Kitco's Nadler Says Premiums Will Shrink
storm888
Posts: 11,701 ✭✭✭
"The premium will likely come down 1 or 2 percent when all coin supplies improve a bit,''
says Jon Nadler, senior analyst for Kitco Metals & Minerals in Montreal.
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He was looking at gold premiums, but the same will apply to silver.
It is a good time to be PATIENT.
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This morning, I watched a team cover 36K shares of GLD in a 10-minute slot.
Each little block was covered lower than the last. No short-squeeze here.
And worse, price deterioration on Buy-To-Cover. NOT a bullish signal.
The chart is broken, and GLD is likely going to tank. There should be a little
rebound, first; but, I dunno.
Folks Who Bite Get Bitten. Folks Who Don't Bite Get Eaten.
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Gold May Pay Only in Case of Maximum Despair: Jane Bryant Quinn
Commentary by Jane Bryant Quinn
Oct. 22 (Bloomberg) -- Gold is for rich guys -- buying physical gold, that is. The metal's highest and best investment use is as insurance policy against a currency collapse. For that purpose, you need a lot of it, stored around the world. Owning 20 or 30 coins is nice but won't protect your standard of living in a world where dollars are dust.
Gold isn't even a reliable hedge against inflation. It reached $850 an ounce in January 1980, a price not seen again until January 2008. During those intervening 28 years, gold plunged and reared but lost more than half of its purchasing power. For a 1980 investor to break even after inflation, gold would have to reach $2,200.
It might, but how long did you plan to wait?
For the average investor, gold boils down to a speculation on higher prices. The latest run-up started in August 2007, when the housing market visibly started falling apart. From $652, it raced up to $1,003 an ounce last March, zig-zagged back to $747 in September, jumped to $905, then slid to $772 as of yesterday.
Hedge funds drove the market but individuals jumped in, too. So far this year, investors have purchased 611,000 newly minted, one-ounce U.S. gold coins, compared with 315,000 in all of 2007.
``We've seen a switch in appetite, with investors moving from futures to physical gold, either owning it directly or going through exchange-traded funds,'' says Suki Cooper, an analyst at London-based Barclays Capital.
Coins purchased strictly for their gold value, not their numismatic value, are known as bullion coins. Many countries mint them -- South Africa (Krugerrand), Canada (Maple Leaf), China (Panda), Austria (Philharmonic) and Australia (Kangaroo), among others. The U.S. Mint makes Buffalos and American Eagles. For investment purposes, you want the one-ounce size.
Supply Shrinks
That is, if you can find them. The yearlong run on bullion has dried up the supply of coins for immediate delivery. Everything was out of stock last week at the online dealer onlygold.com. Kitco.com had Maples at 7 percent more than the spot gold price.
``The premium will likely come down 1 or 2 percent when all coin supplies improve a bit,'' says Jon Nadler, senior analyst for Kitco Metals & Minerals in Montreal.
The various mints project the number of coins they expect to sell each year and produce on demand. Toward the end of each year, they let their inventories run down while gearing up for next year's run. The surge of buyers left them short of high- quality blanks.
Currently, the U.S. Mint is striking only a limited number of 2008 Eagles. The wholesalers are on allocation. No Buffalos are being shipped at all, although a small number might still be minted before the end of the year. By late December, dealers expect to start receiving 2009 coins.
Coin of the Realm
For U.S. investors, American Eagles are the bullion coin of choice. You can put them into individual retirement accounts as long as they remain in their original U.S. Mint capsules. (It's not clear that Buffalos are allowed.)
Eagles also slip through a loophole in the tax reporting law, says Scott Travers, author of ``The Coin Collector's Survival Manual.'' Dealers have to report to the Internal Revenue Service if you sell 25 or more Maples or Krugerrands. They're not required to report your sales of American Eagles and some other coins, although some may do so. (Kitco, in Canada, says it does no tax reporting at all.)
Normally, one-ounce Eagles sell for 5.5 percent to 7.5 percent over the gold price, Nadler says. Small dealers might mark up the price even more.
In this buying panic, I saw online dealers charging as much as 13 percent more than spot gold. Their Web sites warned that there might be a wait before your Eagles could be shipped.
Fool's Gold
On EBay and the Home Shopping Network, coins sell at fantasy prices. A set of Eagles in four different weights was offered on HSN at $4,999.99. In gold, it's worth about $1,450. Prices like these take advantage of neophytes. A coin dealer might sell a four-coin set for $1,850, Travers says.
