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Tocqueville Gold Letter Q3 2013
Tocqueville Gold Letter Q3 2013
Macro
Fig.1. Gold and US Real Rates
$2,000
$1,800
US Real Rates
$1,600
Gold Price
$1,400
$1,200
$1,000
$800
$600
$400
$200
$0
2000 2002 2004 2006 2008 2010 2012
5%
4%
3%
2%
1%
0%
-1%
-2%
-3%
-4%
-5%
1,600
4%
3,500
3%
3,000
2%
2,500
1%
2,000
0%
1,500
-1%
1,000
-2%
500
Source: Bloomberg
1,400
Gold
ECB Real Rates
1,200
1,000
400
200
0
2000 2002 2004 2006 2008 2010 2012
-3%
Source: Bloomberg
14,000
10,000
8,000
6,000
4,000
2,000
0
2000 2002 2004 2006 2008 2010 2012
Source: Bloomberg
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$0
1995
1999
2003
2007
2011
0
1999
2003
2007
2011
Source: Bloomberg
12,000
$3,500
Source: Bloomberg
800
600
$4,000
5%
4%
3%
2%
1%
0%
-1%
-2%
-3%
-4%
-5%
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
2003
2005
2007
2009
2011
2013
Source: Bloomberg
$16
$14
$12
Thousands
Section I. Macro
$50
$40
$1,500
Gold
$30
$2,000
M2
$1,000
$10
$20
$8
$500
$10
$6
$4
2006 2007 2008 2009 2010 2011 2012 2013
$0
1999
Source: Bloomberg
Source: Bloomberg
25%
Fig.9. US M1 YoY%
$0
2003
2007
2011
Fig.10. US M2 YoY%
15%
20%
15%
10%
10%
5%
5%
0%
-5%
1970
1980
Source: Bloomberg
20%
1990
2000
2010
0%
1970
1980
Source: Bloomberg
12%
1990
2000
2010
10%
15%
8%
10%
6%
4%
5%
2%
0%
1999 2001 2003 2005 2007 2009 2011 2013
0%
1999 2001 2003 2005 2007 2009 2011 2013
Source: Bloomberg
Hundreds
Source: Bloomberg
40%
35%
30%
25%
20%
15%
10%
5%
0%
1996
35%
30%
25%
20%
15%
10%
5%
2000
Source: Bloomberg
2004
2008
2012
0%
1996
2000
2004
2008
2012
Source: Bloomberg
Section I. Macro
Fig.16. US National Debt ($T)
$25
Headline CPI
Core CPI
Shadowstats
Fig.15. Inflation
US
Euro Area
1.5
1.1
1.8
1.0
9.2
n/a
$20
China
2.6
n/a
n/a
$15
$10
$5
$0
1940 1950 1960 1970 1980 1990 2000 2010
Source: TreasuryDirect.gov, USDebtClock.org
$17
370%
$16
320%
270%
$15
220%
$14
170%
120%
1947
1957
1967
1977
1987
1997
2007
$13
2011
Source: Bloomberg
Source: Bloomberg
7.0%
6.5%
6.0%
5.5%
5.0%
4.5%
4.0%
3.5%
3.0%
2.5%
2.0%
2000
2012
2013
25%
20%
15%
10%
5%
0%
2002
2004
2006
2008
2010
2012
1988
1992
1996
2000
2004
2008
2012
Section I. Macro
Fig.21. Global Forex Accumulation
(US$B, 12 month sum)
$1,900
$1,400
$900
$400
-$100 2005
2006
2007
2008
2009
2010
2011
2012
2013
$700
$500
$300
$100
1978
-$100
1983
1988
1993
1998
2003
2008
2013
$220
$180
$140
$100
$60
$20
-$201990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Source: US Treasury; MacroMavens, LLC
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2Q13
Supply
Mine production
2,591
2,592
2,478
2,550
2,481
2,476
2,409
2,584
2,739
2,827
2,848
835
944
829
886
1,107
956
1,217
1,672
1,723
1,669
1,626
672
Traditional supply
3,426
3,536
3,307
3,436
3,588
3,432
3,626
4,257
4,463
4,495
4,473
2,081
(412)
(279)
(445)
(86)
(373)
(444)
(349)
(252)
(108)
10
(20)
(26)
545
617
497
662
367
484
236
30
3,559
3,874
3,359
4,012
3,582
3,472
3,513
4,034
4,355
4,505
4,453
2,055
2,680
2,522
2,673
2,707
2,283
2,405
2,187
1,760
2,017
1,972
1,908
1,116
360
385
416
431
458
462
436
373
466
453
428
207
3,040
2,907
3,089
3,138
2,741
2,867
2,623
2,134
2,483
2,425
2,336
1,323
373
314
396
412
421
446
649
743
1,205
1,519
1,256
913
1,409
Demand
Jewellery
Other
Total fabrication
Bar & coin retail investment
Official sector purchases
77
457
