January 2013

Welcome to our January 2013 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 January Precious Metals Report by clicking this link, open the below attachment or go to our website at www.ausmint.com  

Precious Metals performance to 11th January

Gold and Silver did not perform as well as we expected in December, especially as the fiscal cliff negotiations floundered. The agreement reached simply deferred the many tough decisions that need to be made including spending, entitlement reform and raising the debt ceiling were all deferred for two months.

We then saw Gold plunge US$60 per ounce mid last week after the US Fed meeting minutes were leaked stating that several governors were thinking that it is now appropriate to slow or stop asset purchases before the end of 2013. Then by the end of the week Gold recovered US$20 in one day to end the week at US$1,665. (and approximately AU$1,579).

Immediate outlook still murky! 

With political decisions in the US deferred for 2 months and many investors sitting on the sidelines, January and February could see a mixed performance. We may well see lower levels in Edward's predicted range of US$1,600 and US$1,720, providing a buying opportunity.

Gold to regain its footing in 2013.

We will take close interest in Chairman, Ben Bernanke's next speech and his view on any asset purchase reduction (or Federal spending) versus reiteration of the bank's easing policies. The fineline is that any reduction in asset purchasing could send the US economy into recession.

Edward's view is any meaningful balance sheet pruning is unlikely. Moreover, a host of other central banks are all on relatively easy stances, with the ECB, the Bank of England and the Bank of Japan all in this camp.

Let's put the US Balance Sheet problem in perspective!

As of 1960, the Fed's balance sheet stood at US$30 billion and if it were to grow by the GDP growth rate of 3% it would have been US$300 billion by 2008. Instead, by 2008 and before the financial crisis started, it stood at US$900 billion. In 7 weeks after the Lehman bankruptcy, the Fed increased its balance sheet by US$900 billion and then another US$900 billion two months after that, bringing it to the US$2.7 trillion of today.

Add to this the political inertia of the US and the state of the global economy, any recessionary trend will be avoided.

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

Metals Summary:

A summary from Edward's report. 

Gold: The Gold story continues to be positive for 2013. The fiscal side of the US ledger remains a mess, with trillion-plus deficits. Outside of US monetary easing policies continue. In the short term volatility may remain high while for the 2013 year prices should fluctuate between US$1,520 and US$1,800.
 

Silver: Sank to a 4 month low in early January. Whilst Silver will track Gold it is expected to be in a fundamental surplus going into 2013 and this should also help keep overextended rallies somewhat in check. The outlook for the 2013 year is prices between US$26 and US$36.
 

Platinum: Volatility has continued and Platinum has been sluggish of late. The South African supply picture has improved and car sales are mixed (US improving but Europe in decline). The outlook for the 2013 year is prices between US$1,450 and US$1,750.
 

Platinum: Has performed strongly since October gaining 20% in this period. Demand is reported to have a strong outlook giving rise to the view on prices for the 2013 year being between US$620 and US$800.