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World Gold Council | Gold 2048: The Next 30 Years For Gold

The Future for gold

Gold 2048 brings together industry-leading experts from across the globe to analyse how the gold market is set to evolve in the next 30 years.

Download the report

Key insights from authors such as George Magnus, senior economist; Rick Lacaille, Global Chief Investment Officer of State Street Global Advisors; and Michelle Ash, Chief Innovation Officer at Barrick Gold include:

  • The expanding middle class in China and India, combined with broader economic growth, will have a significant impact on gold demand.
  • Use of gold across energy, healthcare and technology is changing rapidly. Gold’s position as a material of choice is expected to continue and evolve over the coming decades.
  • Mobile apps for gold investment, which allow individuals to buy, sell, invest and gift gold will develop rapidly in India and China.
  • Environmental, social and governance issues will play an increasing role in re-shaping mining production methods.
  • The gold mining industry will have to grapple with the challenge of producing similar levels of gold over the next 30 years to match the volume it has historically delivered.
future of gold
Industrial use of gold is changing

To read the full 51-page white paper click below

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World Gold Council | Gold-backed ETFs have highest inflows since early 2017

wgc

Gold-backed ETFs had their strongest inflows since early 2017

Global gold-backed ETFs holdings added 72.2 tonnes(t) to 2,481t in April. This is the strongest month of net inflows in more than a year. Growth in global holdings was led by significant North American and European inflows and supported by a small increase in Asia.

Our analysis of gold-backed ETFs and similar products provide detailed information and insights on global trends in gold investment demand.

Download our 7 step gold investment cheatsheet


Regional flows

  • North American and European funds saw solid net inflows in April, growing by 44t (US$1.9bn, 3.4%) and 27t (US$1.2bn, 2.8%), respectively
  • Total fund holdings in Asia rose by 2.4t (US$100mn, 3.0%) to 80.2t
  • Funds in other regions had a marginal loss of 1t or 3.0% of assets.

ETF

 

 

 

 

 

 

 

 

 

 

 

 

Individual flows

  • SDPR® Gold Shares and iShares Gold Trust took the lion’s share of North American inflows, increasing 25.1t (US$1.1bn, 3%) and 17.1t (US$700mn, 6.4%) during the month
  • Inflows in Europe were led by Xtrackers Physical Gold (7.9t, 34.2%), Invesco Physical Gold (6.2t, 5.5%), Xetra-Gold (6.2t, 3.1%) and ETFS EUR Daily Hedged Physical Gold (5t, 107.4%)
  • Huaan Yifu Gold ETF was the only Asian fund to break into the top 15 inflows, as it added (1.7t, 10.5%).

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Year-to-date trends

  • North American funds continue to account for the overwhelming majority (54%) of gross global inflows, led by iShares Gold Trust (45t, US$1.9bn), SDPR® Gold Shares (33.7t, US$1.5bn). Elsewhere, Xtrackers Physical Gold (15.6t, US$0.7bn) and Bosera Gold (11.7t, US$0.5bn) have also captured significant flows
  • Holdings in Asian gold-backed ETFs remained in the red, down 1.4t so far this year – this has been primarily the result of Bosera migrating assets from its non-listed to its listed fund
  • Despite seeing little movement in assets during Q1 2018 (-1t, US$0.2bn), European holdings are now comfortably up since the end of December mostly as a result of 26t of inflows in April.

ETF

 

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World Gold Council – Investment Update: Gold tracks the dollar as rates take a back seat

World Gold Council23 April 2018

Investors often use the direction of the US dollar as a bellwether for gold’s performance. However, over recent years, short-term movements in gold have been more heavily influenced by US interest rates and expectations of policy normalisation. Our analysis shows that the correlation between gold and US rates is waning and that the US dollar is again a stronger indicator of the direction of price. And, in our view, this will continue over the coming months – even while the dollar won’t explain gold’s movements entirely. Furthermore, the analysis shows that higher real rates have not always resulted in negative gold returns.

Linking gold, the US dollar and interest rates

There is no one single driver of the price of gold. Generally, gold’s price drivers can be grouped into four categories:

1) wealth and economic expansion; 2) market risk and uncertainty; 3) opportunity cost, and 4) momentum and positioning (see page 3).

