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Silver Bullion 'Set to Beat Gold' in 2018 as Both Hit 5-Month Lows, Bitcoin Whips 20% from New Top

GOLD and SILVER prices steadied above 5-month lows versus the US Dollar in London trade Friday, rallying into the weekend as global stock markets rose.
 
The EuroStoxx 50 index of Europe’s largest corporations added 1.8% for the week.
 
Commodities edged higher but major government bond prices slipped further from Thursday’s drop, when gold fell to its lowest since early July at $1244 per ounce.
 
Silver fell harder, also setting new 5-month lows against the Dollar overnight at $15.65 per ounce, before rallying 20 cents in Friday’s Asian and London trade.
 
That curbed the ratio of the two metals’ prices relative to each other at 79.0 ounces of silver per 1 ounce of gold – just shy of the highest since April 2016.
 
The Gold/Silver Ratio has averaged 73.6 so far this year, making gold one-third dearer in terms of silver than its 50-year average.
 
Chart of the Gold/Silver Ratio, daily since 1968. Source: BullionVault via LBMA
 
“At [this] gold/silver ratio,” says a new 2018 outlook from analysts at German financial services firm Commerzbank, “the silver price is low in historical terms.”
 
Forecasting a deficit in silver between supply and demand next year, Commerzbank’s commodities team now expect silver to “outperform” a rally in gold, reaching $18 per ounce by next December and pulling the Gold/Silver Ratio down to 75.
 
Friday’s weak rebound in gold bullion put the metal on track for its sharpest weekly drop versus the Dollar since May, down 2.3% from last Friday at $1245 per ounce.
 
Gold’s weekly losses were sharper still against the British Pound, which surged and then gave back a 1.5-cent jump overnight on news of a new Brexit deal between the UK and the European Union, enabling talks to move onto Britain’s post-March 2019 trade relationship with the world’s largest single economic bloc.
 
Promising “no hard border” between Northern Ireland and EU-member the Republic of Ireland, the deal will cost the UK taxpayer perhaps £39 billion (€45bn).
 
The UK gold price in Pounds per ounce bottomed overnight at £923 per ounce, erasing the last 12 months’ prior 12% gains.
 
So-called crypto-currency Bitcoin meantime sank 20% from Thursday’s fresh all-time above $17,300 – a six-fold gain from 6 months ago – before rallying to $15,800.
 
“We have not abandoned you guys,” said Marko Kobal, CEO of Bitcoin exchange NiceHash, to customers via Facebook last night, promising to try and recoup the 4,700 units stolen by hackers from Bitcoin wallets run by the Slovenian company early Wednesday.
 
The second-half of 2017 “should” have already seen silver outperform gold, Commerzbank says, because of “positive economic trends and increased risk appetite.
 
“Furthermore, Chinese silver imports after ten months are already higher than in 2016 as a whole, which points to robust industrial demand.”
 
Contrasting with Commerzbank’s bullish outlook for 2018, “Silver prices will weaken,” says a note from Dutch bank ABN Amro‘s Georgette Boele, “because of more Fed rate hikes, higher US Treasury yields and a higher US Dollar.”
 
Also, “The speculative positions in silver [futures contracts] and the total ETF [trust-fund] positions are considerable and there is clearly room for liquidation,” she adds.
 
By Thursday night’s close in New York, the number of shares in the largest silver-backed ETF – the iShares Silver Trust (NYSEArca:SLV) – had grown more than 1% from Monday as prices dropped 2.5% for the week so far.
 
That took the quantity of bullion needed to back the SLV back above 10,000 tonnes, equal to almost 37% of global annual mine output.
 
Holdings for the SPDR Gold Trust (NYSEArca:GLD) – the largest such gold-backed vehicle – have slipped 1 tonne this week to 842 tonnes, equal to some 26% of annual global mine output.
 
All told however, gold ETFs worldwide now need well over 2,300 tonnes of bullion backing, equal to 72% of one year’s total mine output.

Chart tese 2

GOLD PRICES  cut this year’s gain below 9% for US Dollar investors in London trade Thursday morning, dropping to new 4-month lows beneath $1255 per ounce as crypto-currency Bitcoin surged past $15,000 for a 2017 gain of 1,456%.
 
Commodities today slipped overall after Wall Street stock markets closed lower overnight for the fourth session running from last week’s new record highs.
 
Copper steadied after this week’s slump, but   held 9% below October’s 3-year high.
 
