Feb 9/No changes in GLD and SLV despite the whack today/Gold hit due to Trump’s “new tax policy’ to be announced in two weeks/it has not chance of passing/Markets are up despite China’s tightening mode (plus an increase in Chinese mortgage rates)/The EU ambassador from the USA states that Greece will be forced into a GREXIT/ISIS fires 4 rockets into Eilat (3 were intercepted by the Dome and the 4th landed harmlessly/Anarchy in the city of Espirito Santo Brazil with hundred dead as police are on strike/David Stockman’s commentary tonight a must read as he outlines what will happen in the USA in the next few months/Final draft

Gold at (1:30 am est) $1235.10 DOWN    $2.50

silver  at $17.72:  UP 4  cents

Access market prices:

Gold: $1229.25

Silver: $17.66



The Shanghai fix is at 10:15 pm est last night and 2:15 am est early this morning

The fix for London is at 5:30  am est (first fix) and 10 am est (second fix)

Thus Shanghai’s second fix corresponds to 195 minutes before London’s first fix.

And now the fix recordings:

THURSDAY gold fix Shanghai

Shanghai FIRST morning fix Feb 9/17 (10:15 pm est last night): $  1251.40

NY ACCESS PRICE: $1241.60 (AT THE EXACT SAME TIME)/premium $9.80


Shanghai SECOND afternoon fix:  2: 15 am est (second fix/early  morning):$   1251.13


   SPREAD/ 2ND FIX TODAY!!:  $11.33

China rejects NY pricing of gold  as a fraud/arbitrage will now commence fully


London FIRST Fix: Feb9/2017: 5:30 am est:  $1241.75   (NY: same time:  $1242.00   (5:30AM)


London Second fix Feb 9.2017: 10 am est:  $1242.10 (NY same time: $1242.00  (10 AM)

It seems that Shanghai pricing is higher than the other  two , (NY and London). The spread has been occurring on a regular basis and thus I expect to see arbitrage happening as investors buy the lower priced NY gold and sell to China at the higher price. This should drain the comex.

Also why would mining companies hand in their gold to the comex and receive constantly lower prices.  They would be open to lawsuits if they knowingly continue to supply the comex despite the fact that they could be receiving higher prices in Shanghai.


For comex gold:



For silver:


For silver: FEBRUARY



Let us have a look at the data for today



In silver, the total open interest FELL by 21556 contracts DOWN to 191,380 with respect to YESTERDAY’S TRADING.    In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e.  .957 BILLION TO BE EXACT or 137% of annual global silver production (ex Russia & ex China).


In gold, the total comex gold ROSE BY 8,528 contracts WITH THE RISE IN  THE PRICE GOLD ($3.40 with YESTERDAY’S trading ).The total gold OI stands at 424,071 contracts

we had 0 notice(s) filed upon for nil oz of gold.


With respect to our two criminal funds, the GLD and the SLV:


We had no changes in tonnes of gold at the GLD

Inventory rests tonight: 832.58 tonnes



we had no changes in silver into the SLV

THE SLV Inventory rests at: 334.713 million oz



First, here is an outline of what will be discussed tonight:

1. Today, we had the open interest in silver FALL by 2,556 contracts DOWN to 191,380 AS SILVER WAS DOWN 5 CENTS with YESTERDAY’S trading. The gold open interest ROSE by 8,528 contracts UP to 424,071 WITH THE RISE IN THE PRICE OF GOLD OF $3.40  (YESTERDAY’S TRADING)

(report Harvey


2.a) The Shanghai and London gold fix report



2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg



i)Late  WEDNESDAY night/THURSDAY morning: Shanghai closed UP 16.19 POINTS OR .51%/ /Hang Sang CLOSED UP 40.01 POINTS OR .17% . The Nikkei closed DOWN 99.93 POINTS OR 0.53% /Australia’s all ordinaires  CLOSED UP 0.25%/Chinese yuan (ONSHORE) closed UP at 6.8662/Oil ROSE to 52.75 dollars per barrel for WTI and 55.50 for Brent. Stocks in Europe ALL IN THE GREEN. Offshore yuan trades  6.8487 yuan to the dollar vs 6.8725  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS QUITE A BIT AS DOLLARS ARE ATTEMPTING TO LEAVE CHINA’S SHORES. ONSHORE YUAN STRONGER AS IS OFFSHORE YUAN COUPLED WITH THE STRONGER DOLLAR





none today


i)The following is very important.  We have been reporting that China is in a “tightening mode” as they are concerned with inflation. They have drained 715 billion yuan form circulation without a corresponding reverse repo.  It sure looks serious enough and this could have devastating effects on the world’s global economy

