Commodity investments push up palladium prices

 LONDON (Commodity Online): Palladium popped above 300/oz in mid-September, with its highest London fix $299/oz, on the 17th of the month. A rally in other precious and base metals, together with a general sense of economic optimism and renewed commodity investment inflows, all helped push palladium prices to their highest since August 2008.

More specific positive factors were a strong August for US car sales and a continuing car boom in China, both of which are palladium-biased autocatalyst markets. The US reclaimed its mantle as largest single car market, with passenger vehicle sales of 1.17m units in August, up from 935,250 units in July and the highest monthly figure since May 2008.

It was also 3.9% higher yearon- year, a remarkable turnaround from earlier this year, when year-on-year sales were at one point some 40% down. Of course, as has been the case in other countries, these US sales were boosted by government incentives, in this case the “cash for clunkers” scheme. That programme ended on 24th August, so what September sales figures reveal will be critical.

There seem to be no such concerns in China (although it too has its own incentive schemes), with August seeing sales of 858,300 passenger vehicles, 90% higher year-on-year. That comparison is flattered by a weak August 2008, but it was nevertheless the second highest month for car sales on record, beaten only by June 2009.

Judging by the steady expansion of exchange-traded fund’s palladium holdings, investors continue to like what they see in prospect for palladium. Total ETF holdings as of 18th September were above 1 Moz, with the UK ETF Securitie’s ETF held 498,212 oz and the Swiss ZKB ETF 546,424 oz, up collectively over 100,000 oz from the position at the end of August, with almost all the fresh inflows into the UK ETF. The ratio of palladium ETF ounces held to platinum hit 1.98, the most in palladium’s favour since March this year.

Palladium Outlook

Palladium’s rally is all down to the rebound in the major car markets, and investors have taken note. But the risks are evenly balanced right now. If the September figures for US new vehicle sales are perceived to be disappointing, then $300/oz will be difficult to cling onto, even with the current boom in Chinese sales.

And, having reached $300/oz, some investors may decide to take some profits. After all, palladium has found cracking $300/oz difficult, even as platinum has kept on rising – the ratio between the two widened from a low of 4.25 on 2nd September to 4.47 by the 17th.

Short-term London pm fix: $265/oz-$310/oz.

Courtesy: Fortis Metals Monthly.

 Platinum, palladium beat gold!

 LONDON (Commodity Online): Even as the world is going ga-ga over the rising gold prices and investors are rushing to possess the yellow metal, there are some small precious metals which are making more profits than gold.

Platinum and palladium, two little known metals, have surged 38% and 56%, respectively, this year beating gold, which climbed by 12% only. Silver is up 42% over the same period.

Platinum and palladium are managing to profit from both jewellery and industrial sectors.

Both the metals have multitude of uses, with the auto industry taking about 60% of each metal’s annual production for catalysts to reduce tailpipe emissions.

Also the metals are a bet on economic recovery, and on the struggling automobile sector in particular.

However, despite cash for clunkers programmes announced by the US to buy gas guzzling cars and sell small cars, analysts still think auto makers’ demand for both metals will decrease this year.

Even with output likely to decline because vital South African mines are plagued with power shortages and labour disputes, both the platinum and palladium markets still confront the threat of a surplus.

One factor supporting prices is the growing appetite from exchange-traded funds that are backed by platinum and palladium.

As investors speculate on commodities, the total amount of the metals held by six such funds — traded in the UK, Switzerland and Australia — hit records last week, with about $1 billion in assets.

China may also have helped prop up the metals, with imports of platinum and palladium up 92% and 63%, respectively, in August from a year earlier, fueled by stronger demand from jewelers and auto makers.

Last year, Chinese jewelers and auto makers accounted for 16% of platinum’s global consumption. China’s jewellery demand for platinum is this year projected to exceed peak purchases seen in 2002, meaning a jump of 43% from last year. However, real demand growth isn’t strong enough to support such explosive imports, suggesting stockpiling..