535
181
39
133
208
260
253
321
617
382
185
279
(579)
143
614
(259)
254
160
(94)
(80)
541
207
(81)
47
217
3,559
3,874
3,359
4,012
3,582
3,472
3,513
4,034
4,355
4,505
4,453
2,055
25.0%
20.0%
15.0%
10.0%
4.1%
5.0%
0.0%
1934
1982
2Q2013
All ETFS
SPDR Trust
40
0
Oct-03
Oct-05
Oct-07
Oct-09
Oct-11
NonInstitutional,
51.30%
Private
Banking, 2.00%
Insurance
Company,
0.10%
Source: FactSet
600
Fig.29. Central Banks Net Purchases (tonnes)
500
400
300
200
100
0
08 09 10 11 12 2Q
-100 00 01 02 03 04 05 06 07
13
-200
-300
-400
-500
-600
Source: World Gold Council
Country
Kazakhstan
Russia
Turkey
Tonnes
1.1
6.4
22.5
Transaction
Purchase
Purchase
Addition
34,000
33,500
Hedge Fund,
15.50%
Mutual Fund,
2.60%
Pension Fund,
0.50%
14%
13%
33,000
12%
32,500
32,000
11%
31,500
10%
31,000
30,500
9%
30,000
8%
29,500
3/00
3/02
3/04
3/06
3/08
3/10
3/12
3/00
3/02
3/04
3/06
3/08
3/10
3/12
100
80
60
40
20
0
2006
2007
Source: GoogleTrends
2008
2009
2010
2011
2012
2013
100
80
60
40
20
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
Source: GoogleTrends
100
$2,000
$1,800
$1,600
$1,400
$1,200
$1,000
$800
$600
$400
$200
$0
80
60
40
20
0
2006
DSI
Gold
2007
2008
2009
2010
2011
2012
2013
100
$2,000
$1,800
$1,600
$1,400
$1,200
$1,000
$800
$600
$400
80
60
40
Market Vane
Gold
20
0
2006
2007
2008
2009
2010
2011
2012
2013
2000
$2,000
$1,800
$1,600
$1,400
$1,200
$1,000
$800
$600
$400
$200
$0
1800
1600
1400
1200
Open Interest
Gold
1000
800
2006
2008
2010
Source: Bloomberg
2012
480%
CCI Index
380%
Gold
280%
180%
80%
-20%
2000 2002 2004 2006 2008 2010 2012
Source: Bloomberg
$2,000
800
$1,800
600
$1,600
400
$1,400
200
$1,200
2006
(200)
2007
2008
2009
2010
2011
2012
$1,000
2013
$800
(400)
(600)
$600
$400
(800)
(1,000)
$200
Source: CFTC
$0
$1,700
80%
$1,100
40%
20%
$900
$700
Millions of Ounces
$1,300
60
Registered Stocks
50
$1,500
More Net Short
60%
40
30
20
10
0%
7/10
$500
7/11
7/12
7/13
0
2003
0
2005
2007
2009
2011
2013
Source: Bloomberg
60%
HUI/Gold
XAU/Gold
50%
40%
30%
20%
10%
0%
1995
1997
Source: FactSet
$4,000
1999
2001
2003
2005
$16
$14
$3,000
2007
2009
2011
2013
$12
$2,000
$10
$8
$0
$6
-$1,000
1H07
2H07
1H08
2H08
1H09
2H09
1H10
2H10
1H11
2H11
1H12
2H12
1H13
2H13
$1,000
$4
$2
-$2,000
-$3,000
$4.5
$0
5/06 5/07 5/08 5/09 5/10 5/11 5/12 5/13
Source: Morningstar
2H13 - as of 8/31/13
Source: FactSet
60%
$4.0
Dividends
Dividend Payout Ratio
$3.5
Billions
$3.0
50%
40%
$2.5
30%
$2.0
$1.5
20%
$1.0
10%
$0.5
$0.0
0%
2002
2004
2006
2008
2010
2012
$18
$16
$14
$12
$B of Equty Issued
# of Transactions
140
120
100
$10
80
$8
60
$6
40
$4
20
$2
$0
0
2000 2002 2004 2006 2008 2010 2012
Source: RBC Capital Markets
$600
8%
70%
60%
$500
50%
$400
6%
40%
$300
30%
4%
$200
2%
$100
0%
$0
02
-2%
03
04
05
06
07
08
09
10
11
20%
10%
0%
05
12
06
07
08
09
Acquisition Cost
Source: FactSet
Universe: NEM, ABX, GG, KGC, AUY, NCM, AU, GFI, HMY
10
11
12
$1,800
$1,600
$1,400
Cash Margin
$1,200
Cash Costs
$1,000
$800
$600
$400
$200
$0
2002
2003
Source: Bloomberg
2004
2005
2006
2007
2008
2009
2010
2011
2012
$2,500
40%
35%
$2,000
30%
25%
$1,500
20%
$1,000
15%
10%
$500
$0
5%
2013 2014
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
E
E
210
253
311
363
413
552
738
661
814
0%
23% 32% 31% 24% 18% 32% 21% 15% 32% 34% 37% 34% 19% 27%
Source: Tocqueville Asset Management, FactSet.
10
Source: Scotiabank
Source: Scotiabank
11