J&T Coins LLC Blog

New COMEX Rule: Another Reason to Fear ETFs

 

www.silver-coin-investor.com

Regardless of their expensive annual fees, frequent tracking errors, and the simple fact that you’ll never be able to actually touch the gold or silver your ETF claims to hold, there are several more reasons ETFs should never be used by precious metals investors. An important rule change by COMEX, the American commodity exchange, allows ETF substitutes for precious metal delivery.

Paper as Metal

To address a temporary problem of liquidity, COMEX has systematically created an even bigger problem for investors. The exchange allows investors to make good on their futures positions with gold and silver ETFs rather than the real assets, thus opening up the door for hugely distorted market prices.

How it Works

Under the clause 104.36 in the COMEX rulebook, exchanges can take place on the exchange as long as the products meet certain criteria. After sorting through legalese, investors find that the criteria isn’t as demanding as one would expect from a multi-trillion dollar exchange, but is actually quite loose. COMEX requires that exchanges be made in economically equal products.  For instance, a 1000 ounce silver futures position can be used in the delivery of 1000 ounces of silver, despite their inherent differences.

This creates immense problems for investors, as well as the exchange itself. First, no silver actually trades hands, but only a silver derivative that has supposed claims to silver.  Second, the exchange-traded fund is economically similar in that it has equal worth to the same amount of silver; however, investors cannot receive physical delivery from the ETF issuer. In essence, purely derivative investments are equal to physical metals in the eyes of COMEX, even though the reality is quite different.

Further Complications

Reading from the prospectus of the two biggest gold and silver exchange-traded funds reveals that through the COMEX marketplace, paper can really be turned into gold!  The popular SLV ETF discloses in its prospectus that there are times when the exchange-traded fund will hold cash, or cash equivalents, allowing itself the opportunity to issue more shares than the silver it actually holds in the trust.

In addition, the exchange-traded fund has the ability to make claims against third parties (a derivative) to track the price of silver on the marketplace. This opens the door for large manipulation in the silver markets, as investment dollars in the ETF can be placed on derivative bets. Then the shares can be exchanged through COMEX to meet delivery on futures positions. 

The result is that derivative products owned by SLV can easily find their way into what is supposed to be a purely physical market, allowing for the opportunity of an oversupply of silver compared to what is actually in existence in vaults.

What it Means for Investors

ETF investors are clearly at a disadvantage, although the chance of manipulation is only a bullish signal for physical investors. COMEX rules have allowed artificial inflation of the amount of silver futures available prices, and it is sure that physical metals will only gain in value as this comes to light. There is simply no better investment than physical metals both for the short and long term.

Dr. Jeff Lewis

Greek Economic Turmoil Could Hurt Euro

By Richard Geidroyc, World Coin News February 12, 2010

Other News & Articles

• Gold Ready for New Highs?
• UNESCO, Nationalism, Collectors Clash
• Greek Economic Turmoil Could Hurt Euro

At the moment it may appear to be unthinkable, but all European Union eyes are on Greece, which due to economic problems could find itself uninvited from continuing in the EU’s euro currency union.

European Central Bank President Jean-Claude Trichet recently called the suggestion an “absurd hypothesy,” but on Jan. 15 Greece presented the European Commission with a three-year budget plan with deficit-reduction measures aimed at reducing what is now Europe’s biggest budget shortfall. There is serious concern that the deficit led to downgrading Greece’s debt during December 2009, sparking a rout in its bonds.

Mitul Kotecha is the head of global foreign exchange strategy for Calyon in Hong Kong. His quoted in the Jan. 18 The Wall Street Journal newspaper as saying, “Although debt concerns are unlikely to dissipate quickly, especially given Greece’s inability to convince markets of its plans to cut its burgeoning budget deficit, the ‘risk on’ tone is likely to have a stronger hand later in the week, driven in large part by strong Chinese data.”

When asked only a day earlier by the Reuters news reporting service what he thought of talk Greece might be forced to leave the “euro zone,” Trichet said, “I do not comment myself on absurd hypotheses, so that would be my response.”

The Jan. 15 Bloomberg Business Week reported Luxembourg’s Jean-Claude Juncker, who is identified as the head of the group of euro-area finance ministers, as saying, “Two things won’t happen: Greece won’t go bankrupt; but it has to make enormous efforts. The second point is that the hypothesis that a country will leave the eurogroup or euro zone is not a question.”

Juncker continued that leaving the euro zone would “cause unmanageable problems for a country.”

Talk like that could be likened to saying South Carolina won’t secede from the Union if Abraham Lincoln is elected president. In this current situation the EU might have to bring in the financial troops to bail out Greece somehow.

