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It’s true that most traditions do not change. But what does change is the behaviour of the customers out there. With the modern information technologies that we have today, it’s hard for an investor or general consumer to not research online before putting his or her money somewhere.

This may be happening in India, where the traditional seasons that triggered gold demand increase, especially in gold jewellery, are not causing the same effect. On the contrary, these times of the year are featuring important lows.

Why is this happening? Hard to tell. During the last few years, India has suffered notable economic problems. Even with the nationwide tradition of buying remarkable amounts of gold jewellery, customers were forced to put their money somewhere else.

Gold Jewellery Had a Calendar

India is by far one of the greatest gold jewellery consumers in the world. This fact has been fuelled by national cultural traditions. A good example of this is Diwali, a millenarian celebration held between October and November.

The first day of Diwali is known as Dhanteras and it’s a day to celebrate wealth, something that those who sell gold jewellery do very well with. During that moment of the year, jewellers fill their pockets easily, even without caring too much about the prices. Indians, especially women, are willing to spend plenty to decorate their garments for the event.

Next to Diwali, India also has its wedding season, another moment of the year where the gold jewellery demand spikes. A big share of the Indian weddings’ budgets goes straight to the yellow metal as the tradition demands it.

Things Aren’t Working as Usual in the Gold Jewellery Industry

So far, it could be impossible to determine the causes behind the recent changes. Things aren’t simply working as they were before. Investors are now afraid of living in uncertainty as they cannot predict the flourishing Indian market of gold jewellery.

In an article published in GoldSeek and BullionVault, Mr. Frank Holmes identifies the odd trend that works as evidence of this change during recent years. “Historically, September has seen the highest returns on gold as Indians make huge purchases in preparation for Diwali and the fourth-quarter wedding season, but lately we’ve seen changes. When we calculate the average monthly returns of the past five years, from January 2012 to December 2016, we find that January is the strongest month, returning 5.3 percent, followed by August with 2.3 percent. September actually returns negative 1.3 percent,” says on the article.

The Bottom Line on the Gold Jewellery Market

With a changing gold jewellery market that we thought we knew already, it’s important to invest our money more wisely by making good use of patience. The Indian market is worth our attention. Nevertheless, we must stop taking things for granted.

The late demonetisation that occurred in India caused terrible problems for gold demand during the last few months of 2016. Now, we see how the economy is energetically recovering and the gold demand is getting back on track. We should watch how the jewellery sector develops under the current circumstances.

Almost everybody who has taken an interest in gold would be aware of the fact that most of the planet’s surface gold has been already mined and by ‘surface gold’ we refer to gold that is on land naturally. This situation has led mining companies to look for gold in other kinds of terrain, including on the ocean floor and a new ore mining process has been invented that enables miners to retrieve minerals from the ocean floor. This mining process involves drilling between 1500 meters to 3,000 meters under the floor of the ocean in order to extract the vast deposits of sulphite which contain not only silver, manganese, zinc and cobalt but also the holy grail of minerals which we all adore so much – gold!

The operations typically utilize hydraulic pumps that suck up the sediment and once the ores are extracted, the tailings are returned to the seabed. These mining sites are located by expedition crews who go about the open ocean looking for mineral deposits and once a site has been identified a mini9ng station is set up in the location for mining operations. Nevertheless the art of mining for precious metals under the ocean floor and especially for gold has been deemed as a venture that did not make economic sense up to this time; but looking at how things are and the growing demand for the noble metal stemming from countries such as India, China not to mention the collective demand from Europe and smaller Asian counties has breathed new life into the prospects of deep sea mining.

As the world population increases the demand for consumer goods containing gold increases as well, from gold jewellery to electronic components that use gold for their conductive abilities the demand for gold is unceasing. The fact that gold is also used for investment purposes in order to protect wealth from inflation and other economic environments that reduce the value of paper currency, the need for more gold is at an upward trend while the supply remains stagnant.

The problem with deep sea mining is however the consequences of it from an environmental perspective which has drawn flack from environmental groups as the possibility of deep sea mining affecting the natural eco systems of the areas that a mined is not only a theory, but an actual fact. The truth behind deep sea mining projects is that when certain layers under the ocean floor is disturbed the toxicity levels will definitely increase due to the disturbed benthic layers which are natural habitats for benthic organisms which are critical to the oceanic eco system and scientists are not really sure of how much the removal of these layers via mining operations would impact the natural eco systems in these areas which are as far as anybody is concerned ‘delicate’.

