Categorie: Laatste blogs

Flight to cash in the Eurozone

Each year we use less cash in daily transactions, but at the same time the amount of banknotes in circulation inside the Eurozone is increasing at a rapid rate. Last year, the total value of all banknotes in circulation reached €1,08 trillion, an increase of 6,5% compared to the year before. The total value of all banknotes in circulation in fact doubled in ten years, in increase that could only partially be explained by inflation and the entrance of new member states to the Eurozone.

More than €1 billion of banknotes inside the Eurozone

More cash in circulation

What explains the increasing demand for banknotes? It could be the result of a growing black market economy, in which goods and services are paid for in cash and cannot be traced afterwards. But in recent years, distrust towards banks and the extremely low interest rate could also explain the flight to cash. Persistent rumors of a possible tax on savings, the new ‘bail-in’ scheme for European banks and the fact that you earn almost no interest on bank deposits make it more attractive to keep savings in the form of cash. We can also imagine people wanting to get out of the financial system by holding cash and buying gold.

Savings

The ECB publishes the number of banknotes in circulation inside the Eurozone, so we collected the data since the introduction of the euro in 2002. The graphs show that there has been a substantial increase in the €500 denomination, which confirms our view that there has been in increasing number of savers taking money out of banks and holding physical banknotes instead. Banknotes of €500 are not suitable for daily transactions, because most stores simply do not accept them. The increase of the largest denomination suggests that savings are already moving out of the banking system in increasing amounts.

The €500 banknotes appear to be in strong demand

Almost 30% of all cash in circulation (in value) is a €500 note

27 januari 2016
Citigroup: “Oil might be the trade of the year”

Analysts of a number of banks suggest that we may have seen the bottom in oil prices. UBS, Société Générale and Citigroup expect a rebound in oil prices in the second half of the year, once the market becomes used to the new supply of from Iran. Citigroup is even going a step further in saying that investors should hold on to their investments, because it might be the best investment of the year.

“Initially, we will see a new wave of supply from Iran, but once the market has digested this effect, prices will stabilize. I think we could see some opportunities in the oil market then. Oil could be the trade of the year, because it is going to have such a broad effect on other financial assets”, Ivan Szpakowski, analyst of Citigroup told Bloomberg last Friday.

Oil price recovery in second half of 2016?

The price of oil dropped by more than 17% this year to a 12-year low of less than $27 a barrel. But in the last few days, we saw a strong rally pushing crude prices above $31 again for both Brent and WTI. The expectation of less economic activity in China, combined with an increasing supply of oil and record high strategic reserves are pushing down the price of crude.

According to UBS analyst Dominic Schnider, the unbalance between supply and demand in the oil market will be solved by a reduction in oil output from US shale producers. Szpakowski shares this long-term view and expects Brent crude to rise to $41 in the third and $52 in the final quarter of this year.

Is this an opportunity to invest in oil? The International Energy Agency (IEA) is not convinced yet. They expect crude prices to remain suppressed in 2016 because of a substantial increase in Iranian oil supply.

25 januari 2016
Russia bought more than 200 tonnes of gold in 2015

The Central Bank of Russia keeps adding gold to their reserves, despite the challenges posed by the economic crisis. According to the latest numbers published by the central bank, they added 21,7 tonnes to their reserves in the month of December. Ranked by total gold holdings, Russia holds the sixth place with a total hoard of 1.415 tonnes of yellow metal.

Data from the World Gold Council shows that Russia added a total of 206 tonnes to their reserves last year, after purchasing 173 tonnes in 2014. When Russia started buying gold in 2006, the central bank held less than 4% of their total reserves in physical gold bars. But with a total hoard of more than 1.400 tonnes, the percentage of gold has increased to more than 13% by December 2015. The increase is not only due to adding weight, but also due to the monthly revaluation of gold reserves to the market price.

The Central Bank of Russia wants to increase their reserves, because the precious metal is regarded as a safe haven without political counterparty risk. The precious metal is seen as a backup asset in the international financial and monetary system and is held by central banks all over the world. Since the start of the financial crisis in 2008, central banks have been net buyers of the precious metal.

