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Koos Jansen

Posted on 9 Jan 2015 by Koos Jansen

Chinese Lunar Year Gold Buying Frenzy Started

Every year around January first the Chinese ramp up gold buying at retail level to an unprecedented pace (click, click and click to read about the buying spree last year). The Chinese calendar (Lunar Year) is slightly different than the Western (Gregorian) calendar. In China new year will be celebrated on February 19, 2015, this time to begin the year of the goat. For the occasion the Chinese buy each other gifts, quite often in the form of gold.

We can see elevated gold purchases on wholesale level (SGE withdrawals) of late, rapidly being sold to end consumers in the shops at the moment. China Gate News Channel reported on January 3rd a “stampede phenomenon” in a shopping mall in Beijing, were gold was sold at a rate of 400,000 yuan per minute.

Reporters saw hundreds of people this morning to appear in a stampede phenomenon. To prevent congestion stores set up a special security tower, have someone on the lookout, to control the shoppers.

…Additionally the staff was increased to ensure smoothly shopping.

Beijing January 3, 2015

Beijing January 3, 2015

Perhaps the shopping mall was prepared for the stampede after what happened last year; in some Chinese shopping malls 200 Kg was sold in one hour.

Beijing January 1, 2014

400,000 yuan per minute means it’s likely more than 0.6 metric tonnes of gold is sold per day in just one shopping mall in Beijing. How many of these shopping malls are there across China? I wish I knew.

These numbers provide an interesting perspective to reflect on SGE withdrawals. The Chinese SGE report that was released today only covered the last three trading days of 2014. Withdrawals (December 29 -31) were strong at 29 tonnes, a rate that transcends global mining production. Total withdrawals for 2014 have reached 2,102.4 tonnes, down 4 % y/y.

Blue (本周交割量) is weekly gold withdrawn from the vaults in Kg, green (累计交割量) is the total YTD.

I we correct SGE withdrawals by SGEI trading volume – read this post for a comprehensive explanation of the relationship between SGEI trading volume and withdrawals – SGE withdrawals in the mainland, were at least 18 tonnes, at most 29 tonnes (in the last three days of 2014). Total SGE withdrawals in 2014, in the mainland, were at least 2,025 tonnes, at most 2,102 tonnes.

My estimates for the supply side of the Chinese gold market in 2014 are (based on 2,025 tonnes SGE withdrawals):

• Import 1,218 tonnes.
• Domestically mined 451 tonnes.
• Recycled through the SGE 356 tonnes.

This would mean at least 1,669 tonnes has been added to Chinese non-government gold reserves, putting the total at 11,623 tonnes. Guessing PBOC reserves at 4,000 tonnes, the total amount of physical gold in China could be approximately 16,000 tonnes.

Read the end of this post to learn how I conceived this chart.

Koos Jansen
E-mail Koos Jansen
  on: koos.jansen@bullionstar.com

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US Treasury to hear from Bitcoin community on banking services access

Posted On 08 Jan 2015

By : Katherine Fletcher

Comment: 0

Tag: Banking services access, Carol Van Cleef,CDC, Chamber of Digital Commerce, US Treasury

The Treasury Department Building in Washington DC.

On January 13, the US Treasury will hold a roundtable discussion with the aim “to share the Government perspective on issues pertaining to financial access for MSBs (money services businesses) and to hear from industry,” reported SiliconANGLE.

Representatives from the federal government, the regulation community, banking and credit union sectors, and the MSB sector will participate in the roundtable. SiliconANGLE reported that digital currency proponents are determined to ensure that Bitcoin is at the forefront of discussions.

Among the groups that have applied for a seat at the roundtable is the Chamber of Digital Commerce (CDC), a Washington, DC-based trade association. In a press release issued Monday, the CDC said that in response to the US Treasury’s Notice of Roundtable Discussion, it formed a Financial Access Task Force to prepare comments.

The CDC said in its press release that one of its critical missions is to advocate for adequate access to financial services, which it calls a lifeline to business operations for digital currency and digital asset firms. The Chamber said certain types of Bitcoin and other cryptocurrency-related businesses have been included in the definition of a money services business, and other industry entities have encountered the residual effects when seeking banking relationships.

