DOCSLIB.ORG

The Effect of Lease Rates on Precious Metals Markets by Merlin Marr-Johnson, Metals Analyst, HSBC Bank USA

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
The Effect of Lease Rates on Precious Metals Markets by Merlin Marr-Johnson, Metals Analyst, HSBC Bank USA THE LONDON BULLION MARKET ASSOCIATION The Effect of Lease Rates on Precious Metals Markets By Merlin Marr-Johnson, Metals Analyst, HSBC Bank USA In the precious metals First, it is probably worth Gold the interest rate differential returning to the simplest Again, the key to lease rates is in between dollar yields and lease markets, lease rates are fundamental of all. As changes in the supply and demand of lending. rates.The producers therefore buying (demand) and selling Staying with gold, the supply side unwittingly reinforced the frequently cited as root (supply) affect prices, so changes for gold lease rates rests firmly on arguments for a declining spot in borrowing (demand) and the large lending reserves market and a rising lease rate. causes for metal price lending (supply) affect lease rates. available to the market. Central The borrowing, of course, banks currently hold helped generate a strong demand behaviour. However, the A lease rate is simply the going approximately 29,000 tonnes of environment for borrowed market ‘price’ for borrowing or gold (multi-lateral institutions gold, which elevated lease rates reason for the lease rate lending the market. If a market is hold around another 4,200 to over 2%. oversupplied relative to demand, tonnes).With the perceived behaviour itself is rarely prices/lease rates are low, and if a economic stability of the 1990s, The reason for the shift lower in market is undersupplied relative and strong returns being achieved lease rates since 2000 stems from examined. This short to demand, prices/lease rates are by most asset classes, central bank an almost total reversal of every high. reserve managers came under factor cited in the previous article aims to discuss increasing pressure to make assets paragraph, causing a marked It is interesting to note, however, work for them. Accordingly, reduction in borrowing demand, the main features of the that an oversupplied spot market central banks entered the market thereby leading to oversupply in does not necessarily mean that the as significant lenders of their the lending market.The vicious leasing markets that lie lending market is oversupplied strategic gold reserves. cycle of price depreciation, strong (nor vice versa). Remember that dollar yields and producer and behind gold, silver, during the late 1990s, when gold It is ironic that the dollar strength fund short selling has been prices were declining from and strong equity market transformed into a positive spiral platinum and palladium. $400/oz in early 1996 to performances drove some central of price appreciation and $255/oz by mid-1999, the spot banks to sell gold to avoid an producer and fund buying. Lease market was awash with gold – but opportunity cost, and that this rates have dropped. lease rates were higher then than very same negative sentiment they are now.As the chart below towards gold as an asset led to In March 2001 a brief surge in shows, one-year lease rates are producers hedging (borrowing the shorter-dated lease rates currently under 1%, but for the gold). Hedging was encouraged occurred as lending was spread four years running from 1996 to by a negative view on gold, and further along the curve – up to an the end of 1999, one-year lease strong interest rates on dollars unprecedented three years by rates averaged 2.12%. that meant producers could sell central banks.The move was in gold forward and borrow it for direct response to a lack of return the interim, taking advantage of in the shorter-dated contracts, 1 Gold Lease Rates 2 Gold Price/Market Positions USD/oz % 6 moz 10 410 5 8 6 390 4 4 370 3 2 350 0 2 330 -2 310 1 -4 290 -6 0 -8 270 -10 250 Jan Jan Jan Jan Dec Dec Dec Dec Dec Dec Jul-02 Jul-99 Jan-94 Jan-97 Jun-00 Jun-94 Jun-97 Apr-01 Feb-02 Apr-95 Feb-96 Apr-98 Feb-99 Mar-93 Sep-01 Sep-95 Sep-98 Dec-99 Nov-00 Aug-93 Nov-94 Aug-96 Nov-97 93 94 95 96 96 97 98 99 00 01 1 month 1 year "'Non-commercials' total net long position – LHS" Gold price - RHS Legend entry page 20 ALCHEMIST ISSUE TWENTY-NINE 3 Platinum Inventory/Price 25 15 5 -5 -15 -25 -35 -45 1975 77 79 81 83 85 87 89 91 93 95 97 99 2001 03 but, as it happened, it market. One-month lease rates Cumulative stock change Platinum price (USD/oz) unfortunately coincided with have averaged 9% over the past some short-term borrowing, two years. and the change in lending patterns caused a short-lived The other key difference 4 Gold Inventory/Price spike in lease rates. Overall, between platinum and gold Inventory, '000t USD/oz central banks have been is the role that the Tokyo 35 700 powerless to stimulate Commodities Exchange 30 600 borrowing demand and, given (TOCOM) plays in the market. 