Rabu, 04 Januari 2012

Gold Price Soars to Open New Year

Amid the turmoil in Europe, investors have sought refuge in the U.S. dollar – the world’s reserve currency – a development that has led to widespread liquidation in investments tied to the gold price. Gold stocks have been hit particularly hard as a result, evidenced by the 16.1% 2011 annual drop in the Market Vectors Gold Miners ETF (GDX). Barrick Gold (ABX), the world’s largest gold producer, retreated 14.0% last year. One of the best indicators of the sector’s dismal performance last year was that Newmont Mining (NEM) – the only gold stock included in the SP 500 Index – fell 0.1% last year but was still one of the best-performing gold producers.

Looking ahead to the first trading week of the new year, a slew of U.S. economic reports are likely to serve as catalysts for the gold price. Later this morning, the ISM Index – a key manufacturing gauge – and a report on Construction Spending will be released. The latest Fed minutes – from last month’s Federal Open Market Committee (FOMC) meeting – are due out this afternoon. The remainder of the week includes several data points on the labor market – with ADP employment and weekly jobless claims scheduled for Thursday, followed by the monthly non-farm payrolls data on Friday.

The Federal Reserve will undoubtedly be keeping a close eye on the economic data as it prepares for its next FOMC meeting on January 25-26. The potential for a third round of quantitative easing (QE3) will continue to be a critical factor for the gold price heading into 2012. Thus far, the Ben Bernanke-led Fed has stressed the importance of maintaining accommodative monetary policies for the foreseeable future, but has yet to launch a new money printing campaign.

While the calendar is considerably quieter in Europe this week, German Chancellor Angela Merkel and French President Nicolas Sarkozy announced yesterday that they will meet in Berlin on January 9 to discuss next steps in combating the sovereign debt crisis. Euro zone officials are then scheduled to meet on January 30 at the next European Summit to draft a stricter set of measures for reigning in government spending.

Commenting on the outlook for the gold price, VTB Capital analyst Andrey Kryuchenkov wrote in a recent note to clients that “Longer-term players and physical buyers are likely to return to the market in the first half (of 2012), while the latest price retreat could serve as a good encouragement for hesitant market participants…There is little alternative to gold in times of economic uncertainty, despite the recent rush for the dollar. Gold stands on its own in terms of safe haven buying and bullion allocations are only likely to gain with currency protectionism still at large.”

Inspirasi Bisnis: Ini Dia Persiapan Mental untuk Menjadi Entrepreneur Sukses Hadapi segala rintangan dan tantangannya!

APA SAJA YANG HARUS KITA PERSIAPKAN SECARA MENTAL UNTUK JADI SEORANG

ENTREPRENEUR? Setidaknya ada 2 hal yang harus kita perhatikan:

1. Tujuan Inti dari Berbisnis

Semua tindakan yang dilakukan pasti mempunyai tujuan khusus. Pun begitu dalam memulai bisnis. Apa sih tujuan yang akan dicapai?

Sering orang lupa untuk menetapkan tujuan ini. Kalau dalam bahasa agama ini disebut “NIAT”. Karena seseorang akan memperoleh hasil pekerjaannya (baca: amalannya) sesuai dengan NIAT atau tujuannya.

Ada bisnis yang dilakukan hanya sekedar coba-coba, atau untuk menambah penghasilan, atau bahkan karena tidak mempunyai pilihan lain selain berwiraswasta. Ada juga yang menetapkan tujuan hidupnya hanya sekedar untuk memenuhi kebutuhan dasar sehari-hari saja. Bisa dibayangkan apa yang bakal dilakukan selanjutnya jika tujuannya hanya itu.

Ambillah contoh, misal kita berjualan PULSA TELEPON, ya hanya sekedar berjualan pulsa saja yang hasilnya hanya digunakan untuk memenuhi kebutuhan sehari-hari. Tidak ada tindakan dan langkah-langkah “unik” untuk berinovasi menghasilkan layanan baru atau membuka pasar baru sehingga jangkauannya lebih luas. Padahal, kemungkinan itu terbuka lebar di depan mata.

