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20-April-2016 Everyday Sydney Gold and Silver Prices

Gold Price AUD $1602/oz, $51.51/g
Silver Price AUD $21.72/oz, $0.63/g

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The big buzz yesterday in the precious metals market was the news that Deutsche Bank has agreed to settle charges for its role in manipulating the London Bullion Marketing Association (LBMA) daily gold/silver price fixings. My view on this, albeit admittedly jaded, is that it is akin to the settlement charges being paid by the big Wall Street banks for their fraudulent behavior in the housing bubble mortgage market. Although Deutsche Bank has agreed to “spill the beans” on other banks, I have yet to hear any mention of JP Morgan, Citibank, Goldman Sachs or any number of other western bullion banks who engage in daily price intervention in the gold and silver futures market on the Comex.
My view on the matter is that until I see otherwise, this is nothing more than a “we took care of the problem, move along there’s nothing else to see here” situation. DB is like a trapped felon who blinked in the game of “Prisoner’s Dilemma” and gave up a couple of names in order to let it continue forward in its endeavor to save itself from collapse. While other indictments may be doled out, I do not see this as an advancement in the effort to reform the trading activity in the gold and silver markets. After all, the banks are manipulating the market on behalf of the western Central Banks and Governments who are highly motivated in their effort prevent a sustained rise in the price of gold from signaling the west’s continued financial and economic deterioration.

While the Deutsche Bank announcement may trigger some celebratory dances in the precious metals community, rest assured that for every bank removed from its gold/silver market manipulation service, they will be replaced by banks “sitting on the bench.” The “reformed” LBMA gold fix process is proof of concept. The prima facie format has been somewhat altered, as have the names involved. But it can be argued that the “reformed” price fix process is perhaps even more permissive of manipulation than the old format.
The more interesting issue in my opinion is whether or not the bullion banks’ ability to keep the price of gold and silver capped with any relative degree of success is fading. History has proved that all forms of market intervention eventually fail. If the intervention in the precious metals market did not ultimately fail, it would be a statistically unique event. I would have the readers recall the fact that the Rothschild family, which founded the London gold fix, withdrew from its involvement and connection to the LMBA, including the twice-daily fix process, in 2004. Something like this happens for a reason…

It’s been my view that silver hit a bottom in mid-December when the Comex silver contract closed at $13.72. The bottom was affirmed the day that silver was instantaneously plunged down to $13.58 for the purposes of the LBMA price fix and the futures immediately thereafter snapped back over $14. That was perhaps the most audaciously blatant act of manipulation that I’ve witnessed in any market in over 30 years of involvement in all aspects of the financial markets. I also believe it was a last-ditch capitulative effort of sorts by the bullion banks. And, of course, the LBMA never did offer an explanation for the egregious price anomaly.
Since mid-January the price of silver has been uncharacteristically “buoyant,” especially in relation to the price-action in gold. In general, silver outperforms gold on days when gold is being successfully manipulated lower and, in general, it outperforms gold on rally days.
I’m not an adamant technician or chart-reader, but the two graphs below are suggestive of a market that is ready to make make a big move higher (please click in the images to enlarge):

The graph on the left is a 2-yr daily of Comex silver. It appears to have carved out a nice bottom and it has broken out above both its 50/200 dma’s after successful “re-tests” of each. The graph on the right is 16-year weekly that goes back to the beginning of the secular bull market in the precious metals. After the big move up from 2008-2011, silver (manipulatively) pulled back a 16-year uptrend line and bounced.

Whether or not this is nothing more than a short-term bounce or the start of the next big move higher remains to be seen. I have told colleagues since the beginning of the year that I won’t break out the first case of champagne until silver trades above $20 and moves higher from there. Certainly the systemic fundamentals which support much higher prices for gold and silver grow stronger everyday.

Having said that, I remain firm in conviction that silver will be the best performing asset class at least through the rest of this decade. I also am growing more confident that both gold and silver are set up to make a big move higher over the next several months.

The latest issue of the Mining Stock Journal was released last night. In addition to providing what I believe is somewhat unique insight on the precious metals market, I present a junior mining stock that has been overlooked by the market. After an extensive conversation with the CEO last week, I don’t think this stock will remain overlooked much longer.