25 500 the current fundamental The volume of material traded 20 400 weaknesses plaguing the major in Japan means that the economies globally, we question platinum lease rate takes a 15 300 whether there is likely to be leading role in driving spot 10 200 committed short selling in gold prices. 5 100 in the years to come. Lease 0 0 rates are likely to remain low. Platinum on TOCOM is a based 1975 1980 1985 1990 1995 2000 on a futures contract – the Platinum active trading month is 12 Cumulative stock change LHS Gold price (USD/oz) RHS The platinum market is the months ahead.This gives the polar opposite to gold, but the public a chance to trade out of 5 Platinum Lease Rates/Price principles remain the same.The the position profitably at some main problem facing both the stage in the ensuing 11 months. % USD/oz spot and the futures markets is If the Japanese general public 30 650 the depletion of above-ground (JGP) sell futures, this position 25 stocks and the lack of a lender will be offset against trade 600 of last resort. Charts 3 and 4, at house long positions, and these 20 550 right, illustrate the point clearly. trade houses will sell spot loco 15 For gold, calculated cumulative Zurich to mitigate the 12- 500 above-ground stocks have barely month risk. In other words, JGP 10 changed over the past 30 years, take an outright position in the 450 5 staying around 32,000 tonnes, market (short in this case) and but the platinum inventory the trade houses are therefore 0 400 levels swing between zero and long futures and short spot, and Dec-00 Mar-01 Jun-01 Sep-01 Dec-01 Mar-02 Jun-02 Sep-02 30 tonnes. Although the they have to finance the 11- Platnium Price, USD/oz (RHS) quantity of inventory held prior month gap. 12 Month to 1975 in platinum is 3 Month unknown, we believe that Trade houses borrow material current inventory levels are on a rolling basis to meet the 6 Palladium Lease Rates/Price close to zero. short obligations, until the contract expires and the trade % USD/oz What is more alarming is that houses receive platinum from 30 with current demand projection the public. All very simple, but 1050 the market is forecast to enter the net outcome is heavy 25 850 uncharted territory with regard borrowing of platinum when 20 to supply and demand deficits. the JGP are short, and 15 Price risks remain skewed to the conversely lending when the 650 upside and there does not JGP are long. Platinum lease 10 appear to be much prospect of a rates are, unsurprisingly, 450 5 net inventory accumulation at volatile.The three clearly visible any stage in the next few years lease rate spikes over the past 0 250 coming in to ease the borrowing two years are associated with: Dec-00 Mar-01 Jun-01 Sep-01 Dec-01 Mar-02 Jun-02 Sep-02 Palladium Price, USD/oz (RHS) 12 Month 3 Month page 21 THE LONDON BULLION MARKET ASSOCIATION 7 Silver Lease Rates/Price 8 Silver Price/Market Positions % USc/oz Moz short covering, lease rate high, moderate price gains USD/oz 20 520 400 7.5 350 7.0 500 300 15 6.5 250 480 200 6.0 10 460 150 5.5 100 440 5.0 50 5 4.5 420 0 -50 4.0 0 400 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Dec-00 Mar-01 Jun-01 Sep-01 Dec-01 Mar-02 Jun-02 Sep-02 Non-commercial net long position - LHS Silver price - RHS Silver Price, USD/oz (RHS) 12 Month 3 Month 1) the palladium price high in Palladium Silver early 2002 Moving to palladium, we believe Finally, a few words on silver. 2) short-covering in post 9/11 that one can now safely classify Silver lease rates are low (one 3) JGP TOCOM short-selling palladium as a by-product metal. month 0.35%, one year 0.7%) coincident with loco Zurich Barring the Stillwater mine reflecting low borrowing demand tightness (in chronological order). (which is, incidentally committed and sufficient lending supply. to expansion), palladium supplies As at the end of 2001 GFMS had Not only can TOCOM positions are dictated by nickel/copper identified 18,440 tonnes of above change very rapidly, the volumes production rates in Russia and ground silver stocks, with 9,200 are large relative to other natural platinum production rates in tonnes held by European dealers borrowers of platinum.
