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As a complete speculation, bought HYGS today...
http://stockcharts.com/h-sc/ui?c=hygs,uu[l,a]daclyiay[dc][pb50!b200][vc60][iuk14!ua8,18,7]
CB Gold Sales
http://amarks.homestead.com/CBGold.html
[miningmx.com] -- GREAT Basin Gold, which is digging for gold in the US and South Africa, said it would sell 13% in the company to a South African company, Tranter Gold, by March for R260m in an empowerment proposal, Bloomberg News reported.
"We can kill two birds with one stone,'' Dippenaar told Bloomberg News at the African Mining Congress in Zambia. "We comply with the legislation and we can put the proceeds toward Burnstone," he said.
The proceeds will be used to fund part of the mine's R1bn development, Dippenaar said.
also SA
It seems the SA Reserve Bank also seems to agree with the bullish gold view as it upped its gold reserves markedly in January to 4.684 million ounces from 3.990 million ounces in December 2006, and according to a leading economist this could be due to the Reserve Bank taking the opportunity to build up reserves when it is "hard to argue against a long-term bullish view on gold".
Jessica Cross sighting...
ETFs behind gold price volatility - Jessica Cross, MD, Virtual Metals
In an interview on ClassicFM @ 18:00 on Monday, 5 February 2007
[miningmx.com] -- RECENT volatility in the gold price was owing to plans to launch gold-backed exchange traded funds (ETFs) in India, and rumours that the IMF was planning to sell gold.
Speaking on Classic Business, a week nightly radio programme, Cross said volatility would continue in the market.
“There’s been four Indian ETFs which has caused excitement. And then today, there’s been talk about a possible Japanese ETF which is particularly interesting,” said Cross.
Reports that the IMF was considering selling some 400 tonnes of gold reserves had resulted in significant uncertainty about the future direction of the bullion price. However, Cross said the gold price was still proving resilient given the opposing market forces that are currently at play.
“The gold price is holding up well given that base metal prices have come off so much since December,” she said. “I think it’s possible the funds are switching from base metals into precious metals," she said.
"So in a sense they’re almost shrugging off this news from the IMF which is interesting. The next few weeks will tell how the market begins to digest this news from the IMF,” Cross said.
Nevertheless Cross expects the gold price to remain volatile in the coming weeks.
“The IMF proposal still has to get Congressional approval, and bear in mind Congress is now largely Democrat rather than Republican which seems to indicate that the vote might go in favour of the proposal."
thanks for the charts.
how about longer term, 3-5 years...?
Me too, over 80% in cash and treasury bonds... Makes for a less stressful tax season...
What is your opinion on Soft Commodities, specifically Corn, Wheat, Sugar, and Soy Beans...?? In my fundamentalist pea-brain view, appears to me Soft Commodities are undervalued for a longer term play... Any opinion here, I noted your comment the other day that longer term you were optimistic only on gold/silver and oil/gas for the rest of 2007. Please advise.
Thanks!
Martin M sighting #2
Speaking at the Mining Indaba 2007 on Tuesday, Dr Martin Murenbeeld, a world-renowned gold expert and chief economist at Dundee told delegates of the dollar's potential to weaken further and the resultant higher gold price.
Murenbeeld's other motivations for higher prices included limited mine supply and research indicating that the current cycle is only in its sixth year of an historical ten year period.
Overall the economist has predicted a fifty percent probability that gold could average $730/oz this year, although his weighted-probability forecast is for a $674/oz average this year and $755/oz in 2008.
By 5.34pm spot gold was trading up $653.35/oz from Monday's close of $648.15.
Martin M sighting...
Dundee economist Murenbeeld says dollar diversification will turn to gold
By: Tessa Kruger
Posted: '06-FEB-07 21:06' GMT © Mineweb 1997-2006
CAPE TOWN (Mineweb.com) -- Respected metals price and currency forecaster Dr. Martin Murenbeeld Tuesday predicted a stronger gold price in 2007, an overvalued U.S. dollar currency, limited supply and higher gold investment demand.
During a presentation at 2007 Mining Indaba in Cape Town, Murenbeeld, Chief Economist of Canada’s Dundee Group, forecast a 2007 gold price ranging from $674 to $707 to $755 per ounce.
