Today's Cranker is dedicated to the Gold Bug's & Traders of Gold, I know there are plenty out there.........
Perhaps this might get some more posting activity going, it has been fairly quiet lately, although there are a few away at the minute, which may explain it.
Gold Futures
Grant Williams, who is the portfolio manager of the Vulpes Precious Metals Fund and strategy advisor to Vulpes Investment Management in Singapore, has come up with another interesting article concerning the Gold Market.
What follows is a brief cut and paste of a very long article which can be found here in full-
The differing attitudes to gold, Western vs Eastern, have been ingrained through centuries of human development; and they have been making themselves abundantly clear in recent times as physical gold moves inexorably from West to East.
In the all-important second quarter of 2013, the two biggest buyers of gold in the world were two of the countries at the Eastern extremities of the old Silk Roads — China and India
Indian demand for physical gold swamped even Chinese demand in Q2 2013, as Indians stocked up on the monetary metal. Not only in the form of jewelry ahead of the traditional wedding season but also in investment form: coins and bars. All the while, their national currency, the rupee, was disintegrating before their eyes.
Between May 1st and August 20th, the rupee fell 20% against the US dollar, and whilst that move may not have resonated with most Westerners. That’s a very real hit, but Indians are used to moves like these in their currency, though the trend over the last 40 years has been largely a one-way ticket to a weaker rupee:
However, that chart tells only half the story. To really understand why Indians covet gold so much, let's take a look at another chart, this time showing the recent performance of the rupee AND gold:
Since April, gold has strengthened 20% in rupees whilst the currency has depreciated by a similar amount vs the US dollar. Purchasing power protection in action, folks. Just one of the beauties of owning gold.
Physical gold has been sucked into the East and into very strong hands — the kinds of hands that don't let go of it easily. Certainly not as easily as those in the West who were scared out by a 20% correction.
The story is the same in Dubai, where refiners have 90-day backlogs in producing the small bars and coins so craved by Asian buyers, while here in Singapore there has been an absolutely extraordinary explosion in gold demand as the Freeport storage facility is deluged, with not only Eastern investors but also savvy Westerners looking to move their gold to a jurisdiction they feel won't come under the kind of pressure being exerted in India. Dennis Gartman published a fascinating chart this week that demonstrates just how crazy demand for gold has been here in Singapore in 2013:
Even Indonesia — not known as a huge destination for gold — is getting in on the act: ------------------------------------------------------------
Uh-oh! You do NOT want to bet against a tide like this — not in a commodity with a very fixed existing supply and a very consistent, but small, annual supply increase of around 2,500 tons. Trust me. You just don't.
Five of the ten most populous nations on earth are hungry buyers of gold, and each of them has a burgeoning middle class that has, over the years, embedded in its cultural psyche the idea that owning gold is just what you do when you can afford to.
Since the day the German central bank demanded ITS gold back, physical metal has been disappearing from just about every vault in the system in almost unimaginable quantities. And as for that bullion bank risk... According to Zerohedge, the bullion banks are being forced to borrow from each other simply in order to make deliveries:
The exodus of gold from the UK to Asia via Switzerland is no accident and no one-off. The surge in imports of gold into China through Hong Kong is, likewise, not a flash in the pan. Indians' desire to own bullion, jewelry, coins — anything golden — is not going away. Trust me.
All these factors will undoubtedly conspire to make the next six months (and beyond) a lot less painful for holders of gold than the last six were — a shift that has already begun to take shape.
Read the entire (very long) article and other interesting stories here-
http://www.mauldineconomics.com/ttmygh
Good Morning and Welcome to the XJO Thursday Thread.
(20min delay)