RBC’s Gero: Gold Soars On Mideast Tensions, Steep Declines In Global Equities

Monday January 04, 2016 11:03

Gold futures are having a happy New Year so far, hitting their strongest level in nearly four weeks. The Comex February contract is up $16.80 to $1,077 an ounce and peaked at $1,083, the highest price since Dec. 9. “With the Middle East tensions, general stock sell-off in the world, China sneezing and all of us catching a cold, the gold up move was expected,” says George Gero, vice president with RBC Capital Markets Global Futures. “Technicals are still negative as we need a move over $1,100 to attract asset allocators and for investors to act positively after all the disappointments last year. Currency devaluations, possibly  Argentina, Brazil (and)China, may add to investors’ concerns and gold may attract attention soon.” Tensions have arisen between Saudi Arabia and Iran, and Chinese equities tumbled overnight after a weak manufacturing survey. The Dow Jones Industrial Average is down by around 422 points.

http://www.kitco.com/news/2016-01-04/Commerzbank-Gold-ETF-Holdings-Decline-In-2015-But-Should-Rise-In-2016.html

Gold Extends Early Gains on More Safe-Haven Demand, Short Covering

Monday January 04, 2016 10:01

(Kitco News) - Gold prices are trading sharply higher in mid-morning dealings Monday.

Rising tensions in the Middle East and a world stock market sell off Monday are prompting safe-haven buying in the yellow metal. Short covering in the futures markets is also featured, including some pre-placed buy stop orders being triggered on the up-move. Important for the gold market bulls will be for them to exhibit follow-through buying interest this week, after securing Monday's good gains. February gold was last up $19.90 an ounce at $1,080.00.

http://www.kitco.com/news/2016-01-04/Gold-Extends-Early-Gains-on-More-Safe-Haven-Demand-Short-Covering.html

Gold & Silver Surge On Heavy Volume

Overnight weakness in global stock markets has prompted safety bids in Treasuries and precious metals but the last few minutes has seen a heavy volume spike in both gold and silver (above $1075 and $14 respectively)...

$1088 is perhaps the next target (50DMA) for gold and $14.46 (50DMA) for Silver.

http://www.zerohedge.com/news/2016-01-04/gold-silver-surge-heavy-volume

How to Protect Your Wealth From China's Big Lie

How to Protect Your Wealth From China's Big Lie By Matt Badiali, editor, Stansberry Resource Report Saturday, January 2, 2016