He asserted that the U.S. dollar exchange rate was significantly overvalued, ranging between 15% and 35%, while the current U.S. account balance had risen to 7% of GDP from 3% a couple of years ago.
Murenbeeld suggested that the current account deficit could improve if there was stronger economic growth in the rest of the world resulting in more U.S. exported goods, or if the United States consumed less on the back of weaker domestic growth.
The Chinese currency, known as the RMB, also needed to be revalued, according to Murenbeeld, who was waiting to see how this issue would be resolved.
He asserted that international U.S. dollar reserves were excessive as $4.8 trillion in currency reserves were estimated to be held globally. Asia now holds more than half of the world’s currency reserves.
“Diversification from U.S. dollar reserves would do wonders for the gold price, even if Asia does not increase their gold investments to an unlikely 15% of reserves, but only decides to buy a portion of the 500 tonnes of gold annually available from the Central Bank Gold Agreement (CBGA),” Murenbeeld said.
Also supporting the gold price is OPEC’s current account surplus that is rising – putting great pressure on the organization to diversify and divest more funds.
“Indications are that there will be further diversification away from dollars, as there are fears of further dollar currency declines and geopolitical trends, such as anti-US sentiment in the Middle East, do not exactly support the currency,” Murenbeeld explained. “But other markets are not cheap, and gold is now cheap at ten barrels of oil for an ounce and in terms of the cost of financial assets.”
U.S. monetary policy is likely to be eased in future, as budgets are stretched as the baby boomers retire, causing fears that the US economy will slow down, he said.
Declining or flat supply caused by the lack of mine expansion during the 1990s also casts a favorable light on the gold price.
There is currently only 4,000 tonnes of “loose” gold in Central Bank reserves available. Meanwhile, non-signatories to the Central Bank Gold Agreement, such as Argentina, have said that it would be buying gold reserves and not selling it.
Demand has risen over the past few years on the back of demand by exchange-traded funds (ETFs) and gold returning to its monetary investment role. Investor demand also picked up in India and as a result of deregulation elsewhere.
Murenbeeld said that gold price cycles generally lasted a minimum of 10 years, and that he was bullish on the price for at least the next four years. However, he cautioned, that one had to remember that a counter year occurred in each 10-year cycle.
On the downside, the gold price could suffer from tight monetary policy, a rise in real interest rates and the observation that the gold price often decreased during or after a recession.
Yep, pretty much DEMAND driven. Gold production (SUPPLY) is stable.
Central Bank SUPPLY, however, is unknown factor. Central Banks sure are behind schedule in their sales this fiscal YTD.
Besides Asian DEMAND, which you believe is key, I would chime in with MidEast DEMAND.
Higher Oil revenue have made the MidEast a nice DEMAND center for the past several quarters.
Hong Kong demand was very disappointing last quarter reported by GFMS. But India is always the key, taking 20% of gold offtake each year. Monsoon season will bear watching again this year and is my key indicator for Indian Demand...
Martin M sighting...
The biggest chunk went to gold exploration. The gold price, which was near $650 (U.S.) an ounce Friday, hit a 26-year high of $730 in May, 2006, and economist Martin Murenbeeld, a regular commentator at global mining conferences, sees it heading higher.
He projected a probability-weighted average gold price of $674 an ounce in 2007, rising to $755 in 2008 as a declining U.S. dollar, looser global monetary policy, rising Asian demand and geopolitics play supportive roles.
Looking at historical gold-price cycles, Mr. Murenbeeld said the shortest cyclical upswing lasted for 10 years, between 1970 and 1980.
"Today, we're at the end of the sixth [year]," he said.
But Mr. Murenbeeld, based in Victoria, also offered a caveat: Every commodity chart, whether gold, oil or copper, shows reversals within the main trend. "In an up cycle, there's a down year and in a down cycle, there's an up year. Bear that in mind."
Great Basin plans to wrap up BEE deal by end-Feb
--------------------------------------------------------------------------------
Great Basin Gold (GBG) was in “the final throes” of its black economic-empowerment (BEE) transaction negotiations with partner Tranter Gold, and it hoped to have the deal's terms finalised by the end of February, CE and president Ferdi Dippenaar told Mining Weekly Online on Wednesday.
