Wt Physica Gold Discussion Threads

[spob] 14/9/2009 22:37

Central banks set to be net gold buyers
By Chris Flood

FT

Published: September 14 2009 18:59 | Last updated: September 14 2009 18:59

Central banks are set to become net buyers of gold this year for the first time since 1998, according to GFMS, the metals consultancy.

This reverses the trend of the past decade when central banks, particularly in Europe, reduced their holdings. Central banks have been net sellers of gold in only seven year since the ending of the Bretton Woods exchange rate agreement in 1971.

EDITOR'S CHOICE
In depth: Gold - Mar-20Hedging loses its lustre for gold - Sep-13Barrick Gold plans to raise $3.5bn - Sep-08Randgold share placing furthers Moto ambition - Jul-28Randgold leads counterbid for Moto - Jul-16India's gold prices set to rise - Jul-06GFMS said the switch took place in the second quarter and would continue in the second half. Net official sales are forecast to drop 93 per cent this year to less than 20 tonnes, the lowest level since 1988.

GFMS said the gold market stood at a crossroads. On the one hand, if government monetary and fiscal stimulus programmes failed to rejuvenate the world economy and deflation fears increased, gold could fall below $850 by the end of the year as investors returned to the safety of the US Treasury market.

On the other hand, dollar weakness and rising inflationary pressures could drive gold higher.

Philip Klapwijk, GFMS chairman, said: "If inflation's return becomes obvious and higher than generally forecast [inflation] levels look possible, then gold prices well over $1,000 could be achievable." He said "on balance" GFMS favoured the latter scenario.

This was in spite of the fact that jewellery demand this year was likely to be the weakest for two decades after a drop of almost 25 per cent in the first half of 2009.

Gold continued to hover around $1,000 a troy ounce on Monday, after breaching that level last week for only the third time in its history.

Worries over an imminent correction have mounted after the largest weekly increase for a decade in bets that prices would rise. The net long position held by speculators stood at a record 29.02m ounces for the week ending September 8, up 6.4m ounces, or 28.3 per cent, on the previous week, according to the Commodity Futures Trading Commission.

UBS said the net long position probably rose further last week.

On previous occasions when the long position has risen by more than 6m ounces in a week, said John Reade, precious metals analyst at UBS, gold prices fell 5.1 per cent on average over the following four weeks.

Mr Reade repeated his forecast for gold to drop to $950 in a month and advised "nimble investors" to take profits and re-enter the market after a correction.

[magnus9] 13/9/2009 13:25

Max Keiser talks with Rob Kirby (GATA consultant). They cover Barrick, JP Morgan and the fact that GATA have been advising the Chinese government since April, 2008.

[babylon3] 11/9/2009 15:08

kaching :)

[goldenshare888] 08/9/2009 08:07

Ditto...............$1000+

[magnus9] 07/9/2009 09:26

It's quite a sobering thought that if only 1 in 4 Chinese buy 1 ounce of ANYTHING, the total volume comes to about 10,000 tonnes.

I hope this gives the Comex nightmares.

[goldenshare888] 03/9/2009 09:04

Breaking out..........................................

[babylon3] 03/9/2009 09:03

Gold seems much more active in the last couple of days.

[babylon3] 02/9/2009 15:55

Lets hope so.

[goldenshare888] 02/9/2009 15:05

Looks like JP Morgan etc may be right..........................................$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

[babylon3] 02/9/2009 13:42

Looking good.

[babylon3] 27/8/2009 14:08

Good for gold?

[goldenshare888] 26/8/2009 09:51

NICE.........................$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

[babylon3] 25/8/2009 13:08

Aug. 25 (Bloomberg) -- Gold will rise to more than $1,000 an ounce next month based on moving-average "deja vu" patterns since the start of 2005, according to Barclays Capital.

This year's trading was similar to previous patterns that indicated gold has a tendency to "break higher" in September and the 200-week moving average showed the uptrend on the precious metal remained intact, Jordan Kotick and other analysts at Barclays wrote in a report on Aug. 21.

