A New Gold Rush has started!
Shops in Abu Dhabi are reporting a 300 percent increase in the buying gold. One Jewelery shopkeeper reported selling over 5 kilos of gold coins and gold bars in just a few hours.
All since the price of gold has dropped by just 15 Dh per gram.
Most of the customers were shopping for Eid Al Fitr and Onam, a festival of Keralties which ended on Thursday but many were reported as buying gold for investment purposes expecting the price of gold to go up fairly soon according to a reporter from the Khaleej Times.
Coins sold out fast as customers rushed the shops to buy whatever gold coins and bars they could.
According to Sheejan Thomas, the manager of Joy Alukkas Jewellery at Hamdan in Abu Dhabi, “We have done over 200 per cent more business this time as compared to the same time last year. The reason is obvious: low prices. Residents are purchasing both 22 and 24 carat gold for investment and wedding purposes. We finished our stock of gold coins and biscuits in two days.
“We have mostly Asian customers, particularly from India. As Asians crave for 22 carat gold jewellery, we deal in them only. We don’t sell 24 carat gold jewellery.”
A cashier at Pure Gold in Dubai’s oldest gold market, Uzair Alam, stated, “For the past three days, our shops have been completely packed with customers purchasing jewellery.” He went on, “In Dubai, our business has been all-time high, reaching over 300 per cent as compared to September last year. People are purchasing jewellery as if they are being given free.”
And Cushar Patni, manager of Ajanta Jewellers in the capital, confirmed, “We made 200-300 per cent more business than the same period last year. “This is because of the low prices of gold. We don’t think the prices will go down further. They are, in fact, going up gradually. Many people are purchasing gold this time for investment purposes.” He said.
It seems the fast east market has a lot of faith in the gold price going up. Either that or they know something we don't.
Monday, September 15, 2008
Friday, July 25, 2008
Hong Kong Gold ETF
Hong Kong will launch its first gold exchange traded fund ( Gold ETF) in a few days attracting Hong Kong investors keen to cash in on gold to preserve their wealth and hedge against rising prices.
The Hong Kong's market regulator, the Securities and Futures Commission, has given the green light for the launch of the SPDR Gold Trust by the World Gold Council and investment firm, State Street Global Advisors.
SPDR Gold Shares is an ETF that will hold allocated pooled gold, stored in a vault in London, as its asset. Each share will represent one-tenth of an ounce of gold. A minimum order of 10 shares, or one ounce of gold will be required to start off an account.
SPDR Gold Shares already trade in New York, Japan and the Hong Kong market is seen as a new and potentially wealthy market to capitalize on.
The exchange-traded fund will be listed on the Hong Kong Stock Exchange. It will track the price of gold which it keeps in a HSBC vault in London.
Sammy Yip, Head of Exchange-Traded Funds (Asia Pacific), State Street Global Advisors, stated, "You may trade these gold shares in exactly the same way you trade any stock."
Hong Kong's listing follows a very similar fund launched in Singapore and Tokyo, but the fund's manager was quick to state there will be no rivalry between the three markets.
"We are talking about three different markets and the underlying investors' characteristics are also different. So I believe the listings basically will be able to offer more to investors to participate in this product," said Yip.
However this ETF will suffer the same disadvantages as other ETFs traditionally have, including the fact that investors will not be able to redeem any gold of course as they will not actually own any gold. This is simply an investment in the value of the unspecified quantity of gold held by SPDR and is subject to the variations that beset any investment vehicle.
James Turk, the noted gold authority, stated recently, "Gold is we all know as an inflation hedge, but not everyone understands that it is also a catastrophe hedge. Gold is both a tangible asset and money. Consequently, gold is the only money that is not someone's liability. In other words owning physical gold does not have counterparty risk, which is an attribute that is becoming increasingly important given the fragility of the banking system."
So, in this case, a more secure gold investment would be to buy gold coins or gold bars that you own 100% and store them securely.
In that situation gold and silver is truly owned directly by you with no counterparty risk. When it comes to your gold and silver bullion, no risk is what it is all about when it comes to your assets!
The Hong Kong's market regulator, the Securities and Futures Commission, has given the green light for the launch of the SPDR Gold Trust by the World Gold Council and investment firm, State Street Global Advisors.
SPDR Gold Shares is an ETF that will hold allocated pooled gold, stored in a vault in London, as its asset. Each share will represent one-tenth of an ounce of gold. A minimum order of 10 shares, or one ounce of gold will be required to start off an account.
SPDR Gold Shares already trade in New York, Japan and the Hong Kong market is seen as a new and potentially wealthy market to capitalize on.
The exchange-traded fund will be listed on the Hong Kong Stock Exchange. It will track the price of gold which it keeps in a HSBC vault in London.
Sammy Yip, Head of Exchange-Traded Funds (Asia Pacific), State Street Global Advisors, stated, "You may trade these gold shares in exactly the same way you trade any stock."
Hong Kong's listing follows a very similar fund launched in Singapore and Tokyo, but the fund's manager was quick to state there will be no rivalry between the three markets.
"We are talking about three different markets and the underlying investors' characteristics are also different. So I believe the listings basically will be able to offer more to investors to participate in this product," said Yip.
However this ETF will suffer the same disadvantages as other ETFs traditionally have, including the fact that investors will not be able to redeem any gold of course as they will not actually own any gold. This is simply an investment in the value of the unspecified quantity of gold held by SPDR and is subject to the variations that beset any investment vehicle.
James Turk, the noted gold authority, stated recently, "Gold is we all know as an inflation hedge, but not everyone understands that it is also a catastrophe hedge. Gold is both a tangible asset and money. Consequently, gold is the only money that is not someone's liability. In other words owning physical gold does not have counterparty risk, which is an attribute that is becoming increasingly important given the fragility of the banking system."
So, in this case, a more secure gold investment would be to buy gold coins or gold bars that you own 100% and store them securely.
In that situation gold and silver is truly owned directly by you with no counterparty risk. When it comes to your gold and silver bullion, no risk is what it is all about when it comes to your assets!
Friday, July 11, 2008
History Has A Way of Repeating: The Gold Price Will Run
One of the most fascinating things we have learned about history, is that we do not learn from history. Well, some of us have been taking notes, and those of you who are regular readers of our newsletter are already onto much of this.
If you choose to study money, and particularly gold’s role as money throughout history, you will find that gold (and silver) has been the one consistent currency of choice, off and on, for over 5000 years.
This is not some archaic hidden secret, facts and figures are readily available to any layman with an internet connection who knows how to execute a search on google.
Societies from the beginning of recorded time have oscillated back and forth between “Easy Money”, also known as Fiat Currency, and “Disciplined Money”, also known as some form of gold or gold exchange standard.
The reason this occurs, is that societies have always gone through a cycle that tends to repeat itself, over and over, as predictable as the tides.
Throughout history, the way that money originated, is that markets traditionally created their own currencies, and over time would almost inevitably end up using gold and or silver as mediums of exchange. This is due to the fact that of the worlds naturally occurring materials, gold serves the role the best.
The reason for this, is that over time, gold has been a reliable measurement of mans labor and time. It takes labor and great capital expense to force the earth to yield the soft yellow metal. In addition, if you measure the number of ounces of gold above ground over any period of history, you will find, that until very recently, there have been roughly one ounce of gold, for every human being on the planet. In ancient times it took the measure of a man’s life to mine roughly one ounce of gold, and likewise, in ancient times a man’s life could be purchased, for his entire life, for one ounce of gold.
Gold has been called “The Money of Kings”, and for much of human history, only Kings traded in it.
So what does this cycle look like, that we mentioned a bit before?
Essentially, once wealth is created in a marketplace, government likes to get involved because “he who controls the issue of currency controls the people and the markets”. At this point, once the government has gained control over issuance of the currency, then the government starts to debase the currency.
Why would a government do this? Well lets say for example that there was a make believe government someplace that for some strange reason wanted to spend more money than it “earned” through taxation, to pay for some silly projects such as social security, pointless wars, or other massive social welfare programs. Crazy, I know, but humor me for a moment. The way a government could do this, would be to simply reduce what each unit of currency was worth (in ancient times this meant melting down pure gold and silver and recasting the coins with a less pure metal), and then create more units of currency – in other words, add more physical money to the money supply.
This, in a nutshell, is the true meaning of inflation. Many people, and even financial analysts, incorrectly believe that inflation is increases in prices. This is not the case. Increases in prices, as well as devaluation of a currency, is a symptom of true inflation, which is the act of adding more currency to an available pool of money.
This is not rocket science. Anytime there is more of something, it becomes worth less. For example, if dollar bills were as common as rocks lying on the ground, they wouldn’t be worth much would they?
A “Disciplined Money” system of course, prevents this. If a currency system is a gold standard, or based on a gold exchange standard, then it acts as a check on the government, and prevents it from printing as much as it likes. Why? Because each dollar, if exchangeable for gold, would imply that there would have to be enough gold to give out if all the dollars were turned in.
This in fact happened in the late sixties, when the USA was printing so much money that several countries around the world got sick of it and started turning in all the dollars we were printing up for the gold instead.
What did we do? In 1971 President Nixon, by Executive Order, simply “closed the gold window”. This is a fancy way of saying we defaulted on backing our currency, and severed all ties to the gold standard that we had operated on for hundreds of years up to that point in time.