And they might have to. Goldman Sachs analyst Themistoklis Fiotakis, based in London, told Bloomberg Business Week Greece’s economic plan “still leaves a number of sources for uncertainty, which could aggravate a nervous market,” continuing, “Part of the euro underperformance can be linked back t the evolving pressures around Greece’s fiscal challenges.”

Greece joined the currency union at its onset in 2001, dumping its drachma currency for the euro. Greece now issues coins and bank notes exclusively in euro denominations, but all this would have to change if Greece becomes officially ineligible to continue as a currency union participant. Should Greece revert to the drachma its currency would experience currency exchange rate fluctuations against the euro as does any other foreign currency, including the U.S. dollar.

Greece and Italy both struggled to fulfill EU economic requirements to join the currency union when the currency union was being initiated. There are a number of additional countries now waiting to join the euro zone, but no nation to date has opted out voluntarily or involuntarily. If Greece was to leave the currency union this could present another dimension to the future of the entire EU.

MUMBAI (Commodity Online): Should investors fear a bubble in gold price? No, there is nothing to worry on gold investment and corrections in the price of gold should not be viewed as bubbles that would burst, says the World Gold Council (WGC).

Saying that gold investment demand across the world remains robust, WGC top officials said that suggestions of a gold price ‘bubble’ do not take account of gold’s market fundamentals.

“The gold price has been building steadily for nine consecutive years, ending 2009 25% higher than on 31 December 2008 at US$1087.50/oz. The PM gold fix in London on Monday 1 February, 2010 was US$1086.50/oz,” said Aram Shishmanian, Chief Executive Officer, World Gold Council.

According to him, the sustained break in gold price above the key $1000/oz level came in early September, with record highs being tested repeatedly over the remainder of 2009. “The current trading range should not be regarded as an overnight spike, but the result of a measured rise, supported by favourable and robust gold fundamentals,” he said.

Marcus Grubb, Managing Director, Investment, World Gold Council on gold demand: “Investor flows, more specifically from western markets, have provided a key means of support during the course of the credit crisis as investors sought to diversify their exposures to other assets and protect their wealth against the current ravages of the global economy as well as future market shocks. These western investor flows appear to have remained resilient even as the global economy has shown signs of recovery.

Furthermore, evidence suggests that even the more tactical elements active in the gold market are being firmly driven by positive sentiment toward gold’s fundamentals. Further price support was provided by a progressive recovery in jewellery demand after a pressured first quarter.

“The diversity in gold demand cited above is expected to continue across multiple sectors and geographies. It is this diversity which has helped insulate the precious metal from shocks impacting other assets. More tangible signs of economic recovery in the second half of 2009, especially in developing economies, also continue to provide support to the gold price”.

Aram Shishmanian said on gold supply: “Robust demand should also be viewed in the context of constrained supply. Significant drivers of the gold price were also apparent on the supply side in 2009. Traditionally, central banks have been suppliers of gold, but this is starting to change. Over the course of 2009, the market saw a structural shift in central bank reserve management as western central banks slowed gold sales and developing nations added to their gold reserves. Other factors contributing on the supply side were sizeable pockets of de-hedging activity, although most major producer hedge books have now been unwound, and a reduction in the supply of recycled gold to market from the extremely high levels seen in the first quarter of 2009″.

By Jim Sinclair

Thoughts For The Day:

Even our school of economics and investors have become habituated to the social, political and financial calamity at hand. The outlaw financial leadership of the entire Western world has sold out our heritage on both sides of the pond.

Governments, states, municipalities, towns and hamlets are broke. Insurance companies, banks and major investment houses are valuing their assets from worth-less to worth-full.

The stampede to the bonus stock holder’s asset give away is clearly because this is the last dip at the well for a decade.

All paper money in the West is the common shares of the bankrupts.

Asia and Africa are rising and their ascension cannot be stopped. They have long term business plans and are working those plans to protect themselves from the multitudinous sins of the West and control world commerce.

Stand back for a moment, without emotion, and look at where we are.

Protect yourselves because no one else is going to do it.

Cling to money that has no liability attached to it, the only honest money, Gold.

Coins Proclaim Year of the Tiger

By Kerry Rodgers, World Coin News January 14, 2010

Other News & Articles

• COTY Goes to Latvia, Hungary Wins People’s Choice
• Coins Proclaim Year of the Tiger
• Famous Nickel Gets $3.7 Million

It’s that time of the year again, the lunar new year, in fact. On Feb. 14 of solar year 2010 the new lunar year will dawn. It is a Year of the Tiger, the third aspect of the 12-year lunar cycle. For those who really need to know, it is the 27th year of the 79th 60-year zodiacal lunar cycle. And, if you insist on getting picky, it is a metal tiger or G?ngyín year.

