AI
PRECIOUS METALS HIGHLIGHTS: Top Stories Of The Day
SINGAPORE (Dow Jones)--Central banks with large holdings
of U.S. Treasurys including China, Japan, Russia, Taiwan,
India, Singapore, Brazil and Korea are the most likely
candidates to add to their gold reserves over the next
few years, Deutsche Bank said in a report dated Friday.
COLOMBO (AFP)--Sri Lanka's central bank said it has been
buying gold to diversify its reserves amid volatile currency
markets, days after India announced it had
purchased 200 tons of the precious metal.
Silver may have trouble gaining more ground on gold--other
than temporary surges--until industrial demand picks up
sufficiently to give silver a stronger boost.
Nearby and most-active gold futures closed higher and briefly
hit the much-anticipated $1,100-an-ounce level Friday.
LONDON (Dow Jones)--Spot gold rallied to a record high above
the key level of $1,100 per troy ounce Friday, extending
this week's dramatic bull run.
LONDON (Dow Jones)--Spot gold edged higher Friday as the
dollar weakened, bringing it closer to a break above a
key level and a new record high.
-By Elisabeth Behrmann, Dow Jones Newswires; 61-2-8272-4689 elisabeth.behrmann@dowjones.com
--
Gold Appreciation To Create Tremendous Inflation In India*****
Tuesday, November 3, 2009
by Eric deCarbonnel
Gold-eagle explains why Indians love gold
Why Indians Love Gold
From time immemorial Indians have been in love with Gold.
The predominant Hindu population finds mention of gold as
a commodity of immense value in their religious books.
Some of these religious books like the "Vedas, Puranas,
Upnishads" are believed to date back a few hundred thousand years.
The revered "GITA" is believed to be a sermon by Lord Sri
Krishna given more than 5000 years back.
In most religious books there is mention of gold as a metal of
immense value.
Hindus believe that Gold is a metal of demi-Gods and monarchs.
From ancient times Gold (and gold jewelry) has enjoyed
safe-heaven status.
In India Gold continues to enjoy safe heaven status even today.
Gold jewelry is worn by all women irrespective of their religious beliefs.
A large number of Indian men also wear Gold jewelry as neck
chains, bracelets, and rings (on fingers).
Gold jewelry is popular among Indians for the following reasons.
1) Jewelry is worn for ornamental value on all social
functions, festivals and celebrations.
2) At one point in time there was 97% income tax in India.
This resulted in large scale tax evasion.
Large population spread over a significant area and lack
of adequate computerization are some other reasons
for tax evasion.
The tax reforms of the last several years have indeed
reduced the level of evasion.
Still a lot remains to be done.
It is believed that there is a parallel economy running in
the country.
The cash component of the unaccounted wealth can not be kept
in Banks (if kept in Banks it would have to be accounted).
This unaccounted wealth can not be kept in safe deposit
vaults as it has to be hidden from the tax authorities.
Gold jewelry is the most convenient option as it occupies
very little space (so easy to hide) and does not have
the risk of being damaged during storage.
3) The Indian rupee is not convertible on capital account.
This means that it is illegal for an Indian (resident
in India) to keep any foreign currency in his possession
or in his portfolio.
Foreign exchange regulation act (FERA) and conservation
of foreign exchange and preservation of smuggling activities act
(COFEPOSA) prescribe deterrent punishments for violators
(including detention for long periods without bail or trial).
It is also illegal to keep Gold in unworked form (pure gold).
As a result, in the prevalent scenario, Gold jewelry is
the only way to protect against depreciation of
Indian rupee against US$.
4) A large population in India lives in villages.
A large number of very poor people do not have proper houses to live.
These poor people have very little assets.
Whatever little they have they must keep in their possession
24 hours a day (as they do not even have a house to keep
their belongings).
Gold jewelry worn on their self is the only option.
When in crisis they mortgage it or sell it.
Floods and drought force many people living in villages
to flee to a safer place.
It is easy to carry gold jewelry while fleeing in distress.
5) In the long term the Indian rupee price of Gold has been
in an up-trend.
Inflation has continuously, year after year, eroded the
value of currency.
Real estate has been the best bet.
Gold jewelry has been the next best option.
Despite the fact that $ price of Gold has been in a bear
trend, Indians continue to believe that Gold is a hedge
against inflation.
The following is the Indian rupee Gold price chart from
1993 onwards.
The downward price movement from 1996 has been for
two reasons.
Firstly, $ price of Gold has gone down by 25% in the
same period.