The Canada-based company viewed this as the “final addition” to completing its mining rights application, which would be submitted “within weeks” of the BEE deal being sealed.
Dippenaar was confident of the application's likelihood for success, saying that the firm had closely followed the relevant framework.
The estimated time for a mining right to be granted in South Africa was 12 months from the date of application.
Meanwhile, GBG's prospecting rights allowed it to take a bulk sample before receiving the actual mining right.
Dippenaar said that early stage production at Burnstone could occur at the end of the year, which would be stockpiled until the project's metallurgical plant began its production build-up in 2008, reaching full production in 2011.
On funding for the mine, Dippenaar said that cash could come from earlier than expected production at its 50%-owned Hollister mine, in Nevada, US.
He said that the development of Hollister was progressing well, and could see early production at the end of this year, and full production in 2009.
If this did, indeed, occur, the company could use the sales from this mine to fund the bulk sampling at its Burnstone mine, near Balfour in Mpumalanga, Dippenaar reported.
If GBG required further financing, it could look at bridge funding or debt equity funding.
Financing would also be impacted if the company's BEE partners “brought cash to the table” in the empowerment deal.
Burnstone resources revised up 8%
Meanwhile, GBG also announced on Thursday that it had increased the resources at Burnstone by 8%, or 582 000 oz of gold.
The project's inferred resources were boosted by 219 000 oz, which was a 54% increase over previous figures, after the firm received the results from eight drill holes, GBG said in an emailed statement.
An initial programme designed to upgrade and expand the mineral resources in Area 1 and Area 2 was nearing completion.
It was anticipated that the remainder of the drilling program would be completed during the February quarter, and the results would be incorporated in the mining plan being prepared by Turgis Engineering.
GBG completed a positive feasibility study on Area 1 of the Burnstone Project in May 2006.
The gold-developer is advancing the first of a two stage development program, designed to take the Burnstone project to production in two years. The current program, involving construction of a decline and taking a bulk sample, will be completed in some 12 months. “The objective of the 2006 drilling programme was to expand and upgrade the mineral resources of the deposit,” Dippenaar said.
“With an overall increase of 800 000 oz, this objective was successfully achieved. The updated resource model has been forwarded to Turgis to update, expand and optimise the mine plan from the 2006 feasibility study.”
He added that, if the results from the remaining drilling were in line with expectations, a project to optimise the 2006 feasibility study would formally get under way.
“As a result, we believe that the production profile from Burnstone mine could increase by between 10% to 15%,” Dippenaar enthused.
The Burnstone goldfield was defined by an 18 km-long, north-westerly trending mineralised corridor developed within the Kimberley Reef, one of four main gold-bearing units in the Witwatersrand Basin. At Burnstone, the central portion of the gold corridor had been uplifted by two north-westerly trending subparallel faults and, as a result, a significant portion of the deposit areas along the trend occurred at relatively shallow depths of 250 m to 750 m. Drilling by GBG had also revealed that several of the gold-bearing areas were continuous, but the firm was referenced to describe different areas of focus for the ongoing drilling programme.
For immediate release
The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent.
Recent indicators have suggested somewhat firmer economic growth, and some tentative signs of stabilization have appeared in the housing market. Overall, the economy seems likely to expand at a moderate pace over coming quarters.
Readings on core inflation have improved modestly in recent months, and inflation pressures seem likely to moderate over time. However, the high level of resource utilization has the potential to sustain inflation pressures.
The Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Susan S. Bies; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Cathy E. Minehan; Frederic S. Mishkin; Michael H. Moskow; William Poole; and Kevin M. Warsh.
Well, guess I'm timing it!! I think we are hitting at least a short term top on both gold and gold stocks.
Do not like Commecials getting short again so much in a single week. Unlike prior years Central Bank Gold Sales Jan YTD, are way behind schedule. We are likely to see some significant sales to rattle the market, IMO. Although Central Banks unlikely to meet their 500 tonne goal this year, they will likely hit at least 450 tonnes.