Walking Liberty Half Dollar Guide to Collecting

Wide Variety of Collection Types with This Coin By Rhonda Earley

The Walking Liberty Half Dollar was minted from 1916 to 1947.  Any historian knows that these years were hard for most Amercians.  From the end of World War I (1914 to 1918) to the end of World War II (1939 to 1945), so many people faced times we probably couldn’t imagine now in the 21st century.  The Walking Libery Half dollar was designed by German-born Adolph A. Weinman who came to the United States at the age of ten in 1880.  The front (obverse) depicts a full-length figure of liberty and is said to be striding to the dawn of a new day.  Liberty is holding branches of laural and oak leaves.  The back (reverse) has an eagle with wings open sybolizing power.  The initials of the designer can be found under the eagle’s tailfeathers.   In 1916, when the Walking Liberty Half Dollar was first minted, it wasn’t in production until November, neither was the Barber Half Dollar so the United States almost didn’t have a half dollar minted in 1916.  The design, when finally released, was welcomed with high praises from The New York Sun and The Boston Globe.  It replaced the Barber Half Dollar (1892-1915).  ABOUT THE MINT MARKS First year coins from Denver and San Francisco, show the mint mark on the obverse below the “IN GOD WE TRUST” as do some coins from 1917.  In that year, the mint mark was moved to the revese of the coin on the lower left remaining there throughout the rest of it’s production.   MINTING Approximately 485 million of these coins were minted throughout the series.  However, none were minted in 1922, 1924-1926, and 1930-1932.  Mintage was particularly low in 1921 and that ranks as a highly sought after key date by collectors.  In a mint state condition will go for over $2,000 while lesser quality, ungraded specimens can be had for about $100.  Other key dates sought after by collectors are the 1916, 1916-S, 1917 D and S with the mint marks on the front and the 1938 D.   COLLECTING A full set of the Walking Liberty Half Dollar will contain 65 coins with the various years and mint marks.  A collector enjoying a challenge (and some deep pockets on some specimens) will be able to find each of them for a complete collection.  However, some collectors choose to collect these differently: Short Sets of years 1934 to 1947 and 1941 to 1947 are popular among many collectors.  The later dates are much easier to obtain in a very good condition with nice eye appeal than those earlier years where a $2000 coin is common.   The Walking Liberty Half Dollar is enjoyed by traditional collector and non coin collectors alike due to their 90% pure silver content of over 1/3 of an ounce.  No matter why you are collecting these beauties, they are a fantastic and history rich coin to consider.   SPECIFICATIONS: Diameter: 30.6 millimeters Weight: 12.50 grams Composition: .900 silver, .100 copper Edge: Reeded Net Weight: .36169 ounce pure silver

More resources

• www.usmint.gov

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By David C. Harper, Numismatic News
September 23, 2009

Sales of 2,118 Ultra High Relief Saint-Gaudens gold $20s bring the total to date to 94,464. Now that the order limit has been completely removed, it will be interesting to see if the weekly sales numbers grow. The sales limit removal was effective Sept. 21, a day after these numbers were compiled.

Gold one-ounce American Eagle sales rose by 29,500 to 74,500. The silver one-ounce American Eagle recorded a rise of 360,000 to reach 960,000 pieces. Commercial reports indicate that the Mint is still keeping up with current demand for the bullion coins, but there is no word yet on when sales of collector versions begin, information more and more readers would like to know.

Lincoln proof sets rose by 8,115 to 120,957 and sales of the two-roll Professional Life set increased by 7,603 to reach 221,718.

Total sales of the regular clad proof set have passed the 1.1 million mark and the silver proof set total is nearing half a million.

The asterisk went up on the Philadelphia 1,000-coin bag of American Samoa quarters, but the Mint did not indicate whether the number rose beyond 1,499.

The Sarah Polk Presidential $1 Coin and First Spouse Medal set total appears this week for the first time. There is nothing unusual about the first sales number.

Consensus points to higher gold

Posted by Dave

I do not yet know how our weekly poll question results about whether gold has peaked out at $1,000. However, those individuals who took the time to send me e-mails with their views are almost unanimous that gold has further to go on the upside.

That is perhaps not surprising given the fact that it has been ascending since 2001 from the middle $250s an ounce. Those who bought then have made a lot of money in eight years.

Had we had the technology to conduct a similar poll in the weeks immediately before the high in 1980, the results would probably have been the same.

Similarity to 1980 does not mean that the present views are in error, but it is sure important to note the fact that nearly everyone who responded at some length holds the same view.

Even this week’s issue of Barron’s, which usually covers Wall Street, was bullish on gold.

Someone who didn’t share the consensus view forecast a gold decline later this year rooted in another dip lower for the economy generally.

Will this overwhelmingly positive majority prove to be right?

There are many people who seem to be both financially and emotionally invested in the answer to that question.

IMF takes up gold sales to expand lending

(AP) – 4 days ago

WASHINGTON — The International Monetary Fund’s executive board on Friday was discussing selling some of the fund’s gold to provide low-interest loans to poor countries and shore up its internal finances.

The move, authorized by the G-20 countries at their summit in London in April, has been long expected and discounted by commodity markets, where the price of gold has been rising amid fears of a weakening dollar and a resurgence of inflation.

The key question for the markets is whether the IMF will sell its gold in auction over a set period of time to get the best price or let central banks from member governments buy it. China, India and Russia, eager to reduce their position in dollar-denominated securities, have expressed interest in buying IMF gold.

