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.

2013 Global Gold Price Report

Posted on December 25, 2012 by PMBG

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Gold is the favoured commodity of 2013 with more than 80% of gold executives expecting to see a rise in the price of gold. An analysis of the 46 largest TSX-listed gold mining companies showed that more than 20 of these gold companies have cash reserves greater than $500 million.

Gold miners are determined to prove they’re a good investment — not just now, but in the long term. In order to receive approval from investors, they will have to establish cost-effective management strategies, increase dividend payments and invest responsibly in production growth.

Gold companies are using cash for development and exploration, with 100% of senior gold companies using cash for such activities and 89% of mid-tier companies planning on using cash for project development and another 83% of mid-tier miners planning on using cash for fund exploration activity in 2013.

There will also be an increase in M&A activity in 2013 as 20% of all senior gold companies plan to spend money on acquisition-related activities, while 33% of junior/mid-tier companies expect to spend their cash on acquisitions. This is double the number of companies that spent money on M&A activity in 2012.

Source: 2013 Global Gold Price Report

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.

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…”

What Role (if any) will Having Elected an Incumbent Democrat Have on Short-Term Prices of Gold and Silver?

Posted on November 13, 2012 by Angela Stern

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PMBG Announces Expected Outcomes Coming out of the Gates of last Week’s Election

Several IRA account holders are putting gold into their IRAs as a part of retirement asset diversification, which can even out the value of their portfolio even during a weak period in the stock market. Precious Metal Brokerage Group International (PMBG) presents their insight into how the recent election may or may not affect those who invest in Gold IRAs.

With the presidential election decided, the market responded ahead of, during and after Election Day itself. Gold is expected to continue its rise in 2013, reaching up to the $2,000 mark (conservatively) – or likely higher (per most analyst’s projections). On Oct. 23, Deutsche Bank analysts called for gold to exceed $2,200 an ounce next year. This came in light of the stimulus measures by central banks. (http://beforeitsnews.com/gold-and-precious-metals/2012/11/gold-silver-and-the-us-election-2455194.html)

See Full Press Release Here: http://www.prweb.com/releases/2012/11/prweb10112673.htm