Source: Hollandgold

Russia keeps buying the precious metal

Russian goldreserves increasing in both volume and value

Total reserves of the Russian central bank are moving towards the yellow metal

Gold as a percentage of total reserves

22 januari 2016
Investors see a new opportunity in pink diamonds

Not only pink, but also red diamonds are becoming very rare as time passes by. This is because fewer mines remain operational and less mines are being discovered. On a global scale only 30 mines remain operational. De Beers, the biggest diamond company in the world, estimates only a 1% chance on finding new exploitable diamond mines.

Auction: 51 pink diamonds

Soon, a collection of 55 diamonds, consisting of pink and purple red diamonds, and four ‘Fancy Red’ diamonds, will be auctioned. The collection goes under the name “Argyle Pink Diamonds Tender” Collection. This is a very remarkable event because in the last thirty years there were only thirteen red diamonds sold at these annual actions.

Argyle Pink Diamonds

Australia: country of the pink diamond

The Argyle mine in Australia is responsible for the mining of this exclusive collection. Almost the only known place on earth known to be a source of pink and red diamonds is this mine. The demand for this mine’s diamonds kept rising for years which leads to sensational sales for the Rio Tinto’s Argyle mine. The prices are much higher for these diamonds compared to the prices of white diamonds.

Asia, a growing market

The price increases aren’t that strange if you take a look at the demand from the Asian continent. In 2000 Asia only covered 8% of the marked. In 2012 China and Hong Kong represented 13% of the global demand. In 2017, their share is probably going to rise to 18%.

About BAUNAT Diamonds: If you would like to know more about pink or white diamonds and you want to invest in this market, don’t hesitate to contact the experts of BAUNAT. (http://www.baunatdiamonds.com/en) They will give you the appropriate advice to make the best investment.

19 januari 2016
Austria successfully repatriates gold from London

The Austrian central bank has successfully repatriated part of it’s gold reserve from the Bank of England and wants to show this to the rest of the world. So they invited the press to visit the central bank and take a look at the freshly delivered goldbars in the vault. Nikolous Jilch from Die Presse was attending this press event and shared a picture with us on twitter.

Breaking: Austrian NB presenting repatriated Gold to journalists. @freegolds @zerohedge @KoosJansen @VictorCleaner pic.twitter.com/Ee7js2k7hf

— Nikolaus Jilch (@JilNik) December 11, 2015

Gold location policy

Earlier this year, the central bank of Austria announced it’s plans to repatriate 110 tonnes of gold, a significant portion of it’s total hoard weighing about 280 tonnes. According to Ewald Nowotny, governor of the Österreichische Nationalbank, the repatriation of gold is part of the new gold location policy of the central bank. The central bank doesn’t only want to bring back precious metal stored in Londen, it also wants to expand the amount of gold held at the Swiss National Bank.

Until recently most of the Austrian gold was stored abroad, which led to a lot of public debate and a desire to bring back at least some of the bars belonging to the Austrians. The illustration below shows the old and new location policy of the Österreichische Nationalbank.

Location of Austrian gold reserves

Global repatriation of gold

When Venezuela decided to repatriate gold from the Bank of England back in 2011 and 2012, it was met with a lot of suspicion and scepticisme. But now it seems he set a new trend by bringing in gold stored abroad. The past couple of years more countries followed the example set by Venezuela, like Ecuador, Germany and the Netherlands. They have already shipped some yellow metal back to their own central bank vaults.

In Belgium and France there has been public discussion about repatriating gold, while the people in Switzerland started a referendum forcing the central bank to bring back all the gold reserves held abroad.

It is quite remarkable that the Austrian central bank invites the press to take a look at the newly arrived gold bars. What kind of message do they want to sent to the rest of the world?

Update: Austria doesn’t store gold at the Bundesbank, as we mentioned previously on Marketupdate.

11 december 2015
Invest in Gold or Silver: Pros & Cons

Gold and silver are always considered to be safe from an investment standpoint. As precious metals, they are the first commodities people around the world turn to when they predict an economic or financial crisis, as it helps them protect their investment.

When thinking about investing in either gold or silver, it is important that you consider the pros and cons of investing in each precious metal. Depending on the type of crisis at hand, one might prove to be a better choice over the other. So without further ado, let’s discuss them both.

Should You Invest in Gold?