“Companies that are involved in developing and deploying the protocol of crypto currencies or other digital assets – but are not involved in the provision of money transmission or other MSB activities – are being denied access to banking services. At best, this is a tremendous diversion of time and resources. At worst, companies are forced out of business, without having the opportunity to recognize the full potential of the technology,” said Carol Van Cleef, chair of the CDC’s Financial Access Task Force, in the press release.

The Chamber is also calling on industry members to take part in a survey to present data to the US Treasury. The survey asks respondents about their experience in trying to open a bank account, whether they have had their account closed, and the nature of their business.

Photo: Public domain image by Loren

About the Author

Katherine Fletcher is a writer and editor based in London, Ontario, Canada. With a graduate degree in journalism, Katherine spent more than five years curating news on Canadian higher education for a marketing consultancy. Her interest in reporting on Bitcoin stems from her belief that digital currency is, and will continue to be, a disruptor in how we conceive modern currency.

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Gold up on lower dollar, shares after US data

10 Jan12:18 AM

[LONDON] Gold rose on Friday as the dollar and equities failed to react to a better-than-forecast US jobs report, and the metal was set for the first weekly gain in four weeks as political uncertainty in Greece boosted demand for assets seen as safe.

Spot gold rose to a session high of US$1,217.30 an ounce after the US data, not far from a three-week peak of US$1,222.40 hit on Tuesday. It was trading up 0.4 per cent at US$1,213.38 by 1506 GMT.

US gold futures for February delivery rose 0.9 per cent to US$1,218.40 an ounce.

Spot prices were heading for a 2.5 per cent weekly gain, snapping a three-week losing streak, mostly due to global equities slumping at the start of the week on worries over developments in Greece that could see it quitting the euro.

The dollar was down 0.1 per cent against a basket of currencies and European stocks remained negative after data showed US nonfarm payrolls increased by 252,000 in December, topping expectations for an increase of 240,000. The unemployment rate fell 0.2 percentage point to a 6-1/2-year low of 5.6 per cent.

Despite recent improvements in the job market, investors remained focused on the fact that the minutes of the Federal Reserve's latest policy meeting released on Wednesday indicated the central bank would be patient in raising rates due to low inflation expectations.

Boston Fed President Eric Rosengren, speaking on Thursday, highlighted the Fed's cautious stance, saying the central bank can likely be patient not only on the timing of the first interest rate hike but also on the series of subsequent increases.

Gold, which has no yield, tends to suffer in an environment of rising interest rates.

"Gold is supported in this tight US$1,200/US$1,230 range because people are still a bit worried that with low inflationary pressures the Fed will not hike interest rates so soon," ABN Amro analyst Georgette Boele said.

In the physical markets, demand from China has been strong in recent weeks in the build-up to the Lunar New Year holiday in February, when gold is bought for gift-giving.

Premiums on the Shanghai Gold Exchange were hovering between US$5 and US$6 on Friday over the global benchmark, indicating strong buying interest.

Silver was up 1.2 per cent at US$16.51 an ounce, while platinum rose 0.6 per cent at US$1,221.50 an ounce and palladium one per cent to US$795 an ounce.

REUTERS

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Americans' new mood about economy: It’s actually pretty good

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A variety of surveys suggest that Americans could be beginning to feel good about the economy for the first time since the Great Recession, despite lingering problems.

By Mark Trumbull, Staff writer JANUARY 6, 2015

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  Matt Rourke/AP

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WASHINGTON — For the first time since the Great Recession, polls are finding a majority of Americans with positive feelings about the economy.

The shift doesn’t mean the economy is moving into overdrive, nor does it alleviate the challenges that millions of Americans still feel – from stretched family budgets to unemployment.

But it does signal a potentially important transition.

Recommended: How skewed is America's income inequality? Take our quiz.

After years of sluggish recovery, the job market last year posted its strongest employment gains since the 2007-09 recession. Forecasters say annual economic growth could reach 3 percent this year for the first time since 2005. And the progress is starting to be felt by growing numbers of workers and consumers.

