OUTLOOK 2013: Central-Bank Gold Buying Expected To Continue In 2013, At Least Offering Floor For Prices

Posted on January 7, 2013 by PMBG

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(Kitco News) – A major shift in the gold market in recent years was the move by central banks from net sellers to net buyers, and that trend is expected to continue in 2013, analysts said.

That doesn’t automatically mean gold prices will rise next year, although it certainly helps. But it at least provides a source of buying that should help limit any downside, some said.

Gold was on the skids for much of the 1990s, and the slide was compounded by selling from central banks, particularly those in Europe. This selling continued early in the last decade even as gold prices picked up, but gradually the selling abated and buying picked up.

“Anywhere from 10% to 15% of annual supply in the gold market was coming from central banks every year,” said Nicholas Brooks, head of research and investment strategy with ETF Securities. “In the second quarter of 2009, central banks became net buyers in the gold market—primarily emerging-market central banks with balance-of-payments surpluses. They are now buying close to 15% of annual supply in the gold market. So you’ve seen a…30-percentage-point switch of a net supplier becoming a net source of consumption in the gold market.”

And that, Brooks said, “puts to some degree a floor under the gold price.”

Central banks collectively bought 77.3 metric tons of gold in 2010, said Natalie Dempster, director of government affairs with the World Gold Council.

“That was the first net purchase by the official sector in two decades,” she said. Previously, central banks collectively were selling between 400 and 500 tons a year on a regular basis, she added.

Official-sector buying surged to 456.8 tons in 2011. This means a swing of close to 1,000 tons from some years when these banks were net sellers, she said. To put that into perspective, the swing is more than a third of the global mine output last year of 2,826.5 tons, she added.

Central banks are buying at roughly the same pace in 2012 as a year ago. Purchases were 373.9 tons through the first three quarters of the year.

Buying Physical Gold Demystified

Posted on December 17, 2012 by Angela Stern

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Precious Metals Brokerage Group International, LLC (PMBG) Announces the ABCs of Buying Gold Prior to 2013

Many Americans want to buy silver before 2013, but where to buy and how to go about it? Precious Metals Brokerage Group, International (PMBG) announces the “ABCs of Investing in Physical Gold” to assist interested first-time and/or newer potential investors.

Precious Metals Brokerage Group, International (PMBG) presents a simplified “ABC Guide to Investing in Gold” to assist American investors who want to buy gold but don’t know where to start or how to go about it. This overview is geared for the first-time and/or newer Gold investor.

A) Understand The Current Market: The fundamental case for increased gold prices remains strong. In late December 2011, gold dipped to a 12-month low, below $1,550/oz. Traders who responded to the barrage of ‘buy’ recommendations were quickly rewarded as the metal soared to test $1,800/oz. again by late February. Since then gold has oscillated in price based upon several macro-economic factors (such as the Eurozone Crisis, an election year and a third round of Quantitative Easing). This oscillating pattern and the temporary pullbacks that have occurred over the last year gives first time gold investors a chance in the remainder of 2012 to establish a position before the metal makes its next move higher. Currently hovering right around $1,700/oz., gold has many leading experts signaling a significant move up by the beginning of 2013, especially since it has already tested or hit the $1,800 mark three times in the last 13 months.

Read Full Press Release Here: http://www.prweb.com/releases/2012/12/prweb10206038.htm

How Gold Miners Can Leverage the Price of Gold

Posted on December 17, 2012 by Angela Stern

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Gazing into their crystal balls in recent days, Wall Street firms interpreted differing futures for gold next year. Morgan Stanley awarded gold the “best commodity for 2013” while Goldman Sachs called the end of the metal’s hot streak.

After seeing 11 consecutive years of positive performance from gold, one needs to be wary of research analysts’ price forecasts, as they have consistently underestimated the shifting dynamics driving the precious metal higher.

