Gold

At $672.00 per ounce, US palladium bar moved up 1.5 percent on April 20, 2012, the day’s biggest change in precious metals prices. The price of Japanese palladium bar finished the day at JPY 1,748 ($21) per gram following a 1.1 percent increase. Chinese palladium bar prices inched up 0.6 percent to CNY 161.00 ($25.54) per gram.

Indian gold bullion prices rose 0.5 percent to INR 28,563 ($547) per 10 grams. The price of Japanese gold bullion increased 0.5 percent to JPY 4,318 ($52) per gram. US gold bullion prices saw a 0.1 percent decline to $1,644 per ounce. At CNY 334.75 ($53.10), the price of Chinese gold bullion finished the market day up 0.1 percent per gram.

The price of Indian silver moved up 0.9 percent, landing at INR 56,333 ($1,080) per kilogram . The price of US silver fell 0.4 percent to $31.74 per ounce. After a 0.3 percent increase, Chinese silver finished the day at CNY 6,615 ($1,049) per kilogram. At JPY 815.00 ($9.97) per 10 grams, the price of Japanese silver was essentially unchanged.

Chinese platinum bar prices saw a 0.4 percent decline to CNY 339.50 ($53.86) per gram. Japanese platinum bar saw its price rise 0.2 percent to JPY 4,141 ($50) per gram. The price of US platinum bar held steady at $1,581 per ounce.

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US palladium bar saw the largest upwards shift on the precious metals MMI, rising 4.4 percent to settle at $661.00 per ounce. The price of Chinese palladium bar increased by a slight 2.2 percent over the past week to CNY 160.50 ($25.47) per gram. Japanese palladium bar prices ticked up one percent over the past week to JPY 1,729 ($21) per gram.

The price of Indian gold bullion rose one percent over the past week to INR 28,472 ($553) per 10 grams. This was the third week in a row of increasing prices. US gold bullion rose 0.3 percent over the past week to $1,643 per ounce. The price of Chinese gold bullion declined 0.3 percent over the past week, settling at CNY 336.30 ($53.36) per gram. Japanese gold bullion saw its price rise 0.2 percent over the past week to JPY 4,327 ($53) per gram.

The price of US silver rose 0.4 percent to $31.53 per ounce after falling one percent during the week prior. The price of Indian silver rose 0.4 percent to INR 55,867 ($1,085) per kilogram after falling 0.3 percent during the week prior. Chinese silver fell 0.2 percent over the past week to CNY 6,620 ($1,050) per kilogram. Japanese silver remained essentially flat from the previous week at JPY 820.00 ($10.16) per 10 grams.

Japanese platinum bar saw a 2.8 percent decline over the past week to JPY 4,139 ($51) per gram. Chinese platinum bar fell two percent over the past week to CNY 342.50 ($54.35) per gram. Closing out the third week of declining prices, the price of US platinum bar dropped by 0.6 percent, finishing at $1,581 per ounce.

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US gold bullion saw little movement on April 16, 2012, staying around $1,652 per ounce. The price of Chinese gold bullion stayed firm at CNY 336.49 ($53.39) per gram. The price of Indian gold bullion remained steady at INR 28,423 ($554) per 10 grams. Japanese gold bullion saw little change in its price yesterday at JPY 4,268 ($52) per gram.

Chinese silver kept even at around CNY 6,585 ($1,044) per kilogram. The price of Indian silver showed little movement yesterday at INR 55,582 ($1,083) per kilogram. At JPY 806.00 ($9.95) per 10 grams, the price of Japanese silver essentially didn’t move. US silver stayed flat at around $31.53 per ounce.

At CNY 338.50 ($53.71) per gram, the price of Chinese platinum bar held steady. The price of US platinum bar also remained even at $1,572 per ounce. The price of Japanese platinum bar showed little movement yesterday at JPY 4,056 ($50) per gram.

The Japanese palladium bar price saw no action yesterday at JPY 1,671 ($20) per gram. The price of US palladium bar also didn’t move much at $646.00 per ounce. Chinese palladium bar held its value yesterday at CNY 155.00 ($24.59) per gram.

Editors Note: In some cases (e.g. Japan and China) prices hold steady because they represent transacted prices and are not exchange-traded.

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Recent details on the new 2012 Summer Olympic medals may have Olympians shooting for the silver, instead of the gold (prestige-mestige, right?).

