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Posts Tagged ‘Eric Sprott’

Panikslagna investerare räknar ned till asiatiska öppningen

Fredagens historiska besked från S&P om en sänkning av USAs kreditbetyg till AA+ och tydliga signaler om att Tyskland motsätter sig att ECB och EFSF köper italienska statspapper har fått redan panikslagna investerare världen över att förbeda sig för ett eventuellt blodbad när finansmarknaderna öppnar om några timmar.

Även om många hade väntat sig en nedgradering så kom den tidigare än de flesta räknat med. Förutom stigande räntor innebär det också sänkningar för amdra obligationer som t ex GSEs. Eftersom många amerikanska pensionsfonder t ex inte tillåts investera i tillgångar som inte har en AAA-rating så kan det få stora konsekvenser.

Finansministrar och centralbankschefer har samtidigt haft krissamtal i helgen och ytterligare krismöten är planerade till måndagen. Möjligheten finns att det kan komma någon form av ‘paket’ om man bedömer att det finns en risk för en kollaps. Via ZH kan vi t ex nu på kvällen läsa att källor uppger att ECB trots det tyska utspelet överväger massiva köp av italienska och spanska statspapper.

Guld, men även silver, borde logiskt stiga på S&Ps besked, men det är sannolikt att kartellen kommer att försöka bromsa denna uppgång för att inte för många skall söka sig till de enda tillflyktsorten nu när till och med amerikanska statspapper inte bedöms 100% säkra.

Gruvbolag kan visserligen dras med ner av den bredare marknaden, men det blir nog sannolikt högst tillfälligt och inte alls lika omfattande som 2008.

Besökte GATAs guldkonferens i helgen och passade på att byta några ord med Eric Sprott. Eric är inte oväntat oerhört positivt inställd till guld, silver och inte minst gruvorna. Eric tror att den katalysator som behövs för att gruvorna skall bryta sig loss är signaler om att guld och silver är de enda tillflyktsorterna. Kanske kan S&Ps nedgradering resultera i en sådan katalysator.

Kommer dela med mig av ytterligare samtal jag haft under konferensen i senare inlägg.

Kategorier:Guld, Statsfinanser Taggar:, , , ,

Eric Sprott: Sprott äger mer fysiskt silver än någonsin

King World News har intervjuat Eric Sprott för att få hans kommentar till uppgifterna om att Sprott Asset Management (SAM) sålt delar av sitt innehav i den egna fysiska silverfonden PSLV, som vi skrev om igår.

Det visar sig att Sprott inte bara återinvesterat likviden i silver utan att SAM äger mer fysiskt silver än någonsin tidigare, vilket säkert lugnar en del oroliga silverinvesterare. Sprott ser inte oväntat att silver på sikt kommer att stiga till nya rekordnivåer.

Här är Sprotts kommentar:

Any proceeds that we’ve received from selling PSLV have immediately gone back into silver or other silver equities.  And I can tell you we have the highest position in physical ownership that we’ve ever had, and we have not lost one ounce of our encouragement for the outlook for the silver price.

I sort of regard the things that are going on in the (silver) market as basically some group of traders working to get the price down quickly, particularly the overnight action on Sunday night when it (silver) goes from $48 to $42 in whatever it was, 9 or 13 minutes.  It’s a travesty of a trading system that would happen.  

We’ve been committed to silver and the fundamentals for silver and people’s interest in silver, so it would be massively incorrect to suggest we think silver has hit a high.  We don’t think that at all, I’ve suggested it (silver) should trade at a ratio of one to sixteen to gold.  Gold I am sure will be $1,600 not too long from now, and by implication that would suggest it (silver) could trade up to $100 and I’m not shying away from that.

Sprott om storleken på försäljningen:

Well, relative to what we owned it was an incredibly small sale.  As a portfolio manager we have to manage the portfolio and there were other things that were underperforming PSLV that we thought we should reinvest our money in so that’s exactly what we did, all in the silver area…Our position in silver today in physical ounces is higher than it’s ever been.

Här är en länk för den som vill lyssna till hela intervjun med Sprott.

Kategorier:silver Taggar:, ,

Eric Sprott ger investare i silvergruvor hopp

SIlver lyckades mirakulöst att resa sig under måndagens handel efter kartellens brutala ‘pappersmisshandel’ och var som högst uppe kring 47,25 dollar innan kartellen kallade in CME för att sätta stopp för hjälteinsatsen med en TREDJE höjning av marginalkraven på kort tid. Snacka om desperation för att undvika en Comex default i maj.

