In The News Today

Posted at 11:45 AM (CST) by & filed under In The News.

Gold Vault Opens in China as Bullion Goes From West to East
By Chanyaporn Chanjaroen & Stephen Engle – Nov 11, 2013 10:04 AM ET

A gold vault that can store 2,000 metric tons, double China’s projected consumption this year, opened in Shanghai this month as owner Malca-Amit Global Ltd. seeks to benefit from rising demand in Asia’s largest economy.

The facility is the biggest for the Hong Kong-based company, and it can also store diamonds, jewelry and art, Joshua Rotbart, precious metals general manager, said in an interview. The site could hold bullion worth about $82.5 billion at today’s price, Bloomberg calculations show. China’s total demand may reach 1,000 tons in 2013, the World Gold Council forecasts.

Consumption in China may increase 29 percent to a record this year, overtaking India as biggest user as lower prices and higher incomes spur demand, according to the WGC. The investment in Shanghai’s new free-trade zone reflects a shift in world demand away from the U.S. and Europe toward Asia. Demand for gold jewelry, bars and coins in Greater China, India, Indonesia and Vietnam is now about 60 percent of the global total, up from 35 percent in 2004, according to HSBC Holdings Plc.

“Such a facility is a massive vote of confidence for the Chinese gold market,” said Philip Klapwijk, managing director of Hong Kong-based Precious Metals Insights Ltd. “The trend for demand has been very strongly positive,” said Klapwijk, who’s monitored precious metals since 1988.

Annual Loss

Bullion is headed for the first annual drop in 13 years as expectations that the U.S. Federal Reserve will curb stimulus hurt investment demand, spurring record outflows from exchange-traded products. Bullion in London traded at $1,282.14 an ounce at 3:03 p.m. in London, 23 percent lower this year and 33 percent below the record $1,921.15 reached in September 2011.


Jim Sinclair’s Commentary

If such occurred it was bought for a reason more compelling than simply a trade.

China’s central bank may have secretly bought 300t of gold this year
Frik Els | November 9, 2013

Central banks bought close to 535 tonnes of gold in 2012, the most since 1964.

Gold purchases by central banks have slowed this year although the institutions remain net buyers of the metal in 2013.

The world’s central banks changed from being net sellers of the metal in 2009 after two decades of decreasing holdings.

Gold movements by central banks are closely watched by the market. None more so than the People’s Bank of China.

China’s gold reserves are officially put at 1,054 tonnes – a number officials haven’t updated since 2009.

Rumours about massive purchases – up to 6,000 tonnes according to some estimates – continue to circulate as the country seeks to diversify its massive foreign exchange reserves which are mostly held in US dollars.

Gold makes up little more than 1% of the country’s $3.6 trillion in reserves compared to more than 70% for the United States which holds 8,166 tonnes of gold in vaults.


Jim Sinclair’ Commentary

A trillion dollar soft loan.

The student loan bubble is starting to burst
Published: Thursday, 5 Sep 2013 | 2:06 PM ET
By: John Carney | Senior Editor,

The largest bank in the United States will stop making student loans in a few weeks.

JPMorgan Chase has sent a memorandum to colleges notifying them that the bank will stop making new student loans in October,according to Reuters.

The official reason is quite bland.

"We just don’t see this as a market that we can significantly grow," Thasunda Duckett tells Reuters. Duckett is the chief executive for auto and student loans at Chase, which means she’s basically delivering the news that a large part of her business is getting closed down.

The move is eerily reminiscent of the subprime shutdown that happened in 2007. Each time a bank shuttered its subprime unit, the news was presented in much the same way that JPMorgan is spinning the end of its student lending.


916 Days: Only a Band of Brothers Remain in This Market
Posted on November 7, 2013

Gold topped out 25 months ago in September of 2011. It has been 30 months since silver briefly bested the magical, mystical 50 dollar mark in April of 2011. To put it another way, Gold has been down for the last 759 days, while the high in silver took place 916 days ago.

The last nine hundred and sixteen days have effectively winnowed all of those upon whom these arguments and personal attacks would have any effect. The people trying to make a quick score are long gone. The people who really didn’t understand what the phrase “The end of the great Keynesian experiment” really means left this market some time ago. Those who simply couldn’t withstand the mental pounding these markets have delivered are certainly long gone.