Load more

Recommended publications
  • Gold Price Dynamics Around the Clock
    Copenhagen Business School Department of Finance 15th May 2019 Gold Price Dynamics Around the Clock Authors: Francesco Donati (115765) Johannes A. Jung (115540) Supervisor: Paul Whelan Pages: 98 Characters: 183,273 Thesis submitted in partial fulfilment of the requirements for the degree of Master of Science in Advanced Economics and Finance (Cand.Oecon) Acknowledgements We want to thank Copenhagen Business School for the splendid learning opportunity. We express our deep gratitude to the thesis supervisor, Paul Whelan, for his guidance. We want to thank our friends and families for their precious support during this exciting last period of our student life. A special mention goes to our parents, of course. We want to thank the amazing people met in the program, their energy, drive and diversity inspired and improved us. We will be missing all the ups and downs of student's life. Further, we want to thank Beyza and Emanuela, for the laughs and joy they brought us every day. Lastly, Johannes wants to mention that his girl Ploy is more precious than gold to him. Francesco & Johannes Abstract In this thesis we examine intraday behaviour of gold prices in the 24 hours day. We make a distinction between eastern world (China, India) and western world (US, Europe). We suspect that the intraday pattern may be affected by two factors: (i) large gold imports by eastern countries and (ii) manipulation of the London Gold Fix. We find a hat-shaped intraday seasonality, with gold appreciating during eastern trading hours in a robust way and depreciating for the rest of the day.
    [Show full text]
  • The London Bullion Market Association Responsible Gold Guidance
    The London Bullion Market Association Responsible Gold Guidance About the London Bullion Market Association The LBMA is the international trade association that represents the market for gold and silver bullion, which is centred in London but has a global client base, including the majority of the central banks that hold gold, private sector investors, mining companies, producers, refiners and fabricators. The current membership includes 129 companies which are actively involved in the loco London bullion market, including trading houses, banks, refiners, miners and fabricators as well as those providing services to the market such as consultants, supervisors and assayers. The membership encompasses a total of 22 countries. The LBMA was formally incorporated in 1987 at the behest of the Bank of England to take over the roles previously played by two separate organisations, the London Gold Market and London Silver Market, whose origins go back to the mid-nineteenth century. The LBMA Good Delivery List In the refining industry, the LBMA Good Delivery List includes the world’s pre-eminent refiners of gold and silver, located in 31 countries. The List is widely recognized as the de facto standard for the quality of gold and silver market bars. This recognition is based on the stringent criteria that applicants must satisfy before being listed, as well as the regular proactive monitoring of accredited refiners by the LBMA. In addition to satisfying the LBMA’s technical standards, a refiner seeking LBMA accreditation must meet a number of non-technical criteria in relation to ownership, tangible net worth and operating history. In response to the Dodd-Frank legislation on conflict minerals emanating from the DRC, the LBMA has informed all gold refiners on the List that in order to maintain their Good Delivery status, they will have to demonstrate that their refined output is conflict-free.