Tujuan Inti berbisnis seharusnya adalah proses menghasilkan keuntungan dalam jangka panjang. Bersabar menanti hasil yang besar. Sabar, menjadi kata kunci disini. Nafsu kadang menggiring kita untuk bertindak tergesa-gesa, ingin hasil besar dalam waktu singkat. Mari kita cermati lagi artikel sebelumnya: Dari Jakarta ke Surabaya Modal 44.000 Rupiah? Bisa!. Itu perjalanan dapat kita lakukan asalkan kita mampu BERSABAR, Mengorbankan waktu dan tenaga.

Lihatlah bagaimana Ir. Ciputra berbisnis property. Beliau tidak langsung jadi kaya begitu memulai bisnis. Ia melakukan segala prosesnya, langkah demi langkah, tahap demi tahap, dengan segala perjuangan pengorbana yang melibatkan tenaga, fisik, pikiran dan waktu. Proses itu bahkan memakan waktu puluhan tahun. Dan ia berhasil! sehingga bisa bilang: IT WORKS! yesss!!!



Bagaimana dengan ANDA?

Sudahkah melalui semua prosesnya untuk menuju pada tujuan inti? Sudahkah BERSABAR, ULET dan tak kenal menyerah ada pada diri kita? LET’s GO!!!

2. YAKIN Sanggup Menjalankan

Ragu-ragu sering membuat gagal! Jadi, anda harus yakin bahwa bisnis yang tengah dijalani akan sukses besar, meski banyak hambatan dan rintangan di depan. Nah, Seberapa YAKINKAH anda terhadap bisnis yang sedang dilakukan saat ini?

Untuk menjawabnya sangat mudah. Mari kita lihat apa yang kita kerjakan saat ini:

* Jika anda belum mempunyai bisnis, anda bingung mau bisnis apa. Lalu bertanyalah anda pada teman-teman. Jawaban teman sering kali mempengaruhi cara berpikir. Sehingga pada akhirnya anda memilih menjalankan bisnis sesuai saran teman. Padahal kebanyakan bisnis yang sukses adalah bisnis yang dilakukan dengan inisiatif sendiri, berasal dari diri sendiri, keyakinan sendiri. maka mulailah dengan menanyakan diri sendiri, “APA SIH YANG AKU SUKAI?” Mulai dari sana. Hobby bahkan bisa jadi bisnis anda!
* Jika anda sudah punya bisnis, mungkin tanpa disadari kita sering melirik jenis bisnis diluar core bisnis kita. Melihat ada bisnis lain yang sepertinya lebih menguntungkan, kita cepat-cepat berpindah haluan, berfokus pada bisnis baru tersebut dan melupakan/melalaikan bisnis lama. Dan “BURUK” nya, cara ini dilakukan berulangkali akibat keragu-raguan pada diri sendiri bahwa bisnis yang sedang dilakukan akan sukses besar nantinya. Akibatnya sudah bisa ditebak, bahwa kita hanya akan menjadi “PETUALANG” bisnis yang tidak pernah mampu membangun sebuah kerajaan bisnis yang kecil sekalipun!

Bagaimana dengan anda?

Apakah anda sanggup menjalankan bisnis yang sudah dipilih dengan sepenuh jiwa apapun rintangannya?

Ragu itu muncul karena “ketakutan terhadap akibat” yang sebenarnya belum terjadi. Pengusaha sukses sering bercerita bahwa mereka sebenarnya hanya bermodal”NEKAT”. Yang dimaksud bermodal “NEKAT” sebenarnya adalah “MODAL TEKAD”. Berani menanggung akibat dari pilihan mereka…apapun itu.

SIAAAPPPPP???????

Bertindaklah Seolah Kita Yakin Tak Mungkin Gagal






Bertindak seolah-olah, teknik memanipulasi otak.jpg

Bertindak seolah-olah, teknik memanipulasi otak.jpg

Salah satu strategi hebat untuk meraih kesuksesan adalah bertindak seolah anda sudah berada di posisi yang anda inginkan.

