Download - Tocqueville Gold Monitor 4Q 2013
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Section I. Macro
$0$200$400$600$800
$1,000$1,200$1,400
$1,600$1,800$2,000
2000 2002 2004 2006 2008 2010 2012-5%-4%-3%-2%-1%0%1%2%
3%4%5%Fig.1. Gold and US Real Rates
US Real RatesGold Price
Source: Bloomberg
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
1995 1999 2003 2007 2011
Fig.2. Fed Balance Sheet ($B)
Source: Bloomberg
-3%
-2%
-1%
0%
1%
2%
3%
4%
2000 2002 2004 2006 2008 2010 2012 0
200
400
600
800
1,000
1,200
1,400
1,600 Fig.3. Gold and ECB Real Rates
GoldECB Real Rates
Source: Bloomberg
0
500
1,000
1,500
2,000
2,500
3,000
3,500
1999 2003 2007 2011
Fig.4 . ECB Balance Sheet ( B)
Source: Bloomberg
0
2,000
4,000
6,000
8,00010,000
12,000
14,000
2000 2002 2004 2006 2008 2010 2012-5%-4%-3%-2%-1%0%1%2%
3%4%5%Fig.5. Gold and PBC Real Rates
PBC Real RatesGold
Source: Bloomberg
0
5,000
10,000
15,000
20,00025,000
30,000
35,000
2003 2005 2007 2009 2011 2013
Fig.6. PBC Balance Sheet (CNY B)
Source: Bloomberg
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Section I. Macro
$4
$6
$8
$10
$12
$14
$16
2006 2007 2008 2009 2010 2011 2012 2013
Fig.7 . The Biggest 6 Central Bank Balance SheetsUS, UK, Japan, China, EU & Switzerland (US$T)
Source: Bloomberg
-5%
0%
5%
10%15%
20%
25%
1970 1980 1990 2000 2010
Fig.9. US M1 YoY%
Source: Bloomberg
0%
5%
10%
15%
1970 1980 1990 2000 2010
Fig.10. US M2 YoY%
Source: Bloomberg
0%
5%
10%
15%
20%
1999 2001 2003 2005 2007 2009 2011 2013
Fig.11. ECB M1 YoY %
Source: Bloomberg
0%
2%
4%
6%
8%10%
12%
1999 2001 2003 2005 2007 2009 2011 2013
Fig.12. ECB M2 YoY %
Source: Bloomberg
0%5%
10%15%20%25%30%35%40%
1996 2000 2004 2008 2012
Fig.13. PBC M1 YoY %
Source: Bloomberg
0%
5%
10%
15%
20%
25%
30%
35%
1996 2000 2004 2008 2012
Fig.14. PBC M2 YoY %
Source: Bloomberg
$0
$10
$20
$30
$40
$50
1999 2003 2007 2011$0
$500
$1,000
$1,500
$2,000
h o u s a n
d s
Fig.8. Gold and M2 (US$B; Fed, ECB, PBC)
Gold
M2
Source: Bloomberg
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Section I. Macro
Fig.15 . Inflation
US Euro Area ChinaHeadline CPI 1.2 0.9 3.0
Core CPI 1.7 0.9 n/a
Shadowstats 8.8 n/a n/a
0%
5%
10%
15%
20%
25%
2013200920052001199719931989
Fig.20. Interest Expense as % of TotalGovernment Outlays
Source: Bloomberg; US Treasury
$13
$14
$15
$16
$17
$18
2011 2012 2013 201
Fig.18. The Debt Ceiling ($T)
Total Federal Debt
Debt Ceiling Limit
Source: Bloomberg
Source: Bloomberg, Shadow Government Statistics. As of 11/30/2013
2.0%
2.5%3.0%
3.5%4.0%
4.5%5.0%
5.5%6.0%
6.5%7.0%
2000 2002 2004 2006 2008 2010 2012
Fig.19. Average Annual Interest Rate on USDebt
Source: US Treasury, Meridian Macro.
