ELEMENTS MLCX Precious Metals Index (PMY)
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- High Prices Cut Demand for Metals
- ETF Update: Gold, Metals ETFs, Potash
- Tom Winmill On Investing In Precious Metals
- Commodity ETFs and ETNs
- ETF Watch (April 4-10)
- ELEMENTS Expands ETN Offerings to Livestock, Precious Metals, Climate Change
- ETF Update: Trading Strategies, Unpopular Bond ETFs, Platinum ETN, New All-World ETF,
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High Prices Cut Demand for Metals [view article]
This guy, Miguel Perez-Santalla, is a permabear in PGM metals and he is proven wrong in the past repeatedly. I don't know why does he has any credibility at all if he can not get the basic historical facts right.He said South Africa's power supply "issues" started in February? It was January 25, 2008 when the whole mining industry of South Africa was forced to shut down for 5 days due to a force majure declaration of ESKOM, the national electricity company. It was a global headline news and this guy could not even get the date right? And I would not call it "issues" whe this is a clear crisis.
I will debunk his arguments one by one at a later time. But for now please read what I have written in the past to debunk all the false myths in the PGM market:
seekingalpha.com/autho...
The recent price fall is nothing but mere market volatility, inevitable consequence of too much investment money chasing too narrow a market. This will pass soon enough and we will see an even stronger rally in the PGM metals market.
Don't you notice that rhodium recovered from $3850 to $6200 in just 4 trade days? That's a 61% gain of a commodity in just 4 trade days. That's the kind of extreme volatility that we will be seeing a lot.
Reply
High Prices Cut Demand for Metals [view article]
Bkuszmar: You are spot on! ReplyHigh Prices Cut Demand for Metals [view article]
I am sorry to say that Perez-Santalla has no idea what he is saying (Like most so called experts) when they talk of Jewelry as the primary user of gold or how important "Jewelry" sales are etc..it is not the jewelry sales we think of here in the US or in European countries, Gold Jewelry in the East is considered more money than Jewelry and is bought as an investment. Jewelry sales in India are the equivilent to Gold Coin/bars sales in the US and Europe.
The use of the term jewelry sales is really misunderstood and misused.
Brian Kuszmar Reply
High Prices Cut Demand for Metals [view article]
the guy had some good stuff to say. But he really totally ignored the monetary aspect of everything. People are looking to hedge against inflation. They could give a damn about jewelry. Replyor
High Prices Cut Demand for Metals [view article]
The supply issue in South Africa (source of about 75% to 80% of world platinum production and upwards of 90% of reserves) is focused on the nation's electricity shortage. Eskom, the nationalized utility has not added capacity to keep up with demand for electricity. I've read analyst reports saying that there is no way to add capacity on a significant level in the next five years. When Eskom has to cut power (coined "load-shedding&qu... it can strongly affect the mining industry in ways ranging from outright closure of operations (gold and platinum mines closed for five days in Jan) or cutback in operations due to limited electricity.While the mining giants such as Anglo and Implats are exploring their own power generation, an impending coal shortage (where S.Africa gets most of their energy) and high price of diesel fuel will not make this any more cost-effective. One company to watch is Sasol (SSL), which is one of the world's leaders in synfuel development. With rising inflation and a slowing economy, S.Africa must salvage their mining industry to stay afloat while the rest of the world slows...which could lead to some new energy-related infrastructure investments between Eskom, Sasol, and the S.African gov't...
It's an interesting situation, and one to watch in the coming months and years.
Cheers Reply
High Prices Cut Demand for Metals [view article]
I am interested in learning whether platinum has any significant investment demand. I know it is the rarest major precious metal, and it seems to be a lot cheaper now. Is it a buy? Or, will it go down to $800 per ounce, because people don't need it so much for auto catalyst use anymore, given what appears to be an oncoming recession/depression. Also, isn't China still selling tons more cars? And, Ukraine? And, so forth for all the second world? So, why is platinum going down so much? Is the supply problem in S. Africa, maybe, solved? ReplyKasparov
High Prices Cut Demand for Metals [view article]
Mike, thanks for the interview. Usually one would expect an industry insider to have a bullish bias on precious metal prices. So if he's expecting them to go down short term - that's a very strong signal. Also, very enlightening comments on what really affects the prices and supply/demand issues. Thanks again! ReplyHigh Prices Cut Demand for Metals [view article]
High prices, because inflation. What causes inflation the FED printing machine, it is easy to print money. It is not easy to find gold or precious metals furthermore everytime is more difficult to find good mines. Profitable ones. ReplyCommodity ETFs and ETNs [view article]
Would anyone recommend a livestock ETF or ETN?Taxation as US investor...any opinions? (reading prospectus)
Do these have enough liquidity...I cannot seem to locate avg. volume?
