OT: Silver to $75 - Alasdair MacLeod
posted on
Apr 20, 2014 06:20PM
Building the Foundations of a Leading Silver Miner
We've heard this before. At some point it will come to be. Who knows when. All the best.
London expert Alasdair Macleod returns to the SD Weekly Metals & Markets with his brilliant PM analysis, including:
A Special Extended Edition Metals & Markets With Alasdair Macleod is below:
https://www.youtube.com/watch?v=PYDKcKBhZaQ
If memory serves, the second to last time the Doc, Alasdair and I discussed Chinese gold demand, Koos Jansen’s quality analysis on Shanghai Gold Exchange deliveries had become an important part of the precious metals community’s understanding. In addition, Eric Sprott had gone on record during the fourth quarter with his estimate that China would hoover as much as 5,000 metric tons of gold in 2013. By November, my analysis concluded it was reasonably conservative to expect Chinese central bank holdings would match declared US holdings of roughly 8,200 metric tons by the end of 2014.
Fast-forward a couple of months. Alasdair has raised the bar on analysis of Chinese gold demand. The following is his summary table for 2008-2013 demand, and you can click here to access his April 4th article:
Alasdair’s analysis is far more true to reality versus World Gold Council estimates. Analysis from the mainstream financial community is little better, and in fact partly predicated on WGC figures. Just to put the perception gulf into perspective, WGC estimated total 2013 gold demand at 3,756 metric tons. This compares to Alasdair’s estimate of 7,603 metric tons — roughly two times higher. The key difference: Alasdair has more realistic delineation of Chinese private gold vaulting, scrap and Shanghai Gold Exchange deliveries resulting in a much larger and more realistic estimate of Chinese gold demand. Wall Street’s so-called best and brightest are stuck on stupid. The popular perception is that China passed India in 2013, with Chinese demand just over 1,000 metric tons.
Near-term Outlook:
The precious metals sector has certainly suffered a bashing over the last 30 days. But as we discuss on the show there’s reason to believe next week will see some upside action. Later this month we must get through COMEX options expiration and the last of the Fed’s FOMC releases until June. Given this event calendar, odds are that gold and silver will once again be muzzled after bouncing back a bit next week. But despite the traditional view for a slow summer season, it wouldn’t surprise me one bit to see the next sustained upward move for gold and silver begin in May, where we will finally retake $1,400 gold and $22+ silver.