Rowe Column: Digging for gold can pay off

May 20, 2012 Posted by admin

In the last few years, we have seen a trend of resourceful people out digging. We have seen an increase in miners, metal detectors, pickers, and people just digging through their possessions for something to sell. This trend has become so big that there is even a host of reality (or reality-based) shows about such activities. All of these popular activities are geared toward adding cash to the bottom line.

Gold mining is the purest form of digging. In tougher times or in times of higher gold prices, the number of people seeking gold climbs. For those that have been lucky enough to find a great place to work the ground, the rewards have been ample in the last few years. We have regulars who bring in a few ounces a week, some who bring in an occasional piece and a lucky few who have brought in hundreds of ounces. But even with high gold prices, digging for gold is nearly always hard work and we still have people bringing in the ever easier to find fool’s gold (iron pyrite).

Metal detecting is another popular way to work the ground for hidden treasures. Some seek gold in the form of nuggets. Others seek lost relics from the past. Those who seek things like coins have to get lucky in two ways.

Finding a coin is no easy task, but finding one that is worth good money is even tougher. The coin had to have been rare when it was lost and then it had to survive in decent shape. Fortunately for those hunting in our area, they can sometimes score big. The main reason is our proximity to the Carson City mint. Many of these coins are rare, and when found even in low grade can be worth good money. We have regularly paid into the hundreds and even thousands for coins dug in this area. The best in the last few years was a $20 gold coin for which we paid $14,000.

It was one of 12 coins found in a small hoard, but it was worth nearly as much as all of the others combined. Remember, if you find a coin, do not clean it. In that same hoard of coins, one that was worth $2,000 would have been worth 10 times as much had the finder not wiped away the dirt. That’s unfortunate but common, as the urge to get a better look usually leads to wiping away a little dirt and a lot of value.

Thirdly, there are those who dig through either their own possessions or go hunting at places like garage sales for things to sell. The most popular has been gold jewelry. Countless times, we have seen a small handful of gold turn into thousands of dollars. And, every week we have someone who brings in an item they picked at a garage sale. Usually a few-dollar investment turns into a few hundred. Picking gold jewelry or sterling silver flatware seems to be the most lucrative. Of course, we also see those who paid a few dollars for something that was plated and not really worth anything.

Whether you are digging in the ground for gold, hunting lost treasures with a metal detector or just digging through old possessions, finding a way to make cash is still out there. Happy hunting.

• Allen Rowe is the owner of Northern Nevada Coin in Carson City.

Article source: http://www.nevadaappeal.com/article/20120520/NEWS/120529992/1070&ParentProfile=1058

Bullion Higher Amid Wide-Ranging Outlooks

May 19, 2012 Posted by admin

Gold prices rallied by more than 2% on Thursday and by nearly 1% early this morning as the US dollar appeared to slow its upward progress on the trade weighted index. Nevertheless, the dollar – trimmed gains and all – was still up for a 15th day in a row in pre-market action. The jump in gold was characterized as mainly a “short-covering surge” and that kind of “profile” probably should not have come as a big surprise to certain players, given the low RSI and extremely low Daily Sentiment Index levels that we had mentioned in Wednesday’s commentary. The bottom line is still that May has thus far greeted gold and silver players with ten down days versus two (perhaps three after today) to the upside. Sell in May? Ummm…yes, and then some…

There was also a mild “QE3 hope” overlay present in the marketplace to help gold recover from the deep loss it incurred on Wednesday. That kind of optimism came from players reading certain things that smacked of potential QE into the FOMC’s just-released meeting minutes, and from just plain reading the numbers related to the Philly Fed manufacturing index and the US’ leading economic indicators (both only so-so). Follow-through action remains essential in order to be able to begin talking about the bear tide having turned. On the physical side, Chinese demand softened notably after the price recovery dampened buying appetite according to Standard Bank’s daily report.

But – as Reuters reports – “with the euro and US stocks in decline and Greece still on the brink of leaving the euro zone, many traders saw the gains as little more than a “dead-cat bounce”, slang for a small but temporary rally that follows significant declines. Milko Markov, an investment management analyst at SK Hart Management LLC, said about yesterday’s action that: ”When the move to the upside is so elastic, it suggests a lot of people caught at the wrong side, but also confirms the medium negative trend.”

Similar sentiment was manifest in the comments made by UBS analyst Edel Tully this morning when she noted in a report that “To see a return of gold reacting positively to macro stresses is indeed refreshing, but it is still far too early to make any firm conclusions from here that gold has indeed turned the corner. Follow-through buying will have to kick in to encourage investors to jump in.” The good news? Nothing (in the markets) goes straight up or down. Ever. Not for long, anyway.

Spot New York dealings this morning showed gold trading at $1,588 per ounce on the bid-side, silver quoted at $28.38 an ounce and platinum and palladium modestly higher as well. The former gained $6 to open near $1,455 and the latter climbed $2 to $603 an ounce. The PGM market is once again manifesting fears about supplies, following the break-out of hostilities between two rival mining unions at Implats’ Rustenburg mine (the world’s largest platinum mine). One worker seriously injured and tensions remain high. Standard Bank reports that “As of this morning, the company reported that “everything is calm” and that the incident had not affected production.”

On the negative side for PGMs there are reports that the slowing Chinese economy is swelling the number of unsold automobiles on the country’s dealership lots. Automakers Honda, Chery, and Geely are now carrying an estimated 45 days’ worth of inventory and the development comes as a warning sign that not all is well with the economy (read more about all that, below). In a country that normally sells a new car every 2.3 seconds, the total vehicular sales tally fell by 1.3% in the first four months of 2012 and that could turn out to be the worst such showing since 1998. Caution: bumpy road ahead.

