Monday, December 31, 2007

Indian Gold Moving Up

Mumbai – 1st of January 2008. Indian gold is moving up and ended on a buoyant note for the year with gold futures traded close to an all time high of 850 USD per ounce amid a weakening US dollar and keen interest to conserve assets according to analysts.

Gold has always been traditionally seen as a valuable asset in India and this is looked at by some analysts as good benchmark for future trading in gold

"As the dollar has started weakening and there is risk aversion, gold is higher," commented K N Rahaman, senior analyst at Way 2 Wealth Securities Ltd.

"Everybody knows that in the beginning of January there could be fresh entrants in gold." The dollar was weaker against other major currencies on talks of interest rate cuts in the US.

A weaker dollar increases the appeal of gold which is more and more seen as a hedge against inflation.

Another analyst, T Gnanasekar, director at Commtrendz Research, said gold would remain range bound, "but as it is a thin market, anything can happen."

“The investor interest generated in gold is likely to continue and the bullish trend in the metal may gather momentum in January, 2008,” BN Vaidya and Associates’ chartered accountant Bhargava Vaidya said.

The open interest for the February gold on the Multi Commodity Exchange of India Ltd was at 14,162 lots, up from 13,967 in the previous session. Volume on Saturday was good at 1.117 kg.

February gold settled at $842.70 an ounce, up $10.9 on the Comex division of the New York Mercantile Exchange. Meanwhile, India’s gold output increased by 8.6% to 8.72 tonnes during the first seven months period ended November 2007.

Confidence in Indian gold moving up looks like to continue with investors expecting to turn a nice profit in the new year.

Sunday, December 30, 2007

Chinese Gold Futures Trading

China Gold Futures Trading is expected to be launched in the new year by one of China's major futures trading agencies, The Shanghai Futures Exchange (SFE)

This has been approved by The China Securities Regulatory Commission in a statement posted on its website Friday 28th Dec, 2007.

However, no date for the commencement was given.

The addition of gold futures trading on the Chinese market will add to the hedging options on what has been described as a fluctuating gold market according to some analysts.

Many financial institutions and investors work to offset risks through futures trading, especially in a volatile market and gold prices have fluctuated strongly recently.

The SFE stated earlier it would adopt strict regulations on the risk control
of gold futures after it initiated preparation work in September with
commission approval.

in 2006 China produced a record 240 tons of gold, a 7.15 growth of
percent year-on-year. In the first nine months of 2007, China produced
191.456 tons of gold, an increment of 22.175 tons, or 13.1 percent, from
the same period last year.

Most commodities, particularly gold and copper, are expected to outperform the market next year as production lags behind rising demand in the Asian countries.

United Overseas Bank Kay Hian analyst Zhang Xi wrote in a report, "We are still at the early stage of a secular bull market in the commodities sector. There is ample upside potential for all commodities, especially gold."

Growing inflationary concerns and a weakening US dollar, have prompted strong demand for gold as investors diversify their portfolios out of US dollar assets for hedging, Zhang indicated.

And Sun Hung Kai, Financial strategist with Castor Pang Wai- sun stated, "As the oil price will continue to increase next year, the gold price, as usual, will follow the uptrend, triggering large countries like China and India to have more gold reserves."

It looks all set for some strong activity in Chinese gold futures trading in 2008.

Thursday, December 27, 2007

Gold Price Predicted to Hit $US1000

THE price of gold is set to remain high in 2008, putting it on track to break $US1,000 an ounce for the first time, as the yellow metal continues to offer investors a safe haven from volatile financial markets and supply remains tight.

Mark Cutifani, The CEO of one of the worlds largest gold producers, AngloGold Ashanti, has expressed confidence about the strength of the world gold price.

"You can take gold anywhere in the world and there will be a buyer, which can't be said for many other commodities," he said in an interview.

Markets are tipping gold to rise to a 28 year high of $850 in the first quarter of 2008 and then hitting $1000 by December.

In 2007 gold climbed from a low of $243.50 range from a low of $601.9 to a high of $845.40 in November.

Mr Cutifani is predicting gold to remain above $US800 in 2008 with heightened demand. "Not taking into account factors such as the high oil price and instabilities in currencies".

He added, "Whether the macroeconomic environment will exert greater pressure on gold will be seen."

He also stated, in December that AngloGold Ashanti would close its hedge book. "We'll make a strategy statement in February about our long term approach."

Senior resources analyst Gavin Wendt from Fat Prophets agrees that gold supply will remain tight, with mine closures and fewer new discoveries, and as the cost of mining gold becomes more expensive. He believes its only a matter of time before the gold price moves up to $US1,000 mark.

"All of the factors that have been at work over the past few years, pushing the gold price higher, are very much still in play," Mr Wendt said. "We're going to see further weakness in the US dollar, which has to be positive for gold. We'll see the continuation of strong oil prices and that inflationary effect will be positive for gold."