IMF officials have said repeatedly the sale will be carried out in a way that does not disrupt the market and in coordination with European central banks, who agreed last month on amounts of gold they will sell during the next five years.

The IMF, a 186-nation Washington-based lending institution, is the third-largest official holder of gold in the world after the United States and Germany.

The IMF is planning to sell about one-eighth of its gold, the equivalent of nearly 13 million ounces, worth roughly $13 billion at current market prices.

The IMF decision comes in advance of next week’s G-20 summit in Pittsburgh, Pa., and the fund’s annual meeting early next month in Istanbul.

In April, the G-20 agreed on the gold sale as part of efforts to provide up to $6 billion in concessional loans to low-income countries.

The IMF is expected to use some of the proceeds to diversify its sources of income by setting up an endowment fund, as recommended by a panel of experts that studied IMF finances, including former U.S. Federal Reserve Chairman Alan Greenspan.

In recent years, some countries with thriving economies managed to pay off their IMF loans ahead of time, reducing income the IMF derived from loan interest and putting a strain on its finances. The IMF is expected to be running a deficit of $400 million in 2010.

The head of the IMF, Dominique Strauss-Kahn, instituted some belt-tightening measures when he took over in 2007, amid suggestions the organization was becoming increasingly irrelevant because of its shrinking loan portfolio,

As the global financial crisis hit and a severe recession and credit crisis set in, the IMF has come roaring back, providing emergency loans to a dozen countries ranging from Iceland to Pakistan.

Provided by Coinlink.com

Silver Investigation Update

By: Theodore Butler

 – Posted 22 September, 2009

Yesterday, I received a number of emails from readers who had been communicating with Commissioner Bart Chilton of the Commodity Futures Trading Commission. Obviously, Commissioner Chilton intended this to be made public and I do so here. My comments will follow.

 Statement of

Commissioner Bart Chilton

Regarding the

CFTC Investigation of Silver Markets

September 21, 2009

 It has now been one year since the Commodity Futures Trading Commission initiated its investigation of the silver markets. In that time, it has invested over 2,318 staff hours in this investigation, 32 individual interviews have been conducted, and approximately 40,000 documents have been reviewed. We have worked with our colleague regulators in the United States and in other nations. In addition, the agency has taken the extra step of engaging an eminent outside expert to assist in its analytical review of this matter. In sum, we’ve put an incredible amount of energy and resources into this effort.

While there are some who I’m sure wish these things could be accomplished faster, let me assure them that we are far from over in our aggressive investigation of this market. Our Division of Enforcement is leaving no stone unturned to ensure that, if there is any illegal activity going in silver, we will find it and we will prosecute it to the fullest extent of our authority under the law.

In the meantime, we have moved in a new direction with regard to assertive and uncompromising oversight of commodity markets in furtherance of the Agency’s mission to protect consumers and markets. In that vein, we have recently completed three days of hearings regarding positions limits and hedge exemptions. In those hearings, we heard from academics, exchanges, end users, commercials, and non-commercials. After hearing their testimonies, it is clear that new authorities in this area, combined with legislative changes to enhance the agency’s oversight in the OTC arena, could significantly increase market transparency and our ability to protect against fraud, abuse and manipulative activity. Accordingly, I am hopeful that, should new authorities be promulgated in these areas, that they would also extend to the metals markets as appropriate, and I will continue to work toward that objective.

 I would like to thank Commissioner Chilton for his statement. There is no doubt that he is the most accessible government official in memory. Virtually all of the readers who sent me the above, also sent along their private exchanges with him on his statement. Those exchanges were almost identical, namely, they all asked Commissioner Chilton one question. How in the world could such an aggressive investigation fail to include conversations with me, the obvious instigator of the investigation? Commissioner Chilton responded that the investigators would be contacting me soon, as he has stated in the past. (For those not aware of the exact sequence of events, the CFTC started its third silver investigation in 5 years, as a result of an article I wrote a year ago, “The Smoking Gun” and subsequent articles http://news.silverseek.com/TedButler/1219417468.php )

Rather than dwell on that, and risk making myself the center of discussion, I’d like to analyze the significance of Commissioner Chilton’s statement. When I first started reading it, I raced through it, looking for the words I have read in so many communications from the CFTC over the past two decades. Those words, of course, were always “and we can find no credible evidence of a manipulation in the silver market.” Well guess what? For the first time ever, those words were missing. Instead, words to the effect, “of investing an incredible amount of energy and resources, of leaving no stone unturned in our year-long aggressive investigation, and if we find anything illegal, we will prosecute, etc.” That’s a far cry from what has been said in the past.

