Friday, January 20, 2012

Gold & Silver: 2011 Milestones, News & Quotes

With an exhilarating year for Gold and Silver in our rear-view mirror I thought now would provide a good opportunity to look back at some of the major milestones, news and notable quotes we saw over 2011.

21 December 2010 – The International Monetary Fund concludes its Gold sales program totalling 403.3 metric tonnes (approved September 2009).

14 January 2011 – Gold Core reports that George Soros’s largest buy in 4th quarter 2010 is Gold adding $64m to an existing position.

25 January 2011 – Commodity Online reports that commercial banks in Vietnam have stopped accepting Gold deposits due to new rules introduced by the central bank prohibiting them from lending the metal to gold bar traders. Under the new rule, banks are only allowed to lend gold for the purpose of producing and trading jewellery causing demand for Gold to fall sharply at the commercial banks.

28 January 2011 – Gold tumbles to its low point for the year trading at $1313.

30 January 2011 – Xia Bin (PBoC Adviser) suggests China should increase its Gold and Silver reserves.

31 January 2011 – Perth Mint announces a new Platinum series coin, the Platinum Platypus, a 1oz coin with a maximum mintage of 30,000.

31 January 2011 – US Mint sells a record number of American Silver Eagles with over 6.4 million sold in the month of January (smashing the previous record of 4.26m the previous November).

1 February 2011 – Bullion Baron reports on Silver product (10oz/20oz/kilo) shortages on the online Perth Mint Bullion website.

2 February 2011 – Renowned investor Jim Rogers says “Gold will have reached an unbelievable price before it starts falling”, but suggests Silver is historically undervalued against Gold and may outperform Gold.

4 February 2011 – Perth Mint announces sell out of the 1oz Gold & Silver Lunar Rabbit coins (with mintages of 30,000 and 300,000 respectively).

7 February 2011 – JP Morgan announces that they will accept physical Gold bullion as collateral for investors who want to borrow cash or securities.

8 February 2011 – Perth Mint reports 100,000 Kilo Silver coins sold since the introduction of 2011 designs in September 2010 the year prior (this is equal to 3,215,100oz or over 5% of Australian Silver mine production).

10 February 2011 – Perth Mint announces that previously out of stock 100oz Silver bars are now available, but that Kilo and 10oz Silver bars are now out of stock.

17 February 2011 – Financial Times reports that the Royal Canadian Mint and Austrian Mint have had to ration sales after record demand.

5 March 2011 - Richard Russell (Dow Theory Letters) said "Warren Buffett's problem is that he only understands balance sheets and earnings. The value of a Picasso or a gem diamond or a bar of gold is outside Buffett's understanding. Which is sad, because Buffett's lack of understanding has kept many an American on the sidelines while gold surged higher in terms of Buffett's beloved paper currencies."

8 March 2011 – Bullion Baron shows examples of ridiculous eBay premiums being paid on kilo Silver bars (up to $190 premium being paid over regular dealer prices!).

21 March 2011 – Reuters reports that Gold premiums in Japan have risen to three year highs which follows panic buying of the metal after a devastating earthquake and tsunami earlier in the month.

23 March 2011 – Gold Core reports that China imported 245.6 metric tons of silver in February. The amount is lower than the 260.6 metric tons imported in February 2010, however the spot price has risen substantially since that time.

31 March 2011 – Perth Mint announces delivery of new 1,000 tonne coin press purchased to increase extra production capacity for larger Silver coins such as the 1 kilo Kookaburra, Lunar and Koala releases.

5 April 2011 - Jin Ulrich (JP Morgan China Chairwoman) says "Gold is Seen as an Alternative to Paper Currencies".

16 April 2011 - The second largest US academic endowment fund (University of Texas Investment Management Co) reports that it took delivery of almost $1 billion in gold bullion and is storing the bars in a New York vault. The purchase makes up around 5% of the funds $20 billion under management.

27 April – Financial Times reports that a Hong Kong-based commodities exchange (HKMEx) backed by Chinese state companies and Russian billionaire Oleg Deripaska plans to make its trading debut next month (May) with a futures contract linked to gold.

