Survival And Prosperity

HSBC Predicts Higher Silver Prices For 2013, 2014

I finished up last night talking about gold. I’ll begin this morning by focusing on silver. London-based banking and financial services company HSBC just released their latest outlook for the precious metal. From a Reuters authored piece on The Economic Times (India) website on Wednesday:

Major bullion bank HSBC on Wednesday raised its forecasts for 2013 and 2014 silver prices, citing growing industrial demand and investor appetite for the metal.

The silver price is likely to move higher in 2013 due to higher industrial demand, steady investor appetite for hard assets, strong coin and bar purchases and a bottoming out of jewelry demand, HSBC analyst James Steel said in a note.

HSBC sees the price of an ounce of silver averaging $33 in 2013 (was $32) and $31 in 2014 (was $28).

Readers may recall that I recently blogged about HSBC and silver on January 29. HSBC had just made a large purchase of silver bullion from KGHM Polska Miedź S.A., the world’s largest silver miner, which fanned rumors of a possible physical silver shortage.

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)

Source:

“HSBC raises 2013, 2014 silver price forecasts.” Reuters. 13 Feb. 2013. (http://articles.economictimes.indiatimes.com/2013-02-13/news/37079184_1_industrial-demand-silver-price-price-rallies). 15 Feb. 2013.

Tags: HSBC, James Steel, KGHM Polska Miedź S.A., silver, silver bullion, silver prices, silver shortages

Physical Silver Shortage Rumors

“If investors can’t buy Silver Eagles, they can also buy other coins like Canadian Maple Leaf silver coins, which are minted by the Canadian government and are ‘just as good.’”

-Peter Schiff, President/Chief Global Strategist of Euro Pacific Capital and CEO of Euro Pacific Precious Metals, in a January 19 article on the ABC News website that noted the U.S. Mint had stopped selling 2013 American Eagle silver bullion coins

First, the U.S. Mint halted the sale of 2013 Silver Eagles.

Now, the Royal Canadian Mint is limiting sales of 2013 Silver Maple Leafs.

Daniela Cambone of Kitco News reported the following on The Globe and Mail (Canada) website last Firday:

Following news last week that the U.S. Mint had run out of its initial production of 2013 Silver Eagles, reports were circulating on industry blogs that the Royal Canadian Mint was next in line after suffering a silver shortage.

Confirming this strain on physical silver supplies, the mint this morning went on allocation, limiting the quantity of sales of the popular Silver Maple Leaf coin.

“Due to very high demand for Silver Maple Leaf bullion coins, the Royal Canadian Mint is carefully managing supply to ensure all our bullion distributors are served and we continue to take orders,” Alex Reeves, senior manager, communications for the Royal Canadian Mint, told Kitco News this morning.

(Editor’s note: Italics added for emphasis)

These latest developments at the U.S. and Royal Canadian Mints- in conjunction with HSBC’s recent large purchase of silver bullion from KGHM Polska Miedź S.A., the world’s largest silver miner- are fanning rumors of a possible physical silver shortage going on. From the Dubai Chronicle (UAE) website Sunday:

News that HSBC has concluded a second large purchase of silver bullion has sparked speculation that there is a physical silver shortage in the markets.

Earlier in the week, a news about the U.S. Mint temporarily running out of Silver Eagle coins added to the momentum. Many of the latest rumors about physical silver shortage talk about the relationship between physical silver-actual silver bullion-and paper silver, which is the silver that exists only on paper in the form of exchange-traded funds (ETFs) or futures contracts. Some market observers have speculated that there isn’t enough physical silver currently available to make delivery to all of the owners of silver futures, which would result in a “default” by the Comex where the silver contract is traded.

Whether these issues are actually reflective of high demand, problems with the mints’ supply chains, or games being played in the silver bullion market by outside forces or silver traders, remain in question.

(Editor’s note: Italics added for emphasis)

A follow-up piece by the Dubai Chronicle suggested silver production looked to be more than adequate in 2012. From the January 29 article:

In response to the recent physical silver shortage speculations, we researched data provided by mining companies for their performance in Q4 of 2012 and the past year in general. According to what the companies state, most of them increased silver production between 2% to 15% and aim to rise production further in the course of 2013.

