Singapore Precious Metals Exchange (SGPMX)

Singapore Precious Metals Exchange (SGPMX) is the world's first precious metal exchange that is fully backed by physical precious metals. With as little as US$1,000, investors can buy, store, transport and trade precious metals like gold and silver.

Jim Rogers, are among those that started to trade on the new exchange by buying more gold on Wednesday. He is not concerned about the recent correction in gold prices and said he will keep buying more gold.

Visit their official website: SGPMX

I have been buying physical silver from retailers in Singapore at a 15% to 20% premium above spot. That was the only way I could get my hands on physical silver since UOB only sells physical gold. Well, SGPMX offers competitively priced physical silver!

A quick check today found that SGPMX retail store sells the 1oz UK Britannia Silver Bullion Coin for S$26.96 each while shops like SilverAG are selling it at S$35.51. A good thing has just happened for anyone who believes in owning gold and silver coins as an insurance against the inherent flaws of fiat currencies.

Silver: Extreme bearishness.

The positive divergence I observed in the chart has been negated. This is very bearish.

Daily chart.

Weekly chart.

With such strong negative sentiments, we could see silver testing support at US$20.00 an ounce next.

Although I believe in the fundamentals of the precious metal, waiting for the dust to settle (i.e. waiting for a clear bottoming process) is the prudent thing to do as the downtrend is still very much in force.

Related post:
Silver: Could be good to buy some.

Cheaper silver is good for me.

"... gold dropped an astonishing $84 per ounce to close at $1,478, down over 5% on the day and below $1,500 per ounce for the first time since July 5, 2011.   Silver had an even worse day with a price decline of 6.5%, closing down $1.81 per ounce at $25.95." 
Source: Panic selling in gold and silver.

How low would prices go? What would I do?

For now, hold my horses and wait for the dust to settle.

If we believe in the long term story behind silver, we should look out for a chance to buy more. If the panic selling should continue, we could buy more on the cheap and cheaper still.

Being able to buy more of something I believe in at lower prices does not cause me distress. Why should it?

Related post:
Silver: Some views.

Silver: Could be good to buy some.

Higher lows on the MACD seen as price formed lower lows on the daily chart. Positive divergence spotted.

On the longer term weekly chart, price is currently at support provided by the 200w MA.

Could be good a good time to buy some silver.

Gold: Weekly chart.

Gold is now testing the 100 weeks MA for support. If this should break, we could see the 200 weeks MA tested for support. This is currently rising and approximates US$1,378.46 an ounce. That is some way to drop.

The MACD is declining after completing a bearish crossover in positive territory. Crossing into negative territory could send price lower. It would have to form a higher low to see price recovering. Having said this, the longer term uptrend, at this point in time, is very much intact.

I would look out for a basing process before buying more.

Gold and silver do well when there is a lot of fear in the air. With the governments of major economies dovish with signs of more monetary easing, equities have gained favour. Risk is on again.

Silver: Weekly chart.

A good friend reminded me that since I am looking to hold silver long term with a crisis mentality, I should be looking at the weekly chart. Indeed!

200w MA is rising relentlessly and is at US$25.55 an ounce. The 50w MA is at US$31.09 an ounce. We are seeing higher lows and higher highs on the MACD, a pure price momentum oscillator. Long term momentum is positive and strengthening.

There is a chance that supports could be tested which would probably see strong buying interest.

Gold and silver: Still important assets to own.

It has been a while since I wrote anything about gold or silver. However, this does not mean that my views on the precious metals have changed. I just don't have anything new to say.

I still believe that everyone should own some gold and silver. People could trade these and try to make some money in the process but I would argue that buying some physical gold and silver is important as they are real assets to own in an environment where fiat currencies are being abused by central banks.

Inflation or deflation? Central banks around the world would rather have the former. Some have even argued that the USA is trying to inflate its way out of its economic malaise. Its currency's value would probably drop in the process. The EU and Japan are doing the same. China might also do it to maintain a semblance of growth.

Whatever we do, leaving our money in bank accounts is the worse thing we can do. Our savings earn almost nothing in interest and although the nominal value might remain the same, our saving's real value is being shaved off over time due to higher inflation.

I am not saying anything new, of course, and this blog post is a reminder to readers and myself that even as we invest in income producing assets, gold and silver remain relevant tools to protect our wealth from possibly higher inflation in the years to come.

Given a choice, would I buy gold or silver now? Silver. I feel that silver's price has a lot more room to appreciate. Some readers might remember a piece I wrote many moons ago on gold and silver ratios. Gold is now trading at about US$1,733 an ounce while silver is at about US$33.30 an ounce. This means that 1 ounce of gold is equivalent to about 52 ounces of silver.