Secondly, the Indian Gold import regulations have been liberalized.
Some benefits of liberalization have been passed on to
the consumers in the form of lower rupee prices.
6) Due to import duty and other limitation on imports,
the price of Gold in India is always higher than
the international price.
Therefore, India continues to import Gold year after year.
Yearly Indian Gold imports
India as a country is heavily long gold
Based on India’s yearly gold imports, there should be over
10,000 tons of gold circulating in India in the form
of jewelry.
These 10,000 tons of jewelry is worth about $381 billion
at $1080/oz.
This huge supply of gold jewelry acts as a second
unofficial currency in India.
The appreciation of gold will create tremendous inflation
in India!
When global gold prices soar, gold owners in India (nearly
the entire population) are suddenly going to find
themselves much richer.
With their new found wealth and greatly increased purchasing
power, they will be willing to pay a lot more for what
they want (food, clothes, etc…).
So rising gold prices are going to result in out of control
inflation in India, with will lead to a surge of raw
material imports (as is already happening in China).
Implications are staggering
Consider these two facts:
1) Both gold and the yuan are undervalued by over 40%.
2) China's population is 1.3 billion and India's population
is 1.2 billion.
Together, China and India make up 38.5 percent of
the world’s 6.5 billion people.
As the dollar collapses and gold/yuan appreciate, India’s
and China’s enormous populations are going to start sucking
up the world’s raw goods (food, energy, metals) with
their increased purchasing power.
pencil icon, that
Gold hit an all-time high this week, and it is rising
in the face of rising currencies -
Gold typically falls when currencies are rising, so many
analysts are suggesting that people are starting to view gold
as the new reserve currency -
On the chart below you can see that gold is being contained
by a rising trend channel, so the next move should be back
to the bottom of that channel;
however, if people are moving away from paper currency,
there is the possibility for gold to go ballistic -
Last trade 1104.94 Change +0.72 (+0.07%
Open 1104.22 Previous Close 1104.22
High 1110.74 Low 1102.93
Bid 1104.94 Ask 1105.43
2009-11-09 12:41:58, 0 min delay
Got Gold Red Lake penny play
WHY RED LAKE GOLD BELT?
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=41185478
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=41481973
http://investorshub.advfn.com/boards/board.aspx?board_id=11788
God Bless
SINGAPORE (Dow Jones)--Central banks with large holdings
of U.S. Treasurys including China, Japan, Russia, Taiwan,
India, Singapore, Brazil and Korea are the most likely
candidates to add to their gold reserves over the next
few years, Deutsche Bank said in a report dated Friday.
COLOMBO (AFP)--Sri Lanka's central bank said it has been
buying gold to diversify its reserves amid volatile currency
markets, days after India announced it had
purchased 200 tons of the precious metal.
Silver may have trouble gaining more ground on gold--other
than temporary surges--until industrial demand picks up
sufficiently to give silver a stronger boost.
Nearby and most-active gold futures closed higher and briefly
hit the much-anticipated $1,100-an-ounce level Friday.
LONDON (Dow Jones)--Spot gold rallied to a record high above
the key level of $1,100 per troy ounce Friday, extending
this week's dramatic bull run.
LONDON (Dow Jones)--Spot gold edged higher Friday as the
dollar weakened, bringing it closer to a break above a
key level and a new record high.
-By Elisabeth Behrmann, Dow Jones Newswires; 61-2-8272-4689 elisabeth.behrmann@dowjones.com
--
Gold Appreciation To Create Tremendous Inflation In India*****
Tuesday, November 3, 2009
by Eric deCarbonnel
Gold-eagle explains why Indians love gold
Why Indians Love Gold
From time immemorial Indians have been in love with Gold.
The predominant Hindu population finds mention of gold as
a commodity of immense value in their religious books.
Some of these religious books like the "Vedas, Puranas,
Upnishads" are believed to date back a few hundred thousand years.
The revered "GITA" is believed to be a sermon by Lord Sri
Krishna given more than 5000 years back.
In most religious books there is mention of gold as a metal of
immense value.
Hindus believe that Gold is a metal of demi-Gods and monarchs.
From ancient times Gold (and gold jewelry) has enjoyed
safe-heaven status.
In India Gold continues to enjoy safe heaven status even today.
Gold jewelry is worn by all women irrespective of their religious beliefs.
A large number of Indian men also wear Gold jewelry as neck
chains, bracelets, and rings (on fingers).
Gold jewelry is popular among Indians for the following reasons.
1) Jewelry is worn for ornamental value on all social
functions, festivals and celebrations.
