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P&F is now saying bearish price of 1100... hmmmm.
17 reasons to own gold
Sprott Asset Management in Toronto has put together an attractive two-page brochure with text written by Chief Investment Strategist John Embry outlining 17 reasons to own gold. It's in PDF form at the Sprott Internet site here:
http://www.sprott.com/docs/Reports/reasons_to_own_gold.pdf
"Production... has been temporarily suspended because of unprecedented demand for American Eagle Gold Bullion Coins... "
http://catalog.usmint.gov/webapp/wcs/stores/servlet/CategoryDisplay?catalogId=10001&storeId=10001&categoryId=10118&langId=-1&parent_category_rn=10191&top_category=10191
"Production... has been temporarily suspended because of unprecedented demand for American Eagle Silver Bullion Coins..."
http://catalog.usmint.gov/webapp/wcs/stores/servlet/CategoryDisplay?catalogId=10001&storeId=10001&categoryId=10120&langId=-1&parent_category_rn=10191&top_category=10191
............................................
Iraq: Gunmen rob gold shops in Baghdad, kill 15
By SAAD ABDUL-KADIR (AP) – 53 minutes ago
http://www.google.com/hostednews/ap/article/ALeqM5hwK_CSpBxsNuVUEaDuOwmSSCiqGwD9FTQHB00
BAGHDAD — Masked gunmen attacked gold shops in Baghdad Tuesday, killing 15 people before they fled with a large quantity of gold, police and hospital officials said.
The gunmen came to the southwestern neighborhood of Baiyaa in five cars shortly before noon, their faces covered with traditional Arab headscarves. They set off a roadside bomb near the shops, killing four bystanders and wounding three, city police officials said.
Then they opened fire on 12 shops, killing nine gold shop owners or their workers and two bystanders. They threw percussion grenades into the shop as a distraction, then fled, police said.
A hospital official confirmed the number of casualties. All the officials spoke on condition of anonymity because they were not authorized to talk to the media.
As Iraq's sectarian violence has ebbed, a new threat from violent crime has cropped up. Tuesday's attack was one of the deadliest in the upswing.
Many of those involved in the crime wave are believed to be battle-experienced former insurgents unable to find legitimate work. They often bring the same brutality to their crimes that they showed in the fighting that nearly pushed the country to the brink of Sunni-Shiite civil war in 2006 and 2007.
The result has been a wave of thefts and armed robberies, hitting homes, cars, jewelry stores, currency exchanges, pawn shops and banks.
There are few statistics tracking the number and kinds of crimes, in part because the government remains focused on the bombings and other insurgent attacks that continue to plague Baghdad and Iraq's north.
But in the minds of the public, crime has become at least as consuming as the violence directly related to the war. And like the lack of electricity and other services, crime is now a top complaint of Iraqis.
Some members of Iraq's security forces are also involved, perhaps a sign that militants are still infiltrating the security services.
In one of the most sensational crimes in recent years, several members of Iraq's presidential guards — which protect senior officials — broke into the state-run Rafidain Bank on July 28 and stole about 5.6 billion Iraqi dinars, or $4.8 million. They tied up eight guards at the bank in Baghdad's central Karradah area and shot each one execution-style.
Last year, Iraq created a military task force to battle gangland-style crime after gunmen with silencer-fitted weapons killed at least seven people during a daylight heist of jewelry stores.
Copyright © 2010 The Associated Press. All rights reserved.
Those who have will be the victims of those who have not... coming soon to US soil I'm afraid.
Capital Ideas: Gold Futures and Leverage Concepts
By Mack Frankfurter and Nell Sloane
May 11 2010 9:08AM
http://www.kitco.com/ind/Frankfurter/apr112010.html
Sponsored by Capital Trading Group, LP
http://www.capitaltradinggroup.com/promo/gcc.cfm
As noted by a Swiss Institute research paper, “the gold market of today is much different than the gold market of ten years ago.” One example is securitization of commodities, a fairly recent innovation with the ETFS Physical Gold[1] being the first gold security traded in March 2003 on the Australian Securities Exchange (ASX). Soon thereafter, additional exchange traded gold securities were launched, including the first US-based gold ETF, SPDR Gold Trust formerly streetTRACKS Gold Shares (symbol: GLD).
Given gold ETFs popularity it is not surprising that individual investors have generally forgotten about the potential benefits of using gold futures. This article sets out to educate investors on such advantages. To begin with, while London continues to be one of the most liquid and influential markets by virtue of its twice-daily fixings in determining the spot gold price, the COMEX gold futures contract,[2] which began trading along-side the US physical market on December 31, 1974, has come to dominate the market in terms of volume.
There are many differences between gold futures and gold ETFs that make an “apple-to-apple” comparison difficult. ETFs are similar in many ways to traditional mutual funds, except that shares in an ETF can be traded throughout the day—but so can futures contracts. Rather, the intrinsic difference has to do with how investors view and trade these instruments. Futures are risk management tools, whereas securities are tied to the “rising tide raises all ships” concept of capital formation. Academics have also noted that commodities are not capital assets, but instead consumable/transformable assets. Gold as a commodity is considered even more unique given its legacy as a “store of value”. But this is just theoretical discussion.
The main practical distinction between gold ETFs and gold futures has to do with the concept of leverage. Specifically, SPDR GLD represents approximately 1/10th the price of one ounce of gold (and thus one share represents approximately 1/10th of one ounce), whereas the COMEX futures contract (symbol: GC) is priced in ounces but each contract represents a 100 ounces. For example, the NAV per share of GLD was initially priced on November 18, 2004 at $44.20 or $442/ounce. Alternatively, GC at $442/ounce is equal to $44,200. So in order to have the same exposure as one futures contract, an investor at initial offering would have had to purchase 1000 shares of GLD and invest $44,200. When the GLD ETF was launched, a futures trader on the other hand would have been required to put up just $2,500 for one contract at that price/face value.
Before going further with our discussion, it is appropriate to remind readers that leverage may work against you as well as for you. In fact, what makes futures trading difficult for so many novices is its high degree of leverage—any market movement can have a disproportional and amplified effect on your deposited funds.
It is also important to remember that the definition of margin for securities is a very different concept than that in the futures markets. Most investors think in terms of “Reg T” requirements in which one may borrow up to 50% of the purchase price of securities. Since this is effectively a loan, the broker charges interest for the money it lends its customers to purchase securities on margin. For more detailed information on securities margin, FINRA provides an educational forum to help investors better understand these markets.
Margin requirements for futures, on the other hand, are akin to a “good faith deposit” which can be as low as 2-3% of the contract’s nominal face value. For example, let’s assume that the initial margin requirement for gold is currently $5,750 and that the June gold contract settled end-of-month in April at 1180.70/ounce. Since one gold futures contract is equal to 100 ounces, the “nominal face value” of the contract is worth $118,070. The initial margin-to-face value then is approximately 4.9%. It should be noted that while minimum margin requirements are set by the exchange on which the contract is traded, individual brokerage firms may require higher margin amounts from their customers than the exchange-set minimums.
This relationship between margin requirement and the nominal face value of a futures contract constitutes leverage. Leverage allows traders the potential to produce high returns as well as large losses. In practice, however, experienced traders will typically allocate more funds than the minimum amount needed to trade in order to provide themselves with a buffer in case a trade goes against them.
The discussion so far serves as background to the concept of notional funding and investing in managed futures. Managed futures is a niche sector of alternative investments, and refers to professionally managed assets in the commodity and financial futures markets. Management is facilitated by either commodity trading advisors (CTAs) or commodity pool operators (CPOs) who are regulated by the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA).
When professional futures traders design a trading program, they usually establish a baseline account level which determines the type and number of contracts that will be traded given the baseline “unit size”. The average aggregate margin requirement for the trading program is then divided into the account level in order to determine the average margin-to-equity ratio. The next paragraph describes how this works.
Let’s imagine that a CTA has developed a trading program which trades one gold contract and collars the position with one call option and one put option. While gold’s face value as of this writing is $118,000, the minimum investment or account size is $50,000. At the same time, the CTA’s typical position requires an initial margin of only $2,500. This results in a margin-to-equity ratio of just 5%. Allowing for drawdowns[3] due to potential trading losses, an aggressive customer could in practice invest just $25,000 to fund the account. This amount is gauged by the CTA as sufficient to trade the program, even if drawdowns should occur.