Protests meantime continued over President Trump’s decision to relocate the US Embassy from Tel Aviv to the Israeli capital, Jerusalem, with fundamentalist Palestinian group Hamas   calling for a new intifadaon what it deemed a “declaration of war”.
 
Rogue nuclear state North Korea today said US Air Force drills above its southern neighbor make the   outbreak of war “an established fact”.
 
“While we stand back, aghast at the complacency in Western financial markets,” says investment strategist Albert Edwards at French bank Societe Generale, “it may be China that is re-emerging, almost unnoticed, as an issue.”
 
Predicting that, as history shows, whatever triggers a crash in global markets will “highly likely be something that investors are not currently worrying about,” Edwards notes the doubling of new credit issued in China this year.
 
 
Monthly change, 2003-2017

Gold Prices Drop Thru' 2017 Uptrend, Bitcoin +1456% as 'Unseen' China Risks Build

GOLD PRICES cut this year’s gain below 9% for US Dollar investors in London trade Thursday morning, dropping to new 4-month lows beneath $1255 per ounce as crypto-currency Bitcoin surged past $15,000 for a 2017 gain of 1,456%.
 
Commodities today slipped overall after Wall Street stock markets closed lower overnight for the fourth session running from last week’s new record highs.
 
Copper steadied after this week’s slump, but held 9% below October’s 3-year high.
 
Protests meantime continued over President Trump’s decision to relocate the US Embassy from Tel Aviv to the Israeli capital, Jerusalem, with fundamentalist Palestinian group Hamas calling for a new intifada on what it deemed a “declaration of war”.
 
Rogue nuclear state North Korea today said US Air Force drills above its southern neighbor make the outbreak of war “an established fact”.
 
“While we stand back, aghast at the complacency in Western financial markets,” says investment strategist Albert Edwards at French bank Societe Generale, “it may be China that is re-emerging, almost unnoticed, as an issue.”
 
Predicting that, as history shows, whatever triggers a crash in global markets will “highly likely be something that investors are not currently worrying about,” Edwards notes the doubling of new credit issued in China this year.
 
Chart of annual growth in China credit issuance. Source: Axiom Capital
 
“Financial deleveraging is poised to pick up soon,” reckons Edwards’ colleague at SocGen Wei Yao.
 
Moreover, Edwards adds, “It seems the level of credit necessary to stimulate growth in China could prove elusive at this point,” quoting Gordon Johnson of Axiom Capital.
 
Had anyone forecast a doubling of new credit issuance in China for 2017, Johnson says, “we would have expected all economic indicators in China to be moving substantially higher.”
 
“China is still the big swing factor in commodity markets,” says a report on Bloomberg, “and metals traders are starting to price the possibility that slower growth will mean less demand.”
 
A survey of economists forecasts that China’s infrastructure investment will grow only 12% in 2018, the newswire says, slowing from nearly 20% annual growth in 2017 to date.
 
New data from the People’s Bank of China said today that it kept the nation’s official gold reserves unchanged for the 13th month in succession in November, maintaining a holding of 1824 tonnes even as overall foreign exchange reserves grew for the 10th month running to a 1-year high near $3.2 trillion.
 
Friday should bring the latest China import and export data.
 
Tomorrow will also bring the latest official estimate of US jobs growth and wages.
 
“The [Fed’s December] rate hike is now looming,” notes David Govett at precious metals and commodities trading house Marex Spectron in London.
 
“People [trading futures contracts] are suddenly realizing that gold may not be the most attractive long position at the moment. [But] people’s memories are short.”
 
With Bitcoin surging 50% from this time last month Thursday morning, “Gold failed to hold above $1267/60,” says the latest technical analysis from SocGen, pointing to “the confluence of the trend line drawn from December 2016, the 200-day Moving Average and the 61.8% retracement of the up move from last July’s low.”
 
Gold prices are now “heading for the next retracement level…at $1245/39,” says SocGen’s technical team, “where a pause should take place.”
 
“On the down side,” says Swiss refining and finance group MKS Pamp’s Asian trading desk, “key support is between $1261-1257.”
 
With the gold price’s low point from October now broken, “support remains…[at] $1240.90,” says the New York technical analysis from bullion bank Scotia Mocatta.
 
The US Dollar meantime extended its rally on the currency markets Thursday, pushing the Euro down towards 2-week lows beneath $1.18.
 
That still left gold prices for Euro investors below €1065 per ounce, on track for a 3% drop in 2017.
 
The British Pound bounced hard from a sudden 1-week low as rumors said the UK Government is ready to make a new proposal to avoid a “hard border” between Northern Ireland the Irish Republic following March 2019’s Brexit from the European Union.