Pros

Safe haven: This is perhaps the most common reason why people own gold. It’s considered to be a currency all on its own, meaning that it can store value, especially in times of economic distress.

Gold Supply: Just as with most other commodities, it is becoming harder to find new deposits. Even if a new source is discovered, the cost of excavation is quite high. This helps in stabilizing the price of gold rather than making it fluctuate.

Stock Market: The stock market is a good place to make money recently and let’s hope it remains that way. However, if you begin to witness distress on Wall Street, pulling out your money and investing it in gold will be a good idea.

Cons

Central Banks: The major demand for gold often comes from developing economies that have had budget surpluses. They use this surplus to buy gold reserves in an effort to appreciate their currency. One forecast is that gold buying is likely to drop by 34% this year.

Dead Money: While gold may have a certain appeal to it, it just lies there and doesn’t make you any more money unless you feel that the price is high enough for you to sell it. Even then, you are only earning the difference. If the market seems stable for now, you might want to consider investing in stocks, which at least will yield dividends.

Should You Invest in Silver
Pros Diversification: In the context of the stock market, you might hear a lot about diversification. Typically, it means not placing all your eggs in one basket and spreading your investment to minimize risks, for instance, investing in both large and small companies. However, precious metals tend to have a lower correlation to other investments, so if your stocks seem to be declining, the price of silver may increase. Return: Another reason to invest in silver is simply to make some money off of it. Silver prices fluctuate often by leaps and bounds; the trick is to keep an eye on the prices and to take advantage of them at the opportune moment. Cons Hassle: Buying silver, taking possession of it and holding on to it until prices rise is a big hassle. Not to mention, when you want to sell it, you have to physically carry silver from your home and take it elsewhere to sell it off. Better alternatives: Silver prices are dependent on economic activity, so when the economy is strong, this metal does quite well. Unfortunately, when the economy is strong, you also have better alternatives available to make money than silver, for instance, the stock market; so determine whether you do really want to invest in it or not.
About Gold Bullion Australia: Gold Bullion Australia assists clients from Melbourne, Sydney, Brisbane, Adelaide, Perth and all over Australia in buying precious metals like gold and silver. They stock leading LBMA certified goldbars and silverbars from refiners like PAMP Suisse, Perth Mint, Ohio Precious Metals and NTR for their customers.

10 november 2015
Move over ZIRP… Here Comes NIRP!

Precious metals prices enter the new week looking to extend the rally that began Oct. 2nd. Silver has gained nearly 10%, and gold is up almost 3.5%. The notion that the Federal Reserve governors may have missed their window to raise interest rates is beginning to sink in with investors. In fact, if the U.S. economy should fall into recession, investors may see central planners move from zero interest rate policy (ZIRP) to the launch of negative interest rates.

The minutes from the most recent Federal Open Market Committee meeting reveal Janet Yellen and company are looking to the socialists in Europe for ideas, and central bankers there have already experimented with negative interest rate policy (NIRP).

Bottom line: You should soon expect to start paying interest for the “privilege” of lending your savings to a bank!

This week, investors will be watching reports on inflation, retail sales, and industrial production. The prospect of recession continues to loom larger, despite a small rally in stock prices. For now, investors seem more focused on the delay in hiking interest rates than deteriorating fundamentals.

