Gold sets record: Is it topping or just getting started?

On The Road With Rhodium

Along with that story of technical progress, we also look forward to a whole lot more investment ‘attention’ to be paid to rhodium, real soon. In this writer’s opinion, at this price equation, the next 35%+ return from a scarce metal is most likely going to emanate from the rhodium and palladium market, as opposed to the gold one. Many of the required ingredients are there; scarcity, unreliable supplies, inelastic user demand, lack of substitutes (for rhodium), exciting new, present and future-tech applications.

It turns out that some folks have already been paying ‘attention’ to rhodium and are paving the way for a larger-scale presence for this metal in the investment arena. As you may recall, Kitco launched a physical, allocated rhodium sponge custodial account in May of 2010. ETF Securities later came to market with a “basket” ETFS (name: GLTR) that contains rhodium plus the other four metals that are popular with investors.

Two months ago, Deutsche Bank AG unveiled is Physical Rhodium ETC. That vehicle is backed by a direct investment in underlying, segregated physical rhodium (also in the form of bottled sponge) being held with Johnson Matthey PLC in the UK. One may buy initial entitlements of 1/10th of an ounce and the annual account fee is 0.95%. The initial interest in the Deutsche Bank instrument was quite encouraging, sources at the bank indicated.

Meanwhile, Bloomberg reports that there is a…difference between wanting to make money, and wanting to make MONEY at any cost. There is also difference between being simply being mad at regulators and legislators, and being MAD at them in a manner sufficient to seek their being “rubbed out.”

Reuters reports that A former commodities trader pleaded guilty on Monday to threatening to kill more than 40 financial regulators, including the heads of the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission. Vincent McCrudden, 50, admitted in court that he posted the threats on his company's website last December, asking for help executing his plan. His guilty plea came the day testimony was to begin in his federal trial, said his lawyer Bruce Barket.”

We will skip the daily update on the topics of the EU’s ‘imminent demise’ as well the “US’ ‘imminent default’ as there is still nothing to report. The dates (July 21 and August 2nd) still stand and any pertinent developments will be covered when and if they occur. Let us take the time instead and cover the underlying issue within the latter topic.

What it comes down to, according to Marketwatch’s Mark Hulbert, who has been tracking the bond market and its behavior, is that the odds of a US default are….”next to” …zero. Mr. Hulbert specifies that the statement is not simply opinion; it is the “collective judgment” of the bond market; a market where Treasury yields have fallen amid the barroom brawls in Washington.

Jon Nadler is a Senior Metals Analyst at Kitco Metals Inc. North America

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About the Author
Jon Nadler Jon Nadler is a Senior Analyst at Kitco Metals Inc. North America
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