GOLD

[grumpy-old-man]

a bit of light relief:

 

 

anyone got a spare £1.6 million for

 

check out the canadian coins

100kg gold coin :o

 

a mistake I presume. you would need a pretty well made pair of pants to put that one in your pocket.

 

[enrieb]

a bit of light relief:

 

 

anyone got a spare £1.6 million for

 

check out the canadian coins

100kg gold coin :o

 

a mistake I presume. you would need a pretty well made pair of pants to put that one in your pocket.

 

On the coin picture it does actually have 100kg stamped on the coin, but how would a person even lift such a thing?

 

Here's a Jim Rodgers interview from the 24th oct, he's been buying gold and still expects massive inflation and a continuation of the commodities bull market.

 

http://uk.youtube.com/watch?v=mBVC3H8Pgc4

 

Also news from the Hindutimes about gold being a good investment

 

 

http://www.hindustantimes.com/StoryPage/St...+best+bet+today

 

It’s Dhanteras, the auspicious day that Hindus buy precious metals to usher in Diwali, but there is a sound economic reason for you to pick gold.

 

At a time when investment in almost everything else — from stock to currency and oil futures — is fraught with uncertainty, investors and traders are increasingly turning to gold because it is safe and promises good returns.

Of course, it’s also a good way to honour Dhanavantri, the physician to the Gods, after whom Dhanteras is so called.

 

Gold prices have nearly doubled in the past six years and experts predict a continued climb, both in the short and the longer term, because supplies will continue to trail demand for several years.

 

“People always want something to bet on,” said Prakash Khandelwal, a Mumbai broker. “Right now, it is gold.”

 

Gold sales through this month have risen about 66 per cent from a year ago, according to the All India Gems & Jewellery Trade Federation. The federation’s figures don’t include fast growing sale of gold coins by banks and post offices that now account for 10 per cent total gold sales in the country.

 

“I am short of salesmen because of the rush,” said Kumar Jain Kumar Jain, who owns a jewellery store, Umedmal Tilockchand Zaveri, in South Mumbai.

 

“People are booking gold in advance for Dhanteras.” Jain said.

 

In recent days, gold prices have fallen as central banks worldwide have been selling gold to boost liquidity. As a result, prices have become more attractive than they were some weeks ago. On Saturday, gold prices closed at Rs 11,900 per 10 grams.

 

Investing in gold makes sense, also because “it is extremely liquid and is a good hedge against inflation”, said Keyur Shah, Associate Director of World Gold Council, a grouping of the world’s leading gold producers.

Like everything else that is trade, gold prices also go up and down, but are much less volatile than stocks, Shah said.

 

“It is the best investment for long run,” said Vanita Gowani, a Mumbai-based garment trader. “It would be profitable even for my next generation.”

 

Especially with double digit inflation in India atm.

 

http://www.hindustantimes.com/StoryPage/St...+concern%3a+RBI

 

With inflation still in double-digits, the Reserve Bank has not tinker with key rates in its credit policy to push up growth as it has to balance price stability and growth.

 

"There are inflationary concerns (in the economy) even though in a mathematical sense, it is coming down...We have to balance the concerns of maintaining price stability and sustaining growth," Reserve Bank Governor D Subbarao told reporters here today.

 

After injecting Rs 1,85,000-crore liquidity into the banking system through various monetary and fiscal measures, including a 2.5 per cent cut in cash reserve ratio and a one per cent cut in key short-term repo rate in recent weeks, the Reserve Bank left its rates unchanged in the credit policy unveiled on Friday.

 

While the apex bank has lowered the growth rate to 7.5-8 per cent for FY'09, it has retained the earlier inflation target of lowering it to seven per cent by March-end.

 

Inflation continued to be a matter of concern as the RBI forecast is based on not merely the wholesale price index but also other data, he said.

 

"The RBI makes a deeper study and if one analyses the consumer price index, the CPI for agricultural and rural labour was up by 11 per cent and that for industry was up 9 per cent," he said.

 

Oil prices, though declining still continued to be volatile and kharif output, though promising, is forecasted to be lower, he said, adding that "a weakening rupee also adds to inflationary pressures."

 

The RBI has announced its monetary policy in the light of these concerns and balanced the need for financial and price stability while propping up sagging growth, he said.

 

Inflation fell to 11.07 per cent for the week ended October 11.

 

[grumpy-old-man]

On the coin picture it does actually have 100kg stamped on the coin, but how would a person even lift such a thing?