    [Show full text]
  • The Last Central Bank Gold Agreement
    ALCHEMIST ISSUE 96 THE LAST CENTRAL BANK GOLD AGREEMENT This is an extract from the European Since 1999 the OVER TIME INNOVATIONS gold market has IN FINANCIAL ENGINEERING Central Bank (ECB) Economic Bulletin, grown and matured FACILITATED THE USE OF GOLD Issue 7 2019, reproduced with the in terms of liquidity AS A FINANCIAL INSTRUMENT 2 kind permission of the ECB. and investor base . THANKS TO THE DEVELOPMENT The structure of the OF EXCHANGE-TRADED gold market differs The last Central Bank Gold Agreement (CBGA) expired in September from that of other PRODUCTS TRACKING GOLD 2019 after 20 years of such agreements. The CBGAs’ signatories financial assets, as PRICES AND BACKED BY included the Eurosystem and the central banks of Sweden, Switzerland gold does not only PHYSICAL GOLD and – initially – the United Kingdom. The first CBGA1 was set up in 1999 serve investment for a five-year period, when concerns about the negative market impact of purposes, but also has practical uses. At the time of the first CBGA, uncoordinated gold sales by central banks were evident, and increasing, the diversity of demand for physical gold was low and concentrated in the gold market. The goal of the CBGAs was to help stabilise the gold in jewellery, while the contribution to demand from the official sector market by alleviating these concerns, relieving downward pressure on was negative. gold prices, and contributing towards more balanced supply and demand conditions by limiting and coordinating central banks’ gold sales. The CHART A Agreement was renewed three times, each time for a five-year period.
    [Show full text]
  • Lending and Borrowing Metal Lending Allocated Metal Options
    Editor’s Note SECTION 9 Introduction London Bullion Market Association Lending and Borrowing London Platinum and Palladium Market Metal The Price London Good Delivery – Gold and Silver Deposits and Leases Good Delivery – Platinum and Palladium London Precious Metals Clearing Limited Calculation Basis Precious Metal Accounts Interest Paid in Currency or Metal Lending and Borrowing Metal Lending Allocated Metal Options Precious Metal Benchmarks Forwards Bank of England Outright Forwards Futures Markets and Exchange Traded Products Forward Forwards Physical Metal Documentation Short Dated Forwards Market Regulation Transaction Dates Taxation ‘End End’ Convention Conversion Table Key Facts about Precious Metals Market Size Clearing Statistics Contango or Backwardation Market Trade Statistics Central Bank and Governmental What Determines Metal Interest Rates Ownership of Gold Properties of Precious Metals Receiving Interest on a Deposit Frequently Asked Questions Options Annexes Disclaimer BACK TO CONTENTS 39 THE GUIDE 2017 - Version 1.0 Editor’s Note Lending and Borrowing Metal Introduction London Bullion Market Association It is often blithely asserted that precious metals have no interest rate. At maturity, the loan can be rolled over (depending on credit This is incorrect. considerations), either with the existing lender or with another bank. London Platinum and Palladium Market The lender has full credit exposure to the borrower over the amount of The Price Deposits and Leases the loan – the currency value of which will fluctuate as the underlying The rationale for lending and, particularly, borrowing metal will vary metal price increases or decreases. London Good Delivery – Gold and Silver between gold, silver, platinum and palladium. However, very broadly speaking, lenders of metals will be seeking a return on their investment, However, it is unlikely that the fibreglass manufacturer will have ready Good Delivery – Platinum and Palladium whereas the borrowers will have a variety of motives.
