Gold With Silver Heading for Worst Decline in Three Decades

December 31, 2013 Leave a comment

Gold With Silver Heading for Worst Decline in Three Decades

Gold headed for the biggest slump in three decades and the first annual loss since 2000 as an improving economy cut demand for wealth protection. Silver was set for the worst annual performance since 1981.Bullion fell 28 percent this year to $1,198.48 an ounce by 8:49 a.m. in Singapore. Investors lost faith in the metal as a store of value amid an equity rally and as an economic recovery prompted the Federal Reserve to pare its $85 billion in monthly bond purchases. Sales of 864.8 metric tons from gold-backed exchange-traded products in 2013 were more than combined inflows in the previous three years, data compiled by Bloomberg show.

While ETP investors “had previously been a source of demand for gold, they became net sellers,” said Ric Spooner, chief analyst at CMC Markets in Sydney. “Investors gave up, at least temporarily, on the notion that central bank stimulation was going to cause an inflationary problem in western economies in the foreseeable future.”

Gold assets were 1,767.1 tons on Dec. 27, down 33 percent in 2013 after expanding every year since the first product was listed in 2003. About $73.7 billion was erased from the value of holdings as prices sank, data compiled by Bloomberg show. The SPDR Gold Trust, the biggest gold-backed ETP, fell 41 percent this year to 798.22 tons yesterday, the lowest since 2009, according to data on the fund’s website.

Silver slumped 35 percent in 2013, the second-worst performer in the Standard & Poor’s GSCI gauge of 24 commodities. Platinum dropped 12 percent as palladium advanced 1 percent.

Holdings in ETPs backed by silver advanced 2.4 percent this year and were at 19,377.5 tons yesterday, according to data compiled by Bloomberg. Palladium assets climbed 15 percent, while platinum holdings surged 71 percent, data show.

Silver for immediate delivery gained 0.4 percent to $19.6618 an ounce. Platinum advanced 0.2 percent to $1,358.80 an ounce, while palladium rose 0.2 percent to $710.90 an ounce.

To contact the reporter on this story: Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net

Filed under Macro Trends

Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a comment