"On May 3, 2007, the Royal Canadian Mint unveiled a Gold Maple Leaf coin with a face value of One Million Dollars,[1] though the gold content was worth over $2 million at the time. It measures 50 cm in diameter by 3 cm thick and weighs 100 kilograms"

 

100kg coin wiki link

 

info near the bottom of the link.

 

actually I thought it would have been bigger than that.

[grumpy-old-man]

oops...

[Steve Netwriter]

actually I thought it would have been bigger than that.

 

Not sure, but I think gold is quite dense

 

I think I'll pass on that coin. Unless someone want to buy me one

 

[G0ldfinger]

That's a very interesting one, if true:

 

http://goldismoney.info/forums/showpost.ph...postcount=21567

Bill,

A quick note.

Mr du Plessis of Rand Refineries tells me that JP Morgan is virtually begging for delivery of all available gold and has been aggressively pushing the South Africans for delivery for a number of weeks already. None of the "non-Cartel" mining houses are willing to sell their stocks stored at the refinery at current prices.

 

He also advises me that J P Morgan are on an extremely short list of buyers entitled to delivery of any stock available for sale and that all buyers not on the short list are simply turned away, no matter how much cash they have in hand. Non-Cartel holders of bullion will sell only at very high premiums over spot, but they do have stock if anyone is interested.

 

The South African refinery is convinced that the pog will bounce off a low somewhere in the mid $500’s and track straight back up past $1000.00 and into the mid $1500’s in short order.

 

Good luck to anyone who can secure delivery at current spot prices.

 

This squeeze is definitely tightening.

Regards

The Buccaneer

 

So, in other terms, maybe JPMorgan shorts the heck out of gold on the COMEX to get artificially low prices and then shows up in South Africa and expects mines to actually sell at these laughable prices. I guess they think they're clever.

 

[Wanderer]

Hi,

 

Can we assume that if BoE cuts interest rates again soon (in response to the evidence that we are now in recession in the UK) that savers will start casting around for somewhere else robust to put their cash given that returns on cash in the banks will be becoming fairly derisory soon?

 

Any evidence this might be gold?

 

W

[id5]

On the coin picture it does actually have 100kg stamped on the coin, but how would a person even lift such a thing?

...

 

100KG or 220LB is not too heavy to lift. It is small in size and easy to get your arms around. A fit male should be able to move their 1.5 times their body weight. Someone who is less than average weight should be able to move it, if not you might want to consider excersise.

[enrieb]

100KG or 220LB is not too heavy to lift. It is small in size and easy to get your arms around. A fit male should be able to move their 1.5 times their body weight. Someone who is less than average weight should be able to move it, if not you might want to consider excersise.

 

*cough* I have done weight training in gyms for many years, I have also worked in metal fabrication firms where I daily have to move around lots of 50kgs bags of abrasive grit and occasionally have to lift objects far in excess of 100kgs. So I do know exactly how heavy 100kgs is.

 

100kgs is a very heavy weight and if its in the form of a 50cm by 3cm disc then it is a dead weight, not a weight most people would be able to lift comfortably without doing themselves some serious damage. True that a fit healthy adult is easily capable of lifting weights much greater than 100kgs, if done in the correct manner, but what percentage of the population are that fit. At a guess based on observations at work and at gyms I would say at best 10% of the population are capable of lifting a 100kg barbell comfortably and if its in the form of a dead weight then that figure would be 5%.

 

Carrying a person using a fireman's lift technique or lifting 100kg on a barbell is very different from lifting a dead weight that does not have anything you can grip with your hands. The 100kgs gold coin mentioned above is similar in size to the 50kgs Olympic weight plates that you will find in the gym. That shows just how dense and heavy the gold is compared to the cast iron weights. The plates stop at 50kgs for a reason, to get a good idea of what its like to lift a 100kgs gold coin try lifting two on their own without a bar. I'm going to the gym this morning so I will give it a try, although I doubt I will be able to get my fingers underneath two 50kg plates if they are on a flat surface

 

 

[wrongmove]

I think it is factually completely wrong to claim that the spike in 1980 was coming from jewellery buying/selling. All reports I have ever read implied that the spike was solely caused by investors and central banks. Jewellery played no role as entirely expected and logical.

 

I never said the spike was due to jewelry. Almost certainly not. It might have been sustained is it was due to real demand, not just get rich quick types and their hot money. I was just pointing out the falacy of your statement about gold's performance in hard times.