More PGM niche-related news for you today: India’s Geological Survey announced that nearly 20 million tonnes of “platinum-group elements” have been found in exploratory surveys across that country. Major PGM findings were reported from the Eastern State of Odisha and Southern States of Karnataka and Tamil Nadu.

Background market indications showed the US dollar steady near 81.40 on the index and the euro mired close to the $1.272 level against it, while crude oil gained 22 cents to rise to $92.75 per barrel. Dow futures pointed higher albeit the past week has not been kind to that market and we won’t even mention what European shares (or Asian ones for that matter) have been subjected to of late.

The latest blows to the EU’s financial system came from Moody’s which downgraded 16 Spanish banks and from Fitch’s which downgraded Greece’s sovereign debt rating to CCC (read: “poor quality with possibility of default”). Germany’s Finance Minister said that-as he sees it-the upheaval in the region’s financial markets might drag on for another two years. The G-8 meets today in the US and will try to once again “do more” to put out the fires in the system.

The heavy fall in gold prices has, of course, once again, given rise to a plethora of allegations about the market being manipulated by unnamed (okay, sometimes even named) evil sources working for the ‘Gubmint’ or for Mr. Bernanke, or for Dr. Evil, or for Auric Goldfinger. Well, here is something this author thought he’d never report on; a major “defection” in the pro-gold camp over to the manipulation-skeptic side. 

None other than noted financial newsletter writer and gold advocate Doug Casey wrote a brilliant piece that appeared on LewRockwell.com in which he dissects the possible manipulation-related questions and concludes that they are little but rhetorical. Mr. Casey advises his readers to buy gold “even at current prices” but he instructs them to do it for “the right reasons.” Fighting “manipulation” is not one of them. 

As Mr. Casey sees it, the “arguments about gold manipulation are more redolent of religious belief than economic reasoning.” Wow. That kind of straight talk, will hopefully not earn Mr. Casey the kind of e-mailed death threat that this author “enjoyed” last week, but it is sure to swell the “inbox” that he gets to read every day. Evidently, he did not realize that talking in “The Church of Gold” is strictly verboten. For his courage, applause is due. 

Meanwhile, Business Intelligence Middle East notes that gold has not only experienced what it calls “heavy falls” since February, but that “Since mid-Q3, when equity markets turned on better US economic data, the price of gold has essentially followed risk appetite.” You have, no doubt, seen numerous headlines on the Kitco news site over the past half a year that have linked gold’s daily trials and tribulations to “risk-off” type of sentiment manifest in the markets. 

Article source: http://www.resourceinvestor.com/2012/05/18/bullion-higher-amid-wide-ranging-outlooks?t=precious-metals

2 Investigators: Some Gold Buyers Short-Changing Customers

May 18, 2012 Posted by admin

CHICAGO — Fair and honest prices. The best value for your gold.

That’s what one of the largest gold buyers in the country says it gives customers selling their jewelry.

But a CBS investigation in five cities found the company makes millions of dollars by giving customers some bad deals.

2 Investigator Pam Zekman found one way you can get cheated is if the buyer makes mistakes about the karat grade of your gold.

For her undercover investigation, Zekman first brought jewelry to two experts to be evaluated.

One of them, Jack Brown, the general manager of a local gold refinery, examined each piece to see if the karat amount was stamped on the jewelry.

Then he did an acid test on each piece — a process in which a scratch is made on a piece of stone. Then various acids that test for 10, 14, 18 and 22 karats are used to determine the karat grade.

After the jewelry is separated by karat quality, it is then weighed. Each group must be weighed separately because the higher the karat grade, the more money you should make.

Brown concluded that based on the amount gold was trading for that day, Zekman’s stash was worth about $10,348.

A second expert from Harlan J. Berk Ltd. conducted the same tests on a different day and calculated a similar value of $10,314.

But what can you expect when you actually sell it? That will vary depending on where you sell your jewelry. Brown says the Zekman stash could get an offer of about $7,000 as a “minimum competitive price.”

But it was a different story when Zekman took the same jewelry to a recent event sponsored by The International Coin Collectors Association, one of several gold-buying subsidiaries of THR Associates, headquartered in Springfield, Ill.

The company says it does 140 gold-buying events a week in hotels across the country.

The buyer Zekman dealt with did not properly test the karats of each piece and weighed all the jewelry together. Brown says that’s akin to cheating a customer.

The THR buyer offered Zekman $3,893 for her more than $10,000 worth of gold, about 38 percent of its value.

“Based on the value of that material — a bad deal,”  says Brown, who says a consumer should get at least 84 percent of the value.

Harlan J. Berk pays 70 percent.

Zekman returned to the THR sale that day and questioned Craig Lynch, the company’s Illinois supervisor, about the procedures used by his employee.

Lynch said the jewelry should have been separated by karat quality and weighed separate. As for the amount she offered, Lynch said he would have offered at least 50 percent.

But he added: “We always buy as low as we can.”

And that’s helped Jeffrey Parsons, the owner of THR Associates, gross $330 million last year in sales for his company.

Lynch said customers are not being cheated. But CBS producers in Philadelphia, Dallas and San Francisco took jewelry to THR gold-buying events in their area, and they were specifically told by buyers that 18-karat pieces were only 10 or 14 karats — either on purpose or by mistake.

Those are all violations of company training guidelines, said THR spokesman Matthew Enright.