( zero hedge)

ii)Chinese leader Xi Jinping sends a letter to Trump seeking a “constructive relationship

( zero hedge)

iii)Bitcoin plunges in value after Chinese exchanges suspend withdrawals.  Of course gold is the beneficiary

( zero hedge)

iv)Here is more proof that China is tightening and is also very scared on inflaton:



Trumps new ambassador Ted Malloch lays it out perfectly as he states that Greece is likely to severe ties with Germany and exit the Euro

( zero hedge)

ii)The yield curve in Greece totally inverts with the 10 yr bond yield at 7.85% and the 2 yr at 10% signifying a huge potential for a GREXIT.  It seems that we have 2 parties that cannot agree on what to do with respect to Greece; the IMF who wants to cut Greece’s debt but Germany says no.  the IMF states that Greece cannot live with their huge debt and cannot have a primary surplus of 3.5% in perpetuity.  If the IMF is not  part of the Troika is bailing out Greece, then Germany will bail which will make the GREXIT a certainty and bring chaos to the monetary EU

( zero hedge)



It sure looks like Iran is not scared from Trump’s scare tactics

( zero hedge)


Russian airstrike accidentally kills 3 Turkish soldiers stationed in Syria with un co- ordinated attacks

(courtesy zero hedge)


This does not look good.  Seven rockets were fired from ISIS and 4 from Egypt’s side trying to hit the holiday capital of Israel Eilat. Three were intercepted by the Dome and the 4th landed harmless in no man’s land. Also one mortar landed in the Golan Heights.  Israel will respond in kind

Israel/Jerusalem Post


i)Deutsche bank/China/World growth

The real reason for the growth in the world was due to stimulation of the Chinese economy in 2016-2017.  As we have pointed out to you, China is now undergoing a tightening and this will have a devastating effect on world growth

( zero hedge)

ii)The Central Bank of Mexico raises its interest rate by 50 basis points as expected  which causes the Mexican Peso to rise

( zero hedge)


none today


Anarchy in the northern city of Espirito Santo Brazil as the police went on strike demanding a doubling of their pay.  The police earn 800 dollars equiv per month.

So far the count is over 100 dead.

( zero hedge)


i)Gold trading today:

Absolute crooks:  the bankers supplied 11.1 tonnes of paper gold short to knock the price down by 5.00 dollars.

(courtesy Dave Kranzler/IRD)

ii)An excellent commentary from Eric Sprott today.  He is watching the gold ETF’s from China.  This instrument is real physical metal and it has been rising daily. If 10 tonnes of gold is added by Chinese investors per day on a 250 day year, 2500 tonnes of gold will be accumulated which is over 100% of annual global supply (ex China ex Russia)

( Eric Sprott/Kingworlds/gata)

iii)I brought this story to you yesterday but I am repeating it today because of its significance.  Eric Sprott above also commented on it:

( Bloomberg/GATA)

iv)As I have pointed out to you each month on the FRBNY gold  report, I speculated correctly that the Germany has repatriated all of its 300 tonnes of gold that it has earmarked to be repatriated, 3 yrs ahead of schedule.  Germany still need 111 tonnes of gold to come across the pond from the Bank of France.  It’s goal is to have 50% on German soil and 50% in NY


( zero hedge)



i a)Early trading today:

Algos gone wild with Trump announcement on taxes and subsidies to the airlines to compete with foreign airlines;

( zero hedge)

1b)The border tax war is on as we highlighted to you over these past several weeks:

(courtesy zero hedge)

ii)Initial jobless claims plunge to 44 year lows despite continuing claims rising.  Of course the big question is what happens next.