$0
$5
$10
$15
$20
$25
1940 1950 1960 1970 1980 1990 2000 2010
Fig.16. US National Debt ($T)
Source: TreasuryDirect.gov, USDebtClock.org
120%
170%
220%
270%
320%
370%
1947 1957 1967 1977 1987 1997 2007
Fig.17. US Debt as % of GDP
Source: Bloomberg
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Section I. Macro
-$20
$20
$60
$100
$140
$180
$220
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Fig.23. China Net Purchases Long-Term US Securities(annual US$B)
Source: US Treasury; MacroMavens, LLC
-$100
$400
$900
$1,400
$1,900
2005 2006 2007 2008 2009 2010 2011 2012 2013
Fig.21. Global Forex Accumulation(US$B, 12 month sum)
Source: Bloomberg; MacroMavens, LLC
-$100
$100
$300
$500
$700
1978 1983 1988 1993 1998 2003 2008 2013
Fig.22. Net Purchases of US Treasury Notes and Bonds by All ForeignCountries (US$B, 12 month sum)
Source: US Treasury; MacroMavens, LLC
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Section II. Gold
19.6%21.8%
3.9%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
1934 1982 3Q2013
Fig.25. Market Cap of Above Ground Gold as % of Total US FinancialAssets
Source: Federal Reserve, World Gold Council
0
40
80
Oct-03 Oct-05 Oct-07 Oct-09 Oct-11 Oct-13
M i l l i o n s o
f O u n c e s
Fig.26. Gold Held by ETFs
All ETFS
SPDR Trust
Source: Bloomberg, Company Filings.
Fig.24. Gold Supply and Demand (tonnes) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 3Q13
Supply
Mine production 2,591 2,592 2,478 2,550 2,481 2,476 2,409 2,584 2,739 2,827 2,848 2,188
Old gold scrap 835 944 829 886 1,107 956 1,217 1,672 1,723 1,669 1,626 1,047
Traditional supply 3,426 3,536 3,307 3,436 3,588 3,432 3,626 4,257 4,463 4,495 4,473 3,235Net producer hedging (412) (279) (445) (86) (373) (444) (349) (252) (108) 10 (20) (39)
Official sector sales 545 617 497 662 367 484 236 30 - - - -
Total supply 3,559 3,874 3,359 4,012 3,582 3,472 3,513 4,034 4,355 4,505 4,453 3,196
Demand
Jewellery 2,680 2,522 2,673 2,707 2,283 2,405 2,187 1,760 2,017 1,972 1,908 1,645
Other 360 385 416 431 458 462 436 373 466 453 428 309
Total fabrication 3,040 2,907 3,089 3,138 2,741 2,867 2,623 2,134 2,483 2,425 2,336 1,954
Bar & coin retail investment 373 314 396 412 421 446 649 743 1,205 1,519 1,256 1,252
Official sector purchases - - - - - - - - 77 457 535 297
ETFs & similar 3 39 133 208 260 253 321 617 382 185 279 (697)Implied net investment 143 614 (259) 254 160 (94) (80) 541 207 (81) 47 390
Total demand 3,559 3,874 3,359 4,012 3,582 3,472 3,513 4,034 4,355 4,505 4,453 3,196Source: World Gold Council
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Section II. Gold
InvestmentAdviser,19.80%
Broker, 9.90%
PrivateBanking, 3.10%
Pension Fund,0.40%
Hedge Fund,5.80%Mutual Fund,
3.20%
InsuranceCompany,
0.20%
Non-Institutional,
60.70%
Fig.27. SPDR Gold Trust Ownership by Type
Source: FactSet
00 01 02 03 04 05 06 07 08 09 10 11 12 3Q13
-600-500-400-300-200
-1000
100200300400500600 Fig.29. Central Banks Net Purchases (tonnes)
Source: World Gold Council
29,500
30,000
30,500
31,000
31,500
32,000
32,50033,000
33,500
34,000
3/00 3/02 3/04 3/06 3/08 3/10 3/12
Fig.30. Central Banks Holdings of Gold(tonnes)
Source: World Gold Council
Fig.28. Notable Transaction in October 2013
Country Tonnes TransactionKazakhstan 2.4 PurchaseAzerbaijan 2.0 Purchase