Now it is important to note here, that when a currency system is removed from a “Disciplined Money” standard and placed on an “Easy Money” standard, that is kind of like removing the thermostat from your automobile, your engine could be going super critical as far as heat, and you would not know it until steam is pouring out from under the hood, at which point the damage is already done. This is not unlike what is happening in our economy today. When we see the price of oil skyrocketing, and financial institutions failing left and right, it is a sign that the damage has already been done. Don’t fret, we have a solution, as you will see below.
Ever since that fateful day in 1971 when we closed the “Gold Window”, the government has been free to print up as much money as desired, a role it has taken to with gusto.
One thing I find very interesting, is that On March 23, 2006, the Board of Governors of the Federal Reserve System ceased publication of the M3 monetary aggregate report. In short, what this report told us, is how much money the government is creating and pumping into the financial system. The reason they cited for no longer producing this report, was that it was becoming too expensive to produce, which of course is a ludicrous argument. Ever since the Federal Reserve Act of 1913 gave permission to the Federal Reserve to essentially create as much money as it wants, the Federal Reserve can create money at will, I don’t see how they can’t afford to pay analysts to produce it. But that’s a rant for an entirely different article.
We will assume, for now that a common truism concerning government applies here: “nothing ever exists (or in this case doesn’t exist), until the government officially denies it”.
What this means to me, is that whenever the government fails to tell its citizens something, or intentionally covers it up, then it is highly likely that the government is doing something naughty. In this case, that naughtyness means printing a whole gangload of money and adding it to the money supply.
The great thing is, we have private firms who still track all the variables involved, and are kind enough to tell us that the government has in fact added almost $14 Trillion (yes that’s Trillion with a T) more dollars to the money supply, at an annualized rate of almost 18% a year.
If you have been paying attention, then perhaps you have come to the same conclusion I did when I started studying this stuff. If the government is creating money at almost 18% annually, that means that my investments and income have to be increasing at OVER 18% annually, or I am going backwards!!! Holy cow Batman, what now?
Lets for a moment get back to the point of the article: The Gold Price Will Run.
Yes, yes, there has already been a tremendous amount of hoopla in the media in regards to how high the price of gold is, and that it has surpassed its 1980 high, and its so overvalued.
With respect, I must say that there has never in history been a stronger set of fundamentals pointing to a massive rise in valuation for gold (and silver, for that matter).
First of all, the current high does not take into consideration inflation, which if factored in, we see that gold must surpass at the minimum $1200 for it to come close to matching the 1980 high.
In addition, if you look at the factors which contributed to the last manic bull run in the metal, we will see factors that eerily match the 1980 manic rise almost identically. This is where that history thing comes into to play.
Once severing the gold standard in 1971, the US Treasury went on a concerted bear raid on gold. Anyone with common sense can come to the conclusion that the reason the Treasury would want to do such a thing is so that the Dollar maintained its strength. The entire world was watching the dollar value after the US closed the Gold window, and a skyrocketing gold price would not signal confidence.
In 1974, before US Citizens were again allowed to buy gold in any form, steps were already being taken to ensure the gold price would go nowhere. In 1975, the United States, aided by the principal members of the IMF, the first gold auction took place, pouring 2,500,000 ounces of gold onto the market.
In august of that same year, the G-10 leading nations decided that the IMF gold reserves should not be increased, but decreased instead, which triggered another 25,000,000 ounces to be sold into the market over the next four years.
What the US Treasury, the IMF, and the G-10 was not prepared for, was that all cycles repeat, and history shows us that when people stop trusting their governments money, they start buying gold.
Dresdner Bank saw right through the ruse, and in 1979 made a bid for the entire allocation of gold for sale at the US Treasury auction in August of 1979. The impact of this was that the entire world piled onto the bandwagon, shattering the $400 ceiling and driving gold prices out of the atmosphere. The public had finally woken up and become fearful about what the government was doing with their money, and they had had enough.
To add gasoline to the fire, in late 1979, Iranian Revolutionary Guards stormed the American Embassy in Tehran taking US Diplomats as hostages. This ignited fears of a new oil crisis.
If you combine these two events and look at what is happening today, with a falling confidence in the US Dollar, and war drums beating over a possible conflict with Iran, not to mention the fact that Americans are already freaking out about prices at the gas pump, and you will see that we have almost an exact repeat of the factors that triggered the last manic run in 1980.
Lets add a few more factors to this puzzle:
1. The governments of the world who are currently sitting on trillions of USD based reserves are all currently looking at each other wondering who is going to bug out first. Let’s face it, if you were China and losing 18% a year on a huge stockpile of USD, you would probably be a little nervous. When the flight comes, it will be a flight to sound money.
2. We are 8 years in to what is normally a 20+ year commodity cycle, and all of the money in Sovereign Wealth Funds sloshing around the world is looking for a place to go, and is going to seek a level – this could very well be sound money aka gold and silver.
3. We are now watching the tail end of the “Easy Money” to “Disciplined Money” Cycle. This means we may actually see a gold standard, or gold exchange standard of some type again in our lifetime. I have written in the past that I already suspect the Chinese may have ideas in this area. If this were to occur, the price of gold would be through the stratosphere overnight.
4. Oil has been catapulting. The historic ratio of oil:gold is 15:1, meaning one ounce of gold historically averages 15 barrels of oil. With oil today at $146, the gold price should probably be closer to $2190
The bottom line is, we are watching a series of events that are lining up perfectly to create a massive fundamental basis for a run in gold far beyond anything we have seen in history.
Some of us should do quite well while the rest of the equities markets are crashing and burning all around us from credit crisis fallout. The question here is: Will you? If you don’t have gold and silver yet, perhaps its time to consider it?
Author: Alex Stanczyk
http://www.rapidtrends.com/blog/
If you choose to study money, and particularly gold’s role as money throughout history, you will find that gold (and silver) has been the one consistent currency of choice, off and on, for over 5000 years.
This is not some archaic hidden secret, facts and figures are readily available to any layman with an internet connection who knows how to execute a search on google.
Societies from the beginning of recorded time have oscillated back and forth between “Easy Money”, also known as Fiat Currency, and “Disciplined Money”, also known as some form of gold or gold exchange standard.
The reason this occurs, is that societies have always gone through a cycle that tends to repeat itself, over and over, as predictable as the tides.
Throughout history, the way that money originated, is that markets traditionally created their own currencies, and over time would almost inevitably end up using gold and or silver as mediums of exchange. This is due to the fact that of the worlds naturally occurring materials, gold serves the role the best.
The reason for this, is that over time, gold has been a reliable measurement of mans labor and time. It takes labor and great capital expense to force the earth to yield the soft yellow metal. In addition, if you measure the number of ounces of gold above ground over any period of history, you will find, that until very recently, there have been roughly one ounce of gold, for every human being on the planet. In ancient times it took the measure of a man’s life to mine roughly one ounce of gold, and likewise, in ancient times a man’s life could be purchased, for his entire life, for one ounce of gold.
Gold has been called “The Money of Kings”, and for much of human history, only Kings traded in it.
So what does this cycle look like, that we mentioned a bit before?
Essentially, once wealth is created in a marketplace, government likes to get involved because “he who controls the issue of currency controls the people and the markets”. At this point, once the government has gained control over issuance of the currency, then the government starts to debase the currency.
Why would a government do this? Well lets say for example that there was a make believe government someplace that for some strange reason wanted to spend more money than it “earned” through taxation, to pay for some silly projects such as social security, pointless wars, or other massive social welfare programs. Crazy, I know, but humor me for a moment. The way a government could do this, would be to simply reduce what each unit of currency was worth (in ancient times this meant melting down pure gold and silver and recasting the coins with a less pure metal), and then create more units of currency – in other words, add more physical money to the money supply.
This, in a nutshell, is the true meaning of inflation. Many people, and even financial analysts, incorrectly believe that inflation is increases in prices. This is not the case. Increases in prices, as well as devaluation of a currency, is a symptom of true inflation, which is the act of adding more currency to an available pool of money.
This is not rocket science. Anytime there is more of something, it becomes worth less. For example, if dollar bills were as common as rocks lying on the ground, they wouldn’t be worth much would they?
A “Disciplined Money” system of course, prevents this. If a currency system is a gold standard, or based on a gold exchange standard, then it acts as a check on the government, and prevents it from printing as much as it likes. Why? Because each dollar, if exchangeable for gold, would imply that there would have to be enough gold to give out if all the dollars were turned in.
This in fact happened in the late sixties, when the USA was printing so much money that several countries around the world got sick of it and started turning in all the dollars we were printing up for the gold instead.
What did we do? In 1971 President Nixon, by Executive Order, simply “closed the gold window”. This is a fancy way of saying we defaulted on backing our currency, and severed all ties to the gold standard that we had operated on for hundreds of years up to that point in time.
Now it is important to note here, that when a currency system is removed from a “Disciplined Money” standard and placed on an “Easy Money” standard, that is kind of like removing the thermostat from your automobile, your engine could be going super critical as far as heat, and you would not know it until steam is pouring out from under the hood, at which point the damage is already done. This is not unlike what is happening in our economy today. When we see the price of oil skyrocketing, and financial institutions failing left and right, it is a sign that the damage has already been done. Don’t fret, we have a solution, as you will see below.
Ever since that fateful day in 1971 when we closed the “Gold Window”, the government has been free to print up as much money as desired, a role it has taken to with gusto.