( zero hedge)

iii)The Senate confirms Attorney General Jeff Sessions. The fun will now begin


Let us head over to the comex:

The total gold comex open interest ROSE BY 8,528 CONTRACTS UP to an OI level of 424,071 WITH THE RISE IN THE  PRICE OF GOLD ( $3.40 with YESTERDAY’S trading).  We are now in the contract month of FEBRUARY and it is one of the better delivery months  of the year. In this next big active delivery month of February we had a LOSS of 62 contracts DOWN to 1387.   We had 3 notices served upon yesterday and therefore we LOST 59 contracts or an additional 5900 oz will NOT stand for delivery and these were cash settled for a fiat bonus.   The next non active contract month of March saw it’s OI fall by 49 contracts lowering to 2079.The next big active month is April and here the OI ROSE by 6072 contracts UP to 288,888.

We had 0 notice(s) filed upon today for NIL oz


And now for the wild silver comex results.  Total silver OI FELL by 2556 contracts FROM  193,936 DOWN TO 191,380 as the price of silver FELL IN PRICE TO THE TUNE OF 5 CENTS with respect to YESTERDAY’S trading.  We are moving  further from the all time record high for silver open interest set on Wednesday August 3/2016:  (224,540).

The  active month of February saw the OI RISE by 13 contract(s) UP TO  179.  We had 1 notice(s) served upon yesterday so we GAINED 14 CONTRACTS  or an additional 70,000 oz will stand.

The next big active delivery month is March and here the OI decrease by 6576 contracts down to 113,427 contracts. For comparison purposes last year on the same date only 98,584 contracts were standing.

We had 0 notice(s) filed for NIL oz for the FEBRUARY contract.

VOLUMES: for the gold comex

Today the estimated volume was 233,192  contracts which is good.

Yesterday’s confirmed volume was 233,777 contracts  which is good

volumes on gold are getting higher!

INITIAL standings for FEBRUARY
 Feb 9/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 362.09 OZ
5 kilobars
Deposits to the Dealer Inventory in oz nil oz


Deposits to the Customer Inventory, in oz 
 48,225.000  oz
1500 kilobars
No of oz served (contracts) today
0 notice(s)
NIL oz
No of oz to be served (notices)
1387 contracts
138,700 oz
Total monthly oz gold served (contracts) so far this month
5119 notices
511,900 oz
15.922 tonnes
Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month     121,574.9 oz
Today we HAD 3 kilobar transaction(s)/
Today we had 0 deposit(s) into the dealer:
total dealer deposits:  nil oz
We had nil dealer withdrawals:
total dealer withdrawals:  nil oz
we had 2  customer deposit(s):
 i) Into Scotia: 16,075.000 oz  (500 kilobars)..dubious!
ii) Into JPMorgan: 32,150.000 oz  (1000 kilobars)  dubious!!
total customer deposits; 48,225.000 oz  1500 kilobars
We had 2 customer withdrawal(s)
i) Out of Delaware: 201.34 oz
iii) Out of Manfra:  160.75 oz (5 kilobars)
total customer withdrawal: 362.09 oz
We had 0  adjustment(s)

Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 0 contract(s)  of which 0 notices were stopped (received) by jPMorgan dealer and 0 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