 

I think the DJIA:gold ratio will go below 2.5:1 over the next 5-10 years. I think an average UK house will be for sale below 100oz during periods over the same time interval. I think gold will reach nominal prices north of $2,000 over the same time period. Gold could do much better than these conservative estimates, I should say.

 

5-10 years!!?? Anything could happen in that time, to gold, and to the dollar. If you are expexting 5-10 years of deflation first, I recommend you keep some powder dry, rather than using your overdraft facility to rush in, like you said last month. Just MHO.

 

 

 

 

 

 

[id5]

*cough* I have done weight training in gyms for many years, I have also worked in metal fabrication firms where I daily have to move around lots of 50kgs bags of abrasive grit and occasionally have to lift objects far in excess of 100kgs. So I do know exactly how heavy 100kgs is.

 

...

 

The plates stop at 50kgs for a reason, to get a good idea of what its like to lift a 100kgs gold coin try lifting two on their own without a bar. I'm going to the gym this morning so I will give it a try, although I doubt I will be able to get my fingers underneath two 50kg plates if they are on a flat surface

 

Put two 50KG plates on edge on a press bench and give them a cuddle. I think that there will be a lot more people that can dead lift 100KG as a small mass cuddled to the chest or on a bar at arms length than you think. Have a look at here for a synopsis of the stats from various places.

 

Average Man

height = 5'8 - 5'10

weight = 160 - 180 lbs.

bench press (max) = 135 - 185 lbs.

deadlift (max) = 185 - 235 lbs.

squat (max) = 185 - 235 lbs.

bicep curl (max double) = 60 - 100 lbs.

bicep curl (max single) = 30 - 50 lbs.

 

EDIT: Like you I lift as well for exercise, can’t stand running

[G0ldfinger]

...

5-10 years!!?? Anything could happen in that time, to gold, and to the dollar. If you are expexting 5-10 years of deflation first, I recommend you keep some powder dry, rather than using your overdraft facility to rush in, like you said last month. Just MHO.

I've never said that timing is easy. I am also not too interested in it, which is why I am averaging in.

 

If things go pearshaped much quicker than we think, and it almost looks so at the moment, we could see 5-10 shrink to 2-3 years, who knows. I just would try not be impatient and/or try and trade the gold market. I think the traders will mostly lose money as long as we see volatility like this.

[enrieb]

I never said the spike was due to jewelry. Almost certainly not. It might have been sustained is it was due to real demand, not just get rich quick types and their hot money. I was just pointing out the falacy of your statement about gold's performance in hard times.

 

 

 

5-10 years!!?? Anything could happen in that time, to gold, and to the dollar. If you are expexting 5-10 years of deflation first, I recommend you keep some powder dry, rather than using your overdraft facility to rush in, like you said last month. Just MHO.

 

This is what GF said

 

In a financial crisis where investors wake up to gold for good, lack of jewellery demand won't matter much.

 

here's what you said in responce

 

Why has gold dropped in price during a financial crisis then? Why did gold crash in 1980, the very day that recession hit the US?

 

I am just saying that by following the jewelry market, the price movements in gold can be easily explained.

 

The trouble with this sort of statement is not that it is statements are untrue, they are both truthful statements

 

1.Gold has dropped during a financial crisis (fact)

 

2.Gold did crash in 1980 (fact)

 

But you did say these two factual statements in response to GFs point, and then followed with an opinion

 

that by following the jewelry market, the price movements in gold can be easily explained (opinion)

 

Now you seem to be saying that you made these statements completely randomly and that they have no relationship to the discourse that you and GF were engaged in. You were careful not to put them into sentences that would have directly challenged GFs point, as I suspect you knew just how weak the point was, this gives you plausible denibility to retract the statements with the following truthful statement.

 

I never said the spike was due to jewelry. Almost certainly not.

 

I have reconstructed the discourse, using WMs statments (in bold) and making them into basic sentences that reply to GFs points. Here's how it should have looked, or indeed how the brain reconstructs the series of truthful statements.

 

GF: In a financial crisis where investors wake up to gold for good, lack of jewellery demand won't matter much.

 

WM: I disagree with you opinion that gold is a good investment in a finical crisis, if it were a good investment then Why has gold dropped in price during a financial crisis then? Why did gold crash in 1980, the very day that recession hit the US?

 

WM:I do not think that investment demand is responsible for the price movements in gold. I am just saying that by following the jewelry market, the price movements in gold can be easily explained.