    [Show full text]
  • Outlookmerge Template
    The Honourable Mary L. Schapiro Chairman U.S. Securities and Exchange Commission 100 F Street, NE Washington, DC 20549 United States of America 5th August 2011 Re: Proposed Rule Release No. 34-63547; File No. S7-40-10 Dear Chairman Schapiro, LBMA Comments Relating To Dodd-Frank Section 1502 Conflict Mineral Legislation The London Bullion Market Association submits this letter in parallel with the statement dated 29th July 2011, made by the participants in the multi-stakeholder forum for conflict-free mineral supply chains, convened by the International Conference on the Great Lakes Region (ICGLR), the Organisation for Economic Co-operation and Development (OECD) and the UN Group of Experts on the Democratic Republic of the Congo (UN GoE on DRC). The LBMA would like to express its broad support for the above-mentioned statement and to highlight the main issues which relate particularly to the gold market. About the London Bullion Market Association The LBMA is the international trade association that represents the wholesale over-the-counter (OTC) market for gold and silver bullion, physically based in London. The current members are shown on the attached list. London is the focus of the international OTC market for gold and silver with a client base including the majority of the central banks that hold gold, plus producers, refiners, fabricators and other traders throughout the world. The LBMA was formally incorporated in 1987 in close consultation with the Bank of England. In the refining industry, the LBMA Good Delivery (GD) List is widely recognized as the de facto standard for the quality of gold and silver market bars.
    [Show full text]
  • Zhou Xiaochuan: Gold Market Functions to Hedge Against Risks
    Zhou Xiaochuan: Gold market functions to hedge against risks Speech by Mr Zhou Xiaochuan, Governor of the People’s Bank of China, at the 2004 London Bullion Market Association Annual Precious Metals Conference, Shanghai, 6 September 2004. * * * I would like to congratulate, on behalf of the People’s Bank of China and in my own name, the convening of 2004 London Bullion Market Association Annual Conference on Precious Metals. Relying on improved infrastructure and as a cohesive force in the national economy, Shanghai is developing various types of financial markets. Any of these markets, be it a foreign exchange market, a bond market, a futures market or a gold market, serves as an important center that connects and influences the rest of the country. This is why it is so encouraging and appropriate to hold this year’s Precious Metals Conference in Shanghai. London gold market is the biggest as well as the oldest gold market in the world. In 1804, London replaced Amsterdam to become the world’s gold trading center; in 1919, London gold market was formally founded; and in 1982, London futures market for gold declared its foundation. Currently, the London gold market is trading at a per week volume of 2-3 billion U.S. Dollars, accounting for 43% of the world’s total gold transactions, establishing itself into not only the world’s largest gold sales market, but also a governmental gold trading market for most of the world’s central banks. It is even a major force in influencing the gold prices in many other countries and regions.
    [Show full text]
  • Gold: a Commodity Like No Other About the World Gold Council Contents
    World Gold Council 10 Old Bailey, London EC4M 7NG United Kingdom T +44 20 7826 4700 F +44 20 7826 4799 W www.gold.org Published: April 2011 Gold: a commodity like no other About the World Gold Council Contents The World Gold Council is the market development organisation Executive summary 01 for the gold industry. Working within the investment, jewellery The golden touch: enhancing a commodity allocation 02 and technology sectors, as well as engaging in government affairs, Optimal portfolios 03 our purpose is to provide industry leadership, whilst stimulating A history lesson: gold at the core of a portfolio 04 and sustaining demand for gold. Gold’s essence: a distinct behaviour 05 We develop gold-backed solutions, services and markets, Demand and supply 05 based on true market insight. As a result, we create structural Bullion market 07 shifts in demand for gold across key market sectors. Derivatives market 08 We provide insights into the international gold markets, Gold’s role as a monetary asset 09 helping people to better understand the wealth preservation Reducing counterparty risk 09 qualities of gold and its role in meeting the social and The golden rule: optimal performance in good times and bad 10 environmental needs of society. Achieving true diversification 12 Negative correlation when it is needed most 14 Based in the UK, with operations in India, the Far East, Turkey, Contango and backwardation 15 Europe and the USA, the World Gold Council is an association whose members include the world’s leading and most forward Conclusion 16 thinking gold mining companies.
