Big money continues to chase precious metals - Wealth Managers

Hedge funds raise gold bets for 4th week running, while new silver vault opens in Singapore

After rising about 9% over the past three weeks, gold easedback Monday as investors await three big news events this week: the Federal Reserve's rate announcement at the end of its two-day meeting Wednesday; the second-quarter U.S. GDP report, also Wednesday; and Friday's July nonfarm-payrolls report from the Labor Department (preceded by a new ADP jobs report Wednesday).

"Gold has found solid recent support at the $1,315 level," saidJason Rotman, president of Lido Isle Advisors in Newport Beach, Calif.
Big funds increase long positions
Gold continues to draw support from hedge funds, Bloomberg reported. "Money managers increased their net-long position by 26 percent to 70,067 futures and options as of July 23, U.S. Commodity Futures Trading Commission data show. The fourth consecutive weekly gain is the longest streak since October. Bullish wagers across 18 U.S.-traded commodities gained 7.4 percent to 615,140. Investors more than doubled bets on lower corn prices to a record net-short holding."

"Buyers are expecting that the tapering program that's been much ballyhooed won't begin quite as soon as a lot of people anticipated," said Mark Luschini, chief investment strategist of Janney Montgomery Scott. "It's been a good month in a bad year."
Huge silver vault already 30% booked
Meanwhile, precious metals remain a key focus of high-net-worth individuals in Asia, with news that Malca-Amit Global Ltd. is opening a 200-tonne silver vault in Singapore this week.

The new facility is 30 percent booked at the opening, saidJoshua Rotbart, precious-metals general manager, citing "strong demand." The storage will add to the firm's five gold-focused vaults at the Singapore FreePort.

"Gold demand is on the rise. Both from financial institutions and high-net-worth individuals who are looking for long-term storage solutions," said Rotbart, citing Singapore and Hong Kong as the main destinations in Asia.

The data bear out Rotbart's observation: "The number of high-net-worth individuals in the Asia-Pacific region expanded 9.4 percent last year, according to Cap Gemini SA (CAP) and Royal Bank of Canada."
China making massive push into solar energy
And based on news out of China, silver should enjoy incredible demand there, says Jeff Clark of Casey Research. "China raised its target for solar generating capacity to more than 35 gigawatts (GW) by 2015, a stunning increase of 67% above the previous target," he noted.

"China's State Council announced on July 4 that installed capacity for solar electricity would grow about 10 GW per year until it reaches the newly set target. The country's previous target was 21 GW; installed capacity in 2012 was about 7 GW, so this would translate into a 400% increase. Moreover, if one looks at the rate at which it keeps raising the target, we may well see even more solar capacity by 2015 -- and quite possibly two times that by 2020.

"What does this mean to us as precious metal investors? A simple answer would be that growing demand could crimp supply and push on prices."
Aussie miner sells stake to Chinese company
Though silver likely will grow in importance as a key strategic metal, China still hasn't lost focus of gold, or so the latest acquisition by a Chinese firm suggests: Australian "mining giant Rio Tinto on Monday announced that it would sell its 80% shareholding in the Northparkes copper/gold mine, in New South Wales, for $820 million to China Molybdenum. ...
Rio said that the sales agreement was conditional upon regulatory approval, and shareholder approval, and would likely be completed by the end of 2013."

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