De senaste dygnets volatilitet har varit en utmaning även för en del härdade silverinvesterare och när det framkom att Eric Sprott, som för många nått närmast ‘hjältestatus’ med sina träffsäkra prognoser, beslutat att sälja av delar av sitt innehav i sin fysiska silverfond så blev det sannolikt för mycket.

I en intervju med Sprott av Globe and Mail framkom det dock att han visserligen sålt delar av innehavet i PSLV, men att intäkterna återinvesterats i fysiskt silver (för att kapitalisera på den stora premien i PSLV) samt silvergruvor som faktiskt uppvisar en NEDGÅNG för året trots silvers raketfärd. Sprott ser helt klart en möjlighet att dra nytta på de nedtryckta priserna på silvergruvor, vilket är en glädjande nyhet för alla gruvinvesterare som kanske helt tappat tålamodet de senaste 24 timmarna.

Här är ett utdrag från intervjun med Sprott:

After a post this morning highlighted that Eric Sprott has sold about $34-million worth of units in his Sprott Physical Silver Trust (PHS.U-T19.48-2.17-10.02%), he wants to make it absolutely clear that he isn’t turning his back on the metal.

“We haven’t lost our enthusiasm for silver,” he told me Monday afternoon.

So why the sales? “Every dollar of money that was raised by selling shares of [the Trust]… was reinvested in silver or silver equities,” he said.

While silver’s (SI-FT45.49-0.59-1.28%) price per ounce has soared in recent months, “silver shares have not done as well, which is almost shocking in a way, and it looked like there were opportunities in either getting some premium on PSLV shares and buying silver or buying silver equities.” The sales were made at an average price of about $21, up from their $10 IPO price about six months ago.

But that doesn’t mean Mr. Sprott is abandoning his trust. He says he still holds around 25 per cent of the total trust units between his funds and his charitable foundation.

As for future public offerings following the IPO, he says he is sticking to a promise he has already made. “There will not be an offering that negatively impacts the premium on the PSLV,” he said.

Kategorier:silver Taggar:,

Eric Sprott: ”Inte förvånad om guld/silver ratiot når ensiffrigt tal”

Eric Sprott hör till de få som mer eller mindre helt prickat in den explosiva uppgången för silver. I en färsk artikel redogör han för varför han inte skulle bli förvånad om guld/silver ratiot når ensiffrigt tal, att jämföra med dagens nivå kring 34. Obligatorisk läsning för alla silverinvesterare,

Här är ett utdrag:

All indications lead us to believe that there is now roughly an equal amount of investment flowing into silver and gold on a dollar-for-dollar basis. And although the price ratio of silver to gold has fallen substantially since the highs of 2009, our analysis strongly suggests that this ratio must move lower to restore a fundamental balance between supply and demand. Only time will tell how much lower it will go, but we would not be surprised to see it hit single digits before settling into a more sustainable equilibrium.

Kategorier:silver Taggar:,

Eric Sprott tar död på myten om att guld är en bubbla

Senaste artikeln från Eric Sprott där han kanske en gång för alla tar död på myten om att guld är en bubbla. Med tanke på dagens ‘uppvisning’ av guld i kölvattnet av tragedin i Japan så torde bubbel-ropen börja klinga av. Läsning rekommenderas.

 

Debunking the Gold Bubble Myth

By:  Eric Sprott & Andrew Morris
Contributing Editor:  David Baker

Gold’s continuous ten-year rise hasn’t sheltered it from controversy. Despite producing consistent returns in virtually all currencies year after year, some market pundits still question its validity as an asset class. It’s true that gold doesn’t pay any interest, and it’s also true that much of the gold produced throughout history still exists in some form today. But these characteristics shouldn’t inhibit it from performing as a monetary asset. Cash, after all, doesn’t pay real interest either, and there is more fiat money in existence today than ever before. So why does gold still receive such harsh criticism?

We believe much of it stems from a widely held misconception that gold is forming a financial bubble. It’s a fairly straightforward view – that gold buyers are merely foolhardy speculators buying on a whim with no rationale other than to sell to the ‘greater fool’ at higher prices in the future. It’s a view that assumes that gold has no intrinsic value and is simply a speculative asset that has captured investors’ imaginations.

We don’t take these views on gold lightly. We’ve seen bubbles before and fully know how they end. We have no interest whatsoever in participating in some sort of speculative frenzy – that’s a recipe for disaster in the investment business. Thankfully, however, our gold investments present no such risk. As our analysis has revealed, gold is actually a surprisingly under-owned asset class – and one that has generated far more attention in the media than it probably deserves. While its exemplary performance since 2000 is certainly worthy of discussion, gold simply hasn’t commanded enough investment to warrant the bubble fears it seems to have aroused among market pundits and business commentators. The truth about gold is that most people simply don’t own it…yet.