“We are going to do what we can to get that corrected and to make sure that those people are following those guidelines and being ethical,” he said. “If we have people out there lying, that is something we are going to look at and we are going to correct it.”

He said buyers are supposed to separate jewelry by the karat grade and weigh it separately before making an offer because it could mean a difference of thousands of dollars in the deal offered to a customer.

As for whether THR is taking an excessive percentage of the gold value, Enright said, “It’s absolutely legal.”

“Are we in business to make a profit? Absolutely. Just as every other business in the country is,” Enright said.

Enright also says it’s a case of “buyer beware” when it comes to consumers making sure they are getting the best deal.

“Now, do they have the opportunity to do their research and find out what their stuff is worth? Absolutely they do. But is it my job to give them that information? No, it’s not,” he says.

You can get some of that information by logging on to the following websites.

Find out what gold is trading for on that day at www.kitco.com. Now, you won’t make that amount. Buyers have to pay their expenses and make a profit and will make an offer that is a percentage of what gold is trading for– an amount that fluctuates daily. The trick is to figure out which buyers are offering you the highest percentage.

To find out what percentage gold buyers in your neighborhood are offering, go to www.shopmygold.com.

For tips on what to watch out for when you are actually dealing with a gold buyer, go to www.chicago.bbb.org. Click on “news center” to see the alert on selling gold.

Article source: http://chicago.cbslocal.com/2012/05/17/2-investigators-some-gold-buyers-short-changing-customers/

Gold Higher as France Refutes EU Fiscal Pact

May 17, 2012 Posted by admin

The wholesale market gold price jumped at the start of New York trade on Thursday, cutting the week’s previous 3.3% dive to 5-month lows in half as the euro fell and euro zone stock markets slumped once again. 

The gold price touched $1,558 per ounce before easing $3 lower. Silver did not follow, failing to break this morning’s earlier dollar high at $27.86 per ounce. 

German Bund yields fell to fresh record lows, but Spain had to offer investors in new three-year debt an annual yield of 4.37%, up from the 2.89% charged at the last comparable sale in April.

The European Central Bank confirmed it has ceased working with some Greek banks because it believes them to be insolvent, while Portugal’s Diario Economico newspaper claimed a joint visit by the ECB, IMF and European Union to assess Lisbon’s €78 billion bail-out will also discuss contigency plans should Greece quit the single currency.

Greece’s interim cabinet of academics, lawyers and diplomats was today sworn in, pending fresh elections in four weeks’ time. 

The gold price in euros jumped 1.9% from Wednesday’s low, trading above last week’s closing level.

France’s new finance minister, Pierre Moscovici, today said the socialist government of Françoise Hollande will not ratify the European Union’s fiscal pact agreed by 25 out of 27 member states last December.

Gold’s Relative Strength Index – a technical measure of the speed and size of price change – “is approaching extreme oversold territory,” says the latest technical note from bullion bank Scotia Mocatta, “but there are no warning signs yet of a change in trend.”

“Gold is definitely in oversold territory, and there should be some good buying interest around the low in December,” Bloomberg quotes Dong Zhuying at Haitong Futures Co.

“Paring its losses near key support at $1,525,” says Ed Meir at Intl FC Stone, the gold price likely saw “a decent amount of short-covering” by bearish traders on Wednesday, if not “fresh buying” after it held that level.

European stock markets fell again Thursday, losing value for the eighth session out of 11 in May so far and taking Madrid’s Ibex 35 index down to a fresh nine-year low, some 3.4% down on the day.

Crude oil slipped to new six-month lows after data on Wednesday showed US energy stockpiles more glutted than any time since 1990.

Commenting on gold’s 20% drop from last summer’s all-time highs, “I believe gold will become a haven again, especially if you see fragmentation in the Eurozone,” said the World Gold Council’s Marcus Grubb to Bloomberg TV this morning, launching market-development group’s latest Gold Demand Trends report.

“Because then you’re going to get currency depreciation, you may get inflation in some countries, deflation in others…and you’ll see gold’s attributes as a hedge come to the fore.”

Article source: http://www.resourceinvestor.com/2012/05/17/gold-higher-as-france-refutes-eu-fiscal-pact?t=precious-metals

Gold falls as Greece batters global markets

May 16, 2012 Posted by admin


LONDON |
Wed May 16, 2012 8:26am EDT

LONDON (Reuters) – Gold fell for a fourth straight day to its lowest since late December on Wednesday, sucked into a broad-based sell-off that dented global markets on the back of alarm over political turmoil in Greece.

Gold dropped along with other more industrial commodities such as copper and crude oil, under pressure from the rise of the dollar, which put silver on track for its longest stretch of consecutive daily losses in nearly four years.

Fears a Greek exit from the euro zone would worsen the European debt crisis gripped financial markets on Wednesday, sending shares and other riskier assets lower as investors shifted funds into safe havens like the U.S. dollar.

The euro touched four-month lows against the dollar, Spanish and Italian bond yields soared, while European equities hit their lowest level for the year. MKTS/GLOB

Spot gold fell 0.3 percent to $1,538.81 an ounce by 1200 GMT, having dropped by nearly 4.0 percent in the last four days. The price was set for its longest stretch of consecutive losses in nearly five months.

“It’s difficult to see a turnaround just yet. There will be one, but I don’t think this is the time, just when we are in the eye of the storm,” Societe Generale analyst Robin Bhar said.

