Source: Bloomberg - Charteris Treasury Portfolio Managers Ltd

Charteris Treasury Portfolio Managers Ltd
Goodacre Gold & Silver Presentation
March 2014
For Professional advisers only. Not to be shown or given to any retail investors
1.
2.
Seasonal Pattern – Gold & Silver tend to bottom around July and rise for the rest of the year
GOFO (Forward Rate) and Futures in backwardation – very unusual – signalling massive shortage of physical Gold for
immediate delivery which is why holders of Gold seem unwilling to do the normal risk free arbitrage (sell spot & buy back
cheaper in 3 months time) . The other problem with the Arbitrage is that you might not get your Gold back (see point 3)
3. COMEX vaults being rapidly emptied of Gold – If too many holders ask for delivery, a large problem will arise (see also
point 2 abo
aboutt Asia)
4. Major Cycle lows – the 10-10½ year cycle in Silver bottomed on 28th June 2013 – this cycle bottomed with a text-book
capitulation sell off
5 Investor sentiment – this is universally bearish towards Gold & Silver Assets – sentiment acts as a reverse indicator – when
5.
the herd is this bearish – BUY – See slide 12 – COT report shows record speculator short positions in Gold & Silver.
6. Gold’s replacement cost is around £1,500 an ounce – Gold is currently $1,300 an ounce, it is not possible for Gold to stay
below its replacement cost for very long
7. Selling from Gold ETF’s (finite amount anyway) by Americans is drying up – Buying from Asia & the Middle East continues
on a massive scale
8. Global Money printing continues unabated despite tapering by the Fed, but massive printing still taking place in Japan &
quite possibly China, if that economy starts to fade
9. Supply/Demand fundamentals very, bullish – Net Global mine output is 2,200 Tonnes. Demand from China (1,200), India
(800) and Japan (250) tonnes means that three Asian countries will take entire 2013 Global Mine Output
10. Ratio of Miners relative to Bullion recently at all time record since XAU Index formed in 1984 (miners cheap relative to
10
Bullion) (see Slide 18)
For professional intermediaries only
2
Source: Bloomberg
Last Price 1,326.44
For professional intermediaries only
(as at 28th Feb ‘14)
3
Source: Bloomberg
Last Price 21.2275
For professional intermediaries only
(as at 28th Feb ‘14)
4
(as at 28th Feb ‘14)
For professional intermediaries only
Source: Bloomberg
5
(as at 28th Feb ‘14)
Source: Bloomberg
Silver in Black
Gold in Yellow
HUI in Green
For professional intermediaries only
6
Source: United Nations
For professional intermediaries only
7
Source: ezilon.com
More
people
live
inside
the red
circle
than
outside
the circle
For professional intermediaries only
8
Source: Bloomberg
For professional intermediaries only
9
Source: Bloomberg
Peaks in the Gold/Silver ratio – correlate to 10 year cycle in SILVER
For professional intermediaries only
(see previous slide P.9)
10
(as at 31st Oct ‘13)
Source: Kitco
For professional intermediaries only
11
Futures Daily Volume
Turnover in
T
i G
Gold
ld F
Futures
t
is
i roughly
hl
10 times the volume witnessed in the
y
Market.
Gold Physical
Physical Gold Daily Volume
COMEX Features COT Report
The COT report is widely analysed as it shows the balance of Open Interest in the futures market between speculators and
commercials Speculators are defined as day traders,
commercials.
traders Hedge funds etc
etc, whilst commercials are defined as Bullion Banks
Banks, Mining
companies etc (i.e. the trade). At major turning points, history shows time and time again that speculators tend to be on the
wrong side of the move and commercials tend to be on the correct side of the market. i.e. at major lows, expect to see record
short positions amongst the speculators - THIS WAS THE POSITION AS AT END OF DECEMBER 2013*
*(as at 31 Dec 13)
For professional intermediaries only
12
For professional intermediaries only
13
For professional intermediaries only
14
For professional intermediaries only
15
For professional intermediaries only
16
Source: Bloomberg
Supply
Mine Production
Mine Production
Metric Tonnes
2,600 Tonnes (Net 2,200 Tonnes)
2,600 Tonnes (Net
2,200 Tonnes)
Scrap
Miscellaneous
Total Supply
1,400 Tonnes
/
4,000 Tonnes
Demand
Metric Tonnes
Jewellery and other Fabrication
2,400 Tonnes
Central Bank Purchases
900 Tonnes
Bar Investment
500 Tonnes
Net Producer De‐Hedging
100 Tonnes
Miscellaneous
100 Tonnes
Total
For professional intermediaries only
4,000 Tonnes
Geographical
Demand
China – 1200 Tonnes
India – 800 Tonnes
Japan – 250 Tonnes
Total – 2,250 Tonnes
(as at 31st December)
17
(as at 17th Mar ‘14)
Source: Bloomberg
This chart shows the Gold shares ratio relative to the Gold price, showing that gold shares are the cheapest they have been in
history.