Price of Gold Bars Rallies with 'Tail Risks' as ETFs Expand, China Fears US-N.Korea Strike, Trumps Moves Israel Embassy

GOLD BARS rallied from yesterday’s 9-week low in Asian and London trade Tuesday as global equities slipped with commodity prices amid rising tensions over Washington’s policies in both the Middle East and towards rogue state North Korea.
 
A Chinese state-run newspaper today gave readers near the border with North Korea a page of “common sense” advice for the event of a nuclear strike.
 
The US Air Force then ran simulated bombing runs above neighboring South Korea.
 
President Donald Trump was meantime scheduled to announce later today that he is moving the  US Embassy in Israel from Tel Aviv to Jerusalem – a move spurring Palestinian protests and condemned as unnecessarily provocative by Washington’s allies across the Middle East and Europe.
 
As the Dollar price of wholesale gold bullion bars gained $6 from Monday’s low at $1261.80 per ounce, world stock markets fell again after US equitis closed lower overnight for the third time running since last Thursday’s new all-time high.
 
With the current “suspension” of the United States’ official debt ceiling set to expire on Friday, risking a shutdown of government departments, “few economists think Trump’s tax cuts” – now approved by the Senate and forecast by the Congressional Budget Office to widen the gap between revenues and outlays by $1.4 trillion over 10 years – “will spur growth,” says Newsweek.
 
Last week’s Senate approval of Trump’s “extensive tax cuts…[saw] market participants regain their risk appetite, so the gold price fell,” reckons bullion market analysts at Germany’s Commerzbank.
 
But “tax reform is not completely negative for precious metals from a macro perspective,” says Japanes conglomerate Mitsubishi’s strategist Jonathan Butler in his latest weekly analysis.
 
“With a risk of the reforms blowing a hole in the budget [to] send the US budget deficit skyrocketing, gold and precious metal may still retain some support from tail risk hedging.”
 
Annual gold ETF gold bar inflows worldwide. Source: World Gold Council
 
Investors using trust-fund products backed by bullion bars to gain price exposure last month grew their total position by 0.4% according to data compiled by mining-backed market development organization the World Gold Council.
 
But while investor demand for new shares took the amount of gold bars needed to back these exchange-traded trust funds worldwide up some 9 tonnes to a new 2017 high at 2,357 tonnes, the largest single ETF – the New York-listed SPDR Gold Trust ( NYSEArca:GLD) – shrank by 11 tonnes.
 
Outweighing that outflow, “Global inflows were concentrated in Europe,” says the World Gold Council, with lower-cost US fund the iShares Gold Trust (NYSEArca:IAU) also growing alongside German-listed gold ETFs designed to give investors exposure to the gold price in Euros.
 
Gold bullion bars today retreated near last week’s 4-month lows against the single Euro currency, slipping to €1068 per ounce.
 
The UK gold price in Pounds per ounce meantime rallied £10 per ounce from Tuesday’s new 5-month low of £938 as Sterling fell amid fresh wrangling both in Parliament and within the Conservative Government of Theresa May over the now stalled Brexit negotiations with the European Union.
 
Meantime in Ankara, the Chief Public Prosecutor’s Office today launched a fresh investigation into Turkey’s opposition CHP leader Kemal Kılıçdaroğlu for “allegedly insulting the president” with claims that Recep Tayyip Erdoğan assisted and covered up sanctions-busting involving gold bars shipped to rogue state Iran, now exposed by the trial in New York of a senior Turkish banker.
 
Erdoğan himself filed a criminal complaint against Kılıçdaroğlu this morning.
 
The Hurriyet newspaper says that Erdoğan yesterday linked the testimony of Iranian-Turkish gold trader Reza Zarrab to US policy over Syria, from where Washington wishes to distract attention so it can “facilitate the establishment of a terror state in Turkey’s southern neighbor”, referring to Kurdish independence group the YPG.

Gold Price Slips Near 'Significant Support' as World Warns Trump on Israel Embassy, Brexit Talks Stall

GOLD PRICES slipped near 1-month lows against a rising US Dollar in London trade on Tuesday, drifting back to $1273 per ounce as world stock markets followed Wall Street lower after Monday’s drop.
 
Commodities fell as major government bond prices edged longer-term interest rates higher.
 
“Gold should encounter significant support at $1269/67 and a rebound should follow once these levels are met,” says the latest technical analysis from French investment bank Societe Generale, pointing to the 200-day moving average of Dollar gold prices.
 