Artinya adalah: berfikir seperti…, berbicara seperti…., berpakaian seperti…., bertindak secara sadar mencari cara-cara kreatif untuk mencapai tujuan Anda.

Ini akan membangun dan memprogram Sistem Aktivasi Retikuler (Reticular Activating System - RAS) dalam otak anda untuk memulai memperhatikan apapun yang akan membantu anda sukses dan juga mengirim pesan kuat ke alam semesta bahwa tujuan akhir itu adalah sesuatu yang benar-benar anda inginkan.

Mulailah  Bertindak Seolah-olah…

Ada contoh menarik pada sebuah bank lokal yang setiap hari saya kunjungi. Ada beberapa teller, dan saya melihat seorang selalu mengenakan setelan jas dan dasi. Tidak seperti temannya dua teller pria yang lain, yang hanya mengenakan kemeja dan dasi, pemuda yang satu ini kelihatan seperti seorang eksekutif.

Setahun kemudian, saya mendengar kabar bahwa ia sudah dipromosikan dan punya meja sendiri, bukan menjadi teller, tapi kini ia bertugas mencatat aplikasi pinjaman. Dua tahun kemudian, ia menjadi supervisor, dan kemudian menjadi manager cabang. Karena penasaran, suatu hari saya coba ngobrol-ngobrol dengannya, dan katanya bahwa ia YAKIN suatu hari akan menjadi menajer cabang, karena itu ia mempelajari cara menajernya berpakaian dan iapun mulai berpakaian seperti itu. Ia mempelajari cara manajernya memperlakukan orang dan mulai berinteraksi dengan cara itu. Ia mulai bersikap sebagai manajer cabang jauh sebalum ia menjadi manajer cabang.

Untuk terbang secepat fikiran, agar dapat barada di manapun yang anda mau, pertamakali anda harus merasakan (seolah-olah) bahwa anda sudah sampai.





Coba kita simak pula pengalaman seorang Richard Bach (Penulis Jonathan Livington Seagull dan Seorang Konsultan Internasional)


Richard Bach: Konsultan Internasional

Richard Bach: Konsultan Internasional

Di akhir dasawarsa 70-an, saya bertemu dengan seorang tokoh yang baru kembali dari Australia. Tokoh tersebut telah berbicara di ratusan seminar diseluruh dunia. Lalu, saya memutuskan bahwa saya juga ingin sepertinya. Bepergian dan berbicara di seluruh dunia. Saya bertanya kepada diri sendiri apa yang akan saya perlukan untuk menjadi seorang konsultan internasional? Saya menelepon kantor imigrasi dan meminta mereka mengirimi saya selembar aplikasi untuk pembuatan paspor. Selain itu, saya juga membeli sebuah jam yang memperlihatkan semua zona waktu Internasional. Kemudian, saya membuat kartu nama bertuliskan “konsultan internasional”.

Saat itu saya memutuskan bahwa Australia akan menjadi tempat pertama yang akan saya datangi.  Jadi,saya pergi ke biro perjalanan dan meminta selembar poster besar bergambarkan Sydney Opera House, Ayers Rock, dan rambu jalan “Hati-hati, Disini Kangguru Menyebrang “.

Setiap pagi, ketika sedang sarapan, saya memandangi poster yang dipasang di pintu kulkas itu dan membayangkan saya telah berada di Australia.

Tidak sampai setahun kemudian, saya diundang mengadakan seminar di Sydney dan Brisbane. Begitu saya mulai bersikap seperti seorang konsultan internasional, akan semesta menanggapi dengan memperlakukan saya seperti- LOA.


Hukum Daya Tarik hanya menyatakan bahwa “suka menarik suka”. Semakin sering anda menciptakan getaran-kondisi mental dan emosional-sudah memiliki sesuatu, semakin cepat anda menariknya kepada anda. Itulah hukum kekal alam semesta yang sangat penting untuk mempercepat tingkat kesuksesan anda.

Atau dalam bahasa timurnya: Berdoalah dan bersyukur kepada ALLAH, dan yakin seolah-olah semua yang kita minta itu sudah diberikan-NYA. Mulailah memantaskan diri untuk cita-cita dan tujuan kita dimasa yang akan datang. Ya, PANTASKANLAH DIRI TERLEBIH DAHULU….. 

