Radio Show Newsletter
WORLD FINANCIAL REPORT ON RADIO May 9th 2019
CHARTS OF THE WEEK-QUOTES-QUICK HITS
-CHART OF THE WEEK: World’s Rich Put a Third of Funds Into Cash as Trade War Simmers. Wealthy investors around the world are holding a relatively high level of cash, and perhaps they’ve become too cautious, according to UBS Group AG. The world’s largest wealth manager said 32 percent of high-net-worth portfolios are in cash, in a survey released May 7. In Asia and Latin America, the portion was 36 percent, compared with 31 percent in Switzerland and 35 percent in the rest of Europe. The outlier: the U.S., at just 23 percent. “Cash is a safe asset for a liquidity strategy but a risky one for longevity,” Paula Polito, client strategy officer at the Swiss bank’s Global Wealth Management unit, said in a statement. “We see high levels of cash globally. This is a good time for investors to consider a more diversified portfolio.” Bloomberg
-CHART OF THE WEEK: Vancouver Housing May Be Down But Not Out, Vancity CEO Says. The housing numbers out of Vancouver, once among the world’s hottest real estate markets, are getting more dismal with each passing month. Sales in April were the lowest in 24 years for a month that typically kicks off the busy spring homebuying season. Benchmark prices are down 8.7 percent from their peak in mid-2018 and the number of homes sitting on the market has ballooned by nearly half, according to the Real Estate Board of Greater Vancouver.
Yet those awaiting a final reckoning and the chance to buy a home on the cheap in this picturesque West Coast city may be disappointed, according to Tamara Vrooman, chief executive officer of Vancouver City Savings Credit Union. “We see no evidence of a freefall,” Vrooman, 50, said in an interview at the headquarters of Canada’s largest credit union. “We have certainly seen a lot of sitting on the sidelines and wait-and-see, but we’re also seeing signs that we might be at the trough.” Bloomberg
-CHART OF THE WEEK: Toronto Housing Market Begins Busy Spring Season With a Bounce. Toronto’s housing market entered the busy spring property season with a bang, as sales surged 17 percent in April compared with a year earlier and prices also pushed higher.The number of transactions totaled 9,042 units last month, compared with 7,744 units in April 2018, the Toronto Real Estate Board said Monday. On a seasonally adjusted basis, sales were up 11 percent in April compared with March. The average selling price of a home climbed 1.9 percent from a year ago, to C$820,148 ($544,344).
The rise in sales is an another indication Canada’s biggest real estate market is stabilizing from a recent slump, though it’s off the dizzying heights of a few years ago. Toronto’s housing market cooled considerably last year as officials tightened mortgage regulations, imposed taxes on foreign buyers and took other measures designed to curb runaway prices raising worries the steps had gone too far. Yet economic fundamentals everything from strong employment gains to a sharp increase in immigration remain supportive, as has the dovish tilt globally from central banks that have helped bring down borrowing costs in recent months. Bloomberg
-CHART OF THE WEEK: China Grabs More Canadian Oil as Crude Supplies Dwindle. China is snapping up more Canadian crude as global heavy oil supplies dwindle amid Iran sanctions and a political crisis in Venezuela. Ambelos is the second tanker to leave Vancouver’s Westridge terminal this year bound for China, according to data compiled by Bloomberg. It’s carrying more than half a million barrels of heavy Canadian crude, according to IHS Markit. It follows the Erik Spirit, which sailed to China’s Nanhai district from Westridge last month.
The shipments happened even as Canadian heavy crude has sold at an average discount to West Texas Intermediate futures of less than $11 a barrel so far this year. Worldwide supplies of heavy, high-sulfur crude are growing tighter after the Trump administration ended all waivers for countries seeking to import sanctioned Iranian crude oil and as a spiraling political crisis in Venezuela curtails that country’s oil output. In addition, supply cuts by OPEC typically target less-valuable heavy, high-sulfur barrels. “It’s a question of adequacy of supply at this point,” Kevin Birn, IHS Markit’s director of North American crude oil markets, said by phone. “Given the rapid deterioration in Venezuela, it’s left that market a lot tighter than it would otherwise be.”