Over the last couple of decades collecting lunar zodiacal coin issues has become a major sub-field of numismatics, and the world’s mints have had no intention of upsetting the punters this time around. Issues galore have been appearing over the past eight months.

Of course, for the Chinese the main significance of the coins is in giving – and receiving – them as gifts known as lai see, particularly the giving by adults to children.

The dosh commonly arrives in red envelopes that symbolize good fortune. Ideally the total amount of lai see cash involves numerous auspicious eights, and today smart mints package their lunar coins in red and/or involve “8” in one way or another, often either in the presentation or in the coin mintages.

The amount of money tells a recipient the depth of the donor’s feelings. Of course, these days folding money is the sole acceptable currency for teens. However, I am assured that a $10 coin will cut the mustard among most junior relatives, and I would except that any of the gold or silver coins described here would prove a most suitable lai see gift for those with a Tiger in their life.

This time around, the happy coincidence of the Lunar New Year with the Western world’s Valentine should represent a substantial money-saving bonus for some of us.

The Tigers Among Us

The Tiger got the bronze medal in the Great Race organized by the August Personage of Jade to determine the order of the lunar zodiac. He arrived at the finish line exhausted, panting out his pardons. He had found it difficult to cross the heavenly river. Strong currents kept pushing him downstream. It was only the power of his muscles that enabled him to reach the furthest shore in time for him to take his place as the third animal of the zodiacal cycle – after the Rat and the Ox.

The Tiger has come to be revered in many Asian societies. He is regarded as a mythical god-like being, a symbol of power and good fortune who protects people from evil, especially little children. His approximate Western counterpart is Aquarius.

The Tigers of our world score high in the popularity stakes. They are lively and engaging people. On their good days they come across as powerful, passionate and stimulating. They are intelligent, thoughtful, alert and farsighted, with a strong sense of their own dignity. They have little value for power or money. Those close to them find them sincere, affectionate and sensitive, being both generous and displaying great sympathy.

In general they are totally open and honest about their feelings, but they also expect the same from you. Then again, Tigers can be somewhat unpredictable. Never try and second-guess a Tiger. They may appear laid back but can strike without warning – and their claws are sharp.

They are naturally suspicious and, at worst, can be extremely short-tempered. Far too often they come into conflict with their elders or authority figures. The upshot is that they can appear intolerant, stubborn, aggressive, impulsive, rebellious and selfish.

Despite these shortcomings, Tigers are natural leaders, capable of inspiring great respect. They have their fingers on the pulse and are good strategists. Yet part of the package is a pig-headedness that can make them difficult if inspirational bosses. Beware their hidden agendas. Oddly, Tigers have trouble making decisions. Too, too often they rush off half-cocked with some ill-conceived notion or make the appropriate choice far too late.

Importantly, Tigers are incorrigibly competitors. They cannot pass up a challenge. They display courage to the point of recklessness but can afford the luxury of doing so, having been born lucky. As such, whatever the outcome, their natural good fortune ensures they land on their feet ready to pursue life with energy. In particular, expect Metal Tigers to stand out in a crowd.

New Zealand Mint’s Charismatic Cats

The newest member of the lunar coin club, New Zealand Mint, beat all other contenders when it released details of its first lunar issue in July of solar year 2009.

Following on from last year’s highly successful Year of the Ox coin, the New Zealand Mint has produced a matching Year of the Tiger 40 mm, 1-ounce, .999 fine silver $2 for Niue. Mintage is just 20,000 with an issue date of November 2009.

The reverse design shows a selectively-gilded, traditional tiger scaling a hill, signifying the animal’s readiness to scale the heights in its on-going quest for personal improvement. The evergreen pine trees around the hill’s summit invoke longevity.

The Tiger coin comes in an identical packaging to last year: a Lucky Blessings Gold Ingot that resembles a traditional boat-shaped gold sycee, a symbol of prosperity. The Chinese characters at top, front and back offer felicitations for success, longevity and happiness. In short, “Live long and prosper.” The auspicious peonies denote wealth, distinction, happiness and peace; a pair of magpies conveys joy and good fortune.

And the mint has produced its third lunar silver $2 for Pitcairn Islands. Mintage details are the same as for Niue except the coin’s diameter is 40.7 mm. The colorized reverse design shows a proud adult tiger prowling the alpine snows – which is just a tad incongruous given Pitcairn’s subtropical clime.

If your local dealer cannot supply either coin, try www.nzmint.com.

Perth’s Purrfection

Perth Mint may not have been first cab off the rank in the lunar coin game this year, but once again this mint has produced a vast array of lunar coins, with its first issues in the third part of its Lunar Series II released last August. Along with proof and common-or-garden bullion issues, there are several of those extra-special items.

Check out Perth’s Web site for details: www.perthmint.com.au. If your local dealer can’t supply, that is the place to buy.

