Wednesday, November 6, 2013

7 Hot Stories and 5 Sizzling Charts for Wednesday

Here is some of what I'm reading ...

1. GOLD UPDATE: Holdings in Gold-backed ETP’s fell 0.3 metric tons to 1,875 tons on Monday, dropping to the lowest since April, 2010, according to data compiled by Bloomberg. On the bullish side, sales of gold at the Perth Mint are shifting into higher gear. And the premium (above regular cost) in India has soared to $100 per ounce of gold.

This is due to the Indian government import suppression scheme, of course. I bet there are a bunch of ticked-off people in India right now (smugglers excepted).

2. CHINA AND GOLD. And as for China, its imports through Hong Kong dropped in September from August, but are still up significantly for the year. Here are two charts to drive that home ...

In September Hong Kong net gold import was 52 metric tonnes, down from 142 tonnes in August. That's down 63% m/m. The year-to-date net import is 489 tonnes. Hong Kong gross gold import year to date is 1751 tonnes, gross export 1262 tonnes.


Annualized mainland net import through Hong Kong is 1101 metric tonnes, a surge of 109% as total import in 2012 was 525 tonnes.  And we aren't even counting the imports through Shanghai.

3. FALLING PRICES. Gas and food prices hit their lowest levels of the year ... 

I wrote more about this topic on Monday. I was at a conference this weekend and one of the speakers was talking about rising gas prices. Along with directly contradicting me, it was just plain wrong.

Anyway, I was pretty positive just two weeks ago that this would boost consumer spending.  I still believe so, but you also have to take into account that millions of people just had their food stamps cut, so that will lessen some of the effect.

4. US DOLLAR I posted a chart yesterday about a possible continued rally in the dollar. Here is more on the topic from Bloomberg. And the always-awesome Kathy Lien adds her two cents

5. ENERGY PRICES (CANADIAN EDITION) Alberta and British Columbia have worked out a deal to move energy resources (produced in Alberta) through BC to new markets. There are hopes that this will ease the $40 discount that Western Canadian Select, the benchmark price for Canadian oil, trades at compared to US oil benchmark West Texas Intermediate.

I'd say that will happen longer-term, but I don't expect much relief in 2014. Still, we'll see.

6. ENERGY PRICES (EUROPE EDITION). Europe's push for cleaner energy is driving up prices (somewhat expected) and holding back the economy (oops!). Once again, America is saved by its abundance of cheap natural gas.

Electricity costs in Europe have spiked 17% for homeowners and 21% for industry. Will this move Europe to re-open mothballed coal plants? Stay tuned.

7. FERTILIZER BREAKTHROUGH?  Multiple people have called me up to tell me about a looming phosphorus (fertilizer) crisis.  Coincidentally, they also are promoting the stocks of phosphorus miners or developers.  Is there a simple solution? This TED speaker thinks so: mycorrhizal fungi. I'm wary because I remember when algae was touted as the next great source of oil. Remember that horse-hockey? Anyway, we'll see.

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