Saturday, December 29, 2012

Itsy bitsy gold bars all the rage in Switzerland

itsy bitsy gold bars in Switzerland
Itsy Bitsy gold bars are all the rage in Switzerland with private investors who are keen to queue up and buy gold in the form of small credit card size bars that can be broken up into bite size chunks as emergency payments.

The Swiss refinery Valcambi, part of the U.S. mining giant Newmont, is keen to bring its bite sized "CombiBar" to, not only Switzerland, but also the United States and India, the worlds largest gold buyer. 
According to Reuters, “Investors worried that inflation and financial market turmoil will wipe out the value of their cash have poured money into gold over the past decade. Prices have gained almost 500 percent since 2001 compared to a 12 percent increase in MSCI's world equity index.”

More and more people are buying gold it seems. According to the World Gold Council, sales of gold bars and coins were reached $77 billion in 2011, up from just $3.5 billion in 2002.
"The rich are buying standard bars or have deposits of physical gold. People who have less money are buying up to 100 grams," said Michael Mesaric, CEO of Valcambi. "But for many people a pure investment product is no longer enough. They want to be able to do something with the precious metal."

Mesaric said the advantage of the "CombiBar", dubbed the "chocolate bar" because pieces can be easily broken off by hand into one gram squares, is that it can be easily transported and costs less than buying 50 one gram bars.

"The produce can also be used as an alternative method of payment," he said.
Valcambi is now building a sales network in India with plans to launch the CombiBar on the U.S. market next year.

Meanwhile in Germany demand is strong, "Above all, it's people aged between 40 and 70 that are investing in gold bars and coins," said Mesaric. "They've heard tales from their parents about wars and crises devaluing money."

Andreas Habluetzel head of the Swiss business of Degussa, a gold trading company said, “The CombiBar is particularly popular among grandparents who want to give their grandchildren a strip of gold rather than a coin and Demand is rising every week," Habluetzel continued, "In Germany, people are buying gold in the fear that the euro will break apart or that banks will run into problems."

As developments in the euro zone lurch from one crisis to another, the demand for gold that can be sold in vending machines is also growing.

"Sales rise according to the temperature of the crisis," said Thomas Geissler, whose firm Ex Oriente Lux operates 17 gold vending machines in Europe, the United States and the United Arab Emirates.
The machines saw record sales in 2010, one day after the then Deutsche Bank CEO Josef Ackermann raised doubts over whether Greece would be able to pay its debts.

Since the launch of the machines, which operate under the name "GOLD to go", 50,000 customers have withdrawn more than 21 million euros in gold. The average buyer is male, over 50 years old and well off.

"Customers are hoarding gold mostly at home as a precaution against a crisis, just as their fathers and grandfathers did before them," Geissler said.

It seems that itsy bitsy gold bars are all the rage not just in Switzerland but all over Europe and Asia for people that want to buy gold.


Friday, December 21, 2012

Gold is winning

Happy Holiday Season from
It is coming up to the end of the year and a look at why one should buy gold from the viewpoint of some prominent people around the world is fitting
This year, the Deutschebank called gold "good money" and paper "bad money".

The President of the German central bank, the Bundesbank, paid tribute to gold as "a timeless classic".

A leading member of the policy committee of the People's Bank of China calls the gold standard "an excellent monetary system".

In The China Post, a CNN reporter wrote that the "gold commission" plank in the 2012 Republican platform will "reverberate around the world".

The Subcommittee on Domestic Monetary Policy of the U.S. House of Representatives twice called on economist, historian, and gold standard advocate Lewis E. Lehrman to testify.

GoldMoney founder and GATA consultant James Turk, in an interview with  King World News, recently remarked that Western market manipulation can't stop the flow of gold into Asia and that paper gold owners eventually will realize that they don't really own the metal but rather a lot of counterparty risk. “At some point in the future, whether it’s next year or the year after that, people who own paper gold are going to recognize they have counterparty risk.  They don’t own gold, they only own exposure to the gold price and that exposure is dependent on their counterparty”.

According to Fund Manager Stephen Leeb, "There is a ritual we see in overnight trading. Gold is usually up $4 or $5 at around midnight or 1 a.m. East Coast time. I'll be watching gold trade at this time and I can't count the number of times that in just a minute or two, instead of gold being up $4 or $5, it's now down $20. No one is trading at 12 or 1 or 2 in the morning. Somebody is doing this and it always happens when there is no liquidity. So you have a game of desperation going on here and the Chinese are aware of this".

Mahatma Gandhi once said, “First they ignore you, then they laugh at you, then they fight you, then you win”.
Well, gold is winning, and so should we all be.


Sunday, December 09, 2012

Gold Rally

Gold Rally

The next gold rally is imminent according to some analysts.
The last big gold rally of 70% ran from December 2008 to June 2011 when the Federal Reserve introduced 2.3 trillion dollars worth of quantative easing (euphemism for printing more money) in two rounds.

With the imminent never ending quantative easing now beginning it is very likely we will see a comparable rally in the gold price coming up over the ensuing months.

At least that is what George Soros and John Paulson appear to think with their continuing purchases of gold.  Between them Solos and Paulson own more gold than many countries and both have proven to be no slouch when it comes to investing their assets for profit. So what do they known that we don’t?

According to the World Gold Council, the SPDR Gold Trust (GLD) holds 1,342.2 tons.
Soros has increased his investment in the trust to mind boggling 1.32 million shares in the third quarter of this year, the most since his purchase in 2010, according to a Nov. 14 SEC filing.

And Paulson is the proud owner of an enormous 21.8 million shares in the SPDR Gold Trust.  This makes him the biggest shareholder.  He has recently raised his stake by a massive 26 percent in the second quarter of this year which means that his holding of 66 tons of gold is bigger than many countries gold reserves including Brazil, Bulgaria and Bolivia.

Now these guys are not buying up gold because they think the price is going to drop. Or because they are idling away time, or as a hobby to play with.  This is serious money and these guys play for keeps.  Google George Soros and John Paulson and you will see their history and how they continue to make money hand over fist.

This, coupled with the central banks buying gold as fast as they can, China still buying gold heavily and Indians, ignoring their banks pleas to stop buying gold, means that those that can are continuing to buy gold regardless and that means that the gold price is expected to rally very soon.
As the world financial and economic climate deteriorates and frantic efforts to bolster it by printing more money and imposing more austerity measures continue, it is evident the wisest know a gold rally is imminent and are taking appropriate steps to buy gold.
Perhaps that is what we should all be doing also.