To be clear, a speculative bubble forms when prices for an asset class rise above a level justified by its fundamentals. For this to happen, increasing amounts of capital must flow into the asset class, bidding it up to irrational levels. Gold may be trading at all-time nominal highs, but a look at investment flows proves that it isn’t anywhere close to being overbought.

In their Gold Yearbook 2010, CPM Group noted that in 1968, gold held by individuals for investment purposes represented approximately 5% of global financial assets. By 1980 that amount had fallen to roughly 3%. By 1990 it had dropped significantly to 0.6%, and by the year 2000 represented a mere 0.2% of global assets. By the end of 2009, nine years into the gold bull market that began in 2000, they estimate that gold had increased to represent a mere 0.6% of global financial assets – hardly much of an increase. Gold ownership didn’t change much last year either, as we estimate that this percentage increased to 0.7% of global financial assets in 2010.1 So despite gold reaching record nominal highs, the world holds about the same portion of its wealth in gold as it did over two decades ago. While this probably says more about the proliferation of financial assets over the past decade than it does about gold investment, it is surprising to note how trivial gold ownership is when compared to the size of global financial assets.

The increase in gold ownership from 0.2% in 2000 to 0.7% in 2010 is also misleading. If you consider the approximate $227 billion that was invested in gold bullion in 2000, that level of investment would have grown to $1.18 trillion, or 0.6% of financial assets, by the end of 2010 – based purely on gold appreciation alone.2 In other words, the actual amount of new investment into gold since 2000 represents only 0.1% of current global financial assets, or about $250 billion. Although this number may seem large, consider that roughly $98 trillion of new capital flowed into global financial assets over the same period, so gold’s approximate 0.3% share of global investment flows is essentially trivial.3

The 0.7% ownership data point also has interesting implications for global gold ownership going forward. Consider that to return to a meaningful level of gold investment, say to the 5% level of 1968, it would require over $9 trillion of gold investment today, or about 6.5 billion ounces of gold at the current gold price. This would represent well over 1.3 times the amount of gold ever produced throughout history and four times the amount of known gold reserves.4,5 So not only is the public relatively underinvested in gold, but at current prices it isn’t even possible to increase our gold holdings back to a meaningful level.

Gold’s apparent underinvestment also applies to gold equity financings since 2000. According to our sources, gold companies raised approximately $78 billion of equity capital in new financings over the past 11 years.6 To put this amount in perspective, this is equivalent to the total amount of equity raised by technology companies in the first three months of 2000.7

To further illustrate the lack of activity in the gold equity capital markets, we compare last year’s gold company financings with the technology company financings in the year 2000 (Chart 1). Once again, looking at the relative amount of capital market activity in the gold equity markets, we find no indication of a bubble whatsoever.

Furthermore, we compiled information on mutual fund flows to get a sense for the average retail investor’s appetite for gold equity investments (Chart 2). We found very familiar results in this area as well: compared to the $2.5 trillion dollars that was invested in US mutual funds since 2000, precious metal equity funds have seen a mere $12 billion in inflows. If there is a bubble in gold investments, the average retail investor hasn’t participated in it.

To truly gauge the level of exuberance (or lack thereof) in today’s gold market, it’s beneficial to review equity valuations, since they provide an excellent lens into investor sentiment for an asset class. Certainly if a bubble was forming in gold, it would likely rear its head in the stock market, where speculative manias have been fleecing ‘greater fools’ for centuries. The best gold index to review for valuation is the Amex Gold Bugs Index (HUI), which has returned a stunning 674% since 2000. It is certainly an index that could be mistaken for a bubble based on its incredible performance… until one considers its relative valuation. In Chart 3 we present a time series chart comparing the price-to-EBITDA of the HUI vs. that of the Nasdaq Composite since 1998. Price-to-EBITDA is a valuation metric that compares a company’s stock price to its profits before accounting for taxes, interest payments, and non-cash charges like depreciation and amortization. It is similar to the ubiquitous price-to-earnings (P/E) multiple but allows for a comparison across periods where net earnings are negative and P/E ratio’s incalculable.

Looking at the price-to-EBITDA multiple for the HUI Index we see absolutely no evidence of a frothy market for gold stocks. At the current level of 13 times EBITDA, the HUI is actually trading below its 15-year average of 14 times. Moreover, valuations for gold stocks are currently one-third of the levels reached by the Nasdaq in late 1999. There simply isn’t any evidence of excessive valuations in gold stocks, which is most certainly where we would expect the excesses to be most apparent.