Proofs: The reverse of the .9999 fine gold proofs all show a magnificent tiger’s head full frontal, its eyes focused on something just above the viewer’s left shoulder. The image is accompanied by the Chinese character for tiger, the inscription “Year of the Tiger” and the Perth Mint’s “P” mintmark.

The coins include 3,000 1-ounce ($100), 5,000 1/4-ounce ($25) and 5,000 1/10-ounce ($15) coins plus 3,000 three-coin sets containing one of each denomination housed in a oval timber and metal presentation case. The diameters and thickness of the three coins are: $100, 38.80 mm and 2.50 mm; $25, 22.60 mm and 2.20 mm; and $15, 18.60 mm and 2.00 mm.

The reverse of the .999 fine silver frosted proofs depicts a tiger in repose, perhaps contemplating a recent satisfying meal or lazily eyeing a prospective fatted calf, along with the Chinese character for tiger and Perth’s mintmark.

These silver coins come as 5,000 1-ounce ($1) and 500 1-kilo ($30) coins. In addition 2-ounce ($2) and 1/2-ounce (50 cents) proofs are available solely within 1,000 three-coin sets that include the 1-ounce ($1) proof. The diameters and thickness of the four coins are: $30, 100.60 mm and 14.60 mm; $2, 55.60 mm and 3.60 mm; the $1, 45.60 mm and 2.60 mm; and 50 cents, 36.60 mm and 2.30 mm.

Lunar bullion: Perth’s .9999 fine gold YoT bullion is the 15th such lunar issue with coin denominations similar to earlier years: 1/20 ounce ($5), 1/10 ounce ($15), 1/4 ounce ($25), 1/2 ounce ($50), 1 ounce ($100), 2 ounce ($200), 10 ounce ($1,000), and 1 kilo ($3,000). This year the 10 kilo ($30,000) has returned. The design is as for the gold proofs, showing a tiger full frontal.

No mintage limits exist for the $3,000, $1,000, $200, $50, $25, $15 and $5 gold bullion coins but production will close at the end of 2010. In the case of the $100, mintage is limited to 30,000 and production will cease when the mintage is fully sold or at the end of the series, whichever comes first. A maximum of 100 $30,000 coins will be produced on a made-to-order basis.

For the .999 fine silver bullion it is the 12th year of issue. The reverse design is that of the tiger-in-repose. Issues are identical to last year: 1/2 ounce ($0.50), 1 ounce ($1), 2 ounce ($2), 5 ounce ($8), 10 ounce ($10), 1/2 kilo ($15), 1 kilo ($30) and 10 kilo ($300).

Mintage limits are similar to last year’s Year of the Ox issues. No mintage limit applies to the $30, $15, $10, $8, $2 and 50-cent coins. With the exception of the $30, production of these coins will close at the end of 2010. Production of the 1 kilo coin will cease at the end of the series. In the case of the $1 coin, a maximum of 300,000 will be struck with production ceasing when that mintage is fully sold or at the end of the series, whichever comes first. A maximum of 500 $300 coins will be produced on a made-to-order basis.

Perth’s transmogrifications: As in past years, the $1 (1-ounce) .999 fine silver coin comes in Perth’s popular colored and gilded versions.

The tiger-in-recline come gilded in 24 karat with 50,000 of these coins struck in specimen BU quality. A colored version has a mintage of 170,000 with just 3,800 available in Australia, as was the case in the past two years.

All four proof, gilded, colored and bullion versions of the tiger-in-recline are available as a single packaged set. Mintage is 1,500 sets.

And this year’s colorized $30 1-kilo .999 fine silver gemstone issue comes complete with a golden topaz for the tiger’s eye.

The obverse of all of Perth’s coins shows the Ian Rank-Broadley effigy of Queen Elizabeth II, the 2010 solar year-date, the monetary denomination and, where appropriate, the weight, composition and fineness of the precious metal.

RAM’s Terrific Tortoiseshells

For the Royal Australian Mint the Year of the Tiger brings the fourth issue of their regular lunar series designed by Vladimir Gottwald. However, unlike the last three issues, this year there are just two coins: a 17.53 mm, 1/10-ounce .9999 fine gold $10 proof with a mintage of 2,500; and a 25.00 mm, 9.00 g BU aluminum-bronze with an unlimited mintage. No lunar silver proof in this series will be available in solar year 2010. If your local dealer cannot supply, these coins can be sourced from the mint’s Web site: www.ramint.gov.au.