“BRICS countries are large economies with large reserves of gold and an impressive volume of production and consumption of this precious metal. In China, the gold trade is conducted in Shanghai, in Russia it is in Moscow. Our idea is to create a link between the two cities in order to increase trade between the two markets,” First Deputy Governor of the Russian Central Bank Sergey Shvetsov told TASS.

China is the world’s largest gold producer. Last year it produced 490 tons. Russia is third after Australia with about 295 tons produced last year. Overall, the countries make up 25 percent of the world gold production.

At the same time, the central banks of Russia and China are the world’s biggest gold buyers. Since the end of 2008 the gold reserves of China have nearly tripled – from 600 to 1,762 tons.

The Central Bank of Russia bought 356,000 ounces of gold in February becoming the largest buyer of the precious metal among the world’s central banks, business daily Vedomosti reported, quoting IMF data. Russia currently has 1,415 tons of gold.

Among the countries with the largest gold reserves, China is fifth and Russia is sixth after the US, Germany, Italy and France.

(Kitco News) – The “mischief makers” in the gold market had their chance to break gold earlier today, but failed, says famed market watcher Dennis Gartman.

“[T]he previous day’s highs have been taken out and we are more than merely modestly impressed!” he writes in the Tuesday edition of The Gartman Letter.

He said in the newsletter, “[T]he ‘mischief makers’ who have tried hard to push gold lower… and who’ve often succeeded in doing so… had every opportunity to do so earlier today in Asian dealing for at one point, spot gold traded down to $1,230 where it was rather obvious that large stop orders lurked. But this time they failed and as we write gold is trading higher and rather importantly so, taking out the previous day’s highs and forging a small ‘reversal’ to the upside.”

Gartman noted that he finds gold’s price action “impressive,” adding that he does not know where the buying has come from. “[W]e find it interesting that gold is strengthening even as the EUR had forged an outside reversal day and an outside reversal week to the downside last week, making us friendlier still to gold predicated in EUR terms than to gold in almost any other term.”

Citing figures from research firm CPM Group, Gartman also noted that in the late 1960’s, gold was approximately 4.8% of the world’s financial assets. By 1980, that figure had fallen to 2.7% and by 1990, it was down to 0.5%. “It has stayed ‘south’ of 1.0% since. Last year, according to the CPM Group, it was still only 0.5% of the world’s financial assets. We shall never expect gold to resume its levels of the late 60’s, but what if it were simply making its way back to 1.0% of the world’s assets? It is worth considering,” Gartman said.

Gold prices were posting good gains on Tuesday, as silver prices hit a 10.5-month high. June Comex gold was last up $20.10 at $1,255.10 an ounce. May Comex silver was last up 4.44% at $16.975 an ounce.

Sydney Gold Traders pay great prices for your unwanted gold, silver, platinum and fine jewellery .

Now check the price to see if you want to sell your gold and silver:

18-April-2016 Everyday Sydney Gold and Silver Prices

Gold Price AUD $1620/oz, $52.08/g
Silver Price AUD $21.25/oz, $0.61/g

You can use GOLD AND SILVER ONLINE CALCULATOR on our website to estimate the value of your metal(Gold and Silver)

Call us 02 9231 2535 or go to Sydney Gold Traders to find out more live gold and silver price. Or just bring your gold, silver , jewellery to Shop. Let us test and evaluate them for you.
Visit Our Office Sydney Gold Traders
Suite 12A, Level 5 the Dymocks building 428 George Street Sydney 2000

A scramble for gold has begun as central banks bet against US dollar inflation  CREDIT: ALAMY

A scramble for gold has begun as central banks bet against US dollar inflation CREDIT: ALAMY

For a century, elites have worked to eliminate monetary gold, both physically and ideologically.

This began in 1914, with the UK’s entry into the First World War. The Bank of England wanted to suspend convertibility of bank notes into gold. Keynes counselled wisely that the bank should not do so. Gold was finite, but credit elastic.

By staying on gold, the UK could maintain its credit, and finance the war effort. This transpired. The House of Morgan organised massive credits for the UK, and none for Germany. This finance was crucial, and sustained the UK until the US abandoned neutrality and tipped the military balance against Germany.

Despite formal convertibility of sterling to gold, the Bank of England successfully discouraged actual conversion.