In August, the vice chairman of one of the world's biggest gold miners - Newmont Mining Corp's Pierre Lassonde, told a gold conference in Western Australia that the price of gold would break $US1,000 within the medium term. The farsighted predictions of Mr Lassonde, a well-known gold bull, have been well founded even if his time frames are somewhat shortened. He correctly forecast gold to rise to the $US750 level, which it did in October 2007.

Mr Lassonde expects gold to be trading over the magic $US850 early in 2008, emphasized no doubt by the very real possibility of a US economic recession.

Argonaut Securities is also expecting the gold price to strengthen in 2008 and The World Gold Council states that gold offers good protection against exchange rate fluctuations, particularly the US dollar. The World Gold Council's Mr Graydon commented that the worsening of geopolitical tensions could also add to the case for a higher gold price.

Confidence that the gold price will rise has also led many of the world's largest gold companies to close down their hedge books in order to get exposure to spot market prices.

The investment bank Société Générale has recently collated figures to show that the global gold hedge book is now at its lowest level since 1992.

Companies that have closed or reduced their risk include some of the top world gold producers such as Canada's Barrick Gold Corporation and Newmont, Beaconsfield Gold NL, View Resources, Lihir Gold, Red Back Mining and Australia's largest miner, Newcrest Mining.

It looks like the gold price prediction to hit or even surpass the magic 1000 dollars an ounce is really on the cards.

Friday, December 21, 2007

China Buying Gold

The international giant nation of China is turning its attention to gold these days.

As the world scrabbles to keep currency buoyant and the US dollar weakens, China is buying gold and platinum as an investment and what looks like a hedge against the declining US dollar said Ralph Preston, senior market analyst with Heritage West Financial.

According to Larry Young, senior trader with Infinity Futures, in addition to the increasing manufacturing uses for gold and platinum, the Chinese are also buying the precious metals as a hedge in case Beijing decides to let the yuan float. The currency is only allowed to fluctuate in a range that is tied to the value of the U.S. dollar which could be a problem if the dollar continues to weaken.

"They're looking at several strategies" for trying to get the lowest price for their commodities, Young said.

Because of a worsening global economic outlook and financial-market uncertainty, the Chinese want the safe haven that gold and platinum offer even above Treasurys, Young said.

"They want something that they can touch and feel," Young said.

China has $1.3 trillion (€900 billion) in cash reserves of which nearly 65 percent is in U.S. Treasurys and only 1.6 percent in physical gold, said Bill Reynolds, investment adviser and commodity specialist with Wellington West Capital.

"This past year — rightfully so — their belief that the U.S. dollar was and will continue to devalue ... has had the Chinese government and others continuing to purchase gold," Reynolds wrote in an e-mail. "This, along with a more liberal Chinese government, which has allowed the citizens to now purchase more luxuries, such as jewelry."

As the world's most populous country, that demand will likely continue to support precious metals prices, Reynolds wrote. It seems that china buying gold for the future bodes well for the gold price, if not for the US Dollar.

Thursday, December 20, 2007

Record Gold Treasure Trove Found

20th December 2007
Is this the secret stash of Asterix and Obelix? A record breaking Treasure Trove of Gaulish gold coins has been found in a farmers field in France.

The hoard of coins, found in central Brittany was discovered by the French government agency, the Institut National de Recherches Archéologiques Préventives (INRAP). They have the right to explore any potentially significant site before a road or new building covers it forever. And this area is due for a new by-pass to be built.

The coins are believed to have been minted around 75 to 5BC and were likely buried in order to protect the Celtic tribes wealth just before, or during, the first Roman invasions of northern and western France

It is believed that they were all buried together but disturbed over the centuries by agricultural ploughing. "We found a single coin about 30cms down and then we started a systematic search," Mr Roy said. "We found 50 more in a single day and then, with the help of metal detectors, we located all the others."

The dig also unearthed the remains of a large manor house or farm, which is thought to have belonged to the "Osisme" people – a Celtic tribe living in the far west of the Breton peninsula.

"Treasure on this scale would only have been used for transactions between aristocratic families," Yves Menez, an archaeologist specializing in iron-age Brittany said. It had always been assumed that the Celtic nobility lived in fortified towns, not in the wild and dangerous countryside. "The reality must have been more complex," Mr Menez continued. Like all Gaulish coins, the 58 "stateres" and 487 quarter "stateres" found near to the village of Laniscat are copies of early Greek money.

Gauls once served as mercenaries in the armies of Alexander the Great. The money that they brought home were used as models for their own and some of the gold coins, rescued from the site of the proposed dual-carriageway, have the familiar Celtic monetary pattern of a horse on one side and a man's head on the reverse. Other coins have hitherto unknown designs, such as horses with human heads.