27 April 2011 – World Gold Council reports that the gold price rose by 2.4% during Q1 to US$1,439.00/oz. By the end of Q1, ETFs held a total of 2,110.3 tonnes of gold worth US$97.6 billion, compared with the high of 2,167.4 tonnes at 31 December 2010By the end of Q1, ETFs held a total of 2,110.3 tonnes of gold worth US$97.6 billion, compared with the high of 2,167.4 tonnes at 31 December 2010.

28 April 2011 – Silver trades at the highest level since the 1980 peak, reaching around US$49.

4 May 2011 – Bloomberg reports that Mexico has increased their Gold reserves by 93.3 tonnes (from 6.9 tonnes in January to over 100 in March a 14x increase). Russia increased their reserves by 18.8 tonnes to 811.1 and in he same month Thailand expanded it’s assets by 9.3 tonnes (bringing their total to 108.9 tonnes).

4 May 2011 – Angela Merkel's budget speaker and his opposition counterpart urge Portugal to consider selling its gold.

6 May 2011 – Bullion Baron reports on some remarkable similarities between the 2006 spike in Silver versus the current one, including margin changes, price action and timing.

11 May 2011 – Steve Forbes, billionaire media magnate, says “A return to the gold standard by the United States within the next five years now seems likely, because that move would help the nation solve a variety of economic, fiscal, and monetary ills.”

13 May 2011 – Perth Mint reports they have sold out of the 2011 Silver 1oz Kookaburra coin (500,000 mintage) and the 2008 Silver 1oz Lunar Mouse (300,000 mintage) which they started minting again earlier this year. 

16 May 2011 – Wall Street Journal reports that billionaire hedge fund manager Soros (who was famously quoted calling Gold “the ultimate asset bubble”) slashed his funds exposure to Gold (SPDR Gold Trust) and Gold mining company NovaGold during the first quarter of the year.

20 May 2011 – Financial Times reports World Gold Council data showing China overtook India as the world’s largest buyer of Gold bars and coins in the first quarter with 93.5 tonnes purchased.

1 June 2011 – Bloomberg reports that Turkey imported 25.7 tons of Silver in May & US silver eagle coin sales through May 2011 are the best since 1986 (series start).

13 June 2011 – Bullion Baron first speculates on the popularity of the Lunar Dragon series to be released by Perth Mint later this year.

16 June 2011 - World Gold Council’s Managing Director Marcus Grubb tells a conference in London today that central banks will be net buyers of gold this year and probably next year.

21 June 2011 – Gold Core reports that imports of gold and silver in India were $8.96 billion in May, a growth of 500% over the previous month and 222% over last year.

21 June 2011 – Financial Times reports that Greek citizens are emptying savings accounts and buying gold as they brace themselves for the possibility of a sovereign default and a run on the banks.

22 June 2011 – Bloomberg reports that Perth Mint Silver coin sales have surged to a new record with the mint selling 10.7 million 1 ounce silver coins since July 1 last year (66 percent higher than the previous year and about 10-fold more than five years ago).

23 June 2011 – Marc Faber, writer of the Gloom, Boom and Doom report says “not to own any gold is to trust central bankers and that you do not want to do in your life.”

7 July 2011 – Gold Core reports that U.K. Royal Mints silver production in 2011 has doubled, while gold production has risen 8.9% over 2010 levels.

8 July 2011 – Commodity Online reports that Minerals and Metals Trading Corporation (India’s state-owned trading company) said on Thursday that it would import 350 tons of gold and 1,200 tons of silver in 2011-12 as demand for the precious metals is rising fast.

11 July 2011 – Ron Paul: “Why do central banks hold it (gold) if it’s not money?” Ben Bernanke: “Well, it’s tradition.

14 July 2011 – World Gold Council reports that the price of Gold saw new record highs during Q2 2011, ending the quarter 4.6% higher than the previous quarter. Gold-backed exchange traded funds experienced strong net inflows adding a collective 46 tonnes of gold to a total 2,155 tonnes (worth US$104.2 billion) in holdings.