Apart from disturbing or disrupting the eco system other concerns that have piled up include pollution from these mining platforms that could range from anything to spillage, to trash and residue from the machines that these miners use for mining and coupled with the fact that the ocean has already been degraded over the last few decades by over fishing, shipping, oil spills and trash which have altered the Ph levels of sea water in most places, most of these projects have come under serious fire and has even caused Greenpeace to move against these mining organisations from conducting such activities aggressively.

However according to other groups who are in favour of deep sea mining, they seem to think that deep sea mining is less harmful to the environment than land mining operations based on the theory or notion that the sea is more adept to neutralise itself.

Piggy bank, red envelope called “Ang Pao” and gold coins in Chinese new year concept, saving concept and wealth.

“Why is gold better than cash?” is a question that is as common as common can get, the fact that gold was the original mode of currency prior to the introduction of paper currency has been all but forgotten.  Going back to the question as to ‘why is gold better than cash’ has numerous answers, but before we get down the usual bulleted points list let us look at the paper currency first. Why do people keep money in the bank? The main reason why money is put into banks by people saving is to keep the money safe in the first place and hope to earn some interest when the money is lent out.  The bank lends your money out at a risk and gives you a portion of the money that they earned from lending out the money that YOU gave them.

Gold on the other hand kept in a bank is different, the bank cannot lend your allocated gold out and you may at any point in time show up at the bank and insist on having your gold and the bank will be bound by law to return your gold. Now that we have that fact cleared up, did you know that if the bank that you are saving your money with went bankrupt, all the money that the bank holds will be shared by the creditors and the balance returned to those who invested in the bank through savings or other means on a prorated basis? Gold as Alan Greenspan once said is always accepted – BY EVERYBODY, but the same cannot be said about money because money is not ‘always accepted’.

The fact that gold cannot be conjured up as and when it is needed like money is makes the value of the precious metal stable in the markets and ‘non volatile’ as how much gold there is (estimated at around one hundred and fifty thousand tonnes) is how much gold there is – not more, not less. However during times when financial crisis takes a hold on the planet the price of gold does rise significantly, which is all the better for those who have gold stored away for a rainy day.

A man with an old tattered 10 dollar note trying to pay for his lunch can be rejected by the eatery, but if he was in possession of a gold ring – no questions asked, it will be accepted by virtually anybody – if that does not answer the question as to why gold is better than cash for storing wealth, nothing else would – in essence – Gold is and always will be gold – precious!

Trump’s victory has unleashed an unexpected rally for the U.S. Dollar, mainly stimulated by the great possibility of the FED raising the interest rate. As usual, there are no clear announcements of this happening during this December but seems like most investors feel quite sure about it.

On Friday, gold prices went down to 9-1/2 month lows, which is something that is making investors worry. There is a lot of people that backed up their wealth with the precious metal before and after the Brexit, believing that it could result in a sure-shot transaction. It really was delivering profits until the U.S. election, where the real estate mogul won.

After this trading Friday, the third declining week in a row was established. For the gold market, November has represented 7 per cent in losses, which is the worst month for a record-breaking year.

The Thin Line of Profit

Usually, investing in gold isn’t something people do to profit. The precious metal works as a safe haven for wealthy people who don’t want to have their money on currency, which is volatile and gets affected by a plethora of common things of the everyday.

Nevertheless, there are exceptions about profiting with gold, even during this unfortunate streak for the market. There are investors who dare to bet on gold in order to profit from it. When it works, this investment delivers big earnings.

But the situation is now different. The mindset has changed since Trump’s victory in early November. “Investors are still retreating from gold, though prices falling below $1,200 has promoted some profit-taking,” said Eugen Weinberg, an analyst at Commerzbank, to Reuters.

Maybe the conditions that were set by the outcome of the recent elections are more appropriate for investing in equities. This is the conclusion we get by seeing the performance of this market, where the profit is massive for those investors who got into on the right time.

The FED Is Not Working for Gold

As the correlation between gold and the U.S. Dollar intensifies, is natural to see how the precious metal falls. Analysts like CME FedWatch, which are dedicated to monitoring announcements, indicators, and policies related to the Federal Reserve, aim to an impressive 100 per cent chance of an interest rate hike during this December.

A recent report regarding the U.S. economy prior the elections was key to boost the currency. Now, the FED has to publish a new report on monthly jobs by December 2. This event could be highly negative for the gold market if the domestic indicators result favorable for an interest rate hike.

Despite gold is on a bad luck after a marvellous year that’s about to end, silver is gaining a few points. Investors that are holding the precious metal should be more patient, even while having an imminent interest rate hike in the upcoming weeks. This whole situation could result dramatic for gold but when Trump arrives the White House, the massive changes that will occur will automatically boost gold prices beyond expectation.