Coins were for the super-rich. "This is an exceptional discovery," said Mr Menez. "It represents a colossal fortune for the period. Each of these coins was like a 500 euro note today."

Further information on what to do if you find treasure trove can be found here: treasure trove.

So get digging, there could be a record gold treasure trove to be found in your back garden.

Friday, December 14, 2007

Japan Gold ETF to Support Global Gold Demand

Japan is ready to introduce the first true gold-backed ETF (exchange traded fund) according to State Street Global Advisors (Japan) Co, who are aiming to offer a gold EFT on the Tokyo exchange early in the new year.

David Collins, vice president in charge of marketing with State Street Global Advisors (Japan), stated that recent revisions to Japans Trust Business Law and Financial Instruments and Exchange Law have opened the door and loosened some of the restrictions on the listing of types of investment trusts that incorporate physical commodities.

Previously the Osaka Securities Exchange's version of a gold ETF had to be backed by bonds linked to the gold price and were not able to be exchanged for physical gold. As such, many investors stayed away considering this as not being a "true" gold ETF.
Collins stated that these regulatory changes in Japan have opened the door for the listing of new ETF products here.

"That's the plan. We are looking at maybe the first quarter of next year, and it will be a dual-listing very similar to what we did in Singapore," he went on, "Demand should be great. There is a very strong desire to diversify right now, and so there should be a great tailwind,"

Gold ETFs allow investors to participate in the gold market without actually having to own and store physical gold. The gold is stored in bank vaults and certificates of ownership are issued which can be traded rather like shares.

The Fortis Bank and Virtual Metals Research & Consulting, in their "Yellow Book" gold market report released earlier this week indicated that ETFs will continue to play a key role in supporting gold demand.

The biannual report stated ETF demand has been above 200 tons for the past three years and forecasts the total amount of gold held by various ETFs around the world will be well over 1,000 tons in the coming year.

"This estimate could be too low if new products are launched in the Middle East and Asia," the report said.

The "Yellow Book" estimates that in 2007, ETFs will have bought 241 tons of gold, which would mean that this relatively new investment tool will account for 6.3% of the total demand forecast for the year of 3,798 tons.

Japan Gold ETF Could indeed Support Global Demand in the coming year.

Wednesday, December 12, 2007

Chinese Billionaires to Buy up Gold

Buy gold is the cry from Chinese Billionaires! Many of Chinese wealthiest investors are selling off their shares and are about to invest almost 68 billion dollars into gold according to a top fund manager.

Wang Weilie, a fund manager who manages over $135 million dollars (1 billion yuan) on the Shanghai Gold Exchange on behalf of himself and his clients, has indicated that the so-called "Zhejiang clique" are about to pounce when Beijing opens up the spot market bullion trading and a futures contract launches early next year.

After accumulating 3 trillion yuan ($400 billion) from investments in red-hot real estate and stock markets, all of which have risen five-fold in the past two years, the wealthy group from eastern China is now looking for the next sure bet.

Wang says that's gold, and is expecting Chinese capital investment into gold over the coming two years to reach a record 500 billion yuan or$67.5 billion dollars US. This would launch China ahead of India as the worlds top buyer.

"We all agreed that upside room on stocks was limited, as was upside on property prices. But the gold price has only increased minimally, even after 20 years of China's reform and market opening," Wang told Reuters during a lunch with three business partners in Lujiazui, Shanghai's financial hub.

Coupled with inflation and global economic uncertainty, the redirection of Chinese capital towards domestic gold contracts will help spot prices more than double, says Wang, who says he once cornered two-thirds of the Chinese gold forward contract. "Spot gold prices will hit $2,000 in coming years," he stated.

Wang is also expecting a massive 15 percent of Chinas current market capitalization of 35 trillion yuan to move from stock investments to gold, meaning a good 5.25 trillion dollars is being earmarked for gold investment.

So when it comes down to when to buy gold, the astute wealthy Chinese investors say now and they are going to be right up there in the front of the queue!

Billionaires Buy Gold in Russia

People sit up and take notice when billionaires buy gold in vast quantities.

In Russia, for example, eight of the countries 10 wealthiest men have snapped up gold bullion mines like there is no tomorrow.

Billionaire Roman Abramovich, Russia's wealthiest man, will pay $400-million for a 40-per-cent stake in Highland Gold Mining Ltd., Russia's fourth-largest bullion producer. The sudden active attention of Russia's billionaires on gold comes just as the metal hit a 28-year-high in November and is now hovering around the 800 US dollars an ounce mark.

"Clearly these people have the financial wherewithal to invest wherever they want, so it speaks positively about gold," said Don Whalen, the executive chairman of Toronto's High River Gold Mines Ltd., which operates in Russia.