This difference between the actual cash deposited in the trading account and the account size is called notional funding. And while the CTA will continue calculating the program’s rate of return based on the $50,000 trading level, the investor’s actual return is a function of the $25,000 funding level.[4] Likewise, a 1% return on $50,000 is equivalent to a 20% return based on the $2,500 margin required for the position.
Again, it is important to note the possibility that an investor could sustain a loss of some or all of the funds deposited. In such a case, the investor not the CTA will receive the margin call from his/her broker. As a standard industry practice professional futures traders maintain a close watch on their margin utilization. Likewise, futures brokers typically retain the right to close out open positions if an investor is unable to meet margin calls. Also be advised that margins are subject to change, especially in times of volatility.
Now on to our monthly market/trading recap: Gold plunged in the latter half of March forcing us to get defensive a few days prior to option expiration. The 1095 strike we established on the May contract was intended to manage downside risk, but the subsequent rally, which likely started as short covering, quickly ascended to the top of the current range. At that juncture rolling up the strike price mid-cycle became a question of risk management. We decided play it prudent and not roll the contract immediately, whereas in hindsight we could have done so earlier. Regardless, we still booked another positive monthly return, although admittedly we were outpaced by the gold ETF for the first time since November last year.
Our mid-month article is going to review research from that Swiss Finance Institute paper mentioned above. The paper analyzes the central bank gold leasing market, the gold forward offered rate (GOFO) and derived lease rates. As we cycle into the month of June, we will further examine the COMEX gold futures contract including details on contract specifications, settlement and delivery.
Footnotes:
[1] Issued by ETFS Metal Securities Australia Ltd., a wholly owned subsidiary of ETF Securities Ltd.
[2] The Commodity Exchange (COMEX) was established in 1933 through the merger of four smaller exchanges. On August 3, 1994, the New York Mercantile Exchange (NYMEX) and COMEX merged under NYMEX Holdings, Inc. On August 22, 2008, CME Group Inc. completed an acquisition of NYMEX Holdings, Inc. The COMEX is now part of the CME Group.
[3] “Drawdowns” is a term frequently used in the managed futures industry to describe the negative rate of return measured from a CTA’s peak performance. Effectively, it is a measurement of risk for CTAs.
[4] Unlike securities, since margin for futures trading is a “good faith deposit,” an investor can invest his money in a fungible instrument such as T-bills, which then collateralize the futures account. For more information on how this works, contact your futures broker.
For more information contact: Capital Trading Group.
Click for Free report on our GOLD program: http://www.capitaltradinggroup.com/promo/gcc.cfm
Mack Frankfurter, Cervino Capital Management LLC
and Nell Sloane, co-author
Gold Prices Break $1,200. Now What?
By Alix Steel 05/07/10 - 01:50 PM EDT
http://www.thestreet.com/story/10750013/1/gold-prices-break-1200-now-what.html
NEW YORK (TheStreet ) -- Gold prices Friday were rising after skyrocketing past the $1,200 level as Greece riots, trading errors, euro instability and safe-haven buying supported the gold price.
Gold for June delivery was up $13.90 to $1,211.20 an ounce at the Comex division of the New York Mercantile Exchange. Gold prices Friday have traded as high as $1,214.90 and as low as $1,193. The U.S. dollar index was slipping 0.25% to $84.68 while the euro was rallying off its one-year lows adding 0.35% to $1.27 against the dollar. The spot gold price was up 20 cents, according to Kitco's gold index, as investors took profits and sold the physical metal for cash.
Gold prices finally broke through $1,200 an ounce on Thursday as the Greece riots, which were televised, spooked investors. European Union nations were voting on their portions of the 110 billion euro bailout for the country, with most people focusing on Germany, which is responsible for almost $29 billion. Thus far the German Upper House has approved the financial aid package. Worries still remain, however, that the Greece turmoil could infect other debt-laden EU countries like Spain and Portugal.
The European Central Bank kept interest rates unchanged at 1%, but did not take further steps to help Greece. Many analysts were hoping the ECB would buy Greece bonds in order to loan the country additional money. Although the euro is staging a mini-rally Friday, most analysts expect the currency to come under prolonged pressure as the debt situation worsens. Gold and the U.S. dollar will benefit from a weak euro as investors buy the typically safer forms of money. Gold prices were selling off slightly on Friday as investors took profits after prices popped 1.8% Thursday.
Markets stayed on edge after Thursday's steep selloff. The U.S. unemployment number rose to 9.9% in April despite adding over 200,000 jobs in the same month. With economic conditions still uncertain gold prices could move higher as investors seek the safety of gold as a form of money that retains its purchasing power. The battle between bargain-hunters and profit-takers though is expected to take center stage and contribute to gold's volatility. Currently, investors are favoring gold headed into the weekend.
"Holding pattern emerged after jobs report and some stability in the markets," says George Gero, vice president of global futures at RBC Capital Markets in his morning metals commentary. "Gold is holding upper level trading range of $1,150 support and $1,225 resistance." Although gold has emerged as one of the biggest safe-haven assets, Gero says that "in past major selling, all assets were sold down to raise cash."
Gold mining stocks, a more risky but more profitable way to invest in gold, were mixed. Barrick Gold(ABX) was down 1.21% to $43.15 while Newmont Mining(NEM) was lower by 1.17% at $54.04. Other large gold miners Kinross Gold(KGC) and Goldcorp(GG) were trading higher at $17.43 and $43.08, respectively.
Shares of Iamgold(IAG) were up 0.23% at $17.82 after the company said it earned 16 cents a share in the first quarter and expects to produce 940,000 to 1 million ounces of gold in 2010. Randgold Resources(GOLD) was slipping 0.27% to $84.02 after Thomas Weisel Partners downgraded the stock to market weight from overweight.
AngloGold Ashanti(AU) was up 1.27% to $41.46 after beating expectations and reporting earnings of 17 cents a shares in the first quarter. AngloGold said it will produce between 4.5 million and 4.7 million ounces of gold in 2010.
Shares of the gold ETF, SPDR Gold Shares(GLD) were down 0.13% to $118.33. The popular ETF added almost 20 tons on Thursday as investors piled into the precious metal. One share of the GLD is equivalent to owning one tenth of an ounce of gold.
Question for the board -
Do you/we think the test of support GLD at 114 / $1,167.00 GOLD is the start of the run up???
Anyone?
Wait and see does not qualify as an answer IMO
(The chances of further retrace looks greater than 50/50 to me, at this point. )
Kiwi.
Re-post from Goldbugs board:
The Chart Pattern Trader >>> 5/2 Commentary: By Maurice N. Walker
Excellent extensive commentary and detailed charts updated.
* May 2, 2010
http://thechartpatterntrader.com/
.
Be careful out there... I have learned to wait for key signals plus confirmation... we are at 1183 spot near the HOD... all the best.
Testing most recent high of $1181.50 - lets hope its the real deal
15min and 1hr ADX looks over extended and MACD has divergence, but we are leaving the station anyhow
Kiwi (again...) (HEY WHERE IS EVERYONE?)
I'm long right now via my FX account on the MT4 platform, and not I'm sure when we will actually break out of this descending triangle pattern on the 15min.
I show support at 1174.30 and feel we may test at least that first, but don't want to miss the break out either. so I'm kinda ready to bail if I have to.
Kiwi
I have been wondering the same thing... apparently when when commentators say this market is thinly traded, they were exactly right!!!
Does any one trade Gold futures - We need more people posting on this board. Where is every one, I though we were about to have a breakout in gold. It this imminent or is it just me thinking this???
Kiwi
What Gold Bubble?
http://seekingalpha.com/article/200349-what-gold-bubble
Gold is getting a lot of attention these days. It’s all over the media, the backlog to purchase gold coins from the U.S. Mint is years long, and one gold exchange company even ponied up for a Super Bowl ad.
Many point to this and shout “Bubble!” Gold has risen too far too fast, they say, and soon the euphoria will give way to despair. We’ve been hearing this since February of last year, when gold was trading around $900. That’s more than 25 percent below where it is today.
Why didn’t the gold “bubble” burst? It could be because there isn’t a gold bubble.
The chart below compares the price performance of gold bullion during the 1970s bull market (green line) to the current price trend (red). As you can see, the price line since the start of 1999, when gold was trading just under $300, has been far less volatile than during the earlier period.
......................................
Gold remains as a safe haven during times of economic uncertainty – in the 1970s, double-digit inflation rapidly eroded wealth, and these days there is a lingering fear of higher inflation as the federal government piles more debt onto its already groaning balance sheets.
