Wednesday, January 15, 2014

Top 10 Reads on Gold and Silver -- the best values in decades!

US Silver Eagle Sales Start 2014 Off With a Bang!

1. The US Mint started its 2014 silver sales on Monday, with a weekly allocation of American Eagle silver bullion coins of 3.575 million coins. Between Monday and Tuesday’s sales, 203,500 are left, the Mint said.

2. No surprise, then, that the premium charged by wholesale dealers for American Eagle coins from the U.S. Mint may rise to 17% from 14%, according to Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. NOTE: One source says this initial flurry of orders for eagles is no big deal, and and premiums should calm down soon.

3. Sales of American Eagle gold coins by the mint have reached 63,000 ounces this month. That topped 56,000 ounces sold in all of December.

4. “We expect China to import around 1,200 metric tonnes of gold in 2014,” says Standard Bank

5. India’s Economic Affairs Secretary Arvind Mayaram announced that the restrictions on gold imports are likely to continue until at least the end of March, unless a significant improvement takes place with regard to the nation’s current account deficit. Keep flogging that dead horse, dummy.

6. Holdings of the world’s largest gold ETF – SPDR Gold Shares (NYSE:GLD) – dropped more than 3 metric tonnes on Tuesday and outflows for the year total 8.7 tonnes. At 789.6 tonnes GLD holdings are at the lowest level since January 2009 after a whopping 552 tonnes left the fund last year.

7. The consensus among Wall Street analysts is that the price of gold will fall another 14.5% in 2014 from the average price of the metal in 2013 ($1,413 per ounce).

8. Frank Holmes reports that valuations of gold miners are approaching their cheapest relative to book value in at least two decades, precisely at the time when free cash flow generation has bottomed and cost reductions are kicking in.

9. Here’s an excellent chart on gold miners from the Financial Times.

And you can read the story that goes with the chart HERE.

10. To get a sense for the relative value of gold miners and bullion, John Llodra, partner at New Harbor Financial Group, compares the price of the Philadelphia Gold and Silver miner index to the spot price of gold. The miner index is at 85 while gold bullion is at $1,226 an ounce -- a ratio 0f 0.07. Over the last 30 years, the ratio was typically just above 0.2.

Even if price of the metal falls another 50%, miners would still be attractive, says Llodra.

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