Thursday, November 28, 2013



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Tuesday, November 26, 2013

Million Dollar Robbery Rocks Bitcoin Exchange

Network World - Bitcoin Internet Payment Services, a Denmark-based exchange billing itself as Europe's biggest, was robbed of bitcoins worth more than $1 million in a theft that took place over the course of the past several days.
Bitcoins are a decentralized digital currency generated by computers “mining” for the solutions to complex math problems, and authenticated on a peer-to-peer basis – not by a central banking authority. It’s the third major heist this month – about $1.4 million worth was stolen several weeks ago from an anonymous Australian who ran an online wallet service known as, and a Chinese exchange abruptly vanished two weeks ago, taking more than $4 million with it.   LINK...
As we said many times on Gold Radio Cafe, this Bitcoin craze is not sound money and it smells like a "Tulip Mania" to me.  BK

Monday, November 25, 2013

Financial Reform, Shadow Banks and Systemic Risk

Is your portfolio "BAIL-IN" proof? Please call and ask about our U-Vault Reserve Account.  BK

Gold and Silver Financial Review

Heraeus Weekly Report

Gold Market

Against expectation there were significant impulses last week that sent gold into a downward spin: on Wednesday the metal lost 2.5%. And as has been the case in the past months, it was the debate around the Quantitative Easing Programme in the USA that was the cause. Gold appears to have become a slave to the contradictory statements being made in this connection. Being strongly linked to the Tapering issue has been damaging to gold and even though one would expect a more subdued reaction when things get repetitive, this is clearly not the case. And thus the focus remains on these discussions.

The gold production increase in Q3, as mentioned last week, was again mirrored in the estimate of Thomson Reuters GFMS for the full year 2013. The news agency expects a record result this year (2,920 tonnes vs. 2,861 tonnes in 2012). In view of the lower prices this may not appear plausible; however the various investments made in the past “success-decade” seem to be bearing fruit. As the average “all-in” production costs (ca. 1,200 $/oz) are now just below the present market level (1,230 $/oz), various mines are trying to improve their overall revenue through volume. Even though this may reduce production volume in the coming years, it appears to be more attractive than cutting production or, where possible, closing shafts. Although the costs for this are enormous, one naturally finds some examples.

The correction middle of last week (a 4-months low) led to a strong increase in demand for investment bars at our counters. Private investors appear to have considered prices below 1,250 $/oz as a good buy-opportunity and reacted consequently.

Since gold fell as low as 1,229 $/oz (29.35 €/g) this morning, it is now imperative to defend 1,200 $/oz. We consider it as very likely that this level will get tested. Technical support lies then at 1,180 $/oz and 1,150 $/oz.

Silver Market

As anticipated by us, the negative outlook was confirmed. The metal broke below the 20 $/oz mark during the course of last week and is now trading at a low last seen in early August. Since we fell below the 19.70 $/oz level this morning, the year’s low of 18.20 $/oz is now coming into focus. Given the present good employment figures, the break-below the 

20 $/oz mark as well as the hawkish (end of the bond-buying spree and / or interest-rate hikes) interpretation of the American FOMC Minutes, we also have a rather negative outlook for the metal. Furthermore, the stable investment-demand from small-investors cannot really support the price at the moment. 

Next week, among others, the US Consumer Confidence (Tuesday 16:00 hours), Employment data from Germany (Thursday 09:55 hours) and the European Consumer Confidence data (Thursday 11:00 hours) are awaited with much eagerness.

Friday, November 22, 2013

Gold and Silver Financial Review 11/22 by Gold Radio Cafe | Finance Podcasts

Recorded LIVE Today at 12:00pm EST
With co-host Jeff Dunphy

Gold Pours Into China

Nov 20 (Reuters) - China, set to pass India this year as the world's top gold consumer, has imported nearly a fifth more bullion than data from its traditional conduit Hong Kong shows as it brings in the metal via other routes.