But a key difference is that gold has gained stature as a legitimate asset class for investors. During the 1970s runup, investment demand peaked around 27 million ounces, about half of what it is today. Contributing to this demand are new investment vehicles, including gold-oriented mutual funds and bullion-backed ETFs, both of which have made it easier for investors to allocate a portion of their portfolios to the yellow metal.
We also have greater affluence in the developing world, where people have traditionally turned to gold to store their wealth. Central banks in these countries, most notably China and India, have built up their gold holdings as a way to diversify their foreign reserves away from the dollar and other paper currencies.
The 1990s dot-com era was a bubble, and likewise the 2000s housing market. But gold? We don’t think so.
Investments in natural resources, emerging markets and infrastructure are subject to distinct risks as described in the funds’ prospectus. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.
Disclosure: Long positions in gold and gold mining companies
At the moment i am entered into a FX Challenge with the MT4 platform (demo)that will alow me to trade Gold/Silver and indicates and FX markets via a CFD
The challenge is currently only FX pairs but when i go live i will trade metals
It is very good for technical analysis skills and I am up about %150 on my 50K start bal since the beginning of the month.
If you want to follow my progress you can see that i am actually on the leader board - Allis: Steve P
Forex Trading Challenge - Leaderboard
http://www.axisodl.com.au/Forex-Trading-Challenge.aspx?promocode=FTCEasterMailout
Kiwi
Bullish price objective - $1310 - revised a few days ago on the Point & Figure chart...
Steve, how is this going for you?
I heard he was a near victim in a hit & run.
Metal$ are in the pits
Trader blows whistle on gold & silver price manipulation
By MICHAEL GRAY
Last Updated: 4:33 AM, April 11, 2010
EXCLUSIVE
There is no silver lining to the activities of JPMorgan Chase and HSBC in the precious-metals market here and in London, says a 40-year veteran of the metal pits.
The banks, which do the Federal Reserve's bidding in the metals markets, have long been the government's lead actors in keeping down the prices of gold and silver, according to a former Goldman Sachs trader working at the London Bullion Market Association.
Maguire was scheduled to testify last week before the Commodities Futures Trade Commission, which is looking into the activities of large banks in the metals market, but was knocked off the list at the last moment. So, he went public.
APBrokers and traders transact gold futures on the Comex floor of The New York Mercantile Exchange, Thursday, April 6, 2006. Gold prices topped $600 an ounce in Comex trading Thursday. (AP Photo/John Marshall Mantel)
AP
Brokers and traders transact gold futures on the Comex floor of The New York Mercantile Exchange, Thursday, April 6, 2006. Gold prices topped $600 an ounce in Comex trading Thursday. (AP Photo/John Marshall Mantel)
Maguire -- in an exclusive interview with The Post -- explained JPMorgan's role in the metals pits in both London and here, and how they can generate a profit either way the market moves.
"JPMorgan acts as an agent for the Federal Reserve; they act to halt the rise of gold and silver against the US dollar. JPMorgan is insulated from potential losses [on their short positions] by the Fed and/or the US taxpayer," Maguire said.
In the gold pits, Maguire sees HSBC betting against the precious metal's price without having any skin in the game in the form of a naked short.
"HSBC conducts an ongoing manipulative concentrated naked short position in gold. Silver is much easier to manipulate due to its much smaller [market] size," Maguire added.
"No one at JPMorgan is familiar with Andrew Maguire," said Brian Marchiony, a company spokesman. HSBC declined to comment.
Also during the CFTC hearing, Jeff Christian, founder of the commodities firm CPM Group, said that the LBMA, the physical delivery market for gold and silver in the UK, has been using leverage, which is another way to depress the price of gold and silver.
Christian said that the LBMA -- the same market Maguire trades in -- has leverage of about 100-1 on the gold bars settled on the exchange. In layman's terms, that means if 100 clients requested their bullion bars be delivered, the exchange could only give one client the precious metal.
The remaining requests would have to be settled for cash equivalent. "That is tantamount to a default on the trade," says Bill Murphy, chairman of the Gold Antitrust Action committee.
Maguire goes further and calls it a fraud: "If you sell something you do not own, then that is fraud."
Back in 2007, Morgan Stanley agreed to settle a $4.4-million lawsuit brought by precious-metal clients, who alleged that Morgan offered to buy gold and silver and store it for the investors, but never purchased any metal and still charged them storage fees.
Morgan Stanley denied the charges at the time, but "settled the case to avoid the cost and distractions of continued litigation," the firm said.
Despite gold's rise each of the last 10 years, Murphy believes the price of gold today would be closer to $2,300 an ounce if the price just moved with inflation.
Maguire believes the price should be even higher given the fear trade that would have sent prices spiking during the financial crisis in 2008-09.
Both precious metals have seen a recent spike since Maguire's e-mails became public. Gold has gained 6.5 percent to close at $1,161.55, while silver has spiked 10 percent to $18.38.
APBrokers and traders transact gold futures on the Comex floor of The New York Mercantile Exchange, Thursday, April 6, 2006. Gold prices topped $600 an ounce in Comex trading Thursday. (AP Photo/John Marshall Mantel)
AP
Brokers and traders transact gold futures on the Comex floor of The New York Mercantile Exchange, Thursday, April 6, 2006. Gold prices topped $600 an ounce in Comex trading Thursday. (AP Photo/John Marshall Mantel)
According to the e-mails Maguire sent to CFTC regulators, he was spot-on in his expectations of how the precious metals would trade on release of the January jobs report.
This message is to "confirm that the silver manipulation was a great success and played out exactly to plan as predicted yesterday. How would this be possible if the silver market was not in the full control of the parties we discussed in our phone interview," Maguire wrote to a staff investigator after the trading day.
CFTC commissioner Bart Chilton said, "I'm appreciative of the information Mr. Maguire provided and I'm glad it was introduced into the investigation."
High, low silver
The prices of gold and silver have been allegedly suppressed by JPMorgan Chase and HSBC, according to a London whistleblower.
Andrew Maguire, who laid out the banks’ plan in e-mails to the CFTC prior to trading on the Comex on Feb. 5.
1.) From: Andrew Maguire
To: Ramirez, Eliud [CFTC]
Cc: BChilton [CFTC]
Sent: Wednesday, February 03, 2010 3:18 PM
Subject: Re: Silver today
Thought it may be helpful to your investigation if I gave you the heads up for a manipulative event signaled for Friday, 5th Feb. Scenario 1. The news is bad (employment is worse). This will have a bullish effect on gold and silver as the US dollar weakens and the precious metals draw bids, spiking them higher. This will be sold into within a very short time (1-5 mins) with thousands of new short contracts being added.
Scenario 2. The news is good (employment is better than expected). This will result in a massive short position being instigated almost immediately with no move up. This will not initially be liquidation of long positions but will result in stops being triggered, again targeting key support levels. Kind regards,
2.) From: Andrew Maguire
To: Ramirez, Eliud [CFTC]
Cc: BChilton [CFTC]; GGensler [CFTC]
Sent: Friday, February 05, 2010 3:37 PM
Subject: Fw: Silver today A final e-mail to confirm that the silver manipulation was a great success and played out EXACTLY to plan as predicted yesterday. How would this be possible if the silver market was not in the full control of the parties we discussed in our phone interview? Kind regards,
3.) Andrew T. Maguire
From: Ramirez, Eliud
To: Andrew Maguire
Sent: Tuesday, February 09, 2010 1:29 PM
Subject: RE: Silver today Good afternoon, Mr. Maguire, I have received and reviewed your email communications. Thank you so very much for your observations.
I am going to start trading Ag & Au via a fx dealer using 100:1 leverage. Ill let you know how I get on ok!
Welcome Huntewr7 to the Gold Futures Index board - good to see you here! The reason there is probably not to many posts here is because a lot of 'news' is posted at the goldbugs board among others. the other reason is most people have no idea whats going on in the world regarding the value of the dollar and inflation looming just around the corner.
"These are serious times and the dollar will inflate and make us all broke if we do not take protective steps." !!!
Do you get the free subscription from The National Inflation Association the http://inflation.us/about.html
Also Bix Weir - Road to Roota: http://www.roadtoroota.com/public/main.cfm (some of his stuff i haven't quite managed to get my haed around, ie the Gold Manipulation Quiz question 19 http://www.roadtoroota.com/public/196.cfm
Kiwi
I was the no. 8 Boardmark. Sure would be nice to see more activity here.
$1300 is the newest bullish price objective set by the P&F chart.
WOW!!!