Selamat mencoba

Jangan Pernah Menyerah

“Maju terus. Tidak ada di dunia ini yang mampu mengalahkan ketekunan. Termasuk bakat; tidak ada yang lebih umum selain orang-orang gagal yang memiliki bakat. Termasuk otak yang cemerlang; orang cerdas bukan siapa-siapa dan hampir selalu ada di sekitar kita. Pun bukan taraf pendidikan; dunia ini penuh dengan orang-orang berpendidikan yang hidup tidak layak. Hanya ketekunan dan tekad yang memiliki kekuatan tak terbatas” — Calvin Coolidge, Presiden Ke 30 Amerika Serikat.

Tips Memilih Produk Clickbank

Sudah sekitar 2 Tahun lalu Clickbank mengijinkan keanggotaan dari Indonesia. Ini sebuah peluang yang terlalu berharga untuk di lewatkan. Buat anda yang belum menjadi member di clickbank, langsung aja signup tenang semua gratis.
Setelah anda menjadi member clickbank dan meiliki affiliate ID, sekarang anda tinggal memilih produk produk yang akan ada pasarkan. Memilih produk clickbank memang gampang – gampang mudah eh maksud saya gampang gampang sulit. Ada beberapa hal yang perlu di perhatikan untuk memilih produk clickbank. Dan yang paling mendasar adalah kita harus bertanya pada diri kita apakah kita seorang “Market Follower” atau kita seorang “Market Maker”. Kenapa hal ini mendasar karena setiap orang mempunyai passion yang berbeda, passion berbeda otomatis tenik memilih produk clickbank akan berbeda, produk yang dipasarkan pun akan berbeda.
Pada kesempatan kali ini saya akan share tentang tips memilih produk clickbank sebagai Market follower, Kenapa? Karena effort sebagai market follower relatif lebih ringan di banding dengan Market Maker.
Sekarang anda bisa langsung buka new Tab pada browser anda masuk ke clickbank marketplace. Ok see…. banyak kategori di sidebar sebelah kiri. Kita harus memilih salah satu dari kategori produk yang ada di clickbank. Akan lebih baik anda memilih kategori sesuai dengan hobi anda. Misal Anda senang olah raga, ok berarti kita masuk ke kategori “sport”. Just click sport pada category sidebar. Nah keluar kan produk yang segitu banyak ( sekitar 436 setika saya menulis artikel ini ). What should I do? Tenang jangan panik.
Berikut akan saya coba jelaskan Tips Memilih Produk Clickbank dari istilah – istilah statistik nya. Nah di atas sebelah kanan ada kolom “sort result by:” nah kita bisa mengurutkan produk berdasarkan kategori
1. Popularity
2. Avg $/sale
3. Initial $/sale
4. Avg %/sale
5. Avg Rebill Total
6. Avg %/rebill
7. Gravity
Wah istilah2 apa tuh…?
Ok tenang saya akan jelaskan satu per satu.
1. Popularity
Adalah indikator kepopuleran sebuah produk di pasarkan oleh para marketer, tapi ingat produk dengan popularity tinggi belum tentu yang paling laris tapi biasanya memang begitu.
2. Avg$/sale
Untuk pembelian satu kali di awal, angka ini sama seperti Initial $ / sale. Jika vendor menawarkan produk penagihan berulang ( recurring ), itu sama dengan rata-rata total penjualan awal ditambah semua rebills, dibagi dengan jumlah penjualan awal. Sederhananya, untuk setiap pembelian baru produk ini, jumlah ini adalah rata-rata $ yang anda peroleh secara total atas seorang pelanggan baru. Namun, ini hanya rata-rata, jumlah ini tidak dijamin
3. Initial $/sale
Angka $ Ini adalah jumlah rata-rata yang affiliate mendapatkan untuk setiap penjualan produk ini. pembelian Upsell dalam satu kali pembelian di awal juga dianggap Initial sales. Angka ini memperhitungkan refund account, Chargeback, dan pajak penjualan
4. Avg %/sale
Angka rata rata prosentasi komisi yang di peroleh oleh para affiliate
5. Avg Rebill Total
Angka $ rata – rata komisi rebill yang diperoleh oleh para marketer untuk produk2 yang mimiliki program rebill.
6. Avg %/rebill
Angka prosentasi komisi rebill yang di peroleh oleh para affiliate
7. Gravity
Angka ini merupakan perhitungan yang unik oleh ClickBank yang memperhitungkan jumlah afiliasi yang berbeda yang memperoleh komisi dengan mempromosikan produk ini selama 12 minggu terakhir. Karena transaksi yang lebih baru diberikan nilai yang lebih tinggi, jumlah ini dapat memberi Anda gambaran tentang produk apa yang “HOT” pada saat ini dalam hal banyak affiliate yang mempromosikan dan berhasil menjual produk ini. Namun, gravity yang tinggi juga dapat menunjukkan bahwa akan ada banyak kompetisi dalam mempromosikan produk ini.
Ok sampai sini dulu Tips Memilih Produk Clickbank (1). Tips tips yang lain akan menyusul pada artikel berikutnya Terima kasih
“Kaya Bersama Membangun Bangsa”

