Tuesday, January 22, 2013

Ed Steer's Gold & Silver Report - January 22 , 2013..... And from silver Doctors - just look at the demand for Gold & Silver in china !

http://www.caseyresearch.com/gsd/edition/worried-about-gold-confiscation-buy-silver-instead

Worried About Gold Confiscation? Buy Silver Instead

Jan
22
"All the money and all the power in the world is now in play in the gold market...and it will get ugly before this game is all over."

¤ YESTERDAY IN GOLD AND SILVER

Note to readers:  As you will read further down, I had some real e-mail issues...and that's why today's column [such as it is] is late.
With the U.S. markets closed for the Martin Luther King holiday...and not forgetting the inauguration...it was pretty quiet in the gold market everywhere on Planet Earth yesterday.  Gold rallied about five bucks to around the $1,690 spot mark shortly after the markets opened in the Far East...and then more or less stayed at that level for the rest of the day.
Gold closed the trading at $1,690.10...up $5.40 on the daily.  Net volume was hardly worth mentioning...around 35,000 contracts.
Silver rallied about a dime at the Far East open on their Monday...and they slid to its low of the day, which came shortly after 11:00 a.m. in London.  From there it recouped all its losses...and finished the day at $32.02 spot...up 15 cents from Friday's close.  Volume was only 11,000 contracts.
The dollar index did precisely nothing.  It opened at 80.05...and chopped sideways in a very tight range, closing at 80.03.
With New York closed, there wasn't much action in Toronto yesterday...and the TSX Gold Index close up about a half a percent.  The silver stocks that traded on the TSX closed mostly in the green as well.
Not surprisingly, there were no reports from the CME, GLD, SLV or the U.S. Mint.
I forgot about the fact that there was a holiday in the U.S. yesterday, as I could have save myself the trouble of writing a column today.  On top of that, I'm out of town...and my ISP's e-mail system is down so I'm writing this out of my Hotmail account...and I can't retrieve any stories that I've been accumulating since Saturday morning, so I'm just going to post the gold-related ones that were dispatched on the GATA website over the weekend.  I only have eight stories in total...and they're all worth spending time on...especially the first one.


and links to news items and views on gold and silver....



¤ THE WRAP

There are no markets anymore...only interventions. - Chris Powell, GATA
Of course since there was no one around in New York, there was virtually nothing going on in any market yesterday.
I was particularly intrigued by the first story on the above list...as this is just another brick in the wall for "da boyz"...more physical gold disappearing from the market and placed far out of reach of the Western central banks.  As I said in my Saturday column, how soon will the trickle of physical demand turn into a flood...whether it's repatriation by governments, or physical demand by large investment funds that can see the writing on the wall?  Of course you can also include retail demand which, if you check the U.S. Mint statistics year-to-date, are already very impressive.
Except for the core non-believers, it was pretty much the consensus at the Vancouver Investment Conference that the move by Germany to repatriate some of its gold, was a seminal event...and as I also said in Saturday's column...who will be next...and how soon?
This game of musical chairs in the gold market is sure to end badly, as it's an absolute certainty that all the central bank gold that they say they have, isn't there. Only a limited number of requests are going to be honoured by the New York Fed...and its U.K. counterpart.  Those that wait to long to make their move, are going to walk away empty handed.  One has to wonder who will be the last country to get theirs back before the door gets slammed shut.  Don't forget that all the money and all the power in the world is now in play in the gold market...and it will get ugly before this game is all over.  Stay tuned.
As I mentioned on Friday, both Saturday and today were going to be brief...and that's what they were.  I have a plane to catch fairly early this morning....and as I hit the 'send' button at 2:41 a.m. Eastern time...gold is up a few dollars and silver is flat.  Volumes are about average...and the dollar fell almost 25 basis points starting at noon in Hong Kong.
Let's see what New York trading brings for us today.
See you on Wednesday.


And from Silver Doctors.....

http://www.silverdoctors.com/first-hand-account-of-gold-silver-mania-in-china-black-friday-style-mobs-scrambling-for-bullion/


