Silver ETP Holdings Climb 0.4% to Record 18,853.6 Metric Tons

Gold and silver have traded a bit lower on Friday and are both heading for a loss of 1% on the week in dollar terms. This is to be expected after the 3% and 5% returns of last week and the trading action this week has all the hallmarks of consolidation.

Interestingly, the sharp falls seen in the Japanese yen this week have created the unusual situation of gold and silver prices being nearly 1% higher in yen terms while lower in most fiat currencies.

The jobless claims numbers were higher than expected (439K vs 338K) yesterday and Superstorm Sandy’s wrath may have worsened an already weakening US economy. Unemployment benefits grew by 78K for the week ending November 10^th. 

Many of those who lost their jobs were unable to immediately file claims due to the dislocation caused by the storm.  Sandy led to over 100 deaths, left no power in many homes, curtailed rail or subway services and insurance losses estimated are between $20 billion and $50 billion.

US industrial output figures for October are published at 1415 GMT.

If the US fiscal cliff isn’t sorted out it will weigh on the dollar and benefit gold however the fiscal cliff is just the preliminary bout in many challenges facing the $16.15 trillion indebted US economy.

The CME Group cut margins on gold and silver futures contracts in a bid to ignite trading interest which is bullish from a contrarian perspective.

Gold demand is still strong.  The SPDR Gold Trust holdings grew to 1,339.616 tonnes by Nov. 15, just a tad off the record high of $1,340.521 tonnes hit in October.

John Paulson kept a major stake in gold in Q3 2012, a confidence boost to bullion's appeal as a hedge against economic uncertainty, a US regulatory filing showed on Thursday.

While John Paulson kept his current stake in the SPDR Gold Trust (NYSE:GLD), Soros increased his holding in the gold trust by 49% to 1.32 million shares.

Soros and his team, unlike many “experts”, clearly believe gold is not a bubble and will protect and grow his wealth in the coming years.

Silver in USD 5 Years – (Bloomberg)

Paulson, who became a billionaire in 2007 by wagering against the subprime mortgage market, owns about 5% of the SPDR Gold Trust, according to data compiled by Bloomberg.

U.S. Securities and Exchange Commission filing for third- quarter holdings showed that Paulson & Co., the largest investor in the ETP, kept its stake at 21.8 million shares. While Bacon’s Moore Capital Management LP acquired 1.8 million shares in Sprott Physical Gold Trust last quarter.

While buying shares in the Sprott Physical Gold Trust, Moore Capital cut holdings in the SPDR Gold fund by 20,000 shares to 100,000 last quarter.  Patrick Clifford, a spokesman for New York-based Moore, declined to comment on the filing. Michael Vachon, a spokesman for Soros, did not reply to an e- mail sent by Bloomberg.

Their liquidation of the SPDR Gold Trust is an interesting development and one which might be seen more often of in the coming months due to concerns about the counter party risk in the SPDR Gold Trust.

Scout Capital Management LLC boosted holdings in the SPDR Gold Trust by 525,000 shares to 1.14 million shares, a filing showed yesterday.

Global ETP holdings reached a record 2,596.1 metric tons on Nov. 8 amid speculation that stimulus efforts will increase as the U.S. faces a so-called fiscal cliff of $607 billion in tax gains and spending cuts next year should Congress fail to act.

Gold Silver Ratio Quarterly – (Bloomberg)

Thomson Reuters GFMS has published research that says they project silver prices to rise 38% in 2013 from current levels, as a sluggish global economy increases safe haven demand.

The bullish silver GFMS forecast was published on the Silver Institute website yesterday and is unusual as the GFMS have been quiet bearish on silver in recent years despite rising prices.

Philip Klapwijk of GFMS said that “a rebound in investment demand stemming from continuing loose monetary policies is expected to drive silver prices towards and possibly over $50 during 2013.”

Spot silver has risen over 17% this year overtaking gold’s 10% gain, and paving the way for its third consecutive rise in four years.

"Strong investment demand, higher gold prices on the back of monetary easing, rising inflation expectations and the persistence of ultra-low interest rates," are among the factors that will lure buyers to the safety of silver,” said Philip Klapwijk of GFMS.

"We are thinking prices will trend higher next year. I'm not convinced that we are going to $50. I think we will definitely see $40 to $45 prices."

Strong silver demand is seen by the increase of 4.5% in holdings of the iShares Silver Trust, the largest silver backed ETF (see chart above).

Klapwijk said, "In China, for example, jewellery demand is growing at a double digit
pace," and predicts silver prices to trade between a low of $30.90 and a high of $36 for the rest of 2012.

Weaker industrial fabrication demand for silver is due to cuts in solar power subsidies in Europe which decreased demand from the electronics field and photovoltaic end users hence increasing the silver supply. In addition mine production has climbed 4% in 2012 said Klapwijk.

Cross Currency Table – (Bloomberg)

NEWSWIRE

(Bloomberg) -- IShares Silver Trust Holdings Fell 45.17 Tons as of Yesterday
Silver holdings in the iShares Silver Trust, the biggest exchange-traded fund backed by silver, declined to 9,985.18t, according to figures on the company’s website.

 (Bloomberg) -- Gold Set for Record in India on Trend Signal: Technical Analysis
Gold futures in India are poised to advance to a record in two to three months as the Raff Regression Channel indicates a rally, according to technical analysis by Kotak Commodities Services Ltd.

“It is time to buy as gold is trading within C1 and C in the channel, which shows positive trend,” said Mumbai-based Dharmesh Bhatia, associate vice president at Kotak, referring to the two trend lines which define the regression channel. Futures may touch 32,600 rupees ($593) per 10 grams,

NEWS
Gold inches down; global economic uncertainty weighs - Reuters

CME lowers gold, silver, copper, natgas margins - Reuters

Swiss firm to build $18m gold refinery, bullion plant in Singapore – Asia One

State won't pay in gold or silver - Politico

COMMENTARY
VIDEO: Smart Money Billionaires Buy Gold; "Small Investors Have Spent Their Money" - Bloomberg

VIDEO: Gold Council: Middle Class Will Boost Gold Demand: Video - Bloomberg

Fiscal Cliff, Asian Currency Wars, Buoys the Gold market - GoldSeek

High gold prices push many Indians to silver - Mineweb

Ireland:
14 Fitzwilliam Square
Dublin

United Kingdom:
No. 1 Cornhill
EC3V 3ND UK

IRL +353 (0)1 632  5010
UK +44 (0)203 086 9200
US +1 (302)635 1160

Twitter, Facebook, YouTube, LinkedIn:

Linkedin - www.linkedin.com/pub/mark-o-byrne
Twitter - www.twitter.com/goldcore
Facebook - www.facebook.com/GoldCore
Youtube - www.youtube.com/GoldCoreLimited

-- Posted Friday, 16 November 2012 | Digg This Article