One thing I find very interesting, is that On March 23, 2006, the Board of Governors of the Federal Reserve System ceased publication of the M3 monetary aggregate report. In short, what this report told us, is how much money the government is creating and pumping into the financial system. The reason they cited for no longer producing this report, was that it was becoming too expensive to produce, which of course is a ludicrous argument. Ever since the Federal Reserve Act of 1913 gave permission to the Federal Reserve to essentially create as much money as it wants, the Federal Reserve can create money at will, I don’t see how they can’t afford to pay analysts to produce it. But that’s a rant for an entirely different article.
We will assume, for now that a common truism concerning government applies here: “nothing ever exists (or in this case doesn’t exist), until the government officially denies it”.
What this means to me, is that whenever the government fails to tell its citizens something, or intentionally covers it up, then it is highly likely that the government is doing something naughty. In this case, that naughtyness means printing a whole gangload of money and adding it to the money supply.
The great thing is, we have private firms who still track all the variables involved, and are kind enough to tell us that the government has in fact added almost $14 Trillion (yes that’s Trillion with a T) more dollars to the money supply, at an annualized rate of almost 18% a year.
If you have been paying attention, then perhaps you have come to the same conclusion I did when I started studying this stuff. If the government is creating money at almost 18% annually, that means that my investments and income have to be increasing at OVER 18% annually, or I am going backwards!!! Holy cow Batman, what now?
Lets for a moment get back to the point of the article: The Gold Price Will Run.
Yes, yes, there has already been a tremendous amount of hoopla in the media in regards to how high the price of gold is, and that it has surpassed its 1980 high, and its so overvalued.
With respect, I must say that there has never in history been a stronger set of fundamentals pointing to a massive rise in valuation for gold (and silver, for that matter).
First of all, the current high does not take into consideration inflation, which if factored in, we see that gold must surpass at the minimum $1200 for it to come close to matching the 1980 high.
In addition, if you look at the factors which contributed to the last manic bull run in the metal, we will see factors that eerily match the 1980 manic rise almost identically. This is where that history thing comes into to play.
Once severing the gold standard in 1971, the US Treasury went on a concerted bear raid on gold. Anyone with common sense can come to the conclusion that the reason the Treasury would want to do such a thing is so that the Dollar maintained its strength. The entire world was watching the dollar value after the US closed the Gold window, and a skyrocketing gold price would not signal confidence.
In 1974, before US Citizens were again allowed to buy gold in any form, steps were already being taken to ensure the gold price would go nowhere. In 1975, the United States, aided by the principal members of the IMF, the first gold auction took place, pouring 2,500,000 ounces of gold onto the market.
In august of that same year, the G-10 leading nations decided that the IMF gold reserves should not be increased, but decreased instead, which triggered another 25,000,000 ounces to be sold into the market over the next four years.
What the US Treasury, the IMF, and the G-10 was not prepared for, was that all cycles repeat, and history shows us that when people stop trusting their governments money, they start buying gold.
Dresdner Bank saw right through the ruse, and in 1979 made a bid for the entire allocation of gold for sale at the US Treasury auction in August of 1979. The impact of this was that the entire world piled onto the bandwagon, shattering the $400 ceiling and driving gold prices out of the atmosphere. The public had finally woken up and become fearful about what the government was doing with their money, and they had had enough.
To add gasoline to the fire, in late 1979, Iranian Revolutionary Guards stormed the American Embassy in Tehran taking US Diplomats as hostages. This ignited fears of a new oil crisis.
If you combine these two events and look at what is happening today, with a falling confidence in the US Dollar, and war drums beating over a possible conflict with Iran, not to mention the fact that Americans are already freaking out about prices at the gas pump, and you will see that we have almost an exact repeat of the factors that triggered the last manic run in 1980.
Lets add a few more factors to this puzzle:
1. The governments of the world who are currently sitting on trillions of USD based reserves are all currently looking at each other wondering who is going to bug out first. Let’s face it, if you were China and losing 18% a year on a huge stockpile of USD, you would probably be a little nervous. When the flight comes, it will be a flight to sound money.
2. We are 8 years in to what is normally a 20+ year commodity cycle, and all of the money in Sovereign Wealth Funds sloshing around the world is looking for a place to go, and is going to seek a level – this could very well be sound money aka gold and silver.
3. We are now watching the tail end of the “Easy Money” to “Disciplined Money” Cycle. This means we may actually see a gold standard, or gold exchange standard of some type again in our lifetime. I have written in the past that I already suspect the Chinese may have ideas in this area. If this were to occur, the price of gold would be through the stratosphere overnight.
4. Oil has been catapulting. The historic ratio of oil:gold is 15:1, meaning one ounce of gold historically averages 15 barrels of oil. With oil today at $146, the gold price should probably be closer to $2190
The bottom line is, we are watching a series of events that are lining up perfectly to create a massive fundamental basis for a run in gold far beyond anything we have seen in history.
Some of us should do quite well while the rest of the equities markets are crashing and burning all around us from credit crisis fallout. The question here is: Will you? If you don’t have gold and silver yet, perhaps its time to consider it?
Author: Alex Stanczyk
http://www.rapidtrends.com/blog/
Friday, July 4, 2008
Gold Rush in Ireland
A million ounces of gold has been reported buried under the heart of the peaceful village of Clontibret in the Emerald Island. Not many people have heard of the village of Clontibret, nestled in the green rolling hills of County Monaghan but this is about to change.
Noted for being one of the few places to repel the forces of Elizabeth I during the conquest of Ireland in the 16th century, Clontibret is soon going to become the Klondike of Ireland with the biggest gold strike in the British Isles.
An exploration and mining company based in Dublin, Ireland, has just issued a formal statement to the London Stock Exchange that an area just outside the village has more than 1 million ounces of gold. The exploration company has estimated that the gold deposits could be worth up to £450 million at today’s gold price.
The company's Chairman in a statement recently, said: "There's never been a gold mine anywhere near this size in Ireland and the UK."
He went on, "The Company's exploration programme in Ireland is focussed on the Longford-Down Massif. The Company at an early stage recognized the significant gold potential of the Massif. It is engaged in active exploration there which has already led to the discovery of a series of gold targets along a 30 mile (50km) strike length stretching from County Armagh across to Counties Monaghan and Cavan."
"At the most advanced of these targets, Clontibret in County Monaghan, a mineral resource of over 1 million ounces of gold (Indicated 440,000 ounces, Inferred 590,000 ounces) has been estimated for an area representing less than 20 per cent of the target. Drilling has commenced in the remaining 80 per cent of the Clontibret target anomaly, which is expected to further increase this resource. This is the largest gold resource reported to date in Ireland or the UK."
The rising price of gold in recent years recently impelled the Cononish mine, near the village of Tyndrum in Scotland, to be reopen after being idle for years. But, in a study of the economic viability of mining the gold, stated that the deposits in Monaghan, a historically deprived border region, were at least four times the amount in the Scottish mine. "We know there is a lot of gold in the area, but we still have to determine how economic it is going to be to mine it," the Director said.
It has been estimated that further excavation could increase the existing indicated resources of 440,000 ounces and additional inferred resource of 590,000 ounces and with the price of gold rising, that is going to be a lot of money by anyone’s standards.
So it is true, even in Ireland to say, “There is gold in them there hills!”
Noted for being one of the few places to repel the forces of Elizabeth I during the conquest of Ireland in the 16th century, Clontibret is soon going to become the Klondike of Ireland with the biggest gold strike in the British Isles.
An exploration and mining company based in Dublin, Ireland, has just issued a formal statement to the London Stock Exchange that an area just outside the village has more than 1 million ounces of gold. The exploration company has estimated that the gold deposits could be worth up to £450 million at today’s gold price.
The company's Chairman in a statement recently, said: "There's never been a gold mine anywhere near this size in Ireland and the UK."
He went on, "The Company's exploration programme in Ireland is focussed on the Longford-Down Massif. The Company at an early stage recognized the significant gold potential of the Massif. It is engaged in active exploration there which has already led to the discovery of a series of gold targets along a 30 mile (50km) strike length stretching from County Armagh across to Counties Monaghan and Cavan."
"At the most advanced of these targets, Clontibret in County Monaghan, a mineral resource of over 1 million ounces of gold (Indicated 440,000 ounces, Inferred 590,000 ounces) has been estimated for an area representing less than 20 per cent of the target. Drilling has commenced in the remaining 80 per cent of the Clontibret target anomaly, which is expected to further increase this resource. This is the largest gold resource reported to date in Ireland or the UK."
The rising price of gold in recent years recently impelled the Cononish mine, near the village of Tyndrum in Scotland, to be reopen after being idle for years. But, in a study of the economic viability of mining the gold, stated that the deposits in Monaghan, a historically deprived border region, were at least four times the amount in the Scottish mine. "We know there is a lot of gold in the area, but we still have to determine how economic it is going to be to mine it," the Director said.
It has been estimated that further excavation could increase the existing indicated resources of 440,000 ounces and additional inferred resource of 590,000 ounces and with the price of gold rising, that is going to be a lot of money by anyone’s standards.
So it is true, even in Ireland to say, “There is gold in them there hills!”
Wednesday, April 2, 2008
Jim Sinclair Bets a Million Dollars Gold Price Will Hit $1650 before the 2nd Week in January 2011
One question that all gold investors want to know whether they be new gold investors or long term holders of gold bullion, is how high will the gold price go?