To calculate the initial total number of gold ounces standing for the FEBRUARY. contract month, we take the total number of notices filed so far for the month (5119) x 100 oz or 511,900 oz, to which we add the difference between the open interest for the front month of FEBRUARY (1387 contracts) minus the number of notices served upon today (0) x 100 oz per contract equals 650,600 oz, the number of ounces standing in this  active month of FEBRUARY.
Thus the INITIAL standings for gold for the FEBRUARY contract month:
No of notices served so far (5119) x 100 oz  or ounces + {(1387)OI for the front month  minus the number of  notices served upon today (0) x 100 oz which equals 650,600 oz standing in this non active delivery month of FEBRUARY  (20.419 tonnes)
 we lost 59 contracts or an additional 5900 oz will not stand in this active delivery month.
On first day notice for FEB 2016, we had 20.124 tonnes of gold standing. At the conclusion of the month we had only 7.9876 tonnes standing. The data suggests that we had almost identical amounts standing in Feb ’16 and Feb 2017; however today’s totals already surpassed the final amt which eventually stood  in 2016.(already 15.922 tonnes vs 7.9876 at the end of Feb).
I have now gone over all of the final deliveries for this year and it is startling.
First of all:  in 2015 for the 13 months: 51 tonnes delivered upon for an average of 4.25 tonnes per month.
Here are the final deliveries for all of 2016 and the first month of January 2017
Jan 2016:  .5349 tonnes  (Jan is a non delivery month)
Feb 2016:  7.9876 tonnes (Feb is a delivery month/deliveries this month very low)
March 2016: 2.311 tonnes (March is a non delivery month)
April:  12.3917 tonnes (April is a delivery month/levels on the low side
And then something happens and from May forward deliveries boom!
May; 6.889 tonnes (May is a non delivery month)
June; 48.552 tonnes ( June is a very big delivery month and in the end deliveries were huge)
July: 21.452 tonnes (July is a non delivery month and generally a poor one/not this time!)
August: 44.358 tonnes (August is a good delivery month and it came to fruition)
Sept:  8.4167 tonnes (Sept is a non delivery month)
Oct; 30.407 tonnes complete.
Nov.    8.3950 tonnes.
DEC.   29.931 tonnes
JAN/     3.9004 tonnes
FEB/ 20.236 tonnes
total for the 14 months;  246.24 tonnes
average 17.588 tonnes per month vs last yr  59.51 tonnes total for 14 months or 4.250 tonnes average per month (last yr).
Total dealer inventory 1,416,640.129 or 44.06 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,983,447.47 or 279.42 tonnes 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 279.43 tonnes for a  loss of 24  tonnes over that period.  Since August 8/2016 we have lost 75 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
And now for silver
 feb 9. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
nil 0z
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
 1,189,997.730 oz
No of oz served today (contracts)
No of oz to be served (notices)
179 contracts
(895,000  oz)
Total monthly oz silver served (contracts) 147 contracts (735,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz
Total accumulative withdrawal  of silver from the Customer inventory this month   4,852,502.9 oz
today, we had  0 deposit(s) into the dealer account:
total dealer deposit: nil oz
we had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 0 customer withdrawal(s):
 we had 3 customer deposit(s):
i) Into HSBC: 611,716.600 oz
ii) into Delaware:  988.800 oz
iii) Into Scotia: 577,292.33 oz
x) Into JPMorgan:  zero  oz**
deposits into JPMorgan have now stopped.
total customer deposits;  1,189,997.730   oz
 we had 0  adjustment(s)
The total number of notices filed today for the FEBRUARY. contract month is represented by 0 contract(s) for NIL oz. To calculate the number of silver ounces that will stand for delivery in FEBRUARY., we take the total number of notices filed for the month so far at  147 x 5,000 oz  = 735,000 oz to which we add the difference between the open interest for the front month of feb (179) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing 
Thus the initial standings for silver for the FEBRUARY contract month:  147(notices served so far)x 5000 oz  + OI for front month of FEB.( 179 ) -number of notices served upon today (0)x 5000 oz  equals  1,630,000 oz  of silver standing for the Feb contract month. This is  huge for a non active delivery month in silver. 
We gained 14 contracts or an additional 70,000 oz will  stand for delivery.
At first day notice for the FEB/2016 silver contract month we initially had 515,000 oz standing for delivery.  By the conclusion of the delivery month we had 835,000 oz stand as some of the bankers required immediate silver inventory.
Volumes: for silver comex
Today the estimated volume was 81,323 which is excellent
FRIDAY’S  confirmed volume was 79,174 contracts  which is very good.
Total dealer silver:  30.205 million (close to record low inventory  
Total number of dealer and customer silver:   182.067million oz
The total open interest on silver is NOW moving away from  its all time high with the record of 224,540 being set AUGUST 3.2016.


And now the Gold inventory at the GLD

feb 9/no changes at the GLD/Inventory rests at 832.58 tonnes

Feb 8/another “deposit” of 5.63 tonnes of gold into the GLD/The addition is a paper addition/total inventory: 832.58 tonnes

Feb 7/another huge fake deposit of 8.30 tonnes of gold into the GLD/the addition is a paper addition and no doubt not physical/ total inventory: 826.95 tonnes

FEB 6/a huge deposit of 7.43 tonnes of gold into the GLD/Inventory rests at 818.65 tonnes

FEB 3/no change in gold inventory at the GLD/Inventory rests at 811.22 tonnes

Feb 2/another huge deposit of 1.48 tonnes/inventory rests at 811.22 tonnes

Feb 1/a huge “deposit” of 10.67 tonnes of gold into the GLD/Inventory rests at 809.74 tonnes.  this should stop GLD from sending gold to Shanghai.