“Clearly, with people staring into the abyss, it could (fall) $50 or even $100 lower as it washes out. That is the unpredictability of it all and as equities fall, as the Greeks take money out of the banks and the banking sector collapses, I suppose you’d have to be wary of further price falls just to cover for losses in other markets,” he said.

Gold tends to trade inversely to the dollar, so that strength in the U.S. unit encourages non-U.S. investors to sell their gold in exchange for greater profits in their own currencies.

Undermining investor sentiment, Greece’s president spoke of “fear that could develop into panic” at the country’s banks in the weeks before fresh elections that could precipitate Athens’ exit from the euro zone, while evidence emerged of locals pulling their euro funds out of banks for fear of their country’s exit from the currency bloc.

BIG BULLS HOLD

In a small positive for gold, billionaire fund manager John Paulson held on to his stake in the world’s largest gold-backed exchange-traded fund, the SPDR Gold Trust, in the first quarter of this year, according to a regulatory filing by his company released on Tuesday.

The prospect of improvement in physical demand for gold from the Indian jewelry sector took a knock on Wednesday with the drop in the rupee to a record low against the dollar, driven by the widespread risk aversion rattling global markets.

Buying in India, the world’s largest bullion consumer, has emerged with the decline in the dollar-denominated gold price to 4-1/2 month lows this week, but local dealers have said the weakness in the rupee could curb this.

“Definitely physical buying has gone up, although demand is not overwhelming. Indonesia has slowed down because there’s a public holiday tomorrow, while Thailand is buying,” said a dealer in Singapore.

“India did buy gold last night. They are not really in the market yet today, but I am sure they will be buying.”

The wedding season is underway in India and will taper off by the end of the month. Gold jewelry is an essential part of the dowry Indian parents give to their daughters at weddings.

In other precious metals, silver was down nearly 0.9 percent on the day at $27.45 an ounce, having fallen for eight days in a row, its longest losing streak since a 10-day decline that began in late August 2008, just before the global financial crisis claimed some of Wall Street’s biggest banks.

Silver has lost nearly 11.5 percent in this time, compared with a 6-percent decline in the gold price over the same number of days.

This has left the gold/silver ratio — the number of ounces of silver needed to buy one ounce of gold — at 56.07, its highest since the start of the year. The higher the ratio, the greater the outperformance of gold relative to silver.

Platinum was roughly flat on the day at $1,424.25 an ounce and was on the verge of wiping out all of its gains for the year to date. So far in 2012, platinum is showing a 2.2 percent gain, having retreated from a year-to-date gain of 27 percent in late February.

Palladium edged up 0.2 percent on the day to $594.72, having fallen to its lowest since late November.

(Additional reporting by Rujun Shen in Singapore; editing by Keiron Henderson)

Article source: http://www.reuters.com/article/2012/05/16/us-markets-precious-idUSBRE8390RW20120516

Sell, sell, sell: Gold slumps to $1550…

May 15, 2012 Posted by admin

Gold has all but lost its shine with the yellow metal plunging to $1,550 per ounce in early trade on Tuesday, a couple of sessions after witnessing its worst weekly drop this year.

Gold prices slumped $61.10 per ounce, or nearly 4 per cent, last week to close at $1,583.60 per ounce on Friday, May 11, compared with $1,644.70/oz that they closed at the previous week, on May 4, 2012.

Continuing the rout, gold is down more than $23.5 per ounce, or 1.50 per cent, yesterday to close at $1,560.60, and was trading lower by another $10 Tuesday morning, at $1,550.36 per ounce at 10am UAE time (6am GMT).

Locally, the retail price of 24ct gold in Dubai was fixed at Dh186 per gram Tuesday morning by the Dubai Gold and Jewellery Group, while 18ct gold can be bought for Dh142.50 per gram.

Gold has been on a downward spiral amid fears over a worsening European debt crisis and sharp losses in equities and commodities, and is trading at its 2012 low (of $1,560 per ounce, recorded on January 1, 2012).

Last Friday, the last trading day of the week, the metal came under heavy selling pressure after JP Morgan Chase Co, an investment bank, revealed a $2bn trading loss, denting sentiment.

“Sentiment soured after JP Morgan announced $2bn in losses from its synthetic credit portfolio since the end of March,” wrote Standard Bank analyst marc Ground in his Friday’s commodities analysis daily.

“Added to this, reports that Spain was making a fourth attempt at a domestic bank rescue package and the ongoing political uncertainty in Greece, there was only one way for market to go – down,” he commented.

In addition, political and financial uncertainty in Europe, most prominently in Greece, France and Spain, kept traders’ confidence low and further squeezed precious metal prices.

Gold has now all bust lost its safe haven status, with the metal now plunging on political uncertainty whereas in the past, such worries would send punters scurrying towards the metal. Now, however, the US dollar is slowly but surely emerging as the go-to instrument for risk-averse investors.

With gold busting through its $1,578 support level, analysts aren’t too optimistic about the metal’s fortunes in the rest of the year, with most experts reckoning that it will soon fall through the next resistance level of $1,523.90, and fear that it could end up below $1,500 levels as well.

“All I’m saying is that, in my opinion, the gold price correction is not yet entirely completed. I see significant support around the $1,500/oz level, but it could drop even lower,” Marc Faber, nicknamed Dr Doom for his contrarian views expressed in the popular Gloom, Boom and Doom newsletter, said recently.

“We could have a big correction if global liquidity tightens or they stop printing money, Marc Faber said in March at the Middle East Investment summit in Dubai.

That forecast seems to be coming true now.

EARLIER STORIES…

Gold drops below $1,700/oz; how much lower can it go?