We all know that there is more than we can see when it comes to the financial markets. It’s hard to know everything, which is one of the many causes of people losing their money when they invest in one instrument or another.

Also, there are too many interests focused on making us invest our money in the system. This isn’t some communist commentary but a truth that a banker would not simply accept. But we don’t worry about it because we know well that smart investing can translate into profits.

On Monday, Koos Jansen from Seeking Alpha released an interesting report about a theory he has about the gold market. According to him, both supply and demand are manipulated by the biggest companies in the financial media.

The Three Main Gold Considerations

In his article’s summary, he pointed out three main considerations we should have before reading the rest of his ideas. The first one is clear and simple: both supply and demand data of the gold market that is published by the biggest media companies is misleading on purpose most of the time.

The second of his considerations points out that both supply and demand data are designed to represent gold as a commodity and not as a currency. And finally, the third consideration is that the commodity image of gold that was crafted and maintained by the media is causing highly-damaging misconceptions among investors, leading to poor strategy effectiveness.

How Does This Gold Strategy Work?

Jansen digs more and more, throwing at us a few clever ideas. It isn’t necessary to mention that firms could be doing this in order to protect the way their business model works. That’s quite obvious.

Now, the gold market is based on how much metal is produced versus consumed, which, according to the author, is a wrong approach. This precious metal is everlasting, so it isn’t consumed once it has a commercial application. Just imagine all the gold there is around in mobile cellphones, for example. That gold is not going to disappear anytime soon.

Media companies do not reflect gold this way. Published data and analyses cast another image, one where gold is consumed and disappear forever, which is a terribly wrong approach.

Another key point of his analysis tells us that firms exclude institutional supply and demand from their reports, which is the bullion trading among high net worth individuals and institutions.

The Bottom Line on Gold

Jansen insists in his article that it will never be a gold deficit in the world, neither for trading nor monetary purposes. From his point of view, this is a great thing which differs from what Keynesian economists do think.

This is one of the many things ignored by big media firms, which also ignore institutional supply and demand. By leaving aside this highly relevant factor, says Jansen, the whole gold market is based on a misleading, wrong price. We are not seeing the true value of the yellow metal and, if things continue the way they are, we will remain working with a false price.

Big names in the media business like Investopedia are pushing investors forward to trust in some mining stocks that are performing surprisingly well these days.

While this could be a product of the gold bullish market, mining companies seem like they have their own reasons to have a great time financially.

The mining sector had difficult times during the past few years. During 2015, Australian companies in this industry had massive losses and many other labour problems, even gold mining is currently struggling despite Australian gold bullion prices gaining ground upon a strong US dollar.

Also, for a few years, even the big names operated almost losing money. They had to shut down exploration projects and the construction of new facilities simply because they didn’t have enough resources to invest in growth.

Capital Drilling Speaks About Profits

Fortunately, this is changing. Today, The Telegraph published an article where Capital Drilling, a London-listed provider company, claims that the mining sector is starting to see good margins in profits; a novelty in years.

This recovery may come from a more stable global economy, at least in comparison with the years closer to 2008, and the bullish gold market. According to Mr. Mark Parsons, who is the chief executive of Capital Drilling, the main cause to pay attention is the favorable price trend among several metals in the market.

“The increasing interest from the mining industry, particularly over the last few months, to invest in assets combined with the firming of selected metal pricing, has injected some momentum in tendering for new contracts as well as higher demand from existing clients for the group’s drilling services”, he said to Jon Yeomans, who signed the article.

Capital Drilling itself is having a good time. Internal finances, according to Mr. Parsons, allowed the board to pay higher dividends to shareholders. The sector seems to be growing quickly, taking the most from metals’ rising prices.

The Philippines’ Problem

While mining’s worldwide panorama seems to be better every day, local industries are receiving hard hits. The Department of Environment and Natural Resources of Philippines, also known as DENR, is taking many decisions that are inflicting damage to many mining companies’ plans in the region.

The Philippine Stock Exchange index lost 37.19 points, ending at 7,946.19 by the close of the trading day. This represents 0.46 percent down. Also, the All Share index also went down by 16.49 points, just to end at 4,697.11.

Now, the Mining and Oil index lost a total of 174.81 points, a 1.69 percent. More losses are expected during this week and the following.
More Problems for Australia

Just like the Philippine case, Australia is suffering its own isolated losses. The ASX 200 index is going down and even the great performance of its mining stocks are not helping in anything.

BHP Billiton, Evolution Mining, and Whitehaven enjoyed notable gains while the broad index is still losing.

Regarding BHP and its fatal incident in Brazil, the mining company had to report its first ever annual loss, estimated around US$8.29 billion. They also presented a strategy to satisfy shareholders’ expectation during upcoming quarters.