Chart of US Dollar gold prices per ounce, last 12 months. Source: BullionVault
 
Gold prices in India – the world’s No.2 consumer nation – today rose to a 6-week high premium above London quotes of $1.50 per ounce according to traders in the key import point of Ahmedabad.
 
Gold premiums in China – the No.1 consumer – held near $7 per ounce on the Shanghai Gold Exchange, below the typical incentive to new imports.
 
Over in Madrid, Spain’s chief prosecutor today cancelled the international arrest warrant for ex-Catalan leader Carles Puigdemont, currently in Belgium ahead of the would-be breakaway region’s new elections on 21 December.
 
The national detention order still stands, however.
 
Over in Manhattan, yesterday’s testimony in the Turkey-Iran sanctions-busting trial of politically-connected Turkish banker Mehmet Hakan Atilla saw the US’s star prosecution witness – former gold trader Reza Zarrab – admit to bribing his way out of jail in 2014.
 
“[Turkey’s] ruling party has an active and effective propaganda apparatus in place,” says columnist Semih Idiz in today’s Hurriyet, and so President Recep Tayyip Erdoğan “will easily be able to survive this affair at home” despite being implicated in the scandal by Zarrab.
 
Atilla’s lawyers argued Monday that prosecutors have hidden key evidence showing that Zarrab will lie to reduce his own sentence.
 
With the Trump administration meantime delaying a decision on whether to move its embassy in Israel from Tel Aviv to the disputed city of Jerusalem, “[We] could go as far as cutting our diplomatic relations with Israel,” Erdoğan today told a parliamentary meeting of his ruling AKP party, calling it a “red line” for Muslims.
 
President of France Emmanuel Macron overnight joined Saudi Arabia in asking the US to avoid heighening regional tensions with such a move.
 
“Any action that would undermine [peace efforts] must absolutely be avoided,” agreed European Union diplomat Federica Mogherini on Tuesday.
 
British diplomats meantime struggled on Tuesday to propose a new solution to the risk of a “hard border” between Northern Ireland and the Republic once the UK leaves the EU, after Prime Minister Theresa May yesterday saw her coalition partners the DUP party reject any plans for Ulster to stay within the EU single market unless the rest of the UK also remains.
 
Irish Prime Minister Leo Varadkar said he was “surprised and disappointed” by the move, which UK opposition politicians called a “damaging embarassment”.
 
Gold prices in UK Pounds recovered Monday’s drop to 5-month lows at £940 per ounce as Sterling fell hard on the FX market.
 
On financial regulation the UK Government wants a “cut and paste of the status quo” post-Brexit said Economic Secretary to the Treasury Stephen Barclay MP to the EU Financial Affairs Sub-Committee today, adding that the City of London has “no appetite” to push for a regulatory “race to the bottom” once the UK leaves the European Union.
 
With US regulators meantime prosecuting a crypto-currency promoter – based in Canada – who raised $15m after promising 13-fold gains in 1 month, regulated futures exchange the CBOE said Monday it will launch Bitcoin contracts on 10 December, one week before competitor the CME’s scheduled launch.
 
“[Bitcoin] is a toxic concept for investors,” said former Morgan Stanley economist and now senior Yale fellow Stephen Roach to CNBC overnight.
 
“Bitcoin is the most vertical of any pattern I’ve ever seen in my career…a dangerous speculative bubble by any shadow or stretch of the imagination.”
 
Prices to buy Bitcoin – a search term now well ahead of ‘buy gold’ according to Google – today neared Sunday’s fresh all-time high above $11,800.

Gold Prices Down, Bitcoin 'Bubble' Up with Stocks + Dollar on Trump's Tax Plan

GOLD PRICES dipped Monday morning as the US Dollar gained following the Senate’s approval of Donald Trump’s tax cuts and Western stock markets rose, writes Steffen Grosshauser at BullionVault.
 
The US Dollar briefly touched a 2-week high after the Senate narrowly approved the Republican Party’s tax overhaul on Saturday, including plans to slash the corporate tax rate from 35% to 20%.
 
This likely tax victory for US President Donald Trump took the focus away from the ongoing FBI investigation into alleged links between his advisory team and the Russian government.
 
European stocks meantime rebounded after Friday’s decline, led by the German Dax index climbing 1.23% and the Stoxx Europe 600 index heading for its first gain in three days.
 
The Dollar price of crypto-currency Bitcoin fell $500 from Sunday’s brief new all-time record high above $11,700.
 
The British police now warned of an explosion in the use of Bitcoins by criminals to launder money, causing calls for regulation.
 