Spot gold prices fell below $1,700 per ounce for the first time in almost six weeks as China, the world’s second-largest economy after the US, lowered its 2012 growth target to an eight-year low of 7.5 per cent.

While spot prices fell to $1,694.82at 1.30pm UAE time (9.30am GMT), a gram of 24ct gold was retailing in Dubai at under Dh200, its weakest showing in 45 days.

Yesterday, after the Chinese government’s announcement of a lower than the earlier forecasted 8 per cent growth target, the price of gold traded in a wide range between $1,695 and $1,720 per ounce in overnight trading.

Gold prices are down almost 9 per cent in six months even as analysts are predicting that the spot price will breach $2,000 per ounce – a gain of almost 18 per cent from current prices – in the next 12 months.

On the other hand, silver prices dipped only marginally today and were trading at $33.46 per ounce at 1.30pm UAE time. Silver has seen limited gains recently as the white metal is up 2.17 per cent in 30 days. However, that is on the back of a correction that it saw in February, and silver is still down almost 20 per cent in six months.

Marc Faber, the famous author of the Gloom, Boom Doom Report, said yesterday that the price of gold could fall to under $1,500 per ounce. “In my opinion, the gold price correction is not yet entirely completed. I see significant support around the $1,500/oz level, but it could drop lower. It depends on global liquidity and on money printing by central banks. We could have a big correction if global liquidity tightens or they stop printing money,” Faber said in an interview with The Gold Report.

He further maintained that silver prices will, in the long run, track gold. “Gold and silver will move in the same direction, up together or down together. At times, silver will be stronger relative to gold, and at other times gold will be stronger relative to silver,” he said.

Like to have your gold in blue or purple?

The 8th Dubai City of Gold Conference will unveil the latest research and development on new varieties of gold. These include new gold colors such as purple and blue, gold alloy effects, powder metallurgy, gold based composites and new colored gold coatings.

Future trends in research to produce transparent gold, color changing gold, and functional and smart gold alloys will also be discussed.

The conference, to be held on 13th November 2011, is an annual global event for the gold, jewellery and diamond industries organised by the Dubai Gold Jewellery Group (DGJG),

New research and development is poised to influence the gold and jewellery markets, consumption and jewelry marketing trends in the near future and will multiply the usage of gold. Progress on technologies such as textile based, sputtering techniques, laser sintering and nanotechnologies will also be assessed in light of their expected impact on the usage of gold not only in jewellery but also in industry.

 

Article source: http://www.emirates247.com/markets/gold/sell-sell-sell-gold-slumps-to-1-550-2012-05-14-1.458661

Sell, sell, sell: Gold slumps to $1559… and looks further down

May 14, 2012 Posted by admin

Gold has all but lost its shine with the yellow metal plunging to $1,559 per ounce this afternoon, after witnessing its worst weekly drop this year.

Gold prices slumped $61.10 per ounce, or nearly 4 per cent, last week to close at $1,583.60 per ounce on Friday, May 11, compared with $1,644.70/oz that they closed at the previous week, on May 4, 2012.

Continuing the rout, gold is down more than $23.5 per ounce, or 1.50 per cent, this afternoon, and was trading at $1,559.91 per ounce at 1pm UAE time (9am GMT).

Locally, the retail price of 24ct gold in Dubai has been fixed at Dh189.25 per gram this morning by the Dubai Gold and Jewellery Group, while 18ct gold can be bought for Dh145 per gram.

Gold has been on a downward spiral amid fears over a worsening European debt crisis and sharp losses in equities and commodities, and is trading at its 2012 low (of $1,560 per ounce, recorded on January 1, 2012).

Last Friday, the last trading day of the week, the metal came under heavy selling pressure after JP Morgan Chase Co, an investment bank, revealed a $2bn trading loss, denting sentiment.

“Sentiment soured after JP Morgan announced $2bn in losses from its synthetic credit portfolio since the end of March,” wrote Standard Bank analyst marc Ground in his Friday’s commodities analysis daily.

“Added to this, reports that Spain was making a fourth attempt at a domestic bank rescue package and the ongoing political uncertainty in Greece, there was only one way for market to go – down,” he commented.

In addition, political and financial uncertainty in Europe, most prominently in Greece, France and Spain, kept traders’ confidence low and further squeezed precious metal prices.

Gold has now all bust lost its safe haven status, with the metal now plunging on political uncertainty whereas in the past, such worries would send punters scurrying towards the metal. Now, however, the US dollar is slowly but surely emerging as the go-to instrument for risk-averse investors.

With gold busting through its $1,578 support level, analysts aren’t too optimistic about the metal’s fortunes in the rest of the year, and fear that it could go down below $1,500 levels as well.

“All I’m saying is that, in my opinion, the gold price correction is not yet entirely completed. I see significant support around the $1,500/oz level, but it could drop even lower,” Marc Faber, nicknamed Dr Doom for his contrarian views expressed in the popular Gloom, Boom and Doom newsletter, said recently.

“We could have a big correction if global liquidity tightens or they stop printing money, Marc Faber said in March at the Middle East Investment summit in Dubai.

That forecast seems to be coming true now.

EARLIER STORIES…

Gold drops below $1,700/oz; how much lower can it go?

Spot gold prices fell below $1,700 per ounce for the first time in almost six weeks as China, the world’s second-largest economy after the US, lowered its 2012 growth target to an eight-year low of 7.5 per cent.

While spot prices fell to $1,694.82at 1.30pm UAE time (9.30am GMT), a gram of 24ct gold was retailing in Dubai at under Dh200, its weakest showing in 45 days.

