U.S. bullion prices were mixed with modest movements Wednesday as caution was in the wind as players awaited the latest FOMC statement. Gold and palladium dipped slightly while silver and platinum edged higher.
Gold prices closed down $1.00, or 0.1 percent, to $1,808.10 an ounce in the December futures contract on the Comex in New York. Gold moved between an intraday low of $1,786.00 and a high of $1,819.40.
While many analysts expect gold prices to drive higher, Christoph Eibl, CEO and founding partner of the $2 billion Swiss commodity hedge fund Tiberius Group, is no longer bullish on the metal. Jon Nadler, Senior Analyst at Kitco Metals Inc., recounts:
Swiss-based hedge fund the Tiberius Group advises that investors would now be better off to consider investing in platinum-group metals as they offer superior fundamentals than those which gold and silver currently do (a view that this writer shares as well). In a news item that curiously vanished from Tuesday’s headline flows quicker than a meteor normally does in the night sky, the Swiss-based $2.8 billion European fund’s manager, Christoph Eibl, said that "from a strategic long-term perspective, you don’t want to be investing in precious metals," referring to gold and silver. Contrarian heresy, or level-headed caution in the wake of a decade-long "sprint?" You decide.
Mr. Eibl told Reuters Monday on the sidelines of the London Bullion Market Association (LBMA) annual conference that was held here in Montreal that "the moment when you have no ETF buying or investment buying, who would buy your gold? Not the Indians; they will not jump in at these levels." Asked how low the gold prices could fall, he said "Below $1,000" an ounce, which better reflects bullion’s production cost. Cash costs for gold production run near $600 while all-in costs are bumping up closer to $900. Silver costs roughly $5 to produce in cash-cost terms. Both metals are in a supply surplus. You do the math.
FOMC’s two-day meeting concluded Wednesday with the expected announcement of "Operation Twist," a policy to sell short term Treasuries for longer-term bonds.
"This program should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative," said the Fed’s official statement.
Precious metals headed modestly lower following the announcement.
In returning to closing New York futures prices, silver for December delivery advanced 33.2 cents, or 0.8 percent, to close at $40.469 an ounce. Prices traded from $39.770 to $40.705.
Platinum prices for October delivery rose $6.30, or 0.4 percent, to $1,788.20 an ounce. Platinum ranged between $1,769.70 and $1,796.20.
Palladium prices for December delivery declined $4.90, or 0.7 percent, to settle at $712.85 an ounce. Prices moved from a low of $707.10 to a high of $723.10.
London Precious Metals Fixings
London precious metals fixings were mixed for a fourth consecutive day. With the exception of gold, the other metals climbed. London PM fixing changes from Tuesday to Wednesday included gold’s $6.00 loss to $1,793.00 an ounce and increases of:
- $1.07 to $40.25 an ounce for silver,
- $5.00 to $1,779.00 an ounce for platinum, and
- $1.00 to $718.00 an ounce for palladium.
U.S. Mint Bullion Coin Sales
The U.S. Mint reported no bullion coin sales for Wednesday, as of 4:35 p.m. ET. However, late Tuesday the Mint did publish sales of 125,000 for its bullion American Silver Eagle coin. The increase raised its September sales to just over 1.4 million and lifted the annual Silver Eagle level further atop 30 million. The latest U.S. Mint daily, September and year-to-date bullion coin sales figures follow:
| Sales of U.S. Mint American Eagle and Buffalo Bullion Coins | |||
|---|---|---|---|
| Daily Gains |
September Gains |
YTD 2011 |
|
| Gold Eagle Coin (1 oz.) | 0 | 29,000 | 701,500 |
| Gold Eagle Coin (1/2 oz.) | 0 | 1,000 | 62,000 |
| Gold Eagle Coin (1/4 oz.) | 0 | 2,000 | 72,000 |
| Gold Eagle Coin (1/10 oz.) | 0 | 20,000 | 340,000 |
| Gold Buffalo Coin (1 oz.) | 0 | 5,000 | 124,500 |
| Silver Eagles (1 oz.) | 0 | 1.4045M | 30.3555M |
| Sales of America the Beautiful 5 Oz. Silver Bullion Coins* | |
|---|---|
| YTD 2011 |
|
| Gettysburg National Military Park 5 oz. Silver Coin | 126,700 |
| Glacier National Park 5 oz. Silver Coin | 126,700 |
| Olympic National Park 5 oz. Silver Coin | 81,300 |
| Vicksburg National Military Park 5 oz. Silver Coin | 28,800 |
| Chickasaw Park 5 oz. Silver Coin | 17,700 |
| TOTAL | 382,100 |
*The Gettysburg and Glacier America the Beautiful Five Ounce Silver Bullion Coins are sold out. Unlike other investment-grade products, the United States Mint does not provide daily per coin sales totals for the Olympic, Vicksburg, and Chickasaw America the Beautiful Five Ounce Silver Bullion Coins. The individual totals are as of Monday, September 12. The overall total is as of Monday, September 19 (900 additional five-ounce bullion coins sold since last week).
One reason, perhaps, that Eibl’s forecast dropped off the headlines (actually, it did not) is that his forecasting history was checked and found wanting: Contrarian Investors’ Journal, Dec 2006 (http://cij.inspiriting.com/?tag=christoph-eibl# ) , highlights another Bloomberg mention of Eibl that month. It reads: “Further down the Bloomberg article, we read that “Some analysts are sceptical gold can gain for a seventh straight year, a feat unmatched in the metal’s trading history. There will be ‘new interest initially,’ said Christoph Eibl, co-founder of Tiberius Asset Management AG in Zug, Switzerland, who predicts gold will average $580 in 2007. ‘Then commodities will burst.’”… Read more »