 

GF: I think it is factually completely wrong to claim that the spike in 1980 was coming from jewellery buying/selling. All reports I have ever read implied that the spike was solely caused by investors and central banks. Jewellery played no role as entirely expected and logical.

 

WM: I never said the spike was due to jewelry. Almost certainly not.

 

Obviously the non bold part has been added by me, as WM would never dream of making such claims. I have put the seemingly random statements into sentences that directly challenge GFs sentence. Of course when this is done the position looks a bit silly and is hard to defend, thats why the discourse takes place as a series of truthful statements. The reader is left to connect the random statements into a sentence the makes sense as part of the discourse between GF and WM

 

 

I believe the vast volumes traded in the West is largely a paper game, and does not consume much actual physical gold. The only explanation given by goldbugs for the falls we have seen during the biggest financial crisis in living memory are mysterious secret organisations. By Occam, I prefer the simpler explanation as it fits the facts just as well.

 

 

The only explanation given by goldbugs for the falls we have seen during the biggest financial crisis in living memory are mysterious secret organisation

 

1. There are many reasons for the recent price fall in gold,

 

2. and no goldbug is claiming that this is done by mysterious secret organisation

 

Now I don't mean to be picking on Wrongmove here, and I'm sorry if it comes across in that way, because everyone does it from time to time. The use of seemingly random 'truthful statements' causes problems in discussions and arguments because one can go back and deny that they meant the 'truthful statement' as a response to points made in the discourse.

 

The lesson is that next time someone makes a 'truthful statement' in response to a point or argument, ask them to put it into a sentence that follows on from what has been said. If they are not willing to do so then the 'truthful statement' should be disregarded as a 'random statement' that has nothing to do with the discourse. Responding to truthful statements in a discussion or argument gives the protagonist the chance to deny that they meant the statement in response to the discussion.

[romans holiday]

The only explanation given by goldbugs for the falls we have seen during the biggest financial crisis in living memory are mysterious secret organisations.

 

This statement is just plain odd.

 

The standard explanation for the fall in POG has been as follows;

Repatriation of capital to the states and massive liquidation of assets, by leveraged hedge funds and other institutions, has led to a spike/rally on the US dollar.

 

Many "goldbugs" see this as a purely temporary phenomena within a larger macro-economic view; that either the dollar will depreciate or inflation will kick in at a later stage.

 

Also, you seem fixated on the price of gold in US dollars. Most people on this forum have used different currencies to buy gold and are still sitting rather nicely given the unwinding of many asset prices at the moment. I bought gold with the Korean Won and the NZ dollar which are both absolutely tanking against the Yen and US dollar at the moment. Just as well I bought gold a.

[rgleeson]

The lesson is that next time someone makes a 'truthful statement' in response to a point or argument, ask them to put it into a sentence that follows on from what has been said. If they are not willing to do so then the 'truthful statement' should be disregarded as a 'random statement' that has nothing to do with the discourse. Responding to truthful statements in a discussion or argument gives the protagonist the chance to deny that they meant the statement in response to the discussion.

 

WM has a thorough understanding of the gold market, just look how badly gold has performed.

 

Enrieb, what credentials you have to make such objections, have you been appointed the site administrator? How well are your investments doing? Many people on this forum hold similar opinions and express their views in the same way.

 

This is a public forum, so why would you restrict free speech and right to express views in alternative ways?

 

Non Sequitur!

 

 

Edit: clean up my fallacies

[wrongmove]

............

Now I don't mean to be picking on Wrongmove here, and I'm sorry if it comes across in that way, because everyone does it from time to time. The use of seemingly random 'truthful statements' causes problems in discussions and arguments because one can go back and deny that they meant the 'truthful statement' as a response to points made in the discourse.

 

The lesson is that next time someone makes a 'truthful statement' in response to a point or argument, ask them to put it into a sentence that follows on from what has been said. If they are not willing to do so then the 'truthful statement' should be disregarded as a 'random statement' that has nothing to do with the discourse. Responding to truthful statements in a discussion or argument gives the protagonist the chance to deny that they meant the statement in response to the discussion.

 

No offence taken by me. This is a board for debate and discussion.

 

Everything I post is in my honest/humble opinion (IMHO).

 

I think I have a higher ratio of factual posts backed up with data and arguments than quite a few here, but yes, I am also prone to speculate.

