The world’s No.1 and No.3 producers of the precious metal by value are teaming up to develop projects in northern Chile.
Metals market global news: China asserts the discovery of a gold mine located in Laizhou-Zhaoyuan region, Barrick and Goldcorp collaborated in developing one of the world’s largest gold-copper deposits in Chile and much more.
China claims discovery of its largest gold mine with $22 billion potential/RT:
The biggest ever gold deposit of an estimated 380 tons has been discovered in China, announced Shandong Gold Group during a news conference in Beijing on Tuesday.
According to local media reports, the Xiling gold seam in eastern China is more than 2,000 meters long and 67 meters wide. At full capacity, the mine could produce gold for 40 years. The mine is located in the Laizhou-Zhaoyuan region of northwest Jiaodong Peninsula, in eastern China’s Shandong. The region has the largest gold deposits in the country.
China had the fifth largest gold reserves in the world after the United States, Germany, Italy, and France. The mine is estimated to have the equivalent of 20 percent of the country’s 1,843 tons of gold reserves. In July 2015, China ended six years of mystery over how much gold it has, revealing a 57 percent jump in reserves since 2009 when it last updated the figures.
Friday’s Trivia Question:
The largest gold nugget found in the U.S. weighed how much?
a) 42 Pounds
b) 52 Pounds
c) 101 Pounds
d) All of the Above
The biggest divorce hearing in history has begun as Britain triggered article 50/Kitco News:
Giving its official notice that it will break away from the European Union. “Today the government acts on the democratic will of the British people,” Prime Minister Theresa May said in the House of Commons, adding, “This is a historic moment from which there can be no turning back. “The highly-anticipated move has not had much impact on gold prices, with gold priced in British pounds up only slightly on the day.
However, analysts say that there will be plenty of risk during what is expected to be a two-year negotiation process. According to Kitco gold currency charts, gold priced in pounds last traded at £1,007.48, up 0.75% on the day; at the same time, Comex April gold futures last traded at $1,252.90 an ounce, down 0.22% on the day.
Analysts say that gold’s future is tied to how amicable the negotiations will be. “Brexit fallout risk, which has been an important source of demand for gold as a haven, seems to be diminishing for the time being and is one of the reasons we suspect gold is heading into another period of consolidation,” said Jasper Lawler, senior market analyst at the London Market Group in an email to Kitco News. “Should the EU harden their position in the early stages of negotiations, making the U.K. leaving the EU without a deal more likely, gold would stand to benefit.”
Barrick, Goldcorp team up to develop one of the world’s largest gold deposits in Chile/Mining.com:
Canada’s Barrick (TSX, NYSE: ABX) and Goldcorp (TSX: G) (NYSE: JointGG), the world’s No.1 and No.3 producers of the precious metal by value, are teaming up to develop projects in northern Chile, particularly Cerro Casale, one of the world’s largest gold-copper deposits. As part of the agreement, Barrick has sold a 25% stake in Cerro Casale to Goldcorp, which will result in a 50-50 joint venture focused on building gold mines in Chile’s prolific Maricunga belt.
The joint venture will allow them to consolidate infrastructure, reduce costs, decrease the environmental footprint and provide better returns than if they had standalone projects. The move, a fresh sign that miners are moving from cost-cutting to expanding operations and investing in exploration, also prompted Goldcorp to acquire Exeter Resource Corporation (TSX: XRC) for about $250 million.
Chinese physical gold demand remained subdued during February this year – Commerzbank/Scrap Register:
Analysts cited a data from the Census and Statistics Department of the Hong Kong government showing that China imported a mere net 47.9 tons of gold from Hong Kong in February. Admittedly, this was more than in the very weak previous month, which some market participants attribute to stocks being replenished after the Chinese New Year festival at the end of January. “Nonetheless, year-on-year imports were down. And after the first two months of the year, net Chinese gold imports from Hong Kong.
Daily volumes on the Dubai gold & commodities exchange/DGCX:
February DGCX traded 62,844 contracts per day. Trading activity on the Exchange’s Indian Products remained consistent on the back of increased volatility in Indian markets due to the Union Budget announcement made at the beginning of the month and the ongoing state elections.
In its latest online report, the Mint has noted sales of 5,000 ounces of American Eagle gold bullion coins last week, all in the full 1-ounce size. No sales of fractional AGEs are reported for the period. The Mint’s year-to-date total for American Gold Eagles is 165,000 ounces. American Buffalo 1-ounce gold bullion coins sold 2,000 units last week, down from the previous report’s 3,000 coins sold. The 2017 total for American Gold Buffalo coins is 54,000 ounces of gold.
Oversupply won’t dent gold’s allure for investors this year – Industry Report/Reuters – Jan Harvey:
Low interest rates are likely to drive fresh investment in gold this year, potentially pushing prices above $1,400 an ounce despite a well-supplied market, an industry report showed on Thursday. Record-high mine output and a dip in jewelry demand will help to keep the market in a surplus of 752 tonnes this year, consultancy Metals Focus said in its Gold Focus 2017 report.