Gold Prices Pop Past $1,600 as Dollar Flails (Update 1)

NEW YORK (TheStreet ) — Gold prices settled at $1,600 an ounce Tuesday as fresh new year buying buoyed the precious metal after it bounced off of key technical levels.
Gold for February delivery closed $33.70 higher at $1,600.50 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,608.70 and as low as $1,566.80 an ounce while the spot price was up $34, according to Kitco’s gold index.
Silver prices added $1.65 to close at $29.57 an ounce while the U.S. dollar index was down 0.8% at $79.56.
“It’s all about the euro,” says Anthony Neglia, president of Tower Trading, who says that higher gold prices have more to prove despite the fact that they bounced off $1,523 an ounce — a key technical level. “Gold can’t sustain [the rally] for just a day,” warns Neglia, who is selling rallies and needs to see gold close over $1,625 an ounce to get more optimistic.
A weaker U.S. dollar and stronger euro were helping support higher gold prices as well as gold’s 10% 2011 finish. A 10% gain might serve to attract investors looking for top performing assets as the SP ended the year flat, but those remembering gold’s volatility — that gold closed down 18% from its intra-day high of $1,923 — might be reluctant to bet big.
The latest commitment of traders report for the week ended December 27th, shows this conflict. Total long positions fell by 5,200 contracts while total short positions also fell by almost 3,000 contracts. “The latest data shows net fund longs are at the lowest since April 2009 in gold,” says James Moore, research analyst at FastMarkets.com, “suggesting plenty of upside price potential once sentiment improves.”
Part of today’s rally could also have been led by short covering says George Gero, senior vice president at RBC Capital Markets. “Look for closes above $1,615 to add new buyers from funds that may have missed last week’s buying opportunity.” Gero warns, however, that gold could be vulnerable to profit taking if prices can’t maintain the rally.
Stan Dash, vice president of applied technical analysis at TradeStation, agrees. “There may be enough demand, if the dollar has topped for now, to absorb a lot of that, but large holders will be liquidating into this rally.” Dash says if gold prices can break above $1,624, the 200-day moving average, and above $1,633 an ounce, a short term average, then he will have more conviction in the rally.
“This bounce is impressive,” says Dash, but “we are following what is going on in Europe.” Dash doesn’t think that gold is acting as a safe haven as political tensions heat up between Iran and the U.S. because the metal and stocks are moving higher together. If gold was a safe haven the two would be moving inversely to each other. “[I would] caution those looking to gold as protection against weak stocks.”
The latest minutes from the Federal Reserve‘s last meeting was a non event for gold, but might help to sustain a longer rally. The Fed indicated it might keep rates low past its initial target of 2013. Policymakers will also give their individual forecast on the fed funds rate as well as their economic predictions, which might make the Fed’s policy more transparent. The Fed will also lay out expectations of its balance sheet which means more direct hints of quantitative easing or tightening.
If rates are kept low for longer than expected or the Fed explicitly hints at pumping more money in the system, gold could rally. If inflation rises faster than interest rates, the dollar in the bank is worth less and gold becomes an attractive hard asset to counter paper money devaluation. The Fed’s next meeting is the last week in January.
Gold is also ignoring disappointing import news from India. The Bombay Bullion Association said that the country imported 125 tons of gold in the fourth quarter of 2011, down 55% from expectations, despite seasonally strong factors like Diwali, the festival of lights, where consumers buy a lot of gold. India imported 878 tons of gold in 2011, which was down more than 8% year-on-year. To make matters worse, in the first quarter India might import 143 tons, just half of what it did in 2011.
“For the time being the gold price will not find any support from this side,” says Commerzbank as demand has been battered as gold became too expensive to buy in rupee terms and as interest rates remained high. These low demand figures put a lot of pressure on China to make up demand.
“I do see [the slowdown in India] as an aberration …but China is continuing to gain on India in terms of consumption of gold,” says Marcus Grubb, managing director at the World Gold Council, who was referring to the slowdown in India from the third quarter.
China represented 28% of global jewelry buying in the third quarter and for only the fourth quarter since 2003 outpaced Indian demand. Grubb says China benefitted as it let its currency be revalued upwards against the dollar versus India which had to contend with a falling rupee- thereby making it more expensive to buy gold.
“We think imports into China could be 400 tons this year,” says Grubb which means China might be on track to consume 747 tons of gold in 2011. India’s gold market was deregulated 20 years ago compared to just 10 years for China, which means “China’s rate of consumption is catching up to India’s rate,” says Grubb and it needs to continue as Indian demand slows.
Gold mining stocks were soaring Tuesday. Kinross Gold(KGC) was rallying 5.53% at $12.03 while Yamana Gold(AUY) was jumping almost 4% at $15.27.
Other gold stocks, Agnico-Eagle(AEM) and Eldorado Gold(EGO) were trading higher at $37.81 and $14.54, respectively.
–Written by Alix Steel in New York.
To contact the writer of this article, click here: Alix Steel.