The five worst ways to buy gold
June 17, 2009
http://timesbusiness.typepad.com//money_weblog/2009/06/the-five-worst-ways-to-buy-gold.html
The tripling of the gold price since 2004 has predictably led to something of a stampede for the metal among private investors.
But in their hurry to gain a slice of the precious metal, they do not always take the most sensible route, says Adrian Ash, of BullionVault, the gold bullion exchange.
Below he outlines five of the worst ways to buy gold:
1. Buying gold coins in auctions on eBay
Mr Ash says the prices can outstrip the true value of gold - the ‘spot’ gold price - by 25 per cent even for the plainest coins. Rarer coins are sometimes bid up to an even higher premium. Mr Ash says you should check out the seller ratings, the full item description and the shipping fees.
2. Chasing after ‘rare’ gold coins
The US authorities have given warning that investors should beware of dealers charging exorbitant fees for coins that turn out to be anything but rare. In 2004 a British telesales company was shut down for selling gold coins at 700 per cent of true market value.
3. Newly minted ‘collectible’ coins
As with supposedly ‘rare’ coins, so-called ‘collectible’ coins can cost a lot more than the value of the gold they contain. Mr Ash says the Royal Mint charges mark-ups of 40 per cent plus. The new ‘Countdown to London 2012’ series, priced at £1,295, costs almost twice the value of the coin’s gold content.
4. Rank over-pricing
Many reputable-looking companies can charge way over the odds for gold, says Mr Ash. “Mail-shots, websites and radio advertisements are now selling gold to UK investors at 15 to 40 per cent above the true ‘spot’ market value. One newly-launched company is selling one ounce bars for more than £800 (spot value £600) and kilo bars for £25,000 plus (spot value £19,400).”
5. Unallocated gold storage accounts
When a bank sells you gold but holds it in safe-keeping, the account is often unallocated. This means you do not actually own any gold. Instead the bank owes you a certain amount of the metal. This makes you a creditor of the bank.
Under 1K is a great buy... I do not believe that will happen but the market will tell us...
Is gold price set for crash below $1,000?
By David Lew
After the historic boom, is gold price climbing down to $1,000 per ounce, to confirm to the controversial prediction that noted economist Nouriel Roubini made some weeks back? It looks so as gold is going bearish, in the weight of economic nervousness coming from the two important countries that matter—United States and China.
Now, as gold sank to a three-week low on Friday across the global markets and commodity bourses, some bullion analysts warned that gold price could plunge below $1,000 per ounce if the talks on property bubbles from China and financial risk taking concerns in the US are going to intensify.
“Gold is on a bearish mood these days after the precious metal’s spectacular ascent to the record high of $1,227 per ounce in November last year. Gold price may not boom above $1,227 this year, if commodities get into a slump in 2010. A crash in gold price below $1,000 per ounce can not be ruled out,” said Mark Robinson, a bullion analyst based in Dubai.
According to Robinson, the main problem with gold is that “its price has been over-hyped by some bullion analysts and forecasters.” “It is funny to see so many gold predictions going around in the search engines on the Internet. Gold price is being predicted from $1,000 per ounce up to a whopping $5,000 and even $10,000 by analysts and investors ranging from Jim Rogers, Marc Faber and Nouriel Roubini to research assistants in small broking firms,” Robinson told Commodity Online.
While Robinson agrees that gold is the most valuable asset among commodities and the yellow metal is arguable the best investment asset class in the world, he points out: “But there is so much hype going on in the bullion market on gold price. The hype lacks basic fundamentals like gold mine supply, demand and possible emergence of other commodities like platinum, palladium and silver as equality challenging investments like gold.”
But, all said and done, what are the real reasons that are prompting investors and bullion traders to press the panic button on gold price?
There are three immediate reasons why gold price is plunging.
First, there is so much of paper gold traded in the world, without adequate physical supply to compensate for. According to Jim Sinclair, noted bullion investor and a great champion of physical gold, the emergence of paper gold is creating artificial demand and supply problems in the bullion markets and commodity exchanges.
“Because of paper gold, market games can be played. What cannot be done is for paper gold to produce bullion. The bullies can attack the paper gold market in unison, but they cannot create supply in real bullion with the ease of highly leveraged paper. The pros depend on the under-financed public to stampede under the pressure of fear of loss,” says Jim Sinclair.
Secondly, gold has been under pricing pressure this week as US President Barack Obama's plans to limit financial risk taking raised concerns about diminishing capital flows from banks, which have provided liquidity for gold and commodities investors.
Analysts said while falling prices could offer some good bargains, investors will likely wait to see how long the global stock market plunge continue and how much in speculative long positions is cleared by current selling before returning to buying gold and other precious metals in full force.
At current levels, spot gold has fallen about 3 per cent on the week, the largest weekly drop in six weeks.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, halted, with its holdings remaining unchanged at 1,111.922 tones as of January 21 from the previous business day.
Thirdly, gold price is falling prey to what is happening in China. Every investor worth the name has been proclaiming his fascinating investment love for China all these months, arguing that the dragon country is the best bet when it comes to investing in commodities, stocks and real estate.
But the news that is emanating out of China is that the country may be caught in a bubble with property prices as some analysts have warned that real estate investments have ballooned without any proper fundamentals and demand. Even ardent China investor and admirer Jim Rogers has now warned that China is showing symptoms of a property bubble, thanks to unwieldy growth of the country’s properties market. A property collapse in China hits commodities like copper, silver, steel etc hard, pulling down investments into commodities sector, thereby hitting gold price at its heart.
As gold price continues its downward plunge, the US dollar has been rising. Now the US dollar is at a five-month high against the Euro and concerns that the China growth story may get stuck, limiting the need for inflation-hedging assets like gold.
Let us wait and watch where gold market is going to head next week. Will gold price continue to plunge next week? Will the yellow metal pick up the pieces and once against ride on the booming road to price prosperity?
David Lew is a precious metals commentator with Commodity Online. You can contact him at info@commodityonline.com
http://www.commodityonline.com/news/Is-gold-price-set-for-crash-below-$1000-25030-3-1.html
http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=94815&sn=Detail
Mineweb Annual Gold Price Competition
Once again Mineweb will be running a gold price prediction competition among its readers to see who can beat the experts with their assessment of what will happen to the gold price over the next 12 months.
Author: Lawrence Williams
Posted: Tuesday , 22 Dec 2009
LONDON -
Amateur or professional forecasters are again welcome to participate in this year's Mineweb gold price competition. This competition, now in its third year, has demonstrated that Mineweb readers prove frequently to do far better in their gold price picks than mainstream analysts do in similar competitions run by organisations like the London Bullion Market Association. While the results of the 2009 competition won't be available until early in the New Year, as we need to wait for the year end data and calculate the averages, overall readers look to have done fairly well again barring any huge gold price changes between now and December 31st - although the average of readers gold price predictions is probably going to be a little higher, than the reality.
The concept of the competition is pretty straightforward. Readers are asked to predict the gold price high, low, average and year-end prices for the year ahead. The figures will all be based on London Bullion Market Association fixings with the year-end price that of the LBMA's final 2009 fixing on December 31st. Readers may send in entries under their own names, or under a pseudonym and should submit as follows: High price, Low Price, Year-end Price and Average Price - and then this year, to keep interest alive mid-year we are asking also for a prediction for the LBMA closing price on June 30. We also need a contact email address, but while all other data will be published on the competition closing date on Mineweb, the email address will be withheld.
We already have a couple of entries in, despite not publicising the competition yet and give nthe growth in traffic the site has seen over the year, the 2010 competition is gearing up to be a record breaking one. The competition closing date will be January 22nd - and should there be any significant change in the gold price which might affect an early entrant's forecast they are welcome to let us have updates right up until the closing date.
As a reminder, the average of Mineweb reader projections for 2009 were as follows: High $1345, Low $764, Year end: $1172, Average $992.
So if you are interested in setting your forecasting abilities against those of your peers - and against the experts, do take part. Send your entries on an email to editor@mineweb.com in the following format:
Name or Pseudonym:
High Price:
Low Price:
Year End Price:
Average Price:
June 30 Price:
Contact email address:
Good luck - and let's see if we can beat the experts again.
if we find sopport here it does look good to buy here if it falls more the 1070 level is next buying opp, I don't think it'll go that far.
A correction is taking place - down more than 100 dollars... time to buy more.
Gold's real virtue is negative. It is not used for much industrially but there is limited supply and real physical constraint on producing more. Unlike, say dollars, you can't simply flip a switch and make more.