FIRST-HAND ACCOUNT OF GOLD & SILVER MANIA IN CHINA- BLACK FRIDAY STYLE MOBS SCRAMBLING FOR BULLION

JANUARY 22, 2013 BY  1 COMMENT
imagesWith the recent claims from an Apple contractor that a Chinese silver shortage is the culprit for the production delay in the new I-Macs, an SD reader who has recently moved to China has given SilverDoctors aMUST READ first-hand account of the retail gold and silver mania underway in mainland China. 
With the Chinese New Year less than a month away, Ichban describes Chinese demand for gold and silver in Beijing as a tidal wave, and states that the demand for gold and silver is more intense than Thanksgiving/ Black Friday mobs in the US, despite the nearly 60% premiums retail dealers are asking for silver bullion!!
Ichban gives readers a glimpse of what to expect when the mania stage of the gold and silver bull markets finally reaches the US, as he describes the scene at Chinese retail bullion stores: 
Despite these high premiums, I have never seen such frenzied buying in my life!  I am a young adult male and 40 year old Chinese women are shoving me out of the way because they are trying to buy some gold and silver!
Ichban’s full first-hand account of China’s gold and silver mania below:
Doc,
I have been in China for the past few months and I have been witnessing the silver and gold demand first hand at ground zero. Let me tell you. At first, I was quite stunned to see the small silver and gold shops that sell everything but the bullion rounds we are used to seeing back in the states like ASEs, Maples, Krugerrands, and even Chinese Pandas (these are only legally sold at the National Chinese Banks like Bank of China, ICBC, etc).
The reason I was stunned is that I did not witness the typical scene described back in Western websites about the massive PM demand in China when I first arrived in October. Of course there is a lot of retail demand in China for silver and gold but the bulk of this retail demand appears to comes around the Chinese new year (which is Feb 9 this year).  The typical scene at a silver/gold store did not impress me. This changed very quickly as the Chinese buying habits according to a Western mind (me) are not very predictable and appear to be lemming like or Giffen-good esque. In other words, if they see that something will increase their prestige or esteem and people are catching on, then all of a sudden like a tidal wave, everyone will start buying it, wearing it, or doing whatever “it” is. This is a common trait in South Korea, where 1 product or musician can become very popular out of no where. One has to keep in mind that in general, Asia, which is not based on Judeo-Christian norms, is an area all about perception, prestige, and not losing face.
I just wanted to tell you that the last couple weeks, these retail shops which are often found around big box stores like Carrefour or Wal-Mart in China, have been absolutely swamped with buyers. I was not impressed with the traffic a couple months ago but there is a lot of money flowing to gold and silver the last couple weeks here and it isn’t showing any signs of abating soon. I have never witnessed anything like it before, and this is comparing it to Thanksgiving shopping in the US, where people get stabbed over the newest Iphone that is released on Thanksgiving.
For a little background: The Chinese New Year is the biggest holiday celebration in China of the year and it is based of the Lunar calendar (but it is usually sometime in February or early March according to the Gregorian calendar). This is the only time of the year that every Chinese person has some time off to visit with family, similar to our Christmas but even bigger in my opinion because of the magnitude of people moving around in China and the amount of time off (usually 1 month). With that in mind, gift giving is a very important thing in China because of something called guanxi (pronounced gwan she) and mianzi (pronounced meon zuh).
The Chinese are the ultimate source when it comes to presentation and perception. Because of this, the children will buy the parents a gift of something that they can wear, and it is almost always in the form of Gold and/or Silver. Silver and Gold signify money and wealth to all Chinese and this is just a basic concept to them. Anyways, instead of buying your mother a vacuum cleaner for Christmas a typical Chinese son or daughter would prioritize spending 500-1500 yuan on gold/silver for their parents (focusing on the mother first). This is $80 to $240 in USD.But the buying doesn’t stop with the children. Usually the mother and father will go out and buy gold and silver on their own in addition to their son or daughter buying them gold and silver. Just today while I was at Carrefour, I saw multiple grandmas, fathers, and mothers wearing gold necklaces that were 20 karat  or above and weighed around 70-85 grams. One such necklace I saw was $5000. I took a good notice at what clothes the man was wearing. He had some old tennis shoes, and just a t-shirt with some basic jeans. I know judging a book by its cover is wrong but he did not appear to be ultra wealthy. You would not see this sort of buying back home in the states which is why this is absolutely stunning to any Westerner. I also saw numerous older women wearing traditional silk Chinese shirts with similar necklaces that looked to have cost around $2500, as I would look at their necklace and compare it to the one in the shop (as they are all pretty easy to look at and compare because they are sort of standardized here).
Next time I go, I will take photos for you and you can post them on SilverDoctors… Furthermore, I was shoved numerous times out of the way by 40 year old women who wanted to get a gander at the newest necklaces and bracelets….. I am not a big guy but I am a young adult male nonetheless and these are women that are shoving me out of the way because they are trying to buy some gold and silver. This just gives you the idea the sort of frenzy that is going on over here. I won’t make price predictions, but I do expect silver and gold to go higher from here over the next 3 weeks, with a small correction by the end of February.
Here is a breakdown on the prices:
The gold at most of these small silver gold stores were selling anywhere between 388-420 yuan per gram (or $62.47 to $67.63 per gram, using a 6.21 exchange rate). With a current gold spot of $1685, the per gram cost is $54.18. China’s retail precious metals scene is currently putting only a 15% to 25% premium above spot prices. This of course is higher than premiums in the west but relative to Chinese premiums, this is pretty cheap. All of the PM retail shops in China lower the premiums significantly leading up to the Chinese New Year (Feb 9) in order to attract more buyers. I’ve witnessed premiums well above 50% a couple months ago for gold.
The silver was anywhere between 8.8 yuan to 20 yuan per gram (depending on the significance of the artwork, and other factors). However, there were .999 50 gram art bars that were selling for 10 yuan per gram or 500 yuan per bar. These art bars have each of the 12 zodiac animals on them. So, one 50 gram art bar is $80.51 or $1.61 per gram…. whereas at the current spot price of $32 equals $1.02 per gram. So in other words, China has a street silver premium of 57% on a typical art bars…. If this 50 gram Chinese Zodiac art bar were to only weigh a troy ounce (31.1 gram) it would cost $50.07…. a much higher premium than the art bars you can buy at your local dealer, SD Bullion, retail shop, or on eBay.
Anyways, despite these high premiums, I have never seen such frenzied buying in my life before. I must take pictures and/or a video next time I go to the Carrefour in Beijing just to show everyone in the West what the mania stage will look like when it finally arrives in the states. In the meantime, I am going to take care of those bruises I received today from the 40+ year old women who shoved me out of their way. Cheers from Beijing.
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