According to a recent article in The Economist, based on current metal prices, the silver found in this year’s gold medal is actually worth more than the gold.

Look at these beauties. Not a bad look for the 2012 Olympics, eh? Source: guardian.co.uk

Weighing in at 400 grams (14 ounces), this year’s medal is one of the largest and heaviest to grace the necks of Olympians. And apparently, “they will be more than twice as heavy as the average of the previous five games, and almost 17 times heavier than at the 1912 Olympics in Stockholm.”

Imagine having this bad boy, minus 0.5 oz, hanging around your neck. Source: girlichef.com

What is it made of, you ask?

Well, don’t bite down too hard, champions… your gold medal only has a thin layer of gold on the outside — about 6 grams — while the majority of the medal is made up of 92.5% silver, and the rest copper. The Economist estimated the medal would be worth about $706, but for fun, we thought we’d break down the raw material numbers using the data from our MetalMiner IndX℠ for you.

Our estimated value, not counting manufacturing cost, rounds out to be about [drum roll] $475.50! Here is a breakdown:

Gold (1.5%): $59.70

Silver (92.5%): $415.57

Copper (6%): $0.23

Of course, prestige is priceless, and as the article noted, “medals are, of course, worth far more than their weight in gold. On March 29th Wladimir Klitschko, a Ukrainian world heavyweight-boxing champion, raised $1m for charity by auctioning off his 1996 gold medal.”

Thus, while the medal in raw materials is worth less, any champion wishing to sell their medal’s metal would certainly make some pocket change. With that said, let the games begin!

The new MetalMiner IndX℠ is coming out soon — learn more here.

 

US Copper Producer Grade 110 Price Collapses

The price of US copper producer grade 110 saw the biggest price shift of the day, dropping 5.2 percent on April 11, 2012. US copper producer grade 102 prices saw a one percent decline. Following two days of dropping rates, the cash price of Japanese primary copper flattened out at JPY 716,000 ($8,818).

Copper prices in China were mixed for the day. The price of Chinese bright copper scrap increased 3 percent. The cash price of copper on the SHFE saw a 2.2 percent decline to CNY 59,050 ($9,356) per metric ton. The price of Chinese copper wire fell as well, down 1.8 percent.

After three essentially changeless days, the 3-month price of primary copper dropped 1.4 percent on the LME yesterday to $8,225 per metric ton. The LME cash price of primary copper fell 1.3 percent yesterday to $8,256 per metric ton after remaining flat for three days.

Price of Japanese Palladium Bar Falls 2.9 Percent

On April 12, 2012, the day’s biggest precious metals mover was palladium bar in Japan, which saw a 2.9 percent decline to JPY 1,663 ($20) per gram. US palladium bar prices rose 1.9 percent to $645.00 per ounce. The price of Chinese palladium bar fell 0.6 percent to CNY 156.00 ($24.76) per gram.

US gold bullion saw its price rise 1.9 percent to $1,669 per ounce. The price of Indian gold bullion increased 0.8 percent to INR 28,405 ($551) per 10 grams. Chinese gold bullion prices rose 0.2 percent to CNY 337.90 ($53.62) per gram. The price of Japanese gold bullion prices flattened out at JPY 4,320 ($53) following a two-day increase.

US silver prices inched up 2.2 percent to $32.09 per ounce. Japanese silver prices saw a 0.9 percent decline to JPY 813.00 ($10.05) per 10 grams. After falling for two days, the price of Chinese silver rose 0.3 percent to CNY 6,610 ($1,049) per kilogram. Indian silver gained 0.1 percent to finish at INR 55,725 ($1,082) per kilogram.

The price of Japanese platinum bar fell 2.5 percent to JPY 4,149 ($51) per gram. Following two days of rising prices, the price of Chinese platinum bar dropped two percent to CNY 342.50 ($54.35) per gram. US platinum bar prices saw a 0.1 percent decline to $1,588 per ounce.

The new MetalMiner IndX℠ is coming out soon — learn more here.

In Part One, we covered the creation of China’s new rare earths association, designed to facilitate consolidation and more environmental oversight of rare earths miners and processors.

Now let’s turn to more life-and-death matters — gold and futures trading.