A 5 percent rise in physical investment, equal to 49 tonnes of additional demand, and a drop-in recycling are seen trimming the overhang from last year’s levels, however. Despite the surplus, with inflation picking up and only tentative increases to U.S. interest rates expected, negative real short-term rates should drive broader investor interest in gold, and consequently prices, the consultancy added.
Platinum coins/Coin Collecting News:
The sales total for the 2017 American Eagle one-ounce platinum bullion coins is 20,000 units. The value of an ounce of platinum is up $15.00 compared to this time last week, and is now at $977.00. The metal’s average last week, Monday through Friday, was $965.80, up a little from $944.60 the previous week. Palladium had a fairly strong first quarter with the huge rally we have seen of late, so it remains vulnerable to long liquidation in both funds and on the cash market.
The Upstarts at the CME vs the LME
London metal exchange hit by regulatory delay to plan to cut margins/Business News:
Regulatory delays to a proposal to slash initial clearing margins by the London Metal Exchange has dealt another blow to the exchange’s ability to fend off competition from U.S. rival CME Group (CME.O), whose margins are sharply lower. The LME, fighting declining volumes and complaints from its members about higher trading fees, has seen steep losses to the CME in the copper market early this year. In January alone the average daily volume (ADV) for CME copper futures contracts surged by 22 percent while the ADV for LME copper lots slid by 12 percent.
The LME is the world’s oldest market for industrial metals and still hosts the majority of trading but has seen its dominance eroded in recent years. There are a host of reasons why speculators have gravitated to the CME in copper, including a more complex futures market structure at the LME, but initial margin is a major one, brokers and industry sources said. Customers trading on financial exchanges have to put down an initial margin, in cash as a guarantee that they will fulfil their contract obligations.
“Everyone is fixated on costs these days, so that (a cut in margins) would be a material change to the market,” said the head of metals at a top LME brokerage, who declined to be named. Initial margins for one lot of copper at the LME are $12,800 while for an equivalent amount of copper on the CME they are $6,834, according to the exchanges. Volumes on the 140-year-old LME have come under pressure since trading fees jumped an average of 31 percent in January 2015.
CFTC’s Giancarlo gives industry what it’s looking for, it hopes/Michael Coglianese:
When CFTC Acting Chairman J. Christopher Giancarlo spoke before the FIA conference in mid-March, he received a standing ovation largely for his message: cut out burdensome regulations that have been adopted post-2008 financial crisis and the onset of Dodd-Frank. In his speech, Giancarlo promised to re-organize the agency that can better monitor the industry while at the same time getting rid of “flawed and excessive regulation.” He noted that “our markets today are fragmented, more concentrated, less liquid and less supportive of economic growth and renewal than in the past.” He hopes to change that with an agenda that fosters economic growth, enhances the financial markets and sets appropriate-sized regulation.
Top Turkish banker arrested in U.S. in Iran sanctions probe/Bloomberg’s Daily:
A senior executive at one of Turkey’s largest state-owned banks was arrested in the U.S. Tuesday on charges of conspiring to evade trade sanctions on Iran, escalating a case that has prompted diplomatic tensions and political maneuvering between the two countries. Mehmet Hakan Atilla, a deputy chief executive officer at Turkiye Halk Bankasi AS, is accused of conspiring with Reza Zarrab, an Iranian-Turkish gold trader, to launder hundreds of millions of dollars through the U.S. financial system on behalf of Iran and its companies.
Atilla was detained by FBI agents at John F. Kennedy International Airport in New York, according to people familiar with the arrest. Zarrab was a key figure in a 2013 scandal, in which Turkish prosecutors accused him of bribing the country’s cabinet ministers in a gold-trading operation worth at least $12 billion, a charge he denied.
Erdogan called the investigation a coup attempt, and all charges against Zarrab and members of his administration were eventually dropped. Suleyman Aslan, the former CEO of Halkbank, was among dozens arrested as part of a December 2013 probe into gold smuggling, money laundering and bribery in government tenders. Aslan was taken into custody after police raided his home and found $4.5 million stuffed into shoeboxes — money the CEO said was intended as “charitable donations.” He was later released and charges were dropped.
Here’s another reason to own gold:
U.S. debt to reach 150 percent of GDP in 30 years – CBO/David Lawder – Reuters:
U.S. debt held by the public will balloon to 150 percent of economic output by 2047 unless tax and spending laws are changed, the Congressional Budget Office said on Thursday, far exceeding the record level just after World War II. The new projections show steeper 30-year debt growth than last year’s long-term forecast by the non-partisan budget analysis agency, and could make it harder for some members of Congress to support a tax reform plan that is partly financed with higher deficits. Last year, the CBO estimated U.S. public debt would grow to 141 percent of gross domestic product by 2046, while the record was 106 percent of GDP in 1946. That level would be reached in 2035, the CBO said.
Friday’s Trivia Answer:
D, all of the above. The largest gold nugget found in the U.S. weighed 195 pounds; it came from California. A one-ounce gold nugget is more rare to find than a five-carat diamond. The largest nugget in Australia was a 2,332-ounce nugget of solid gold. The Welcome Stranger Nugget was discovered buried just inches below the surface in Moliagul, Victoria, Australia on February 5th, 1869. Unbelievable that people were literally walking right over it!
DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation in writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.