This Month in Gold – February 2014

Gold Hits 16-Week High
Bloomberg – In the last week of February, gold and silver hit a 16-week high, driven by concerns of weak US economic growth and Ukrainian political turmoil. The Chicago Federal Reserve’s measurement of US economic activity in January was nearly twice as bad as predicted, indicating below-trend growth. Meanwhile, the interim government of Ukraine is asking for $35 billion of financial assistance to avoid default. Gold is seen as a safe-haven investment in light of these problems. By the end of February, gold had risen 11% from its December lows. UBS AG has raised its 2014 forecast for gold, stating that the metal has “started to shed its stigma.” Read Full Article>>

2013 Silver Coin Sales Hit Record High
Silver Institute – Global sales of 1-ounce silver bullion coins hit a record high in 2013. The US Mint sold 26% more American Eagle silver coins in 2013 year-over-year. Totaling 42.675 million ounces (Moz), this was a single-year record for the US Mint. Austrian Silver Philharmonics, Canadian Maple Leafs, and the Perth Mint’s Silver Kookaburra sales increased 62%, 60%, and 41% respectively last year. Robust investment demand drove the strong sales, which also extended to silver bars and silver-backed Exchange Traded Funds (ETFs). As of February 14th, 631 Moz were held in silver-backed ETFs, compared with just 314 Moz at the end of 2008. Read Full Article>>

Gold Consumption Data Suggests Chinese Stockpiling
CNBC – The latest gold consumption, importation, and production data suggest that China may have consumed more gold than its citizens bought last year. Some analysts claim the difference is being stockpiled by the Chinese central bank, though the PBOC claims its gold reserves remain at the 2009 level of 1,054 metric tons. In 2013, China imported 1,158 tons of gold from Hong Kong and produced 428 tons. The amount of gold imported directly through Shanghai has not been published. Chinese gold demand data measures only final consumption, and one analyst estimates China’s total gold consumption exceeded 1,700 metric tons – 500 more than reported. “It’s not only about increases in official holdings. It’s more accurate to say that every level of society, from individuals up to banks, has been allocating more to gold,” said Liu Su, a capital futures analyst in Beijing. Read Full Article>>

Indians Exploit Gold Import Loopholes
Wall Street Journal – Indian jewelers and gold traders are avoiding strict gold import regulations by asking citizens returning from migrant work to import extra gold. After living abroad for 6 months, Indians are allowed to return with as much as 2.2 lbs of gold, on which they pay a 10% duty. More than 4K lbs of gold were declared at the Calicut airport alone last December, compared to 518 lbs in November. This legal loophole and growing illegal smuggling rings are two ways Indians are getting around new gold import regulations. Due to the strict regulations, a kilogram of gold selling for about $40,300 elsewhere in the world can fetch $48,400 in India. Indian officials raised the import tax from 2% to 10% last year, but are now considering lowering it to between 6% and 8%. Read Full Article>>

Bitcoin Exchange Loses $480 Million of Customer Assets
Bloomberg – Mt. Gox, one of the world’s largest bitcoin exchanges, announced that it lost 750,000 of its customers’ bitcoins – about $480 million worth. It has filed for bankruptcy protection with the Tokyo District Court. Mt. Gox claims its bitcoins were stolen by hackers exploiting security weaknesses in its software systems. While there are methods of keeping bitcoins safe from hackers, Mt. Gox’s failure has spooked many speculators in the nascent market for crypto-currencies. Read Full Article>>

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