Looking at:
CATL, ETFS Live Cattle...trades on London
COW, iPath Livestock Reply
Commodity ETFs and ETNs [view article]
I'm missing RJI, RJN, and RJZ. ReplyTom Winmill On Investing In Precious Metals [view article]
EE, how many investors in the said ETF's are in on the Short selling them self? It makes you wonder, after all Goldmans new it was selling worthless SIV's to all of it's compitition ! Hank the prank Paulson came from Goldmans, & now is working I think with the FED! CFTS's has shown it will not take action,nor will Comex,which raises flags, the Market has become a haven of immoral bunch,that cares not whom is hurt,as long as they keep the game going, but it will blow,when it does,if you have Physical G/S not in the storage coffers like SLV, the Perth Mint,& other Bullion Banks,then you are some what safe.There is a big movement in the juniors gold miners, you can read it at jsmineset.com , Jim S. has been & is active in takeing care of his customers, I have come to have great respect of his daily updates accross the board.I hope share holders of all these small mineing companys will read about this at jsmineset.com !
It will take more folks like Ted Butler,Jason Hammel,Jim Sinclair to weed out,search thru data, like GATA.org does & get it out to the Public. To much is left out by TV,news papers and even Gov Stats,because of who has a stake in this sort of news hitting Public Ears!! Reply
Tom Winmill On Investing In Precious Metals [view article]
Get ready to witness history or be a part of it if you own silver or gold ETFs You can speed the price rise time table! Here is a part of Ted Butlers June 16th 2008 comments. I suggest you log on butlerresearch.com and read it all along with past reports..............."So here we had evidence of delays in the delivery of both retail and wholesale silver. Many are loath to utter the word "shortage" in connection with silver. They believe that to be impossible or they think the word means no availability at any price. That definition is silly, as there will always be some quantity available at some price. A commodity shortage doesn’t mean that all the silver (or any other commodity) in the world suddenly disappears. The correct definition of a commodity shortage would revolve around delivery delays, not unavailability. In other words, a delay in delivery of both retail and wholesale forms of silver would constitute a shortage. Maybe not a severe shortage, but a shortage nevertheless. Such evidence of delivery delays, in the face of declining prices, should disturb believers in free market principles.
Although these delivery delays into the SLV well after the shares were purchased bothered me, I chose not to complain. (By the way, this pattern can be discerned by the uneven deposit pattern into the SLV compared to its trading volume). The main thing that bothered me was that the shares were being shorted at all.
I am going to make a very straight-forward statement. I don’t think short-selling of any kind should be allowed in the shares of the SLV, nor in the shares of the two publicly-traded gold ETFs, GLD and IAU. Of all the tens of thousands of different common stock and other traded securities that are regulated by the US Securities and Exchange Commission (SEC), these three metal ETFs are very unique and distinct from the rest. Out of tens of thousands of different securities, only SLV, GLD, and IAU call for a rigid metal backing, 10 ounces of silver behind each share of SLV, one-tenth of an ounce of gold behind each share of either GLD or IAU. Investors buy shares of these ETFs because they are assured that this specific metal backing exists. Investors buy shares knowing that the sponsors and custodians guarantee the metal to be there.
But what happens when someone buys shares in these ETFs and the seller is selling those shares short? Does the short seller deposit metal to back up the buyer’s purchase? No. The short seller just sells the shares short without depositing metal, perhaps borrowing other shares first, perhaps not. The buyer doesn’t know who he is buying from, he gets a confirmation of his purchase from his broker, pays for it and assumes, according the representations in the prospectus, that he is buying new shares issued by the sponsor who has deposited metal, or from an existing shareholder who has decided to liquidate his shares. It never occurs to the buyer that he is buying from a short seller who is not depositing metal. In essence, the short seller is circumventing what is promised in the prospectus. That party is short-circuiting and destroying the promise clearly laid out in the prospectus that real metal backs every share sold.