Bitumen from Northern Alberta’s oil sands represent the world’s third largest reserves of crude but a shortage of pipelines impede exports. Prices have surged since sinking to a $50 a barrel discount late last year, after the Alberta government imposed production curtailments on large producers. Heavy Western Canadian Select in Hardisty, Alberta was $13 a barrel below WTI, and about $19 below Dubai, the Middle East benchmark. It costs about $4 a barrel via pipeline to reach the Westridge terminal for pickup by tanker, according to toll data. Bloomberg
-CHART OF THE WEEK: China Defaults Hit Record in 2018. 2019 Pace Is Triple That. This year is shaping up to be the biggest by far for defaults in China’s $13 trillion bond market, highlighting the widening fallout from the government’s campaign to rein in leverage. Companies defaulted on 39.2 billion yuan ($5.8 billion) of domestic bonds in the first four months of the year, some 3.4 times the total for the same period of 2018, according to data compiled by Bloomberg. The pace is also more than triple that of 2016, when defaults were more concentrated in the first half of the year, unlike 2018. The trend is clear: unless something changes, 2019 will be the new high.
China continues to press banks to extend credit to the private sector, and small and medium-sized companies especially. The latest move came Monday, when the central bank loosened some reserve-requirement rules for lenders. But President Xi Jinping’s team has also focused on shrinking the shadow-banking system, where credit decisions were made with less regulatory oversight and where it was easier to build up unsustainable leverage. It’s that funding squeeze that explains the default surge that began in late 2017 and continues today. By contrast, 2016 was more a story of China’s push to shrink excess industrial capacity having reverberating effects in credit markets. Bloomberg
-‘Bond King’ Jeffrey Gundlach says the national debt is ‘totally out of control.’ DoubleLine CEO Jeffrey Gundlach is flagging risks in the rising U.S. deficit. “People are starting to realize that the deficit and debt are totally out of control,” Gundlach says on CNBC’s “Halftime Report” Tuesday. Gundlach also flagged trouble in the corporate bond market, which “is so much worse today than it was in 2006.” CNBC
-Warren Buffett rejects socialism, calling capitalism ‘absolutely a miracle’ for the United States. Warren Buffett on Monday rejected the type of socialist ideas gaining favor on the far left of the Democratic Party delivering a full-throated endorsement of free market capitalism. “If you look at what was here in 1776 and you look at what’s here now, this country has done an incredible job in terms of the deployment of resources and human ingenuity,” Buffett told CNBC’s Becky Quick, in an interview from Omaha, Nebraska where Berkshire Hathaway held its annual shareholders meeting this weekend.
“The idea of people unleashing their potential it’s absolutely a miracle.” On stage Saturday, before a crowd of tens of thousands of investors and fans of his investment philosophy, Buffett affirmed, “I’m a card-carrying capitalist.” With a rising tide of 2020 presidential candidates including democratic socialist Bernie Sanders who are advocating more government control over the economy, Buffett argued on “Squawk Box” that compared with countries with central planning at the heart of their economic and political systems, “we win hands down” in the United States. “We’re just getting started with what capitalism can do.” “Does that mean that every decision should be made by open market determinants? No, there’s need for regulation,” said Buffett, who supported Democrat Hillary Clinton in the 2016 presidential race.
“Human ingenuity is incredible, and you want something that maximizes its use; and then curbs, on a few of the ideas that some of those people may have to sort of have it for all themselves.” Sitting next to Buffett, Microsoft co-founder and philanthropist Bill Gates told CNBC on Monday, “Some people think when you defend capitalism you’re defending the tax rates.” He said that is not the case. Gates and Buffett for years have called for higher taxes on wealthy individuals, like themselves, to fund social safety nets and pay down the country’s debt. They have also maintained the rich are being undertaxed compared with working Americans. Read more here-https://cnb.cx/2WuTRhr
-Berkshire Hathaway Vice Chairman Charlie Munger said Monday political leaders in the U.S. and Europe shouldn’t push central banks to cut interest rates. “I am so afraid of a democracy getting the idea that you can just print money to solve all problems. Eventually I know that will fail,” Warren Buffett‘s longtime investing partner told CNBC’s Becky Quick in an interview. “You don’t have to raise taxes, you just print.” “In the end, if you end up printing too much, you end up like Venezuela,” he added. Venezuela, which is now in the midst of an economic and humanitarian crisis, has been used as a cautionary tale about socialism.