Jim Sinclair, noted gold expert, has really put his money where his mouth is on this topic. For years now Jim Sinclair has been calling for the gold price to reach at least $1650 during this gold bull market and has more recently commented that he thinks if anything his prediction is way too low.
Giving new meaning to the term commitment, Jim Sinclair has made a wager of $1,000,000 US dollars that the gold price will hit US$1650 before the 2nd week of January 2011.
Jim Sinclair was the original founder of the Sinclair Group of Companies in 1977, offering brokerage services with branches in New York , Kansas City, Toronto, Chicago, London and Geneva. That was sold in 1983. and Sinclair served as a Precious Metals Advisor to Hunt Oil and the Hunt family for the liquidation of their silver position as a prerequisite for the $1 billion loan arranged by the Chairman of the Federal Reserve, Paul Volker. He’s also been a General Partner and Member of the Executive Committee of two New York Stock Exchange firms and President of the Sinclair Global Clearing Corporation (commodity clearing firm) and Global Arbitrage (derivative dealer in metals and currencies).
Sinclair is the author of numerous articles, three books dealing with a variety of investment subjects, including precious metals, trading strategies and geopolitical events. He is often called to speak at gold investment conferences and his commentary on gold and other financial issues garners extensive media coverage at home and abroad.
In January 2003, Mr. Sinclair’s "Jim Sinclairs MineSet," was launched and now hosts his gold commentary as a free service to the gold community.
On this website Sinclair makes the announcement.
"My position on timing and price is that Gold will trade at USD $1650 before the second week of January 2011."This means that if the gold price does NOT reach $1650 USD on or before the end of the 1st week of January 2011, then Sinclair will have to cough up the princely sum of One Million US dollars to anyone who takes up his bet.
"I am offering a $1,000,000USD wager to a financially qualified party that this will occur within the stated timeframe. Any party on Bloomberg, CNBC or CNN-Business stating an opposite opinion on the price of gold should be informed of this challenge."
"Please communicate to ANY vocal bearish so-called gold expert that I challenge them to put their money on their views."
"Any commentator unable to financially meet this challenge should not be opining. If they really knew the gold and currency market they could easily meet the challenge."
Now … is that confidence or is that confidence?
He goes on to say:
"I am relying on you CIGAs to forward this challenge to any vocal bear, suggesting they stop flapping their lips by putting up or shutting up. It is one thing to hide behind a computer screen. It is another to betAs has been the case for the last 8 years while the gold price has been rising year after year, there is no shortage of financial commentators and so called experts providing their advice that the gold bull market is over, every time there is a correction in the gold price.
the ranch on the view you promote."
"The technical procedure of a serious wager is:1. Prove you can in fact wage the challenge by an attorney's letter.
2. Segregate the funds in cash or near cash kind in the hands of your attorney.
3. Execute an agreed upon binding contract stating the terms of the wager."
For example, this investment advice titled "Goldman Sachs says sell gold in 2008", reported by Reuters:
LONDON, Nov 29 (Reuters) - Investors should sell gold in 2008 to take advantage of falling prices as the dollar steadies, Goldman Sachs said on Thursday, naming the strategy as one of its top 10 tips for next year.If these financial commentators are so sure of their forecasts they should be more than happy to take Jim Sinclair up on his generous offer to double their money in just 3 years time.
Perhaps someone may be courageous enough to take Sinclair up on his challenge, but the way the long term gold trend is going, his $1,000,000 would be better invested in gold bullion.
If Jim Sinclair is correct with his forecast that the gold price will reach $1650 by 2nd week of 2011, gold investors who buy gold today at $900 will be the ones who win, as they stand to make a profit in USD of at least 83% in the next 3 years.
Thursday, March 20, 2008
A Gold Price Buying Opportunity
Over two days the gold price has dropped 10 percent. This is like the local department store offering a 10 percent discount on the gold price!This is a fantastic opportunity to buy gold. A window of opportunity for a few days before the gold price starts it climb to even higher peaks.
The long term trend of gold is still upward and onward and the regular drop before a further climb to greater heights has been the track record over the past few months.
Remember, every time someone buys gold, someone else has to sell it. But with exchange traded Funds, this can now be done in a flash. But gold is not actually changing hands, instead the value of gold is being affected by the hugh amount of gold being bought and sold by traders trading ETFs.
In addition, the US Dollar Index is being shored up on the quicksand of false economy, by hurriedly printing more dollars to save more banks in deep trouble with mounting debt. Eventually this frail edifice is going to crumble and the dollar will continue its downward spiral.
Gold, however, keeps its value. Gold is money and in the coming months and years this will become even more apparent.
So now is the time to buy gold which the gold price is at a discount.
It may be the last one available.
Thursday, March 13, 2008
Price of Gold Hits 1000 Dollars an Ounce!
A historic moment in the price of gold happened today when the price of gold hit that magical 1000 dollars an ounce. For gold bugs this was champagne time (paid for with gold of course) and a celebration of that which they have known for years. Gold is Money!This does not say much for the dollar but it says an awful lot for the price of gold. This is a highest ever. Various factors have influenced the dramatic rise of gold, most notably the ever weakening paper dollar. In 6 months gold has more than doubled. In 5 years gold has more than tripled! This shows where the real faith and trust is. Not in the US dollar or, for that matter, any fiscal paper money, but in good solid shiny yellow gold!
Those that say buy gold and own gold are now running around saying, "I told you so!", "I told you so!" and they are right.
Gold IS money!
Predictions from gold experts are now that gold is likely to reach an incredible 2000 dollars an ounce this year!
How could this be? It is, as has been so ably pointed out, not the value of gold that is changing, but the value of the fiscal currency. As the price of gold rises, the true value of the dollar in your pocket comes to light. Those people that own gold will still be able to buy the same amount of service and products with their ounces of gold while people continue to scrabble around to find that even more dollars are required to buy the same product or service as an ounce of gold.
Gold is more than a hedge, more than a safe haven. It is a established bank of asset worth, for the astute investor, the person who saves and, indeed, even the person who uses gold as a currency, for gold is gold and paper is paper.
This gold price rise is not a fly by night increase. This is not the 1980s all over again. This is a steady stable rise that has been going on for ten years and the trend looks set to continue off into the distant future until the true value of the heavily inflated paper currency matches the value of pure gold.
That could be many thousands of dollar to an ounce of gold.
So watch this space for the true value of the gold price in the future and remember, Buy Gold!
Monday, March 10, 2008
Gold Price Poised for a Long Jump
The gold price is poised for a long jump. Steady in the 970 range with a few peaks above 990 recently, gold is looking good to make the big jump passed the magic 1000 dollars an ounce anytime soon.
With the US economy continuing to falter despite frantic attempts to prop it up, and with banks now teetering on the edge with more debt than one can throw a stick at, more and more investors will be seeking that safe haven for their assets thereby pushing gold up into the rarefied atmosphere of 1000 to 1500 dollars an ounce over the coming weeks and months.
Not lost on investors lately is the fact that gold and oil have long been compatriots in the market place and oil is now approaching an all time high at near 105 dollars a barrel, adjusted for inflation. Yet gold still remains at less than half of its inflation adjusted high of 2400 USD per ounce. So What gives?
Previously the price of gold rose at around twice that of oil, yet now we have a scenario where the gold price is rising at only half that of oil. The up down, up down, up down of the gold price seems to indicate a fight between those forces keen to keep the price of gold down and those forces trying to bring it back to normal. Well you cannot hold a good man down and you cannot continue to hold gold down under these circumstances in the face of such economic turmoil, so it is sure to want to follow alongside oil as it has always historically done in the past.
This means it has some catching up to do and a gold price of 2,300 dollars an ounce is not out of the question over the coming months.
So, exercise your golden legs folks, the long jump is coming!
With the US economy continuing to falter despite frantic attempts to prop it up, and with banks now teetering on the edge with more debt than one can throw a stick at, more and more investors will be seeking that safe haven for their assets thereby pushing gold up into the rarefied atmosphere of 1000 to 1500 dollars an ounce over the coming weeks and months.
Not lost on investors lately is the fact that gold and oil have long been compatriots in the market place and oil is now approaching an all time high at near 105 dollars a barrel, adjusted for inflation. Yet gold still remains at less than half of its inflation adjusted high of 2400 USD per ounce. So What gives?
Previously the price of gold rose at around twice that of oil, yet now we have a scenario where the gold price is rising at only half that of oil. The up down, up down, up down of the gold price seems to indicate a fight between those forces keen to keep the price of gold down and those forces trying to bring it back to normal. Well you cannot hold a good man down and you cannot continue to hold gold down under these circumstances in the face of such economic turmoil, so it is sure to want to follow alongside oil as it has always historically done in the past.
This means it has some catching up to do and a gold price of 2,300 dollars an ounce is not out of the question over the coming months.
So, exercise your golden legs folks, the long jump is coming!
Sunday, March 2, 2008
Gold Price Verging on 1000 USD Per Ounce
Today the gold price is less than 2 percent below the 1000 dollars per ounce. Who would have thought, 5 years ago that the gold price would climb so high. This is no 1980 flash in the pan. This is the real McCoy.
As we prepare to break out the champagne, eyes are now looking speculatively at the $2000 per ounce mark. Some even speculating higher. Crazy? Not really. How crazy would it have been to predict $1000 per ounce five years ago. Many gold experts, including the noted James Turk, predicted then that the price of gold would go over US$1000 per ounce. It was just a question of time.
