Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
“U.S. Mint reports selling 4,588,000 silver eagles so far in January. There’s No Substitute for Gold as the World Order Changes. States Warned of $2 Trillion Pensions Shortfall….and much more. “
Gold rose quietly all through Far East and early London trading yesterday…and about twenty minutes before the Comex opened, a more substantial rally began that ran into some serious resistance as it approached its 50-day moving average. Gold’s high tick of the day [$1,377.40 spot] came about 8:50 a.m. Eastern time and got sold down pretty quick before slowly declining for the rest of the New York trading session, but finished up about six bucks on the day.
Silver didn’t do a lot until around 10:00 a.m. Hong Kong time, when a smallish rally began. This rally picked up a head of steam very shortly after London opened for trading…as silver tacked on another 30 cents in short order and, except for its high price tick [$29.08 spot] at 10:20 a.m. in New York, not much happened to the silver price for the rest of Tuesday’s trading day.
The dollar peaked early in the morning in Far East trading on Tuesday. And, by 9:30 a.m. in London, the world’s reserve currency was down about 75 basis points. It’s absolute low [78.66] came shortly before 10:00 a.m. in New York before rallying a bit into the close. But it still closed below 79 cents. For a change, there actually was some co-relation between the dollar and the gold price yesterday.
The gold stocks gapped up and then hardly changed from the opening bell to the closing bell. The HUI was up 1.52% for the day. Most [but by no means all] of the silver stocks did quite a bit better than that.
Yesterday’s CME Delivery Report showed that 59 gold and 66 silver contracts were posted for delivery on Thursday. JPMorgan was basically the only issuer in both metals, while the Bank of Nova Scotia was the big stopper in gold and Prudential the big stopper in silver. The link to the action is here.
The GLD ETF continued its almost unrelenting decline, shedding another 78,072 ounces yesterday. But, over at the SLV ETF, an eye-watering 4,494,034 troy ounces were withdrawn. That’s pretty close to being a one-day record withdrawal from SLV. Considering the price action in the last few days, it’s obvious that someone desperately needed the silver they had stored there…and withdrew it. Or they purchased the shares…and immediately withdrew what they just bought…leaving Blackrock with the problem of replacing it.
As astonishing as that SLV withdrawal was…the U.S. Mint had a little surprise for us yesterday as well Their sales report showed that they sold another 12,500 ounces of gold eagles, along with a gargantuan 1,181,000 silver eagles. Month-to-date, the U.S. Mint has sold 75,500 ounces of gold eagles…and 4,588,000 silver eagles. This is a one month record for silver eagles sales; I’ve seen full years go by when they didn’t sell that many eagles. And 1996 comes to mind when only 3,466,000 were sold in the entire year. Those eagles are selling for a very healthy premium to spot.
Also of note is the gold/silver eagle sales ratio. Silver eagles are outselling gold eagles 367 to 1. My bullion dealer’s gold/silver sales ratio is around 1,000 to 1. One has to wonder how much longer it will be before investment demand absolutely buries the ‘8 or less’ traders. I make it an absolute unshakable rule that I buy some silver bullion every month without fail. Like the headline of my column said yesterday…”Sell gold, buy silver”.
It was a busy day over at the Comex-approved depositories. All four warehouses saw action, and, by the end of the day on Friday, their collective silver inventories had declined a smallish 46,643 ounces. The link to all the action is here.