Munger added that he didn’t think the U.S. was anywhere near a situation such as that, but that it is dangerous when a democracy thinks it can print money to solve all of its problems. President Donald Trump last month, in his most brazen attack yet on the Federal Reserve, called for the central bank to cut interest rates by 1 percentage point and to implement more money-printing quantitative easing. Trump has expressed concerns that high interest rates could hurt economic growth under his presidency. The call for rate cuts comes despite another strong economic performance in the first quarter. GDP rose at a robust 3.2% after many economists had been predicting little or no growth. Last week, the Fed voted to hold interest rates steady. CNBC
-The U.S. added 263,000 new hires in April, easily beating Wall Street expectations of 190,000. The unemployment rate fell to 3.6% vs. 3.8% expected and the lowest since December 1969. CNBC
-Buffett highlights that unemployment remains so low, yet interest rates and inflation are not rising. At the same time the U.S. government continues to spend more money than it takes in. These conditions are not sustainable for the long term, Buffett says. “No economics textbook I know that was written in the first couple of thousand years that discussed even the possibility that you could have this sort of situation continue and have all variables stay more or less the same,” he says. CNBC
-Risks Are Receding in Canada’s Housing Market, Agency Says. Recent rule changes by Canadian policy makers, including tightened mortgage lending, appear to be bringing the country’s real estate market more into balance. The federal housing agency lowered its assessment of the overall vulnerabilities in the national market to “moderate,” from “high,” according to a report Thursday from Ottawa. Canada Mortgage and Housing Corp. cited evidence of easing price acceleration for the country as a whole, with prices in Toronto and Vancouver moving closer to levels supported by fundamentals. After being rated “high” for 10-straight quarters, the overall degree of vulnerability for Canada has changed to “moderate,” the agency said in the report.
Home sales and prices have slowed in Canada after governments at various levels took steps to mitigate the risks of a crash. The federal banking regulator-imposed stress tests on new mortgage lending last year, a measure that has been particularly controversial. Toronto-Dominion Bank and Canadian Imperial Bank of Commerce, along with realtor groups and home builders, have argued the rules should be eased, saying they are punishing first-time buyers. Bank of Canada Governor Stephen Poloz said last week that after a “huge run up in housing,” speculation is coming out of the Toronto and Vancouver housing markets, but more time may be needed for it to settle out completely. Bloomberg
-Poloz Says He’s Confident Canada Housing Will Return to Growth. Bank of Canada Governor Stephen Poloz said he’s confident the nation’s housing sector will return to growth later this year, as markets like Toronto and Vancouver stabilize and the impact of new regulations is absorbed. In a speech in Winnipeg that focused on housing and mortgages, Poloz downplayed the effect of higher policy rates and tougher mortgage qualifications in the recent cooling, painting instead a picture of a sector still supported by a growing economy and labor market. For markets undergoing adjustments, Poloz said, it’s mostly due to local circumstances.
“Fundamentals of the Canadian housing market remain solid, and growth will resume once the effects of reduced expectations for house price inflation and the new mortgage guidelines have been absorbed,” said Poloz, according to prepared remarks of a speech he’s giving Monday to the Canadian Credit Union Association. For example, he blamed the cooling of markets in Toronto and Vancouver to a build-up of froth in recent years that had been driven by “extrapolative expectations” for price gains. These expectations had fueled speculative demand and prompted other buyers to rush in for fear of missing out in those markets. “What we take from this is that it is not higher interest rates and changes to mortgage lending guidelines that have had the greatest effect on housing,” said Poloz. “Rather, it is their interaction with froth that matters most.” Bloomberg
-Stephen Poloz has delivered a self-described “call to arms” to diversify Canada’s mortgage market and give borrowers a wider range of options to choose from. In a speech yesterday in Winnipeg, the Bank of Canada governor pointed out only two per cent of mortgages issued last year had fixed-rate terms longer than five years. And he wants that to change. “At a minimum,” he said, “we could do more to make people aware of the longer-term options that are available many people I talk to do not know that longer-term mortgages exist.” Now the question is whether financial institutions will play ball. BNNBloomberg
-Cash is still king: San Francisco to ban credit-only stores. San Francisco is about to require brick-and-mortar retailers to take cash as payment, joining Philadelphia and New Jersey in banning a growing paperless practice that critics say discriminates against low-income people who may not have access to credit cards. The Board of Supervisors will take up the issue at a meeting Tuesday, and it’s likely to pass, with nearly all 11 members listed as sponsors or co-sponsors. “I just felt it wasn’t fair that if someone wanted to buy a sandwich in a store, and they had cash, that they would be turned away,” said Supervisor Vallie Brown, who introduced the legislation. “We also have our homeless population. They’re not banked.” Read more here-http://bit.ly/2WvbPAc
