfolios through the practice of window-dressing.

"You've seen an over-run on the downside here. I am not positive that this is the low but we are very close to it," said John Hummel, AIS Group's chief investment officer, who manages $400 million in assets including a managed futures fund.

Spot gold recently was up 2.2 percent at $1,226.46 an ounce, rebounding sharply from a low of 1,180.71 an ounce, which marked the cheapest price since August 2010.

Friday's rise was the metal's biggest one-day gain since May 20.

Gold's relative strength index climbed to 28 on Friday but still below 30 in an area technical analysts regarded as oversold.

Mark Arbeter, chief technical strategist at S&P Capital IQ, said: "It will take months for gold to trace out a potential bullish reversal formation because of the severe technical damage."

Thursday's slide to below $1,200 an ounce for the first time in three years has prompted nervous investors to buy put options to hedge against further losses.

U.S. gold futures for August settled up $12.10 at $1,223.70 an ounce, with trading volume at around 310,000 lots, nearly 50 percent its 30-day average, preliminary Reuters data showed.

Open interest of Comex gold rose 1 percent to around 400,000 lots, suggesting more participants added bearish positions, traders said.

Physical Demand Lags

Bullion has taken a beating — losing as much as 15 percent or about $200 an ounce — since the beginning of last week when Federal Reserve Chairman Ben Bernanke laid out a strategy to roll back the bank's $85 billion monthly bond purchases in a recovering economy.

After a spectacular surge in physical demand after a $200 two-day dive in April, dealers and jewelers said consumers across the world are reluctant to buy even after the latest price decline.

With one day left in the month, sales of the U.S. Mint's American Eagle gold coins in June stand at only 47,000 ounces, a fifth of what was sold in all April, when sales hit a 3-1/2 year high. Silver Eagles sales are down 20 percent.

Investors, not individuals, are likely to hold the key for prices in the second half. The world's eight largest gold ETFs lost 530 tonnes of gold in the first half of 2013, equivalent to about 10 percent of annual gold production.

Among other precious metals, silver rose 5.9 percent to $19.53, rebounding sharply from a near three-year low at $18.19 an ounce. Platinum rose 1.7 percent to $1,335.49, while palladium also gained 1.7 percent to $655.85

The gold market

Force Majeur Was the End Game All Along, COMEX Will Default in the Next Week!

Max Keiser,

16 April, 2013

The COMEX will default in the next week or several weeks and people will be “settled” with Dollars, no more metal will be delivered!  



So, knowing that “game over” has arrived, they are dumping a massive volume of  paper contracts with impunity to push the metals prices as low as possible before the “default”.  This way the “shorts” do not have to and will not be “covered” when “supply” cannot be obtained because of “an act of God”.  They will be settled in cash (at a profit no less) because these “unforeseen” disruptions in supply.  “Who could have seen it coming?” will be the mantra.  I would suspect that banking stress and “bail ins” will also become prevalent globally.  The pricing structure” will now push any and all physical sellers away from the markets and the “door” to safety is effectively being shut.  Either you own metal or you don’t.



After the closure of the COMEX and LBMA doors there will be no availability and “price” will be meaningless.  Your ability to protect yourself is right now for all intents and purposes being eliminated.

Click here for more on whether we are witnessing the long-awaited default of the COMEX & LBMA:

The carbon market

Europe's Carbon Emissions Market Is Crashing

Marketweek,

28 March, 2013

Carbon markets were supposed to help the world fight climate change by making fossil fuels more expensive, thereby curbing the burning of coal, oil, and natural gas, which release carbon dioxide into the atmosphere. This year, the market is pricing a lifetime of pollution at less than the cost of a tank of gasoline. Using one type of United Nations carbon credit, in January it was possible to offset 581 tons of emissions, about as much as the average European generates in 80 years, for €23.24 ($30). The price has climbed to $82. “The fact that prices are so cheap says the market is broken,” says Edward Hanrahan, director of ClimateCare, in Oxford, England, which invests in carbon-reducing projects. “It’s not spurring large emitters to make investments” in reducing emissions.

Carbon markets were set up to help developed countries meet the emissions targets they agreed to under the 1997 Kyoto Protocol. The idea is to issue factory owners and utilities permits for a certain amount of pollution, with a declining number of permits issued each subsequent year. Companies that don’t use all their allowances can sell them to companies that exceed their limits. There are also markets like the UN’s Joint Implementation program, where companies can buy carbon “credits or “offsets” to help meet their emissions quotas. The money they spend on credits is invested in UN-approved emissions-cutting projects.

The European Union Emissions Trading System is by far the biggest carbon market, accounting for 89 percent of the $61 billion in trading worldwide in 2012, according to data compiled by Bloomberg. Users range from German power company RWE (RWE) to Danish brewerCarlsberg (CARLA). RWE emitted 140 million tons of CO2 in 2011 and had a cap of 89 million, so it had to buy 51 million tons of either carbon permits from other EU companies or offsets on the UN market.

When the EU started its Emissions Trading System eight years ago, policymakers expected the price of carbon would have to hit €25 to €30 a ton or more to coax industry to shift to renewable energy. David King, the science adviser to Britain’s then-Prime Minister Tony Blair, said companies wouldn’t change for less than €100 a ton. After trading on the EU ETS began, prices reached a high of €31 per ton. But the economic slump beginning in 2008 slowed industrial activity, depressing prices. Permits for delivery in December 2013 (and valid for seven years) touched a low of €2.81 on Jan. 24. They closed at €4.15 on March 22.

Lawmakers in the European Parliament are due to vote April 16 on a European Commission proposal that would delay issuance of new permits through 2015, temporarily restricting supplies in hopes of lifting prices. Prospects for passage are uncertain. Poland objects out of concern the plan would boost energy prices. Cyprus says it can’t afford to lose revenue from auctions. Greece is also opposed. Germany hasn’t decided how to vote. Without a big adjustment to the structure of the European market, buyers fear it “might just fall away,” says Abyd Karmali, head of carbon for Bank of America (BAC) in London. “You might end up with a patchwork quilt of measures across the 27 member states, where each state decides to put in place its own policies.”

In the U.S., proposals for a national carbon-trading market supported by President Obama stalled in the Senate in 2009. Japan’s government shelved a trading plan in 2010. At the same time, Japan, Canada, and Russia have declined to take part in the second round of quotas called for in the Kyoto agreement, which came into effect on Jan. 1, so companies there no longer require any permits or offsets. With the EU ETS foundering, support is growing for alternative approaches to curbing emissions, such as a direct tax on carbon. Even some oil company executives have endorsed the idea. “A carbon tax is much more straightforward,” Rex Tillerson, chairman ofExxonMobil (XOM), said in an interview with Charlie Rose on March 7. Dieter Helm, a professor of energy policy at Oxford University, agrees that taxing carbon would be more effective. “We want a carbon price to reflect where you want to go,” he says, “and not just current circumstances.”

The bottom line: With the price of carbon below €5 a ton in the EU’s Emission Trading System, companies have little incentive to cut emissions.