In addition, it is the RAM’s second year for its second lunar series struck specifically for the Asian market and designed by Shang Erji. Last year’s Ox coins proved a great success and are matched by corresponding proof Tiger issues. These include a 40 mm, 1-ounce .999 fine silver dollar with a mintage of 30,000, a 17.53 mm, 1/10-ounce .9999 fine gold $10 with a mintage of 10,000, and a similar 30 mm, 1/2-ounce gold $25 with a mintage of 3,800. The silver dollar can be bought on its own or paired in sets with either of the gold coins. The gold $10 and $25 come solely in the sets.

At the time of writing, supplies of these coins in Australia were available from Downies at www.downies.com.

China’s Marvelous Moggies

The People’s Bank of China released 15 different .999 fine gold and .999 fine silver coins in October to celebrate the upcoming G?ngyín year. These come in a variety of shapes and sizes. All are legal tender of the People’s Republic of China.

The reverse of 11 of the coins shows a crouching tiger backed by tiger mask along with the face value and “G?ngyín” in Chinese characters. Nine of the obverses show the national emblem of the PRC either enclosed in a wreath of lotus and fish or flanked by lotus and fish to denote the upcoming year as one of abundance.

Four of these coins are conventional circular proofs: a 40 mm, 1-ounce silver ¥10 with a mintage of 100,000; a 100 mm, 1-kilo silver ¥300 (mintage 3800); an 18 mm, 1/10-ounce gold ¥50 (mintage 80,000); a 180 mm, 10-kilo gold ¥100,000 whose mintage is just 18 pieces.

Three are plum-blossom-shaped proofs: a 40 mm, 1-ounce silver ¥10 with a 60,000 mintage; a 27 mm, 1/2-ounce gold ¥200 (mintage 8,000); a 100 mm, 1-kilo gold ¥10,000 (mintage 118). Spring blossom is a potent symbol of the New Year. In general it signifies good fortune, but traditionalists consider the blooming of a seemingly dead branch as symbolizing hope. For those looking for love, plum blossoms are where it’s at.

Two coins are rectangular: a 80 by 50 mm, 5-ounce silver ¥50 (mintage 1,888) and a 64 by 40 mm, 5-ounce gold ¥200 (mintage 118).

Two BU strikes are fan-shaped: a 1-ounce silver ¥10 (mintage 66,000) and a 1/2-ounce gold ¥200 (mintage 6,600). Their reverses show the crouching tiger but their common obverse depicts the Drum Tower in Jiuquan, Gansu Province. In China fans represent prosperity and good fortune.

Four selectively colored coins have a reverse showing a traditional Chinese folk tiger design prancing in a field of auspicious peonies, along with the face value and the words G?ngyín in Chinese: a 40 mm, 1-ounce silver ¥10 (mintage 100,000); a 70 mm, 5-ounce silver ¥50 (mintage 8,800); an 18 mm, 1/10-ounce gold ¥50 (mintage 30,000); a 60 mm, 5-ounce gold ¥2,000 (mintage 1,500). The obverses of these coins are same as the round proofs.

Canada’s ‘Kaptivating’ Kitties

As in previous years, the Royal Canadian Mint launched its YoT coins in October and November. Last year was the 12th and last of the $15 bimetallic lunar series designed by Harvey Chan. This year the mint has inaugurated a new Lunar Lotus series, the work of Three Degrees Creative Group. The $15 .925 silver coin has a distinctive eight-fold scallops reminiscent of a lotus flower. On the reverse a restless tiger lashes its tail as it prowls through a bamboo grove. The plain-edged coin has a diameter of 38 mm and weighs in at 26.29 grams. As with Harvey Chan’s bimetallic lunar issues, the mintage is an auspicious 48,888.

Meanwhile, Harvey’s $150 18 karat (0.750 gold, 0.250 silver) extremely popular holographic lunar series continues on its most colorful way. As with the earlier nine coins in this series, the diameter is 28 mm and its weight 11.84 grams. Mintage is 4,888. The overall quality and colorfulness of this issue makes it an ideal Lunar New Year gift.

Both coins feature RCM’s distinctive, uncrowned effigy of Queen Elizabeth II by Susanna Blunt. Prospective purchasers can try www.mint.ca if their friendly neighborhood dealer proves unable to supply.

Singapore’s Fabulous Felines

This will be the 29th year Singapore Mint has issued its lunar coins. The first series ran from 1981 through 1992 and featured realistic representations of the 12 lunar animals. The second series from 1993 to 2004 depicted the animals as traditional Chinese cut-paper effigies.

Since 2005 the designs for the third series by Xu Yunfei of the Shanghai Mint has drawn its inspiration from traditional Chinese calligraphy. His Year of the Tiger coins were released on Nov. 21, 2009. The coins themselves are available from www.mint.com.sg or with a bit of tiger luck, from your favorite coin dealer.