For professional intermediaries only
Last Price 13.0902
18
For professional intermediaries only
19
G ld Cycles
Gold
C l
Year
Month
Weekly
Day
40
480
2080
14600
3.36
40.4
173
1212
2.7
33.6
404
2828
.83
10
43
300
.52
6.3
27
190
Bold print denotes the cycle under which it is commonly known as
as.
For professional intermediaries only
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For professional intermediaries only
21
For professional intermediaries only
22
1. Gold and Silver bullion are amongst the most volatile assets on Earth
2. Gold & Silver mining shares are even more volatile
3. Silver is more volatile than Gold – therefore, if an investor is bullish and wants
p
to Precious metals,, Silver will rise much more than Gold in a Bull
exposure
Market
y
and GOFO analysis
y
p
points to a major
j multi-year
y
low – ideal buying
y g level
4. Cycle
5. Mining Shares at record levels of cheapness to Bullion
6. WAY Charteris Gold and Precious Metals Fund has 70% exposure to Silver
miners
7. This fund has the ability to outperform every other mutual fund in the UK. IF a
Bull market in Silver and Gold develops (see separate presentation on the
fund)
For professional intermediaries only
23
Ian Williams – Chartered FCSI & Chartered Wealth Manager
Ian has spent the past 35 years trading equities, commodities and G7 government b d
bonds, covering sales, research, market i
l
h
k t
making and proprietary trading. He was a member of the London Stock Exchange for many years before joining Chase Manhattan Bank (now JP Morgan). He then worked for Dresdner Kleinwort B k(
JP M
) H h
k df D d
Kl i
Benson and Guinness Mahon (now Investec) before becoming Chairman & Chief Executive of Charteris Treasury Portfolio Managers. Ian also manages the WAY Charteris Gold Fund (
(which was the top Fund in the country across all sectors in its first four months of trading, City Financial Strategic Gilt Fund (which was the top UK Gilt Fund in 2007 & 2009*) & The Elite Charteris Premium Income Fund. Ian Williams awarded Trustnet Alpha Manager in 2011 & accomplished a CityWire A rating in 2009, 2010 & 2011.
For professional intermediaries only
Nick Taylor – Chartered FCSI & Head of Private Client Wealth Management Nick Taylor has 38 years of international investment management experience, gained at Morgan Grenfell, Invesco, and was Managing Director at Cigna International Investment Advisors and Matheson Investment Management. An award‐winning manager, Nicholas has run equity portfolios for a broad range of investors, including institutional pension funds, such as the Cadbury Schweppes Pension Fund alongside running several million pounds of private client portfolios and investment trusts. Nick is also a p
p
Chartered Fellow of the Chartered Securities Institute.
Mark Williams
Mark graduated from Surrey University with a BA in 2005 and began his career in Investment Management with Forsyth Partners. He joined Charteris in November 2008 as a Junior Fund Manager assisting with the management of both individual private client portfolios as well as the management of the in‐house Charteris funds.
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This presentation is issued by Charteris Treasury Portfolio Management Ltd which is
authorised and regulated by the Financial Conduct Authority & the Gibraltar Financial
S i
Services
C
Commission
i i
•
Past performance is not a guide to future performance and investors may not get back the full
amount invested
•
The price of shares and any income from them may fall as well as rise
•
On redemption of holdings investors may not receive back the full amount invested.
Management and other fees may reduce the capital invested
•
The information provided does not constitute advice or a personal recommendation for which
the duty of suitability would be owed by us and you should seek your own advice as to the
suitability of any investment matter mentioned here
•
Professional advisers should be aware that this document is intended for their use only and
this document is not to be shown or given to any retail investors
•
The presentation is made on the basis of our current understanding of United Kingdom Tax
laws, which may be subject to change in the future
For professional intermediaries only
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