Dylan Grice, strategist at Societe Generale in London (who, by the way, I'd happily sit next to on a train) points out that the value of the gold held by the Fed only equals 15% of the U.S. monetary base and that the price would have to rise to $6,300 per ounce to make the currency fully backed by gold reserves.
http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=93501&sn=Detail
Why do fiat currencies always fail?
Put simply, governments are fundamentally incapable of maintaining the value of their currencies. Every leader, whether king, president or prime minister, serves at the pleasure of two powerful constituencies: Taxpayers irate about what they currently pay and violently opposed to paying more, and recipients of government help who demand vastly greater levels of spending on everything from defense, to roads, to old age pensions. Alienate either group, and the result can be an abrupt career change.
So our hypothetical leader finds himself with two choices, the most obvious of which is to level with his constituents and explain that there’s no such thing as a free lunch. Taxes are the price of civilization, but government largess can consume only so much of a healthy economy’s output, so no one person or group can have all they want. This looks simple on paper, but in the real world it opens the door to challenge from rivals who have no qualms about promising whatever is necessary to gain power.
Not liking this prospect at all, our leader then turns to his remaining option: Borrow to finance some new spending without raising taxes. Then create enough new currency to cover the resulting deficit. The anti-tax and pro-spending folks each get what they want, and no one notices, for a while at least, the slight decline in the value of each individual piece of currency caused by the rising supply. Human nature being what it is, every government eventually chooses this second course. And the result, almost without exception, is a gradual loss of confidence in the value of each national currency, which we now know as inflation.
But a little inflation, like a little heroin, is seldom the end of the story. Over time, the gap between tax revenue and the demands placed on government tends to grow, and spending, borrowing and currency creation begin to expand at increasing rates. Inflation accelerates, and the populace comes to see the process of “debasement” for what it is: the destruction of their savings. They abandon the currency en mass, spending it or converting it to more stable forms of money as fast as possible. The currency’s value plunges (another way of saying prices soar), wiping out the accumulated savings of a whole generation. Such is the eventual fate of every fiat currency. “The Coming Collapse of the Dollar” tells the stories of five of the more spectacular currency crises, but like I said, they all go this way eventually.
What Is a Dollar Collapse?:
A dollar collapse is when the value of the dollar falls so fast that all those who hold dollars panic, and sell them at any cost. This would include foreign governments who hold U.S. Treasuries, traders in exchange rate futures who trade the dollar versus other currencies, and even individual investors, who will demand assets denominated in anything other than dollars. The collapse of the dollar means that everyone is trying to sell their dollar-denominated assets, and no one wants to buy them, driving the value of the dollar down to near zero.
What Would Cause the Dollar to Collapse?:
Over the last six years, the dollar has declined 40% relative to the euro and 30% relative to the yen. That means that Europeans who hold U.S. stock market funds have lost 40% of the value just because of the dollar decline. However, since the decline has been over a six year period, and since the global economy has been growing over this period, European investors have only gradually been moving out of the dollar and into the euro-denominated investments. (Source: St. Louis Fed)
The Japanese government, which owns $586 billion in U.S. Treasuries, lost $150 billion in relative value in the last six years. Japan bought dollars to keep the value of the yen low to make Japanese cars relatively cheaper in the U.S. market, helping Japan's economy to escape a 10-year deflationary cycle. Japan has been slowing selling Treasury bonds as its economy improves. Unfortunately, the recent dollar decline will weaken its economy by making its exports more expensive. (Source: U.S. Treasury, Major Foreign Holders of Treasury Securities)
China owns $492 billion in U.S. Treasuries, a 12% increase over last year. That's because China has pegged its currency, the yuan, to the dollar, so they need to buy dollars and hold as reserves to keep that exchange rate where they want it. As a result, the dollar's relative value has only declined 15% in the last six years against the yuan.
Altogether, foreign countries own $2.4 trillion in U.S. Treasuries. If China, Japan or other major holders begin selling a lot of Treasuries on the secondary market, it could start a panic amongst all sellers, causing a dollar collapse.
Why would they do this? Only if they really felt their holdings were declining in value too fast AND they had another market to sell their products to. Right now the economies of Japan and China are dependent on U.S. consumers. They know that if they sell their dollars, their products cost more in the U.S., and their economies will suffer. Right now, it is still in their best interest to hold onto their dollar reserves.
China and Japan are both trying to sell to other Asian countries, who are gradually becoming wealthier. However, the U.S. is still the best market in the world. (See Demand in the U.S. Economy)
If the Dollar Collapses, What Will Happen?:
Demand for Treasuries will fall, which will cause interest rates to rise. Imports will become relatively expensive, which will spur inflation. Money previously invested in dollars will go to gold, real estate and other commodities, further spurring inflation. High interest rates will make homes even more expensive.
However, U.S. exports will be dirt cheap, helping the economy. Unfortunately, the high interest rates will prevent businesses from adding capacity. That could lead to unemployment, a recession and stagflation.
How Can I Protect Myself from a Dollar Collapse?:
The best way to protect yourself from a dollar collapse is to protect yourself from a gradual dollar decline. That is to have a well-diversified portfolio that includes foreign mutual funds, gold and other commodities. The equity in your home counts as part of this diversification. In addition, a dollar collapse would mean global economic turmoil of unknown proportions. The best defense against that is to have plenty of liquid assets that can be switched if necessary. Be ready to move to another country if needed. Make sure your job skills are transferable. Be mobile. This requires a dramatic change to your lifestyle.
Is a Dollar Collapse Imminent?:
Fortunately, it is highly unlikely that the dollar will collapse. That is because no one who has the power to make that happen - China, Japan and other foreign dollar-holders - wants it to happen. It is not in their best interest. Why bankrupt your best customer? Instead, the dollar will probably decline gradually, as these countries gradually find other customers. (See Not With a Bang But a Whimper)
What worries me is how much more can our dollar take befor a complette coplapse.!
Despite a dollar rebound gold surges to new record above $1,160
Analysts attributed the rise to safe-haven buying on the back of growing concerns about inflation in the US
Author: Lewa Pardomuan
Posted: Monday , 23 Nov 2009
SINGAPORE (Reuters) -
Gold defied a rebound in the dollar on Monday and powered to a record on safe-haven buying, driven by growing worries about inflation and a drop in U.S. stocks that stirred doubt about the economic outlook.
Bullion, which has gained around 32% so far in 2009, struck a succession of lifetime highs in November as sentiment urned extremely bullish after India acquired 200 tonnes of the precious metal from the International Monetary Fund.
Gold XAU= was quoted at $1,161.25 an ounce by 0202 GMT, up $13.05 an ounce from New York's notional close on Friday. It hit another record at $1,161.80 in a thin trade also driven by technical buying after bullion surpassed previous record.
"We're in unchartered territory. It's going to move fairly freely. Momentum becomes quite a big driver of prices. You could see the hint of safe haven buying returning," said Mark Pervan, ANZ's senior commodities analyst.
"There is increasing expectation that the market could deleverage risk towards the end of the year. There's a view that we could see some selling in equity markets, that lowering a risk would also benefit gold prices."
U.S. gold futures for December delivery GCZ9 added $14.4 an ounce to $1,161.20 on the COMEX division of the New York Mercantile Exchange, having struck a record at $1,162.50.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust (GLD: Quote, Profile, Research), said its holdings stood at 1,117.493 tonnes as of Nov 20, unchanged from the previous business day. [GOL/SPDR] Trading was thin in Asia, with Japanese speculators away for a holiday.
The dollar inched higher on Monday, extending a short-covering bounce as investors pared risk trades in a holiday-thinned week, while oil CLc1 rose toward $78 a barrel on heightened tensions between Iran and Western nations. [USD/] [O/R] In theory, a firmer dollar makes dollar-priced gold more expensive for holders of other currencies, but on the other hand, strong oil prices raise the metal's safe-haven appeal against inflation.
"You've got more high-profile hedge funds visibly investing in gold. That's yet another factor encouraging moves into gold by the wider investor community," said David Barclay, commodity strategist at Standard Chartered in Hong Kong.
Option traders are betting that gold will hit $1,200 an ounce or higher by early next year, and strong options interest could in turn lift underlying prices further into the uncharted territory.
U.S. stocks fell for a third straight day on Friday as investors took weaker-than-expected results from computer maker Dell (DELL.O: Quote, Profile, Research) and homebuilder D.R. Horton (DHI.N: Quote, Profile, Research) as a further sign the recovery would be anemic. [.N]
Can gold keep on flying?