FWIW, I still have 18% of my portfolio in gold stocks, so I am not exactly under invested in the sector...
Right now I like US & Canadian T-bonds and cash, thank you very much. Sold a bit of my USO and DBO oil funds today as well. US T Bond 5% yield is just fine with me during tax season, makes it much more relaxing.
As for gold $800, I hope gold hits and maintains $850 so my AAU rights and warrants into CKG stock bear some torque. Sold just a bit of my EPM as well at C$.95 the other day. Exercised my AUY warrants acquired in PP and sold deep Jan 08 covered calls. My 2 largest gold stock positions now are AAU/CKG and EPM. Have a smathering left of AGI, KGI and EDV which are so low cost I can't stand paying capgains.
Good luck, am glad to see you remain bullish on gold stocks and even more glad to see most of those political posts have ceased...
The golden slope of hope
Commentary: Contrarians worry because gold-timers are too exuberant
Hulbert, MarketWatch
Last Update: 12:01 AM ET Jan 30, 2007
ANNANDALE, Va. (MarketWatch) - At the end of December, I reported that contrarians were expecting gold to outperform stocks in 2007.
So far so good for that contrarian forecast, with gold bullion at more or less a breakeven. See Dec. 27 column
Nevertheless, gold timers have so quickly jumped on the bullish bandwagon in recent weeks that contrarians are beginning to wonder about their forecast for the entire year.
Consider the Hulbert Gold Newsletter Sentiment Index (HGNSI), which reflects the average recommended gold market exposure among a subset of short-term gold timing newsletters tracked by the Hulbert Financial Digest. As of Monday night, the HGNSI stood at 67.9%. This is too high, no matter how you look at it.
For example, the HGNSI stood at 25% as of my Dec. 27 column. So, the editor of the average gold timing newsletter has become more than twice as bullish in the course of a month.
The high level of current bullishness is also evident in what happened to the HGNSI on Monday. Even though gold bullion fell during the day's trading session, the average gold timer became significantly more bullish. For the day, the HGNSI jumped more than 14 percentage points.
These developments are worrisome, according to contrarian analysis, because the markets rarely behave in the ways that the majority expects them to. Contrarians would be far more comfortable in forecasting a strong gold market if the gold timers on balance weren't so exuberant.
A good illustration of the wall of worry that bull markets like to climb is what happened to gold sentiment in early 2002, just as gold bullion was rising above the $300-per-ounce level. Between February and July of that year, during which gold bullion produced a net gain of around $10 per ounce, the HGNSI dropped from 90% to minus 23% (with the negative level indicating that the average gold timer was net short the market).
In other words, in the wake of a 3% rise in gold bullion, the average gold timer reduced his gold market exposure by more than 110 percentage points. Now that's a wall of worry, and contrarians were not at all surprised that gold thereafter entered into a multi-year bull market.
The contrast to today's situation couldn't be more complete. In the wake of a rise in gold bullion of similar magnitude to what took place five years ago, the average gold timer - far from reducing his exposure - has more than doubled it.
Unless the gold timers markedly reduce their exuberance, contrarians seriously doubt that the gold market will respond any where near as bullishly over the next year as it did following 2002's wall of worry.
_______________
Sold about 35% of my CKG at C$6.75
central bank gold sales
http://amarks.homestead.com/CBGold.html
GREAT Basin Gold (GBG), a gold exploration firm, is to complete a R260m empowerment deal with Tranter Gold, reported Business Report citing Ferdi Dippenaar, CEO and president of GBG.
GBG would like to close the deal in the first quarter in which Tranter would buy a 26% stake in GBG's R1bn Burnstone project, equal to a 13% stake in GBG, Dippenaar told Business Report.
Tranter is led by Sipho Nkosi who is the former head of Eyesizwe Coal which merged with Kumba Resources last year to form Exxaro Resources, Business Report said.
No more political posts on this board please!
It's tax season, I don't have the time to read through all this malarky...
Central Bank Gold Sales
http://amarks.homestead.com/CBGold.html
Dippenaar's great leap of faith
Michael Coulson
Posted: Fri, 19 Jan 2007
[miningmx.com] -- AT some stage in their careers, many executives in big companies are faced with a choice: stay comfortably where they are, even though the chances of further promotion are limited, or take the risk and move on and out to a more senior position in a smaller operation.