22 July 2011 – Pierre Lassonde, famed mining entrepreneur, "In 1980 the only players were the Americans, they were essentially the only players in the gold market, or the dominant players. Today the dominant players are China and India, 58% of all the gold sold this year will be sold in these two countries. So they are by far the dominant players and as I've said the Chinese love gambling. When we reach that phase (the mania) I told you and I will tell anyone who wants to listen, watch out because it will truly make your head spin."

29 July 2011 - Cazenove Capital technical strategist Robin Griffiths said that the real inflation adjusted high (using the RPI) from 1980 was over $8,500 per ounce and gold could reach that level in the coming years. He said that silver was volatile but would likely outperform gold.

1 August 2011 – Perth Mint reports they have received coin industry offers to purchase the entire Gold Lunar coin mintage (30,000 x 1oz) due for release later in the year. The offers were rejected to ensure their usual distributors receive a fair allocation.

2 August 2011 – Gold Core reports that South Korea's central bank bought 25 tonnes of gold over the past two months. The gold is worth $1.24 billion and resulted in a 17-fold increase in their gold reserves.

9 August 2011 – JP Morgan says Gold may rocket to US$2500 by years end.

9 August 2011 – Bullion Baron reports on brand new lows (for the current bull market) seen in the Dow:Gold ratio, pointing out there is historical precedence for it to get even lower.

11 August 2011 – Bild Zeitung, Germany’s biggest- selling newspaper, prints a front page article encouraging the purchase of Gold. Gold “is better than cash,” the article read, “While any amount of money can be printed, gold is limited,” making it “one of the safest investments in crisis times.”

15 August 2011 – On this day, August 15th, 40 years ago, President Nixon announced the end of the Gold Standard, marking the end of the Bretton Woods international monetary system.

17 August 2011 – Bloomberg reports that Venezuelan President Hugo Chavez has ordered his government to repatriate $11 billion in gold held in banks abroad to safeguard the country from the economic crisis.

22 August 2011 – GLD (SPDR Gold Trust) overtakes SPY (S&P) as world’s largest ETF by market capitalisation.

23 August 2011 – Gold climbs to a record price topping US$1910 for the first time.

23 August 2011 – UBS have raised their 3 month forecast for silver sharply from $30/oz to $50/oz suggesting that investors may be too nervous to short Gold and rather choose to buy Silver.

24 August 2011 – Perth Mint unveils the designs for the 2012 Australian Gold and Silver Bullion Coin Program. Pictures and release dates were supplied for Lunar, Kookaburra, Kangaroo and Koala series coins.

24 August 2011 – An influential member of Germany’s ruling coalition, Ursula von der Leyen, said that Germany should follow Finland’s lead on Greece and seek collateral (preferably Gold) for loans from bailout countries.

1 September 2011 – Bloomberg reports that Columbia increased its Gold reserves by 2.3 metric tonnes in July, while Mexico and Tajikistan reduce their holdings by a combined 4.5 tonnes.

5 September 2011 – Perth Mint struggles to keep up with demand for all the Lunar Silver coin variations and temporarily suspends ½, 2 and 5oz Lunar coins (as of 20/1/2012 they are still not available from the Perth Mint).

6 September 2011 – Gold manages to claw its way back up to trade at a new high of US$1923.

19 September 2011 – Financial Times reports that European central banks have become net buyers of gold for the first time in more than two decades.

24 September – Peter Schiff (CEO Euro Pacific Capital), "If I liked silver last week at $40 an ounce, I’ve got to like it even more at $30 an ounce.  It’s the same silver, so if I can get it for less money, why wouldn’t I buy it?"

26 September 2011 – Silver trades back at levels not seen since January, putting in a bottom at around US$26.

27 September 2011 – Robert Lenzner (Forbes) reports on the new Pan Asian Gold Exchange (PAGE), which is scheduled to be fully functional by June, 2012 in Kunming City, Yunman Province. PAGE will allow Chinese customers to speculate in gold futures contracts or buy physical gold through an account with a bank or broker. Essentially it will make Gold more accessible to the Chinese than is currently possible through the Shanghai Gold Exchange (opened in 2002).

4 October 2011 – Gold Core reports that Vietnamese gold bullion imports are $1.5 billion so far in 2011 with $600 million worth imported in September alone.

