Industry News

Increasing central bank appetite for gold

Demand for gold as a reserve asset strengthened considerably in 2018, rising by 74% compared to 2017, in response to the geopolitical and macro-economic environment. It also broadened. Our flagship training programme for reserve managers, held in conjunction with the National University of Singapore, received a record number of applications from central banks globally keen to learn how gold can help them meet their safety, liquidity and other objectives. Our mid-year central bank survey reported that one-fifth of central banks surveyed intended to increase their gold holdings over the next 12 months, with none planning a decrease.

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An ex-J.P. Morgan Chase trader has admitted to manipulating the U.S. markets of an array of precious metals for about seven years -- and he has implicated his supervisors at the bank.

John Edmonds, 36, pleaded guilty to one count of commodities fraud and one count each of conspiracy to commit wire fraud, price manipulation and spoofing, according to a Tuesday release from the U.S. Department of Justice. Edmonds spent 13 years at New York-based J.P. Morgan until leaving last year, according to his LinkedIn account.

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Will a government guarantee for an exchange-traded fund be enough to lure investors back to gold?

On Wednesday, Australia’s Perth Mint Physical Gold ETF, the first with bullion holdings guaranteed by a sovereign entity, will start trading on the New York Stock Exchange. The fund, backed by physical metal of at least 99.5 percent purity, debuts at a time when investors are fleeing the asset class, taking holdings in all ETFs tracked by Bloomberg to a seven-month low.

“We believe investors will have greater confidence with the knowledge that their wealth is physically stored in one of the most secure central bank-grade vaults in the southern hemisphere,” Richard Hayes, the Perth Mint’s chief executive officer, said in a statement. “AAAU is a truly unique offering for investors as it adds a new layer to hard asset investing in the United States,” he said, referring to the ETF by its ticker.

The ETF allows holders to exchange their shares for gold. Investors can get the physical metal delivered to their doorstep by Perth Mint, which refines and manufactures precious metals product.

The University of Texas Investment Management Co. will examine its $1 billion gold position in the portfolio of the largest public university endowment in the U.S.

“We’re in no rush to sell but it may not be a long-term strategic hold,” Britt Harris, the new chief executive officer at Utimco, said Thursday during a break at a board meeting in Austin. The endowment is also looking at fixed-income investments because of their poor returns, Harris said.

The gold position is about 3 percent of the portfolio. Utimco oversees $31 billion in assets for the University of Texas and Texas A&M University as of Dec. 31. It manages another $12.3 billion in operating funds.

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2017: Q4 recovery fails to mitigate full-year decline

Gold demand rallied in the closing months of 2017, gaining 6% year-on-year (y-o-y) to 1,095.8 tonnes (t) in Q4. But it was too little, too late: full-year demand fell by 7% to 4,071.7t. ETF inflows, although positive, lagged behind 2016’s stellar growth. Central banks added 371.4t to global official gold reserves, 5% down on 2016’s net purchases. Bar and coin demand fell 2% on a sharp drop in US retail investment. India and China led a 4% recovery in jewellery, although demand remains below historical averages. Increased use of gold in smartphones and vehicles sparked the first year of growth in technology demand since 2010.

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In 2014, the Dow Jones eclipsed 18,000, the S&P 500 topped 2,000, and commodity prices tumbled. Gold will close the year down YoY ~1%, while silver will close the year down more than 20%. As most Texans lament, oil prices have collapsed more than 50%.

The precious metals market, at large, is estimated to be down 30%-40% in terms of overall revenue, even though silver coin sales ticked up slightly YoY due to falling prices. Precious metals “demand” is a relative term, and can be misleading. Reports of “record” demand in coin sales tend to obfuscate the reality of declining revenue. US Mint Silver Eagle production hit a record 44M coins in 2014, up 3% from the 2013 tally of 42.6M, but certainly not enough production to account for the 20% decline in prices. US Mint Gold Eagle production fell from 743,500 coins in 2013, to 415,500 in 2014.
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(Shiner, TX) - Texas Precious Metals today announced the release of the new 2015 Texas Silver Round, the popular one troy ounce 99.99% pure silver round, the third release in the annual series. The reverse of the one-ounce round features the bust of a Texas white-tailed deer designed by highly acclaimed coin sculptor Heidi Wastweet.

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PERTH MINT: RELEASE

Phenomenal interest in the 2014 Australian Saltwater Crocodile coin means that The Perth Mint has now received committed trade orders for 1 million coins.

As a result, we are taking no further orders from wholesale customers worldwide.
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The World Gold Council has released it 1st Quarter report on global demand trends. From the press release:

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The Perth Mint, best known in the US for its line of gold coins and bars, has begun making a more active push into the silver market. The new 100 oz silver bars are the first major investment-grade offering in this space. These beautiful, brand new bars are now available for immediate shipment.

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