October 2012

Welcome to our October 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 open the October Precious Metals Report by clicking this link or go to our website at www.ausmint.com  

Precious Metals performance in September

'Call the printing presses to the rescue but will it work? 

Late July, European Central Bank Chief Mario Draghi said they 'would do whatever it takes to save the Euro'. Not to be outdone, the US Federal Reserve Chairman Ben Bernanke rolled out QE3 (Quantative Easing Phase 3), but the strategy had no end date.. only as and when labour markets begin to heal. The Fed would extend zero rates well into 2015.

Meanwhile, Bank of Japan would extend its asset purchase plan by US$126B. The Bank of England voted unanimously to continue buying bonds. And the Chinese government unveilled a US$150B stimulus program.

The problems with all this is that results take time to emerge and pumping money is an inflationary gamble.

So what happened on the back of this was that Gold rose more than US$100 per ounce in September hitting a new yearly high.

Edward and the teams' view is that while there may be some pull-backs that they would look to buy Gold on any substantial pull-backs as Gold will be a beneficiary of the massive easing policies that continue. If investors can withstand the occassional setbacks then Gold remains a good investment going into 2013.

Typically, silver followed gold and now looks as if it could break through the important level on the charts of US$35.50, in which case it could test US$38. However the fundamentals as an individual metal is not that great especially as Chinese imports are showing signs of decreasing.

Platinum continues to be affected by the South Africal strikes, with supply under strain give rise to support in the metal price.

Paladium technically does not look as constructive as other metals in the precious group.

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 including a personalised Safety Deposit box and full online Bullion Account management.   

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

The case for Gold and it's continued rise

• The troubles in Europe are far from over. Unemployment in many countries is at record highs (Greece and Spain remain at greater than 25%). Whilst we have some current stability, the fundamentals are still precarious. 
• The USA Federal Reserve has announced its third quantitative easing program (QE3), but this could well be as some Economists are saying a 'Game Changer'. Their stated objectives are to put downward pressure on longer term interest rates, support mortgage markets and generally help financial conditions to be more accommodative.  
• Even more significantly is that the Federal Reserve will buy US$40 Billion in mortgage backed securities every month with no end date nor maximum dollar amount it will invest. 
• These policies increase inflation.
• These policies weaken currencies relative to Gold. 
• Globally Central Banks are buying more Gold, including China. This trend is likely to continue lending further support to the price of Gold.

For all of the above reasons and other historical charting information comparatives (that are often very complicated to understand and apply), we conclude that there is more upside on Gold and as a result other precious metals for the foreseeable future. 

Australian Indicators

• Last month we talked about a probable Interest Rate decrease. Well that happened in September and we have seen the AUD$ come off. The question is whether the AUD$ is now at a peak? If there is downside in the currency then an investment in Gold will hedge this factor to a certain extent. 

There continues to be a lot going on that will influence the price of gold and other precious metals in the coming weeks. Watch this space! 

Please note our Disclaimer on our website and in the Precious Metals Report.