27 October 2011 – Perth Mint unveils a spectacular one tonne Australian Kangaroo Gold coin, the worlds largest coin.

1 November 2011 – Bullion Baron presents a case for the 2012 Kookaburra, suggesting the low mintage and other attributes will see it sell out and start attracting a premium (sold out 2 weeks later).

7 November 2011 – Germany rejects a proposal by France, Britain and the US to have German gold reserves used as collateral for the Eurozone bailout fund. Germany Economy Minister Philipp Roesler said on Monday that the German people's gold reserves cannot be touched and “must remain off limits."

14 November 2011 – The 2012 1oz Silver Kookaburra is sold out at the Perth Mint with orders for the full mintage of 500,000 coins having been placed.

15 November 2011 – Paulson & Co. (hedge fund founded by billionaire John Paulson), cut its stake in the SPDR Gold Trust to 20.3 million shares in the third quarter from 31.5 million as of June 30. The firm remained the largest holder. Soros Fund Management LLC held 48,350 in the SPDR Gold Trust as of Sept. 30, compared with 42,800 shares at the end of the second quarter.

16 November 2011 - Celente became the latest victim of the MF Global bankruptcy, he told Russia Today (RT), “I really got burned, I got a call last Monday, I have an account with Lind-Waldock, and I have been trading gold since 1978, and I have a very simple strategy. As you well know, I’ve been very bullish on gold for many years…  So I was building up my account to take delivery on a contract, and I got a call on Monday, and they said I needed to have a margin call.  And I said, what are you talking about, I’ve got a ton of money in my account.  They responded, oh no you don’t, that money’s with a trustee now.”

17 November 2011 – Financial Times reports a 40 year high for Central Bank Gold buying with 148.4 tonnes (net) purchased in July – September, with end of year net purchases expected to reach in excess of 400 tonnes.

17 November 2011 – World Gold Council reports that Gold demand in the third quarter of 2011 reached 1,053.9 tonnes (+6% compared to the same period last year). Investment demand in Europe reached a record quarterly value of €4.6bn, equating to 118.1 tonnes - a year-on-year increase of 135%.Investment demand in Europe reached a record quarterly value of €4.6bn, equating to 118.1 tonnes - a year-on-year increase of 135%.

19 November 2011 – Mineweb reports that Paulson, Soros, Einhorn (some of the biggest US investment names) have been buying Gold stocks (Paulson and Soros both having cut their exposure to the spot Gold price when selling GLD earlier in the year).

25 November 2011 – Russia bought 19.5 metric tons of gold in October bringing their total gold reserves to 871.1 tons according to IMF data released today.

2 December 2011 – Gold Core reported that the central bank of South Korea announced a 15 metric tonne purchase of gold in November. According to the Bank of Korea (BOK), the 15 tonne increase bought the nation’s gold reserves to 54.4 tons worth $2.17 billion as of the end of November.

5 December 2011 – After selling out of the 2011 Platinum Platypus Perth Mint announces the release of the 2012 coin (same design).   

6 December 2011 – Bloomberg reports that Japanese Finance Minister Jun Azumi announced reconstruction bond investors will be rewarded with physical Gold. Individual investors who purchase more than 10 million yen ($129,000) in the debt with a 0.05 percent return and keep it for three years will receive a gold commemorative coin weighing 15.6 grams.

28 December 2011 – China Daily reports that China’s Central Bank (PBoC) announced that it is banning local regions, institutions or individuals from setting up gold exchanges apart from the existing Shanghai Gold Exchange and Shanghai Futures Exchange. This was in order to ensure Gold trading was occurring in a sufficiently regulated market.

29 December 2011 – Silver tumbles lower to retest the $26 mark last seen in September.

Here's hoping 2012 provides as many memorable and exciting moments!

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  1. My personal favorite
    11 July 2011 – Ron Paul: “Why do central banks hold it (gold) if it’s not money?” Ben Bernanke: “Well, it’s tradition.

    I just didn't know the banks were so sentimental

    1. Its the other way of saying: Because we cant print it. ;)

      On the other hand, other ultimate collateral alongside gold is human labor which is quite hard to store ;)