2012 Gold Outlook

Looking Back
Given gold’s recent lethargy, it’s easy to forget just how well it has performed over the last twelve months. At the time of this writing (early December 2011), gold is up around 22% on the year. Compare this to the major global stock indices: The U.S. Dow Jones Industrial Average is up around 4%; the UK FTSE100 is down 7%, the German DAX has fallen 14% while the Japanese Nikkei 225 is down 15% and the Shanghai Composite is heading for an 18% loss. Even when looking at other metals, gold has outperformed. Silver is about 3% higher while COMEX copper has fallen around 20% over the last twelve months.
However, 2011 was not all fun and games for gold bulls. Gold began the year struggling to break above $1,400 and fell steadily over January to retest support just above $1,300. Then gold embarked on a strong rally which eventually took it to a fresh all-time high in nominal terms just above $1,900 by the end of August. However, it subsequently dropped 10% over the next three trading sessions. This move corresponded to a general slump across all so-called “risk assets” following the failure of U.S. policymakers to act decisively on extending the country’s debt ceiling. This political impasse triggered a downgrade from ratings agency Standard and Poor’s, whereby the U.S. lost the AAA credit rating which it had held since 1941. Yet, gold recovered quickly and made a fresh intra-day record high in dollar terms in early September. But then, we experienced a second vicious and protracted sell-off, which saw gold lose 20% over the next three weeks. The metal has recovered its poise over the fourth quarter, but there is little doubt that investor confidence has taken a knock and there are now doubts over gold’s reputation as a safe haven.
Gold in a Bubble?
Many analysts were quick to say that gold was in a bubble that has now popped. Typically, these analysts actively discourage investment in precious metals by saying that because gold doesn’t pay interest or a dividend (and costs money to store in physical form or to hold via futures or ETFs), it is a poor place to park capital. However, in a world where yields are universally low, or come with unacceptable risk, owning gold becomes more attractive. On top of this, the growth in Exchange Traded Funds (ETFs) has allowed the wider public to trade it easily. For many who were unhappy holding physical gold, either because of the storage costs or security risks, ETFs have proved to be a viable alternative.
But die-hard gold bugs (who point to gold’s universal acceptance as a medium of exchange for thousands of years) say that gold is nowhere close to “bubble territory.” They note that when adjusted for inflation, the previous record high of $850 achieved back in 1980 would price gold at around $2,400 today. Gold bugs also argue that gold is destined to rise much further than this, as central banks continue to print money and inject liquidity into the markets. This is viewed as a desperate measure to combat the debt deleveraging currently taking place. In addition, as every country seems intent on boosting growth by cheapening their currency to encourage exports, this simultaneous devaluation of fiat currencies can only boost gold’s appeal. Bullish gold investors are quick to point out how gold holds its value and frequently cite the following example: after the Bretton Woods Agreement in 1946, gold was fixed at around $35 per ounce. Back then, an ounce of gold would buy you a decent suit. Flash forward to today, an ounce of gold will still buy you a good suit, but $35 won’t. Which would you rather have held over the last 75 years: $35 or an ounce of gold?
Central Bank Purchases