Table 1: The influence of US rates on gold has fallen behind that of the dollar

Correlations between gold, the US dollar, and various interest rate benchmarks*

Gold versus US Dollar

 

In the short and medium term, two variables attract investors’ 10 commandmentsattention most: the US dollar and interest rates. Historically, gold has had a consistently negative correlation to the US dollar (Chart 1). Gold’s relationship with the dollar is determined by US-based gold supply and demand, as well as by the status of the dollar as the reserve currency globally (Gold and currencies, Gold Investor, October 2013). And while the US dollar is often a good bellwether of gold’s price performance, in recent years, gold has seemingly reacted more to the behaviour of US rates.

Yet, gold continues to trend higher – increasing by 8.5% since the Federal Reserve rate hike in December 2017 – despite interest rates rising at an accelerated pace. A key question for investors is, therefore, what matters more – the direction of the US dollar or the direction of interest rates? The answer is, generally, the US dollar. But there are exceptions to this rule.

Chart 1: There is a consistently negative correlation between gold and the US dollar

Correlation between gold (US$/oz) and the US dollar real exchange rate*

gold versus the USD
*Based on weekly returns between January 1971 and March 2018.
Source: Bloomberg, ICE Benchmark Administration, World Gold Council
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World Gold Council – Enhancing The Performance of Alternatives with Gold

In recent years, buy-and-hold investors such as pension funds, endowments, insurance companies, and sovereign wealth funds have gradually increased their investments in alternative assets to diversify their portfolios and boost returns.

‘Alternatives’ make up 23% of SWF portfolios and Insider's Guide to gold and silver24% of global pension funds, up from single digits in 2000.

Alternatives can offer attractive returns but be highly correlated to the stock market during downturns and often require long holding periods. Our research suggests that gold can complement alternatives by providing returns, improving diversification, adding liquidity, and enhancing overall portfolio performance.

The financial gold market is larger than the size of many alternative assets

The estimated size of alternative assets*

World Gold Council

*Based on most recent available data on each market as of December 2017.
Source: Barclays, BIS, JP Morgan, Preqin, REIT.com, World Gold Council

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World Gold Council – Cryptocurrencies are no substitute for gold

Bitcoin’s parabolic price rise was the big story of 2017 – putting the spotlight on the cryptocurrency market. While gold’s performance was a solid 13%, it was a fraction of the 13-fold increase of bitcoin by the end of the year. Some commentators went as far as to claim cryptocurrencies could replace gold. Cryptocurrencies may become an established part of the financial system. But, in our view, gold is very different from cryptocurrencies, as gold:

  • is less volatileCryptocurrencies
  • has a more liquid market
  • trades in an established regulatory framework
  • has a well understood role in an investment portfolio
  • has little overlap with cryptocurrencies on many sources of demand and supply.

These characteristics underpin gold’s role as a mainstream financial asset that will likely continue to resonate in today’s digital world.

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The gold market in 2018 – four trends to watch out for

In 2017, investors added gold to their portfolios as incomes increased, uncertainty loomed, and gold’s positive price momentum continued: US$8.2bn flowed into gold-backed ETFs and the US$ gold price rose 13.5%, its best year since 20102018 Gold trends

As 2018 begins we explore four key market trends and their implications for gold:

  • synchronised global economic growth
  • shrinking central bank balance sheets and rising rates
  • frothy asset prices
  • market transparency, efficiency, and access.

We believe that these trends will support demand and maintain gold’s relevance as a strategic asset.

Gold has delivered positive returns over the long run, outperforming key asset classes

Annual average returns over various time periods*

2018 Gold trends

*As of 31 December 2017. Annual return computations are based on total return indices, except gold where the spot price is used. This arrangement more accurately reflects portfolio level performance.

Source: Bloomberg, ICE Benchmark Administration, World Gold Council

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World Gold Council – Gold-backed ETF holdings increase by 31.4t

6 Sep 2017wgc

Gold-backed ETFs increase by 31.4t in August to 2,295t in global holdings

Welcome to the monthly analysis of gold-backed ETFs and similar products, where you will find detailed information and insight on global trends of gold investment demand through ETFs.

Regional fund flows

  • North American ETFs drove global inflows in August as investors added 27.8 tonnes ($1.3bn, 2.6% AUM)
  • Flows in Europe were mixed with a net increase of 6.4t ($321mn, 0.78% AUM)
  • Asia funds lost 2t ($80mn, 3.0% AUM), with many of the Chinese gold-backed funds losing assetsInsider's Guide to gold and silver

ETF inflows

 

 

 

 

 

 

 

Individual fund flows

  • In North America, SPDR® Gold Shares led inflows with +22.4t ($1.03bn, 3.2% of AUM), followed by iShares Gold Trust with +4.6t ($266mn, 3.1% of AUM).
  • European inflows were driven by Source Physical Gold +6t ($245mn, 5.5% of AUM) and ETFs Physical Gold +2.1t ($109mn, 1.87% of AUM).