A cheaper way of buying gold is through an exchange traded fund. The most widely traded fund, SPDR Gold Shares, costs 0.4 percent a year in fees, plus your brokerage commission. You don't own the gold directly. A trust holds large gold bars (warehoused principally in London) and sells shares against them, which are traded on the open market. You can't redeem in gold itself.
It costs even less to buy bullion in a pool account, such as the ones offered by Kitco. Like an ETF, a pool account sells shares in a large bar of warehoused gold. You pay just a hair over the spot gold price, and sell it back to Kitco for just a hair under. There are no annual expenses. For a fee, you can redeem in gold itself. As with ETFs, you depend on the pool's trustee to support its guarantee.
Gold, by the way, is taxed as a collectible -- whether you buy it in the form of coins, ETF shares or an interest in a pool account. Your tax rate on long-term capital gains would be 28 percent, compared with 15 percent on other assets. Only a significant price gain (or currency collapse) redeems your bet.
(Jane Bryant Quinn, a leading personal finance writer and author of ``Smart and Simple Financial Strategies for Busy People,'' is a Bloomberg News columnist. She is a director of Bloomberg LP, parent of Bloomberg News. The opinions expressed are her own.)
To contact the writer of this column: Jane Bryant Quinn in New York at jbquinn@bloomberg.net
Last Updated: October 22, 2008 00:01 EDT
Bid/Ask 722.90 - 723.70
Low/High 720.20 - 769.50
Change -47.00 -6.10%
30daychg -175.40 -19.53%
1yearchg -30.00 -3.98%
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The lemmings that jumped out of stocks and into JUNK metals
are learning a lesson about "safe havens" and "value storehouses."
They will NEVER be back, once they SELL.
John Nadler is the proverbial gold bear in bull's clothing. To my knowledge he's not called any up moves correctly in the past 7 years and was just woefully wrong from June 2007-March 2008. His only claim to fame now is that he "called" an eventual downward trend after dozens of blown calls. Now that's he been proven right once out of about fifty calls, the's milking it for all it's worth. I guess he could say that he's been 100% since March 2008. All his calls are downward ones at this point. He's taking advantage of his 15 min. of fame but he'll leave all his readers at the station once again. Considering that he never gets his readers into the gold market to start with, how does he benefit "them" by telling them it's always ready to correct?
roadrunner
<< <i>Jane Bryant Quinn on precious metals? Who's next, Suze Orman?
roadrunner >>
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That is a VERY fair comment; I said the same thing when I saw it.
I think she is just trying to warn the peasants away from the pumpers,
while appearing to be relevant doing it.
<< <i>1 or 2 % from the current levels or over spot. 2% right now is a joke considing the 30% up pricing. >>
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"That is, if you can find them. The yearlong run on bullion has dried up the supply of coins for immediate delivery. Everything was out of stock last week at the online dealer onlygold.com. Kitco.com had Maples at 7 percent more than the spot gold price.
``The premium will likely come down 1 or 2 percent when all coin supplies improve a bit,'' says Jon Nadler, senior analyst for Kitco Metals & Minerals in Montreal. ""
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From the context, it looks like he means "points" off the current premium.
Down from 7 to 5.
I suspect it will be much lower than that in January.
He's the Cramer of Precious Metals!
<< <i>What ever Nader says, do the opposite!
He's the Cramer of Precious Metals!
Indeed!
Nadler is the kiss of death for metals, be it gold or anything else for that matter.
I know when he says that we are circling the drain, it's great news and time to shop for bargains.
Looks like premiums will continue and rise for some time now.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
My "storehouse of value" is in the toilet!!!!!!!!
Bid/Ask 727.10 - 727.90
Low/High 718.90 - 769.50
Change -42.80 -5.56%
30daychg -171.20 -19.06%
1yearchg -25.80 -3.43%
<< <i>YIKES!!!!!!!!!!!
My "storehouse of value" is in the toilet!!!!!!!!
Bid/Ask 727.10 - 727.90
Low/High 718.90 - 769.50
Change -42.80 -5.56%
30daychg -171.20 -19.06%
1yearchg -25.80 -3.43% >>
Well, that is where paper goes after it's served it's purpose.
The truth is, physical prices remain at high premiums and represent real value.
They have held up better than other commodities in this flummox of a crash.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Not mine. My slabbed gold is still the largest share of my gold holdings and they haven't budged all that much since moving up 30% a couple of weeks ago....to 15-20 yr highs. They are not paper gold....but plastic gold! Not all boats are affected by sinking paper.
