December 2012

Welcome to our December Newsletter and Precious Metals Report.

Our Precious Metals Report comes to you from our USA based commodities expert, Edward Meir.

Edward Meir - AusMint's commodities expert

Edward has been in the commodities business for about 30 years in various capacities. Edward started his career in commodities with Drexel Burnham Lambert as a commodity futures research analyst and since then has provided research services to Trans-World Metals, MF Global and now with INTL FCStone. Mr Meir is based on New York and joined the Australia Mint Bullion & Coin team in May 2012.

Edward will be responsible for contributing news articles, personal views and updates, and the monthly Precious Metals Report.  

Please check out the December Precious Metals Report by clicking this link, open the below attachment or go to our website at www.ausmint.com  

Precious Metals performance in November to early December

As Edward states, the various twists and turns of the fiscal cliff did not impact the markets as we thought they would. We thought that Gold would rally substantially as the talks were going on then sell off once an agreement was reached.

This was not the case, we are now in the midst of a modest sell-off in Gold.

So what next with the US 'Fiscal Cliff' issue? 

The odds favour a modest agreement, or at least the first phase of an all encompassing agreement that will result in the expansion of the current US$40 billion a month QE3 program.

If, however time runs out and/or the politicians fail to agree, the result could be a multi-market meltdown that could set in during the first week of January.

Given that two of the strongest factors that result in higher Gold prices are money supply expansion and increased inflation, a significant extension to the QE3 program would be very positive for Gold.

The alternative 'meltdown', well that probably results in a flight to safety!

Positive signs out of China.

HSBC data shows that manufacturing in November hit its highest level in 13 months.

In addition, Edward's view is that the new Chinese leadership will likley announce a further series of measures to boost the economy, including a likely lowering of reserve trequirements and interest rates.

Edward's predictions for December:

"We think the base metals group will move higher over the course of December and January, likely responding to improving macro numbers, while also getting a secondary lift from the expected fiscal cliff resolution."

Gold: Given the modest sell-off of recent weeks we are quite cautious on Gold, but would be looking to do some buying on setbacks to around US$1,650-US$1,670.

Silver: Silver had a decent advance over the course of November and well outperformed Gold on a percentage basis. Over the very short-term and assuming an accord is reached, we think Silver will push down to the US$31.30 level at which point, we would consider doing some buying.

Storage as important as a buy/sell decision

No matter the size of your precious metals investment the question of storage and security should be carefully considered.

How much does it cost? Is your investment fully insured? Are your physical holdings under official audit review and control?

This is why we have chosen to partner with Westpac to offer secure and insured storage at Westpac's vault and safety deposit box facility at 341 George St, Sydney.

Qualifying Members receive these services for free for the first year from the date of their investment.   

AusMint Member benefits

• Free access to Thomson Reuters Knowledge Direct for Wealth Management, including real-time Global Financial News, Market Analysis and Pricing.
• Comprehensive charts with historical trends and comparisons across multiple precious metals, currencies and other investment classes (eg. ASX).
• Define your own profile of News (Business or Commodity specific) and specific Charts that you wish to track. Login securely and view your personal Bullion Investment Dashboard at any time.
• Your Bullion Investment Account records all your transactions and is a register of every bar or coin you currently hold. Each bar or coin has a certificate and you are free to check your physical holding at any time.
• For qualifying Members; Free storage of your bullion in a personal Safety Deposit box in Westpac's Vault at 341 George Street, Sydney.

Contact us at anytime on 1300 987 995

Key News to follow:

Over the coming holiday period in Australia, there are some key news items to watch out for that may result in opportunities to acquire or increase your position in precious metals. 

1. USA politicians agreement on the fiscal cliff issue. If not resolved before the end of December, watch out for a meltdown. If it is resolved, the implications are for further increases in money supply and low interest rates. Both are positive for Gold prices, its a matter of timing and degrees.
2. Increased spending by the Chinese government to boost the economy. China growth or otherwise in 2013 will be a major factor on many markets.
3. The impact of the Eurozone debt crisis on Germany, where the economy has been slowing sharply of late led by a substantial drop in exports.
4. Continued aid packages for Greece, Spain, Italy and to some extent France remain unresolved.