Saturday, 25 February 2012

Silver: Trading above the 200d MA.

Silver is at US$ 35.43 an ounce. Will it go higher?

The RSI has just tipped into overbought territory but this does not mean silver's price cannot go higher. It simply means that silver is beginning to be overbought. In very bullish conditions, silver could stay overbought.

I would pay more attention to the MACD which dipped but is once again rising as the 200d MA at US$ 34.92 was overcome by a long white candle. A bullish crossover is observed. Whether higher prices are on the horizon would depend on whether a higher high or a lower high is formed on the MACD. 

If we should see a lower high on the MACD when a higher high in price has already been formed, we could be seeing the onset of a negative divergence which would be a precursor of a possible price correction.

Related post:
Silver: Broke resistance provided by the 50d MA.

Tuesday, 21 February 2012

Luring bullion refiners to Singapore.

Gold is essentially a very old form of money and like many people, I have always thought that having a consumption tax on investment grade gold is incorrect.

With the government exempting investment grade gold and other precious metals from GST come October 2012, buying physical gold as a hedge against systemic failure in the world of fiat currencies will become less burdensome.

Singapore's investment gold demand nearly tripled to 3.5 tonnes last year, according to consultancy firm Thomson Reuters GFMS.
Refiners have been put off by Singapore's taxes, opting instead to mould and sell gold bars in Hong Kong, which does not impose duties on bullion, and Japan, where the consumption tax on gold is 5 per cent.

Industry sources, however, said at least one major refiner has shown interest in opening a factory in Singapore around the talk of the tax change.

More gold traders are expected to set up offices here and store more bullion, following JP Morgan Chase & Co which opened a precious metals vault in 2010.

"I think this is really going to change the landscape in Singapore. A lot of companies will find the incentive to start operations in Singapore," a gold dealer said.

"This news is going to draw attention to Singapore as a safe place to park funds. Asset managers will also be very excited.

"The trend in the last three years is that people are moving to physical hard assets from paper," the dealer added.

Singapore imports gold bars from Australia, Switzerland, Hong Kong and Japan, which are then sold to buyers in South-east Asia and India, the world's largest gold consumer.

Source: TODAY online, 21 Feb

Friday, 17 February 2012

Investment grade gold exempted from GST.

As part of Singapore's Budget for 2012 announced by finance minister Tharman Shanmugaratnam, "Singapore is set to capitalise on the strong demand in Asia for gold as an asset. The government is exempting investment-grade gold and other precious metals traded as financial assets, from the goods and services tax (GST). This is already being done in a number of other countries such as Australia, the UK and Switzerland."

About time.