Storm888's "stormhouse" of value is to short the American economy whenever possible. At least he can say he helped to take down some old US banks.
roadrunner
Gold Falls to One-Year Low as Dollar Rallies
Platinum Drops to 3-Year Low in New York as Dollar Strengthens
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Yes, but they were all bad.
Those "mergers" or "buyouts" are called zombie banks......the walking dead.
roadrunner
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I don't remember posting this here, but it is about the fate of the bailout money
that is being extorted from taxpayers.
.......
EBAY has $3.4-billion in offshore banks that cannot be repatriated without MASSIVE
tax consequences.
WFC - the primary MA for PayPal - convinced EBAY that billmelater.com was a good
thing to buy.
WFC and BAC - with Barclays'/JPM' hands deep in the mix - arranged to loan EBAY $1B
to buy BML. When the deal closes, the "bailout money" that Paulson gave to the
"troubled banks" will fund the closing.
NO loans for "Joe The Plumber" to start his business will EVER come from the
"bailout."
But, EBAY gets to dip its beak to fund the purchase of consumer-debt that will
likely all turn to caca when folks stop paying their debts to BML.
And, the PayPal money-markets remain deeply "invested" in the funds that
Barclays has FILLED with subprime-mortgage derivatives.
Yup. I helped put some of the bad banks to sleep, and I suspect I will get some
more practice at it in the near future.
<< <i>Yup. I helped put some of the bad banks to sleep, and I suspect I will get some
more practice at it in the near future.
Well, it is a target rich environment.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
IcantbelieveIlost thewholething.com
We talked about the fact that a large % of paypal funds were sunk into illiquid derivatives a year or two ago. Didn't seem to phase anyone at the time. So is that $3-4BILL stuck overseas a potential corporation killer for ebay?
roadrunner
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No; probably not.
BUT, it would cost a fortune in taxes for them to bring it home.
It will continue to stay where it is, and will never be used to
do anything worthwhile for shareholders...OR, for Americans.
Yes, and when prices are $40/oz. for physical silver, the supplies will come out of hiding and the premiums will come down, for awhile. That Nadler guy is pretty sharp!
Join me in a Comex-free world!!!
I knew it would happen.
<< <i>1 or 2 % from the current levels or over spot. 2% right now is a joke considing the 30% up pricing. >>
Thats exactly what I thought when I read it...LOL.. kind of like Gas is on SALE right now.
BTW Nadler would like nothing more than the premium to decrease by 1 or 2 %.. meaning their margin would have just went up and stay at something like it is now as opposed to typical in the past of 5%..Whats he smoking?
<< <i>The premium will likely come down 1 or 2 percent when all coin supplies improve a bit,'' says Jon Nadler, senior analyst for Kitco Metals & Minerals in Montreal.
Yes, and when prices are $40/oz. for physical silver, the supplies will come out of hiding and the premiums will come down, for awhile. That Nadler guy is pretty sharp!
Join me in a Comex-free world!!!
We'll see $40 an ounce, just a matter of time.
When Nadler calls the PM bull dead and buried, fasten your seatbelts.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
That's the one call he will probably be right on. But in the meantime, he's going to continue to call for repeated down moves from here. And at some point, he will be 180 degrees of wrong, and stay wrong for quite some time. Everyone will remember him though because on the final move down in silver and/or gold several years away, old John Nadsler will have called the "final" 30-35 year peak. He will go down in history as a sage (lol). See, he's pretty smart after all.
roadrunner
That is all.
R
From Nadler on 10/23 as gold hit under $700. This is about as bearish as he gets.
Good Morning,
Bullion prices came within a hair of marking a $200 loss over the past 30 days in the overnight hours. Comparisons are futile, as each successive freefall since the middle of the year had its own peculiar but deadly flavor - this last one however, is perhaps even more perverse and worrisome than most that came before it. There remains no technical chart to be found on Kitco's back pages that does not show gold breaking through 200-day moving-average lines with a depth and sharpness such as what began on July 7.
An ugly, unmitigated disaster, this. And this morning, the metal fell despite an easing dollar and rising crude oil market. Decoupling? Depends on your definition of the term. The nosecone has come off this rocket and the gyroscope has spun out of control. You are now actually being told not to read the gold-related news in order to avoid fainting. Don't know about you, but there are faint signs that some may be ready to capitulate. In any case, they have run out of explanations faster than the cheese shopkeeper in the Monty Python sketch.
At least he didn't end the article with the "happy trading" line.
roadrunner