As in recent years, three 0.9999 fine gold proof coins are available: $5 (1/4-ounce, 21.96 mm, mintage 2,000), $100 (1-ounce, 33.00 mm, 2,000) and $200 (5-ounce, 60 mm, 200).

In addition a tiny, 7 mm, 0.3 gram $1 gold coin comes mounted on a gold-colored card featuring a tiger family portrait. Singapore Mint claims this to be the smallest 0.9999 fine gold coin in the world. With a mintage of 3,000, it makes an ideal lai see gift for a junior relative.

The massive 5-ounce 0.999 fine $25 silver coin is the largest coin issued by Singapore Mint. The diameter is 65 mm and mintage of just 250 pieces. It is complemented by a small 20-gram $2 silver coin with a 6,000 mintage. But the prize of the silver collection is the 2-ounce, 45 mm, .999 fine silver $10 piedfort on which the tiger burns bright in full glorious color. Mintage is 20,000.

For those not into precious metals, as in past years a cupronickel proof-like, 38.70 mm $2 is available with an 80,000 mintage.

Once again these coins are available singly or in sets. The three-in-one set contains the $100 gold, the colored $10 silver piedfort and the $2 cupronickel coin, as well as an additional eight-sided, floral-shaped ingot featuring a tiger family taking their ease. The painting is the work of tiger artist Mr. Tan Seng Yong. Only 500 of these sets are available.

This year there is also a two-in-one set that contains the colored $10 silver piedfort, the $2 cupronickel coin and the eight-sided, floral-shaped tiger family ingot. Three-thousand sets have been produced.

And the regular circulating coin sets of the Singapore Mint for 2010 are available in bright red tiger-embellished packs accompanied by an auspicious Chinese New Year blessing. The obverse of all coins bears the Singapore Arms and 2010 solar date.

Once again the Singapore Mint has struck the lunar commemoratives for the Monetary Authority of Macau, as has occurred in the Year of the Rat and Year of the Ox. In keeping with these earlier issues, the designs blend of Western and Eastern cultures as happens in the melting pot of Macau itself.

The obverse of each 2010 coin features a stylish tiger crouching amidst pine trees depicted in brilliant red and green and symbolizing longevity. On the reverse is the Mandarin’s House built in 1881. A World Heritage Site, this was the home of the distinguished scholar Zheng Guanying, whose writings on economics influenced both Mao Tse Tung and Sun Yat Sen.

Mintages, denominations and metals are as for last year’s issue: 21.96 mm, 1/4-ounce (7.776 grams) .9999 fine gold colorized proof 250 patacas with a mintage of 3,000; a 65.0 mm 5-ounce (155.52 grams) .999 fine colorized silver proof 100 patacas with a mintage of just 500; and a 40.70 mm, 1-ounce (31.10 grams) .9999 fine silver colorized proof 20 patacas with a mintage of 6,000.

The coins along with those from Year of the Ox and Year of the Rat are available from www.mint.com.sg.

But There’s More!

Regrettably, back in November 2009 Mongolia’s designs were unknown but, as in recent years, The Big Cat will likely stalk this country’s second lunar cycle series on its 500, 1,000, and massive 2,500 tugrik silver issues, as well as the 10,000 and 50,000 tugrik gold coins.

Nor had anything come in from Monnaie de Paris, who became a fully paid-up member of the lunar coin club in 2007. If the last three years are anything to go by, it can be assumed they will be issuing their silver 1/4-euro and gold 10-euro lunar coins with their distinctive, if somewhat unusual, bicultural designs: the obverse with Jean de La Fontaine, the 17th century French fabulist, and all 12 lunar zodiacal animals; the reverse bearing a tawny cat.

And I am sure there are others out there. Kung hei fat choi!

By Dave:

Dollar Up, Dollar Down – End of Pattern?
January 14, 2010

Winston Churchill once joked that democracy is the worst form of government – until you consider the alternatives.

That statement might easily apply to the U.S. dollar. To read many online posts it is the worst of currencies. But what are the alternatives?

Anyone who owned Venezuelan bolivars got a 50 percent haircut overnight this week. Its exchange rate versus the dollar has been fixed for years. Surprise.

Argentina’s peso has been in slow decline versus the dollar even as the dollar was declining against other stronger currencies.

The British pound dropped by 20 percent against the dollar as the financial crisis unfolded and has stayed down.

Even the Chinese currency was absolutely fixed to the dollar all through 2009. For a strong country that is supposedly concerned about the mistakes of the United States, that is curious behavior.

My point isn’t that all is hunky-dory. It isn’t. Readers can point to the euro, which rose a tad against the dollar in 2009, or to the Australian and Canadian dollars which rose much more on the back of rising commodity prices.

Is the dollar weakness permanent or just a temporary illness? That diagnosis will inform market decisions all year long.