    [Show full text]
  • Let™S Get Physical
    Let’s Get Physical BY JOHN HATHAWAY ON DECEMBER 12, 2012 Money printing by world central banks, it would seem, has propelled the prices of all things rare. The list includes fine art, vintage wines and antique sports cars. It is front page news that the flood of paper money has enhanced the quotation of almost any tangible asset perceived to be in scarce supply. In a 11/23/13 article, The Economist reports: “Evermore wealth is being parked in fancy storage facilities….The goods they stash in freeports range from paintings, fine wine and precious metals to tapestries and even classic cars.” The article observes that a key factor fuelling “this buying binge…is growing distrust of financial assets.” It doesn’t hurt that the prices of most of these items have trended steadily higher in price over the past decade. Most intriguing in this array of ascendant alternative assets, however, is the crypto currency known as Bitcoin, whose advocates offer a rationale that is striking in its parallel to that for holding gold bullion. Bitcoin, as almost everyone knows, is a liquid transactional medium of strictly limited supply. The parallel breaks down, of course, when it comes to price behavior of these two otherwise similar alternative currencies. The price of a Bitcoin has increased to $975/coin (Mt. Gox 12/10/13) from less than $25 in May 2011. At the end of May 2011, bullion traded near $1500/oz, and is quoted today at a price that is 17% lower. The supply of gold has increased over the past two years by 180 million ounces.
    [Show full text]
  • Schenk, Catherine R. (2013) the Global Gold Market and the International Monetary System
    View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Enlighten: Publications Schenk, Catherine R. (2013) The global gold market and the international monetary system. In: Bott, Sandra (ed.) The Global Gold Market and the International Monetary System from the Late 19th Century to the Present: Actors, Networks, Power. Palgrave Macmillan, Houndsmill, Basingstoke, pp. 17-38. ISBN 9781137306708 Copyright © 2013 Palgrave Macmillan A copy can be downloaded for personal non-commercial research or study, without prior permission or charge Content must not be changed in any way or reproduced in any format or medium without the formal permission of the copyright holder(s) When referring to this work, full bibliographic details must be given http://eprints.gla.ac.uk/90725/ Deposited on: 07 February 2014 Enlighten – Research publications by members of the University of Glasgow http://eprints.gla.ac.uk C.R. Schenk ‘The global gold market and the international monetary system’, in S. Bott ed., The Global Gold Market and the International Monetary System from the late 19th Century until Today, Palgrave, 2013, p. 17-38. The Global Gold Market and the International Monetary System Catherine R. Schenk University of Glasgow The role of gold in the global economy has been complex and variable over the past few centuries. This chapter examines how gold became established at the foundation of national and international monetary systems and traces its movement from the core to the periphery of the global monetary system. The monetary role of gold has had a profound effect on the global gold market which trades in gold both as a commodity and as a portfolio asset.
    [Show full text]
  • Commodity Option Pricing Is a Must-Read for Option Traders, Risk Managers and Quantita- Tive Analysts
    “It has been very hard to find a comprehensive option pricing book cover- ing all exchange-traded commodities, until Iain Clark’s book. Commodity Option Pricing is a must-read for option traders, risk managers and quantita- tive analysts. The author combines academic rigor with real-world examples. Practitioners can find an extremely useful toolkit in option pricing andan excellent introduction to various commodities.” Joseph Y. Chen, Chief, Market Analytics, Nexen “Being himself a practitioner with a wealth of experience, Iain knows what is relevant to the daily work of commodities trading desks. He uses his remarkable pedagogical skills to develop the reader’s intuition for the mod- els and products before delving into the practicalities of the commodities markets. Many of the details covered in this book cannot be found elsewhere in the literature. I am pleased to recommend this book to quants and traders, who will soon find themselves relying on it in their daily work.” Paul Bilokon, Director, Deutsche Bank “Option pricing analytics for trading commodity derivatives can be quite different from those of equity and fixed income derivatives. This book fills a gap in current literature by presenting a comprehensive treatise on the risk characteristics associated with pricing and hedging commodity derivatives. The author strikes a fine balance between option pricing theory and financial practice in the markets. The materials are succinctly written, with clear and insightful descriptions of the features of various commodity markets and state-of-the-art pricing models. This book is destined to be a valuable prac- tical guide for practitioners and a useful academic reference for researchers in trading and understanding commodities derivatives.” Yue Kuen Kwok, Professor, Department of Mathematics, Hong Kong University of Science and Technology Commodity Option Pricing For other titles in the Wiley Finance series please see www.wiley.com/finance Commodity Option Pricing A Practitioner’s Guide Iain J.