“[This] looks like the second biggest bubble in history after Tulip mania,” reckons analyst and newsletter writer James Rickards, editor of Strategic Intelligence and author of the best-seller Currency Wars.
 
Furthermore, “We’ve never seen Bitcoin’s performance in a financial panic — so that’s a big uncertainty right there, leaving aside the criminality.” 
 
Betting on gold prices by hedge funds and other money managers grew over 15% last week net of that group’s bearish bets, reaching the largest size in 9 weeks according to data on Comex futures and options positioning from US regulator the Commodities Futures Trading Commission (CFTC).
 
The net-long positions of “managed money” in silver, in contrast, shrank 12% last week.
 
Last week the CFTC approved the launch of Bitcoin futures contracts by Comex operator the CME Group, now scheduled for 18 December.
Chart of Managed Money category's gross long and bearish position on Comex gold futures and options. Source: BullionVault via CFTC
 
“With this [US] tax deal, markets could pick up speed into the end of the year,” reckons Angelo Meda, head of equities at Italian asset manager Banor SIM in Milan.
 
“It looks like the ingredients for a year-end rally [in stocks] are there.”
 
Gold prices today dropped 0.5% to $1274 per ounce, still up more than 12% year-to-date versus the Dollar but trading almost unchanged against the Euro and British Pound.
 
UK gold prices in Pounds per ounce fell back to £940 per ounce Monday morning — near its lowest in 12 months — as Sterling rose following reports of agreement with the EU over the issue of a ‘hard border’ between Northern Ireland and Eire following March 2019’s Brexit deadline.
 
UK Prime Minister Theresa May is set to meet EU negotiators in Brussels today to break the deadlock.
 
Progress was reportedly made at the weekend on a “divorce bill” plus citizens’ rights post-Brexit.  
 
Half of Britons now support a second vote on whether or not to leave the European Union, according to a new poll.
 
The US and South Korea on Monday meantime launched their largest-ever air drills, ignoring North Korea’s warning that this would push the Korean insula to “the brink of nuclear war”. The drill followed another test of an intercontinental missile by North Korea a week earlier despite international sanctions and condemnation.
 
The silver price again extended the drop in gold on Monday, falling to 2-month Dollar lows at $16.38 per ounce.

Bitcoin: Lighter Than Air

So the perfect ‘asset’ for this bubble in everything…

BITCOIN blew by another milestone, writes Bill Bonner in his Diary of a Rogue Economist.

Last week, the world’s first cryptocurrency hit a new record above $10,000.

It started off the year trading at just $997.

“I can’t believe what happened,” said a friend.

“I bought $1000 worth in 2012. Bitcoin was trading at about $8 at the time. Then one of the big cryptocurrency exchanges, Mt. Gox, was hacked and almost $500 million worth of Bitcoin was stolen. I got out.

“If I had just held onto my stake, it would have been worth more than $1.2 million today.”

You hear stories like that all the time now. They are bull market stories. The hero regrets having sold too early.

Later on come the bear market stories when he regrets having sold too late.

But let’s enjoy the bull stories now…while we can.

The typical story has its hero…and its villain. The hero bought Bitcoin when everyone told him not to. Now he’s regarded as a genius. Even his father-in-law is asking his opinion on everything from politics to cocktail recipes.

Last week, the geniuses multiplied…

From what we can tell, Bitcoin is headed to the moon. Or to Hell.

Weightless…frictionless…why not?

If it hit $9,000…why not $90,000…or even $900,000?

Bitcoin is a perfect “investment” for the fake-money era. Lighter than air. Not here; not there. Neither animal, vegetable, nor mineral.

Immaterial. Implausible. Imponderable. And immeasurable. There is nothing to hold it back.

Almost all assets are overpriced or fraudulent – usually both. Something was bound to soar to the top of this gassy heap. Why not Bitcoin?

Stocks have been bid up to the sky by fake money from central banks.

Management teams took the Fed’s super-low-interest-rate loans and pretended to be investors – buying back and canceling shares in the corporations they run to boost earnings per share.

Unbelievably, the only net buyer of US stocks since 2009 has been corporations themselves!

Earnings were faked, too, using “non-GAAP” adjustments to make it look like they were more profitable than they really were.

The third quarter of this year may have set a new record. Of the 30 Dow companies, 14 reported “adjusted” earnings, rather than using the old-fashioned Generally Accepted Accounting Principles (GAAP).

And those 14 companies reported adjusted income 26% higher than the GAAP numbers would have shown.

One case, drug maker Merck, stands out. It took a loss of 2 cents a share and turned it into a profit of $1.11.

