This Month in Gold – September 2013

Gold at 3-Month High on Safe Haven Appeal
Reuters – In the last week of August, the gold spot price climbed to its highest since May and silver rose to its highest since April. The rise was attributed to the potential of a US military strike against Syria and gold’s safe haven appeal during times of geopolitical uncertainty. Gold and silver hit $1,433 and $25 respectively on August 28th, while US and Asian stock markets fell on the Syria news. IMF data showing that central banks are still growing their gold reserves may have also helped gold and silver to rise.
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East Absorbs West’s Abandoned Gold
The Telegraph – The latest report from the World Gold Council noted that physical gold is being bought by Asian investors at record rates, while western markets have been selling physical precious metals. Westerners sold positions in gold ETFs that triggered outflows of more than 400 metric tons of the physical metal in the second quarter of 2013. In that same period, bar and coin purchases rose 78% worldwide and global gold jewelry demand rose 37% year-over-year. China, India, and the Middle East accounted for the majority of the physical buying surge.
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Mint Sales Leap on Gold Price Drop
Bloomberg – Western mints reported huge sales growth after gold’s price drop. The Austrian mint, which creates the Philharmonic gold coin, saw sales increase 79% from January to July year-over-year. Sales of the US Mint’s American Eagle gold coin rose 82% over the same period. In April, the British Royal Mint tripled its gold coin sales, while the Australian Perth Mint’s monthly demand hit five-year highs. “We sell everything we produce and we think it will keep that way,” said the marketing and sales director of the Austrian mint.
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Record Foreign Selling of US Treasuries
Reuters – Foreigners sold a record $40.8 billion of US Treasuries in June, which is the largest outflow since 1977. That was part of a total $66.9 billion of foreign sales of long-term US securities, which is the largest since August 2007. China and Japan alone accounted for approximately $40 billion of the Treasury sales, which some blame on Ben Bernanke’s May statements about potentially tapering quantitative easing in September. June was the fifth consecutive month of foreign sales of long-term US securities. Short-term US assets and stocks also experienced large foreign sell-offs in June.
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Swiss Metals Trader’s Vault Demand Surges
Bloomberg – Pro Aurum, a Swiss company that trades over a billion francs of gold and silver each year, saw a dramatic rise in demand for its high-end vault services following Cyprus’ plans to levy bank deposits in March. Pro Aurum has also opened a vault in Hong Kong for geographic diversity, following the trend of metals traders opening vaults in Singapore. Beginning in 2014, Pro Aurum will follow the lead of transport company Via Mat and ask US clients to leave due to the burden of US compliance. Read Full Article>>

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