The dollar has come back before. It was under attack in the late 1960s and then again in the late 1970s. In the middle 1980s it was considered so strong that it had to be deliberately weakened to save U.S. export industries. This occurred again in the early 2000s.

Will the pendulum swing again?

Wednesday, December 30, 2009   What is in that Gold On the NGC Forums, there was a discussion about collecting gold dollars where someone asked about their composition. Being curious, I looked up the composition information. What I found was that there were different compositions that was tied to the evolution of US coinage.

After posting the basic information, I thought it would be interesting to look up which series of gold coins were made from each of the different compositions. The rest of this posting is what I found after consulting a few references.

The Coinage Act of 1792, the First Coinage Act, set the standard for gold coinage to be .9167 fine with the balance of silver and copper. Gold coins struck 1792-1834 were made of this composition. These coins include:

• Turban Head $2½ Quarter Eagles (1796-1807)
• Capped Bust $2½ Quarter Eagles (1808-1834)
• Capped Bust to the Right $5 Half Eagles (1795-1807)
• Capped Bust to the Left $5 Half Eagles (1807-1812)
• Capped Head to the Left $5 Half Eagles (1813-1834)
• Capped Head to the Right $10 Eagles (1795-1804)

The Coinage Act of 1834, the Second Coinage Act, set the price of gold at $20.67 and changed the composition to .8992 fine with the balance of silver and copper. Gold coins struck from 1834-1839 were made of this composition. These coins include:

• Classic Head $2½ Quarter Eagles (1834-1939)
• Classic Head $5 Half Eagles (1834-1838)

The Coinage Act of 1837, also called the Bland-Allison Act, put the US on a bimetal monetary standard mostly to help the silver industry following the Panic of 1873. Originally, President Rutherford B. Hayes vetoed the bill only to have congress override the veto. Gold coins struck from 1839-1933 were made of .9000 gold and the balance was silver and copper. These coins include:

• Liberty Head One Dollar (1859-1854)
• Indian Princess Dollar (1854-1889)
• Liberty Head $2½ Quarter Eagles (1840-1907)
• Indian Head $2½ Quarter Eagles (1908-1929)
• Indian Princess 3 Dollars (1854-1899)
• Liberty Head $5 Half Eagles (1839-1908)
• Indian Head $5 Half Eagles (1908-1929)
• Liberty Head, No Motto Above Eagle $10 Eagles (1838-1866)
• Liberty Head, Motto Above Eagle $10 Eagles (1866-1907)
• Indian Head $10 Eagles (1907-1933)
• Liberty Head $20 Double Eagles (1849-1907)
• Saint-Gaudens $20 Double Eagles (1907-1933)

All gold commemoratives, both prior to 1933 and since 1982, are struck using .9000 gold. Commemorative struck before 1933 was filled with 1-part silver and 2-parts copper. Commemorative coins struck since 1982 use a 2-part copper to 1-part nickel filler.

The $4 Stella patterns were an attempt to create a standard coinage composition for international trade. The composition called goloid was made of 6 grams of gold, 0.3 grams of silver, 0.7 grams of copper. A Flowing Hair and Coiled Hair Liberty Head patterns were struck in 1879 and 1880.

American Gold Eagle bullion and proof coins are .9167 gold (22 carat). The one ounce gold Eagle contains one troy ounce of gold plus .0909 troy ounces of filler consisting of 2-parts nickel to 1-part copper.

The American Buffalo gold coin contains one troy ounce of .9999 fine gold (24 carat) with copper as the filler.

I hope someone finds this useful. Labels: bullion, Eagles, gold

Gold Records Ninth Consecutive Annual Gain

By Michael Zielinski on December 31st, 2009
Categories: Featured Articles, Precious Metals

 The price of gold finished the year at $1,104 based on the final London Fix price, representing a gain of more than 27% for the year. Gold also recorded its ninth consecutive annual gain during a decade of strong performance.

 Gold opened the year at $869.75 and after a brief dip, moved steadily towards the $1,000 level. It narrowly missed the mark in mid-February and spent the next seven months between a range of $870 to $980 before breaking above $1,000 in September. The price of gold continued its ascent to the all time high of $1,212.50 reached on December 2, 2009. In the remainder of the month, the price of gold declined to finish the year at $1,104.

 The table below presents the London Fix closing price of gold from 2000 to 2009. The annual gain in dollars and expressed as a percent has been calculated based on the change between closing prices.