Other oligarchs (pronounced ollie'garks. A member of a small governing faction - The Russian oligarchs are business entrepreneurs who started under Gorbachev during his period of market liberalization ) with gold assets include Vladimir Potanin and Mikhail Prokhorov, who control Russia's largest producer OAO Polyus Gold; Suleiman Kerimov, who owns OAO Polymetal, Russia's third-largest producer; and Mikhail Fridman, an oil and banking magnate who set up a gold mining arm this year.

Oleg Deripaska, whose Basic Element also owns gold companies in Mongolia, in a recent interview with The Globe and Mail, indicated he would like to invest in more gold projects, perhaps with the help of a Canadian company.

And now this week, OAO Severstal, the Russian steel maker owned and run by billionaire Alexei Mordashov, stated that most of London's Celtic Resources Holdings PLC shareholders, which has gold projects in Kazakhstan, has tendered to a $328-million (U.S.) takeover bid.

When it comes to buying gold, the Russian Oligarchs are definitely making their position crystal clear, expecting gold to improve even more over the coming months and years and determined to get their slice of the pie.

Tuesday, December 11, 2007

The Mystery of the Gold Coins.

It seems gold coins are not just for collecting. They are also for donating to charity as well. All over the country anonymous donor or donors are dropping gold coins like confetti into the traditional Salvation Army Red Kettles.

Each year, over the past 12 years, a gold coin has been anonymously dropped into a Salvation Army Kettle during the holidays in the Paris community.

This year, according to Ken Hamilton, chairman of the kettle campaign, the coin mysteriously appeared in the red kettle which was set-up at Wal-Mart on Dec. the 1st.

And now another gold coin has turned up in a Nebraska red kettle collection. Salvation Army officials found the gold Friday while counting the day's cash haul in Grand Island. Captain Debbie Richardson says the coin is dated 1880 and bears a portrait of Lady Liberty and has the words United States of America stamped on it.
It's about the size of a nickel and was dropped in the kettle by an anonymous donor. A local coin dealer says it is worth around $200.

The Omaha Salvation Army has also found two gold South African Krugerrands in its red kettles so far this holiday season.

And an anonymous donor has made Christmas a whole lot merrier in northern Franklin County by dropping a gold coin into Salvation Army red kettles not once but twice.
The first, a 1910 $10 Indian head sealed in a plastic protective case, turned up at K-mart on Black Friday -- the day after Thanksgiving and the kickoff of the annual Red Kettle campaign.

"And we got a second one Saturday at Price Chopper," said Candace Breen, treasurer for the Malone Salvation Army unit.

This one, also preserved in a protective case, is an 1899 Liberty gold coin that she believes was also a $10 piece.

Each is worth between $900 and $1,000. "It's just fantastic," Breen stated.

She sent the coins off to the Salvation Army headquarters in Syracuse "because I really didn't know anyone around here" from whom to obtain an appraisal and determine a fair value. Once their worth is established, 90 percent of the money will be returned to the Malone unit for use on local Salvation Army needs, Breen said.

Just who is behind the gold coin donations remains a mystery but the Salvos are certainly not unhappy about it.

The Future of Gold

Gold prices around the world are having a slightly bumpy but steady road to higher values.

A recent slight drop, due in part to a fed rate cut in the US is only a pause in the general trend up. The rate cut by 25 basis points to 4.25%, will temporarily bolster the flagging dollar for a period but will not affect the value of gold in the long term.

Charles Nedoss, a gold analyst at the Peak Trading Group in Chicago, commented that the short-covering in the dollar right after the Fed decision led traders to lock in gains in the precious metal.

"With the recent strength in gold, you're seeing a little bit of profit-taking," Nedoss said. "Going forward, however, gold is supported by strong fundamentals," he continued. "Technically, we're holding onto levels that we need to."

"Traders were looking for a larger cut of the fed funds rate or at least a 50 basis points discount rate cut," said Kathy Lien, chief strategist at "Stocks are down sharply, carry trades have plummeted and the U.S. dollar has strengthened across the board."

However with the weaker dollar and higher debt this cannot be sustained and despite overseas shoring up of the dollar we can expect a further decline in the coming months.

Meanwhile, a report recently issued by Bloomberg earlier this week indicated that demand for gold jewellery in China could increase 20 per cent by the end of the year, which would make China the world's second-largest gold consumer.

In addition figures released by Commodity Online found that consumption of both gems and gold in India increased by 11 per cent on the five-year period ending in 2007.

Around 80 per cent of India's jewellery market is based on gold, with the country representing around 20 per cent of the world's gold consumption.

So as far as the gold price is concerned, it is likely that we can expect a fall after the holiday season and a fairly quiet January period, but then the rise is likely to resume again with some experts predicting a new plateau of 900-1000 US dollars per ounce in the new year.