Jeff Rhodes Macro Overview of Global Precious Metals & the Importance of Asia

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Jeff Rhodes Macro Overview of Global Precious Metals & the Importance of Asia

  1. 1. ” Macro Overview of Global Precious Metals & The Importance of Asia " Jeffrey Rhodes | Global Head of Precious Metals & CEO INTL Commodities DMCC Investing in Asian Mining Indaba, October 29th, Singapore
  2. 2. DisclaimerCommodity trading involves risks, and you should fully understand those risks prior to trading. FCStone Group, Inc., INTL FCStone, Inc., and their affiliates assume no liability for the use of any information contained herein. Neither the information, nor any opinion expressed shall be construed as an offer to buy or sell any futures, options on futures contracts, or OTC products.Past financial results are not necessarily indicative of future performance. Any examples given are strictly hypothetical and no representation is being made that any person will or is likely to achieve profits or losses similar to those examples.References to and discussions of exchange traded products are made solely on behalf of FCStone, LLC. References to and discussions of OTC products are made solely on behalf of INTL Hanley, LLC, and OTC products are only available to eligible counterparties.Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Any opinions expressed herein are subject to change without notice. Reproduction or use in any format without authorization is forbidden. All rights reserved.
  3. 3. Agenda Macro Overview of Precious Metals o Total Supply Versus Fabrication Demand o Top 5 Producers and Consumers o Precious Metals Prices 2001 – 2011 Focus On Gold – The Yellow Metal Dominates The Precious Metals Sector o Global Gold Prices 2001 – 2011 o Gold – A Major Supply Versus Demand Surplus The Importance Of Asia In The Global Gold Market o Percentage Share Of Supply o Percentage Share of Demand o The Major Markets Of Asia The Outlook For Precious Metals Prices in 2012 Q&A
  4. 4. Total Supply Versus Fabrication DemandGold (tonnes) 2010 2011Total Physical Supply 4,350 4,424Total Fabrication Demand 2,784 2,771Supply Versus Demand Surplus/Deficit 1,566 1,653Average Gold Price USD $1,224.08 $1,571.64USD Value of Surplus/Deficit Mio $61,341 $83,133Silver (Mio ounces) 2010 2011Total Physical Supply 968 1,019Total Fabrication Demand 879 914Supply Versus Demand Surplus/Deficit 89 105Average Silver Price USD $20.1219 $30.4200USD Value of Surplus/Deficit Mio $1,791 $3,194Data Source: Thompson Reuters GFMS 4
  5. 5. Total Supply Versus Fabrication DemandPlatinum (000 ounces) 2010 2011Total Physical Supply 7,900 7,948Total Fabrication Demand 7,230 7,238Supply Versus Demand Surplus/Deficit 670 710Average Platinum Price USD $1,608.98 $1,721.86USD Value of Surplus/Deficit Mio $1,078 $1,223Palladium (000 ounces) 2010 2011Total Physical Supply 9,135 9,298Total Fabrication Demand 8,540 8,842Supply Versus Demand Surplus/Deficit 595 456Average Palladium Price USD $525.51 $733.30USD Value of Surplus/Deficit Mio $313 $334Data Source: Thompson Reuters GFMS & Johnson Mathey Review 5
  6. 6. Total Supply Versus Fabrication DemandUSD Value of Deficit/Surplus Mio 2010 2011Gold $61,341 $83,133Silver $1,791 $3,194Platinum $1,078 $1,223Palladium $313 $334$90,000$80,000 2010$70,000$60,000$50,000 2011$40,000$30,000$20,000$10,000 $0 Gold Silver Platinum Palladium 6
  7. 7. Top 5 Global Producers & Consumers 7
  8. 8. Top 5 Global Producers & Consumers 8
  9. 9. Precious Metals Prices 2001 – 2011 Annual Average % Change 2001 - 2011120.00%100.00% Gold 80.00% 60.00% Silver 40.00% Platinum 20.00% 0.00% Palladium-20.00%-40.00%-60.00% Data Source: Thompson Reuters GFMS
  10. 10. Global Gold Prices 2001 – 2011 2001 2005 2010 2011 2011 v 2001 2011 v 2010Average Gold Price USD/oz $271.04 $444.45 $1,224.52 $1,571.64 480% 28%Average Gold Price Euro/kg € 9,737 € 11,521 € 29,739 € 36,358 273% 22%Average Gold Price Yen/g ¥1,058 ¥1,577 ¥3,444 ¥4,018 280% 17%Average Gold Price Yuan/g ¥72.13 ¥117.09 ¥266.15 ¥326.61 353% 23%Average Gold Price Rs/10g Rs4,462 Rs6,454 Rs18,304 Rs23,899 436% 31% Data Source: Thompson Reuters GFMS$1,800 Average Gold Price USD$1,600$1,400$1,200$1,000 $800 $600 $400 $200 $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