How did it do that?

We don’t know exactly, but the usual magic depends on declaring certain expenses “one-time-only outlays that might give investors a misleading picture of the regular and usual earnings of the business.”

That gets you through one year. Then, the following year, you find other mistakes that you swear you will not repeat.

In smaller companies – especially in the tech sector – the practice is even more extreme.

Twitter, for example, showed a loss of $21 million in the third quarter. But with a little hocus-pocus on the ledgers, it was able to turn that into non-GAAP earnings of $78 million.

Bitcoin is perfect for this kind of market. It doesn’t have to deceive investors about its profits. It has none.

And, of course, the statistics and metrics we use to keep track of the economy have also been faked.

The feds claim full employment when there are more working-age men without jobs than ever before. Consumer price inflation is seriously miscalculated – as everyone who goes shopping knows.

We don’t shop often. But the other day, we bought a pomegranate. It cost $2.50. The lady at the checkout was appalled. “Do you still want it?” she asked.

“Real” (inflation-adjusted) GDP is still rising modestly, but only if you adjust it by the fake inflation number. If you applied a more realistic figure, it would show the US economy in recession for the last 10 years.

Meanwhile, the world’s governments go further into debt on the fake premise that they will pay it back.

Bitcoin has no debt problem, either. Nor does it have any of the fake qualities of other investments. It is 100% real…or at least 100% not fake.

It has no sluggish, greedy management to mess up the company’s business…no rising material costs to squeeze its margins…no wages to renegotiate…no bonuses to pay…none of the things that pinch profits.

And it doesn’t have to tell lies. The truth is strange enough.

One new crypto “coin” was called UET. Its promoter explained the investment thesis as follows: “You’re gonna give some random person on the internet your money.”

UET stands for Useless Ethereum Token – a reference to the second-largest crypto asset by market value, Ethereum – and has a logo with someone giving you the middle finger.

Nevertheless, it still trades…for approximately nothing.

Here at the Diary, we’ve been skeptical of Bitcoin…but ready to be impressed.

Our sons think it’s the real deal – le dernier cri in money circles. They took some of the family money and invested it in cryptos in June. In less than five months, we’re up more than 200%.

There’s nothing like success to stop the learning process. You don’t ask questions when prices are rising.

Still, we can’t help but wonder. Maybe the mysterious creator of Bitcoin, Satoshi Nakamoto, was a genius. But it’s unlikely that there are so many others.

Gold Bullion Nears 4-Week Friday Low as 'No Way Currency' Bitcoin Rallies, Turkey-US Tensions Worsen

GOLD BULLION prices gave back a rally against the US Dollar on Friday to head for their lowest weekly close in four as European stock markets retreated, relations between Turkey and Nato ally the US worsened again, and Bitcoin rallied 6% below this week’s new all-time record high.
 
Falling back to $1273 per ounce at lunchtime in London, wholesale gold bullion bars began December 10% higher for 2017 to date against the Dollar, but was lower from New Year for Eurozone investors and flat in terms of the British Pound.
 
Rising over 10-fold for 2017 to date in contrast, crypto-currency Bitcoin — widely called “digital gold” by pundits and headline writers — rose to $10,500 as derivatives exchange the CME Group said it has received regulatory approval for Bitcoin futures contracts to launch on 18 December.
 
Sales of gold and silver bullion coins by the US Mint have in contrast totalled the lowest in 10 years, before the financial crisis exploded, so far in 2017 according to data compiled by Reuters.
 
“We need to be clear,” said French central bank chief François Villeroy de Galhau today, speaking in Beijing.
 
“Bitcoin is in no way a currency, or even a cryptocurrency. It is a speculative asset. Its value and extreme volatility have no economic basis, and they are nobody’s responsibility.”
 
Adding that the Banque of France itself is “experimenting with [the] innovative technology” of blockchain and distributed ledger record-keeping, “We have also noted with interest the measures taken by the Chinese authorities regarding ICOs,” said villeroy de Galhau, referring to Beijing’s September ban on what it called “illegal and disruptive” initial coin offerings of other digital tokens.
 
After new data yesterday put US economic growth at its strongest pace in 3 years, manufacturing surveys today said business at European factories is expanding the fastest since 2000.
 
Gold prices for Eurozone investors fell to new 3-month lows beneath EUR 1070 per ounce.
 
The gold price in Pounds per ounce meantime headed for its lowest Friday finish since mid-July at £945, as the Markit data agency’s UK PMI survey put manufacturing activity at a 4-year high.
 
