Diamond News Archives

Gold weathered the Federal Reserve's 7th rate hike of this cycle this week. Gold-futures speculators and to a lesser extent gold investors have long feared Fed rate hikes, selling ahead of them. Higher rates are viewed as the nemesis of zero-yielding gold. But contrary to this popular belief, past Fed rate hikes have proven very bullish for gold. This latest hike once again leaves gold set up for a major rally in coming months.

The Fed's Federal Open Market Committee meets 8 times per year to make monetary-policy decisions. These can really impact the financial markets, and thus are closely watched by gold-futures speculators. These elite traders wield wildly-outsized influence on short-term gold price action due to the truly extreme leverage inherent in gold-futures trading. What they do before and after FOMC decisions really impacts gold.

This week's latest Fed rate hike was universally expected. Trading in the federal-funds-futures market effectively implies rate-hike odds. Way back in mid-April they shot up to 100% for this week's meeting, then stayed there for 5 weeks. In the last several weeks they averaged 91%. So everyone knew another Fed rate hike was coming. That's typical, as the FOMC doesn't want to surprise the markets and ignite selloffs.

The big unknown going into the every-other FOMC meetings followed by press conferences from the Fed chairman is the future rate-hike outlooks. Top FOMC officials' individual federal-funds-rate outlooks are summarized in a chart traders call the "dot plot". That was hawkish this week, with 2018's total expected rate hikes climbing from 3 to 4. More near-term rate hikes projected have really hammered gold in the past.

But on this week's Fed Day gold didn't plunge despite these hawkish dots and 7th rate hike of this cycle....

One of the reasons gold is such an unparalleled store of long-term value is that it cannot be destroyed. The only way it has ever been created in any real quantity has been via gigantic outer space collisions^[1], much to the chagrin of would-be alchemists through the years.

It is, in fact, possible to synthesize gold from metal like lead or bismuth. Tiny, tiny, tiny, amounts of atomic gold. So tiny, in fact, that given the immense quantities of energy required (not to mention a particle accelerator), it would cost about one quadrillion dollars per ounce^[2] to create gold in this manner.

Easier to just find some gold already fully formed and just waiting to be discovered. Maybe in gold watch form, underwater, where it has been patiently biding its time for 180 years until yesterday.

Immune to the ravages of the elements^[3], time, and the manipulative machinations of man^[4], gold stands alone.

Divers recovering artifacts off the steamship Pulaski have made an eerie find that gives credence to eyewitness accounts of the night the ship sank in 1838, taking some of the nation’s richest people to the bottom of the Atlantic.

A mysterious “grapefruit-sized” encrustation found at the site off North Carolina’s coast turned out to be a heavily decorated solid gold pocket watch attached to a gold chain.

However, what has historians buzzing is the fact that the watch’s hands are frozen at 11:05.

That’s 5 minutes after the time witnesses say the ship’s boilers exploded on the night of June 14, 1838. The dramatic sinking, often referred to as “the Titanic of its time,” occurred...

* Sales, tax revenue a fraction of previous levels

* Kimberley Process members meet this week

LONDON, June 18 (Reuters) – Despite a partial lifting of a ban on its diamond exports, the Central African Republic (CAR) is struggling to restore sales and seeing only a fraction of the tax revenue it once did, its mining minister said in an interview.

As a member of the 81-nation Kimberley Process which certifies ethical diamond exports, CAR was banned from exporting diamonds in 2013 after rebels seized power.

In 2016, the ban was partly lifted, with CAR allowed to resume sales from five "green zones" from which the then newly-elected government could enforce the Kimberley Process to certify diamonds are conflict-free.

Mines Minister Leopold Mboli Fatrane told Reuters in a telephone interview the country needs more help including training, as the demands of Kimberley Process administration are holding up shipments for between three and six months.

"It's a country of conflict. The situation has affected a lot of people, notably the mining sector, which is more than 20 percent of the population," the minister said, adding the country needed flexibility and practical help to enforce the Kimberley Process.

So far this year, Fatrane said official diamond sales of just over $2 million have generated $27,180 in taxes, suggesting the CAR will fall far short of last year's sales which he said came to around $7.6 million and raised $361,493 in taxes.

Sales peaked at $62 million in 2012.

Beyond official sales, diamonds continue to be smuggled out of the CAR, however, and the east of the country remains under rebel control. The conflict in the CAR escalated in 2013 when mainly Muslim Seleka fighters ousted then-President Francois Bozize, prompting reprisal killings...

So you think you want to be a liquidity analyst? Here’s a list of links to get you started.

H 41 – Weekly Fed Balance Sheet^[1] By tracking this over time you can see the growth or shrinkage of the Fed balance sheet. This is virtually in real time, published 1 day after the close of the weekly statement period.

H8 Weekly US Commercial Banking System Balance Sheet^[2] There’s a wealth of data here on the condition of a slew of banking system indicators. It’s published 9 days after the close of the weekly statement period, so it’s timely. Again, by tracking over time, you can see the liquidity flows.

Agency MBS Historical Operational Results and Planned Purchase Amounts^[3] Follow the ever shrinking Fed MBS replacement purchases as they head toward zero in October or November.

Treasury Net New Issuance or Paydowns ^[4]Know how much supply is coming to the market, or conversely in quarterly tax collection  periods, how much cash.

FRED Banking system demand deposits chart^[5] Watch the level of deposits slow and maybe even decline as the Fed pulls money from the system. The St. Louis FRED database has a wealth of financial and economic data. You can even combine various series into your own custom indicators.

Debt to the Penny^[6] The daily level of the Federal debt posted with a one day lag. There’s a tool here for historical data so that you can see and plot the trend in your own spreadsheet.

FedFunds Data^[7]  Track the level and trading volume of Fed Funds with a one day lag.

Primary Dealer Statistics^[8] Historical data on total Primary Dealer positions in...