Here’s the disturbing question - which buyers’ shares are left without silver backing when short sellers are involved in the transaction? Just the hapless and unsuspecting buyer who was unlucky enough to happen to have his purchase short sold, or do all SLV shareholders get shaved proportionately, like a silver coin clipped in olden times? Don’t look to the prospectus for answers, because you won’t find any.
For those who were unaware of this and don’t understand how shares can be sold with no metal backing (or doubt my contention), there is hard proof. There is a short position list reported that proves short selling exists. Currently, the SLV shows a small published short position on the American Stock Exchange of around 250,000 shares, or the equivalent of 2.5 million ounces. On March 11, this reported short position hit almost 1 million shares, or nearly 10 million ounces. So, there can be no doubt that some short selling exists, which raises all sorts of disturbing questions. In my opinion, this aspect of the metal-only ETFs wasn‘t fully thought through before their introduction. Unfortunately, the problem may be worse than just this SLV short selling; maybe much worse.
WHAT’S GOING ON?
Around this past April 15 I began to notice a more pronounced delay of silver deliveries into the SLV. This was for much larger amounts of silver than I previously observed. In fact, the amount of short selling in SLV shares began to look extreme.
Just a short word on short-selling. Please don’t confuse this discussion on the short selling of shares of the SLV (and GLD and IAU) with the short selling I continually discuss in COMEX silver futures. I know this can be a complicated topic, but it is important for you to understand it. In futures, there must be a short for every long. Therefore, the problem in silver futures is not the presence of shorts, but the documented concentrated nature of this short position, namely, an extremely large short position held by just a few traders. Less extreme concentrations in other commodities have always been considered manipulative by the CFTC in the past; just not now in silver (and gold), for some reason.
In securities, there is no requirement that there be a short position for every share of stock. In fact, that would be absurd. But, due to relaxations in the restrictions on short selling over the past decade by the SEC, the new phenomenon of naked short selling has exploded. Naked short selling in stocks doesn’t involve first borrowing the shares in which to sell short. The naked short seller just sells short without borrowing shares. The short seller then fails to deliver the shares to the buyer on settlement date. The punishment for what is essentially a delivery default? The SEC puts out a (long) list of stocks which have fails to deliver. That’s all it does, it makes a list. No fines, no forced buy backs, no identification of who is naked short selling, no staying after school for detention. And yes, SLV is on that list from time to time. To SLV owners, that should be disturbing.
One last kick in the teeth for SLV and silver investors. All investors who purchase SLV shares must pay in full for their shares (or borrow from their brokers at sky-high margin interest rates). Not only do the naked short sellers not have to deposit a dime for their short sales, nor deposit one ounce of real silver, they receive the full cash proceeds that the buyers put up and get to earn interest and deploy that cash until they buy back their short sales. Which may be never, as no one is pressuring them. This is a Wall Street scam and fleecing of the first order".......ALSO CHECK OUT silverstockreport.com/... Reply
Jackson
Commodity ETFs and ETNs [view article]
Update: We just added the new Platinum long and short ETFs to the list, and re-organized the Further Reading section to make it more informative. ReplyJackson
Commodity ETFs and ETNs [view article]
Update: we just added the three Deutsche Bank inverse and leveraged gold ETFs:DB Gold Double Long ETN (DGP)
DB Gold Double Short ETN (DZZ)
DB Gold Short ETN (DGZ)
Here's an excellent article by Don Dion about leveraged ETFs:
seekingalpha.com/artic...
And an earlier, more detailed article on the same topic by Tristan Yates:
seekingalpha.com/artic... Reply
Jackson
Commodity ETFs and ETNs [view article]
Update: we just added the rest of the UBS Bloomberg Constant Maturity Commodity Index [CMCI] ETNs: CMCI Index (UCI), CMCI Agriculture Index (UAG), CMCI Livestock Index (UBC), CMCI Industrial Metals Index (UBM), CMCI Food Index (FUD), CMCI Energy Index (UBN), CMCI Gold Index (UBZ) and CMCI Silver Index (USV). UBZ charges 0.30%, while USV charges 0.40%. The rest of the ETNs charge 0.65%. Reply