18 December 2015

A way around FBAR/8938 reporting using LockSmart?

I am often asked by US residents whether precious metals are reportable under IRS and FinCEN foreign asset/account reporting obligations:
  • Form 8938, Statement of Specified Foreign Financial Assets
  • FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR)
According to the IRS comparison of these requirements, “precious metals held directly” is not reportable.  So what does “held directly” mean? The IRS’ own Q&A confirms that safe deposit boxes are not reportable but otherwise provides no explanation of the term.

Read more here.

15 December 2015

Warehouse Wars: The JPM Awakens

Last week I wrote about the gold warehouses associated with the CME’s kilo futures contract. Today I’ll have look at the Comex New York warehouses but rather than focusing on the eligible/registered debate, which has been done to death, I want to look at the fight between the warehouses for storage customers and the entrance of JP Morgan into this $30 million per annum business in early 2011 (hence my tacky topical title). Read more here.

11 December 2015

Hong Kong Gold Warehouse Movements

Back in July I pondered what happened to 110 tonnes of gold in one of the Hong Kong gold warehouses registered by CME for its kilo futures contract. The chart below updates the figures and shows that wherever the gold went, its is gone for good.

Those that get worked up about Comex “leverage” ratios should be interested in the fact that the Hong Kong warehouse report only shows eligible stocks and has never shown any registered, which probably has something to do with the fact that the delivery notice report shows no issues/stops for the kilo contract so far this year. Forget your 300:1 Comex “leverage” – that would put the OI/Registered Stocks ratio as divide by zero error, or in other words, the CME’s Hong Kong contract has infinite leverage!

Read more here.

09 December 2015

China accelerates gold reserves accumulation

In July I did a post on How much gold does China really have? which looked at the rate China was accumulating gold reserves based on their occasional announcements of how much gold they had. Extrapolating out their average monthly rate of 8 tonnes gave the chart below, which projected to 2,186 tonnes by the end of 2020. Since then China has begun to report its gold reserves every month and has accumulated 86 tonnes in five months – an average of 17.2 tonnes. That is a lot more than their previous rate and you can get a better idea of the acceleration if I update the chart above with the new reserves figures and then project that rate into the future. Read more here.

01 December 2015

Gold and silver coin sale diverge

The Perth Mint’s latest minted coin and bar sales are out, which reflect retail investor interest. In silver we posted our fifth best month in four years, although the September figure probably should be ignored because we were stocking up for months beforehand for the launch of our silver Kangaroo coin and didn’t expect to sell that all in one go. Read more here.