Year-to-date trends

  • Global gold-backed ETFs collectively hold 2,295t and added 143.5t, equivalent to $5.3bn so far in 2017. This represents an increase of 5.5% of global AUM.
  • European funds continue to lead inflows accounting for nearly 79% of all inflows during the year.
  • European funds have increased their AUM by 12% on the year, while Asian funds have lost 16% of their assets.

Gold ETFs YTD

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Revealed for the first time: just how much gold is in London’s vaults

London has long been acknowledged as the biggest gold trading centre in the world, but no one has ever been able to say for sure how much gold is stored in the capital – until now.

New data has revealed that around 7,500 tonnes of gold was held in London in March of this year – the equivalent of 596,000 gold bars, or £227bn-worth of gold.

The data was published by the London Bullion Market Association (LBMA) Insider's Guide to gold and silveras part of a new drive to provide greater transparency around the gold market and encourage investors to buy into the precious metal.

Around 68pc of London’s physical store of gold is held at the Bank of England, which has around 5,100 tonnes in its vaults. The Bank looks after the UK’s gold reserves and also holds the metal for other central banks.

The rest of the gold, or around 2,500 tonnes, is held for use by investors, and traded through banks and other clearing houses that are members of the LBMA.

By comparison, there are an estimated 187,200 tonnes of gold above ground in the world, according to Thomson Reuters’ annual gold survey. This means that London’s total accounts for just 4pc of global stocks – although the LBMA data does not include jewellery or holdings by private individuals.

The Bank of England’s gold pile is slightly smaller than that of the US Federal Reserve, which holds around 6,700 tonnes of gold.

gold bars
Just how much gold is held in London? 7,500 tonnes, according the LBMA

The LBMA data will be published with a three-month delay, and encompasses all gold holdings within the M25.

Apart from the Bank of England, there are just seven custodians of gold in London: security firms Brinks, G4S Cash Solutions, Malca-Amit and Loomis International; and banks HSBC, ICBC Standard Bank and JP Morgan.

Around £13.8bn worth of gold is traded each day in London, according the LBMA.

The data also revealed that London’s vaults held 32,078 tonnes of silver in March, worth £14.5bn.

Ruth Crowell, chief executive of the association, said: “‘How much gold and silver is there in the London vaults?’ It’s a question that I’ve been asked since I joined the market a decade ago and one I’m sure that was asked many years before.

“Today, I’m delighted not only to give a meaningful answer, but also to announce that these numbers will be available monthly from now on.”

Joni Teves, an analyst at UBS, said: “The more detail and information about the market, the better chance of understanding market dynamics and putting the various pieces of the puzzle together.

“Maybe it will even be of interest to those outside the industry to finally have some idea of how many gold bars – like the ones in the movies – are actually sitting in vaults in one of the world’s busiest cities.”

Bank of England 
The Bank of England still holds most of the gold in London

According to Ms Teves’ analysis, around 1,485 tonnes of gold in London, worth about £45.7bn, are used to underpin so-called Exchange Traded Funds.

Gold ETFs are financial products that allow investors to track the prices of the metal without owning the underlying commodity itself. However the funds are usually – though not always – backed up by physical gold, which can sometimes be stored in a different country. ETFs are listed and can be bought and sold in the same way as ordinary shares.

Gold is currently trading around $1,267 an ounce, up 10.44pc this year. Some investors have been put off buying gold because the US Federal Reserve is widely expected to raise interest rates again this year, which is likely to knock the value of the metal.

However Ms Teves said demand for physical gold had been “stable” so far this year.

 

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World Gold Council | Gold Investor | Summer 2017

Welcome to the summer edition of Gold Investor, where leading commentators and market participants discuss new developments for gold and its evolving global role.

Aram Shishmanian

CEO, World Gold Council

Dr Reddy

A new era for gold

Dr YV Reddy spent 11 years as Deputy Governor and Governor of the Reserve Bank of India. Against a backdrop of rapid change in India and geopolitical turmoil worldwide, Dr Reddy explains how gold can contribute to economic growth both in the subcontinent and across the world. Read more.

 

Building an ecosphere for goldEcosphere

E-commerce is a global phenomenon, with consumers increasingly purchasing goods and services online and on mobile. ICBC, the largest bank in the world by assets, has created a suite of apps allowing customers to buy gold, trade it and invest in it online. SUN Yang of ICBC explains why. Read more.