Chart of UK gold price in Pounds per ounce. Source: BullionVault
 
Hong Kong’s stock market fell for the fifth session running, trading over 3% below last week’s new 10-year high.
 
Commodities meantime ticked higher as crude oil rallied towards last month’s 2-year highs following confirmation of a 2018 output cap by producer-nation cartel Opec together with Russia.
 
Over in New York, Iranian-Turkish gold trader Zarrab yesterday implicated Turkey’s president, Recep Tayyip Erdoğan, in evidence against bank executive Mehmet Hakan Atilla over sanction-busting cash transfers to Iran.
 
Avoiding prosecution himself by pleading guilty and co-operating with the US authorities, Zarrab said Turkey’s former economic minister Zafer Caglayan — whom he claims to have bribed — told him that Erdogan had approved payments to Iran by two Turkish banks in 2013.
 
Cut off by Western sanctions over its nuclear program, Iran allegedly used money paid into Atilla’s Halkbank to buy gold bullion, smuggle it to Dubai, and then sell it for cash.
 
Erdogan’s team last week said Zarrab was being held “hostage” by the US in a politically-motivated case.
 
Today the Public Prosecutor in Istanbul today issued an arrest warrant for former CIA vice-chairman Graham Fuller, claiming he was involved in July 2016’s failed coup attempt in Turkey.
 
Accused along with US academic Henri Barkey of “attempting to overthrow the government” of Turkey, Fuller supported the 2006 immigration to America of Turkish cleric Fethullah Gülen — blamed by Ankara as the mastermind of last year’s coup attempt — and last month named as part of the plot by Russian political strategist and philosopher Alexander Dugin.
 
Nicknamed “Putin’s brain” for his reported sway over the Russian president, Dugin said Moscow has “concrete evidence that CIA agents commanded the failed coup attempt.”
 
Tensions between the US and fellow Nato military treaty member Turkey – the world’s No.5 gold bullion consumer – have risen sharply in recent months over policy towards the Assad regime in Syria and also Ankara’s purchase of a new missile system from Russia.

Bullion Down, Gold Mining Stocks Up as Opec Extends Oil Cap, Bitcoin Whips 17% Below New Peak

BULLION PRICES slipped again but gold mining shares rose Thursday in London as Asian stock markets followed Wall Street lower but Eurozone equities rose.
 
Crypto-currency Bitcoin jumped and slumped again, retouching yesterday’s low of $9,300 to trade 17% below Wednesday’s fresh all-time record above $11,300.
 
Gold fell 1.7% from Monday’s attempt at 6-week highs of $1300 per ounce, trading down at $1278 as silver fell over twice as hard, down to 8-week lows at $16.44.
 
Platinum prices held firm again, unchanged from last week’s finish at $941 per ounce.
 
Crude oil rose meantime towards this month’s 2.5-year highs at $64 per barrel of Brent after the Opec cartel of major producers, meeting in Vienna, said they’re ready to extend a cap on output to the end of 2018.
 
Major government bond prices edged lower with gold, nudging 10-year US Treasury yields up to 2-week highs at 2.39%.
 
But South African and London-listed gold miners added 0.5% as a group for the day by lunchtime, as Harmony (JSE:HAR) jumped 2.3% following the re-start of work at its Hidden Valley project in Papua New Guinea two weeks ahead of schedule.
 
The UK gold price in Pounds per ounce fell to its lowest level since mid-July at £950, down over 8% from start-September’s 10-month highs above £1000.
 
Euro priced gold meantime fell back near its cheapest level since early August at EUR 1081 per ounce.
 
Gold priced in Australian Dollars meantime erased this week’s earlier 1.1% gain, but held within 9% of mid-2016’s return to the all-time record highs of mid-2011.
 
Chart of spot gold prices in Australian Dollars, last 20 years. Source: BullionVault
 
With the Australian Dollar falling over 30% against the US Dollar since 2011, gold mining costs in the world’s No.2 producer have fallen sharply compared to other countries’, with annual output rising by more than one-tenth.
 
Over the first half of this year Australia’s average mining costs rose 3% per ounce, driven mostly by a rally in the AUD’s exchange rate according to specialist analysts Thomson Reuters GFMS, but its total “all in sustaining costs” still held below the global average.
 
Today the ASX stock exchange in Sydney opened trading in Canada-based Kirkland Lake Gold (TSX:KL), now operating a quarter-million ounce mine in the east of Australia and one of 25 listed companies exploring the nugget-rich edge of the western Pilbara region.
 