-Investor Sam Zell agrees with President Donald Trump that slashing interest rates would make the economy take off rapidly. The consequences of that, though, could be “a disaster,” he said. The president recently suggested that the Federal Reserve cut its benchmark rate by 1 percentage point, which would take it to a range of 1.25 percent to 1.5 percent. Trump said doing so would make the U.S. economy would take off “like a rocket ship.” Zell agrees, but indicated Wednesday that the long-range impact could not be good. “I don’t think that there’s any justification for any kind of a significant increase,” Zell said at the SALT 2019 hedge fund conference in Las Vegas. “I think he’s right. If we reduced interest rates by 100 basis points, I think the economy would soar and so would inflation and so would the dollar fall accordingly.” That expected tumble in the dollar would threaten the greenback’s status as the world’s reserve currency. CNBC
-Billionaire investor Sam Zell dismissed President Donald Trump‘s tax records as irrelevant, saying that as a fellow real estate developer in the 1980s and ’90s, he used some of the same deductions to report losses. “Absolutely, as did every other real estate investor in the United States,” Zell said in an interview on Bloomberg Television from the SALT conference in Las Vegas. Trump’s tax returns “don’t tell much of a picture” about the success of his business, and following the cash flow would be more relevant, Zell said.
“For a real estate guy to have huge deductions, who owns a lot of brick-and-mortar, is not unusual,” he said. Trump’s businesses generated huge losses, and his hotel and casino properties were eligible for large depreciation write-offs that meant he paid taxes for only two years between 1985 and 1994, according to tax records obtained by the New York Times. Trump racked up $1.17 billion worth of losses in that time, according to the documents. Bloomberg
-Remember bitcoin? It’s back. In a big way. Bitcoin prices have surged nearly 60% to about $6,000 after plunging almost 75% in 2018. Sure, the cryptocurrency is still far from its all-time highs of just under $20,000, which it hit in December 2017. But crypto investors are increasingly optimistic that the bitcoin bounce of 2019 is real and that it and other cryptocurrencies may enjoy a steady march higher. It may be tempting to declare this year’s bitcoin rebound as another sign of investor insanity. “Uh-oh: Investors are doing it again. Cue the sounds of a bubble being inflated. All we’re waiting for now is the inevitable pffft as the bubble pops.” But bitcoin may finally be trading at an appropriate price. Read more here-https://cnn.it/2VrPE1G
-In a shocking demonstration of the latest surge of illegal immigrant’s border officials are struggling with, over 1% of the populations of Guatemala and Honduras have entered the United States since September, according to the Homeland Security Department chief. Worse, 3% of the population of one Guatemalan county has crossed into the U.S., acting Homeland Security Secretary Kevin K. McAleenan told the 49th Washington Conference of the Americas tonight. “The current migration flows, especially of vulnerable families and children, from Central America through Mexico, to remote areas all along the U.S. border, represent both a security and humanitarian crisis.
The situation is not sustainable,” said the long-time border and immigration official. Overall, he predicted the April numbers of illegal immigrants will be even worse than the jaw-dropping March figures which shocked the White House into shaking up its immigration team. “In March, we had over 103,000 irregular arrivals of undocumented migrants 90% crossing the U.S. border unlawfully and unsafely in the hands of human smugglers. We will see similar numbers in April,” said McAleenan. He detailed a shift in illegal immigrants coming from Central America, from predominantly Mexican to Guatemalan, Honduran and El Salvadoran. Read more here-https://washex.am/2DTdYOY
-How to force Google to automatically delete the information it saves about what you do online. Google began rolling out a feature this week that will automatically delete some of the data it has on you after either 18 months or after 3 months. This means it won’t have any data from before that time, and it will continue to automatically delete any private information that’s older. We’ll show you how to turn this on to stop Google from saving all of your web and app activity. Google will roll out additional controls this year. CNBC
-$6M ‘Bubble Gum’ Ring to Lead Christie’s HK. A diamond named for its resemblance to bubble gum will go under the hammer at Christie’s Hong Kong sale later this month. The rare cushion modified brilliant-cut, 3.44-carat, fancy-vivid-purplish-pink diamond, which is internally flawless, will lead the Magnificent Jewels sale on May 28, the auction house said last week. The center stone of the ring by jeweler Moussaieff, called the Bubble Gum Pink, is surrounded by pear-shaped pink diamonds and marquise-cut white diamonds. The lot has a presale estimate of $6 million to $8 million.
