Richard (Rick) Mills
Ahead of the Herd
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As a general rule, the most successful man in life is the man who has the best information
There are signs that in 2016 gold will reverse its losing streak.
In China, physical delivery from the Shanghai Gold Exchange reached a record 2,596 tonnes, or a whopping 80 percent of total global output for 2015.
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In addition, the People’s Bank of China reported adding 19 more tonnes in December, bringing the total amount to over 1,762 tonnes.
Meanwhile, U.S. demand is just as electric. In the third quarter of 2015 U.S. buyers bought far more coins and bars than they did in any other quarter over the past five years - U.S. Mint Eagle sales reached their highest level
since the second quarter of 2010.
“Global investment demand saw a significant increase this quarter, up 27% to 230t. Bar and coin purchases were up by a third on Q3 2014 with Western markets in particular showing a surge. In the US, bar and coin demand
reached its highest total in five years, up 207% to 33t.
Europe also saw strong levels of demand in the investment sector as ongoing concerns surrounding the Greek debt crisis and c uncertainty in Eastern Europe, the result of a number of factors including continuing tensions between Russia and Ukraine and saw demand climb by 35% to 61t.
In China, investment demand grew by 70% to 52t, as demand was initially stimulated by the gold price weakness in July, which was further fuelled by the mid-August foreign exchange reform. In India, the investment sector saw its first increase since Q3 2014, up 6% year-on-year to 57t.
Central banks remained a significant source of demand, and were net buyersfor the 19th consecutive quarter. Purchases by official sector institutions reached 175t, a level almost matching the record highs in Q3 2014, as the net widened to include new reports from countries such as China and the UAE.” World Gold Council
Gold demand and supply statistics for Q3 2015
- Overall demand increased by 8% year-on-year to 1,121t.
- Total consumer demand – made up of jewellery demand and coin and bar demand – totalled 928t, up 14%.
- Global investment demand saw a significant rise of 27% to 230t, up from 181t in Q3 2014. This was led by the US which saw a surge in bar and coin
demand, up 207% to 33t from 11t on the same period last year, with
support from China, up 70% to 52t and Europe up 35% to 61t.
- Global jewellery demand for Q3 2015 was up 6% year-on-year to 632t compared to 594t in Q3 2014. In India, demand was up 15% to 211t and
China was up 4% to 188t. The US and the Middle East also saw gains, up
2% to 26t and 8% to 56t respectively.
- Central bank demand reached 175t, the 19th consecutive quarter of net purchases.
- Demand in the technology sector declined 4% to 84t as the sector continued to endure pressure, with the industry choosing to shift towards
alternative, cheaper materials in technological applications.
- Total supply was 1,100t in Q3, up 1% year-on-year. Total mine supply
(mine production + net producer hedging) remained relatively flat up 3% year-on-year to 848t compared to 814t in the same period last year. Year-
on-year quarterly mine production shrank by 1% to 828t in Q3 2015
against 836t in Q3 2014. Recycling levels were down 6% year-on-year to 252t compared to 268t in Q3 last year.” World Gold Council
The gold coin buying frenzy continued into the new year. On January 1, Americans gobbled up unprecedented amounts of gold and silver coins from the U.S. Mint. For the month of January, the U.S. Mint sold 124,000 ounces of American Eagle gold bullion coins, up 53 percent from a year ago.
As for precious metal pricing in Canadian dollars let’s check out current pricing:
Gold - US$1,117.80 = CDN$1,573.86
Silver – US$14.24 = Cdn$20.05
It might be time to add a gold stock or two to your radar screen.
Fort Hope and Fort Yale
From its headquarters at York Factory on Hudson Bay, the Hudson's Bay Company (HBC) had controlled the fur trade throughout much of North America for several centuries. In 1848, Hudson’s Bay Company (HBC) built Fort Hope and Fort Yale.
The first major placer gold find in southern British Columbia was in the late 1850s at Hill's Bar. Prospectors discovered a rich gold-bearing placer bar just 15 kilometers south of Fort Yale on the Fraser river. The Hills Bar, named after one of the prospectors, became one of the richest gold producing bars ever discovered in B.C.
From 1858 to 1863, tens of thousands of miners and others (mostly American gold seekers from the California gold fields), all infected with ‘gold fever’, invaded the interior of B.C. During its heyday Yale was the largest town north of San Francisco and west of Chicago, hitting a peak population of roughly 16,000.