Gold and Silver Fall as More Governments Meddle in Metals

SILVER and GOLD PRICES fell on Tuesday, erasing yesterday's pop as London and New York traders returned from long holiday weekends to find crude oil rallying after the US and Iran exchanged air-strikes despite ongoing peace talks, while more national governments were seen interfering in their domestic precious metals markets.

Malaysia is now charging 10% customs duty on bullion bar imports says Bloomberg, quoting un-named traders in gold's No.21 consumer nation 2 weeks after giant gold consumer India hiked its bullion import tax to try defending its currency.

Starting next Monday, large mining sites in No.6 gold producer Ghana must sell 30% of their output to the central bank, up from 20% currently.

France's state-owned Monnaie de Paris is meantime launching gold investment coins, minting bullion products for the first time since World War One to meet "investor demand" and "democratise the gold market in France".

Gold priced in Euros today fell near 1-week lows beneath €3870 per troy ounce as the single currency strengthened on the FX market, still down by €100 from Monday's peak after rallying 0.6% back to unchanged for the week so far.

The gold price in Dollars meanwhile dropped 1.7% from Monday's 3 peaks at $4579 to briefly test $4500 per troy ounce before rallying $20, a move which also put the 'safe haven' flat for the week so far in UK Pounds at £3355.

Crude oil rose from yesterday's 3-week lows, regaining almost 3.0% for both US WTI and European benchmark Brent futures.

But betting that US central bank the Federal Reserve will start to raise US interest rates from December fell back, dropping from a 2-in-3 certainty to little better than an evens shot according to futures contract positioning tracked by the CME derivatives exchange.

"It won't [just] be business as usual where we just automatically renew the lease," said Ghana's Minerals Commission's CEO Isaac Andrews Tandoh to Reuters yesterday, warning South African-listed mining major Gold Fields that it will fresh scrutiny over its operations at the Tarkwa project.

Malaysia's import tax change comes only a fortnight after the sudden hike to bullion import duty by India − the second largest gold consumer nation after China − back to modern record levels.

The Ministry of Finance in Kuala Lumpur is said to be "engaging with the industry" regarding "minted gold products" rather than unwrought bullion, Bloomberg says.

Next month's launch of French gold coins featuring national symbol Marianne will see the Paris Mint add bullion products to its collectibles and non-precious circulating currency businesses.

The German Ministry of Finance last month clarified its VAT sales tax rules on silver, platinum and palladium, confirming that the 19% levy applies to any purchase of the industrially-useful 'white' precious metals made inside the world's 3rd largest economy, including when it's held in third-party 'freeport' storage in Germany.

Silver and other precious metals storage providers in the USA should prioritize new facilities away from the current hub of New York, the Senate heard last week, with a Bill already introduced into Congress this March proposing new rules to ensure "affordable access to metal exchanges and safeguard assets in the event of a national emergency or extreme weather event."

Also known as "the SILVER Act", the "System Integrity through Licensed Vault Expansion and Resilience Act" would be enforced by regulators the CFTC, and it would amend the Commodities Trading Act of 1936 to put a geographical requirement on any centrally-cleared derivatives platform that its precious metals contracts can be settled with bullion from approved warehouses in at least 2 of the 4 major US time zones.

At present, and with the CME now the only recognized investment exchange for silver, platinum, palladium or gold futures or options, all Comex and Nymex approved warehouses are in the Eastern time zone.

London silver bullion prices today erased Monday's UK and US Bank Holiday bump but held a little stronger than gold, rising to show a small gain for the week so far at $76.30 per troy ounce, equal to £56.70 and €65.65.