The Golden Ticket — to the Gallows

Apparently, a 30-year-old Chinese woman, named Wang Caiping, has been sentenced to death (after serving two years in prison) for losing CNY 94 million (about $14.9 million) on the gold and futures markets on behalf of investors.

Reuters, working from the original Xinhua report, noted “the intermediary court of Wenzhou, in China’s eastern Zhejiang province, ruled that Wang had committed the ‘crime of fraud of financing’ and sentenced to death for the huge sum of money involved.”

Wow, if the US had a criminal justice system the likes of China’s, heads may truly have rolled on Wall Street following the financial collapse…

Seriously, though, this kind of stuff seems to happen in China all the time. Another woman by the name of Wu Ying was also recently “sentenced to death by a local court for ‘illegally raising’ 770 million yuan in funds,” Reuters reported; China’s supreme court is reviewing the case. The harsh natures of these sentences seem to say, “If you’re a woman in China, you’d be better off not handling large sums of money.” (Some slightly heartening news: the article notes, “in China, a sentence of jail time and death usually means the punishment will be reduced to life in prison.”)

A propos of losing money, the world’s major aluminum producers are in danger of doing just that, and much of their profit margins hinge on what’s happening in — you guessed it — China.

China’s Aluminum Appetite — Satiated or Still Growing?

As the market for small rare earths smelters in China may be shrinking, reports indicate the market for aluminum smelters in western China may be expanding very soon.

The Financial Times reports that the Chinese aluminum industry is about to start “an enormous programme of expansion in the coal-rich Xinjiang province in the country’s far west,” mainly based on the region’s access to cheap coal.

Executives are promising to build 10 million metric tons of annual production capacity over the next three years, enough to meet nearly 60 percent of China’s current demand, according to the article.

But even though China’s government and government-supported sectors are bullish on such industry dynamics, the current climate of global smelter shutdowns has Rusal, Alcoa and other non-Chinese producers sounding pretty bearish. (After all, to paraphrase one executive, cheap coal can’t last forever, and infrastructure challenges await China’s aluminum producers.)

If the previous thousand words or so, spanning two posts, point to any sort of picture, it’s this: China may still be growing, but the country is still years — maybe decades — away from getting its act together in terms of developed-world advancement.

Image source: thegreenhead.com

Worries about the inflationary impact of monetary easing may well appear misplaced. However, no doubt they remain widespread – so widespread in fact that they have  underpinned the rise of the gold price over the last couple of years. Recent assessments by the Fed that the near term economic outlook appears to have improved combined with reduced anxiety over the European debt crisis have taken much of the steam out of the gold price and allowed it to drop back below its 200 day moving average. At the same time, a cautious but growing optimism that global GDP growth particularly among manufacturing if not strong then not as bad as previously feared has acted as a support for platinum allowing the more industrially focused catalytic metal to rise in price. It has taken its 200 day moving average back above gold for the first time in six months.


Source: ETFS Securities

Central bank and investment buying remain support factors for gold but the demand from emerging market private investors has become a problem in some markets. Although China has encouraged the general public to become physical gold buyers in India the Associated Chambers of Commerce and Industry of India (ASSOCHAM) has said the government has proposed to raise import duties from 2 to 4% to try to discourage excess imports into the country. India’s annual gold production at approximately two tons, (the country imports around 900 tons), has caused a strain on the country’s balance of payment. As the largest importer of gold in the world, India accounts for nearly one-third of the annual demand. Imports by value have increased from $4.1 billion in 2001-02 to $33.8 billion in 2010-11 due to higher prices and rising demand in the country. Some fear imports could reach $100bn by 2015-16.

Platinum’s rise appears similar to gold this year, haven risen up to late February only to fall back a little since.  Relatively speaking though, platinum support appears strong due to its improving industrial fundamentals over gold with weakening financial fundamentals. How the next few weeks will play out nobody knows but the momentum appears to favor platinum.

–Stuart Burns

As we prepare to kick off our conference next Monday, we thought we should point at some happenings in commodity markets this week and what they might say about the broader outlook for prices heading into Q2 2012.

China’s Rare Earths Are Not So Rare

That was the headline of a Wall Street Journal opinion piece yesterday, tying up a week in which rare earths exports from China burst back onto the mainstream scene. As the Obama administration actively sought to start talks with China through the WTO to make them lift their restrictions, analysts and pundits alike wonder what this will actually do to prices — for the short- to medium-term, Morgan Stanley sees a seasonal pickup in demand in mid-2012, as Japan ups its imports, according to a recent report by the bank.