 

Roy SebagBanking on gold

Roy Sebag is Chief Executive Officer of Goldmoney, the largest gold-based savings and payments network in the world. A successful trader since his teenage years, Sebag explains why he believes that gold is the premier commodity money. Read more.

 

 

Block chainGold and the blockchain

Gold and BitCoin have been set against one another as competitors, amidst suggestions that technological advances will make gold less relevant as a global asset. Charlie Morris, Chief Investment Officer at Newscape Group, explains the fault lines in this argument. Read more.

 

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Is China manipulating the gold market?

31 May 2017 (Gold Seek)

Gold Seek

 

  • Hedge fund, PhD statistician claims gold market is “the most blatant case of manipulation”
  • PhD: “Statistically impossible unless there’s manipulation occurring”
  • Gold serves as political chips on the world’s financial stage.
  • Price is being suppressed until China gets the gold that they need
  • Gold will go higher when all central banks ‘confront the next global liquidity crisis’
  • ‘When that happens, physical gold may not be available at all.’

Jim Rickards: The Golden Conspiracy

Jim Rickards

Is there gold price manipulation going on? Absolutely. There’s no question about it. That’s not just an opinion.

There is statistical evidence piling up to make the case, in addition to anecdotal evidence and forensic evidence. The evidence is very clear, in fact.

These are the opening lines of Jim Rickards’ piece ‘The Golden Conspiracy’, an op-ed that may surprise even the most seasoned followers of gold markets.

Gold and silver price manipulation is not a new topic to regular readers. For years the idea that precious metals markets are subject to more than just free market forces has been dismissed by the mainstream. Many have referred to gold and silver manipulation as topic fodder for the conspiracy and deep web forums. This is despite evidence to the contrary.

In the last eighteen months or so what was dismissed as anecdotal tales of manipulation has finally been recognised by the regulators and lawmakers as something very real and serious. Fines have been doled out and regulators have been slowly implementing new rules.

But what if the manipulation goes above institutions that can be called to account? Can they be fined? Can it be somewhat controlled by the authorities? What if it is a country doing the manipulation? Rickards believes it is.

‘…where is the manipulation coming from? There are a number of suspects but you need look no further than China.’

Role of China

Previously we have been excited about China’s role in the gold market. In April last year they launched yuan denominated gold bullion trading. We not only expected this to further boost its power in the global gold and forex markets but to also lead to increased transparency and reduce price manipulation.

However the country is not only keen to increase transparency in the market for their own long-term gain, they have short-term goals as well – to increase their gold reserves.

Rickards explains:

China wants to do what the U.S. has done, which is to remain on a paper currency Insider's Guide to gold and silverstandard but make that currency important enough in world finance and trade to give China leverage over the behavior of other countries.

The best way to do that is to increase its voting power at the IMF and have the yuan included in the IMF basket for determining the value of the special drawing right (SDR).

China accomplished that last September when the IMF added the yuan to its basket of currencies.

The rules of the game also say you need a lot of gold to play, but you don’t recognize the gold or discuss it publicly. Above all, you do not treat gold as money, even though gold has always been money.

The members of the club keep their gold handy just in case, but otherwise, they publicly disparage it and pretend it has no role in the international monetary system. China is expected to do the same.

Right now, China officially does not have enough gold to have a “seat at the table” with other world leaders. Think of global politics as a game of Texas Hold’em.

What do want in a poker game? You want a big pile of chips.

Gold serves as political chips on the world’s financial stage. It doesn’t mean that you automatically have a gold standard, but that the gold you have will give you a voice among major national players sitting at the table.

For example, Russia has one-eighth the gold of the United States. It sounds like they’re a small gold power — but their economy’s only one-eighth as big. So, they have about the right amount of gold for the size of their economy. And Russia has ramped up its gold purchases recently.

The U.S. gold reserve at the market rate is under 3% of GDP. That number varies because the price of gold varies. For Russia, it’s about the same. For Europe, it’s even higher — over 4%.

In China, that number has been about 0.7% officially. Unofficially, if you give them credit for having, let’s say, 4,000 tons, it raises them up to the U.S. and Russian level. But they want to actually get higher than that because their economy is still growing, even if it’s at a much lower rate than before.

 

Where is the evidence for this?

As we have explained previously, manipulation is often dismissed as a conspiracy and anecdote driven theory. But Rickards has academic evidence:

I spoke to a PhD statistician who works for one of the biggest hedge funds in the world. I can’t mention the fund’s name but it’s a household name. You’ve probably heard of it. He looked at COMEX (the primary market for gold) opening prices and COMEX closing prices for a 10-year period. He was dumbfounded.

