Gold Hit By Takedown At Chinese Open: Morning Market Update April 21

china-goldGold rallied sharply last night in Asia to touch the $1,300 mark, before a large number of sell orders at the open of the Chinese market slammed prices downward, triggering sell stops.

Gold traded in Europe between $1,285 and $1,290. Two major gold markets, London and Hong Kong, are closed for the Easter holiday.

Speaking of China and gold, Reuters is reporting on growing rumors that the Chinese government is now allowing gold to be directly imported into Beijing. The nation’s capital joins Shanghai and Shenzhen as allowable gateways for gold. Twelve banks are the only licensed importers of gold to China. The Chinese government is reportedly tired of the nation’s imports being analyzed, as they pass through Hong Kong. It considers gold and gold imports to be a matter of national security, and the move to divert more imports away from prying eyes in Hong Kong is a reflection of that policy.

Japan-China-ConflictDiplomatic relations between Beijing and Tokyo took another turn for the worse, as a court in Shanghai ordered officials to impound a Japanese-owned ore ship for… WWII reparations. (No joke.) The heirs of a Chinese shipping company that leased two ships to a Japanese company in 1936 have sued for reparations, despite that all reparations claims by China were given up when the two countries resumed diplomatic relations in 1972. The two ships were seized by the Imperial Japanese government and lost at sea during WWII.

Bloomberg reports that this is purely a civil matter, and the Chinese Foreign Ministry claims no responsibility. But, since nothing like this ever happens in China without at least a wink and a nod from Beijing, it’s fairly certain that China is sending a signal of its displeasure over visits by Japanese officials to the Yasukuni War Shrine, where WWII war criminals are buried alongside warriors of the past.

The dollar is seeing support from a weaker yen, as Japan’s trade deficit is reported as widening. Wall St. looks to continue last week’s holiday-shortened rally, while Shanghai closed down and the Nikkei was barely in the red.

The United States and Russia are working to implement last week’s four-party peace agreement for Ukraine. The U.S. Secretary of State John Kerry is headed to Kiev, while Russia attempts to talk down pro-Russian separatists who refuse to vacate government buildings in eastern Ukraine.

mine shaftReports Friday that the two largest South African platinum companies had given in to the demands of workers after a 13-week strike proved to be premature. The company offer, which seemed to meet the union demand of a 140% pay raise, was counting living expenses and other benefits. The union wants the 140% pay increase as base pay, AND increases in living expenses and bonuses. Therefore, the strike, which has idled 40% of global platinum production for three months, continues.





by Steven Cochran

Gainesville Coins Portfolio Tracker and Financial News

Two Rare High-Relief Matte Proof 1922 Peace Dollars Found


Two high-relief 1922 Peace dollars have been discovered in a Concord, Ca., bank vault. Each coin was in a 2″ x 2″ manila coin holder, inscribed” 1 of first 20 struck — 1922 given by Raymond T. Baker Sec of Treas.” (Baker was actually the Director of the U.S. Mint from 1917 to 1922.)

Both coins have been graded by PCGS — one at Matte Proof 64, and the other at Matte Proof 67, which ties as the finest example known. Before this discovery, there were less than a dozen known examples of this rare coin, in all grades. These coins with be offered by famed coin auctioneers Ira and Larry Goldberg in their June 1-4 auction.

(Note that the Numismaster story linked above incorrectly states that Baker’s first wife died on the RMS Lusitania. She was the widow of Alfred G. Vanderbilt, head of the Vanderbilt family who died on the torpedoed ship in 1915.)


Platinum Mineworkers Win Strike in South Africa: Morning Market Update April 18

empty-gold-mine-cartThe two largest platinum refining companies in the world, Anglo American Platinum and Impala Platinum, have given in to striking mineworker demands for a 140% pay raise over three years.

The 13-week long strike, the longest in the industry’s history, has cost over 13 billion rand in lost revenues, and over 6 billion rand in lost wages to the workers.

The mining companies seemed to have the upper hand in this unprecedented contest of wills, as workers began to crack under the burden of three months without pay, but the union, Association of Mineworkers and Construction Union (AMCU) made a public appeal for donations to a benevolent fund to help workers, and received very large donations from anonymous sources.

At this point, two of the three mining companies decided to throw in the towel, an submit to demands that they had maintained were impossible in the current economic climate. Only Lonmin has so far refused to acquiesce to the union’s demands.

The union’s jubilation may be short-lived, as in order to meet these pay demands, companies will have to drastically cut their workforce and close mines that were already marginal or losing money.  News of the accord caused platinum to fall $24 in afternoon trade in New York.

2014 1 oz Platinum American Eagle - Brilliant Uncirculated

2014 1 oz Platinum Eagle

Markets in the U.S., Europe, Hong Kong, and Singapore are closed today for the Good Friday/Easter holiday. Many investors looking to taking advantage of the dip in prices are buying physical platinum bars and coins before all markets reopen on Tuesday of next week.

The dollar is steady, and the yen saw a ten-day low, as an accord to de-escalate violence between Ukraine and Russia was reached. The agreement, brokered by the U.S. and E.U., calls for armed paramilitaries of both sides in eastern and western Ukraine to disarm and seized government buildings to be vacated, in return for a general amnesty. It remains to be seen if Russia can put its genie back in the bottle, after supporting unrest in the region.

iStock_000013551810MediumWall St. had its best week since last July, fueled by good earnings reports, while gold was down 1.9%. Year to date returns on futures still has gold up 7.5% for the year, compared to 1.28% for the S&P 500, a -0.52% for the Dow, and a -1.50% for the Nasdaq.

The London Metals Exchange and the New York Globex will both be closed on Monday.

In China, news that the rise in home prices continues to slow (up 7.7% for March, y/y, compared to 8.7% in February) raises hopes that the housing bubble is being contained. Government restrictions on speculative home buying by “flippers”, and tightening requirements on loans for secondary homes has helped slow down rampaging home prices.

What’s Coming Up Next Week?

  • Monday:  Leading economic indicators
  • Tuesday:   Existing home sales and retail sales
  • Wednesday:   The preliminary manufacturing PMI and new home sales
  • Thursday:  Durable Goods orders, and first-time jobless claims
  • Friday:  Consumer sentiment on Friday.


Have a safe and happy Easter holiday!

by Steven Cochran

Pakistan Lifts Ban On Gold Imports

pakistan-flagsThe government of Pakistan has decided to lift a four-month long ban on the import of gold. Smugglers were abusing import laws enacted to help the Pakistani jewelry industry, by importing gold and running it across the border into India, where it was sold at a tremendous profit.

Today’s measure was not a return to the status quo, as reported by Express Tribune in Islamabad.  Future gold imports will have to abide by new restrictions put in place to protect the rupee from devaluation:

  • Gold imported under the savings plan for jewelry re-use is restricted to a maximum of 10 kg per month.
  • Failing to meet export requirements of the gold will result in losing the ability to import gold.
  • Single transactions are limited to 10 kg.