Slider - I agree
except I think with or without oil squeeze, gold and other precious metals are going up. Some signs that supplies are being drawn down.
The US Defense dept has to sell more than its normal annual amt of palladium to make up for shortages. At current rate of depletion of stockpiles, they will be around ZERO in 2 years or less.
__________________________________________________________
US Will Offer Palladium From Its Stockpiles Monday
London, Aug. 24 (Bloomberg) -- The U.S. will resume selling palladium from its stockpiles on Monday, releasing an extra 100,000 ounces by the
end of September because of a global supply shortage of the metal, the Defense National Stockpile Center said.
The Fort Belvoir, Virginia-based center said on its Website it will offer palladium on Aug. 28 after Congressional approval for sales of an additional
100,000 ounces takes effect tomorrow. It reached its initial 200,000-ounces quota for the fiscal year in January, said Peter Mory, the center's
director of planning and research.
``The world market appears to be tight,'' Mory said.
The extra 100,000 ounces brings the total amount of palladium, which the U.S. Defense Department is authorized to sell in the year started Oct. 1,
to 300,000 ounces.
Although the amount equals only about 4 percent of the world total, the sales represent almost half of U.S. annual supplies. The auctions come at a
time when demand from makers of cars and electronics is on the rise and while shipments from Russia, the world's biggest palladium supplier,
remain limited.
``The industry needs the metal and it will be absorbed fast,'' said Otto Boess, a precious metals trader at Degussa-Huels AG, which makes
autocatalysts that reduce car pollution. While ``the amount (offered) isn't that large, it will affect the market sentiment.''
Retreat
Palladium for immediate delivery fell $12.50, or 1.7 percent, to $722.50 an ounce in London.
It is not clear how much of the extra 100,000 ounces will be offered starting Monday, Mory said. ``We're not going to put it all out at one time,'' he
said.
The 100,000-ounces increase from the 200,000-ounces annual quota will also apply to sales for the next fiscal year, he said. The department also
got permission to increase its annual quota of selling columbium concentrates, tantalum minerals, mica, sebacic acid and beryllium copper master
alloy.
The government has 899,122 ounces of palladium left in its stockpile, built up during World War II.
Palladium has fallen 14 percent from a record $858 an ounce on Aug. 3 on signs that Russia resumed deliveries after a halt that lasted almost
throughout July. Still, deliveries remain unreliable, traders said.
``There seems to be a sufficient amount of the metal for the moment, but I don't know for sure where it's coming from,'' Boess said. ``There's no
clear picture what the Russians are doing.''
Russia supplies two-thirds of the world's palladium, used also in mobile phones and other electronics as well as in dentistry and jewelry. Last year,
global demand for palladium exceeded supply by 1.31 million ounces, according to Johnson Matthey Plc, the world's biggest palladium refiner and
marketer.
The metal from U.S. stockpiles ``will be a relief for the market,'' said Frederic Panizzutti, head of strategy at Geneva- based MKS Finance SA. ``It
will add to physical supply at a time when supplies remain tight and delays in shipments from Russia remain possible.''
Russian deliveries fell to 5.4 million ounces of palladium last year from 5.8 million ounces in 1998, even though global demand rose to 9.37 million
ounces from 8.6 million, Johnson Matthey said. Analysts expect a palladium deficit to occur also this year, the fourth year in a row.
Aug/24/2000 13:06 ET
For more stories from Bloomberg News, click here.
____________________________________________________________
Also we saw gold and silver inventories down at the commodities exchange last week.
cbs.marketwatch.com hoo&dist=yhoo
Its starting to seem like the US is trying to keep a lid on the truth about inflation by drawing down supplies of precious metals to temporarily relieve inflation.
I guess that might work until your out completely. But this is risky and I do believe its all going to blow up in their faces before long.
M. |