Turkey 13.0 AdditionSource: World Gold Council
8%
9%
10%
11%
12%
13%
14%
3/00 3/02 3/04 3/06 3/08 3/10 3/12
Fig.31. Gold as % of Total Reserves
Source: World Gold Council
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Section II. Gold
0
20
40
60
80
100
2006 2007 2008 2009 2010 2011 2012 2013
Fig.32 . Web searches for "Gold Bubble"
Source: GoogleTrends
0
20
40
60
80
100
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Fig.33. Web searches for "Gold Investment"
Source: GoogleTrends
$0$200$400$600$800$1,000$1,200$1,400$1,600
$1,800$2,000
0
20
40
6080
100
2006 2007 2008 2009 2010 2011 2012 2013
Fig.34 . Bernstein's Daily Sentiment Index
DSIGold
Source Bloomberg, Bernstein's DSI
$400$600$800$1,000$1,200$1,400$1,600$1,800$2,000
0
20
40
60
80
100
2006 2007 2008 2009 2010 2011 2012 2013
Fig.35. Market Vane Bullish Consensus
Market VaneGold
Source Bloomberg, Market Vane
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Section II. Gold
$0$200$400$600$800$1,000$1,200$1,400
$1,600$1,800$2,000
800
1000
1200
1400
1600
1800
2000
2006 2008 2010 2012
Fig.36. Comex Gold Futures Open Interest(tonnes)
Open Interest
Gold
Source: Bloomberg
-20%
80%
180%
280%
380%
480%
2000 2002 2004 2006 2008 2010 2012
Fig.37. Gold vs ContinuousCommodity Index
CCI Index
Gold
Source: Bloomberg
$500
$700
$900
$1,100
$1,300
$1,500$1,700
$1,900
0%
20%
40%
60%
80%
100%
7/10 7/11 7/12 7/13
Fig.39. Commercial Net Shorts as % of TotalOpen Interest
Net Short/Open InterestGold
Source: Bloomberg; The McClellan Market Report
More Net Short
Less Net Short
$0
$500
$1,000
$1,500
$2,000
-1,000
-800
-600
-400
-200
0
200
400
600
800
1,000
2006 2007 2008 2009 2010 2011 2012 2013
Fig.38. Comex Gold Futures Activity (tonnes)Net Large SpeculatorsNet Hedgers/CommercialsGold
Source: CFTC
0
1020
30
40
5060
70
8090
0
1
2
3
4
5
6
2003 2005 2007 2009 2011 2013
M i l l i o n s o
f O u n c e s
Fig. 40 . Registered COMEX Gold Stocks vs.Owners per Ounce
Registered Stocks
Owners per Ounce
Source: Bloomberg
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Section III. Gold Mining Equities
0%
10%
20%
30%
40%
50%
60%
70%
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
Fig.41. XAU and HUI as a Ratio of Gold
HUI/GoldXAU/Gold
Source: FactSet
-$3,000
-$2,000
-$1,000
$0
$1,000
$2,000
$3,000
$4,000
1 H 0 7
2 H 0 7
1 H 0 8
2 H 0 8
1 H 0 9
2 H 0 9
1 H 1 0
2 H 1 0
1 H 1 1
2 H 1 1
1 H 1 2
2 H 1 2
1 H 1 3
Fig.42. Net Fund Flows For Lipper's EquityPrecious Metals Fund Universe ($M)
Source: Morningstar2H13 - as of 11/30/13
$0
$2$4
$6
$8
$10
$12
$14
$16
5/06 5/07 5/08 5/09 5/10 5/11 5/12 5/13
Fig.43. Market Cap of Van Eck Gold EquityETFs ($B)
Source: FactSet
0
50
100
150
200
250
300
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
00 01 02 03 04 05 06 07 08 09 10 11 12 13
Fig.44. Equity Capital Issued by Gold Miners
$B of Equty Issued
# of Transactions
Source: RBC Capital Markets
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Section III. Gold Mining Equities
Source: BMO Capital Markets
Source: BMO Capital Markets
Fig.49. Gold Price Discounted by Market ($/Oz)
Fig.50. NAV Premiums Senior & Intermediate Producers (N.A.)
Source: ScotiabankSource: Scotiabank
Fig.51. P/CF Universe of Coverage AverageFig.52. Adjusted Market Cap per Oz of Resource
Divided by Gold Price