Inflation and currency devaluations could see gold continuing to outperform at least in the short term.
Author: James Stafford
Posted: Tuesday , 17 Nov 2009
LONDON -
Are you sold on gold? The precious metal outperformed every major equity index in the world in 2008. The question is, can gold-and other precious metals-keep on flying? Or would buying today mean buying high and selling low?
Precious metals have always been intriguing to investors because they tend to hold their value. In times of geopolitical crisis or currency devaluation, for example, the value of paper money might fluctuate, but a hard asset will always be worth something. As a result, historically, precious metals have been considered a "safe haven" in times of economic and financial instability.
That brings us to why gold is on a tear today. It declined in 2008 and early 2009 as panicked investors rushed into cash in an attempt to weather the financial crisis. But sometime in the middle of 2009, when investors began to move their money from the sidelines, gold started to rally. It returned 32.59% through the third quarter of 2009, vs. 19.26% for stocks.
The question is, where can we expect gold to go from here? In order to predict whether gold prices will skyrocket or come crashing down, it's important to understand the principal factors that affect the price of any commodity: supply and demand.
The supply side of the equation is not particularly relevant in regard to gold because gold supplies remain fairly constant. That's because production has not significantly increased due to a lack of new mining sites - indeed it has declined over the last few years. Should supplies increase, however, investors may want to be cautious.
The demand side of the equation, then, is the one gold investors must look at. And as we noted above, demand for gold tends to increase when investors have a lack of confidence in the U.S. economy and financial markets.
That's certainly the case today. In fact, we see two factors that could lead gold to outperform in the near future: inflation and currency devaluation. In response to the financial crisis of 2008 and 2009, the Federal Reserve injected massive amounts of liquidity into the money markets. Ultimately, that increase in the money supply could devalue the U.S. dollar and lead to inflation. In fact, the U.S. dollar is already shockingly low. On October 14, 2009, it fell to a 14-month low against the euro, hitting $1.4947, the weakest since August 2008, according to Bloomberg. And while inflation is not yet a problem, economists are on the lookout for it.
These conditions led Standard & Poor's (S&P) to raise its gold price assumption for 2010 from $750 per ounce to $800 per ounce. "Investors seeking a hedge against inflation risks and uncertainty in the financial markets continue to support gold prices," the S&P analysts write. "The metal's properties as a safe haven, and to a lesser extent the demand for jewelry, also support its longer-term price prospects."
S&P's estimate, however, look to be on the low side. As of November 2009, gold was trading at more than $1,100 per ounce. And since gold exceeded the $1,000 per ounce level, the price has been extremely resilient, with no meaningful pullback seen. There have been periods of profit-taking, but increased demand quickly appears on any weakness in price.
In sum, then, good old-fashioned gold fever is back-and investors who are looking for a promising trend may want to consider investing in it and other precious metals.
But don't consider gold an investment only for troubled times. One of the greatest advantages of precious metals exists regardless of economic and market conditions. Precious metals tend to perform differently from other assets. As a result, investing in precious metals may be a good diversification strategy for a portfolio comprised mainly of stocks, bonds and real estate-in all environments.
Article written by OilPrice.com. Oilprice.com offers free information and analysis on Energy and Commodities - http://www.oilprice.com
Shortly after gold closed, the ICE Futures U.S. Dollar Index was down 0.198 point at 74.947 point. The 75-point area has proven to be pivotal for gold recently, with buying ratcheting up in the metal when the index dips below that level.
Central banks around the world won't easily be able to pull back the vast amount of liquidity they've pumped into their respective economies, and as such, inflation remains a "real concern," said Rob Kurzatkowski, futures analyst with optionsXpress.
That should mean continued support for gold, often used as an inflation and dollar hedge and more broadly seen as an alternative currency. So far this year, the Dollar Index has lost around 8%. Meanwhile, December gold has risen about 28%.
"At this point, I don't know anything that could stop the gold rally, other than investors being nervous to buy it at these high levels," Kurzatkowski said.
From mine web gold being bought by banks!
Central banks to be net gold buyers this year - Blackrock
Such an occurrence would mark the first time in two decades that central banks have bought more gold than they sold
Author: James Regan (Reuters)
Posted: Monday , 16 Nov 2009
SYDNEY (Reuters) -
Central banks will be net buyers of gold this year as they diversify away from the U.S. dollar, global commodities investment fund BlackRock said on Monday in comments that helped drive bullion to fresh record highs.
BlackRock is one of the world's largest fund managers, boasting a total $1.4 trillion under management across all asset classes. It is manager and adviser to the U.S. Federal Reserve and its views can influence the direction of global markets.
Evy Hambro, who runs two of the world's largest commodities funds, BlackRock World Mining Fund and Gold & General Fund, gave an upbeat outlook for gold during a media briefing in Australia.
His forecast for net central-bank purchases of gold this year would, if met, mark the first year in two decades when the world's central banks bought more gold than they sold. They have been net sellers of gold each year since 1988.
"The most recent break-out in the gold price in U.S. dollars has caused most gold prices to start trending higher at the same time," Hambro said, adding that investors were now looking for gold to rise in other commodities as well as U.S. dollars.
"When you start to see the price rising in a range of different currencies, it is a clear sign of a very strong market to come," he added.
Spot gold XAU= stood at $1,123.70 as of 0216 GMT after touching $1,126.30 per ounce, a record, compared with the notional New York close of $1,118.50, helped higher by Hambro's bullish outlook, according to financial broking group IG Markets.
The previous record was $1,122.85 marked on Nov. 12.
Bullion was also gaining on renewed appeal as a hedge against the U.S. dollar's weakness and inflation risks.
In other currencies, gold has not reached new highs since early 2009. In Australian and Canadian dollars and the South African rand, it peaked in February.
But Hambro said investors were now "looking for price rises across all currencies" as central banks build up their gold holdings and global supplies tapered off.
"Gold's role is gathering a lot more attention in terms of risk diversification," he said.
Hambro also said that the high level of gold production in China, which has replaced South Africa as the world's biggest producer, was not sustainable, pressuring world supply.
China's gold production rose 13.49% in the first half of 2009 from a year earlier to 146.505 tonnes, according to the Ministry of Industry and Information Technology.
Hambro also said U.S. demand for commodities was starting to show signs of recovery. This, along with stronger Asian demand, set the stage for a prolonged bull market, he added.
Hambro said China's rapid rise would underpin the next bull market. China accounts for about 40 percent of demand in almost every commodity and more than half the demand in some commodities such as steel and copper during the second quarter of 2009.
"Obviously other countries as well (that are) in a similar position to China, such as India, Brazil and so on are also having another magnifying affect in terms of the commodity picture," Hambro said.
Less gold coming out of ground can only mean higher gold price!!
http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=93062&sn=Detail
IGNOMINIOUS END TO GLORY DAYS
South African gold on final deathwatch as top grade scientist finds residual gold is more than 90% less than claimed
Research shows that production rates should fall permanently below 100 tonnes a year within the coming decade
Author: Barry Sergeant
Posted: Monday , 16 Nov 2009
JOHANNESBURG -
The apparent bottom line in a paper published in the South African Journal of Science is that South Africa's gold industry is on final deathwatch, despite claims of massive existing below-ground reserves. Chris Hartnady, research and technical director of Cape Town earth sciences consultancy Umvoto Africa, has found that South Africa's Witwatersrand goldfields are around 95% exhausted, and anticipates that production rates should fall permanently below 100 tonnes a year within the coming decade.
Gold production from the Witwatersrand, the biggest known gold field in the world, peaked at around 1,000 tonnes in 1970 and has declined ever since. Hartnady says that while initially (1970-1975) the decline was "quite precipitous", it has been interrupted by only short periods of slight trend reversal (1982-1984 and 1992-1993).
Leon Esterhuizen, a London-based specialist analyst at RBC Capital Markets, has reacted to the research by saying that "South African gold is dying -- this is not new news", but adds "that it may be dying faster than we currently believe is novel". On the levels of reserves, Hartnady finds that the South African "residual gold reserve" after production through 2007 is only 2 948 tonnes, a little less than three times the 1970 production figure, and much less than 10% of the officially cited reserve.