(Editor’s note: Italics added for emphasis)

And a recent Money Morning article noted Kitco Senior Analyst John Nadler claims there are 207 million ounces of surplus silver overhanging the markets.

Still, stories of silver shortages, like this one by Matterhorn Asset Management founder Egon Von Greyerz on on the King World News Blog back on January 18, are making the rounds on the Internet these days.

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)

Sources:

Cambone, Daniella. “Mint limits sales of Silver Maple Leaf coins on high demand.” Kitco News. 25 Jan. 2013. (http://www.theglobeandmail.com/globe-investor/mint-limits-sales-of-silver-maple-leaf-coins-on-high-demand/article7855390/?cmpid=rss1). 25 Jan. 2013.

“News about physical shortage drive silver price higher.” Dubai Chronicle. 27 Jan. 2013. (http://www.dubaichronicle.com/2013/01/27/news-about-physical-shortage-silver-price/print/). 29 Jan. 2013.

“Physical Silver Shortage Rumors Confronted.” Dubai Chronicle. 29 Jan. 2013. (http://www.dubaichronicle.com/2013/01/29/physical-silver-shortage-rumors-confronted/). 29 Jan. 2013.

Tags: COMEX, Egon von Greyerz, HSBC, John Nadler, KGHM Polska Miedź S.A., paper silver, physical silver, Royal Canadian Mint, silver, silver bullion, silver bullion coins, Silver Eagles, silver ETFs, silver exchagne traded funds, silver futures, Silver Maple Leafs, silver miners, silver production, silver shortages, silver supply, U.S. Mint

China’s Gold Imports From Hong Kong Up 172 Percent On The Year

While many Americans continue to question the utility of gold, other nations just can’t get enough of the precious metal.

Case in point, China.

China’s gold imports from Hong Kong remain strong these days, even after a banner-year in 2011. Tatyana Shumsky wrote on the Wall Street Journal website Tuesday:

HSBC precious metals analyst Jim Steel said in a note to clients that China’s gold imports from Hong Kong are a signal of the country’s “strong appetite for gold.” China imported 68 tons of gold from Hong Kong in July, up 172% on the year, but down slightly from 75 tons imported in May.

(Editor’s note: Italics added for emphasis)

In 2011, Chinese gold imports from Hong Kong surged 259 percent (428 tons) from the year before, according to figures released by the Hong Kong Census and Statistics Department. Imports from Hong Kong are seen as a proxy for China’s overall gold imports.

Speaking of HSBC, analysts from the London-based banking and financial services company recently predicted gold prices could rally over $1,900 an ounce by the end of 2012. CNBC Assistant News Editor Holly Ellyatt reported on August 3:

“Economic uncertainty, geopolitical tensions and the uncertainty of the U.S. November elections are theoretically gold-bullish,” and gold should perform better later in the year “when U.S. growth is poor and the dollar is weak,” a new HSBC report said. “We expect prices to rally to above $1,900/oz by the end of the year. Patience is the most important commodity.”

(Editor’s note: Italics added for emphasis)

Ellyatt added:

HSBC recommends holding onto gold as an asset that will gain in value as investors fear the future of the euro and dollar, with governments and central banks expected to intervene to shore up their currencies’ strength.

More on gold later.

(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)

Sources:

Shumsky, Tatyana. “PRECIOUS METALS: Gold Prices Slip in Slow Trade.” Wall Street Journal. 7 Aug. 2012. (http://online.wsj.com/article/BT-CO-20120807-716396.html). 8 Aug. 2012.

Ellyatt, Holly. “Gold to Rally Above $1,900 by End 2012: HSBC.” CNBC. 3 Aug. 2012. (http://www.cnbc.com/id/48478951). 8 Aug. 2012.

Tags: 2012 election, China, Euro, gold, gold bullion, gold prices, Hong Kong, HSBC, Jim Steel, physcial gold, U.S. dollar