One who took the latter course was Ferdi Dippenaar when he took the role of CEO of Great Basin Gold (GBG) in December 2005, six months after that company first approached him and at the third time of asking.
For years, Dippenaar had been seen as Harmony CEO Bernard Swanepoel’s right-hand man. But both are in their mid-40s, and with Swanepoel seemingly a fixture, Dippenaar had got as far at Harmony as he could. It’s possible, too – though he doesn’t say so – that he also felt a little sidelined from the main action in his role as executive director of corporate affairs.
However, GBG offered him the opportunity to build up his own mining group. The Canadian-based explorer, whose main original project was the HDB venture in Nevada, bought the Burnstone project in South Africa’s South Rand gold basin, about 80km south-east of Johannesburg.
The two make an interesting package. HDB is a relatively short-life mine that should come into production in 2008 and almost immediately hit its full capacity of 160,000 oz/year of gold equivalent (including 760,000 oz of silver). Burnstone, which was assembled over many years by the veteran geologist John Handley, is a typical, but relatively shallow, long-life South African mine that, if all goes well, will build up slowly to full production of 214,000 oz in 2011.
So the strategy is clear: use HDB as a cash cow and minimise, if not eliminate, GBG’s need to dilute its equity by raising capital for Burnstone. But how feasible is that?
The uncertainties are so great that back-of-the-envelope calculations are all that’s really possible. The first point is that another North American mining group – Hecla – is conducting advanced exploration and development work at HDB to take it into commercial production, which theoretically will earn it a 50% interest in HDB.
So only 50% of HDB output, equivalent to 80,000 oz, will accrue to GBG, plus a $50/oz royalty on the balance. GBG’s maximum cash commitment to HDB is $10m.
HDB’s total costs are estimated at $258/oz. At the current price of around $600/oz, that gives a profit of around $350/oz – or $28m/year on 80,000 oz. Over the four years between 2008 and 2011 that grosses up to $112m, or R820m at the current US dollar/rand exchange rate. Burnstone’s capex is estimated at R800m to production, or just over R1bn life-of-mine.
Those are heroic assumptions but show that it could just be possible and that GBG has a plausible game plan. In practice, too, Burnstone may not have to be financed entirely by equity.
Click Here to subscribe to our daily newsletterGBG listed on the JSE last October. In its prelisting document, net present values (NPVs) were calculated at $118m for HDB (of which only half is attributable to GBG) and $140m for Burnstone. But Dippenaar reckons that assets are broadly split 50:50 between the US and South Africa. At the listing, GBG also had cash on hand of $34m, while HDB covers only 5% of the Hollister property.
Both HDB and Burnstone are actively looking to increase their reserves, and Burnstone is also planning to explore several other properties on the outcrop of the South Rand basin. Moreover, the basic calculations for both projects were done at a gold price of $450/oz and at $1/R7. Gold at $600/oz and the US dollar at R7.30 make a big difference: in the prelisting presentation, Dippenaar said that at $600/oz Burnstone’s NPV is $523m.
Apart from anything else, that reflects a substantial extension of Burnstone’s life from the current projected 14 years.
The prelisting statement puts GBG’s objectives as to be a medium-tier producer with output of 500,000 oz of gold within three years by developing its existing projects into high-margin operations; acquiring prospective companies and/or assets; and focused exploration programmes.
It’s clear that GBG has ambitions that go well beyond its current HDB and Burnstone projects and it’s implicit that Dippenaar would ultimately like to do with GBG what Swanepoel did with Harmony.
South African investors haven’t gone overboard on GBG. The company undertook to make 20% of its equity available in South Africa – though there can be no guarantee that it’ll all be available to trade. In the first 30 days on the JSE, trading volume was 1.8 million shares – but more than one million of that was on one big day and most days trade is negligible.
The range since listing is 2,000c to 1,090c, and the latest – 1,230c – is much closer to the bottom end. It equates to a market cap of R1.4bn, exactly the same as the figure in Canada immediately before the listing.
