September 2012

Dear Friend/ Member,

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

Precious Metals performance in August

What a change a few days can make!

The Precious Metals Report by Edward Meir was written on the eve of Thursday 6th September, including a statement that details of the European bond buying scheme could be released on Thursday. This continued progress and pro-activity of the European Central Bank is giving investors an element of confidence.

Gold then raced to a six month high on Friday shooting up 2% for the second time in two weeks, ending at US$1,735 per ounce. This was after US jobs growth slowed more than expected in August, with a view that this may pave the way for additional stimulus.

This continuing rise of the price of gold is gaining more momentum given that this negative data on the job front makes the quantative easing no. 3 (QE3) much more likely. This is coupled with the ECB's potentially unlimited bond buying program and signs in China of moves to lower rates/ reserve requirements, raises the inflation outlook and adds to gold's attraction as a hedge against rising prices.

Typically, silver followed gold gaining about US$5 per ounce in the last two months. For the chartists, silver broke through a 3 and a half month trading range late in August and is expected to be in a range of between US$29.80 and US$35.

After not doing much for the past 3 months, platinum had a meteoric rise in the last two weeks of August, taking on almost US$300 per ounce. This was most likely due to supply disruptions and deadly riots that stemmed from a strike at Lonmin's Marikana mine in South Africa. Edward is expecting a trading range of US$1,480-$1,680 over the course of September.

Paladium seems to be trading more in sympathy with base metals, which as a group, have been relative laggards given the macro concerns emanating from China.

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

Global Indicators

• Markets give Europe a 'stay of execution', but for how long? Positive leadership by ECB chief Mario Draghi is giving confidence to global markets especially when he says they will do 'whatever it takes' to save the Euro. 
• Watch out for September 12th. The German constitutional court renders its verdict on the legality of Europe's bailout fund, known as the European Stability Mechanism.  
• US Federal Reserve Chairman, Ben Bernanke said just a week ago that the state of the US economy was 'far from satisfactory', with high unemployment being a particular concern and that this was causing 'enormous suffering'. A week later and the data on US jobs growth was even more negative than expected..... watch out QE3 could be announced sooner than later. 
• In China, there is talk that the government may further stimulate the economy and/or fast-track more projects. Chinese leadership appears to favour low unemployment to higher inflation. 

Australian Indicators

• Attended a breakfast of the Economists last week. The panel included Michael Blythe (CBA), Bill Evans (Westpac), Rob Henderson (NAB) and Warren Hogan (ANZ). Amongst all the banter some of their conclusive views included:

  - Unemployment will increase in the short term.

  - Expect another rate decrease before the end of the year.

  - Government overly focused on a 'surplus' but not enough on giving some certainty to the economy.

  - A big range of opinions (2.5% to 3.5%) on the cash rate by end 2013. 

A lot going on that will influence the price of gold and other precious metals in the coming weeks. Watch this space!