Coal and Power Sectors Not So Hot Right Now

Source: Wall Street Journal

“To the uninitiated, ‘dark spreads’ sound unpleasant—like ugly splotches found on mens’ shirts on a muggy day. And right now, they aren’t even fun for executives in the coal and power industries, especially as unseasonal warmth makes them sweat.” What a great lead from this article — the sweat is a direct result of low natural gas prices and low US electricity demand coming together to shrink margins for coal-fired power companies. Will natural gas prices stay this low forever?

Red (Metal) Scare

Copper prices rose in Q1 2012, but still lower compared to levels late last year, due in part to EU debt concerns and China’s waning demand for the red metal, but unsettling news out of Chile’s mines could get that supply-demand equation beating quickly again. Declining ore grades, reports the FT — not to mention perennial thorn-in-the-side of strike tensions — play a major role in the worrisome drops in copper production (“nearly 8 percent year-on-year in January, and by about 20 percent from December”).

Without a doubt, our expert speakers and panelists for Commodity EDGE will shed much more light next week onto how manufacturers can strategically avoid being stung by volatile commodity price trends, like the ones mentioned above.

If you’re already registered to attend — gold star. (Gold spot prices, incidentally, has been falling off, although physical gold ETF holdings reached new highs two weeks ago.)

If you’re not registered yet — why wait?

And if you can’t make it to Chicago next Monday or Tuesday, make sure to check in with here on the blog — we’ll be posting reports live from the conference!

As Chile is hit by falling ore grades and Peru is hit by delays due to populist agitation, the copper market is pinning a lot on the start of copper production later this year at Rio and Ivanhoe’s Oyu Tolgoi mine in southern Mongolia’s Gobi desert.

First identified over ten years ago, Rio and their subsidiary, Ivanhoe, along with the Mongolian government that holds a 34 percent stake, have poured billions into what is one of the most exciting mining projects in the world. Admittedly not as large as Chile’s Escondida, Oyu Tolgoi still holds the promise to yield some 450,000 tons per year of copper and 330,000 ounces of gold when it reaches full production sometime in 2013.

The ore body is growing in estimation as further exploration is done, but already extends over 30 kilometers (19 miles) long by 1 kilometer wide (0.65 mile) and over a kilometer (up to a mile) deep. Oyu Tolgoi is estimated to have reserves of at least 36 million tons of copper and 45 million ounces of gold, enough for a 45-year mine life.

The region’s position just 50 miles from the border with China places it ideally for delivery to the world’s largest consumer, easing global copper supply by replacing supplies China would have pulled from elsewhere.

Is There a Catch?

But bringing this vast resource to productive life has not been without its challenges.

Resource nationalism simmers beneath the surface in Mongolia, struggling as it does with widespread poverty, poor employment prospects and weak governments prone to caving in to populist pressure, seen as a legacy of its socialist past when Mongolia was part of the Soviet Union. Those in power arenot blind to the balancing act they must pull off, maximizing the country’s return for the exploitation of its natural resources while continuing to encourage new investment for future projects elsewhere.

As ResourceInvestingNews.com points out when it quotes Bloomberg Businessweek’s Dexter Roberts, “Four-fifths of the country is still un-surveyed. Over the next decade copper production is expected to double, iron ore to triple, coal to grow by six times, and gold and oil by 10 and 13 times, respectively.” With such riches available, Mongolia does not want to scare off the foreign investment and knows that will be needed to realize such wealth.

Oyu Tolgoi will go some way to replacing the “lost” production from chronic under-investment by the industry a decade ago — at 3 percent of global production, the mine will make a sizeable contribution, but as Reuters points out, it will take further investment at Escondida, the realization of projects currently underway in Peru and BHP’s Olympic Dam to achieve capacity before the copper market can be said to have a sustainable supply outlook.

Brought to you by Zycus, MetalMiner’s Sourcing Outlook focuses on cotton, natural gas, steel, copper and aluminum this month.

In our One-On-One interview, Lisa Reisman speaks with Omer Abdullah, co-founder and managing director of The Smart Cube, Inc., about how commodity forecasting can help your business.

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