Based on our findings, this notion of a gold bubble is patently false. The current investment interest in gold relative to other financial assets remains surprisingly low – about where it was two decades ago. Moreover, the modest valuations of gold equities highlight the absence of unbridled investor enthusiasm for gold investments. The fact is, despite all this talk about the gold bubble, the capital flows into gold vis-à-vis other financial assets have simply not been large enough to indicate any speculative mania. Investors can rest assured that they are not participating in any speculative bubble by owning gold. They are merely protecting their wealth.

Kategorier:Ädelmetaller, Guld Taggar:,

Eric Sprott: Det finns inget mer silver!

Kategorier:Ädelmetaller, silver Taggar:,

‘Explosiv’ efterfrågan på guld i Kina enligt landets största bank

Reuters rapporterar att Industrial and Commercial Bank of China (ICBC), landets och världens största bank, ser en ‘explosiv’ efterfrågan på guld i landet. ICBC sålde 7 ton guld i januari i år, vilket var i nästan hälften av de 15 ton man sålde under hela 2010! Efterfrågan på silver är också rekordstor.

Denna nyhet kommer knappast som en överraskning för de som läste Eric Sprotts artikel ‘Guld Tsunami’ nyligen. För de som ännu inte läst den bör helt klart göra det.

Här är mer information från Reuters (via ZeroHedge):

Chinese Demand For Gold ”Explosive”

According to an executive of Industrial and Commercial Bank of China, the world’s largest bank by market value, demand in China for physical gold and gold-related investments is growing at an ”explosive” pace and its appetite for the yellow metal is poised to remain robust amid inflation concerns, reports Reuters. In other words, what was previously repeatedly reported on Zero Hedge, and by the World Gold Council, is starting to be appreciated by everyone else. Yet in a market in which supply and demand are completely disconnected from price discovery thanks to global central planning, and courtesy of precious metal price suppression by JPM, China investors are able to accumulate gold and other non-dilutable metals at prices that no longer reflect surging global demand. And just like in the US, China is also starting to fall for physical substitute investments: ”There is also frantic demand for non-physical gold investments. We issued 1 billion yuan worth of gold-price-linked term deposits in 2010, but we managed to sell the same amount over just a few days in January this year,” Zhou said, adding that such deposits would easily exceed 5 billion yuan ($759 million) this year.” Although in China, unlike in London, these deposits may actually have real coverage behind them.

From Reuters:

ICBC, the world’s largest bank by market value, sold about 7 tonnes of physical gold in January this year, nearly half the 15 tonnes of bullion sold in the whole of 2010, said Zhou Ming, deputy head of the bank’s precious metals department on Wednesday.

We are seeing explosive demand for gold. As Chinese get wealthy, they look to diversify their investments and gold stands out as a good hedge against inflation,” Zhou told Reuters.

Gold imports into China soared in 2010, turning the country, already the largest bullion miner, into a major overseas buyer for the first time.

The surge, which comes as Chinese investors look for insurance against rising inflation and currency appreciation, puts the country on track to overtake India as the world’s top gold consumer and a significant force in global gold prices.

Gold prices jumped 30 percent in 2010 and struck an all-time high of $1430.95. Spot silver surged 83 percent last year and is currently hovering at around $30 per ounce.

Zhou said China’s gold demand could grow at a stronger pace this year compared with 2010, as a choppy stock market and moves by Beijing to rein in property speculation and purchases means more investors will pile their cash in bullion investments.

Unlike the property market, investment in the gold sector is something the government is encouraging,” he said.

Beijing has encouraged retail consumption and announced last August measures to promote and regulate the local gold market, including expanding the number of banks allowed to import bullion.

”China has a centuries-long cultural attraction to gold and because we have started at such a low base, I think demand growth will likely stay strong for quite some time,” he said.

Oh yes, silver too

Zhou said there was also voracious demand for silver, with the bank selling about 13 tonnes of physical silver in January alone, compared with 33 tonnes in the whole of 2010.

Not surprisingly, China is doing all it can to offload bubble frenzy to its billion plus consumers:

The bank on Tuesday launched its second physical gold investment product, which sells gold bars to investors, which can be resold for cash through ICBC based on real-time gold prices.

The WGC said ICBC’s introduction of this gold investment could lift China’s gold retail investment by 10 to 15 percent in 2011 from about 170 tonnes last year.

For those who think gold is already in a bubble… check back in 1 year.