Yesterday, after the Chinese government’s announcement of a lower than the earlier forecasted 8 per cent growth target, the price of gold traded in a wide range between $1,695 and $1,720 per ounce in overnight trading.

Gold prices are down almost 9 per cent in six months even as analysts are predicting that the spot price will breach $2,000 per ounce – a gain of almost 18 per cent from current prices – in the next 12 months.

On the other hand, silver prices dipped only marginally today and were trading at $33.46 per ounce at 1.30pm UAE time. Silver has seen limited gains recently as the white metal is up 2.17 per cent in 30 days. However, that is on the back of a correction that it saw in February, and silver is still down almost 20 per cent in six months.

Marc Faber, the famous author of the Gloom, Boom Doom Report, said yesterday that the price of gold could fall to under $1,500 per ounce. “In my opinion, the gold price correction is not yet entirely completed. I see significant support around the $1,500/oz level, but it could drop lower. It depends on global liquidity and on money printing by central banks. We could have a big correction if global liquidity tightens or they stop printing money,” Faber said in an interview with The Gold Report.

He further maintained that silver prices will, in the long run, track gold. “Gold and silver will move in the same direction, up together or down together. At times, silver will be stronger relative to gold, and at other times gold will be stronger relative to silver,” he said.

Like to have your gold in blue or purple?

The 8th Dubai City of Gold Conference will unveil the latest research and development on new varieties of gold. These include new gold colors such as purple and blue, gold alloy effects, powder metallurgy, gold based composites and new colored gold coatings.

Future trends in research to produce transparent gold, color changing gold, and functional and smart gold alloys will also be discussed.

The conference, to be held on 13th November 2011, is an annual global event for the gold, jewellery and diamond industries organised by the Dubai Gold Jewellery Group (DGJG),

New research and development is poised to influence the gold and jewellery markets, consumption and jewelry marketing trends in the near future and will multiply the usage of gold. Progress on technologies such as textile based, sputtering techniques, laser sintering and nanotechnologies will also be assessed in light of their expected impact on the usage of gold not only in jewellery but also in industry.

 

 

Article source: http://www.emirates247.com/markets/gold/sell-sell-sell-gold-slumps-to-1-559-and-looks-further-down-2012-05-14-1.458661

Gold jewellery schemes don’t shine

May 13, 2012 Posted by admin

Gold is considered to be an integral part of an Indian household. No doubt, we are the largest buyers of gold in the world. With gold prices hitting the roof, It has become a matter of concern for lots of Indian families who are finding it difficult to buy gold. Now, various companies have come up with gold jewellery schemes to lure the jewellery buyers. The gold jewellery companies offer schemes where a customer has to pay only 11 instalments out of 12 and the rest is borne by the company.

Example
Ms Sunita from Delhi wanted to buy 20 grams gold for investment, but she did not have enough money. The jeweller offered a scheme under which she could buy the gold jewelry after one year at the prevailing market rate after paying 12 monthly instalments. She also got the offer that the last instalment would be paid by the jeweller himself after she completes the 11th installment on time.
It means for Rs 60,000 jewellery, she had to pay Rs 55,000 in 11 months, and Rs 5,000 will be paid by the jeweller.

Benefit of gold jewellery scheme
The only benefit that a buyer gets in this type of scheme is buying in instalments and keeping money intact for this objective. From a buyer’s point of view, this type of scheme will lead to more loss than gain.

Limitations
The instalment paid, can be used only to buy the jewellery, and it cannot be redeemed against gold biscuits or coins. As shown in the table, jewellery also carries the making charges, and its purity is lesser than the biscuit or coin. So if we compare a 10-gram gold biscuit to gold jewellery, then the buyer would gain if he chooses the gold biscuit.

Let’s check the comparison:
The buyer is under an obligation to the seller to purchase the gold at the prevailing market rate. If at the time of booking jewellery, the gold rate is Rs 2,800/gram and after the completion of instalments, the rate increased to Rs 3,000/grams, then the buyer has to pay Rs 2,000 extra for every 10 grams due to change in price of gold.

If the main purpose of a buyer is to invest, then buying jewellery is not a wise choice. Jewellery is not made of 24 carat gold, and it also carries some making charges, so the return value of jewellery would be much less when compared to the gold coin, biscuit or bars.

Other attractive options to buy gold in installments

The buyers have many other options to buy gold at a cheaper cost and at a better quality. Some of the options include:

If the buyer wants to buy gold after 12 months under the instalment pattern, then it would be a better option if he buys Gold ETF in the stock market every month and averages out the inconsistency. He can also buy it in e-gold format (National spot exchange) where he can buy as little as 1 gram gold. After 12 months, he can sell the gold in electronic form and buy the gold jewellery from the proceedings, or if he wants to carry it longer then he can keep it in the demat A/c.

If the buyer wants to invest in a coin or bar, then he also has the option to put the money every month in a recurring deposit account for 12 months and earn interest on the money and buy gold with the maturity proceedings.

The basic flaw in the gold jewellery scheme is that jewellers not only earn interest on the buyer’s instalment but also sell the jewellery after earning a handsome margin.

For 20 grams gold jewellery, he earns Rs 600 making charge and sells 22 carat gold at rate of 24 carat gold. So he earns approximately 8 per cent extra by selling gold of 22 carat purity.

For jewellers, this scheme is a win-win situation as he gets the chance to sell his product, and at the same time he earns interest on the customer’s instalment whereas buyers, who cannot distinguish whether they are buying gold as jewellery or as an investment, are always set to lose out in this type of deal.