Bolivia’s Strikes

Going back to South America, Bolivian president Evo Morales will face the mining companies that are on strike. The leaders of the National Federation of Mining Cooperatives, locally known as Fencomin, want to discuss several petitions the organization made to the central government.

Seems like things went out of control when last week 10 miners were arrested after an alleged violence episode against police forces during a protest. Fencomin wants the release of the 10 miners before sitting down and discuss the petitions.

According to President Morales, the local mining sector is requesting demands that are not possible, because they allegedly are non-constitutional.

Although many believe that gold prices will bounce back soon, it seems like the pressure the greenback is exerting on the shiny yellow metal will prove otherwise. Despite the current buying spree gold bugs are on, the impending rate hikes by the Feds are keeping the prices of gold status quo and as a matter of fact has been actually pressuring the prices of gold downwards, which is not actually bad news for those who purchased gold at above 1,300 USD per ounce as currently they have the opportunity to bring the average prices of their gold down substantially.

Early on in the year analysts were optimistic that gold prices would break its shackles and start surging over its stagnant position however, they did not account for the inhibitors that were already in place which included fed rate hikes, stronger dollar, low oil prices and a slower economic machine which were already undermining commodity prices only allowing small and controllable moves and their expectations to see gold over the $1,300 an ounce mark fell short and based on the fact that the more recent slump of gold going under the 1,200 USD mark attests to that fact.

Nevertheless, selling should be the furthest agenda on any investors mind in the current situation as one thing that is certainly happening to gold and other precious metals is that the market is definitely oiling tighter and tighter and it is approaching breaking point and when this happens, there is no way to stop the prices of precious metals surging by at least 50 % from where they are currently before meeting any market resistance at all. The current market resistance at slightly below the 1,300 mark is stemming from the gold bugs themselves who are trying to reduce their averages.
On the other hand, gold related mining stocks are totally a different matter as the mining industry is currently being pressured due to the lower prices of gold and therefore many are actually under-valued, especially small cap mining stocks that have substantial reserves and positive balance sheets, these stocks are have enormous potential to bring about positive numbers to an investor’s portfolio. For instance most analysts are expecting a few small cap mining stocks to soar this year, these few include Pershing Gold Corp, Go-Gold Resources, Pilot Gold, Lydian International and B2 Gold.

These companies are severely undervalued due to market sentiments, but a glance at their financial standings reveal that these companies have sufficient current assets to meet their short term obligations and would be able to ride the current downturn right up to the point when market conditions improve at which point these stocks will soar by more than a 100 % quite easily. Pilot Gold for example has a current market price of 0.48 / share with the year high at $0.83 and year low at $0.22.

The company has a market capitalisation of slightly over 60 million dollars with a total of 125 million outstanding shares. What most do not realise is the fact that the company recently closed a Canadian contract worth C$ 4.47 million and has C$ 14 million in liquid holdings.

Mining for gold is an enterprise that has been going on for thousands of years and currently gold mining operations take place on every continent on the planet with the exception of Antarctica. The social and economic impacts are sizeable in the sense that the direct contributions that stem from the mining industry account for more than 80 Billion dollars whereas the indirect economic impact amounts to more than 170 billion dollars annually.

According to Gold.org from 2000 to 2013 the GDP contributions attributed to gold mining activities rose by 700 % and its role in host nations are equally sizeable based on the fact that 70 % of all expenditure by gold mining companies (payments for inbound and outbound logistics including contractors, suppliers and as well as employees) remain within the country. Another factor worth mentioning here is the fact that more than 60 % of the countries producing gold (top 30 countries) that account for 90 % of the global gold production are low to lower middle income nations and the positive relationship between the growth of gold mining activities with the improvements in income status is undeniable.

The substantial impact that that gold mining has on wealth creation in developing nations such as Papua New Guinea, where gold mining activities account for 15 % of their GDP, Ghana – 8 % of their GDP, Tanzania – 6 % of their GDP on top of earnings from foreign exchange attests to the fact that gold mining is in general a positive element for most countries.
However, the underlying issues that seems to shed a gloomy shadow over gold mining activities is the environmental impact it has on the region calling for better legislation to enforce responsible mining measures especially with regards to pollution of waterways. Social responsibility programmes have been on the priority list of most mining companies in light of the recent tight controls on how mining activities are conducted with priority given to communities within a hundred kilometre radius of where the mining is being done.