He said it was is the most blatant case of manipulation he’d ever seen. He said if you went into the aftermarket, bought after the close and sold before the opening every day, you would make risk-free profits.

He said statistically that’s impossible unless there’s manipulation occurring.

I also spoke to Professor Rosa Abrantes-Metz at the New York University Stern School of Business. She is the leading expert on globe price manipulation. She actually testifies in gold manipulation cases that are going on.

She wrote a report reaching the same conclusions. It’s not just an opinion, it’s not just a deep, dark conspiracy theory. Here’s a PhD statistician and a prominent market expert lawyer, expert witness in litigation qualified by the courts, who independently reached the same conclusion.

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Surely they can be honest about it?

One would perhaps think that given China’s resources and their growing power in the physical gold market, the country would be able to just buy all that they need. Without the need for cloak and dagger activities.

Rickards argues this isn’t possible:

Here’s the problem: If you took the lid off of gold, ended the price manipulation and let gold find its level, China would be left in the dust. It wouldn’t have enough gold relative to the other countries, and because the price of gold would be skyrocketing, they could never acquire it fast enough. They could never catch up. All the other countries would be on the bus while the Chinese would be off.

When you have this reset, and when everyone sits down around the table, China’s the second largest economy in the world. They have to be on the bus. That’s why the global effort has been to keep the lid on the price of gold through manipulation. I tell people, if I were running the manipulation, I’d be embarrassed because it’s so obvious at this point.

The price is being suppressed until China gets the gold that they need. Once China gets the right amount of gold, then the cap on gold’s price can come off. At that point, it doesn’t matter where gold goes because all the major countries will be in the same boat. As of right now, however, they’re not, so China has though to catch-up.

I’ve described some catastrophic scenarios where the world switches to SDRs or goes to a gold scenario, but at least for the time being, the U.S. would like to maintain a dollar standard. Meanwhile, China feels extremely vulnerable to the dollar. If we devalue the dollar, that’s an enormous loss to them.

China has recently sold a portion of its dollar reserves to prop up its own currency, which has come under tremendous pressure. But it still holds a large store of dollar reserves.

If China has all paper and no gold, and we inflate the paper, they lose. But if they have a mix of paper and gold, and we inflate the paper, they’ll make it up on the gold. So they have to get to that hedged position.

China has been saying, in effect, “We’re not comfortable holding all these dollars unless we can have gold. But if we are transparent about the gold acquisition, the price will go up too quickly. So we need the western powers to keep the lid on the price and help us get the gold, until we reach a hedged position. At that point, maybe we’ll still have a stable dollar.”

China isn’t the only one

We know that the banks like to play with the gold market, but China isn’t the only country involved. Rickards says Russia has the same goals as the PRC. Together they are not only critical to the physical gold market but also for the overall structure:

Currently the price of gold is set in two places. One is the London spot market, controlled by six big banks including Goldman Sachs and JPMorgan. The other is the New York gold futures market controlled by COMEX, which is governed by its big clearing members, also including major western banks.

In effect, the big western banks have a monopoly on gold prices even if they do not have a monopoly on physical gold. But that could be about to change.

Russia and China are not only building up physical reserves and exploring for more, they are building trading systems that allow for price discovery and leveraged trading in gold.

It may take a year or so to attract liquidity, but once these new exchanges are fully functional, the physical gold market will regain the upper hand as a price maker.

Then gold will commence its march to monetary status, and its implied non-deflationary price of $10,000 per ounce.PHYS01_Animated_Gif_2_MPU

How to turn a problem into an opportunity

Manipulation goes on across many markets, whether precious metals, interest rates or forex. At no point is it victimless. Individuals and companies alike have experienced losses on their investments, both as a direct and indirect result of manipulation.

To hear this can be depressing, many investors might just ask what the point is in investing in assets such as gold and silver when they might be as manipulated as paper markets. Sure they might go to $10,000, but what stops it being manipulated even then?

Those who are concerned should take a step back and look at the bigger picture which is actually an opportunity rather than a problem. A suppressed price means great opportunity for investors to accumulate more bullion. Ironically for those looking to manipulate the price, this is good news for those who are keen to stock up on both gold and silver.

In the long-term Rickards is convinced that we will see big changes in the gold price ‘when China reaches its gold reserve target of 10,000 tons — surpassing the United States. At that point, it will be in China’s interest to become more transparent and let the price of gold soar, which is another way of saying the value of the dollar is in free-fall.’