Precious Metals: More Important Than Ever in Your Portfolio
Nobody is talking about it these days, but we still live in an inflationary age. Wall Street is fixated on the possibility of deflation as prices for crude oil fall and headline Consumer Price Index flat-lines. But the wheels of global inflation continue to turn. Zero interest rates and bond purchasing programs have defined central bank policy for most of the last decade. Central bankers developed these extraordinary programs and sold them to the public as economic stimulus. It is now clear just how little of that largesse made its way into the real economy. We now know the real purpose of those programs was to stimulate bank profits and boost equity markets. Meanwhile, government debt and entitlement commitments have only grown larger. That epic problem was top of mind for investors when gold and silver spot prices peaked in 2011. Battles over the debt ceiling and inflation fears captured headlines. Unfortunately for precious metals bulls, the central planners at the Fed and Wall Street managed to shift investor focus away from those topics. Higher stock prices, heavily massaged economic data on employment and consumer prices, and hammering down of paper gold and silver prices all help to mask the fundamental problems that make metals so essential in modern portfolios. These days, most investors seem unconcerned about the inflationary potential of the trillions of dollars created by the Federal Reserve to buy U.S. Treasury bonds and mortgage securities. Many are outright “inflation deniers,” and few seem the least bit worried about what ZIRP or NIRP will ultimately do to the purchasing power of the dollar. But rewarding borrowers and spenders while waging jihad against savers IS going to lead to serious ramifications. And all those extra dollars created in multiple rounds of QE are out there – in the stock markets, parked as excess bank reserves, and just about everywhere else but in the real economy. Inflation and financial sector risks have not been vanquished. They are still there, and, in fact, they are still growing. They aren’t weighing heavily in investor psychology today, but change is already in the air. Fear will factor prominently in investor decision making once again – perhaps soon. The Federal Reserve is in no position to significantly raise interest rates. Congressional Republicans will soon reveal just how incapable they are of drawing a line in the sand on raising the federal debt ceiling even higher than the current $18.1 trillion cap. And people are once again talking about the possibility of recession. Investors are starting to worry about exorbitant price to earnings (P/E) valuations, falling corporate profits, and a potential bond bubble. Some corporate and municipal bonds are priced as if the borrower was Apple when the financial statements look more like they belong to Enron. Despite all of the disparaging talk about precious metals, there is always demand for an inflation hedge that offers privacy, diversification, and zero risk of going bankrupt. Look for investor demand to rise dramatically in the coming years in spite of the bias against gold from Wall Street. Gold and silver may be down, but after thousands of years of history as a reliable store of value, but they are anything but out.
Money Metals Exchange
Clint Siegner is a Director at Money Metals Exchange, the national precious metals company named 2015 "Dealer of the Year" in the United States by an independent global ratings group. A graduate of Linfield College in Oregon, Siegner puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals' brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.

20 oktober 2015
China on gold: “Troy ounce no more”

On 28 October, the Chinese central bank will launch their new 2016 gold and silver Panda coins. An interesting detail discovered by @BullionBaron is that these coins will not appear in one troy ounce size. Instead, they will be minted on a metric weight system with sizes varying from 1 gram up to 1 kilogram. The one troy ounce version of the gold and silver Panda coins are replaced with a coin weighing 30 grams. That’s slightly less than a troy ounce, which equals 31,1034768 grams.

The press release on the People’s Bank of China website mentions nine different sizes for the gold Panda and three different versions of the silver coin. All these coins have a 99,9% purity and will be produced with a limited mintage. For more details on mintage and the yuan face value, we refer to the press release on the central bank of China’s website.

Gold coins: 1 gram, 3 gram, 8 gram, 15 gram, 30 gram, 50 gram, 100 gram, 150 gram, 1 kilogram

Silver coins: 30 gram, 150 gram, 1 kilogram

From troy ounce to 30 gram for the gold Panda coin

From troy ounce to 30 gram for the silver Panda coin

Troy ounce
The history of the troy ounce goes back to the Roman empire, where bronze bars were casted in a size referred to as 'troy pound'. One twelfth of this size was called the uncia back then, or ounce in English. That is where the English name troy ounce emerged, a weight defined as 480 grains or 31,1034768 grams. The troy ounce format has been used ever since in the monetary system. It is known to be in use in England since about 1400. The American Congress recognized the troy ounce as a measure of weight in the Coinage Act of 1828. The term troy ounce is often connected to the city of Troyes as well, once an important trading town located in France.
Precious metals
While our monetary system evolved from gold and silver coins to fiat money, the troy ounce weight survived as a standard weight for precious metals. Gold, silver, platinum and palladium coins are often based on this odd weight of a little over 31,1 grams. Well known investment coins like the Maple Leaf, the American Eagle and Philharmonikers, just to name a few, are all based on troy ounces or a fraction of it.
China
The history of the troy ounce lies in civilizations and monetary systems in the Western world. That's why the troy ounce is quite unfamiliar in China. Because the Chinese monetary system didn't use the troy ounce, it is far from logical to use this standard measure of weight besides the metric system of grams and kilograms. So it isn't just a symbolic move by the People's Bank of China to switch from troy ounce to grams for their investment coins. The shift from troy ounce to the metric system is an ongoing event in China, were they prefer gold bars of 1 kilogram instead of the 400 troy ounce Londen 'Good Delivery'. Swiss refiners have been melting many of these larger bars into new kilogram bars, destined for the Chinese gold market.