TEST YOUR KNOWLEDGE How skewed is America's income inequality? Take our quiz.

PHOTOS OF THE DAY Photos of the day 01/06

A Gallup index of economic confidence had a positive reading (+1) in the week ending Jan. 4. That was the second positive week in a row after a string of downbeat readings going back to the recession, Gallup announced Tuesday. The index blends people’s view of the current situation with their outlook for the future.

Similarly, in late December, a CNN/ORC poll found that 51 percent of Americans rated the economy as “somewhat good” or “very good,” the first time in seven years that a majority of Americans have said that.

And a monthly survey of consumer sentiment by Thomson Reuters and the University of Michigan has reached its highest level in eight years.

“Importantly, rather than basing their renewed optimism on volatile oil prices, consumers have become convinced that growing strength in the national economy will result in continued gains in jobs and wages during the year ahead,” economist Richard Curtin said in releasing the December survey.

By itself, a better mood doesn’t mean those hopes will be fulfilled. But some economists say conditions could be ripe for consumer spending to strengthen and for economic growth to surprise on the positive side of current forecasts.

The rising confidence coincides with improvements in home values and a high stock market (even after recent dips), which bolster household wealth.  Plunging oil prices act like a tax cut, putting more money in consumer pockets to use for other things. The job market and the climate for getting approved for loans also continue to improve.

The nation’s official unemployment rate has fallen below 6 percent of the labor force. But economists still see lots of room for improvement in the job market. A strengthening economy should start to pull labor-force dropouts back into the hunt for jobs.

In a December survey of consumer confidence by the nonprofit Conference Board, more people said jobs are “hard to get” (27.7 percent) than that jobs are plentiful (17.1 percent), hinting at the job-market weakness that remains.

More broadly, that’s a reminder that lots of Americans still aren’t feeling economic good times. 

The monthly Christian Science Monitor/TIPP poll in December found Americans feeling moderately positive about the outlook for their own personal finances, but the responses varied widely by income. High-income respondents were the most upbeat.

In the below-$30,000 income group, more people said they expected their finances to worsen over the next six months (23 percent said this) than to improve (20 percent).

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Cubits Launch Aims to Accelerate Bitcoin Buying in Europe

Nermin Hajdarbegovic | Published on January 7, 2015 at 21:55 GMT

Cubits has launched a web application designed to speed up and simplify bitcoin transactions.

Notably, the London-based cryptocurrency startup allows customers to buy bitcoin in minutes, making it one of the fastest digital currency platforms in Europe, according to the company.

"We want to speed up the process of getting bitcoin and making online payments fair and accessible, especially for merchants and charities that could really benefit from lower fees," said Andreas Lehrbaum, co-founder of Cubits and the co-founding chairman of Bitcoin Austria.

Focus on speed and accessibility

The first products based on the new platform are a consumer-focused wallet and a merchant payment system called Cubits Pay, which have been in beta since October last year.

The company said both products were designed with ease of use in mind, so the user interface is geared toward mainstream users as much as early adopters.

For security, Cubits indicated that customers' bitcoin funds are stored in offline cold storage and all transactions require multi-signature authentication.

Although much of the focus is on Europe, Cubits supports instant payment options and bank transfers in 17 different currencies, including euros, US dollars, British pounds, Turkish lira, Polish zloty and others. Support for additional currencies is also on the way.

Users can choose one of three different instant payment providers – SOFORT Banking, OnlineBankTransfers(OBT) or OKPay to buy bitcoin.

Julian Mautner, co-founder of Cubits, explained the process:

"The user specifies an amount of fiat to be converted to bitcoin and finalizes the purchase via the selected payment provider. The payment provider interfaces directly with the users' online banking account and notifies Cubits about the payment. Bitcoin will then be credited to the user immediately. We have partnered with several banking institutions who support us with both SEPA and international payments."

If the account is already funded, the exchange is instantaneous.

Free currency conversion for merchants

Cubits Pay was designed for merchants with a global audience, the firm says, allowing them to leverage bitcoin’s low transaction fees and offer an alternative to credit cards and other established payment options. The service offers free conversion into any supported fiat currency.