The country's gold reserves are less than half of the current United States Geological Survey (USGS) estimate of 6 000 tonnes, and the country is not first, but fourth in world rankings, after Australia (5,000 tonnes), Peru (3,500 tonnes) and Russia (3,000 tonnes), Hartnady's research shows. The USGS currently cites South Africa's gold reserves at around 6,000 tonnes, while SA claims a 36,000 tonnes reserve base figure (or about 40% of the global total). Hartnady's findings are based on Chamber of Mines figures and mathematical modeling pioneered by the distinguished American geologist M. King Hubbert.
Esterhuizen comments that "most recent indications from Harmony (even with gold bullion at new dollar records over USD 1,100/oz) is that its old shafts - effectively the Free State gold field - are dying. DRDGold has got Blyvooruitzicht on life support and is trying to get permission to keep the plug in for a little bit longer (with everything around Blyvooruitzicht now having been shut down), while Pamodzi Gold's demise and Simmer & Jack's failure at Buffelsfontein just proves the point -- all of this, at record gold prices in rand terms".
POG has smashed through the P&F Bullish Price Objective as if it never existed.
Silver is next. But look how far this prediction is.
The Silver Price Will Rise 4.83 Times as Far as Gold Price
http://goldprice.org/silver-and-gold-prices/2008/12/silver-price-will-rise-483-times-as-far.html
Unless you understand this one principle, you understand nought about precious metals' bull markets: monetary demand, and monetary demand alone, drives both gold AND silver. It's not Indian wedding demand or the popularity of silver jewelry that drives their prices, but sheer monetary demand, holding them as "money" because the alternatives -- national currencies -- are clearly failing.
WHEREFORE, before this bull market ends, you will need only 16 ounces of silver to buy one ounce of gold, which means from here that the silver price will rise 4.83 times as far as the gold price. Forget the siren song of the "gold-only" bugs, who have fallen for the myths of the money interest: both silver and gold are money, and always will be.
Marc Faber bats for gold, silver against US dollar
2009-11-13 22:15:00
http://www.commodityonline.com/news/Marc-Faber-bats-for-gold-silver-against-US-dollar-22901-2-1.html
Dr.Marc Faber
The United States is dedicated to debasing its currency, the US Dollar. Are you ready? There is a risk in holding cash in an environment of asset price inflation – a condition that usually occurs when governments create large fiscal deficits and inflate the money supply. The practice is endemic to banana republics and declining empires...and it is happening in the US at this very moment.
The global recession and financial crisis have refocused attention on government stimulus packages. These packages typically emphasize spending, predicated on the view that the expenditure 'multipliers' are greater than one – so that gross domestic product expands by more than government spending itself. Stimulus packages typically also feature tax reductions, designed partly to boost consumer demand (by raising disposable income) and partly to stimulate work effort, production and investment (by lowering rates).
The existing empirical evidence on the response of real gross domestic product to added government spending and tax changes is thin. But the evidence is quite strong that these policy responses usually trigger inflation.
Get historical quotes on India gold, silver futures
I suppose that even someone without any common sense might understand that a "strong currency" over longer periods of time reflects a high degree of prosperity and economic success, whereas a chronically weak currency is symptomatic of economic imbalances, such as a lack of competitiveness or overconsumption, arising usually from excessive supply of money and credit.
I would also suppose that even if someone never travels overseas, he would understand that if the US Dollar loses 50% of its value against all the other world currencies (everything else being equal), it means the US is 50% poorer relative to the rest of the world. (Now, this is not entirely correct, since the US has overseas assets that would appreciate in value in USD terms).
Moreover, stock price movements become extremely volatile and erratic in countries with a depreciating currency. In the long run, the depreciation of the currency will usually more than eliminate the gains in local currency terms. So, whereas in 2007 both the Dow Jones and the S&P 500 exceeded their previous highs reached in 2000 in US Dollar terms, these indices failed to make new highs in Euro terms. In addition, whereas the US economy expanded in US Dollar terms between 2001 and 2007, in Euro terms it actually contracted!
Even with the S&P 500 having shot up since the beginning of the year by over 25%, it has merely kept pace with the price of Gold. And during the last 10 years, the S&P has lagged behind the official US inflation rate...while lagging VERY far behind both the Euro and gold. Since the end of 1999, the S&P 500 has delivered a total return after inflation of about minus 25%.Unfortunately, the US is not the only country that is busily debasing its currency. "Everyone" is doing it. Because of the current collective debasement of all paper currencies by central bankers, I believe that precious metals and mining companies will maintain their purchasing power.
In the 1980s the US Dollar was a very strong paper currency compared to the Mexican Peso. Today, there is no paper currency that is as strong relative to the US Dollar as the US Dollar was relative to the Peso in the 1980s! The only "currencies" that have a chance of becoming as strong against the US Dollar as the US Dollar was against the Peso between 1979 and 1988 are precious metals such as gold, silver, platinum, and palladium.
Also, I should add that precious metals could appreciate even if the US Dollar miraculously recovered strongly against foreign currencies for an extended period of time. Such Dollar strength would probably be a symptom of some horrible economic or political problems around the world, which could be friendly to precious metals.
Central bankers and pundits seem to believe that they have averted the second Great Depression, while ignoring the fact that more and more debt produces less and less GDP and fewer and fewer jobs.
For now, though, the low ten-year bond yield is the lifeline from which all support flows. Much of the investment universe holds together because money can still be had for cheap – not by the volition of a cooperative private sector, rather induced by a US government that simply distributes money for free. Such an ill-conceived idea could only have been born in the test tube of a central banker.
Private lenders comprehend the difficulty of making profits when being forced to lend for nothing, so the government increasingly finds itself to be the interest-free lender of last resort.
Ultimately, if central bankers continue this process for long enough, it is the Dollar, and any currency or economy still pegged to it, that could eventually crash. Therefore, we investors find ourselves in the precarious position of having to maintain sufficient liquidity, but not too much in case the real value of these liquid reserves is wiped out by politicians and central bankers gone mad.
Courtesy: www.bullionvault.com
Yes, too many for a mortally wounded economy. The worst inflation scenario may be set to unfold in the coming 3-5 years.
Member mark #5 for sharing the news/DD... Keep it coming, OK? Thanks.
LARGELY A DOLLAR STORY
Sliding dollar helps powers gold toward $1,120
The dollar index fell to 15-month lows as the yellow metal ventured ever closer to the $1,120 mark
http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=92597&sn=Detail
Author: Jan Harvey (Reuters)
Posted: Wednesday , 11 Nov 2009
LONDON (Reuters) -
Gold hit record highs near $1,120 an ounce on Wednesday as the dollar index .DXY fell to 15-month lows, with expectations that an erratic U.S. economic recovery will keep American interest rates low.
The metal is now poised for more gains, analysts said, with the weak dollar helping gold build on a rally that began last week after the IMF sold 200 tonnes of bullion to India's central bank, raising the prospect of more official sector buying.
Spot gold hit a high of $1,117.95 an ounce and was bid at $1,115.75 at 1441 GMT versus $1,105.30 late on Tuesday.
U.S. gold futures for December delivery on the COMEX division of the New York Mercantile Exchange rose $12.90 to $1,115.40 an ounce.
"Today's move has been largely a dollar story -- you've got euro/dollar testing fresh lows, the same with the dollar index," said Daniel Major, an analyst with RBS Global Banking & Markets.
"The trend for dollar weakness seems to be reasonably firmly in place, which of course is supporting gold."
The dollar index fell a quarter of a percent to a 15-month low of 74.831 and the euro rose to a two-week peak within sight of last month's 2009 high of just over $1.5060.
Analysts said the dollar was smarting after Fed officials said on Tuesday that high unemployment and sluggish consumer spending were risks to recovery in the U.S. economy, which may keep the Fed funds rate low.
Weakness in the unit boosts gold's appeal as an alternative asset, and makes dollar-priced commodities cheaper for holders of other currencies.
Gold prices also rose in non-dollar terms. Euro-denominated gold reached its highest since March at 743.27 euros.
"The way gold keeps accelerating away from its previous highs is quite incredible," said Saxo Bank senior manager Ole Hansen. "Continued momentum is driving prices higher. Whenever we see new highs, we see more momentum buying."
BARRICK SEES RECORD MARGINS
In supply news, Barrick Gold Corp (ABX.TO), the world's biggest gold producer, told Reuters it sees the potential for record margins in the fourth quarter as gold prices hit new peaks and costs are stable or lower.
In major gold producer South Africa, the country's biggest union said it had received the go-ahead from authorities for its workers to strike at Gold Fields (GFIJ.J) over a disputed recruitment assessment method.