Agreed the weaker dollar, rising inflation and other factors have all had their effect on the rise but gold was bound to rise as the consumer price index rises. Gold is always good for buying goods and services ounce for ounce. An ounce of gold will still buy the same products as it did in 1975. But you need a mountain of paper currency these days.
There may be a bit of profit taking when the magic $1000 is reached. But then it will be onward and upward once again.
As long as we have inflation and a weaker US economy and gold being seen more and more as a safe haven, the gold price will continue to climb.
It still has a long way to go. The 1975 to 2008 graph says it all. The trend is likely to continue well past the $2000 per ounce mark and a long way beyond.
Chip Hanlon, who holds gold as the manager of $1.5 billion at Delta Global Advisors Inc. in Huntington Beach, California advises, "It is hard to see how the monetary environment is going to be anything but supportive of higher gold and commodity prices anytime this year."
And Ron Goodis, a trader at Equidex Brokerage Group Inc. in Closter, New Jersey, who has been buying and selling gold since 1978. points out, "It's up 15 percent since breaking the 1980 record in January, and may rise another 33 percent to $1,300 an ounce by year end."
The gold price is not a roller coaster it seems, more like a rocket to the heavens!
Friday, February 29, 2008
How to Lose Double Your Money on Rising Gold Prices with Gold ETNs
Deutsche Bank announced that it will issue three Gold Exchange Traded Notes (Gold ETNs), that will be traded on the NYSE Arca.
The New Gold ETNs are:
DB Gold Double Long ETN (NYSE Arca: DGP)
DB Gold Double Short ETN (NYSE Arca: DZZ)
DB Gold Short ETN (NYSE Arca: DGZ)
The ETNs provide +200%, -200% and -100% monthly returns respectively on gold future prices. The Gold ETNs also provide an additional return equivalent to investing cash in Treasuries which adds approximately 5% return to each Gold ETN, including the Short ETN.
There are two ways to lose money in a Gold Bull Market.
One is to get in the way of a generational gold bull market by going short. Going short is where one bets the gold price will go down.
The other way to lose money is to buy gold on margin and have your entire position wiped out with a margin call. These new Gold ETNs provide you with the opportunity to be wiped out both ways.
They also offer an even better way to lose your wealth in a gold bull market by allowing you to go short gold on margin. That is for every 1% that the gold price increases, you will lose 2% of your capital. When you consider that the gold price has increased over 30% in the last 6 months from around $650 to today's gold price of $970, if you had of owned the DB GOLD Double Short ETN during this time you would have lost 60% of your capital in just 6 months. The bonus 5% T-Bill rate on top of this staggering loss would hardly make up for it.
While the GOLD ETNs also give you the opportunity to go long gold, take careful note that the Gold ETNs are not backed by gold bullion. So you are not investing in gold when you buy the Long Gold ETNs, you are investing in a paper product which is not actual gold. The Gold ETNs merely track the price of gold futures, and you have no rights to any actual gold. There is a big difference between owning a paper product that tracks the price of gold and owning real physical gold coins or gold bars in your possession or gold bullion in secure storage.
Richard Russell the editor and publisher of Dow Theory Letters makes this important point about what gold is and why people buy gold, on his website on the 19th of February:
"Gold is the universal, time-honored standard of wealth. Gold is pure, tangible wealth, and since pure wealth cannot be bankrupted or destroyed, gold is totally 'safe.' Gold is so safe that it doesn't need to pay any interest to tempt people to hold it. Wise men and women don't hold gold for income any more than they hold a ten-carat D color diamond or a Picasso picture for income. They hold these items because they represent timeless wealth."
How To Profit From Rising Gold Prices
The wise way to buy gold is to buy physical gold bullion without margin that you own 100% in the form of gold coins or gold bars.
Monday, February 25, 2008
IMF Gold Sale is a Spit in the Wind
The Bush administration is backing a plan for the IMF to sell off some of its gold.
The Bush administration recently announced it supports sales of as much as 12.9 million ounces, recommended by Andrew Crockett, former head of the Bank of International Settlements of IMF gold stocks
The IMF, which in view of the current surplus of funds most nations have, is becoming largely redundant and is having a hard time keeping its head above water these days.
It tried to get approval, first in 1999, and then again in 2005 to sell some gold to cover its losses, but was knocked back both times. US Congress demanded then that the IMF puts its house in order before it sells off the family jewels.
But these days the El President Bush rules the administration, so it is likely the IMF will get the go ahead in the next couple of months and sell off almost 13 million ounces in the hope that it will stave off a flagging economy, or at least the appearance of one.
If IMF do sell gold, it will be but a hiccup. This small amount of gold the IMF is contemplating selling could easily be gulped down by China without even a burp.
You know what they say. You will be assimilated. Resistance is futile. Nothing, not even selling off the IMF crown jewels, can save this paper economy.
Gold is money! Buy Gold!
The Bush administration recently announced it supports sales of as much as 12.9 million ounces, recommended by Andrew Crockett, former head of the Bank of International Settlements of IMF gold stocks
The IMF, which in view of the current surplus of funds most nations have, is becoming largely redundant and is having a hard time keeping its head above water these days.
It tried to get approval, first in 1999, and then again in 2005 to sell some gold to cover its losses, but was knocked back both times. US Congress demanded then that the IMF puts its house in order before it sells off the family jewels.
But these days the El President Bush rules the administration, so it is likely the IMF will get the go ahead in the next couple of months and sell off almost 13 million ounces in the hope that it will stave off a flagging economy, or at least the appearance of one.
If IMF do sell gold, it will be but a hiccup. This small amount of gold the IMF is contemplating selling could easily be gulped down by China without even a burp.
You know what they say. You will be assimilated. Resistance is futile. Nothing, not even selling off the IMF crown jewels, can save this paper economy.
Gold is money! Buy Gold!
Monday, February 18, 2008
China Gold Demand Now Second Largest in the World
In 2007 China surpassed the USA to become the second biggest retail gold market in the world after India. Total consumer demand in China's mainland, Hong Kong and Taiwan reached 363.3 tons, an increase of 23.5 percent from 2006, the World Gold Council indicated in a research report.
To put that figure into perspective 363.3 tons, is equal to 10,596,250 troy ounces of gold, at today's gold price of approximately $900 US that is $9,536,625,000 US Dollars worth of gold.
Mainland China gold demand, including gold jewelry and retail gold investment, reached 326 tons, an increase of 26 percent from 2006. This is the first time it has surpassed the 300 ton level. The gold jewelry demand in mainland China reached 302 tons in 2007, a year on year growth of 23.5 percent. Gold Jewelry and other ornaments have always been a form of savings in China since time immemorial.
India which has the world's largest gold demand had a gold demand of 773.6 tons in 2007, while the US now in third place had a gold demand of 278.1 tons.
"Encouraging civilian reserves of gold has strategic significance and economic value," said a director of the Peoples Bank of China's (China's Central Bank) official news vehicle back in 1998 when gold was around $300US. Can you imagine the US Federal Reserve Bank giving such a recommendation and what it would do to the gold price?
The article went on to say "If there are problems with the U.S. dollar, there will be an international catastrophe." "Reducing reliance on the dollar, and maintaining greater diversification in foreign exchange reserves is the only way to reduce the risk," it said. "As a result, an increase in our country's gold reserves is necessary."
It looks like the Chinese people have been taking notice of the advice from their central bank to buy gold. China's mainland gold demand rose 18% percent from 2006 level to 94.3 tons during the 4th quarter. This was when the gold price rocketed from the breakout area of of around $730US to around $900US.
Consider this, the U.S. possesses 262 million ounces of gold for its nearly equal population. Were China to achieve the same financial gold backing, it would require 1.2 billion ounces of gold. The same amount of ounces of gold owned by all the world's central banks and more than ten years of global gold mining production. However, China is now the worlds largest gold producer, surpassing South Africa in 2007.
According to the Peoples Bank of China, China’s foreign exchange reserves as of the end of 2007 were $1.53 trillion. If their central bank were to have 10% of these reserves ($153 billion) in gold they would need 168.3 million ounces of gold at the current gold price. The Chinese central bank currently has 19.29 million ounces of gold leaving them 149 million ounces of gold short. China could buy all of the IMF’s gold, and they still would not have 10% of their reserves in gold.
China's Gold demand is likely to continue to increase and put significant upward pressure on gold prices for many years to come, particularly if the US Dollar continues to decline in purchasing power as many analysts are predicting it will do. If China's new sovereign wealth fund decides to purchase gold, expect significantly higher gold prices.
To put that figure into perspective 363.3 tons, is equal to 10,596,250 troy ounces of gold, at today's gold price of approximately $900 US that is $9,536,625,000 US Dollars worth of gold.
Mainland China gold demand, including gold jewelry and retail gold investment, reached 326 tons, an increase of 26 percent from 2006. This is the first time it has surpassed the 300 ton level. The gold jewelry demand in mainland China reached 302 tons in 2007, a year on year growth of 23.5 percent. Gold Jewelry and other ornaments have always been a form of savings in China since time immemorial.
India which has the world's largest gold demand had a gold demand of 773.6 tons in 2007, while the US now in third place had a gold demand of 278.1 tons.
"Encouraging civilian reserves of gold has strategic significance and economic value," said a director of the Peoples Bank of China's (China's Central Bank) official news vehicle back in 1998 when gold was around $300US. Can you imagine the US Federal Reserve Bank giving such a recommendation and what it would do to the gold price?