JAN 31/no change in gold inventory at the GLD/Inventory rests at 799.07 tonnes

jan 30/no change in gold inventory at the GLD/Inventory rests at 799.07 tonnes

Jan 27/no changes at the GLD/Inventory rests at 799.07 tonnes

Jan 26/no changes at the GLD/Inventory rests at 799.07 tonnes/

jan 25/another exactly the same withdrawal as yesterday: 50.4 tonnes and again this was used in the whacking of gold today/inventory rests at 799.07 tonnes

jan 24/a huge withdrawal of 5.04 tonnes and probably this was used today in the whacking of gold/inventory rests at 804.11 tonnes

Jan 23/a big change/this time a deposit of 1.19 tonnes of gold into the GLD/inventory rests at 809.15 tonnes.  The drainage of gold from the GLD to Shanghai has now stopped!

Jan 20/no changes in gold inventory a the GLD/Inventory rests at 807.96 tonnes

Jan 19/no changes in gold inventory at the GLD/Inventory rests at 807.96 tonnes

Jan 18/no changes in gold inventory at the GLD/Inventory rests at 807.96 tonnes

Jan 17/17/a deposit of 2.96 tonnes of gold/inventory at the GLD rests at 807.96 tonnes.  I guess there is no more gold inventory to sent to C+Shanghai

Jan 13/17/there were no changes in gold inventory at the GLD/Inventory rests at 805.00 tonnes

Jan 12/2017/no change in gold inventory at the GLD/Inventory rests at 805.00 tonnes

Jan 11/no change in gold inventory at the GLD/Inventory rests at 805.00 tonnes

JAN 10/no changes in gold inventory at the GLD/Inventory rests at 805.00 tonnes


Feb 8/2017/ Inventory rests tonight at 832.58 tonnes


Now the SLV Inventory
Feb 9/no changes in silver inventory at the SLV/Inventory rests at 334.713 million oz
feb 8/No changes in inventory at the SLV/Inventory rests at 334.713 million oz
Feb 7/no change in inventory at the SLV/Inventory rests at 334.713 million oz
Feb 6/a we had no changes at the SLV/Inventory rests at 334.713 million oz
FEB3/ a tiny withdrawal of 136,000 oz to pay for fees etc/inventory rests at 334.713 million oz
Feb 2/no changes in silver inventory at the SLV/Inventory rests at 334.849 million oz
Feb 1/a withdrawal of 948,000 oz from the SLV/Inventory rests at 334.849 million oz
Jan 31.no change in inventory at the SLV/Inventory rests at 335.797 million oz
jan 30/no change in inventory at the SLV/Inventory rests at 335.797 million oz
Jan 27/we had a deposit of 758,000 oz into the SLV/Inventory rests at  335.797 million oz
Jan 26./ a huge withdrawal of 2.369 million oz from the SLV/Inventory rests at 335.039 million oz
Jan 25./another changes at the SLV/Inventory rests at 337.408 million oz
jan 24/ a withdrawal of 948,000 oz at the SLV/Inventory rests at 337.408 million oz
Jan 23/no changes in silver inventory at the SLV/Inventory rests at 338.356 million oz
Jan 20/no changes in silver inventory at the SLV/Inventory rests at 338.356 million oz
jan 19/no changes in silver inventory at the SLV/Inventory rests at 338.356 million oz
Jan 18/no changes in silver inventory/inventory rests at 338.356 million oz/
Jan 17/no change in silver inventory at the SLV/Inventory rests at 338.356 million oz/
Jan 13/2017/on changes in the SLV inventory/rests tonight at 338.356 million oz/
Jan 12.2017/ no changes in the SLV Inventory/ rests at 338.356 million oz
JAN 10/no changes in inventory at the SLV/Inventory rests at 341.199 million oz
JAN 9/no changes in inventory at the SLV/Inventory rests at 341.199 million oz/
Feb 9.2017: Inventory 334.713  million oz