One of the biggest fundamental drivers for gold’s recent price rise has been the changing behavior of central banks. For over twenty years, central banks were net sellers of bullion. But in the last couple of years, we have seen significant purchases by China, Russia, India, and Mexico amongst others. We have also seen Venezuela begin to repatriate its physical gold from banks in Europe, the U.S., and Canada. Meanwhile, the central banks of developed economies, which hold significant proportions of their reserves in gold, stopped selling. There are two reasons for this change in behavior. First, in contrast to many developed countries, emerging market central banks typically have only a small percentage of their foreign exchange reserves in gold; they are now in a position and have the will to rebalance their reserves in gold’s favor. Second, noting the persistent budget deficits that the U.S. is running which threaten the status of the dollar as the world’s reserve currency, there is a wish to diversify out of dollars as well as other fiat currencies.
A Few Thoughts on Silver
Gold and silver are often bundled together these days in the minds of investors. Silver generally moves in the same direction as the yellow metal, but with far greater volatility. Silver has a dual capacity: It is viewed as both an investment and an industrial metal. However, it is rare that these two qualities are considered at the same time. Consequently, when investors are concerned about a slowing global economy, they tend to sell silver and forget about its investment potential. But like gold, silver has acted as a medium of exchange and store of value for thousands of years. There are reasons to believe that investors will rediscover these important properties. In addition, silver tends to get used up in industrial processes and recycling rates are low. This is in stark contrast to gold where the vast majority of gold ever mined still exists above ground. Silver stockpiles have fallen quite dramatically. Estimates suggest that above-ground stockpiles have now fallen to one billion ounces from four billion in 1980.
Looking Forward
As noted previously, gold and to a lesser extent silver have both performed well over the last year. Many investors will be asking themselves if this upward momentum can continue. The drivers for this year are likely to be the same as last: If central banks continue to be net buyers, then gold should find strong support, at least as far as the physical market is concerned. However, the paper (futures and forward) markets dwarf the physical in terms of the outright number of ounces traded each day. Physical buyers tend to be long-term holders who have made the decision to own gold because it offers a method of wealth preservation. It is a store of value and a medium of exchange. It cannot be devalued as it cannot be created by the press of a button as currency and debt instruments can. Therefore, it makes up an important part of any investment portfolio.
Yet, over the short-term, the movements in the gold price correlate closely with those of other “risk assets.” Leveraged investors, such as fund managers and speculators, use the futures market and ETFs. These instruments are typically traded on margin. Consequently, if say equity markets experience a sell-off, there is usually a rush to liquidate all margined positions to raise cash and limit future losses. Both gold and silver have been caught up in these sell-offs before, and it’s probable that they will suffer again. As we have seen this year, the buy-side of the gold trade can get overcrowded; a small piece of negative news can result in a rout and heavy losses for longs, especially if over-leveraged. One thing is for certain ? precious metals will remain volatile for as long as economic uncertainty continues to grow.
- David Morrison contributed to this article