In January 1980, 1 ounce of gold could only buy 14.9 ounces of silver. Could we see that again? We could. Why not? Even if gold's price should stay stagnant at today's level (which is rather unlikely), silver could be worth as much as US$116.30 an ounce using this ratio. If gold should hit US$5,000 an ounce which many experts think it would over time, silver would be US$335.57 an ounce using this ratio.

Of course, I am just throwing up hypothetical situations and playing with numbers but these are possibilities when central banks around the world are just printing money to try and escape recessionary pressures. This is happening even as the world's stock of silver is finite and being depleted.

Immediate support for silver is at US$31.00 an ounce or so and a test of support could see buying interest returning. Immediate resistance is where it is now and if it should be overcome, we could see a retest of the double top at US$35+ an ounce. The MACD is just entering positive territory and the return of positive momentum could trigger a breakout.

Related posts:
1. Gold or silver?
2. Real value of gold.
3. Silver: Some views from Sean Rakhimov.

Jim Rogers: I Won't Sell Gold Despite Losses.

Gold prices could plunge should the European debt crisis intensify, such as messy Greek or Spanish default and withdrawal from the eurozone.

Such a scenario would send gold on fresh declines as investors run to the metal's traditional hedge, the U.S. dollar, but bargain hunters will snap the metal right back up.

Translation: Gold is headed up either way, especially if weak economies prompt central bank to continue stimulating their economies.

"If Spain suddenly goes bankrupt out of the blue, everything is going to collapse ... to $1,300 or $1,200 if it goes that low, and I hope I am smart enough to buy a lot more," Rogers says.

Read more: Jim Rogers: I Won't Sell Gold Despite Losses

Silver: Some views from Sean Rakhimov.

1.  Gold and silver are the only markets driven by fear, and fear usually does not emanate from the metals, but from other areas. A lot of the other assets are driven by greed.

2.  Silver does display a high degree of volatility and I believe its fundamentals are far superior to those of gold due both to its industrial usage as well as price. Silver is far cheaper than gold and a lot of investment has been switching over to silver. For instance, Sprott says it sells equal amounts of silver (in dollar terms) to gold, which means in today's numbers, silver is selling 50 times more in ounces than gold.


3.  I do think that the gold:silver ratio will get below 20, probably closer to 10:1. It's over 50:1 right now; so, that should be a good guideline.


4.  Generally speaking, though, with silver, we are probably somewhere midway through the cycle and have another 10 years to go. Investors should constantly revisit their reasons for being in this space and what exactly they are looking to get from it. I think there's nothing to worry about in the volatile price action. Silver is about the most volatile asset that you can be in. Other than that, I think it is up and up from here.

Read complete article: here.

For quite a while now, I have not really talked about gold, preferring to look at silver because I think the upside for silver is far superior to that of gold over the longer term. I also blogged about the gold:silver ratio before.

Accumulating more silver if its price should test supports would be a good idea.

Related posts:
1. Gold or silver?
2. Buy more silver on weakness.

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.

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

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.

Silver: Broke resistance provided by the 50dMA.

It is the first day of the Chinese New Year. This is the Year of the Dragon and silver roared with life as it broke the resistance provided by the declining 50dMA, forming a long white candle.

The next resistance level is provided by the 100dMA at US$33.17 an ounce. With the MACD on the verge of crossing into positive territory after forming a higher low as silver tested US$26.00 an ounce thereabouts late last year, the positive divergence could see silver's price pushing higher in time.

If the 100dMA should be overcome successfully, the next resistance is provided by the 200dMA and that is currently at US$35.93 an ounce.

Given the relative volatility of silver's price, look to the weekly chart for guidance as a longer term chart shows stronger supports.

The 100wMA is the crucial support to watch. In the last decline, this support was broken briefly and likely to have weakened. Despite the strength of silver's upmove in price, it is still in danger of forming a lower high which could see price retreating once more. Whether the 100wMA would then hold as support would be the question on everyone's mind.

If the 100wMA should break, the next long term support is provided by the 200wMA and that is at US$21.65 and that is some way to fall. However, expect very strong support at the 200wMA if it should be tested.

Jim Rogers on silver and gold.

Jim Rogers sees long term trends and here is what he thinks about silver and gold:

"I think silver will be a great place for the next 10-20 years."

"It would not surprise me to see gold go to US$1200 – but if it goes that low I’d buy a lot more – gold has been up 11 years in a row it deserves a substantial correction."

Source: CNBC, 29 Dec 2011.

The story has not changed.

I am looking to buy more gold and silver on further price weakness.

Related post:
Silver: Searching for support.

Silver: Searching for support.

Silver formed a white hammer in the last session, closing at US$27.70. This is a single candle reversal signal which has to be confirmed. If valid, we could see price heading higher and testing resistance provided by the declining 50dMA once more. The 50dMA is currently at US$32.05.