The article went on to say "If there are problems with the U.S. dollar, there will be an international catastrophe." "Reducing reliance on the dollar, and maintaining greater diversification in foreign exchange reserves is the only way to reduce the risk," it said. "As a result, an increase in our country's gold reserves is necessary."
It looks like the Chinese people have been taking notice of the advice from their central bank to buy gold. China's mainland gold demand rose 18% percent from 2006 level to 94.3 tons during the 4th quarter. This was when the gold price rocketed from the breakout area of of around $730US to around $900US.
Consider this, the U.S. possesses 262 million ounces of gold for its nearly equal population. Were China to achieve the same financial gold backing, it would require 1.2 billion ounces of gold. The same amount of ounces of gold owned by all the world's central banks and more than ten years of global gold mining production. However, China is now the worlds largest gold producer, surpassing South Africa in 2007.
According to the Peoples Bank of China, China’s foreign exchange reserves as of the end of 2007 were $1.53 trillion. If their central bank were to have 10% of these reserves ($153 billion) in gold they would need 168.3 million ounces of gold at the current gold price. The Chinese central bank currently has 19.29 million ounces of gold leaving them 149 million ounces of gold short. China could buy all of the IMF’s gold, and they still would not have 10% of their reserves in gold.
China's Gold demand is likely to continue to increase and put significant upward pressure on gold prices for many years to come, particularly if the US Dollar continues to decline in purchasing power as many analysts are predicting it will do. If China's new sovereign wealth fund decides to purchase gold, expect significantly higher gold prices.
Friday, February 1, 2008
How Much is Our Gold Really Worth?
GATA, the Gold Anti-Trust Action Committee sponsored a full page ad in the Wall Street Journal on Thursday proclaiming the hidden manipulation of the gold price by the world's central banks.
GATA, is a charitable organization, founded in 1999 "to advocate and undertake litigation against illegal collusion to control the price and supply of gold and related financial securities," according to its Web site, www. GATA.org.
Chris Powell, managing editor of the Journal Inquirer in Manchester, was a co-founder of the Gold Anti-Trust Action Committee Inc., or GATA, together with William J. Murphy III of Dallas, Texas and a former commodities trader and former wide receiver for the then-Boston Patriots.
Titled "Anybody seen our gold?," the ad stated, "since 2004, four major international investment houses ... have issued reports stating that Western central banks have been manipulating the gold market."
"Rigging of the gold market is really part of a coordinated central bank scheme to regulate many markets," It goes on, "If you look closely enough at certain places, they are really candid about it. Government intervention in what are believed to be free markets is close to pervasive, in our opinion."
The ad notes gold's recent rise toward $900 an ounce "shows that the price suppression scheme is faltering. When it is widely understood how central banks have been suppressing gold, its price may rise to $3,000 or $5,000 or more."
The assertions in the ad are all backed by documentation, which is available for viewing through links on the GATA Web site, according to Powell, "All of this stuff is public record," he added.
Powell also stated that the organization doesn't have any other officers or members, though it does have "3,000 people on our e-mail list." The organization raises money through donations
Further information is available at http://www.gata.org/node/wallstreetjournal.
GATA, is a charitable organization, founded in 1999 "to advocate and undertake litigation against illegal collusion to control the price and supply of gold and related financial securities," according to its Web site, www. GATA.org.
Chris Powell, managing editor of the Journal Inquirer in Manchester, was a co-founder of the Gold Anti-Trust Action Committee Inc., or GATA, together with William J. Murphy III of Dallas, Texas and a former commodities trader and former wide receiver for the then-Boston Patriots.
Titled "Anybody seen our gold?," the ad stated, "since 2004, four major international investment houses ... have issued reports stating that Western central banks have been manipulating the gold market."
"Rigging of the gold market is really part of a coordinated central bank scheme to regulate many markets," It goes on, "If you look closely enough at certain places, they are really candid about it. Government intervention in what are believed to be free markets is close to pervasive, in our opinion."
The ad notes gold's recent rise toward $900 an ounce "shows that the price suppression scheme is faltering. When it is widely understood how central banks have been suppressing gold, its price may rise to $3,000 or $5,000 or more."
The assertions in the ad are all backed by documentation, which is available for viewing through links on the GATA Web site, according to Powell, "All of this stuff is public record," he added.
Powell also stated that the organization doesn't have any other officers or members, though it does have "3,000 people on our e-mail list." The organization raises money through donations
Further information is available at http://www.gata.org/node/wallstreetjournal.
Tuesday, January 22, 2008
Gold Steady as She Goes – Oops!
Gold ended up at 858.75 at the last count for the day.
Talk about slipping on a wet floor. The bear markets have yanked golds chain and gold dropped to the below the level it was on January the 7th., but the good news is it started to perk up almost immediately.
As the word markets 'tumble for ya', gold will be seen as the investors haven and there is an opportunity for a sharp eyed gold investor to grab what he can before it starts its stratospheric climb again.
When to buy gold!
Remember when someone sells it means someone has bought, and visa versa. The trick is to be the one buying at the bottom.
But in reality anytime is a good time to buy gold. One isn't buying gold, one is preserving ones assets. The value of gold throughout the ages has always maintained its stability come what may. Nations may come and nations may go but gold rules forever!
Talk about slipping on a wet floor. The bear markets have yanked golds chain and gold dropped to the below the level it was on January the 7th., but the good news is it started to perk up almost immediately.
As the word markets 'tumble for ya', gold will be seen as the investors haven and there is an opportunity for a sharp eyed gold investor to grab what he can before it starts its stratospheric climb again.
When to buy gold!
Remember when someone sells it means someone has bought, and visa versa. The trick is to be the one buying at the bottom.
But in reality anytime is a good time to buy gold. One isn't buying gold, one is preserving ones assets. The value of gold throughout the ages has always maintained its stability come what may. Nations may come and nations may go but gold rules forever!
Saturday, January 19, 2008
Chinese Love Affair With Gold
An alternative investment is increasing in China, the appeal of gold as its price hits new highs and analysts forecast the gold price to keep rising in the mid to long term.
The recent strong upward trend has attracted many individual Chinese investors such as Yao Yun, for example.. The chief financial officer of a Shanghai-based foreign company bought 50,000 yuan ($6,849) in gold bars and the price has risen by 12 yuan per gram in just half a month.
"I believe the price will keep rising," he said. "The stock market is too volatile, and the real estate sector is subjected to macro-control. Investing in gold is a good choice at this time."
In the Caishikou Department Store, a popular physical gold dealer in Beijing, over 100 people lined up to purchase bullion for the Lunar Year of the Mouse on November 22, last year. the first trading day of the products. More than 200 kilograms of the gold bars were sold within 1.5 hours. The total subscription amounted to two tons of gold.
Li Xiang, a manager of the department store, said, at the time, sales of gold products surged more than 50 percent to 2.38 billion yuan in 2007.
A leading gold products manufacturer in the country, Zhongjin Gold Cooperation Limited, stated that its bullion sales had kept a steady growth of 50 percent month-on-month since July last year.
And the China Gold Association has just release statistics revealing gold investors nationwide have exceeded 1 million.
That number doesn't include speculators of gold futures, however, which made a strong debut in Shanghai on January 9th when China gold futures contracts surged to the daily 10 percent limit minutes after trading started at 9 a.m. on the Shanghai Futures Exchange. More than 6,000 clients traded on the market.
Many experts believe the China gold futures market will grow into a leading global market as it was launched at a time when international gold prices have repeatedly been hitting new highs. Global prices jumped more than 30 percent throughout last year, representing the biggest increase since 1979.
China is truly having a love affair with gold!
The recent strong upward trend has attracted many individual Chinese investors such as Yao Yun, for example.. The chief financial officer of a Shanghai-based foreign company bought 50,000 yuan ($6,849) in gold bars and the price has risen by 12 yuan per gram in just half a month.
"I believe the price will keep rising," he said. "The stock market is too volatile, and the real estate sector is subjected to macro-control. Investing in gold is a good choice at this time."
In the Caishikou Department Store, a popular physical gold dealer in Beijing, over 100 people lined up to purchase bullion for the Lunar Year of the Mouse on November 22, last year. the first trading day of the products. More than 200 kilograms of the gold bars were sold within 1.5 hours. The total subscription amounted to two tons of gold.
Li Xiang, a manager of the department store, said, at the time, sales of gold products surged more than 50 percent to 2.38 billion yuan in 2007.
A leading gold products manufacturer in the country, Zhongjin Gold Cooperation Limited, stated that its bullion sales had kept a steady growth of 50 percent month-on-month since July last year.
And the China Gold Association has just release statistics revealing gold investors nationwide have exceeded 1 million.
That number doesn't include speculators of gold futures, however, which made a strong debut in Shanghai on January 9th when China gold futures contracts surged to the daily 10 percent limit minutes after trading started at 9 a.m. on the Shanghai Futures Exchange. More than 6,000 clients traded on the market.
Many experts believe the China gold futures market will grow into a leading global market as it was launched at a time when international gold prices have repeatedly been hitting new highs. Global prices jumped more than 30 percent throughout last year, representing the biggest increase since 1979.
China is truly having a love affair with gold!
Friday, January 18, 2008
Gold, Steady as She Goes!
Gold bounced up this week with opportunists looking for a good bargain after a fall of just over 4% from the high of 915 an ounce last week."Gold is consolidating after touching recent highs," said Christoph Eibl, head of trading at Tiberius Asset Management, noting that there had been some investor selling of gold held in exchange-traded funds (ETFs).