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 9.0 percent to NAV usa funds and Negative 8.9% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.6%
Percentage of fund in silver:39.2%
cash .+0.2%( feb 9/2017) 
2. Sprott silver fund (PSLV): Premium FALLS to +.10%!!!! NAV (Feb 9/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES TO – 0.020% to NAV  ( feb 9/2017)
Note: Sprott silver trust back  into POSITIVE territory at +0.10% /Sprott physical gold trust is back into NEGATIVE territory at -0.020%/Central fund of Canada’s is still in jail.


Major gold/silver trading/commentaries for THURSDAY


Give Gift of Real Gold This Valentines Day

Gift of Real Gold – Give It This Valentines Day 

For the love of gold
(Don’t) put a ring on it
Is gold jewellery going out of fashion?
You’ll never get what you paid for it
Devaluation: Synthetic diamonds, 3D Printing and Rise of the machines
Buy gold – No one has cracked alchemy
Give the gift of real gold – They will thank you for it  💕

For the love of gold

The first line of one of the oldest known Valentine’s reads

Je suis desja d’amour tanné or I am already sick of love

The lines were written in the 15th century by Charles, Duke of Orleans to his wife from the Tower of London and tragically the duchess died before the poem could reach her.

It is a funny line to start with in a love poem, but one that perhaps many of us can relate to at this time of year.

Everywhere we look there is a sea of red. Hearts and apparent expressions of love adorn shop windows, supermarket shelves and adverts on the television. The marketeers tug at our heart strings. It can all get a bit much for even the most romantic amongst us.

They say you can’t put a price on love, but at this time of year many have a darn good go at it. It’s February which means Valentine’s Day is here and we are guilt tripped into either feeling awful that we are single or that we don’t know what to buy the person we love.

A whopping 80% of Americans who are dating, engaged, or married celebrate Valentine’s Day, according to time.com. And like, I suspect, their European counterparts, they go all out when it comes to celebrating.

According to the U.S. National Retail Federation, spending this Valentine’s is estimated to fall this year, estimated to be down to $18.2 billion from $19.7 billion. 2016 was a 10-year high, whilst this year is expected to be a 3-year low. The average spend on Valentine’s in the United States in 2016 was $196 by men and $100 by women.

It isn’t so surprising when you look at the climb in prices, year on year. If you want to see a real example of inflation, look no further than the By My Valentine Index created by bankrate.com. It shows that this year the cost of buying a basket of Valentine’s gifts will cost you $580.98. The price has climbed significantly from the 2016 Index of $512.02.

So it is not surprising that less of us are spending this year, but a three year low is quite a drop. So what happened? Are we not feeling the love, or are the harsh facts of reality setting in?

Times are tough both politically and financially and lovers are perhaps realising there’s no money to waste and instead things of real meaning and value should be bought – like unforgettable holidays, precious hours with loved ones and beautiful memories.

(Don’t) put a ring on it

What if you’re reading this and thinking that you’re way ahead of us and already planning on buying precious metals for your loved one and have a nice ring or necklace in mind. To that I would say not so fast, jewellery, or jewelry for our American friends, is not the answer here.

Fundivo.com estimates that $19.7 billion was spent by Americans on Valentine’s Day last year, $4.5 billion of this was on jewellery, the most spend in any category. (Somewhat depressingly $681 million was spent on Valentines for pets).


According to entrepreneur.com, 50% of proposals happen on Valentine’s Day. Which, to be honest, seems to be a bit of a cop out. There are 365 days in which to surprise your loved one and you pick the one day of the year that it is most likely to happen. But I digress.

You may be thinking that compared to other items in the Valentine’s basket, jewellery is a win-win. Not only will your loved one be delighted but you will also have made a wise-investment. Especially compared to something like chocolate … given cocoa prices are down on last year.

Chocolate gets eaten and when its gone, its gone. You can’t eat gold as Nouriel Roubini used to tweet a bit. Forgetting you can use gold to buy water, food, a shop, animals or indeed your own farm to produce food.