The 50dMA has proven itself to be a strong resistance, pushing prices lower in November and early December when it was tested. It would take some extraordinary buying pressure to break through this wall to go higher. I expect traders to recognise this as well and many sellers would be waiting to sell if the 50dMA should be tested.

Looking at the MACD, it is in steady decline in negative territory. However, not reaching the depths it did in October is promising. We could see the formation of a positive divergence. A lower low in silver's price with higher low in the MACD would be a buy signal for me.

If I do buy some silver upon sighting a positive divergence, would I hold forever? Probably not. It would probably be for a trade and I would probably sell at resistance. Why?

Looking at the weekly chart, the MACD is still plunging. Momentum over the longer term is clearly negative with no reversal in sight. Although decreasing volume with continuing price weakness is encouraging for long holders, price could drift lower. I would like to see major support provided by the 200wMA tested before making my next move.

What are Jim and Marc saying about gold?

Investment gurus Jim Rogers and Marc Faber in recent interviews seem to agree on the dynamics in the gold market. Rogers says he’s not selling his gold and Faber says there is no bubble. But that doesn’t mean bullion is not still in a correction phase.

Dr Marc Faber, “when you buy gold, it’s an insurance against systematic failure and problems in the financial markets.”

Read full report: click here.

Silver is testing resistance.

Silver has been forming higher lows. Could it form a higher high next?

Momentum oscillators have been exhibiting encouraging signs. We have a higher low in the RSI as well as the MACD. Indeed, the MACD looks like it is on the verge of a bullish crossover with the signal line. However, it remains in negative territory and we could be seeing just a rebound. The rising RSI is touching the 50% line which in this case could act as resistance.

Although forming a white candle in the previous session, price is still being resisted by the 50dMA. The 50dMA has, in the past, proven to be a formidable resistance which pushed the price down as it was tested repeatedly earlier in November.

With the MACD still in negative territory and the RSI coming up against the 50% line as resistance, the 50dMA could be hard to overcome once again. If, however, it should be overcome, expect resistance next at the 20dMA which is currently at US$ 33.30 an ounce.

Having said this, if the 50dMA could be overcome convincingly, resistance posed by the 20dMA should be less of a problem. We could eventually, then, see the 100dMA tested. That is at US$36.51 an ounce now.

Silver: Breaking the 20d MA support.

Silver has been hugging the 20dMA for support but the declining 50dMA has proven to be much stronger and has pushed it hard enough to break the support provided by the 20dMA, forming a long black candle.

At the same time, RSI has gone below 50 which often acts as support in a declining market. It has some way to go before it becomes oversold. The MACD is forming a bearish crossover with the signal line and we could see momentum turning negative again as the MACD continues to dip. Overall picture, bearish.

As an investor, in situations like this, I would put silver higher up on my watchlist. If price were to decline further and possibly forming a lower low, I want to see a higher low on the MACD. A positive divergence is what I would be looking out for. This would be a signal to go long and I would increase my long exposure accordingly.

If we believe that the longer term direction for silver is up, there is no need to panic and we should view strong selling in the market as possible opportunity to load up instead.

Silver has broken out of resistance.

I have not been saying much about silver in a few weeks because it was basing and there was nothing much to say. Silver touched a low of US$26 an ounce like I thought it would in Silver: Accumulate or wait and see?

Although it touched a low of US$26 an ounce, it also formed a long legged hammer, a bullish reversal signal which was confirmed as its price recovered. I said that the white metal was oversold and that a rebound was likely in Silver: Bouncing off the 100dMA.

Silver's price has been forming higher lows since my last blog post. In the last two sessions, it broke resistance provided by the 20dMA and this MA was successfully tested as a support in the last session. A resistance turned support. This is what long holders are looking for before adding to their positions. Indeed the rising MACD shows improving momentum although still in negative territory.

Further improvement in the price of silver is likely to meet resistance at US$37 an ounce or so. That is where we find the confluence between two declining MAs, the 50d and the 100d. Of course, price could turn south as well although the probability of an upside is somewhat better. Technical analysis is about probability, never certainty.

Silver: Bouncing off the 100wMA.

Silver is currently at US$31.28 an ounce. I hear some people saying that if silver should go under US$30.00, we should cut short our long positions. I don't like to sell when prices are forming new lows. I like to sell on rebounds.

Silver did touch a low of US$26.00 an ounce but a long legged hammer formed on the daily chart. This is a bullish reversal signal. Although the MACD is plunging into negative territory, the RSI is now in the oversold region, something that has not happened in a long time.

Momentum is negative but the drop has been fast and furious. Such an aggressive drop is often followed by an aggressive recovery. The RSI suggests that currently the white metal is oversold and a rebound is likely.

On the weekly chart, momentum is still positive and it is quite clear that price bounced off the 100wMA at about US$26.00 an ounce. We could probably expect some resistance at US$34.44 an ounce which is where we find the 50wMA.

Related post:
Silver: Accumulate or wait and see?