Monday, December 2, 2013

Gold, Energy, Charts and More for Monday

I'm flying to San Francisco this week, where I will be interviewing CEOs and other reps from a bunch of mining and energy companies. I'll post videos for my subscribers later in the week, so they can form their own opinions about these companies and what the CEOs have to say.

In the meantime, here are some things that have caught my eye.

Precious Metals

Thanks to the government crackdown on imports, Indian gold demand ahead of the Diwali festival season has been cut in half.

Holdings in gold-backed ETPs fell to 1,841.9 metric tonnes on Nov. 29, the lowest since March 2010, according to  Bloomberg data.

What's more, November saw $1.4 billion exiting gold-tracking ETFs, according to BlackRock. That brings the 2013 year-to-date outflow for the group to $36.4 billion. Gold ETFs around the world hold $74.1 billion, according to the same figures.

Speaking of November, spot gold showed a decrease of around 5.5% for the month. Gold hasn't dropped that much in November (which seasonally should be a bullish month) since 1978, according to data from the World Gold Council. In November 1978, gold fell 20%.

Historically speaking, gold has averaged a gain of 1.4% during November over the last 45 years, according to research by online gold exchange BullionVault and CNBC. Obviously, this time it's different.

You want some optimism? BMR points out that "what followed after that horrible November 1978, by the way, was an immediate climb that intensified throughout 1979 and eventually resulted in a quadrupling of the Gold price over a period of just 14 months"

Other Metals

China is expected to produce 770 million tons of steel this year, a record for the country.

Meanwhile, Mexican drug cartels ship iron ore to China, and China ships chemicals used to make methamphetamines to Mexican ports. Call it "Breaking Badder." Or "Breaking Malo." Hollywood, call me.


Not only is China getting grabby about airspace over flyspeck islands that no one lives on, it's also using ancient shipwrecks to lay claim to most if not all of the South China Sea. And who's going to tell them "no"? Too bad we spent all our treasure fighting endless wars in the Middle East, eh?


The United States will pass Saudi Arabia and Russia to become the world’s top oil producer in 2015, according to the International Energy Agency. Also, the IEA raised its forecast of global oil demand  to 101 million barrels per day (bpd) in 2035, up from 86.7 million bpd in 2011. That far out, those forecasts are Amazing Karnak-esque.

Meanwhile, OPEC expects overall demand for its crude to drop by about 300,000 barrels a day next year. Tensions are rising in the group over which members should trim back production. Couldn't happen to a nicer buncha people.

Global Economy

Morgan Stanley's Global Economics research team has a new note out looking ahead at 2014 titled Five Key Transitions.
In it, they identify five big themes that characterize what the regions of the globe are going through right now:

  1. US: From QE to credible forward guidance on interest rates.
  2. Japan: From deflation to (moderate) inflation.
  3. Europe: From financial fragmentation to a credible banking union.
  4. China: From leverage-driven growth to reform-driven growth.
  5. EM: From broken traditional to sustainable new growth models.

As MS sees it, the more these transitions are accomplished in 2014, the more likely we'll see robust global growth

Meanwhile, Bank of America Merrill Lynch has a chart showing that European equities have seen the longest streak of inflows in 11 years.

Finally, in the U.S. retail spending over Thanksgiving weekend dropped for the first time in at least seven years. Warning sign, or will Cyber-Monday (today) save retailers?Stay tuned.

No comments:

Post a Comment