Take a look at analysts’ annual predictions of gold prices, which is “a telling picture,” CEO Nick Holland of Gold Fields told the crowd at a mining conference last summer. From 2006 through 2011, Bloomberg’s contributing analysts have forecasted that future gold prices would be lower. “The analysts who keep telling us the gold price is going down have been wrong seven years out of seven. That’s a remarkable track record!” says Holland.

t is worth keeping gold’s DNA of volatility in mind as the day-to-day price of gold naturally fluctuates, of course. This is the case for both gold and gold equities.

The upside to gold stocks is that investors historically have received a 2-to-1 leverage by owning gold equities instead of the commodity. U.S. Global’s Portfolio Manager Brian Hicks reminded The Gold Report readers of this fact during an extensive conversation that he and Portfolio Manager Ralph Aldis had with Brian Sylvester.

We believe that effective management can help miners gain more leverage over the metal for their shareholders. Picture the gold price as a pulley with gold company executives applying force on one side of a rope. The more disciplined and successful the management, the bigger the potential boost in gold equity returns.

BofA Favors Gold, Copper for 2013 as Commodities Outlook Neutral

Posted on December 11, 2012 by PMBG

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Gold, copper, silver, platinum and palladium will outperform other commodities next year on easing by the U.S. Federal Reserve and supply constraints, according to Bank of America Corp.

Global economic growth will average 3.2 percent in 2013, “modestly” supporting demand for raw materials, analysts led by Francisco Blanch said in a report today. The so-called fiscal cliff of automatic tax increases and budget cuts could tip the U.S. economy into recession and “abrupt policy changes” in Europe may cause “large commodity price swings,” the analysts wrote. The bank is neutral on commodities, John Bilton, European investment strategist, told reporters in London today.

“We expect large-scale policy easing by the Fed and the ECB should push gold prices higher,” the analysts wrote, forecasting gold prices at $2,000 an ounce for 2013 and $2,400 for the end of 2014. “A stronger Chinese economy will likely lend support to supply constrained metals next year, and we expect copper prices to average $7,750 a ton in the fourth quarter of 2013.”

Commodities as tracked by the Standard & Poor’s GSCI Spot Index are down 2 percent this year, led by declines in coffee, sugar and cotton. The gauge almost doubled in the three years to 2011 as central banks and governments around the world took action to boost their economies hurt by the global financial crisis in 2008.

Spot gold, up 9.2 percent in 2012, is rallying for a 12th year as central banks join investors buying bullion to diversify assets. Holdings in exchange-traded products are at a record, data compiled by Bloomberg show, and central banks are also adding to their holdings. Silver has “scope” for a 20 percent rally from the current levels, the bank said.

Bank of America expects grain prices to ease gradually into 2013, while “precariously low inventories” can drive prices higher at the start of the year, it said.

Source: BofA Favors Gold, Copper for 2013 as Commodities Outlook Neutral

Gold’s Buyable Bounce

Posted on November 13, 2012 by Angela Stern

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Your reasons for owning gold don’t matter to me right now. It could be that you want to protect yourself from the declining dollar. Or perhaps you believe foreign demand will increase prices. Readers of these pages will have plenty of ammo for a bullish gold argument at hand. So, rather than lecture you on why you should have your very own stash of shiny yellow metal Instead, I want to help you buy it for the best possible price.

Even if you’re a long-term investor, it’s important for you to time your gold purchase in order to get the most out of the investment. And right now could well be an excellent buying opportunity…

Shortly after gold started to move higher in September, I told my readers about three new buying opportunities to exploit before gold attempts to make new all-time highs. Despite its recent breakout, gold had simply moved too far, too fast. That’s why I thought you should wait for a better-timed entry, instead of getting caught chasing the price.

Here’s what I wrote in September:

“Gold is running out of gas as it approaches resistance at $1,800. It will probably need to rest or retrace before attacking $1,800…

“If and when a pullback occurs, give gold several days to a couple of weeks to move down and/or sideways. Eventually, the price will tell you where and when support will be.

“Once gold moves higher from its new support level, you will have found your low-risk entry point. If I had to guess right now, I would say you might have an opportunity to buy near $1,725…”