  11. 11. Gold – A Major Supply Versus Demand Surplus5,000 Total4,500 Physical4,000 Gold Supply3,500 (tonnes)3,0002,500 Gold Supply Versus2,000 Demand1,500 (tonnes)1,000 500 Total Fabrication 0 Demand -500 (tonnes)-1,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 11
  12. 12. $100 Billion Needed to Sustain The Bull Market USD Value of Deficit/Surplus Mio$90,000,000$80,000,000$70,000,000$60,000,000$50,000,000$40,000,000$30,000,000$20,000,000$10,000,000 $0($10,000,000) 12 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
  13. 13. Asia’s Importance In The Global Gold Market50.00%45.00%40.00% Asia Versus35.00% Global Supply30.00% %25.00%20.00%15.00%10.00% 5.00% 0.00% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Data Source: Thompson Reuters GFMS
  14. 14. Asia Is Crucial To Global Gold Demand78.00%76.00%74.00% Asia Versus Global72.00% Fabrication70.00% Demand %68.00%66.00%64.00%62.00%60.00%58.00%56.00% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Data Source: Thompson Reuters GFMS
  15. 15. The Major Gold Markets Of Asia Asia - Top Ten Gold Supply Markets (tonnes) 2011550500 Mine Supply450400350300 Scrap Flows250200150100 Total Supply 50 0 Data Source: Thompson Reuters GFMS
  16. 16. The Major Gold Demand Markets Of Asia Asia - Top Ten Gold Offtake Markets (tonnes) 2011800700600500400300200100 0 India China Japan Turkey South Iran Malaysia Saudi Indonesia Egypt Korea Arabia & Yemen Data Source: Thompson Reuters GFMS
  17. 17. The Outlook For Precious Metals Prices in 2012LBMA Survey Outlook 2012 5th January 2012 Gold Silver Platinum Palladium AM Fixing on 5th January $1,614.50 $28.92 $1,624.00 $735.00 Predicted Average Price 2012 $1,766.00 $33.98 $1,624.00 $735.00 Actual Average Price 2011 $1,572.00 $35.11 $1,720.00 $733.00 Change USD 2012 v 2011 $194.00 ($1.13) ($96.00) $2.00 Change % 2012 v 2011 12.34% -3.22% -5.58% 0.27% High High Predcition 2012 $2,500.00 $53.00 $2,120.00 $1,050.00 Average High Prediction 2012 $2,055.00 $44.49 $1,875.00 $879.00 Low Low Predcition 2012 $1,200.00 $19.20 $1,250.00 $450.00 Average Low Prediction 2012 $1,443.00 $24.06 $1,313.00 $549.00YTD Actual As At End September 2012 Average Price 2012 $1,650.12 $30.619 $1,534.98 $640.36 High 2012 $1,791.75 $37.230 $1,729.00 $722.00 4-Oct-12 29-Feb-12 23-Feb-12 29-Feb-12 Low 2012 $1,537.50 $26.670 $1,390.00 $564.00 16-May-12 12-Jul-12 3-Aug-12 24-Jul-12 Gold Silver Platinum Palladium Jeff Rhodes / Glyn Stevens High $1,975 $50.25 $1,940 $920.00 INTL/FCStone Low $1,465 $22.25 $1,305 $565.00 Average $1,727 $36.25 $1,735 $765.00
  18. 18. Global Precious Metals INTL FCStone Inc. (NASDA Q: INTL) is a Fortune 500 Our Products & Services Include: company, providing customers across the globe with  Spot, Forwards and Options execution and advisory services in commodities,  Global Physical Deliveries capital markets, currencies, and asset management.  Bars, Coins, Grains, Sheets, Scrap, Dore &Wire Please visit www.intlfcstone.com for more information  Jewellery Inventory Financing Our precious metals business started in the U.S. in  Location Swaps 2003, expanded to London in 2006, and then to Dubai  Hedging Structures and Singapore in 2007. We now have a highly  OTC Margin Trading qualified, focused global team with combined  Pricing in Foreign Currencies experience of more than 250 years providing world  EFP’s class transactional expertise in gold, silver and platinum group metals Our Clients Include: Singapore offers a virtual 24-hour service from  Banks & Financial Institutions  Bullion Wholesalers & Traders Monday to Friday, Dubai is open 7 days a week, and  Consumers/Producers our UK and US staff are available to clients 24/7  Government Agencies We are a key player in all the major global physical  Jewellery Manufacturers; Wholesalers; Retailers bullion markets  Industrial Users  Investors Our memberships include:  Refiners and Smelters • The London Bullion Market Association • The London Platinum and Palladium Market Contact Us: Singapore +65 6309 1010 Reuters Dealing: INTS Dubai +9714 447 8510 Reuters Dealing: INTA London +44 203 580 6181 Reuters Dealing: INTM Orlando +1 407 741 5332 Reuters Dealing: INTO

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