In the short-term, gold investors and those considering diversifying their portfolio with the yellow metal would be wise to consider the following, according to Rickards:

  • Private gold holders continue to hold their gold
  • There is persistent excess of demand over supply
  • Situations in North Korea, Syria, Iran, the South China Sea, and Venezuela (to name a few) show no signs of improving, in fact the opposite.
  • Fed policy tightening is normally a headwind for gold. But, the last two times the Fed raised rates — December 14, 2016 and March 15, 2017 — gold rallied as if on cue. Look for another Fed rate hike on June 14, and another gold spike to go along with it.

Gold manipulation aside, we are currently in a period of major market complacency. Mainstream investors have seemingly been lured into thinking that years of risky and unprecedented policy making will be without consequence. They believe that elevated prices of stocks and bonds and reduced price volatility in stock markets are completely normal. This cannot be.

At some point the marketplace will realise all is not really as it seems. When this happens, expect a serious backlash and ensure you are holding onto something that is real and has shown its true value despite years of manipulation on all fronts.

 

 

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Gold Bullion Coin Worth $4 Million, Stolen in Berlin Museum Heist

Gold SeekPublished: Tuesday, 28 March 2017

– Gold coin called ‘Million Dollar Gold Coin’ or ‘Big Maple Leaf’ stolen from Berlin museum early on Monday
– World’s purest gold coin and in the Guinness Book of Records for its purity of 99999 fine gold
– Gold coin was legal tender, investment grade, bullion coin and only 7 other coins were minted
– The other ‘Million Dollar Gold Coin’ is still available for sale by GoldCore safely stored in vaults in Ottawa

– Royal Canadian Mint minted the gold coin in 2007 and carries imprint of Queen Elizabeth II
– Like all bullion coins, is worth much more than its legal tender value
– Gold should be stored in secure vaults, in safe jurisdictions such as Singapore, Hong Kong and Zurich

Million Dollar Coin Mounties

When debating whether or not gold has value or not, the naysayers will often argue that it is a “pet rock” and just a shiny, heavy, cumbersome piece of yellow metal that has no “intrinsic” value.

Ignoring the fact that the majority of humanity still know that gold remains great valued. Even daring thieves realise the value of gold and will go to great lengths to get their hands on it.

Yesterday morning German police received a call from Berlin’s Bode Museum saying that one of the ‘Big Maple Leaf’ coins had been stolen over the weekend.

  • Face Value: $1,000,000
  • Composition: 99999 fine gold
  • Weight (troy oz): 3,215
  • Weight (kg): 100
  • Coins in Existence Worldwide: 5
  • Coins Currently for Sale Worldwide: 1 (Now maybe 2)

Despite the massive size of the gold coin and huge weight – Insider's Guide to gold and silverit wasn’t too big for thieves and they were more than happy to relieve the Berlin musuem of one of the their prized possessions.

The museum houses one of the world’s largest coin collections, with about 102,000 coins from ancient Greece and about 50,000 Roman coins, so why did they single out this particular one?

World’s purest gold coin as “big as a tyre” and one of just seven

The gold coin, issued in 2007, by the Royal Canadian Mint is about as big as a tyre. The 53cm across and 3cm thick coin weighs nearly 100 kilos (221-pounds or 3,215 t.oz). It is made of 99.999% pure gold bullion and is this one of the purest gold coins according to the Guinness Book of Records.

Given the vast size and weight of the coin, this clearly was not an opportunistic theft. Reports state that the alarm system was circumnavigated and a ladder onto a nearby rail track was also found. It would want to be a very strong ladder !

Police shut down the local transport system in order to comb for clues. Whilst this is a crime and one that can never be condoned, it serves a great purpose in showing that gold remains greatly valued and highly coveted and perhaps more importantly of the vital importance of owning gold coins and bars in secure vaults in the safest jurisdictions.

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They don’t want the coin

The coin is arguably a collector’s item, but it is unlikely that this is why it was stolen. Thieves had easy access to a 100kg of gold at the highly technical purity of 99.999%. When asked what the thieves would do with the coin, a police spokesman Die Welt: “Either they were hired to do it by someone who wanted to have the coin, but it’s more likely that it will be melted down.”

One of the many reasons we like gold as money is because of its divisibility. It can be melted down, broken into smaller parts. Those smaller parts retain the value of the gold it contains, unlike a diamond which is worth more as a whole rather than broken into fragments.

Gold can be broken up many times over, no matter it’s appearance, it will always be worth the same whether apart or melted into one bar or coin.
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The coin with the poker face

The thieves may be keen to melt it down not just because it will make it easier to transport and resell, but because they know that it’s still worth something despite losing it’s current appearance. The face value of the Big Maple Leaf reads CAD 1 million, it is in reality worth around €3.7m, £3.2m or $4m given the value of the total gold content.