It’s too early to tell whether Dippenaar’s leap of faith will be justified. Experienced investors need no reminding that, however impressive geologists’ reports and drill results may be, only when you actually get underground can you be confident of a project’s success.
So far, it all looks good. And as progress reports are published this year, we’ll see whether GBG can justify its share price moving up towards those NPV calculations as HDB nears production.
Sold USO and switched to DBO. DBO should be less volatile given how DBO manages trading of contango and backwardation. Both have .5% management fees.
Thanks basserdan...
bought a small position of USO this morning
Bought 100 USO $44.34 $4,434.00
Central Bank Gold Sales
http://amarks.homestead.com/CBGold.html
YTD actual sales are now 96.0 tonnes versus expected 149.0 tonnes. About 53 tonnes behind scheduled sales.
McBeanburger, thanks for article, yes it is interesting...
http://news.goldseek.com/GoldSeek/1168362120.php
KastelCo, good educational video for your kids...
http://www.break.com/index/effect_of_drugs_and_alcohol_on_spider_webs.html
Russians and PGM metals
like this part:
When Almaz was recently asked to say what it planned to do about the delay in abolishing PGM quotas and the parallel delay in issuing export quotas, an Almaz official, who refused to give his name, referred the question to ""the person you need [who is] currently away, and he may not appear today and tomorrow.” Asked to identify him by name, the source said he "does not know him." Asked how it is possible to know his movements, but not his name, the source claimed “our company is a big one”. That's wishful thinking -- if and when Putin signs the abolition decree, Almaz is likely to shrink to the vanishing-point.
_____
Norilsk Nickel platinum group metal exports halted by Kremlin delays
By: John Helmer
Posted: '06-JAN-07 19:00' GMT © Mineweb 1997-2006
MOSCOW (Mineweb.com) --The London bullion market was busy cutting platinum $16 per ounce, and palladium $2 per ounce, in Friday trading, in lockstep downwards with gold -- apparently oblivious of a serious supply disruption in Moscow.
Starting from January 1, Norilsk Nickel, the single largest exporter of palladium in the world, is unable to obtain the government export quotas it requires to ship abroad platinum, palladium, or rhodium. The only source of Russian palladium that may reach the market for the time being is the metal which the state stockpile agency Gokhran has been holding for years now in a bank vault in Zurich.
Norilsk Nickel spokesman, Viktor Borodin, acknowledged there has been a delay in export quotas for platinum group metals (PGMs). He told Mineweb this has happened before, with delays that have in the past stretched for five months or longer. The "company will fulfill its obligations to traders and customers,"he noted, without explaining how timely delivery can be effected. There is no predicting when exports may resume, Borodin added.
What has happened to delay Russian PGM exports is easier explained than mended, because the quotas are linked to the slowness with which the United States, then a handful of other states, have tried to slow down Russia's accession to the World Trade Organization (WTO).
Several months ago, President Vladimir Putin received the text of a draft decree abolishing the traditional Russian mechanism for annual export quotas on PGM and diamonds. The gold trade was deregulated several years ago, but the government hung on to the restrictions for PGM and diamonds, because they gave leverage, and more, to state officials who supervised the process; and because Russia's trade negotiators wanted to use an offer to abolish the quotas as a bargaining card in the WTO negotiations.
It was for the latter reason, more than the former, that there has been a delay in Putin's signing the decree. In parallel, and anticipating problems with the WTO, Norilsk Nickel says it filed its annual application for an export quota for the year 2007 back in October. That has been approved at the Finance Ministry, but not by the Prime Ministry, which has been taking its cue from the Kremlin.
In the first half of 2006, Norilsk Nickel reports that it sold 1.5 million oz of palladium, almost all to export markets, for $559 million. The physical volume was down 1%, compared to H1 2005, but the revenues were up 37% year on year. Platinum volume in the same period was 336,000 oz and sold for $474 million -- volume was up 34%, revenues 26%, compared to the year before.
Rhodium production and sales data are not released by the company. Reporting the market consensus, Rob Edwards of Renaissance Capital estimates Norilsk's annual production of rhodium at 115,000 oz'; at current rhodium price highs in the marketplace, company revenues from rhodium may exceed the totals for palladium and platinum. Altogether, PGM sales account for about a third of Norilsk Nickel's revenues.