“In the past year,” says Mining Weekly, “a record 1,896 gold prospecting licenses were granted by the Western Australia Department of Mines,” mostly to individual prospectors using metal detectors.
 
“The Pilbara will be the next big thing or we’ll be looking back in 12 months saying, ‘Oh, that was interesting and that’s all’,” says Joe Treacy of Australian gold explorer Marindi Metals.
 
Currently trading 94% below its share-price peak of start 2011, Marindi reports finding 63 nuggets of gold in Pilbara this month, “the biggest a 6mm nugget” says Mining Weekly.
 
Contrary to other forecasts of gently declining gold mine output worldwide, consultants BMI Research now forecast annual average growth of 2.3% over the next decade, a “slight deceleration [from] the previous eight-year average of 3.1%.”
 
BMI expects the growth to come from mining companies in China — now the No.1 producer since 2007 — as they buy and expand new projects overseas in a bid to meet the country’s growing consumer demand for the metal.

Strongest US GDP in 2 Years Erases Week's Gold Price Gains, Platinum 'Oversold' Says HSBC

GOLD PRICES dropped on Wednesday as new data said the US economy expanded 3.3% per year between July and September, its fastest pace since 2014.
 
Falling from its 6th attempt above $1296 so far this week, the gold price lost $10 per ounce against a rising US Dollar while silver and platinum fell sharper still.
 
Broader commodity prices slipped for the second day running as major government bond prices fell, edging the yield offered by 10-year US Treasury debt up to 1-week highs above 2.35%.
 
North Korea’s overnight missile test — reported by the dictatorship of Kim Jong-un as proving Pyongyang could hit anywhere in the United States with a nuclear weapon — saw US President Donald Trump vow to “take care of it.”
 
But the test “appeared calculated to avoid crossing red lines that could provoke military action by Washington,” according to the Wall Street Journal.
 
With gold prices erasing this week’s previous 0.9% gain to the Dollar, silver fell twice as hard, hitting new November lows at $16.71 per ounce.
 
Platinum held firmer, fixing at its highest price since mid-September at London’s AM benchmarking before halving this week’s gain so far to 0.4% at $942.
 
“We regard platinum as being oversold and look for a recovery in prices,” says a note from global investment and London bullion clearing bank HSBC.
 
“Concerns of loss of market share in the auto sector, while valid, may be exaggerated,” says the note. 
 
“[Other] supportive factors, such as limited supply and a potential for increased investment [and] jewelry demand…have yet to buoy the market. Low prices have crimped mine investment.”
 
Chart of US Dollar platinum price. Source: BullionVault
 
South Africa’s Public Investment Corporation — which runs $150 billion of assets for state-employee pensions — today asked for two seats on the board of troubled platinum miner Lonmin (LSE:LON), raising what it called “urgent” concerns over the firm’s leadership and challenges.
 
Also asking Lonmin to move its main stockmarket listing to Johannesburg from London, PIC owns some 30% of the world’s No.3 platinum miner after stepping in when a 2015 rights issue failed to find enough private investment.
 
Non-profit organization the Mining Forum of South Africa this week called on the government to suspend Lonmin’s operations over what it calls the miner’s failure to comply with social and labour plans such as building 5,500 houses for employees planned in 2006.
 
Major stock markets meantime rose everywhere on Wednesday except China and the UK, where the FTSE-100 index fell as the Pound surged on the forex market on news of Britain doubling its “divorce payment” offer to the European Union.
 
With no official statement on the size of the deal  — reported at EUR 55 billion by the BBC — UK foreign secretary Boris Johnson called it a “fair offer” intended “to get the whole ship [of Brexit negotiations] off the rocks.”
 
New survey data today put economic confidence across the 19-nation single Euro currency zone at a 17-year high, rising for the 6th month in a row.
 
Versus the Dollar however, the Euro fell further from Monday’s 2-month highs, despite yesterday’s US report of the worst trade deficit on goods for more than 2 years.
 
Meanwhile in Turkey — the world’s No.5 gold consumer nation, where bullion prices have hit record highs on a plunge in the Lira — the prime minister today called opposition claims that President Recep Tayyip Erdoğan paid millions of dollars to offshore banks accounts “lies”.
 
Next week’s New York trial of Turkish-Iranian gold trader Reza Zarrab — accused of breaching sanctions against Tehran — may now be suspended after he pleaded guilty and turned witness for the prosecution of Turkish banker Mehmet Hakan Atilla over the same  multi-billion dollar allegations.
 
Zarrab is expected to testify later today, reports the New York Times.