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Irish property auction http://www.independent.ie/lifestyle/the-property-auction-that-will-show-us-just-how-bad-the-crash-is-2606455.html

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SluggerOtoole synopsis and pointers

The following section is from a Merrill Lynch report of the 17th August. The formatting is lost since just the text is copied from a pdf. Screen snapshots of the charts and tables are at the hosted links. Gold Overview We have recently upgraded our forecast and see gold averaging $1,191/oz this year and $1,350/oz in 2011 (see Global Metals Weekly, 21 June 2010). Our positive view is heavily influenced by the current macroeconomic environment and we therefore reinforce our positive outlook on the metal. We argued back in October 2008 that gold prices would move up to $1500/oz in three steps (see Global Metals Weekly, 10 August 2010): ? The outburst of the credit crisis in August 2007 marked the start of the first stage where gold started to reflect the rising risk premia, rising from $650/oz to about $950/oz. ? The second stage of gold price appreciation, we argued well over a year ago, would primarily be about USD weakness and lack of confidence in fiat currencies. We argued that gold could break through $1,200/oz in this second stage and strengthen against all currency crosses as governments rushed to debase fiat currencies. ? The third and final stage will be driven, in our view, by a strong cyclical recovery in energy and commodity prices. Monetary policy will push gold prices higher As policy measures help create an upswing in economic activity over the next two years, cyclical pressures will come back into the system, likely resulting in a lot more money chasing the same oil barrels or the same gold ounces. Here is where we continue to see a third stage of gold price appreciation where gold moves up on the back of higher oil and commodity prices (Chart 90). Admittedly, chances of a robust upturn in economic activity have diminished, but continued economic stimulus will ultimately create either growth or inflation. Simply put, we still believe that more money chasing the same barrels will likely push oil back up above $100/bbl over the next 18 months. As we expect gold to maintain its long-run relationship with other commodities, we believe a significant cyclical rally in oil prices could ultimately push gold to $1,500/oz (Chart 91). Emerging market consumer demand for gold will surge As incomes grow across a broad range of emerging economies, we expect jewellery and coin demand to grow in countries like China and India. Physical gold demand has been historically dominated by India. But following a series of policy changes, China’s gold demand has also flourished of late (Chart 92). Opening an organised gold exchange was one of the earliest steps implemented by the government. The jewellery sector has also been gradually liberalised. For a long time, gold hoarding had been prohibited but the removal of jewellery price controls by China’s authorities will help spur demand. And of course, the government itself has also been a steady gold buyer, raising its gold holdings to 1,054 tons in recent years. After the sharp fall following the financial crisis, global jewellery demand in 1Q10 was up 43% relative to 1Q09 (Chart 93). In our view, this trend is likely to continue going forward as EM consumers’ purchasing power is spurred by economic growth and FX appreciation. EM FX reserves continue to grow and diversify Perhaps one of the most supportive arguments to own gold comes from foreign exchange reserves asset allocation in Emerging Markets (Chart 94). What are foreign exchange reserves exactly? FX reserves typically include foreign currency deposits, bonds, gold, SDRs and IMF reserve positions held by central banks and monetary authorities. In recent years foreign exchange reserves have grown exponentially as many Emerging Economies, led by China, opted to maintain large trade account surpluses to fuel export-led growth. With a bleaker economic growth outlook for the US and Europe ahead, it is unlikely that the pace of foreign exchange reserve accumulation will continue on the back of large EM trade surpluses. However, substantial capital outflows from developed to emerging economies could lend support to EM foreign exchange reserve accumulation for a number of years (Chart 95). Moreover, given the relatively low share of gold in EM FX reserve portfolios, we believe that diversification into the yellow metal will likely continue over the next few years. The importance of central bank gold purchases is also reflected in Table 20, which shows that EM central banks from India, Sri Lanka and Mauritius have absorbed almost three-quarters of sales that have emanated under the umbrella of the Central Bank Gold Agreement. Gold supply trails the expansion in global nominal GDP In effect, the increase in the global stock of gold is roughly equivalent to the increased mined output every year. In 2009 and 2010 we estimate this figure to be 2,350 and 2,300 tons, or roughly 1.5% of the current global above-ground stock of gold. With governments around the world loosening up monetary policy to stimulate the economy, not enough gold is mined out of the ground relative to other goods in the economy. Because the public finances of the US, Japan, Britain and the Eurozone are in such dire straits, it is hard to envision how these countries will return to trend economic growth without robust foreign demand, suggesting that this dynamic could go on for a while. http://www.mediafire.com/imgbnc.php/18d7d9...2713afa286g.jpg http://www.mediafire.com/i/?ue63i48my5d68nq http://www.mediafire.com/imgbnc.php/b3b5d3...852bd3eb16g.jpg http://www.mediafire.com/imgbnc.php/e50edb...4372c187a6g.jpg http://www.mediafire.com/imgbnc.php/328207...dc8ba26fe6g.jpg

http://produkte.erstegroup.com/CorporateCl...l?ID_ENTRY=2150 is a 71 page report on gold just published by Erste Group.