Bullion jumped 7.8 percent in September 2005 and 10 percent in September 2007, laying the ground for the metal to rise to new highs in the following months. Gold traded at $946.20 an ounce at 12:40 p.m. local time in Singapore, up 7.3 percent this year. The metal was "mired" in a contracting range between $967 and $928, the analysts said.

"This is likely a repeat of Aug. 2005 and Aug. 2007 when the market broke significantly higher in September," the analysts said. "We are looking for a breakout above $1,033 next month." Gold rose to a record $1,032.70 on March 17 last year.

The metal will rise to $979.74 an ounce in the fourth quarter and climb to 994.84 in the first quarter, according to a weighted average calculated by Bloomberg using forecasts of 18 analysts.

JPMorgan Chase & Co., Standard Chartered Bank and three other financial companies predicted bullion would top $1,000 in the fourth quarter, the survey showed.

[spob] 19/8/2009 21:04

Warren Buffett warns budget deficit may harm dollar

Warren Buffett has given warning that the US's $1.8 trillion (£1.1 trillion) budget deficit could harm the purchasing power of the dollar, even though he admits the American economy "appears to be on a slow path to recovery".

By James Quinn, US Business Editor
Published: 8:07PM BST 19 Aug 2009

Warren Buffett admitted that the American economy "appears to be on a slow path to recovery" Mr Buffett, the world's second-richest man and famed for his ability to make astute investments, believes that the "gusher of federal money" flowing in to the US economy could eventually fuel inflation and devalue the greenback.

In a comment piece in yesterday's New York Times, Mr Buffett said that while he "resoundingly applauds" the efforts the Federal Reserve and both the Bush and Obama administrations have made to support the US economy, it does not come without a price.

Writing that the "US economy is now out of the emergency room," he continues: "Enormous dosages of monetary medicine continue to be administered and, before long, we will need to deal with their side effects."

"For now, most of those effects are invisible and could indeed remain latent for a long time. Still, their threat may be as ominous as that posed by the financial crisis itself."

Mr Buffett likened the threat of what he called "greenback emissions" to that of greenhouse emissions, before urging members of the US Congress to work to reduce the budget deficit by making changes to taxes and spending.

His comments were made as the Pacific Investment Management Company (PIMCO), warned that the dollar's status as the world's reserve currency will undoubtedly come to an end.

Curtis Mewbourne, PIMCO's portfolio manager said in a report that " we are clearly seeing a loss of status for the US dollar as a store of value".

[spob] 15/8/2009 16:43

Central Bank Gold Agreement

Adam Hamilton August 14, 2009



Meanwhile, the Asian CBs that are likely to grow dramatically are radically overweight US dollars and need to buy lots more gold in the coming years. The top 5 European CBs in terms of gold holdings are Germany at 69.5% of its reserves in gold, Italy at 66.1%, France at 73.0%, Switzerland at 37.1%, and the Netherlands at 61.4%. In stark contrast, the top 5 Asian CBs are China at 1.8% of its reserves in gold, Japan at 2.1%, Russia at 4.0%, Taiwan at 3.8%, and India at 4.0%. Unlike the European CBs, the Asian CBs need to diversify into gold. They are woefully underweight it.

And they will. As this secular gold bull continues higher and gold becomes ever more attractive as an investment, CB gold buying from the East should easily eclipse CB gold selling in the West. Worldwide, there is little doubt that CBs will become net buyers of gold before this secular bull ends. Obviously this is extremely bullish, since CB supply up to this point is the only thing that capped gold prices at a mere quadrupling.

[spob] 07/8/2009 18:52

Central banks to lower gold sales ceiling
By Javier Blas in London


FT

Published: August 7 2009 12:10 | Last updated: August 7 2009 17:08

Gold bulls were given a psychological boost yesterday as European central banks announced a lower ceiling than expected for their bullion sales over the next five years, reducing their annual quota by 20 per cent to 400 tonnes.