2) At one point in time there was 97% income tax in India.
This resulted in large scale tax evasion.
Large population spread over a significant area and lack
of adequate computerization are some other reasons
for tax evasion.
The tax reforms of the last several years have indeed
reduced the level of evasion.
Still a lot remains to be done.
It is believed that there is a parallel economy running in
the country.
The cash component of the unaccounted wealth can not be kept
in Banks (if kept in Banks it would have to be accounted).
This unaccounted wealth can not be kept in safe deposit
vaults as it has to be hidden from the tax authorities.
Gold jewelry is the most convenient option as it occupies
very little space (so easy to hide) and does not have
the risk of being damaged during storage.
3) The Indian rupee is not convertible on capital account.
This means that it is illegal for an Indian (resident
in India) to keep any foreign currency in his possession
or in his portfolio.
Foreign exchange regulation act (FERA) and conservation
of foreign exchange and preservation of smuggling activities act
(COFEPOSA) prescribe deterrent punishments for violators
(including detention for long periods without bail or trial).
It is also illegal to keep Gold in unworked form (pure gold).
As a result, in the prevalent scenario, Gold jewelry is
the only way to protect against depreciation of
Indian rupee against US$.
4) A large population in India lives in villages.
A large number of very poor people do not have proper houses to live.
These poor people have very little assets.
Whatever little they have they must keep in their possession
24 hours a day (as they do not even have a house to keep
their belongings).
Gold jewelry worn on their self is the only option.
When in crisis they mortgage it or sell it.
Floods and drought force many people living in villages
to flee to a safer place.
It is easy to carry gold jewelry while fleeing in distress.
5) In the long term the Indian rupee price of Gold has been
in an up-trend.
Inflation has continuously, year after year, eroded the
value of currency.
Real estate has been the best bet.
Gold jewelry has been the next best option.
Despite the fact that $ price of Gold has been in a bear
trend, Indians continue to believe that Gold is a hedge
against inflation.
The following is the Indian rupee Gold price chart from
1993 onwards.
The downward price movement from 1996 has been for
two reasons.
Firstly, $ price of Gold has gone down by 25% in the
same period.
Secondly, the Indian Gold import regulations have been liberalized.
Some benefits of liberalization have been passed on to
the consumers in the form of lower rupee prices.
6) Due to import duty and other limitation on imports,
the price of Gold in India is always higher than
the international price.
Therefore, India continues to import Gold year after year.
Yearly Indian Gold imports
India as a country is heavily long gold
Based on India’s yearly gold imports, there should be over
10,000 tons of gold circulating in India in the form
of jewelry.
These 10,000 tons of jewelry is worth about $381 billion
at $1080/oz.
This huge supply of gold jewelry acts as a second
unofficial currency in India.
The appreciation of gold will create tremendous inflation
in India!
When global gold prices soar, gold owners in India (nearly
the entire population) are suddenly going to find
themselves much richer.
With their new found wealth and greatly increased purchasing
power, they will be willing to pay a lot more for what
they want (food, clothes, etc…).
So rising gold prices are going to result in out of control
inflation in India, with will lead to a surge of raw
material imports (as is already happening in China).
Implications are staggering
Consider these two facts:
1) Both gold and the yuan are undervalued by over 40%.
2) China's population is 1.3 billion and India's population
is 1.2 billion.
Together, China and India make up 38.5 percent of
the world’s 6.5 billion people.
As the dollar collapses and gold/yuan appreciate, India’s
and China’s enormous populations are going to start sucking
up the world’s raw goods (food, energy, metals) with
their increased purchasing power.
pencil icon, that
Gold hit an all-time high this week, and it is rising
in the face of rising currencies -
Gold typically falls when currencies are rising, so many
analysts are suggesting that people are starting to view gold
as the new reserve currency -
On the chart below you can see that gold is being contained
by a rising trend channel, so the next move should be back
to the bottom of that channel;
however, if people are moving away from paper currency,
there is the possibility for gold to go ballistic -
Last trade 1104.94 Change +0.72 (+0.07%
Open 1104.22 Previous Close 1104.22
High 1110.74 Low 1102.93
Bid 1104.94 Ask 1105.43
2009-11-09 12:41:58, 0 min delay
Got Gold Red Lake penny play
WHY RED LAKE GOLD BELT?
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=41185478
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=41481973
http://investorshub.advfn.com/boards/board.aspx?board_id=11788
God Bless
Discover What Traders Are Watching
Explore small cap ideas before they hit the headlines.
