Germany ramped up its gold repatriation project last year, joining other European nations bringing gold home. The trend underscores the importance of holding physical gold within easy access.
Germany’s Bundesbank transferred more than 210 tons of gold back into the country from vaults in Paris and New York last year. According to the Financial Times, with last year’s transfers, Frankfurt now ranks as the largest storage location for the country’s reserves after New York.
In early 2013, the Bundesbank announced a plan to repatriate massive amounts of its physical gold reserves back into Germany. The goal is to have half of its gold back in within the country’s borders by 2020. Germany’s gold reserves are currently the second-largest in the world, with nearly 3,400 metric tons.
Government regulations are no match for Indians’ love of gold.
Try as it might, the Indian government has been unable to stem the tide of costly gold imports, nor stop Indians from hiding billions of dollars in undeclared “black money” by investing in the yellow metal.
The latest attempt was a requirement that buyers of high value gold jewelry must provide their tax ID. But instead of denting demand, the move has apparently boosted unofficial trading.
We’ve focused a great deal on gold demand in China, India, and Eastern Bloc countries over the last several months, but people in these nations aren’t the only ones buying gold. Demand for the yellow metal is also robust in the Middle East due to what analysts call “safe haven buying.”
Despite general sluggishness in the retail sector, gold jewelry sales surged in the United Arab Emirates during January. According to Gulf News, retailers in Dubai sold upwards of 8 tons of gold jewelry last month. This rivals sales rates from January 2015, despite a much more difficult environment for retailers this year. Abdul Salam K.P., a member of the board at Dubai Gold & Jewellery Group, pointed to gold sales as one of the few bright spots for UAE retailers:
Ever since the Federal Reserve raised interest rates in December, Peter Schiff has insisted that the state of the US economy didn’t justify the move. In fact, on numerous occasions, Peter has said the US may already be in a recession. If not, we are on the verge of entering one. Earlier this week, Peter reiterated this message during an interview on Newsmax:
I think the US economy has already reentered recession. I think the current recession we are in is going to be worse than the one we left in 2009, and I think the Fed is going to be back to its old tricks of 0% interest rates and another round of quantitative easing.”
Now it seems mainstream analysts are staring to see the writing on the wall. A recent video featuring Bloomberg’s Scarlet Fu highlighted three charts that show the US may be entering a recession.
Gold supplies took a nosedive as demand increased in the final quarter of 2015, according to the latest GFMS Gold Survey by Thompson Reuters.
Total gold supply dropped 7% in Q4 of 2015, driven down by a 4% decline in mining production. It was the largest decline in mine output since 2008, according to the report:
We expect this trend to continue in 2016, due to lower production at more mature operations and a lack of new mines coming on stream. We currently forecast global mine output to shrink in 2016, marking the first annual decline since 2008 and the largest in percentage terms since 2004.”
This article was written by Addison Quale, SchiffGold Precious Metals Specialist. Any views expressed are his own and do not necessarily reflect the views of Peter Schiff or SchiffGold.
In Part 1 of Maximizing Your Metals Holdings Using the Gold-Silver Price Ratio, we briefly went over what the gold-silver ratio is, and how it tends to fluctuate up and down over time.
Generally speaking, the ratio tends to rise (gold becomes more valuable versus silver) during metals bear markets, and it tends to fall (gold becomes less valuable versus silver) during bull markets. This is due to the fact that silver is more volatile. As mentioned at the end of part I, by focusing on this ratio, and exchanging and trading holdings of one metal for the other at key points, investors can actually maximize gold holdings.
(A quick disclaimer – SchiffGold does not recommend the trading strategy explained in this two-part article. Some sophisticated traders of gold and silver do employ it to increase their gold holdings. I’m writing about this, because SchiffGold believes gold investors should be aware of the long-term relationship between gold and silver and the implications of this price ratio. You can read more in our free special report – The Powerful Case for Silver.)
A basic but dependable way to implement this strategy is to pinpoint generally the levels at which gold is overvalued versus silver and vice versa.
Peter Schiff recently appeared on Newmax Prime with J.D. Hayworth and tackled the issue of falling oil prices and crashing stock markets, saying there is no causal relationship between the two. In fact, both are crashing for the same reason:
Wall Street is just trying to blame the carnage in the stock market on oil prices. But that’s not really why stocks are going down. The reality is oil prices and stocks are both going down for the same reason, and it’s because the Federal Reserve is threatening to raise interest rates and the dollar has moved higher. Stocks and the oil price are adjusting down to reflect the higher interest rate and stronger dollar that everybody thinks is coming. But I think they’re wrong, because I think the US economy has already reentered recession. I think the current recession we are in is going to be worse than the one we left in 2009, and I think the Fed is going to be back to its old tricks of 0% interest rates and another round of quantitative easing.”
SchiffGold is giving away more than $4,500 worth of prizes, including gold coins, silver bars, and books signed by Peter Schiff. Anyone can enter to win before March 22, 2016 – no purchase necessary! Click the link below to learn more or scroll down to enter immediately.
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In a recent interview published at the Daily Bell, Anthony Wile engaged in a wide-ranging discussion with economist and investment expert Marc Faber.
Wile and Faber hit on a wide range of subjects from oil markets, to agricultural lands, to the future price of gold.
Faber said we shouldn’t follow the media lead and blame China for all of the current problems, echoing what Peter Schiff has said. Ultimately it all comes down to central bank and government actions – policies Faber views as unsustainable.
But what exactly does the future hold? Faber said there is no way to precisely tell, but it isn’t good:
It’s difficult to make predictions but it’s impossible to make any accurate prediction when you have interventions. We have a lot of interventions, and in the whole history of mankind, which is documented say starting 5,000 years ago up to today, interest rates have never, ever been this low. Never. And this is an experiment the professors and academics who never worked a day in their lives in a real job have undertaken. Nobody knows the precise outcome. I can only say the outcome will be negative.”
In his most recent gold videocast, Peter Schiff said he thinks the recent Fed rate hike was the end, not the beginning of the tightening cycle. The next move will be a drop back to zero and another round of quantitative easing. When that happens, investors who have been selling gold believing the economy is on the rebound will have to reverse their bets and begin buying as gold rallies.
It’s looking more and more like Peter was right, and now some of the mainstream folks are starting to catch on. A recent Bloomberg article proclaimed “gold is back in fashion.” The reason? People are beginning to recognize the shakiness of the economy. As a result, they are turning back to gold as a safe haven:
The $15 trillion rout in global equity markets since May is reawakening the lure of gold for investors seeking safety.”