Christie’s will also offer a cut-cornered rectangular step-cut, 3.01-carat, fancy-vivid-blue diamond ring. The piece, which features two heart brilliant-cut, fancy-intense-purple-pink diamonds on either side, is valued at $4.7 million to $7 million. Other notable items include a cushion-shaped, 26.41-carat Kashmir sapphire brooch, surrounded by old-cut diamonds, estimated at $4 million to $6.5 million. A pair of Grand Muzos earrings featuring two Colombian emeralds weighing 23.34 carats and 23.18 carats, with white diamonds and pearls, will be offered at the auction for $3.8 million to $6.5 million.
Signed jewelry by Bulgari and Harry Winston, as well as a rare Jadeite bead necklace and Jadeite cabochon ring, will also be on sale. “The striking centerpieces of Christie’s spring sales include both fancy-vivid-blue and pink diamonds, as well as one of the finest emeralds ever to come to auction,” said Vickie Sek, chairman of Christie’s jewelry for Asia. “This collection of some of the most prized gems is bound to draw strong interest from collectors around the world.” Read more here-http://bit.ly/2Vm4zKy
-Pink Diamond Prices Firm in 1Q. Pink fancy-color diamonds outperformed other major color categories in price terms during the first quarter, the Fancy Color Research Foundation (FCRF) said. “At a time of diamond-market uncertainty, fueled by growing white-diamond inventory and the emergence of lab-grown diamonds, most categories of fancy-color diamonds are showing continued pricing stability, with the pink segment posting slight price increases,” said Oren Schneider, an FCRF advisory board member.
Prices for pinks grew 0.5% quarter on quarter for the three months ending March 31, according to the FCRF, which released its quarterly Fancy Color Diamond Index (FCDI) last week. By contrast, overall prices of blue fancy-color diamonds, which previously held the top spot, declined 0.2% compared to the previous quarter. Yellows slipped 1.5%, causing the overall index for fancy-color diamonds to fall 0.2%. “The color-diamond market as a whole is in a slowdown, following the hyper price rises of the past years,” added Alan Bronstein, president of the Natural Color Diamond Association. “Demand always goes through cycles where values rise and fall.” Diamonds weighing 1 carat showed the best performance in both the fancy-yellow and fancy-intense-blue categories during the quarter, according to the FCRF.
The segment was led by the 3- and 5-carat vivid-pink categories, which increased by an average of 3.1%. In February, the FCRF predicted a rise in the price of yellow diamonds for 2019, as Dominion Diamond Mines’ Ekati deposit one of the main suppliers of those stones transitions from open-pit to underground mining. The group cautioned there would be a shortage of supply during the transition phase. The Fancy Color Diamond Index tracks prices of yellow, pink and blue fancy-color diamonds in Hong Kong, New York and Tel Aviv. Read more here-http://bit.ly/2Yf89Dg
Gold to silver ratio at 80 to 1 with gold at $2,000 the silver price would be $25.00
Gold to silver ratio at 70 to 1 with gold at $2,000 the silver price would be $28.57
Gold to silver ratio at 60 to 1 with gold at $2,000 the silver price would be $33.33
Gold to silver ratio at 50 to 1 with gold at $2,000 the silver price would be $40.00
Gold to silver ratio at 40 to 1 with gold at $2,000 the silver price would be $50.00
Gold to silver ratio at 30 to 1 with gold at $2,000 the silver price would be $66.67
Gold to silver ratio at 20 to 1 with gold at $2,000 the silver price would be $100.00
Gold to silver ratio at 15 to 1 with gold at $2,000 the silver price would be $133.33
-CHART OF THE WEEK: Central Banks Are Ditching the Dollar for Gold. First-quarter gold purchases by central banks, led by Russia and China, were the highest in six years as countries diversify their assets away from the U.S. dollar. Global gold reserves rose 145.5 tons in the first quarter, a 68 percent increase from a year earlier, the World Gold Council said Thursday in a report. Russia remains the largest buyer as the nation reduces its U.S. Treasury holdings as part of a de-dollarization drive. “We’ve seen a continuation of the strong demand from central banks,” said Alistair Hewitt, head of market intelligence at the World Gold Council. “We’re expecting another good year for central bank purchases, although I’ll be pleasantly surprised if they are to match the level seen in 2018.” Bloomberg