We recently wrote about how collectible gold coins should be likely avoided in the majority of situations due to their face value (and later resale value) failing to reflect the underlying metal content or purchase price.

Some mints or private minting companies have a habit of churning out collector coin sets that commemorate certain events or series.

But this is where this gold coin bucks the trend. As explained above, the coin might have a face value of 1 million Canadian dollars, but in truth it is worth significantly more than that, and it has become more valuable (due to its gold content) since it was minted in 2010.

We’re used to the actual value of money not being what we’re told it is according to its face, but it’s rare that the real value exceeds that face value. The 100 kg of the purest minted gold, is worth several multiples of 1 million Canadian dollars legal tender, but the provenance of the coin also contributes significant value to it.

Will you get your hands on the ‘Million Dollar’ Big Maple Leaf?

There are legitimate ways to own the Big Maple Leaf, in fact there are four more versions of the coin excluding the one that is no doubt on it’s way to be melted down. However there is only one that is for sale.

A year ago GoldCore announced that we had been given the exclusive rights in the UK and Ireland, to sell one of the five Big Maple Leaf coins. It is the only one that is currently for sale, in the world.

As we explained at the time, owning one of the extremely rare Big Maple Leaf is the opportunity to own a piece of history. It is a unique opportunity to own not only something is rare in its existence but is “It is a collector’s item and commands a premium both for its gold bullion content but also for being incredibly rare.”

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Don’t store your gold in a public place

Whilst this escapade is another example of how gold is money, the main lesson of this is that this amount of gold should not be stored anywhere other than a secure vault in one of the safest jurisdictions.

Very few vaults meet this criteria. Loomis International and Brinks vaults as offered by GoldCore’s partners in secure locations including Switzerland, Singapore and Hong Kong are some of the safest vaults in the world, provided the coins and bars are owned in allocated and segregated storage.

Unlike the Berlin-based museum, the gold bullion you store with GoldCore isn’t there because of a need to show it off and to allow people to admire it. Allocated and segregated coins and bars are fully insured and owned in the name of the client who have outright legal ownership.

Gold is a safe haven asset but only if held in a safe haven manner. It is locked away in the safest vaults to keep it safe and so it is there when you need it to protect your wealth.

Owning the financial insurance that is physical gold is important in these uncertain times.

Owning gold has protected people throughout history and again in recent years. Bail-ins as seen in Cyprus and now enacted in the EU, UK and U.S. may see deposits confiscated in the same manner that the Berlin thieves ‘confiscated’ the gold coin yesterday.

 

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World Gold Council – Indian Gold Demand

World Gold Council8 Mar 2017

Market update:
Indian gold demand will recover from 2016 lows

Last year Indian demand fell to it is lowest level since 2009, rocked by a barrage of policy initiatives and a soaring gold price. But the outlook is better – we expect Indian demand to be between 650-750t in 2017.

 

A barrage of policy initiatives, aimed at purging India of black money and instilling greater transparency, have rocked the country’s economy, including its gold market.

The most dramatic was the radical decision to demonetise over Rs15 trillion, equivalent to US$220bn. Other policies – such as the re-introduction of excise duty – also affected the gold market. And the forthcoming Goods & Service Tax (GST) will change the shape of the industry. It’s clear that India’s gold market faces short-term headwinds. But looking ahead, these policies promise to deliver a stronger and more transparent economy. This will support gold demand, which we expect to be between 650-750t in 2017.PHYS01_Animated_Gif_2_MPU

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Russia Gold Buying Is Back – Buys One Million Ounces In January

add gold to your pension
21 Feb 2017Gold Seek

Russia gold buying returned in January with the Russian central bank buying a very large 1 million ounces or 37 metric tonnes of gold bullion.

The increase in the gold reserves came after Russia did not buy a single ounce in December – a move seen as potentially a signal or an olive branch to the U.S. and the incoming Trump administration.

russia-buy-gold-january-2017

It also came after Russia had accelerated its gold buying in the final months of the Obama Presidency. October 2016 saw an increase of 1.3 million ounces or 48 metric tonnes and this was the largest addition of gold to the Russian monetary reserves since 1998. Indeed, it was the biggest monthly gold purchase in this millennium for the Russian central bank.

November 2016 saw another increase of 1 million ounces. Some analysts saw the increased Russian gold buying as a parting ‘gift’ and warning shot by Putin and Russia to his rival outgoing President Obama and the monetary and financial elites in the U.S.