Other issues related to mining activities include areas where armed conflicts are taking place, that has been the driving force behind the ‘conflict free gold standard’ whereby any gold associated with armed conflicts or the undermining of human rights are ejected from the ‘gold based economic sphere’.
With the recent jump in gold prices, mining activities around the world are expected to step up operations; however there are uncertainties involved that might cause mining operations to cap production to an extent until gold prices are above 1,300 USD per ounce in order for the mining companies to be able to sustain their businesses.

The current gold prices have made it difficult for mining companies to sustain their operations in a profitable manner causing many of these companies to liquidate their non performing assets driving the prices of most gold related mining stocks down. Nevertheless, as it always is, gold always recovers in due time and gold bugs just need to stick to their guns for the time being.

It has become common knowledge that the US debts to domestic growth ratios are at present the highest after the end of the Second World War without even including contingent liabilities that would push the ratios even higher if at all entitlements are to be considered as debts, which in most case scenarios are considered as such. Although one may tend to argue that US deficits have declined, the fact that remains is that the people on the hill and their haphazard policies are adding to the overall debt rapidly and the debts are actually growing faster than the economy is.

No matter who says what, what is clear is the fact that the United States of America is on direct collision course with a fiscal crisis and that will lead towards loss of confidence in the dollar. It seems that the Feds have finally run out of bullets to handle depressed growth effectively let alone efficiently. What is baffling is that what they could actually do is since their policy rate is off zero; they could cut rates much later in 2016 or even later in early 2017.

The fact that quantitative easing measures 2 and 3 did not achieve much, QE4 is very unlikely to be executed. Although, they could still try negative rates, but based on what has happened in Europe, Switzerland and even Japan, negative rates are not much better for growth than zero rates and as a matter of fact, they could even prove to be counter-productive as they are an indication of deflation fears which lead to stronger savings and less spending which is exactly the opposite of what central banks need and this vicious cycle keeps rolling on as it is not an easy cycle to break.

The only thing that looks like they are going to be doing is return to the currency wars in a bid to cheapen the greenback which is what they did in 2011 which gives the US economy a short lived lift. This lift would be a temporary relief as there is no way that any economy is going to escape from the impending global economy slowdown.

At that point the only other viable option is to print more money and increase spending which means more debts raising new questions with regards to who will be buying these new government bonds, how is the Treasury going to maintain low interest rates in order for the Treasury bond market not to collapse. All these things will eventually boil down to the average man on the street, and his only hope is to buy into precious metals and preferably in physical form, because when the currency gets devalued, the man on the street will be holding the shortest straw and the only way he can hedge himself is by having substantial gold or silver stashes.

Nothing has changed much except for the fact that governments and central banks keep introducing different measures that end up resulting in the same results.

Concerns about another financial or economic breakdown is on the horizon and most people are in the dark about what they should do with their savings as paper money is notorious for losing value or purchasing power. This is largely due to inflationary pressure that is often absorbed by paper money to balance the scales and remedy economic fractures. So what can people do to protect themselves from inflation and losing the purchasing power of their savings – the answer is actually much simpler than you thought it would be – the best way to hedge against inflation is by investing in precious metals. For thousands of years gold and silver have been the only ‘real money’ and believe it or not, it still is.

Disparate from paper money, gold or silver for that matter does not lose its intrinsic value, only because they are scarce and cannot be produced instantly by governments the way paper money is produced and if economics is a subject you are well versed with, you would know that when there is an access of supply, value is lost as is the case with paper money. Buying gold and silver and putting it away as savings is without doubt the best way to save due to a number of reasons, mainly due to the fact that over long periods of time they are unlikely to lose value like how paper money loses value every year. The most important aspect of saving in gold or silver is to buy during times of economic stability, when the prices of precious metals are not as volatile as they are during times of economic turmoil.

However, it is good to note that when it comes to investing in gold or silver as savings, it is not the same entirely. For instance those who choose to buy gold bullion would be able to store them rather easily as gold does not require as much space as silver does, leaving most to wonder how can they invest in silver. Although individuals are able to buy silver bullion just as they are able to buy gold bullion, storing silver bullion to a significant value requires space – a lot of space, and thus the best way to buy silver is by purchasing financial securities that moves with the value of silver.

Another fact that new investors must be vary about is that both gold and silver investments should be deemed as long term investments and as such short term speculation is not advised as the furious price swings of precious metals in the short run can make new investors lose their shirts rather easily, however in contrast, the long term approach will ensure that you are able to buy a new shirt. Those who had gold and silver in their coffers at the height of the 2008-2009 financial crisis when demand for these two metals were particularly high, premiums shot-up on all gold and silver related investments, making many of them twice as rich as they were before.

The moral of the story here is that, when you invest in gold and silver – rest assured you will be safe financially in the long run.

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