Gold sovereigns were withdrawn from circulation and turned into 400-ounce bars. This form of bullion limited gold ownership to the wealthy, and confined gold’s presence to vaults. A similar disappearance of gold as a circulating currency occurred in the US.


Gold graph
The price of gold has jumped in recent years CREDIT: LONDON METAL EXCHANGE
In 1933, US President Franklin Roosevelt issued an executive order making ownership of gold a crime. FDR relied on the Trading with the Enemy Act of 1917 as statutory authority for this edict. Since the US was not at war in 1933, the enemy was presumably the American people.

In 1971, US President Richard Nixon ended convertibility of US dollars into gold by trading partners of the US. Closing the gold window was said by Nixon to be temporary. Forty-five years later the window is still closed.

In 1973, the G7 nations, and the IMF demonetised gold. IMF members were no longer required to hold gold reserves. Gold was now just another commodity. The view of the monetary elites was that gold was dead.

Yet, like Banquo’s ghost, gold insists on its seat at the monetary table. The US holds 8,133 tonnes of gold. The members of the eurozone and ECB hold 10,788 tonnes. China reports holdings of 1,788 tonnes, but actual holdings are closer to 4,000 tonnes, based on reliable data from Hong Kong exports and Chinese mining.

Russia has 1,447 tonnes, and has been acquiring over 200 tonnes per year. Mexico, Kazakhstan, and Vietnam, among other nations, have added to their gold reserves recently. (Pity the UK, which sold more than half its gold at rock- bottom prices between 1999 and 2002).

After decades as net sellers of gold, central banks became net buyers in 2010. A scramble for gold has begun.

What drives gold’s new allure? In some cases, central banks are constructing a hedge against US dollar inflation.

China has $3.2 trillion in reserves, over half of which is denominated in US dollars, mostly US Treasury notes. The dollar has no greater friend than China because its wealth is held in dollars. Still, inflation looms. China cannot dump its Treasury notes; the Treasury market is deep, but not that deep.

If Chinese selling of Treasuries became a threat to US interests, a US president could freeze Chinese accounts with a phone call.

The Chinese know this. They are stuck with their dollars. They fear, rightly, that the US will inflate its way out of its $19 trillion mountain of debt.

China’s solution is to buy gold. If dollar inflation emerges, China’s Treasury holdings will devalue, but the dollar price of its gold will soar. A large gold reserve is a prudent diversification. Russia’s motives are geopolitical. Gold is the model 21st century weapon for financial wars.

Chinese dragon
China has been on a gold buying spree CREDIT: KIM KYUNG-HOON/REUTERS
The US controls dollar payments systems and, with help from European allies, can eject adversaries from the international payments system called Swift. Gold is immune to such assaults. Physical gold in your custody cannot be hacked, erased, or frozen. Moving gold is a simple way for Russia to settle accounts without US interference.

Countries are also acquiring gold in advance of a collapse of the international monetary system. The system has collapsed three times in the past century. Each time, major financial powers came together to write new rules.

This happened at Genoa in 1922, Bretton Woods in 1944, and the Smithsonian Institution in 1971. The international monetary system has a shelf life of about 30 years.

It has been 30 years since the Louvre Accord (an upgrade to the Smithsonian Agreement). This does not mean the system will collapse tomorrow, but no one should be surprised if it does. When the financial powers next convene to reform the system, there will be no appetite for the dollar’s exorbitant privilege.

The Chinese yuan and Russia ruble are not true reserve currencies. The only feasible benchmarks for a new system are the IMF’s world money, called special drawing rights, and gold.

Critics claim there is not enough gold to support the financial system. That’s nonsense. There is always enough gold, it’s just a matter of price.

Based on the M1 money supplies of China, the eurozone, and the US, and with 40pc gold backing, the implied non-deflationary price of gold is $10,000 per ounce.

At that price, a stable gold-backed monetary system could be sustained. When it comes to monetary elites, watch what they do, not what they say.

While elites disparage gold at every opportunity, they are buying it, hoarding it, and preparing for the day when one’s gold determines one’s seat at the table of systemic reform.

It’s past time to claim your seat with an asset allocation to physical gold.

– James Rickards is the author of The New Case for Gold, published by Portfolio Penguin, hardback, £12.99