China just "sandbagged" the gold market… On July 17, China shocked the financial world by disclosing its gold reserves for the first time since 2009. The People's Bank of China announced the country has just 1,658 metric tons of gold – or about 53.3 million ounces. That's about 600 metric tons more than it had six years ago. Back then, China told the world it held 1,054 metric tons – or about 33.9 million ounces. The news sent gold prices down to a five-year low. That can only mean one thing… China is lying about its gold reserves. We've been tracking China's gold purchases for years… They're part of a larger, secret strategy to corner the world's gold markets. The country is not only buying bullion… It has been scouring the world to buy prized gold assets in the ground. But according to its latest announcement, China's gold hoard only grew about 100 metric tons per year (3.2 million ounces). At that rate, it would take the country until 2079 to reach the same level of gold reserves as the U.S. This is highly unrealistic. China doesn't want it to take that long. Let me explain…  Over the last few years, we've repeatedly warned readers that China is secretly hoarding gold. The country has been importing tons of the precious metal every month. It has also been developing its domestic gold industry. In 2007, it became the world's largest producer. It's clear that amassing gold is a critical part of China's long-term economic strategy… China has a $3.7 trillion problem. Over the last 30 years, China has built a massive economy on its exports. Its companies sell cheap goods to developed economies, like the U.S. and Europe. From 1980 to today, China's foreign-currency reserves have swollen from $2.5 billion to $3.7 trillion… Now, China has to figure out what to do with all that cash. Initially, China bought U.S. government bonds. As of June 2015, it held $1.27 trillion in U.S. bonds. But the U.S. dollar is trying to inflate away those debts. So China faces a huge problem. As economist John Maynard Keynes famously said, "If I owe you a pound, I have a problem. If I owe you a million [pounds], the problem is yours." If China hangs on to those bonds… it could see their value greatly "inflated away." But if China tries to dump those bonds, it would flood the market. And the value of those bonds would collapse… Instead, China has been "safeguarding" the value of those reserves against inflation. That means one thing… buying gold. China is also buying huge amounts of gold to back its currency, the yuan. It's no secret that China has been challenging the U.S. for dominance in the global economic landscape. The country is buying U.S. real estate and businesses, stockpiling Treasurys… and it is buying gold to become the world's next reserve currency. According to an April article from Bloomberg: China became the world's second-largest economy in 2010 and has stepped up efforts to make the yuan a viable competitor to the dollar. That's led to speculation the government has stockpiled gold as part of a plan to diversify $3.7 trillion in foreign-exchange reserves… "If you want to set yourself up as a reserve currency, you may want to have assets on your balance sheet other than other fiat currencies," Bart Melek, head of commodity strategy at TD Securities, said by phone from Toronto. Gold is "certainly viewed as a viable store of value for an up-and-coming global power," he said. In short, China knows it needs a strong currency to join the ranks of the world's elite powers… one backed by huge amounts of gold. This is why China "fast-tracked" its gold industry and became the world's largest producer. It's why it has bought a massive amount of physical gold over the past decade. And it's why its "official" gold-reserve figure makes no sense at all…  From 2009 to 2014, China's gold mines produced 2,465 metric tons of gold. That's about 79 million ounces. All the gold went to the Chinese government. But the government said it kept only 25%. The rest must have gone… somewhere else. And that's just the domestic gold production. According to "official" data, the country imported hundreds of metric tons of gold every year. From 2011 to 2012, it imported more than 2,000 metric tons. The chart below shows the massive gold hoard China gained from its mines and from its imports: Some of that gold went to China's public. Its citizens set record demand for gold in 2013, at just more than 1,000 metric tons. But we can add up all the consumer demand for jewelry, coins, and industrial goods since 2009. The total demand, according to data from Thomson Reuters Datastream, comes to about 5,413 metric tons. That means, even after all the demand, China should have nearly 1,500 metric tons of gold more than it did in 2009 – not just 600 metric tons more. So where did all that gold go? And why is China hiding it? The answer to the first question is simple. The gold is still there, sitting in some unofficial vault. That gives the government plausible deniability for its skewed number. The second question – the "why" – becomes far trickier…  I believe China's gold-reserve number is a fabrication designed to crush the gold price. If I'm starting to sound like a conspiracy theorist, bear with me… China was the largest buyer of gold in the market for years. It was often the only bidder after the gold price peaked in 2011. By announcing an artificial gold-reserve figure, China undercut the idea that it was hoarding gold. As a result, the gold price collapsed, as you can see in the chart below: If you were a major gold buyer and had the ability to make the gold price drop, wouldn't you do it? I would… and that's what China did. And in the process, it clobbered gold and gold stocks. The gold price is down nearly 40% from its 2011 high. And gold miners have fallen twice as much. The Market Vectors Gold Miners Fund (GDX) fell from its high of $65.80 per share in September 2011 to a recent low of $13.64 per share… an 80% loss in four years. This is all part of China's plan to replace the U.S. dollar as the world's reserve currency. Understanding this development is critical to protecting your wealth in the years to come… It's only a matter of time before China makes its big yuan announcement about the status of its gold reserves… one that could shake up the markets in a huge way. It wouldn't surprise me if, once the country is done accumulating gold, it does something to make it shoot up in value, just like it pushed it down… Good investing, Matt Badiali

Vintage Taxco Mexico Modernist Sterling Silver Amethyst Ring Eagle 3 Stamp

Vintage Taxco Mexico Sterling Silver Amethyst Modernist Ring PGS Coins
Very Good Vintage Condition with normal vintage wear. 
Ring Size is 5.0.
Weighs 4.5 grams. 
Hallmarked "Mexico", "925", Eagle 3 Stamp for Taxco.
Comes from a smoke free environment.

Available in PGS Coins Ebay Store:
http://www.ebay.com/itm/Vintage-Taxco-Mexico-Modernist-Sterling-Silver-Amethyst-Ring-Eagle-3-Stamp-/301142896358?hash=item461d83eee6

More Upside Ahead For This Small-Cap Gold Producer

More Upside Ahead For This Small-Cap Gold Producer

by Frank Curzio, Editor, Disruptors & Dominators

Dear Suzanne,

As you know, the gold sector is going through one of its toughest times in decades. Most gold producers have watched their stock price push lower for four straight years.

Yet, one company in particular — one of the lowest-cost producers in the industry with a strong asset base — saw its stock fall much more than its peers' over the past 12 months.

That's why I recently told my Disruptors & Dominators subscribers to buy it.

And since my call, shares of Yamana Gold (AUY) have zig-zagged their way higher. Subscribers who took action could be looking at a nice 15% gain as of this writing.