On the demand side, physical buying was slack in Asia, with traders in India -- the world's biggest bullion consumer last year -- keeping to the sidelines as prices rose.
Vietnam's central bank said it will allow imports of gold -- banned since May last year -- after bullion prices rose sharply in recent days, potentially opening up a new source of demand.
Interest in gold exchange-traded funds also remained soft, with holdings of the largest bullion-backed ETF, New York's SPDR Gold Trust, unchanged on Tuesday.
But with the prospect of persistent dollar weakness boosting fund interest in gold and further central bank purchases seen as a distinct possibility, the outlook for gold prices is positive.
U.S. investment bank Goldman Sachs said on Tuesday gold could rise to record highs in a range from $1,150 to $1,200 an ounce, driven by falling real interest rates and renewed buying interest by central banks.
Among other precious metals, spot silver was bid at $17.63 an ounce against $17.32, tracking gold higher, while platinum was at $1,368 an ounce against $1,349.50.
Palladium was bid at $343.00 against $331.50.
Earlier it touched $346.75 an ounce, the highest since August 2008, partly because of fund buying and partly because demand expectations have been bolstered by strong car sales data from China, traders said.
World Jumping on Gold Boom Bandwagon
NOVEMBER 10, 2009 09:46
http://english.donga.com/srv/service.php3?biid=2009111013688
The rapidly soaring demand for gold has led to surging prices of the valuable metal.
With gold growing as a prominent investment product, gold refiners are gathering gold rings, bracelets and necklaces to be turned into gold bars from across the world. Some are even attempting to develop new gold mines.
In a nutshell, a new “golden era” for the metal has arrived.
The small Swiss city of Mendrisio produces a third of the world’s gold bars. Argor-Heraeus SA is a major refiner in Mendrisio that processes roughly 400 tons of gold per year.
In an interview with the New York Times, Argor-Heraeus SA CEO Erhard Oberli said, “As gold prices have recently surged, a large amount of bangles, bracelets and necklaces arrive in plastic bags from souks in the Middle East, from pawn shops in Asia, and from corner jewelers in Europe and North America every day.”
According to the World Gold Council, gold investment jumped 51 percent in the second quarter but spending on gold accessories such as bracelets, necklaces, and rings fell 20 percent. That means gold accessories have been rapidly replaced with gold bars.
In a media interview, Suki Cooper, a metal strategist for Barclays Capital, said, “The global gold frenzy has been fed by hedge funds and central banks. Even individual investors have also fueled the frenzy. It’s a structural shift we’re seeing on the investing side.”
In cooperation with Swiss gold refiner PAMP, upscale London department store Harrods has begun selling gold products ranging from tiny one-gram ingots to hefty 12.5-kilogram gold bricks.
Chris Hall, head of Harrods Gold Bullion “The response has been astounding. Bars are definitely more popular than coins. The 100-gram bar is the most popular.”
In the United States, even ads for gold bars or ingots are securing late-night television spots.
Amid the gold frenzy, the spot price for gold jumped to a record 1,104.80 U.S. dollars per ounce on the London Commodity Exchange yesterday. Moreover, the gold price for December delivery hit 1,105.4 dollars per ounce, another record high.
Experts, however, are mixed over the prospects of gold prices. Jim Rogers, chairman of Singapore-based Rogers Holdings, said gold could reach 2,000 dollars per ounce.
Nouriel Roubini, professor of economics at New York University`s Stern School of Business, however, derided this forecast as “utter nonsense,” citing lack of inflationary or economic pressure that could drive the price of gold to that level.
they are eye opening now to find out when the gold thats in the ground will start paying.
The newest eye opening charts have been added to the i-Box and these reflect the state of the underlying fundamentals as much as anything else...
really far.. American dollar is done nobody wants to use it anymore e/m
Gold running hard... how far will this go???
Not since March '08 has Gold in the spot (or cash) market closed this high... knowing that the cash market in the metals leads the futures markets, looking for much higher prices in fiat terms seems logical.
Please see the charts and data -
http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx
Recently, the charts showed a potential triple top but we know that bull markets in commodities are long cycle markets typically lasting 20+ years and we should have been able to guess this was going to have a bullish resolution...
Check all the closing prices here for precious/semi-precious metals -
http://www.kitco.com/
ONWARD 'N UPWARD!!!
MUST READ... 13 Reasons for Major Gold Breakout
By Jim Willie CB
Sep 10 2009 4:26PM
http://www.kitco.com/ind/willie/sep102009.html
http://www.GoldenJackass.com
Can't keep it down today... Gold seasonality -
History Lesson: September Is Best Month for Gold
http://www.kitco.com/ind/Holmes/holmes_aug312009.html
and overnight in the electronic spot market, gold goes to $1008.00/oz.
Track it here -
http://www.kitco.com/
China pushes silver and gold investment to the masses
A report suggests that the Chinese government is pushing the general public into buying gold and silver bullion, which could have a dramatic effect on the markets.
http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=88452&sn=Detail
Author: Lawrence Williams
Posted: Thursday , 03 Sep 2009
LONDON -
We are indebted again to Paul Mylchreest's Thunder Road Report for news that will bring big smiles to gold and silver investors everywhere. Apparently China is pushing the idea of buying gold and silver for investment purposes to the general population in the way that Western television sells soap powder. If 1.3 billion Chinese citizens start buying gold and silver, even in tiny quantities, imagine what that will do to the market!
The report notes that China's Central Television, the main state-owned television company, has run a news programme letting the public know how easy it is to buy precious metals as an investment. On silver investment the announcer is quoted as saying " China has introduced its first ever investment opportunity for silver bullion. The bars are available in 500g, 1kg, 2kg and 5kg with a purity of 99.9%. Figures show that gold was fifty times more expensive than silver in 2007, but now that figure has reached over seventy times. Analysts say that silver has been undervalued in recent years. They add that the metal is the right investment for individual investors and could be a good way to cash in."
What appears to have happened in China is a total relaxation of strictures on holding precious metals by the individual with the government pushing gold and silver as an investment option, seemingly at every opportunity. This is a far cry from the situation only a few years ago where the distribution of gold and silver was strictly controlled. Now, the Thunder Road Report notes that every bank will sell gold and silver bullion bars in four different sizes to individuals and gold related investments are said to be soaring in popularity.
Around a year ago, Leyshon Resources managing director, Paul Atherley, in an investor presentation in London - and no doubt delivered elsewhere in the world too - commented that some employees at the company's gold mining project in northern China would, on pay day, go to the local bank and buy a small gold bar as an investment and wealth protector. To an extent we put this down at the time to mining company hype - but this seems to be exactly the same phenomenon noted by Thunder Road. The Chinese are being converted from being the lowest per capita gold consumers in the world to a nation of small precious metals investors. Now, by next year, Chinese consumption of gold is likely to exceed that of India, which has been for years the world's biggest gold market. And one suspects that the potential for gold purchasing by individuals is only in its earliest stages. As more and more Chinese move into the cities and individual wealth grows, this trend is only likely to accelerate.
Paul ends the piece on Chinese gold and silver potential with the following comment: "Simply put, the Chinese government is trying to trigger a national gold craze...and it's working. The Chinese public now has gold trading platforms on steroids.... ...Also, for the first time in history, Chinese investors can even trade gold abroad (in London) with the swipe of a ‘Lucky Gold' card. I can't even get Bank of America to open a foreign currency account."
This may be an overstatement of the case from a precious metals bull - or it may not! Certainly if China is indeed pushing the public to buy gold then there may well be a hidden agenda here. It's unlikely they are doing it and will suddenly pull the rug out from under millions of investors. A cynic (or a raging gold bull) would suggest that this will precede a move to switch a good proportion of the country's reserves into gold which would have a huge effect on the global gold price and could prove disastrous for the dollar. Maybe it's not in China's interests to drive the dollar down too much until it has managed to divest itself of the huge dollar overhang (see the article on Chinese Sovereign Wealth Funds we published yesterday - Chinese sovereign wealth fund dumping dollars for strategic investments like gold ). The country may well already be, of course, surreptitiously building its gold reserves without reporting the build-up.
If the Chinese are indeed beginning to buy gold and silver as the quoted report suggests then this has to be a strong signal that prices are going to rise, and perhaps rise dramatically, in the relatively near future. We await comment from other China watchers for confirmation of the gold and silver buying spree, but with global gold production at best flat and probably in decline, even a small increase in Chinese buying could have a substantial impact on gold and silver prices.
Gold has a bullish price objective of $1005 on the P&F chart... almost there!!!
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