Delaying these sales for weeks or months will not matter to the revenue bottom-line for Norilsk Nickel if deliveries eventually catch up, and in the meantime prices rise on speculation of a lengthy period of disequilibrium between demand and supply. Upward pressure on the platinum and rhodium highs will be problematic for physical speculators, because there is no telling when a Putin signature will put an end to the delay.
Russian negotiators for accession to the WTO have already agreed to abolish the trade restriction on gems and precious metals, and in 2004 formulation of the presidential decree dismantling the old quota system started at the Ministry of Finance, headed by Alexei Kudrin. Kudrin is a safe pair of hands for a bureaucrat, but his knees turn to water when he passes through the Kremlin gate. He has not been able to persuade the president's advisors to move ahead of WTO accession with the quota abolition decree.
When resistance to Russia's joining the trade body by some WTO member states, led by the US, delayed agreement on accession, the presidential staff pigeon-holed Kudrin's draft decree. The Bush administration finally agreed to accession a few weeks ago, but there remain other, mostly procedural obstacles to completing the accession process. A source at the Ministry of Economic Development and Trade confirmed it has approved the abolition of the quotas. Lower-level government officials are hopeful the hold up at the Kremlin will end with Putin's signature during January -- unless further delays materialize in the WTO process.
A new spokesman at the Finance Ministry, Andrei Saiko, claimed the draft decree has been accepted in the Kremlin, but he could not say when the signature will be attached. He referred the question to Gokhran, which is an agency subordinate to Finance, but with a mind of its own. Olga Medunova told Mineweb she hasn't heard anything about the fate of the decree.
Gokhran remains the last relic of the Soviet system of PGM control, and it jealously and secretly guards its prerogatives. The size of the palladium stockpile in Switzerland remains a Russian state secret, even if Swiss bankers know the number precisely, and Swiss Customs publish regular bulletins when the palladium is sold out of the vault, and is exported from Switzerland to the US, Japan, or other destinations.
Even more secretive is another Finance Ministry agency in Moscow called Almazjuvelirexport (Almaz for short). It used to house the trading brains of the Soviet Union's PGM sales department; one man, Sergei Gorny, a deputy chief of Almaz, was the powerful figure in charge of releasing the metal -- Norilks's annual production, other mined platinum, and stockpiled PGM -- on to the market. For a time in 2002 and 2003, Gorny had hopes of obliging Norilsk Nickel to work with Almaz in a joint venture for marketing PGM in international markets. But the joint venture didn't suit the two oligarchs, Vladimir Potanin and Mikhail Prokhorov, who think of Norilsk Nickel's sales revenues as iintimately connected to their own pockets. Putin understood as much, and they were never powerful enough to persuade the Kremlin to privatize Almaz's US subsidiary and allow them to buy it.
Gorny hung on to his restricted sales function, but he has been slowly slipping on the deregulation banana-skin ever since, kept upright only by the intransigence of the US in the WTO negotiations.
Almaz retains its power to trade state stockpiled PGM on behalf of Gokhran, and if the export delay continues, Almaz might tempt the market into bidding higher for the Zurich stocks. Almaz is not talkative about its intentions. The last time Gorny spoke to Mineweb was in July 2003, when he claimed the joint venture with Norilsk Nickel "is still in the process of establishment. It doesn't carry out any operations yet." Asked to comment on whether there had been a change in government policy regarding coordination of sales of PGM between the government and Norilsk Nickel, Gorny replied that coordination is going on "in a working order". Both remarks were obfuscation.