The lower ceiling is a fresh sign that the "anti-gold" climate that was prevalent among central banks throughout the 1990s and in the early part of the current decade seems to be fading away. Bullion prices hit a 23-year low in 1999 after the Bank of England revealed it was selling a large chunk of its gold holdings.

EDITOR'S CHOICE
In depth: Gold - Jan-03Sugar prices surge amid supply concerns - Aug-07Interactive graphic: The unstable metal - May-07ECB joint statement on gold - Aug-07Although other factors, such as jewellery demand, investors' buying patterns or mine production are more important for prices, the official sector activity usually has an important psychological impact on the bullion market.

In a joint statement, the European central banks said their gold sales "will be achieved through a concerted programme of sales over a period of five years, starting on 27 September 2009, immediately after the end of the previous agreement".

They went on: "Annual sales will not exceed 400 tonnes and total sales over this period will not exceed 2,000 tonnes." The new agreement will also "accommodate" the International Monetary Fund's plan to sell 403 tonnes of gold from its reserves.

Jonathan Spall, a director at Barclays Capital's commodities desk and expert on gold, says: "All in all [it is] mildly positive for gold – with the stress on mild."

John Reade, a precious metals strategist at UBS in London, agrees, saying the lower ceiling is a "small positive" for the market, noting the signatories of the Central Bank Gold Agreement "have not used the full ceiling for the past couple of years".

At the same time, the Swiss National Bank, one of the top 10 holders of the metal, said it had no plans to sell gold soon. The bank was a big seller earlier this decade and in the 1990s.

In London, spot gold surged on news of the lower ceiling to $963 a troy ounce, near a two-month high. But later it pared gains to trade at $958. Since the Lehman Brothers collapse last September, gold prices have gone up, rising almost 13 per cent in the past 12 months. Bullion hit a record high of $1,034 an ounce in March 2008.

Investors, from hedge funds and rich individuals to pension funds and retail investors, have piled into gold, buying bullion-backed exchange-traded funds, futures and even bullion coins and bars.

The market will pore over central bankers' speeches for any sign of selling, but most bullion traders struggle to say who will fill the 2,000 tonnes over the next five years. Setting aside 400 tonnes from the IMF, with Switzerland excluding itself, only the European Central Bank and Banque de France appear candidates for meaningful sales.

The Bundesbank has yet to follow other European central banks that have sold gold over the past decade, and analysts believe the German central bank is unlikely to dispose of its bullion holdings now.

Banca d'Italia has not sold either, but now the Italian government is pressing it to pay a special capital tax over the increase in the value of the central bank's gold holdings. Banca d'Italia opposes the measure and Jean-Claude Trichet, ECB president, this week stepped up his opposition to the tax plan.

"We have an unambiguously negative opinion," he said in Frankfurt. The ECB argues the measure would undermine the principle of central bank independence.

Without sales from Germany and Italy, most analysts and traders believe the 400-tonnes quota will not be fulfilled in any year. Indeed, the CBGA signatories have not satisfied their annual 500-tonnes current quota in the past two years.

GFMS, the London-based precious metals consultancy, estimates that central banks' gold net selling – including banks outside the CBGA – fell in the first half to 39 tonnes, down 73 per cent from the same period last year, and it forecasts that it will total 140 tonnes this year, the lowest since the trough of 130 tonnes in 1994.

The consultancy says the "anti-gold" climate seems to have ended. China shocked the bullion market earlier this year when it announced a significant increase in its gold reserves, from 600 tonnes in 2003 to 1,054 tonnes.

"Although the official sector remains a net seller overall, sentiment ... has shifted to one considering the metal to remain an important reserve asset," GFMS argues.

Additional reporting by Ralph Atkins in Frankfurt

[babylon3] 31/7/2009 10:23

A very good read...

[babylon3] 31/7/2009 08:50

Well I bought PHAU this AM.