dec 6- 7 JWU

JWU

Dec 6-7, 2014

JWU UPDATE

  1. I need to repeat this question regularly, and answer it equally regularly: How important to the price of your gold is the action of the dollar?
  2. The answer is: It depends whether you mean the dollar versus the euro, yen, cbone, yuan, pound, or rupee.
  3. During the gold bull and bear markets era, the action of the dollar versus other Western currencies was very important to the gold price.
  4. In the gold jewellery era, the action of the dollar against the yuan carries limited importance, because, at least for now, China has a massive current account surplus, and is unlikely to impose any kind of restriction on gold imports.
  5. In India, the action of the dollar versus the rupee still needs to be watched. The exchange rate has been used by banksters and the mafia to justify attacks on gold imports, which can hurt the price in the short term.
  6. Currently, the Indian central bank is very happy with the exchange rate.
  7. So, given the above facts, it’s clear that the movement of the dollar right now against other fiat is of limited importance to the gold price.
  8. Obviously, if the super-crisis were to reassert itself as a key gold price driver, via a dramatic fall in the dollar against other fiat, the gold price would benefit.
  9. As somebody who took a course on OTC derivatives years before 99.9999{7d2759035a2769ee7a6afa7c646e6642b67314b0cd0e17ac0c6ae4f965ff87d9} of the gold community had even heard of them, I’m far more aware most are, of how easily the Western financial system can create a parabolic move in the price of gold.
  10. But owning gold mining stocks basely solely on that premise is madness. The price of gold is determined by putting supply on one end of a scale, and demand on the other. Jewellery demand briefly reached
  11. Please click here now: http://www.cncam.ca/ I told you months ago that 2015 would feature the WGC (world gold council) using new methods to calculate Chinese gold demand, methods that would result in higher demand numbers.
  12. NaLiu’s (he’s MBA and CFA certified) CnC crew just finished talks with the WGC, and the WGC has now revised its 1060 tons of demand for 2013 for China, up to 1275.
  13. I never cared about the bargain hunters of China and India in 2013. That’s because I knew they would show up. Unfortunately for the gold bulls, the mafia showed up too, and stomped on the ability of the bargain hunters to buy what the ETF crackheads sold.
  14. I was always interested in the long term trend of gold jewellery demand, which is pointed up, and pointed towards ultimately overwhelming mine supply.
  15. That’s because I like to manage risk first, and then worry about reward. The best way to manage junior gold stock risk is to have permanent demand for supply from your mines overwhelm that supply.
  16. Then you can cheer for the reward from the super-crisis and various GEOP events that could appear, and do so in a relatively worry-free way.
  17. On that note, and for the good news, please click here now: http://gracelandjuniors.com/wordpress/wp-content/uploads/2014/12/2014dec7c1.png I’ve highlight this chart numerous times, because repetition of basic tasks is the road to excellence, and increased wealth. The Chinese gold jewellery demand trend is now at about 60,000 kilos a week, in terms of withdrawals from the SGE.
  18. Some parabola demanders, like Koos Jansen, mean well, but they don’t understand the nuances of demand/supply as well as NaLiu and the WGC do.
  19. Regardless, please click here now for more good news: http://www.en.sge.com.cn/ That’s the newly revamped SGE website. Click the “news” button for the latest action. The old site’s latest news, horrifically, was from 2011. This is another bull era step forwards for gold, and for you.
  20. Key points regarding the SGE and China’s gold market itself are these: Gold that is withdrawn from the SGE cannot simply be dumped back into the exchange. Any bar that comes out of there must be refined back into a new bar, with a new serial number by a recognized refiner, before it can be resold on the SGE. There are costs to re-refining, so you can be reasonably confident that of the 60 tons coming out of there, a solid amount is real demand.
  21. Having said that, combined, the comex/crimex and the LBMA trade about 50 times more gold than the SGE does, on a daily basis. It will take a number of years, obviously, for the SGE to overwhelm the crimex and the LBMA, and become the centre of price discovery that the Western gold community thinks it soon will be.
  22. Whether the centre of price discovery, via trading volume, is the crimex, the LBMA, or the SGE really doesn’t matter to me, or to the bank econs. What matters is supply versus demand, and the WGC’s numbers are at the forefront of what the econs look at. Despite what you see on CNBC, the top econs like Dominic Schnider and Jeff Currie are mainly focused on the demand versus supply numbers, when they make their statements.
  23. In the past, the WGC was little more than a bankster mouthpiece. Times may have changed more than the gold community realizes. I think that 12 months from now, the gold community is going to be shocked with how the WGC comes to represent China and India much more than it represents that Western banks and mega miners.
  24. Gridtime: Please click here now: http://gracelandjuniors.com/wordpress/wp-content/uploads/2014/12/2014dec7i1-1024x687.png That’s the Indian inflation chart, which just hit a record low. When the fear trade ruled the gold price discovery roost, falling inflation charts sent terror into the hearts and minds of goldbugs. At best, they were met with hope for money printing. Welcome to the new era, where lower inflation and falling oil prices are awesome news for your junior gold stocks, because it makes Chindians richer. When Chindians get richer they buy more gold. A lot more. I’ll follow this update in a few hours with analysis of some individual juniors. It’s important to understand why you own these stocks from a risk perspective. In the fear trade era, gold stocks were the riskiest investment in the world, and not just because gold is so hard to find. Within 12 months, I think that the way institutions view the risk involved in gold stock ownership is going to change, in a major and positive way.

 

 

Kirk Jr. on the gold explorers bridge, out!

Thanks!

Cheers

St

 

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