-China announces fifth straight month of growth in gold reserves. China’s central bank added gold to its reserves for the fifth month in a row in April, the latest emerging market central bank to stock up on the yellow metal. The People’s Bank of China said its gold reserves rose to 61.1 million ounces last month, an increase of 480,000 ounces from March, and bringing its total gold holdings to about $78.3 billion. Read more here-http://bit.ly/2Vl5b30
-Craig Hemke: Two inglorious anniversaries for gold and silver. Craig Hemke of the TF Metals Report, writing at Sprott Money, today recalls the anniversaries of the Bank of England’s infamous gold sales of 1999 and what he calls the May Day Massacre of silver by JPMorganChase in 2011. Read more here-http://bit.ly/2H8H79P
-Sprott’s CEO Peter Grosskopf:We’re Betting Against The Street On Gold. “Nobody likes gold right now, and we’re contrarian, and we think there’s great investment opportunities across the spectrum in gold, even if it doesn’t move. But at some point in the next few years, those other markets will have problems and when they have problems gold will be an amazing hedge,” Grosskopf told Kitco News on the sidelines of the Mines and Money conference in New York. Grosskopf noted that sentiment for gold is improving and more sophisticated investors are beginning to take notice and invest. Read more here-http://bit.ly/2LKppiz
-Daniel Oliver Myrmikan Capital:Gold Price Not Going Back To $1,900, It’s Going To $3,000 Or Higher. Amidst market pessimism, one expert sees gold prices climbing to record heights of $3000-$4000 an ounce in the future. “When gold launches higher, they’re all going to be winners,” said Daniel Oliver, founder and managing director of Myrmikan Capital, referring to gold investors. “It’s just about the degree which one is going to win more, and which one is going to win less.” Read more here-http://bit.ly/2vNMENL
-Gold Imports by India Are Said to Have Jumped Ahead of Festival. Gold imports by India surged in April amid falling prices and higher demand ahead of the second-biggest gold-buying day in the Hindu calendar.
Inbound shipments grew to 121 tons last month from 52.8 tons a year earlier, according to a person familiar with the data, who asked not to be identified as the information isn’t public. Shipments were higher than the 73 tons in March as well. Finance Ministry spokesman D.S. Malik wasn’t immediately available for comment. Gold demand in India is picking after slow sales in the last couple of years as higher prices and government curbs to crack down on unaccounted wealth weighed on the sector.
Consumption in the second-biggest gold buying nation may rise this quarter because of the traditional wedding season purchases, the auspicious Akshaya Tritiya festival and rising crop prices that increase the spending power of rural consumers, the World Gold Council said last week. Hindus buy valuables including gold and silver on Akshaya Tritiya, which falls on Tuesday this year, in the belief that it will bring luck and prosperity. That faith coupled with an about 7 percent drop in prices from a more than five-year high in February is underpinning demand. “Because prices have come down, it has helped everybody,” said Chirag Sheth, an analyst at Metals Focus Ltd. “There was a certain amount of pent demand which was also there in the market.” Bloomberg
-Lawrie Williams: Central Banks keeping up gold buying pressure or are they? This week the World Gold Council (WGC) produced its latest, always insightful, Gold Demand Trends report which suggested overall that demand for the yellow metal remains strong, although with the suggestion that new mined gold supply is not yet starting to fall as many analysts have been predicting. Peak gold may not be with us quite yet, although the likelihood remains that any new-mined gold production increase that may arise this year will be small in total. Last year reported increases in central bank gold holdings were the highest since President Nixon ended dollar/gold convertibility back in 1971 so an additional rise in Q1 this year could prove to be significant, although perhaps not as significant as some have been suggesting.
The rises in global central bank holdings were, as far as reported increases were concerned, led primarily by Russia which has almost entirely wound down its dollar related foreign exchange holdings in response to U.S. economic sanctions and other potential measures. However there has always been the suspicion that China has been building its own gold reserves surreptitiously without reporting increases to the IMF which could be adding another dimension to global central bank gold advances.