As much as it breaks my heart to write this (and hope that my significant other isn’t reading) jewellery is actually not a great investment. I would argue that you would be far better investing your money into physical gold than a trinket that happens to be made from it.

My reasons for this are three-fold. First demand for gold jewellery is declining, second the jewellery industry is under threat and thirdly and perhaps most importantly the resale value of jewellery is always appalling … unless you own some famous beheaded Queen’s wedding ring.

Is gold jewellery going out of fashion?

First of all there is the demand factor, demand for jewellery whether as a gift or an investment is down across the globe.

In a year when gold investment was at a four-year high, gold jewellery sales fell to a seven-year low in 2016, to just 2,041.6t according to recent WGC data, a fall of 15% worldwide. Whilst the final quarter of the year saw 26% growth in the sector, thanks to the sharp fall in the gold price.

But in the West demand for jewellery did not perform so well, writes the WGC:

“The mild upward trend in US jewellery consumption came to an end in 2016: demand slipped 1% to 118.3t on weakness in the second half of the year…Q4 and full-year demand in Europe followed similar patterns: France and the UK underperformed broad stability elsewhere. In France, 2016 jewellery demand softened by 4% as consumer confidence was undermined by security concerns and increasingly divergent domestic politics. In the UK, the tentative gains made since 2012 came to a halt. Post-Brexit uncertainty and pessimism affected consumers; Q4 demand fell 5% to 12.2t, leading to a 3% drop in annual demand to 25.2t.”

Consumers globally are waking up to the rip off that is jewelry. They are becoming more sophisticated and “moving up the value chain” and opting to buy gold coins and bars rather than trinkets and bangles. This is especially the case in India, China and Asia.

You’ll never get what you paid for it

It is estimated that the markup on a diamond wedding and engagement ring is between 300% and 1000%, with a tendency towards the lower end of the scale. The chances of us seeing this back are unlikely in the extreme as a buyer will only take into account the components of the jewellery rather than the purchase price.

We talk about gold as a form of insurance. During times of inflation, and especially hyperinflation you will be looking for the financial insurance to protect your wealth. In both economic and political times of difficulty, gold is the best form of financial defence. Making an investment in jewellery is a false economy given you won’t see a financial return and there is no protection from economic dislocations as it is not liquid and there is no liquid market to sell jewellery at a fair and transparent market price.

The price we put on jewellery is not just based on the original price that we paid for it, but also the sentimental price. This is unfortunately not appreciated by the buyer should you ever come to resell it.

And, let’s be honest you are going to be far more willing to sell your gold coins and bars than the engagement ring that is valuable only to you and your family.

Unlike jewellery, the value of bullion is not subject to personal tastes. And unlike with gold, there is no unified market price for diamonds.

It is also notoriously hard to resell a diamond, Edward Jay Epstein described in 1982, “To make a profit, investors must at some time find buyers who are willing to pay more for their diamonds than they did. Here, however, investors face the same problem as those attempting to sell their jewelry: there is no unified market in which to sell diamonds. Although dealers will quote the prices at which they are willing to sell investment-grade diamonds, they seldom give a set price at which they are willing to buy diamonds of the same grade.”

Just to put into perspective, one ring, on average will cost $5,200, the same amount it would cost you to buy just over 4 oz (according to prices on the 9th February). A troy ounce is around 31g. There is approximately 5g of gold in an engagement ring. So for the same amount of money you could buy 130g of gold.

Gold, in contrast to gold jewellery has held it’s value throughout history. Yes, the price has changed, but the value has remained constant.

Devaluation: Synthetic diamonds and Rise of the machines

But the issue with jewellery is not just about resale value or buying trends. The fact is, the jewellery sector as we know it is under threat.

Even though the technology for synthetic diamonds was first patented in the 1950s (by Lockheed Martin) it is only in recent years that it has become sophisticated enough to play a major role in the jewellery market. Synthetic diamonds are chemically and physically the same as natural diamonds. It is near impossible for experts to tell the difference given they are the same composite.

It is estimated that in 10-15 years time lab-grown diamonds will be a real threat to the mined diamond industry. They are currently 20 – 30% cheaper than mined (or natural) diamonds. For example, a 0.50 carat can range from $500 to $2,500, while a 1.00ct from $2,000- $8,000.