Yamana is a Canadian-based gold producer with projects located in Brazil, Argentina, Chile, Mexico and Colombia. Its seven producing mines have been generating over one million gold equivalent ounces (GEO) for years.

To be fair, most gold stocks moved higher over the past two months. However, Yamana easily outperformed its peers.

Despite the recent gains in the stock, Yamana still has huge upside potential. Based on my research, shares could pop more than 50% from these levels over the next six months.

Yamana Gold has had its share of ups and downs over the past few years. However, the downturn in the stock since 2014 has been brutal.

In fact, the stock is trading near its IPO price from more than 10 years ago. To put this in perspective, Yamana was producing roughly 100,000 of gold equivalent ounces (GEO) back then. Today, the company produces 1.2 million GEO annually.

The underperformance can be attributed to Yamana's large debt position. For example, Yamana is sitting on $1.8 billion in debt. That's a huge number considering Yamana's entire market cap is just $2.3 billion.

With the stock trading right under $2, the market clearly believes Yamana could file for bankruptcy in the near future.

These debt fears are overblown.

Yamana will not file for bankruptcy anytime soon. And if gold moves just slightly higher from current levels, Yamana could offer investors massive returns.

View Issue Online » MORNING EDITION

Thursday, December 31, 2015 More Upside Ahead For This Small-Cap Gold Producer by Frank Curzio, Editor, Disruptors & Dominators Dear Suzanne, As you know, the gold sector is going through one of its toughest times in decades. Most gold producers have watched their stock price push lower for four straight years. Yet, one company in particular — one of the lowest-cost producers in the industry with a strong asset base — saw its stock fall much more than its peers' over the past 12 months. That's why I recently told my Disruptors & Dominators subscribers to buy it. And since my call, shares of Yamana Gold (AUY) have zig-zagged their way higher. Subscribers who took action could be looking at a nice 15% gain as of this writing. Yamana is a Canadian-based gold producer with projects located in Brazil, Argentina, Chile, Mexico and Colombia. Its seven producing mines have been generating over one million gold equivalent ounces (GEO) for years. To be fair, most gold stocks moved higher over the past two months. However, Yamana easily outperformed its peers. Despite the recent gains in the stock, Yamana still has huge upside potential. Based on my research, shares could pop more than 50% from these levels over the next six months. Yamana Gold has had its share of ups and downs over the past few years. However, the downturn in the stock since 2014 has been brutal. In fact, the stock is trading near its IPO price from more than 10 years ago. To put this in perspective, Yamana was producing roughly 100,000 of gold equivalent ounces (GEO) back then. Today, the company produces 1.2 million GEO annually. The underperformance can be attributed to Yamana's large debt position. For example, Yamana is sitting on $1.8 billion in debt. That's a huge number considering Yamana's entire market cap is just $2.3 billion. With the stock trading right under $2, the market clearly believes Yamana could file for bankruptcy in the near future. These debt fears are overblown. Yamana will not file for bankruptcy anytime soon. And if gold moves just slightly higher from current levels, Yamana could offer investors massive returns. FINAL DAY to Grab Massive Savings on Lifetime Membership! Disruptors & Dominators. Global Resource Hunter. Income Superstars. Cash Flow Kings. Additional monthly newsletters we launch in the future. All FOR LIFE. Plus, a huge “refund check” for joining! The only catch: You have just hours left to act... Click here and complete enrollment by Midnight Eastern Time. Internal Sponsorship The company's $1.8 billion in debt is a large number. However, most of this debt won't come due until after five years. And roughly 35% of this debt won't come due until 2024. In the shorter term, Yamana only has to pay $118 million in principal repayments over the next two years and a total of $230 million in principal repayments through 2018. Yamana has $120 million in cash on its balance sheet. The company also has $260 million left on its revolving credit facility. This amounts to a total of $380 million, or enough cash to pay its $230 million in debt obligations through 2018. The company expects to produce over 1.5 million ounces of gold and 15 million ounces of silver annually for the foreseeable future (most of Yamana's assets have more than a 15-year mine life). If gold stays at current levels over this time, Yamana should generate at least $500 million in cash flow annually. In short, Yamana Gold has plenty of cash to service its debt through 2018. The company also has plenty of cash left over to buy more projects and build up existing mines. And my estimates do not include any restructuring. Management recently stated that it's aggressively looking for ways to further pay down debt through refinancing and by using cost-cutting initiatives. Plus, Yamana could generate an extra $150 million in the next few months through its Brazilian assets. This is a huge amount of cash that's not factored into the stock price. For example, Yamana has 50% of its costs hedged on their Brazil portfolio (accounts for 40% of total production). This has been a negative for the company since Brazil's currency is down 60% over the past 12 months. Remember, gold is priced in dollars. And Yamana should be seeing much lower costs to produce gold in Brazil with its currency down so much. These hedges will roll off in 2016. Yamana predicts it could see a net benefit of up to $150 million in cost savings once these hedges expire. This cash could be used to further pay down debt. More important, this will ease the solvency fears — which is the major risk that pushed shares down to these super-depressed levels. Yamana Gold's tangible book value is $6.80. This amounts to a 72% discount to where Yamana Gold is trading today. The company also expects to produce over 1.5 million ounces of gold annually at least over the next few years. Based on valuation alone, Yamana should be trading north of $4.50 a share. That's more than twice the current price. However, if gold finally comes out of a bear market... or begins pushing higher over the next few years — Yamana could easily return three times or more on your investment. To put this gain in perspective, Yamana just needs to push back up to its 52-week high to generate over 300% returns for investors. Good investing, Frank Curzio