The writer is CEO of BankBazaar.com

Article source: http://www.deccanchronicle.com/channels/business/personal-finance/gold-jewellery-schemes-don%E2%80%99t-shine-investment-017

Jewelry designer Alexis Bittar in expansion mode

May 12, 2012 Posted by admin

Fashion jewelry design is in the midst of a renaissance the likes of which we haven’t seen since the 1980s. And Alexis Bittar blazed the trail. In the last two decades, the New York-based jewelry designer has gone from selling his signature colorful, hand-carved Lucite pieces on the streets of SoHo to bejeweling leading ladies in Hollywood and beyond, including Lady Gaga, First Lady Michelle Obama, Madonna, Cameron Diaz, Meryl Streep and Rihanna. At the same time, he’s managed to keep the core of his collection in an accessible $225-to-$645 price range.

Bittar has also challenged the definition of fashion muse by eschewing prepubescent models in his ad campaigns in favor of women, such as eccentric octogenarian Iris Apfel, “Dynasty”diva Joan Collins and, most recently, “Ab Fab” stars Jennifer Saunders and Joanna Lumley.

And now, with a recent influx of cash from private equity firm TSG Consumer Partners, Bittar is ready to expand his vision globally and to introduce a new, higher-priced line of jewelry in sterling silver and gold that will debut next year.

He’s already one of the most prolific jewelry designers in the business, turning out hundreds of pieces each season that incorporate innovative materials such as molten metals, reconstituted coal and Lucite, which was big in the 1950s and is currently having another moment in fashion but which Bittar has built his brand on since the beginning.

For spring’s O’Keeffe collection of bold, Southwestern-looking Lucite cuff bracelets and collars, he took cues from the artist’s skulls and Native American textiles, then layered on Art Deco-ish crystals. Another spring group, Dark Garden, features Lucite beaded necklaces and carved floral brooches with crystal-encrusted thorns, movable blooms and pollen pods. The younger sister collection of the family, named Miss Havisham, includes “man-made druzy quartz” cocktail rings carved from crushed glass embedded in resin.

It’s no wonder that art museum shops caught onto his talents first, followed soon after by high-end boutiques and department stores, including Neiman Marcus, Saks Fifth Avenue and Bloomingdale’s.

“[Alexis] is responsible for elevating the status of costume jewelry and making it a category that is taken much more seriously in fashion,” says Brooke Jaffe, fashion accessories director of Bloomingdale’s. “He draws in a broad range of customers.”

He understands the need for one-of-a-kind fantasy pieces for photo shoots, as well as commercial pieces for women’s everyday lives. “Most designers get one or the other but not both,” she adds.

Along the way, Bittar has created spikey Lucite masks, floor-length necklaces and oversized cross earrings, for the likes of Lady Gaga, Rihanna and Madonna. His work has been shown on the covers of countless magazines, including Vogue, V and W. He’s also collaborated on jewelry design with other brands, including Burberry, Michael Kors and Jeremy Scott.

Bittar “has a design intelligence,” says stylist and costume designer Arianne Phillips, who has known him for eight years. “No matter what he chose to do, whether it was design a car or clothes, he’d be capable of it.”

Phillips relies on Bittar to create custom pieces for magazine spreads, music videos and films (he made several pieces for “W.E.”). The more classic pieces she wears herself, including crystal-studded Lucite bracelets and pyramid studs.

“He created a niche that opened the door for so many other people,” she says, pointing to the new class of cool, young jewelry designers that has emerged in recent years, including Pamela Love, Eddie Borgo and Justin Giunta of Subversive.

Michelle Obama has worn several Lucite brooches by Bittar as well as statement pieces by other brands in his league, including Erickson Beamon and Tom Binns. She has undoubtedly helped put the spotlight on fashion jewelry (and taught women to take risks when wearing it). But Bittar says business has really been on the upswing for the last 12 years.

“When I started in the early 1990s, jewelry was at a real low point,” Bittar, 43, said recently over coffee at his showroom in Soho, which is a wonderland of glass cases full of jewelry, a rustic wood table, antique mirror, bird cage and taxidermy ferret — and not far from where he used to work as a street vendor when he was in his 20s. “It was the age of Jil Sander minimalism. People didn’t know how to wear jewelry, or they were brainwashed that it wasn’t cool. Now, that’s completely changed. What is selling are the most artistic pieces, the more interesting the better.”

Bittar has been nurturing a love of jewelry since he was a child growing up in Brooklyn. On his 13th birthday, his parents, who bought and sold antiques, gave him a tangled mess of jewelry as a gift. He started playing with it, and he was hooked.

When he was in his late teens, he bought a box of vintage chandelier parts from the 1920s, all made of Depression-era glass with handmade brass and wire tassels. He started making and selling his own pieces from a table he set up on the corner of Prince and Greene streets.

What hit it big were colorful Lucite button earrings. “I was looking at a lot of Lalique and Bakelite,” Bittar explained. “I was obsessed with clear plastic sheets of acrylic and saw a way of manipulating them, carving them and hand-painting them.”

Today, Lucite is 60% of his business. Everything is still handmade, only at his factory in Brooklyn, which employs some 250 artisans, instead of on his kitchen table.

“When jewelry first started trending in 1999, there was such a naivete in terms of what was tasteful,” Bittar said. “You could just put a big pendant with a string on it and people would buy it. But now, the sophistication and expectation is higher. People are increasingly wanting to be more individual, and part of that has been driven by the celebration of individual style on blogs.”