Now, in its latest Gold Demand Trends report the WGC has stated that Q1 official gold holding increases have advanced by a very large 68% year on year to 145.5 tonnes, but before gold followers get too carried away, around 33 tonnes (over 70%) of the actual rise in reported holdings relates to China which only re-started reporting monthly gold accumulation figures at the end of last year. Whether the nation actually added hidden amounts of gold to its holdings in the first 11 months of 2018 remains shrouded in secrecy. As we have reported here before, the country has a track record of adding gold to accounts it says it has no need to report to the IMF, and only announces these at multi-year intervals when it consolidates these holdings into its official forex figures. Read more here-http://bit.ly/2VUheUo
-David Lin: Finally, Silver Prices May Have Bottomed, But What Happens Next? Silver may have finally hit a bottom as the metal trades near the lowest point in four years, this according to a report published by Sprott. “At $15, the silver price is close to levels not seen since 2015 and we see little downside risk at this level. Any future economic hiccups and market sell-offs are likely to encourage investors to look for safe havens and alternatives to traditional financial assets,” the report said.
The macroeconomic outlook points to an increased physical deficit for silver, but higher investment demand is what will ultimately drive prices up, said Maria Smirnova, senior portfolio manager at Sprott Asset Management. “Today, with the price of silver hovering at $15 per ounce, we see tremendous investment upside with little downside given that we believe the metal’s tepid price performance masks very positive developments in the market,” she added. Higher investment demand is likely to come from coins, bars, ETFs, as well as silver contracts by non-commercial entities, Smirnova said in the report published Friday. “Of these, we believe that the silver futures market is having the biggest impact on silver prices there is a clear correlation between net speculative positions (longs net of shorts) and the price of silver,” she added.
According to the report, 2016 saw speculators take on more long bets in silver, which was followed by a drive up in silver prices. Since then, short positions have been observed to depress the price. “We believe this short trend has been due to a growing U.S. economy and the general U.S. equity market (the S&P 500 Index) being in a multi-year uptrend,” the report said. On supply and demand fundamentals, the report noted that silver’s deficit has widened in recent years. Read more here-http://bit.ly/2Jst1Tt
-Ted Butler: Silver Market Commentary, A Voice From the Grave? The news that Bart Chilton, the former commissioner of the CFTC, suddenly passed away was truly sad but also shocking, so much so that some were given to fabricating conspiracy-type explanations. Chilton certainly had a larger than life persona and many came to appreciate his colorful pronouncements, enthusiasm and willingness to respond to just about everyone who contacted him qualities quite rare in a regulator. I learned this first-hand very early on when I started communicating with Chilton shortly after he became commissioner in 2007, as I recounted not even a month ago in reaction to his last known interview, with Chris Marcus from Arcadia Economics
I stated in the first sentence of that article that Chilton’s interview nearly knocked me off my feet, but I didn’t fully explain why that was so, which I’d like to rectify today. Yes, I found the interview shocking because Chilton seemed to confirm much of what I had contended for more than a decade, but it was much more than that. I was confounded because I couldn’t quite fathom what prompted Chilton to “spill the beans” about the inner workings at the agency regarding JPMorgan’s manipulation of silver after so many years. After all, there was never any acknowledgement from the “inside” that the Commission was quite close to cracking down on JPMorgan Chilton’s clear admission of this in his interview was the first ever. And perhaps the last. Read more here-http://bit.ly/3055fmr
-Platinum bullion coin mintage of 40,000 sells out in April. No more 2019 American Eagle platinum bullion coins set for production. The West Point Mint will strike no more 2019 American Eagle 1-ounce platinum bullion coins, although authorized purchasers acquired all of the remaining available coins in April. The U.S. Mint limited overall platinum bullion coin output to 40,000 coins, with initial production of 30,000 pieces. Once the initial allotment was purchased, the remaining 10,000 coins were struck and released for sale. The coins first went on sale Jan. 7. During the month of January, the U.S. Mint recorded sales of 27,100 of the $100 platinum coins. Another 2,400 coins were recorded sold during the month of February, 4,000 in March, and the final 6,500 coins in April. Read more here-http://bit.ly/2HbM1TA