"ETF investors ... are holders rather than traders, therefore the recent drop has some strength." he added.
Gold's investment appeal remains intact however, unlike the mortgage and currency markets still suffering turmoil in the US and with no end in sight.
Barclays Capital said in a report,"External factors such as higher inflation expectations, broader economic concerns, geopolitical tensions and Fed rate easing are likely to drive prices higher."
"On a fundamental basis mine supply remains constrained and physical and investment demand should emerge upon price dips providing a price floor," it continued.
It seems likely that gold will maintain a steady increase but will be more than a week before the 900 is reached again. It seems probable it will stay within the 870-890 range before peaking at around 887 per ounce.
So there is still some time for bargain hunting before gold starts its big climb again!
Gold EFT investors take a Profit
StreetTracks Gold Shares, one of the biggest Gold EFTs around, saw redemptions of 21.51 tone of gold worth over 600 million dollars last Wednesday. Current holdings of StreetTracks totals 631 tones or twice that of the Bank of London.
This would account for the drop in gold as greedy investors decided to cash in and walk home with the dosh.
In fact gold futures dropped 3 percent at one point and caused some order imbalances on the electronic exchanges according to some traders.
The selling came immediately after gold topped the 900 dollars mark in New York.
ETFs have come along way since the first gold EFT opened on the Australian Stock in 2004.
Shortly after that time, analysts, such as Michael Porter for Lipper USA, voiced the expectation. "I expect this to be a blockbuster, because a lot of institutional investors who might not have been mandated to own gold other than mining stocks will finally be able to get directly involved in the gold market," Lipper told reporters.
Never has this prophetic statement been so true as recently demonstrated by the StreetTracks investors taking a profit.
Some analysts are expecting those investors to start buying in again now the price has dropped.
This would account for the drop in gold as greedy investors decided to cash in and walk home with the dosh.
In fact gold futures dropped 3 percent at one point and caused some order imbalances on the electronic exchanges according to some traders.
The selling came immediately after gold topped the 900 dollars mark in New York.
ETFs have come along way since the first gold EFT opened on the Australian Stock in 2004.
Shortly after that time, analysts, such as Michael Porter for Lipper USA, voiced the expectation. "I expect this to be a blockbuster, because a lot of institutional investors who might not have been mandated to own gold other than mining stocks will finally be able to get directly involved in the gold market," Lipper told reporters.
Never has this prophetic statement been so true as recently demonstrated by the StreetTracks investors taking a profit.
Some analysts are expecting those investors to start buying in again now the price has dropped.
Wednesday, January 16, 2008
Aussie Gold Rush Strikes Again!
The soaring gold price on the international market has sparked a gold fever in Australia. As they watched the price of gold climbing up ordinary Australian Mums and Dads have started to snap up gold bars and coins, ingot, even medallions and shares on gold bullion companies.
Australians remember well the "recession we had to have" as announced by the then Australian Treasurer Paul Keating in the early 1990s. This time they are determined not to be caught out and gold is fast being seen as a safe haven from a possible impending recession as a result of the US economic turmoil.
"Traditionally when markets are a bit shaky, investors turn to gold as a safe haven," said one commodities dealer.
Business has also been brisk at the Perth Mint shop, which sells actual gold bullion bars, ingots and coins worth anywhere from $500 to several million and total sales have jumped by almost 50 per cent in the past six months.
Perth Mint treasurer Nigel Moffatt said mum and dad investors, especially those running self-managed superannuation funds, were shelling out an average $150,000, but some buyers were pouring millions into the glittery metal. "There are a lot of people in Australia with a lot of money to invest who are quite nervous about the stock market and see gold as a solid investment that has been around for 5000 years."
Manager Cathy Anza commented that 75 per cent of sales in the past month have been to first-time investors.
"People have been watching the price moving upwards and are hoping it will keep going," she said.
"When times are tough, people take a lot of comfort in gold because they like to have a physical asset they can hold."
Ms Anza said buyers often stored their gold bullion, delivered by armored vehicle, in bank safety deposit boxes.
An Aussie gold rush is on again!
Gold Going Down or Gold Correction?
Since hitting the all time high of 914 dollars an ounce gold has been dropping and is now in the 870 to 890 range. A big fat drop it would seem. But the economy has not changed. Yes, the dollar has strengthened slightly (whatever does that mean? You can't tear it in half anymore?) and oil is lower. But that would not account for such an "interesting" drop. The demand for gold has not changed. The value of gold has not changed. Only the value in dollar terms. So what has changed?
The higher the value set on a commodity the bigger will seem the drop. Instead of saying, "Wow, gold dropped 20 dollars today!" Perhaps one should be looking at the percentage of the drop. "Oh gold only dropped 2 percent today." That give a better perspective.
The drop is slight. Part of the day to day ups and downs, the parry and thrust.
So what has changed?
Profit taking. That's what has changed. Many people bought into gold when it was in the 600 to 800 range. Now maybe because they emotionally believe it is too high, or maybe seeing a good profit to be made, some are selling out and raking in the profits. This is what has bought the price down.
"There has been a reversal of recent trends and the dollar has strengthened and oil and commodities have sold off from overbought conditions," said Mark O'Byrne, analyst at Gold and Silver Investments Ltd. "Corrections in most markets were expected as recent movements had been sharp."
Now that the profit takers are sitting home at the kitchen table counting their money, gold is likely to return to its busy trend. UPWARD.
There is still a long way to go for gold to reach its true value against the dollar That one thousand dollar gold price can be seen in the distance now.
And it is getting closer.
Why Gold?
Why gold indeed. It is often said that money talks. Well, if money talks then gold screams.Gold has been steadily climbing since the turn of the millennium and if that is not a scream I don't know what is.
It has been said that "the price is being driven by growing investment interest, safe-haven demand and strong market fundamentals." Actually it is more driven by the decreasing value of paper currency. In addition to that we have a stronger than ever Asian interest in gold unparalleled even in the 1980s. China, is buying gold as if there was no tomorrow and the stocks of gold increase by only 2 percent per year meaning that soon it is going to be in very short supply.
Apart from some expected profit taking, gold is now in the 900 dollars an ounce range and analysts are expecting that magic 1000 dollars an ounce to be reached early this year.
Then it will be time to break out the champagne.
But what does this mean to the fellow in the street? It means everything in short. Gold is the barometer of finance. It is the handkerchief fluttering in the wind. The canary in the gold mine. The wind up the Khyber Pass. In short gold tells you what the state of the economy is.
Inflation
Inflation could be said to be an increase in prices or a decrease in the value of the currency mostly cause by too much money in circulation. How can that be, some might ask. "I don't have too much money," I hear someone say!
Inflation is not caused by ET or strikes or greedy company CEOs. It is caused by printing more paper money to pay for more debt created by banks using the fractional system.
Meyer Rothchild once said, "Give me control of a country's money and I care not who makes the laws".
The apparency of inflation is that prices, like oil for example, are going up. But the actually value of products and services is not going up. The dollar is going down in value and so it takes more of them to buy the same product or service. This is not the case with gold. In 1900 one ounce of gold would buy you a very nice men's suit in London. Gold was about 20 dollars an ounce then. Today you can buy a very nice men's suit in London for one ounce of gold. I bet you know how much gold is per ounce today.
The difference, of course, is the drop in the value of the dollar. Hence higher oil prices, Higher property prices. Higher food prices. Higher everything prices.
So when you read about greedy oil companies, or high property prices know that it is not true. The value of commodities are not rising. The dollar is falling.
So Why Gold
"The central banks are flooding the market with paper. Does anybody now take the dollar, the euro or the pound seriously? People are turning to gold because it is the only hard store of value."
- Peter Hambro of Peter Hambro Mining
There is 641.81 tonnes of gold held in the vaults of StreetTracks gold ETF (exchange traded fund) for private investors. They are the 7th largest holder of gold in the world. Impressive when you consider that most of the gold holdings are owned by banks. This is a private company, not a bank. This fund only began in 2004 so is only 3 years old.
Evidently private investors, in the face of ineffectual economies, are turning to gold as a safe haven and a protection from the Begger-thy-neighbour practice*
Bond guru at Morgan Stanley, Joachim Fels has stated that the central banks will tolerate an upward creep in the underlying level of inflation because the pain required to kick the habit at this late stage is deemed too high. "I strongly doubt that they will tighten the screws. I expect 2008 to mark the beginning of another global liquidity cycle."
So there is to be no relief anytime soon it seem as far as the economy, inflation and value of the dollar is concerned.
So it is no surprise that gold is valued so highly.
Objections to Buying Gold
A gold analyst recently gave the following responses to objections to buying gold.
You can't eat gold
Response: So? You can't eat paper money either. Gold isn't in competition with food. It is in competition with paper money.
You can't put gold into your car's gas tank
Response: You can't put gasoline in your pocket either. See previous response.
Gold is only worth what someone is willing to trade for it
Response: That is true. It is also true of paper money. The difference is that to get gold you have to find it, dig it up, smelt it, and coin it. The stock of gold usually only grows at about 2 percent a year. Paper money, on the other hand, can grow by infinite amounts because all you have to do to create it is punch some keys on a keyboard. This is why gold retains its value and paper money always becomes worthless in the end. For example, in 1899 London an ounce of gold would buy you a nice men's suit. In today's London an ounce of gold would buy you a nice men's suit.