    [Show full text]
  • Global Silver Investment October 2019
    Global Silver Investment Prepared for The Silver Institute October 2019 Global Silver Investment Table of Contents 1. Introduction & Executive Summary 2 Introduction 2 Executive Summary 2 2. Investment & Price Determination 6 Introduction 6 Silver’s Correlation to Other Commodities 6 Macroeconomic Variables 7 Silver Prices and the Supply/Demand Balance 8 3. Mining Equities 11 Introduction 11 Investment Case 11 Risk Characteristics of Silver Stocks 12 Investment Criteria 12 Investment Opportunities 13 Conclusions 15 4. Commodity Exchanges 16 Introduction 16 Comex 17 China 18 India 19 Other Exchanges 20 5. Over-the-Counter Markets 21 Introduction 21 6. Exchange Traded Products 23 Introduction 23 Historical Performance 23 2019-to-date Developments 24 Key Holders 24 Regional Performances 25 Outlook 25 7. Physical Investment: Coin and Bar Demand 26 Introduction 26 US 26 India 27 Germany 29 China 29 Chapter 1: Introduction & Executive Summary Global Silver Investment Chapter 1 Introduction & Executive Summary – Investor demand for silver across a range of investment vehicles, including futures, TheIntroduction Silver Institute commissioned Metals Focus to undertake a study of ETPs and mining equities, has improved global silver investment. The study has two objectives. First, to review noticeably this year. current trends within the principal avenues of silver investment and second, to assess the outlook for each of these, highlighting opportunities as well as – This reflects growing macroeconomic and any headwinds that may be in prospect. political uncertainty, which have lifted the appeal of safe haven assets. In recent months, investor interest in both silver and gold has risen significantly. The catalyst for this has been growing macroeconomic – Looking ahead, as the backdrop remains uncertainty, due to the escalating US-China trade war, which has increased supportive of higher silver prices, we the risk of recession (as suggested by negative bond yields).
    [Show full text]
  • The Bank's Golden Evolution
    ISSUE 95 October 2019 The Bank’s International Golden A PRICE Development Evolution BENCHMARK of the SGE Interview with the FOR THE AGES By Wang Zhenying - page 11 Bank of England - page 4 By Rachel Harvey - page 21 SAVE THE DATE! Global Precious Metals Conference 2020 11-13 OCTOBER EPIC SANA Lisboa Hotel, [email protected] Lisbon, Portugal www.lbma.org.uk/events ALCHEMIST ISSUE 95 EDITORIAL ISSUE BY THOMAS KENDALL, CHAIR OF LBMA’S PUBLIC AFFAIRS COMMITTEE AND HEAD OF PRECIOUS METALS SALES, ICBC STANDARD BANK PLC HIGHLIGHTS The Bank’s Golden Evolution - A Q&A Session The basic The programme will be kick-started by a With Victoria Cleland and keynote speech from James Kynge, Emerging Ruth Crowell, page 4 numbers are Markets Editor for the Financial Times. 100 Years of the Gold Price - Part Four impressive James is one of the most-experienced Western By Dr. Michele Blagg and journalists covering Asian affairs, having spent when it comes Fergal O’Connor, page 8 over two decades in the region for Reuters and, to China and since 1998, for the FT. He’s exceptionally well The International Development gold: $90+ placed to put the current macroeconomic and of the Shanghai Gold Exchange geopolitical forces into context. By Wang Zhenying, page 11 billion in official reserves; The session focusing on innovation in the Jeremy East: Shining a Light on Asia 400+ tonnes in mine Chinese gold market will cover developments Interview with Aelred Connelly, page 14 production; 15+ million on the exchanges, in the jewellery market, in clearing and vaulting, and in both retail A Price Benchmark for the Ages ounces traded onshore and investor products.
    [Show full text]