Individual style is something that Bittar has a particular appreciation for, as seen in the subjects of his recent ad campaigns, Joan Collins and Joanna Lumley among them.

“When you look at the models in fashion magazines, it’s one young girl after another,” Bittar said. “I find it disturbing. That’s not who is buying [fashion]. And I feel like there’s a message that if you are not young, you’re not beautiful.

“I don’t want to get typecast for doing this,” he said. “But I’m like a kid in a candy store. And I think it’s a cool political message.”

Bittar opened his first namesake boutique in 2004. Now he has seven, including three in New York and two in the Los Angeles area. He’s looking forward to two more by the end of 2012, now that he has a new business partner to help.

And he’s not ruling out launching a few new product categories either. (Home furnishings, perhaps?) But first up next year, he’ll debut a still-unnamed, higher-priced jewelry line. “I already design three collections, but I live and breathe jewelry, and I have forever.”

Indeed, Bittar has amassed such a large personal collection of antique jewelry (which he lovingly discusses on his blog at AlexisBittar.com) that he’s started selling it in his boutiques. “I used to hoard it and keep it rolled up in an old quilt. But now I buy and sell it. On my birthday, on my day off, I go buy antique jewelry. There’s nothing I would rather do.”

booth.moore@latimes.com

Article source: http://www.latimes.com/features/image/la-ig-bittar-20120513,0,1499193.story

Demand factors driving gold – Part I

May 11, 2012 Posted by admin

In the first of a two part series, Julian Phillips looks at the jewellery and technology segments of gold demand and their effect on prices.

Author: Julian Phillips
Posted: 
Thursday
,
10 May 2012

JOHANNESBURG - 

We have looked at central bank gold market demand and showed just what a dynamic force it’s becoming, just below the surface of the gold market. It’s a relatively price-insensitive force that’s strong day-to-day, clearing the market of stock when available. It enters the market in a way that leaves the market relatively undisturbed. But the rest of demand is very different. It’s this other demand that will drive the gold price. Some of it is price sensitive, some not. Some is price sensitive in a surprising way. Some simply take up tonnage without being in itself a driving force. There are some forces that have no intention of holding gold for longer than their short-term view persists and then will sell it again.

Within the above parameters, it’s extremely difficult to define gold demand accurately. The major difficulty lies in the difference in the motives for buying gold in the first place. For instance, the motive for Indians buying gold jewelry is very different from the motive behind developed world buying of gold.

We face the same difficulty in defining supply too. “Re-cycled” is a general term that does not touch on the motives for selling gold, and yet re-cycled gold is currently supplying 36% of supply. The motives behind re-cycling gold are very different in one part of the world to another and from one seller to the next.

These differences in the motives for buying and selling gold have a considerable impact on the price of the metal. That’s what makes an understanding of these factors so critical. With an investor in gold needing so much more information than a trader -who can restrict himself to technical analysis- it is critical for him to understand these facets of the market.

Different Demand Types on the Gold Price

Technology

As you can see from the Gold supply and demand presentation from the World Gold Council, this demand is persistent, steady, and predictable, usually taking the shape of a contract to deliver in this pattern throughout the year. This predictability ensures it has little impact on the daily price of gold. In base metals this component of demand can rise up to 90% of total demand. This makes the remaining 10% of selling and buying (discretionary) unpredictable and the major influence on that metal’s price. In the gold market, this facet of demand makes up only 10.5% of the total, leaving the balance of demand less predictable.

Furthermore, it’s fair to assume that barring any major change in the state of the global economy, this component of demand will not fall. The emergence of Asia is now part of that formula and is unlikely to cause any major variation of that demand.

By far the greatest bulk of the demand from industry is consumed, never to return to the market, but that only amounts to 140 to 150 tonnes of demand; however, in uses such as the computer industry, there are determined efforts to reclaim and re-cycle that gold. This inevitably softens the impact of this demand on the gold price as much of it is reclaimed and recycled. Electronics uses 71% [330 tonnes] of Technology demand with the balance making up dentistry and other industrial uses, which are not re-cycled. Once that gold is in the mouth it doesn’t come out again.

The result is that Technology demand is not a day-to-day price driver. Its impact on the price is that it takes off an amount from supply, lessening the volume that will affect the price.

Jewelry (Developed World)

In the developed world, it means jewelry with a gold content. Its quality doesn’t matter that much except to express status for the average western woman who would almost never think of it as a form of money. It is almost exclusively for decorative purposes. The thought of melting it down for sale as gold would appear destructive to its owners. So whether it is 9-carat, 18-carat or 22-carat simply states its cost to the observer. As a piece of gold it has little other meaning.

Even melting it down to make new pieces from it is foreign to the average western woman. As to considering it a part of a household’s financial security -only if the piece were of particular note- would that ever be contemplated. The current gold selling parties, where a jeweler gathers a group of women together and buys their old unused jewelry from them is the exception. Usually it involves pieces long sent up to the attic. We expect this facet of supply from the jewelry industry to last for a few years only, before that western world source is exhausted; however, it is a significant amount of the supply component. It’s price sensitive to the extent that sellers remember the low prices paid for the gold, i.e. – $300 or less?, and see a windfall profit never expected. Don’t expect to see these sellers buy again.

Julian Phillips is the founder of www.GoldForecaster.com / www.SilverForecaster.com

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Article source: http://www.mineweb.com/mineweb/view/mineweb/en/page103855?oid=151221&sn=Detail&pid=102055