No one spends an incredible amount of energy and resources investigating any matter that is not credible. That’s the key point. At the very least, Chilton’s statement indicates that the Commission takes my allegations seriously. That’s because the allegations are well-founded. I’ve always used their own public data, so they can’t claim it is bogus. I’ve always argued in accordance with their own principles and historical findings on concentration, manipulation and position limits. I’ve always relied on common sense and the intent of commodity law. How could they possibly argue with that?

Besides, I never even asked them to investigate silver for a third time in five years; that was their choice. All I asked was a very simple question, namely, how could one or two US banks be short 25% of the world production of silver (or any commodity) and that not constitute manipulation? In one full year, neither the CFTC nor anyone else has been able to come close to legitimately answer that question. That’s because there is no legitimate answer. Faced with having to answer a question to which there is no legitimate answer, do the next best thing – investigate.

I’m going to resist attacking the CFTC on this matter. I want to take the high road. I know this is a major market problem with a solution that involves serious complications and repercussions. That’s why I’ve persisted for 25 years. Certainly the Commission must tread carefully. But it still must confront this silver manipulation. I’m sincere when I say I am more interested in seeing this manipulation terminated than I am in extracting my pound of flesh for two decades of regulatory failure. What’s most important now is for the Commission to recognize that this is very much a crime in progress. A little old lady is still being mugged on the street and the police have no higher priority than stopping the crime first and investigating later.

I think the intent of Commissioner Chilton’s statement may be different than first assumed. I don’t think it was solely intended to provide an update to those who had been inquiring about the investigation. I think it was intended as a warning to the shorts. Intention aside, the message to the big shorts is that the Commission is taking allegations of a silver manipulation seriously. That’s because the evidence is compelling. Taken together with the no-nonsense approach and pragmatism of the new chairman, Gary Gensler, the message is clear. Be short silver at your own risk.

For complete access to all past and future articles, please go to www.butlerresearch.com

Thursday, September 17, 2009

Personal hobby interaction still matters

Posted by Dave

I had an conversation with Jon Lerner for tomorrow’s Coin Chat Radio program. He is the bourse chairman of Coinfest, which will be held Oct. 9-11 in Stamford, Conn.

What I found most interesting about our conversation was at the point I was asking him just how important it is to have face-to-face interaction of collectors and dealers in this age of the Internet.

For committed collectors, this personal knowledge is still critical in many ways, perhaps not if you are looking solely to buy the proof sets issued since 1950, but to find out if there is a fit of personality and attitudes for the long-term building of collections.

In the history of numismatics dealers and collectors have built amazing collections together, but it doesn’t get done if one or the other’s traits rubs the other party raw. You might be able to get through a single transaction in difficult conditions, but the dealer for sure is not going to take a want list and start acting on it without feeling very comfortable with the other party.

What do I mean?

Lerner illustrated his comments at one point with an anecdote of a recent show. He had a junk box on his bourse table. Someone searched through it and pulled out a silver half dollar marked $5.

At the time, the silver in it was worth about $6. Lerner said he was going to let the potential buyer have the coin for the marked price until he said, “Will you take $3?”

Lerner said no and took the coin back without further negotiation.

Something as simple as this short personal interaction is enough to make or break any kind of profitable potential long-term commercial relationship.

So even in the age of the Internet, personal compatibility still matters.

Buy as many UHR gold coins as you want

Posted by Dave

Order limits come off on Monday for the 2009 Ultra High Relief Saint-Gaudens $20 gold piece.

For the first time since the coins went on sale in January, any buyer can buy as many from the U.S. Mint as he can pay for.

The limit had been set at one when the program started to assure the widest possible distribution among collector buyers. It rose to 10 in July and to 25 in August.

So at 9 a.m. Eastern Time Sept. 21, it is a whole new ball game.

What does this signify?

The Mint must now feel that it has enough supply on hand to meet all likely demand. But how much might that be? I don’t know. I heard talk by private collectors at ANA putting the final demand around 125,000. But how much credence should be put in talk?

This order limit change could also signify the program is winding down and this is the way of cleaning out the pipeline. The Mint does this at the end of commemorative programs. That would confirm ANA chatter.

This possibility seems less likely than the first because it is only September and the maximum mintage limit for the entire program was set at 300,000. Buyers haven’t even hit the 100,000 mark yet.

However, if the program is winding down, what would that signify?

Perhaps ending the program early would be the mechanism to free up gold bullion to be made into blanks for the proof American Eagle program. That’s another program that is leaving collectors in an expectant mood.

Gold has given the hobby an exciting time in recent months, but the downside is that there are more questions than answers.

Anybody who is interested in getting an example of the UHR gold coin should probably think about purchasing it now. Why take a chance in being disappointed if you really do want one?

If you happen to want 10,000, you can probably have them, too.

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