Russian gold reserves increased a very large 199.1 tonnes in 2016 alone.

goldcore bloomberg chart2 28 04 14

Concerns about systemic risk, currency wars and the devaluation of the dollar, euro and other major currencies has led to ongoing diversification into gold bullion purchases by large creditor nation central banks such as Russia and of course China.

There was silly speculation in 2013, 2014 and 2015 that the financial challenges facing Russia and the depreciation of the ruble could lead to Russia selling some of its increasingly large gold reserves. We pointed out on Bloomberg TV at the time that this was highly unlikely and pointed out that Russia was much more likely to sell some of its very large dollar and euro reserves and was more likely to continue to diversify into gold.

Russia has been steadily buying bullion since before the global financial crisis and is now the sixth-biggest holder of gold reserves internationally – after the U.S., Germany, Italy, France and the IMF.PHYS01_Animated_Gif_2_MPU

The monetary diversification accelerated during the global financial crisis and in recent years. It has more than tripled its gold reserves since 2005 and holds the most gold since at least 1993, IMF data shows.

Although, it is worth noting that countries like Lebanon, Egypt, Laos, Pakistan, Kazakhstan and Turkey all have a much bigger share of gold in their foreign exchange reserves than Russia does – suggesting the recent trend is likely to continue. Especially if politics intercedes and the relationship between Russia, Trump’s U.S., the EU and NATO worsens again in the coming months.

Russia places much strategic importance on its gold reserves. Both President Putin and Prime Minister Medvedev and have been photographed on numerous occasions holding gold bars and coins. In May 2015, we pointed out how the Russian central bank views gold bullion as “100% guarantee from legal and political risks.”

Astute, risk aware investors are following Russia’s lead by diversifying and having an allocation to physical gold coins and bars.

 

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“World Gold Council – India’s gold market: evolution and innovation” is locked World Gold Council – India’s gold market: evolution and innovation

WGC
India was one of the world’s fastest-growing economies in 2016. In recent years millions have been lifted out of poverty and India’s middle class has swelled. This is important because our econometric analysis indicates income growth drives gold demand. But India’s relationship with gold goes beyond income growth: gold is intertwined with India’s way of life. And as we look ahead, India’s gold market will evolve.

Indian Jewellery

Highlights

Our comprehensive report focuses on the following:

  • Economic growth drives gold demand: India was one of the world’s fastest-growing economy in 2016. This is key to the health of the gold market. Our econometric analysis of the drivers of Indian gold demand reveals income growth is the most significant factor: as India becomes richer, gold demand increases.
  • Urbanisation will change the shape of consumer demand: Rural and urban India can be thought of as two distinct markets. Rural India prefers to invest in gold jewellery, while urban India has a greater preference for bars and coins. Rural-to-urban migration will change the shape of consumer demand.
  • India has a young population with a strong affinity with gold: Over 45% of India’s population is under the age of 25. And young people think about the world differently from the previous generation. But our large-scale consumer research indicates that they do have a strong affinity with gold: when we asked the question what you would buy if you were given Rs50,000, a third of respondents aged between 18–33 said they would invest in gold.
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The gold market in 2017

wgc 16 Jan 2017

In 2016, investors around the world returned in large numbers to the gold market, as a combination of macroeconomic drivers and pent up demand kept interest in gold high. As we start the new year, there are some concerns that US dollar strength may limit gold’s appeal. We believe that, on the contrary, not only will gold remain highly relevant as a strategic portfolio component, but also six major trends will support demand for gold throughout 2017.

What’s in this report?

The World Gold Council’s Outlook comprises four sections. A section on major trends that will support, in our view, gold performance this year. And three short sections from notable economists, gauging the economic outlook for the US, Europe and Asia, respectively. Our guest contributors are:

  • Jim O’Sullivan, Chief US Economist at High Frequency Economics, dubbed ‘most accurate forecaster in America over the past 10 years’ by MarketWatch
  • John Nugée, renowned economic and geo-political commentator and former Reserves Chief Manager at the Bank of England
  • David Mann, award-wining economist and Chief Economist for Asia at Standard Chartered Bank.

Using the economic perspective from our guest economists as a backdrop, we believe there are six major trends in the global economy that will support gold demand and influence its performance this year:

  1. Heightened political and geopolitical risks
  2. Currency depreciation
  3. Rising inflation expectations
  4. Inflated stock market valuations
  5. Long-term Asian growth
  6. Opening of new markets.

Insider's Guide to gold and silver