c2, the script continues to track very true
just in
Austria Makes the First Move on Restricting Gold
According to the Commodity Online service, Austria has adopted a policy which restricts the purchase of gold by individuals. Essentially, individuals will be limited to purchasing 15,000 Euros of gold at a time, making gold a “restricted” commodity. Money laundering was the reason given by Austrian officials as to why this policy was enacted.
Whatever the reasoning, the effect will be the same. If restrictions on holding gold bullion begin to proliferate, scarcity breeds higher prices. It also launches a search for alternatives and in this case, that should be gold mining stocks. As I write this at 10:00 am on Monday, the price of gold is down 1.4%, while GDX, the large cap miners ETF, is down 0.3%. No, the gold miners in aggregate are not up, but key large caps such as ABX and NEM are up about 1%. Let’s see whether this initiative by the Austrians catches a tailwind. I have thought for a while that the precious metals stocks would go higher when ETFs lost their appeal. What I had not counted on was a heavy-handed move by a government to restrict individual purchases of bullion. This is almost better than an ETF related problem, as it sends a signal that owning the stocks may be safer than owning the bullion. What’s the next step for the Austrians?
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