Not Every Gold Stock Went Down in 2015

Where Do You Dig Next?

By JL Yastine, Editorial Director, The Sovereign Society

Oh mining stock investor, tell me your tale of woe. We all have plenty to tell these days.

As we survey the mining stock landscape, our precious-metal shares have been trampled like the African savanna after an elephant stampede.

As a sector, the average gold stock — I’m using Market Vectors Gold Miners ETF (NYSEARCA: GDX) as my proxy — is down nearly 25% for the year. Juniors did a little better — down about 18%.

But not every gold stock was underwater this year. A handful of mining companies actually saw their share values rise in 2015. The big question is why did these particular miners (I counted six on my screen) buck the bear-market trend?

One factor shared by every company in the group of winners is that they all control large, high-quality undeveloped reserves, and they’re ready (or nearly so) to go into production.

Green Light for Digging

Seabridge Gold (NYSE: SA) is a good example. It gained a little over 9% in 2015. The company has long referred to itself as a “gold in the ground ETF,” after having acquired a portfolio of raw properties in Canada back in the early 2000s when the gold bull market was just getting underway, and prices were still cheap.

The company’s main focus has been on its “KSM” property purchased during that time. And what a property it is! KSM ranked a few years back by Natural Resource Holdings as one of the top 10 undeveloped gold deposits in the world.

But it’s taken all this time, with extensive test drilling, environmental approvals and the like, just to get to the point where the property can go into production. When that happens depends on the price of gold, and likely a bigger partner. But the point is that the property is ready to go.
Agnico-Eagle Mines (NYSE: AEM) is another of the companies on the list of “gold gainers” for the year, up about 10%. Likewise, it controls the Meliadine gold project in Canada’s Nunavut province, which is also highly ranked in the top 50 of the world’s identified-yet-undeveloped gold mines. More recently, the miner has been getting good indications for “Amaruq” — yet another of its Canadian exploration areas.

The rest of the companies fall more or less into the junior mining category, with most up by just a percent or two for the year. Still, considering the average junior gold miner — I’m using the Market Vectors Junior Gold Miners (NYSEARCA: GDXJ) exchange-traded fund as my proxy — is down more than 17% for 2015, that’s saying something.

Again, the key factor appears to be proven fresh reserves, ready to go into production. For instance, Richmont Mines (NYSEMKT: RIC) has been pulling company-record amounts of the yellow metal from its Island Gold Mine this year and last. The company put out a press release just last week, noting more positive test-drilling results as it explores the potential of the property. Likewise, another junior gold miner on the list, Asanko Gold (NYSEMKT: AKG) — notably the only one in my group with its main project outside of Canada — said it too is nearing the start of its production phase (slated for the first quarter of the coming year).

Gold “Banking” on the Cheap

The oft-used analogy of an in-the-ground gold “bank” isn’t that far off the mark with any of these companies. The share prices of these companies are up for the year — but down (along with the rest of the sector) over the last five years, reflecting the out-of-favor status of gold among investors in general. Companies are being valued as if gold prices will always be at such low levels.

We know, of course, that they won’t. Clearly, the smart money is now migrating to fresh, high-quality projects that are heavily discounted at current prices. But they will be worth much, much more — and ready to go into production — when gold prices start ticking higher again.

Kind regards,

JL Yastine
Editorial Director, The Sovereign Society