Now compare that to the purchasing power of a U.S. dollar.
Gold isn't money
Response: Then why do Central Banks around the world have 13,000 tons of it in their vaults? Why would a bank put something into their money vault if it isn't money? "But they are selling it," you say. Well, they are buying it to.
There's not enough gold around to be a currency today
Response: Not at today's gold prices there isn't. But then there is no reason for gold to remain at today's prices.
When currencies collapse you want a gun, not gold
Response: First of all, when whole societies collapse only precious metals are money. Nothing else is (for example, Roman coins were used as money for centuries in Europe after Rome had fallen). Precious metals became money without government coercion, and when the government becomes powerless, precious metals will return as common currency. Because unlike paper, precious metals aren't built on debt.
Secondly, every idiot in the country (USA) has a gun. Your gun isn't going to impress them.
Thirdly, society rarely collapses when its currency does. A good example is Weimar Germany. History is filled with examples of paper money becoming worthless, impoverishing whole sectors of a nation, and then the nation moves on and learns from the mess for a couple generations before they make the same mistakes all over again.
Gold is a bad investment based of its track record since 1980
Response: The argument sounds good on face value, but not if you look closely.
First of all, gold spent all of two trading days above $800 in 1980. So extremely few people bought gold at the top of the 1980 mania, thus very few people lost the kind of money that gold-haters like to portray.
Secondly, the same people who criticize gold as an investment probably won't tell you to never buy tech stocks, despite the fact that a lot more people bought NASDAQ stocks near 5,000 (and lost quite a bit more) than ever bought gold near $800. The lesson here is: don't buy into a mania.
Finally, and most importantly, people didn't start buying gold in 1980. People have been buying and selling gold for 5,000 years. It has a track record that almost no other investment class can beat. It neither gains value or loses it. It just sits there...retaining value.
Gold is a risky investment
Response: Gold is probably the safest investment you can make. Looking at the chart above, there is really only one instance in history that caused gold to make a dramatic fall - Spain dumping stolen Incan and Aztec gold onto the market. Barring a half-mile wide asteroid made of solid gold hitting the Earth, that is unlikely to ever happen again. The huge gold strikes in California and South Africa barely even made a dent in the price of gold.
So there is the answer to the question, why gold. Gold keeps its value even while the dollar doesn't. Besides, you never know when your going to need a new suit.
*An international trade policy of competitive devaluations and increased protective barriers that one country institutes to gain at the expense of its trading partners. http://financial-dictionary.thefreedictionary.com/Beggar-thy-neighbor
Wednesday, January 9, 2008
Chinese Gold Futures
Chinese gold futures made a strong debut on the Shanghai Futures Exchange (SFE) on Wednesday amid a world wide bull market for gold.In a time of potential impending recession in the US, rising oil prices and property not seen as quite the favorite anymore, gold is being seen as a safe haven for investors world wide not the least by the astute Chinese business market.
The June delivery contract made a strong start surging 9.98 percent to 230.95 yuan (around 31.54 USD) per gram. Other daily limit contracts rose for July through to December delivery.
Contract size was set at 1000 grams. This is over three times the original envisaged but was out in place to discourage individual investors.
Analysts said they believed most futures brokers will ask for a 12 percent cash deposit for each contract and investors would need around 24,000 yuan to secure a futures contract.
The most active June contract closed the first trading day at 223.3 yuan per gram, up 6.34 percent, with a turnover of 23.2 billion yuan, according to the SFE website. The total turnover of the seven contracts was registered at more than 27 billion yuan for the day.
After peaking at 230.99 yuan all futures dipped slightly to end up at between 223 yuan and 228 yuan at the close of the day.
China gold futures trading was launched as international gold prices have repeatedly hit new highs. Global prices jumped more than 30 percent last year, the biggest increase since 1979 and look set to jump even higher in the first part of this year.
China now looks set to be a big player in the gold futures market
Tuesday, January 8, 2008
Gold Coin Goes from 20 Dollars to Half a Million
Buy a gold coin for 20 dollars and sell it for half a million dollars. That's what Douglas Winter, a Portland USA coin broker did. He bought a 1856-O Double Eagle, the rarest gold coin struck at the New Orleans mint in November last year and sold it in Dec the 17th for a hearty 542,000 US dollars.The New Orleans Mint struck only 2,250 of these coins and only 20 to 30 are known about today, according to Douglas Winter, who does business from a Pearl District loft as Douglas Winter Numismatics and wrote "Gold Coins of the New Orleans Mint, 1839-1909."
Owning one of these coins, he stated, is like an art collector landing a Raphael painting.
"It is a true classic rarity," agreed Gary Adkins, a coin dealer in Minnesota and president of the selective Professional Numismatists Guild, of which Winter is a member. "If you were a collector, this would be a crown jewel of your collection."
Winter bought the 1856-O -- slightly larger than a half dollar but nearly three times its weight -- for $525,000 from a St. Paul, Minn., dealer. He sold it to a New England collector he declined to identify to honor his privacy.
The coin is well known for its almost perfect appearance. A full strike of the die in all areas of the liberty head and eagle figures, and the satiny luster and shadowing around each star, according to CoinFacts.com. The New Orleans mint started making gold coins in 1839, closed during the Civil War and reopened from 1879 through 1909. The double eagles were the largest denomination of gold coins. The smallest was a gold dollar piece.
The sale underscores interest in these little vessels of American history. Winter and Adkins also said interest in gold coins, especially, is expanding as investors look to diversify in the face of fading real estate and stock markets.
But Winter said his typical customer is a baby boomer guy -- like him -- who grew up collecting Lincoln pennies, could never afford the prized 1909-S Vdb penny, and now has the money to indulge his interest.
Winter, 48, moved from Dallas, Texas, to Portland two years ago for the lifestyle. And while he has, on occasion, obtained and sold coins for more than this double eagle, he said handling this one was a thrill.
"That gave me some goose bumps, to be able to buy and sell a coin that was so rare and at that price level," he said. "It was really one of the highlights of my year."
Thursday, January 3, 2008
Gold Futures up Again for the Second Day
Gold futures were up again for the second day running pushed by a weakened dollar and ever increasing oil prices. Oil is over that magical 100 dollars a barrel and gold is now well over the 850 dollars an ounce. Gold is evidently being seen far and wide as a safe haven investment.
In the futures, gold for February delivery rose $8.60 to $868.60 an ounce on the New York Mercantile exchange. Also February silver added 17 cents to $15.40 an ounce, while February copper gained 7.85 cents to $3.1380 an ounce.
The confidence in gold as a short and long term investment is clearly demonstrated by the gold futures now maintaining a steady climb to what some analysis see as a new plateau for gold. 1000 US dollars an ounce is now not out of the question and this could be reached in the first quarter of the year some analysis predict.
On Wednesday, gold prices around the world hit a trading high of $864.50, marking an almost historic 30-year record in what's known as front-month trading of gold contracts; the previous high was $850. Gold prices have increased over 3o percent in 2007. A great investment by anybodies standard.
"The euro continues to tick a little higher, and that's supporting the gold market," said James Steel, a precious metals analyst at HSBC. "If you combine that with the uptick in the oil price, you have a cocktail that is positive for bullion."
According to Jon Nadler, an analyst with Kitco Bullion Dealers, a gold buying spree by investment funds also propped up gold Thursday, the second trading day of the new year.
"The funds' Godzilla-sized footprint is really evident today. They have a lot of money to play around with, and it's helping gold," Nadler said.
The surge in the price of oil - which hit $100 a barrel for the first time ever Wednesday and did so again Thursday - also contributed to boost the price of gold while investors shifted more resources to the precious metal, often seen as a hedge against inflation and political uncertainty.
We can probably expect a little profit taking today or tomorrow resulting in a slight drop, giving some advantage for latecomers to buy in, but it looks certain that the gold price is going to continue its climb over the coming months.
In the futures, gold for February delivery rose $8.60 to $868.60 an ounce on the New York Mercantile exchange. Also February silver added 17 cents to $15.40 an ounce, while February copper gained 7.85 cents to $3.1380 an ounce.
The confidence in gold as a short and long term investment is clearly demonstrated by the gold futures now maintaining a steady climb to what some analysis see as a new plateau for gold. 1000 US dollars an ounce is now not out of the question and this could be reached in the first quarter of the year some analysis predict.
On Wednesday, gold prices around the world hit a trading high of $864.50, marking an almost historic 30-year record in what's known as front-month trading of gold contracts; the previous high was $850. Gold prices have increased over 3o percent in 2007. A great investment by anybodies standard.
"The euro continues to tick a little higher, and that's supporting the gold market," said James Steel, a precious metals analyst at HSBC. "If you combine that with the uptick in the oil price, you have a cocktail that is positive for bullion."
According to Jon Nadler, an analyst with Kitco Bullion Dealers, a gold buying spree by investment funds also propped up gold Thursday, the second trading day of the new year.
"The funds' Godzilla-sized footprint is really evident today. They have a lot of money to play around with, and it's helping gold," Nadler said.
The surge in the price of oil - which hit $100 a barrel for the first time ever Wednesday and did so again Thursday - also contributed to boost the price of gold while investors shifted more resources to the precious metal, often seen as a hedge against inflation and political uncertainty.
We can probably expect a little profit taking today or tomorrow resulting in a slight drop, giving some advantage for latecomers to buy in, but it looks certain that the gold price is going to continue its climb over the coming months.
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