 2000-2009 Gold Annual Performance

  

Year	Closing Price	Annual Gain	Percentage Gain
2000	272.65
2001	276.50	3.85	1.41%
2002	342.75	66.25	23.96%
2003	417.25	74.50	21.74%
2004	438.00	20.75	4.97%
2005	513.00	75.00	17.12%
2006	635.70	122.70	23.92%
2007	836.50	200.80	31.59%
2008	865.00	28.50	3.41%
2009	1,104.00	239.00	27.63%

 

While other asset classes have experienced boom and bust cycles during the past decade, gold’s steady performance resulted in an unbroken string of annual gains, which resulted in a collective 291% advance from the January 2000 opening price to today’s closing price. The annual returns provided by gold have ranged from a low of 1.41% in 2001 to a high of 31.59% in 2007.

SPDR GOLD TRUST SALES

Gold bubble worries lead to significant sell-off in top gold ETF

Investors have been taking profits in their holdings in the world’s largest gold ETF on ‘burst bubble’ worries

Author: Lawrence Williams

Posted: Wednesday , 09 Dec 2009

LONDON -

The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust (GLD), noted that its holdings fell to 1,116.247 tonnes, worth over $41 billion at the current gold price, as of December 8th. This represented a fall of 1.2 percent or more than 13 tonnes in a day and was the largest one-day drop in around five months according to a Reuters report. The SPDR Gold Trust ETF hit a record high of 1,134.03 tonnes on June 1, and up until recently had been climbing back towards this level again.

Further falls were expected to be announced today as the gold market is going through a period of uncertainty and some investors are liquidating some or all of their holdings, and taking some hefty profits, in case the recent gold price falls are because a gold price ‘bubble’ has burst.

The SPDR Gold Trust gold holdings are larger than those of most nations’ Central Banks, and there has always been a worry that this overhang of gold, effectively in fickle investors’ hands, could in itself prompt a catastrophic fall in the gold price if sentiment moved sufficiently to generate a major sell-off, leading to a downwards price spiral.

So far this has not happened, and with the weaker dollar this morning seeing the gold price pick up, and continuing economic uncertainty, there is evidence of buyers coming back into the gold market seeing the earlier falls as a good buying opportunity, and ignoring the ‘bubble’ talk.

There is no doubt that the recent sharp movements in the gold price that have seen it fluctuate up and back down by nearly $100 in the past weeks make this a market for those with nerves of steel. Several observers have warned of excessive volatility ahead and these warnings are definitely coming into play. The fundamentals which have been driving the gold price upwards are still in play, but as we have warned before on Mineweb, markets are often driven by investor sentiment and if the force is no longer seen to be with gold there could be even more volatility ahead for the price until some stability sets in.

Movements up or down in the SPDR gold ETF holdings will thus be watched with particular interest over the next few days as this will be a good indicator of where gold investment sentiment is trending.

WASHINGTON (Commodity Online): The United States Mint has suspended sale of its one ounce gold coin and in a statement it said the mint has depleted its inventory of 2009 American Buffalo one ounce gold bullion coins.

According to Mineweb, supply problems also persist with smaller gold coins, particularly given the enormous demand for fractional sized gold coins following the suspension of the one ounce Gold Eagles. Thus the Mint was forced to issue a second memo on Friday saying the American Eagle Gold Tenth-Ounce Coin inventory was depleted and that inventory for the half-ounce and quarter-ounce coins remains very limited. Following the sale of these remaining gold coins on Friday, the Mint anticipated that it would again offer all fractional sizes by mid-December, but in an allocation process.

The resumption of American Silver Eagle bullion sales will resume this week. These silver coins were suspended along with the one ounce gold coins a week ago – also due to depletion.

The Mint had been trying to control sales by not releasing the 2009 coins for sale until late in the year – they are usually available throughout the year, but demand has proven to be enormous. This doesn’t mean though that coins are not available to the US public as some authorized dealers will continue to hold stocks, although these are being depleted rapidly and premiums charged on sales are increasing.

According to a report on website Coinupdate.com “The US Mint began sales of fractional weight American Gold Eagle bullion coins on December 3, 2009…. These fractional Gold Eagles are typically available throughout the year, but this year the Mint delayed the release to focus production on the one ounce bullion coins. After only one day of availability, the US Mint recorded sales of 56,000 of the one-half ounce coins, 58,000 of the one-quarter ounce coins, and 260,000 of the one-tenth ounce coins. They have indicated that the inventory for one-tenth ounce coins has already been depleted and the inventory for one-half and one-quarter ounce coins is limited. The remaining limited inventory will be offered via the US Mint’s standard allocation process and additional inventory is expected to be available in mid-December.”

While the shortage of US Mint offerings due to demand exceeding supply is, in reality, not that significant in terms of global gold sales it does demonstrate the extent to which demand for easily available physical gold has increased over the past two years. Some of this has been the ever increasing interest by the U.S. public in gold in general and also a certain amount of distrust generated by some commentators as to whether the various ‘paper gold’ offerings were secure.

(Source: Mineweb)