Gold shipped from Hong Kong to the mainland, used as a proxy for Chinese demand as bullion imports are a state secret, nearly tripled to 855 tonnes in the year to September.

But a surge in China's gold purchases as prices slumped by a quarter this year has also seen at least 133 tonnes shipped directly, according to Reuters calculations based on data from Global Trade Information Services (GTIS).

Monday, November 18, 2013

Heraeus Weekly Commentary

Week Ending Nov 17

Those hoping for a recovering last week in gold, after its recent correction, were disappointed. In fact the metal dropped by the middle of the week to 1,265 $/oz; it’s lowest in four weeks. By the end of the week it had recovered somewhat and closed at 1,287 $/oz. The trigger for this move was again the discussions centred around the potential tapering in the USA, which one FED-member feels could be a possibility this year. However, on Wednesday, Janet Yellen, Bernanke’s successor as chairperson of the FED, propagated to the contrary: her statement that the US economy would get monetary-policy support till such time that stable growth and corresponding job-market strength had been achieved was supportive for gold. Nevertheless the largest of the gold ETF’s, SPDR Gold Trust, saw further erosion of stocks which have now fallen to a 4-year low of 865 t.
The World Gold Council (WGC) came out with the demand summary for gold for the third quarter. The jewellery industry, with 487 t, has been responsible for the larger part of this demand. Though total demand in the period July to September, compared to previous year, fell by 21% to 870 t, demand for the first three quarters has gone up, whereby a shift is seen from the West to East. Bar and coin demand has increased by 6% compared to Q3 2012. There was again the discussion that China would overtake India as the largest gold consumer but according to the WGC the difference would possibly be much smaller than anticipated by some (China: 1,000 tonnes / India: 900 tonnes). The supply side shows a year-to-date mine production increase of 70 t whilst recycling fell to its lowest level since 2008 (385 t).
With no significant impulses expected we foresee a sideway movement in a range of
1,280 - 1,295 $/oz for the next few days.

Friday, November 15, 2013

Friday, November 8, 2013

Thursday, November 7, 2013

Heraeus, Nov 7 Commentary

Good Afternoon,

If you are watching CNBC this morning you would think the world revolves around the company Twitter. While the media is focused on the equity markets and the Twitter IPO, traders in the commodity market continue to play the range game. Here is a recap of the news this morning:

1.       Bank of England kept the interest rate at 0.50% and kept their bond purchasing program steady
2.       European Central Bank surprised the markets by cutting interest rate to 0.25% from 0.50% and signaled that they will keep interest rates low for as long as necessary   
3.       US weekly initial jobless claims at 336k and continuing claims at 2868k
4.       US GDP grew at 2.8% in the 3rd quarter faster than most estimates
5.       US personal consumption grew at 1.5%, less than expected
6.       GDP price index increased at 1.9%, more than expected

ECB is focused on not letting the European economies slip back into recession and pump maximum liquidity into the markets. Lack of inflation and stubbornly high unemployment rates are causing concerns. US economy grew at a faster pace in the 3rd quarter due to increase in inventory levels but there are underlying signs of weakness from business to consumer spending. Economic and political uncertainty in the US have been affecting business and consumers alike. US job markets are showing signs of life but the real unemployment rate and the quality of the jobs being created are both being debated. After all these data, we are right back at where we started… waiting for more “convincing” data to point us to the direction of the US and global economies and further central bank actions. Precious metals continue to trade in a range, gold $1300-$1325, silver $21-$22, platinum $1425-$1475, and palladium $725-$765. Any attempts to break these ranges have so far been met with stiff counter moves. We anticipate gold and silver to trade slightly lower on continuing debate over US FED bond purchase tapering. Platinum and palladium will move depending on next sets of economic data out of China and Europe with South African mine strike news in the background. We believe traders will continue to trade the ranges and jump heavily into a position once data becomes clearer. 

David M. Lee
Heraeus Metals New York LLC