The platform features a number of plugins for a wide range of popular shopping cart systems, as well as free customer support. Tailored solutions for retailers interested in incorporating bitcoin payments are also available.

Cubits is privately funded by the company’s management team, David Julian Mautner, Tim Rehder, Andreas Lehrbaum and Benedikt Manigold, who have prior experience in IT, finance and startup ventures.

The team says it is committed to creating a “strong and secure bitcoin marketplace” and intends to use blockchain technology to take part in the transformation of international payments

The company has offices in London and Berlin. Cubits is registered in the UK as an IT payment service provider.

European exchanges race to cut transaction time

Speed is becoming a significant differentiator in the industry, especially in the European market. A number of exchanges have already introduced fast payment options, allowing customers to buy bitcoins faster than ever.

Last month Swedish bitcoin exchange Safello partnered with an unnamed British bank to offer faster transfers to UK-based customers. London-based exchange Yacuna also announced a new service, allowing UK customers to use SOFORT Banking for GBP deposits to its trading platform.

The only downside of using fast or near-instant services like SOFORT is the relatively high cost, as withdrawals and transfer fees tend to come at a premium. For example, Yacuna users can expect to pay a 4.90% fee on SOFORT deposits, along with a 3.00 GBP withdrawal fee.

Euros image via Shutterstock

CubitsPayments

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Bitcoin Broker LibertyX Raises $400k for Hiring Push

Pete Rizzo (@pete_rizzo_) | Published on January 7, 2015 at 22:40 GMT

LibertyX has raised more than $400,000 in funding from early-stage VC firm Project 11 as part of a seed round and its first public fundraising.

Previously operating under the name Liberty Teller, LibertyX formally rebranded this December. The name change coincided with a shift in the company’s services, from operating a small fleet ofbitcoin ATMs in the greater Boston area to adding an in-person bitcoin buying network supported by 2,500 US merchants.

Co-founder Chris Yim explained that the capital will be used to grow the LibertyX team, which today consists of just three employees, while expanding its presence in the US.

Yim told CoinDesk:

"We've bootstrapped everything to-date and I am proud of what we've accomplished with just the three of us. This round will allow us to add staff to help address the growth we are experiencing across the board."

LibertyX has already put the funding to use since it was completed on 22nd December, hiring a dedicated CTO to the team. Yim said additional staff will be added in 2015.

The company is formally registered under the name Moon, and an SEC filing for the deal reveals the total funding received was $404,104.

With the move, LibertyX joins additional Project 11 portfolio companies including online catering company Phoodeez, location analytics company Locately and electronic tipping startup DigJar.

Capturing market interest

Operational for roughly one year, LibertyX has also arguably benefited from its early and timely entrance into the bitcoin market.

As Liberty Teller, for example, the group launched what is considered to be the second bitcoin ATM ever installed in the US in Boston’s South Station last February. A Lamassu model that debuted in a cigar bar in New Mexico, and was later removed, is believed to be the first.

Controversy aside, the group has remained relevant, strategically placing machines in high-profile locations near the tech-friendly campus of MIT at a time when bitcoin activity on the campus has been of international interest.

The company has also struck key partnerships both as a graduate of the MassChallenge startup accelerator and a partner of transaction processing specialist Qpay, which enables it to reach an extensive network of retail partners in its home market.

Opportunity for ATM operators

As LibertyX has quickly expanded beyond owning and operating four bitcoin ATMs, Yim expects that the move is a sign that other ATM owners may begin to announce more ambitious plans.

“Most operators today manage few machines where external funding is not necessary. But, I believe it's only a matter of time,” Yim said, alluding to new funding rounds that could occur in 2015.

Though he sees much opportunity in the space, Yim also suggested that this window of opportunity could be limited, as he predicted increased VC interest would coincide with a consolidation of market participants.

First introduced in late 2013, the bitcoin ATM sector experienced an impressive year of growth in 2014, expanding from just a few units to hundreds around the globe.

More data regarding bitcoin ATMs can be found in CoinDesk's "State of Bitcoin 2015" report.

Hiring image via Shutterstock

fundingInvestorsLibertyX

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