Archive for May, 2015

May 19, 2015

Goldman Sachs: 20 Years Left of Mineable Gold.

Recent Goldman Sachs report reveals that some of the world’s rarest commodities are expected to become seriously scarce, with only two decades left of mineable gold and diamond reserves.

 The report was researched and written by Eugene King, Goldman Sachs’ European metals and mining analyst. His report “shows that there are only 20 years of known mineable reserves of gold and diamond.” In addition to those gold and diamond reserves, platinum, copper, and nickel reserves are also estimated to have about 40 years left.
Gold bars

“The combination of very low concentrations of metals in the Earth’s crust, and very few high-quality deposits, means some things are truly scarce.” He wrote in the report.

King notes that the intention behind the report was to highlight the areas of scarcity, and demonstrate how scarcity is the ultimate driver of value and investment.

“Perhaps unsurprisingly, these are the so-called precious metals (and diamonds), and that their value is derived from the fact they are rare.” He writes, “Gold has been used as a measure of wealth for more than 4,000 years, as the ancient Egyptians soon worked out that gold was not only shiny and heavy, but rare.”

He adds that the relative scarcity of the commodity, and “the market’s belief that new discoveries will be limited, is what drives the price of these super-rare commodities.”

King’s report falls in line with the forecast made last year, estimating that 2015 will be the year when gold production would reach its peak in the mining industry, a concept known as Peak Gold.

Last September, Coldcorp, a leading gold miner, forecast estimated that Peak Gold will be reached in 2015. “Whether it is this year or next year, I don’t think we will ever see the gold production reach these levels again,” Goldcorp CEO Chuck Jeannes told the Wall Street Journal. “There are just not that many new mines being found and developed.”

Peter Grant, an analyst for USAGOLD makes a similar estimation. Speaking to Marketwatch, he explained “Mining output has been fairly flat for years, but new discoveries of gold have been falling rapidly.”

“If we do reach peak gold in the new future,” He added. “One would logically expect this to be broadly supportive to the price of gold for years to come.”

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May 15, 2015

Family Wins Back Cache of Rare Coins

  • (Associated Press)

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    Philadelphia

    A family was awarded the rights to 10 rare gold coins possibly worth $80 million or more on Friday after a U.S. appeals court overturned a jury verdict.

    U.S. Department of the Treasury officials insist the $20 Double Eagles were stolen from the U.S. Mint in Philadelphia before the 1933 series was melted down when the country went off the gold standard. They argued that Joan Langbord and her sons cannot lawfully own the coins, which she said she found in a family bank deposit box in 2003.

    Langbord’s father, jeweler Israel Switt, had dealings with the Mint in the 1930s and was twice investigated over his coin holdings. A jury in 2012 sided with the government.

    However, the appeals court returned the coins to the Langbords because U.S. officials had not responded within a 90-day limit to the family’s seized-property claim, filed in about 2004.

    Family lawyer Barry Berke said: “Congress clearly intended for there to be limits on the government’s ability to seek forfeiture of citizens’ property, and today’s ruling reaffirms that those limits are real and won’t be excused when the government violates them.”

    Langbord, who’s in her mid-80s, worked in her father’s store on Jeweler’s Row for most of her life. Her sons, entertainment lawyer Roy Langbord, of New York City, and David Langbord, of Virginia Beach, Virginia, joined her in the legal fight.

    They do not plan to comment on the ruling and have not decided whether the coins will be sold, Berke said.

    Sculptor Augustus Saint-Gaudens designed the Double Eagle with a flying eagle on one side and a figure representing liberty on the other.

    One Double Eagle, once owned by King Farouk of Egypt, sold in 2002 for $7.6 million, then a record for a coin. Its later owner, a London coin dealer once jailed by the U.S. over it, split the proceeds with the U.S. in a deal brokered by Berke.

    The Langbords offered the government a similar split but were rebuffed.

    The family had taken the coins to the Secret Service in Philadelphia to have them examined, Berke said.

    “They authenticated the coins and said, ‘Thank you very much. We will now be keeping them,'” he said.

    The Mint struck nearly a half-million of the Double Eagles in Philadelphia in 1933 but never released them. They were melted into gold bars after President Franklin D. Roosevelt abandoned the gold standard.

    While prosecutors argued to jurors in 2011 that Switt must have stolen the coins with help from a Mint insider, Berke said he could have traded his scrap gold for them.

    A Treasury spokeswoman had no immediate comment on Friday’s ruling.

    Switt admitted to the Secret Service in 1944 that he had possessed and sold a set of nine other Double Eagles, which were recovered and destroyed. The surviving Farouk coin is believed to have been a 10th coin from that batch.

    The Mint sent a pair of 1933 Double Eagles to the Smithsonian Institution for its U.S. coin collection.