Between 2016 – 2018 mined diamonds are expected to see a shortfall in supply versus demand. With this in mind we can expect to see the discount increase upwards to 45% on synthetic diamonds. Imagine the difference in a decade’s time when the technology is even more refined.

Currently purists try to dismiss the potential market size of synthetic diamonds arguing that it’s more romantic to have a diamond that took millions of years to form. I would contend a diamond is a diamond and if one has been grown especially for you then that’s really romantic. And sensible.

Granted, it is unlikely that we are going to see auction houses putting synthetic diamonds up for bids, but how many of us were intending on buying diamonds that would end up in such a place anyway? When it comes to a bar of gold there is no stress in worrying about what the market looks like in terms of fashions, technology and perceived value.

It isn’t just lab-grown diamonds that are threatening the huge industry, 3D printing also poses a threat.

By 2020 3D printing in jewellery markets is expected to $11 billion by 2020, this poses a threat to artisan jewellers and the value of pieces produced by the big name jewellers found on Bond Street and Mayfair.

There is no longer a need to spend a small fortune on a sparkly number, when a machine is able to mould and design the perfect item at a fraction of the cost.

So when it comes to the jewellery industry we can no longer reassure ourselves that what we buy will hold its value at a time when technology is usurping one of the few things that gave it any value –  being carefully crafted and handmade.

Buy gold – No one has cracked alchemy

At the time writing one of life’s biggest mysteries still remains – how can man make gold?

The fact is, we still can’t. Gold cannot be created with technology. Diamonds, yes. Chocolates, yes. A nice meal, certainly. Jewellery, just get yourself a printer. But gold remains one of the last mysteries yet to be solved by humans.

Gold can be improved to suit its purpose through technology (to make gold solar panels, gold leaf etc) but gold is gold and very little can be done to affect its value, as history has shown.

Unlike other components of jewellery, gold has remained a safe haven for thousands of years. It has repeatedly shown its value and worth through countless financial and geopolitical crises.

What better expression of love than to give actual gold – something that has stood the test of time, weathered all problems and continues to be desired around the world?

We’re not saying that you shouldn’t treat the one you love this Valentine’s Day, or in fact any day (why the excuse?) and you should buy an engagement ring for your big day.

But, when it comes to making the decision of a life time we argue your wealth is better placed is something simple and time-tested such as a bar or coin of pure gold.

If you are planning to give your loved one something golden this Valentine’s day, consider giving them the gift of real gold with GoldSaver. That way they own real, pure 24 carat gold bullion in an extremely safe way.

Saving is never as sexy as splurging on shiny things but delayed gratification is important and by saving in gold now your better-half will be able to afford many more luxuries – whether they be nice meals, great holidays or perhaps some 3D printed shiny trinkets in the coming years.

Oscar Wilde wrote

“I have the simplest tastes. I am always satisfied with the best. And sometimes, only the best will do – it’s that simple.”

Gold really is that simple and it really is the best.

What more could your loved one ask for this Valentine’s Day?


Give The Gift of Real Gold This Valentines Day With GoldSaver


Gold trading today:

Absolute crooks:  the bankers supplied 11.1 tonnes of paper gold short to knock the price down by 5.00 dollars.

(courtesy Dave Kranzler/IRD)

11.1 Tonnes Of Paper Gold Dumped In Sixty Seconds

Central banks stand ready to lease gold in increasing quantities should the price rise.  – Alan Greenspan, 1998 in Congressional testimony on OTC derivatives

Gold has been in a steady uptrend since December 18th, bottoming at $1131 after a four and half month price correction.  Firmly back over the 50 dma, the price momentum appears to be a threat to the “bullion”  banks who suppress the price of gold in the paper derivatives market on behalf of the western Central Banks and, ultimately, the BIS.

The banks must feel threatened by the recent activity in both physical and paper gold trading.  This morning the price of gold was attacked in the Comex paper market after St. Louis Fed-head, James Bullard, delivered remarks about interest rate policy that should have propelled the price of gold higher:  “We think the low-safe-real-rate regime is unlikely to change in the near term. This means the policy rate can also remain relatively low over the forecast horizon (link).

Instead, the Comex was bombed with paper: