Articles in Category: Precious Metals


The summer has almost arrived, and wedding bells are ringing; flower girls are singing, and caterers and cakes and florists abound. People used to consider weddings an important time to splurge, lavishly spending money on that meaningful day. But with unstable economics, tighter budgets, and volatility in the precious metals arena, who wants to spend thousands on a fairy-tale wedding when that money could go toward the mortgage for your castle and moat?

Now that precious metals prices are through the roof, splurging on an expensive ring isn’t as exciting. Instead, many engaged couples realize that it might be wise to skimp. In a recent Reuters article, it was noted that many “cash-strapped couples [are switching] from platinum bridal rings to cheaper white metals such as white gold and palladium.”    Platinum already hit a record high earlier this year, and although prices have dropped a bit since that point, platinum is still up 40 percent from last year. Read more

There’s a new type of event on the social scene: Gold parties.

Interested in throwing a party, but worried about costs? If a host wants to make money instead of spending it, a gold party allows them to convert unworn and unfashionable  jewelry  and knick-knacks into cool cash.

USA Today explains, “Rather than wait for bold gold to come back in fashion  — a return to the ’80s, anyone?  — women are scrapping their unwanted gewgaws for cash or checks at wine-and-cheese Ëœgold parties’ … Think Tupperware parties, but instead of buying plastic, guests bring gold (coins, watches, necklaces, teeth) to be assayed (tested) for carat content and weighed. Depending on the ounce-cost of gold that day, guests can walk away with hundreds or even thousands of dollars. The party host pays them with cash or a check, then ships the gold to a refinery, where it is melted down and recycled.”

NBC Nightly News also covered this new phenomenon on a recent broadcast, listing the site My Gold Party as an excellent place to mine for more information about these social gatherings.

With current debate about whether or not to sell gold stocks this month, this could be a good time to try your hand at a gold get-together. The price of gold is constantly changing — it can even change several times per day — but it’s still considered the “safe haven” commodity. Even if you would rather sell scrap metal on your own time, a gold party could always be an excuse to see old friends, have some fun, and laugh at those bold gold bangles of yesteryear.

–Amy Edwards

I’m allergic to sesame seeds, so when I order a burger in a restaurant, I’m always in the hunt for a good bun substitute. So I thought it might be  interesting to take a look at the current state of product substitutions in various metals markets. About a year ago, when nickel was trading at over $50,000/ton, it was almost a no-brainer to consider moving to other grades of stainless, as one example. What with the price of 304 stainless moving from the mid $6000/ton range to $5000/ton today, substitution to 200 series alloys looks a little less interesting, according to this article in Metal Center News. Read more

Shame on me for betting against the dollar thinking that silver would do a little better than gold (provided that the dollar continued to poorly perform against other currencies). Both silver and gold are off for the reasons stated in my earlier piece (e.g. the Fed has indicated that the rate cutting may be at an end and there is talk that the dollar will be moving out of the gutter where it appears to have taken up permanent residence) There have been a few market shifts worthy of mention. Some of these shifts may mean some good news for industrial buyers of other types of metals. Silver prices have dropped over 21% since Mid-March despite a 28 year high on March 17, according to this article in the Financial Times. As we have mentioned previously, Exchange Traded Funds (ETF) have been driving a lot of the investment (speculation) in precious metals. And it is these ETFs that are now leading the way out of gold to pursue other opportunities such as the bond market or stocks. And they appear to be moving out of silver as well.

But what the article points out is that analysts are concerned that ETF’s basically invested in silver as a tag-along to their investments in gold as opposed to investing in silver based upon supply and demand fundamentals. What a shocking statement. Analysts are acknowledging that ETF’s didn’t undertake a rigorous analysis of supply and demand to justify investment decisions? With silver’s decline in use in applications such as photography, lacklustre demand for silver in jewelry making, combined with less demand for silver due to softness within the electronics industry, is it any wonder that silver prices may now be poised to drop further? Ironically, I still believe that silver is backed by stronger fundamentals than gold (gold really is used as the world’s investment safe-haven)…we’ll cover that in another post. In the meantime, I can think of a few other metals trading at some frothy price points without any substantial demand behind them. Can you?

–Lisa Reisman

Gold has certainly had a roller coaster ride this last 12 months, up to a peak of $1030/ounce before falling back some $200. You’ve heard the popular saying: “When the dollar falls, gold rises.” In reality, the relationship between the euro, the dollar, and gold has been 94% accurate, according to a   Reuters report in Mineweb.

In that case,  what could the current fall in gold tell us about the direction of the euro and the dollar? If the dollar were to make a significant gain against the euro this year, from its current 1.55 towards 1.45 last seen in 2007, we could see a flood of cheaper imports, particularly steel, come into the market. The dollar won’t change the fundamentals of the world steel industry, but a combination of a stronger dollar and more imports could curtail price rises later this year if the assumed relationship between gold, the euro, and the dollar holds true.

–Stuart Burns

Is the rise in metal prices really so inevitable? We usually place considerable weight on articles appearing in, but I have to take issue with a feature from yesterday which suggests metals will continue to rise on the back of power problems around the world. Certainly the first quarter of this year has seen it’s fair share of power problems, but many of them are unlikely to be repeated — nor was power the sole driver behind first quarter price rises. For example, the bad weather in China caused power problems, but it was a one in 50 year period of severe weather. Also, it is unlikely to be an issue going forward, serious as it was for aluminum, zinc and many ferro alloys. Power stations may be closed or run at reduced capacity for the Beijing Olympics, but so will the power hungry industries those power stations fed. The power problems affecting aluminum,  precious metals  and ferro alloy production in South Africa are more entrenched, but they were significantly exacerbated by heavy rains, as were the flooding of Queensland’s iron ore mines  — neither of which is likely to be of such magnitude again in the coming months. Somehow  I don’t see power being the deciding factor. It will have an influence in certain situations, but the extent to which demand continues to grow will be more of an issue.

–Stuart Burns

Although our blog readership is steadily growing, we seem to be misperceived by many as being quite “niche”. It is true to say that we aren’t going to be writing about Britney Spears or Paris Hilton (unless they happen to don some new metalized bra or something) but to say that the metals industry is “niche” is just, well, downright idiotic. And I love to report the statistics because there are so many of them which show how our readers represent an absolutely massive industry. To wit, January and February imports of unfinished metals associated with durable goods output totaled $12 b (and yes, that is b for billion). The US imported $6 b of finished metals associated with durable goods output during those same two months. So that is $18b of metals related imports in the first two months of the year and I haven’t even counted the metal content associated with six other categories (such as automotive vehicles, parts and engines and durables, manufactured except automotive). Hmm… think there are metals in those categories? These are just a small glimpse at the import numbers  — we’re talking over 100 billion dollars of imports annually in a lousy year for imports! Check out the numbers! I’ll cover the domestic numbers in another post. But please, whatever you tell me, don’t say that we are playing in a “niche” market.

–Lisa Reisman

Here’s an old idea that has caught the attention of commentators  this week but  with a new twist due in large part to the high price of the metals involved. Metals and material have been recycled for decades and in many countries considerable encouragement is given by governments in an effort to reduce raw material and energy consumption. But the rise in the price of gold, silver and many other metals used in the electronics industry has given the recycling of mobile phones, laptops and other electronic devices a major boost and promoted the phrase urban mining. The figure that caught my eye was a direct correlation to the mining industry ” one ton of ore from a gold mine produces just 5 grams (0.18 ounce) of gold on average, whereas one ton of discarded mobile phones can yield 150 grams (5.3 ounces) or more, according to an article in Reuters.

The article goes on to say the same volume of discarded mobile phones also contains around 100 kg (220 lbs) of copper and 3 kg (6.6 lbs) of silver, among other metals. Hence the phrase urban miners used to describe the recycling industry that has grown up around this resource. The company being reported, Eco-System of Honjo, Japan typically produces about 200-300 kg (440-660 lbs) of gold bars a month with a 99.99 percent purity, worth about $5.9 million to $8.8 million. That’s apparently the equivalent of a small gold mine.

In a country with 128 million people with over 80% mobile phone ownership and who on average change them every 2 years 8 months, you would think there would be a never ending supply of raw material. But you would be wrong, only 10-20% of the phones discarded each year are recycled. Why? Largely because of fears that the phones contain personal data, people horde them away rather than risk releasing them for recycling. As PC’s, laptops and now even mobile phones have become the gateway to our bank, share dealings, health records, and in fact every item of sensitive data in our lives the risks are perceived to be ever greater of letting them fall into the wrong hands. Particularly in Japan where the use of the mobile phone is more advanced than in the US or Europe, phones can be used for payment of bills, move funds around bank accounts, pay rail and bus fares. Indeed the mobile phone is becoming the mobile wallet.

It does raise an interesting concept though.

As the world’s reserve of metals becomes ever smaller, to what extent can we access those already used and available in manufactured goods? Certainly we have only scratched the surface so far and the high prices of all metals will encourage this resource to be pursued much more vigorously in the future.

–Stuart Burns

There are constant news reports on stolen metals: Bridges disappearing overnight, copper pipes stolen from homes, and large, bronze statues disappearing from the streets.  

Delaware State Police have decided to take a bite out of metals crimes, creating new rules for businesses which cover some of America‘s most stolen metals, including copper, brass, gold, and silver. WBOC suggests that these rules will stop metals thieves from striking: Pawn shops and scrap metal processors  that sell  metal  now  have to wait 18 days after purchasing  the metal  to sell it to a new customer. This gives police the opportunity to investigate when a potential victim claims property was stolen.

In addition, some of these shops will need to register with police for a sales license, as well as keep track of all sales to the store.  While securing a sales license and collecting information about sales shouldn’t harm businesses, some business owners worry that the 18-day wait before selling to new customers will hurt their own  operations, especially considering the fluctuating prices of metals in the economy.    
Read more

When doomsday hits and Mel Gibson’s world of “Mad Max” becomes a reality, at least those with piles of canned goods and precious metals should be safe.

At least, that’s the idea that some survivalists — or those that practice “extreme preparedness” — seem to share. “The traditional face of survivalism is that of a shaggy loner in camouflage, holed up in a cabin in the wilderness and surrounded by cases of canned goods and ammunition,” Alex Williams recently wrote in the New York Times.

But that shaggy loner with his mountain of ammunition now sits near a molehill of ammunition rather than a mountain, given the rising cost of metals in ammo. These days, even police officers have to decrease their action at the firing range. And that shaggy loner? He no longer represents survivalists as a whole, as the search for self-sufficiency against a growing tank of economic and environmental threats cause more self-described “normal” people to prepare: Buying silver coins for possible currency, building cabins, purchasing GPS units and satellite telephones.

In times of crisis, “Your safe haven must be self-sufficient and capable of growing some kind of food,” the article quotes Barton M. Biggs, the former chief global strategist at Morgan Stanley, who noted that people should “assume the possibility of a breakdown of the civilized infrastructure.” He adds that this safe-haven should be well-stocked with seed, canned food, clothes — and even wine, which I should have realized is always necessary when one faces impending doom. It makes widespread chaos that much easier to bear. “Even in America and Europe,” Biggs concludes, “there could be moments of riot and rebellion when law and order temporarily breaks down.”

What is causing these intense ideas? Should we really be worried, or is this a random repeat of Y2K, thanks to the hum of Wall Street and Al Gore’s inconvenient truths? We should always be self-sufficient, but you have to wonder if these extremes are necessary. At least I’m prepared: I have a can of beets in my cabinet from a moment of health-consciousness. They never looked very appealing after that initial purchase. And the metal content of all those pennies and nickels accumulating in the cup-holder of my car has to be worth something — well, someday. Most importantly, I have Skittles and Jolly Ranchers, and lots of them.

–Amy Edwards

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