16 oktober 2015
5 redenen waarom het slecht gaat met de Russische economie
Het gaat niet goed met de Russische economie. CNN Money komt met de 5 belangrijkste redenen hiervan.
1. Daling van de economische groei. De Russische economie zal dit jaar met 3,4% gaan krimpen, en volgend naar nog eens met 1 procent. De prijzen in Rusland zijn met 16 procent gestegen en ongeveer 22 miljoen Russen leven in armoede. Dalende netto lonen en hoge rente percentages hebben de binnenlandse markt hard geraakt. De gewone burger en de kleine bedrijven hebben hier voornamelijk last van.
1. Lage olieprijzen. Olie is Ruslands hoofdinkomen. 70 procent van de export is aan olie gerelateerd, en 50 procent van de overheidsinkomen komt direct van de oliesector af. De prijs van een vat olie is gedaald van 100 dollar naar 45 dollar per vat. Analisten verwachten dat Rusland hierdoor zo’n 2 miljard dollar per dag misloopt. Door de lage olieprijzen is de roebel ook 20% in waarde gedaald ten opzichte van de dollar.
1. Internationale sancties. Deze sancties zijn opgelegd naar aanleiding van de Russische inval van de Krim in Oekraïne. De sancties zorgen ervoor dat Russische bedrijven geen mogelijkheid hebben om geld te lenen van andere Europese landen. Daarnaast zijn bankrekeningen in westerse landen van meerdere rijke Russen geblokkeerd. Als reactie op deze sancties heeft Rusland een verbod ingevoerd op het importeren van voedsel en landbouw producten vanuit west Europa. Hierdoor is er een tekort aan diverse producten waardoor de prijzen stijgen. Nadat de sancties zijn ingevoerd is de waarde van de import van Rusland met 39 procent gedaald en de waarde van de export met 30 procent gedaald.
1. Geen nieuwe vrienden. Voordat de sancties werden opgelegd werd er veel handel gedreven met West-Europa. Door de internationale sancties is dit niet meer het geval. Rusland heeft daardoor de contacten met China verbeterd. Deze contacten moesten even veel geld gaan opbrengen als de handelsrelatie met West-Europa maar dit is tot op het heden nog niet het geval.
1. Olie en sancties zijn niet alleen de reden. Een andere reden van de verslechterende economische toestand in Rusland is de corruptie. In Rusland wordt veel geld verdient maar dit geld gaat vaak naar de zelfde personen. Het overgrote deel van de bevolking profiteert hier niet van.
29 september 2015
Economische groei VS sterker dan verwacht

De groei van de economie in de Verenigde Staten is in het tweede kwartaal hoger uitgevallen dan al gedacht. Dat blijkt uit de derde schatting die de Amerikaanse overheid vrijdagmiddag heeft gepubliceerd.

De grootste wereld economie van de wereld groeide vorig kwartaal met 3,9 procent op jaarbasis. Eerder werd gedacht dat de economie met 3,2 procent zou groeien, later werd dit al bijgesteld naar 3,9 procent. De meeste economen hadden geen rekening gehouden met een nieuwe positieve bijstelling.

25 september 2015
Chinese economie niet zo zwak als gedacht

De Chinese economie is niet zo zwak als het lijkt, aldus de Amerikaanse marktonderzoeker CBB internationaal. Dit is gebaseerd op basis van een eigen economische monitor voor China. Door slechte berichten over de Chinese economie is er de laatste tijd veel onrust op de beurzen geweest. In het China Beige Book-rapport wordt gesproken over een gemengd beeld voor China, maar er is duidelijk geen sprake van een ineenstorting van de Chinese economie.

Volgens de onderzoekers komen de investeringen weer op gang en toont de dienstensector zich sterkt. Wel moet gezegd worden dat de export afzwakt en de industrie krimpt. Het rapport is opgesteld op basis van onderzoek bij ruim 2.100 bedrijven in China en gesprekken met bankiers, managers en bestuurders.

21 september 2015