When Almaz was recently asked to say what it planned to do about the delay in abolishing PGM quotas and the parallel delay in issuing export quotas, an Almaz official, who refused to give his name, referred the question to ""the person you need [who is] currently away, and he may not appear today and tomorrow.” Asked to identify him by name, the source said he "does not know him." Asked how it is possible to know his movements, but not his name, the source claimed “our company is a big one”. That's wishful thinking -- if and when Putin signs the abolition decree, Almaz is likely to shrink to the vanishing-point.
central bank gold sales
YTD actual sales are now 94.1 tonnes versus expected 139.4 tonnes. About 45 tonnes behind scheduled sales.
http://amarks.homestead.com/CBGold.html
your comment:
"let's watch and see how the etf behaves for a bit relative to the real world "
so far, has closely tracked the NAV intraday. look at chart to far right which is likely 30minute delay based upon reuters quotes for these 4 commodities :
http://www.dbfunds.db.com/dba/weights.aspx
"Ticker: DBA
Last Update 08-Jan-2007
04:14 PM
Price 24.98
DB Agriculture Index Level* 85.17
Indicative Intra-day
NAV** 24.87
Last end of day
NAV*** "
Really like to track the NAV intraday...
also, broad commodity fund DBC which has been around for 10 months has enjoyed tight bid/ask relationship relative to its NAV
http://www.dbfunds.db.com/dbc/index.aspx
(yes, DBA is less than 3 days old since IPO at $25)
http://www.investorshub.com/boards/read_msg.asp?message_id=16056858
thanks, DBA is 25% each of wheat, corn, soy, and sugar#11, but rebalanced only once each year in November, current weightings here:
http://www.dbfunds.db.com/dba/weights.aspx
also via this link above, see chart at far right which gives intraday NAV of DBA (likely 30 minute delay):
"Indicative Intra-day NAV** 24.87 " (per chart at right)
"Last end of day NAV*** 24.897 "
(thus change of -$.027 for today)
DBA is a long term investment for me, glad to find a cheap means to invest in a agricultural commodity index. Just took a small starter position. Agriculture commodities (staple goods) should do better than more cylical commodities (e.g. base metals) in a recession. Also, somewhat of a hedge to my natgas working interest/royalty business (El Nino warming bad for natgas, but drought (less rainfall over midwest) would be good for agricultural commodities).
Remain very bullish LONG TERM on natgas and drilling more long life wells.
http://www.energypulse.net/centers/article/article_print.cfm?a_id=1397
would be interested in your following corn, wheat & soybeans!:
"I am going to chart them together and watch; might as well add Corn, wheat and soy beans . but that seems like too many charts ~ I do not trade anything but stocks so I am not sure if it makes sense to watch these other charts …"
since there is NOW a way to trade these 3 grain commodities plus sugar via DBA:
http://www.investorshub.com/boards/board.asp?board_id=7945
thanks, interesting point on the global non-USA yield curve being steep...
New board.
Thanks for Faber link. Picked up some DBA at $24.96
DBA is a new commodity ETF invested in agricultural commodities – corn, wheat, soy beans and sugar.
Finally, a decent/cheap means to get into agricultural commodities.
http://www.dbfunds.db.com/
http://www.resourceinvestor.com/pebble.asp?relid=27788
[miningmx.com] -- A MEMBER of the 12-strong European Central Bank (ECB) system may have bought gold at the year-end, according to The Telegraph, a British newspaper.
An ECB spokesman told The Telegraph that member banks had bought gold "once or twice" since the euro launch in 1999. He called the latest purchase an end-of-year "technical" adjustment.
However, The Telegraph said that a substantial purchase of gold by an ECB member, possibly Italy, would have a positive impact on investor psychology as the main central banks had been sellers of gold in the past.
Central Bank Gold Sales
* Per top 2007 chart, YTD actual sales are now 92.5 tonnes versus expected 129.8 tonnes. About 37 tonnes behind scheduled sales.
http://amarks.homestead.com/CBGold.html
don't hold your breath...:
"under the impression that Tranter had to pay their own way at market value for everything they got."
Tranter will be given essentially a free ride for their shares, IMO, e.g. a loan to purchase shares at no interest or some other very generous discount. Best to just assume 20% dilution for Tranter BEE deal, this should be a good ballpark estimate. FWIW, I would be pleasantly surprised if it was under 15% dilution.
don't hold your breath...:
"Tranter had to pay their own way at market value for everything they got."
Tranter will be given essentially a free ride for their shares, IMO, e.g. a loan to purchase shares at no interest or some other very generous discount. Best to just assume 20% dilution for Tranter BEE deal, this should be a good ballpark estimate. FWIW, I would be very surprised if it was under 15% dilution.