 

 

To clarify what I meant above:

 

I think that following the jewelry market, which is where well over half of physical gold is actually sold, has helped to explain the recent price moves. I have only been following the jewelry market for the last two "cycles" i.e. the high in July, the subsequent drop, the rise back up in October, and the subsequent drop. On both occasions, gold rose quickly from paper buying in the west, Indians stopped buying, or even started selling, and the price dropped back down to what I would call fair value, i.e. expensive enough that inefficient mines get by, and efficient ones make a good profit. If gold dropped lower than this, mines would start to shut, supply would tighten, and I would describe the PoG as cheap.

 

My statement about gold's performance in hard times, which are generally not good (can anyone show me a recession where gold grew in real terms? Or even kept up with cash on deposit?) was unrelated to jewelry. All I would say is that paper trading in volume can shoot the price up quickly, but I do not believe this can be sustained unless physical buyers follow through before options contracts expire. If they don't the price will soon return to nearer fair value. I would guess that this is what happened in 1980, but it is of course only a guess. I was not studying gold or jewelry at that time.

 

 

In response to your general points, I try to maintain good debating techique and avoid logical fallacies, but this is a forum, sometimes posts are made in haste, so I don't always suceed.

 

 

To address your final points, could you list the reasons for the falls in some order of priority - I am interested in your opinion. Mine is simply that physical buying largely dries up above about $850, and subsequently the price falls back down to a level that physical buying kicks in again. As simple as that.

 

 

Also, some goldbugs do frequently allude to secret organisions - the "PPT" primarily. The only PPT I know of is the "Paulson P1ss Take ", but selling gold is not in that remit, and not is propping up the DOW by trading, let alone the S&P, Russel 2000, Nasdaq and all the other markets. And all this stuff about a lack of physical gold causing these premiums in coins, rather than simply a lack of coins (mining output is 2,500 tons a year, Eagles are about 20 tons this year, which is high. Some mints only stamp about 1 ton a year, in a good year)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[enrieb]

WM has a thorough understanding of the gold market, just look how badly gold has performed.

 

Enrieb, what credentials you have to make such objections, have you been appointed the site administrator? How well are your investments doing? Many people on this forum hold similar opinions and express their views in the same way.

 

This is a public forum, so why would you restrict free speech and right to express views in alternative ways?

 

Non Sequitur!

 

 

Edit: clean up my fallacies

 

I'm not asking that we restrict free speech, I fully encourage alternate views, its just when people use statements to refute others arguments it causes problems because they can easily claim that the statements they made were not made in response to the original argument. If the statement is put into a sentence that makes it clear about what its role is in the discourse whether it is being used to refute a point or if it is just a random comment, then it helps clarify arguments that distract from the investment topics.

 

I'm sorry if I've gone about posting that in a style that offends you or anyone else. I didn't think I needed to be an administrator or have some kind of special credentials to call attention to that. Using statements on their own in response to peoples posts causes problems.

 

[wrongmove]

WM has a thorough understanding of the gold market, just look how badly gold has performed.

 

You are too kind! Seriously. I am very much an amateur, and I am not putting large sums where my mouth is, because I do not have large sums right now. But the subject interests me at the moment, gold vs. cash seems to be the only game in town for now, but it would be nice to start trying to spot some early bargains in equities. Cambrian mining at 35p, for example!!!

 

I think that gold is always capable of a big leg up, but it is getting hard to see what will cause it, considering what we have already been through. Some sort of treasury default looks to be the only thing that will do it at the moment, and while this is possible, it seems a way off at the moment. In the meantime, I suspect gold will disappoint, doing better than commodities (but that won't be saying much), but generally drifting lower on reduced jewelry demand, unless investers can start buying physical, rather than just placing bets on how much Indians are going to pay for physical, which as far as I can see is largely the situation now. Speculation, not investment.

 

 

So for now I am sticking to 10% insurance and no investment, but I accept that if some people have totally lost their faith in cash, they have to go with their research/instincts, and I agree that gold is where to be. Almost certainly better than insurance shares But dry paper plus PM insurance policy for me, for now. And pay down debt, just in case we don't go hyper! If I see oil start to rise in any sustained way, or lending kick off again, then I will change my tune. And if I see evidence of western gold investment, rather than just speculation (and a few tons of coins), I will change my position.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[rgleeson]

I'm sorry if I've gone about posting that in a style that offends you or anyone else. I didn't think I needed to be an administrator or have some kind of special credentials to call attention to that. Using statements on their own in response to peoples posts causes problems.

 

My response was just a light hearted attempt to use fallacies to attack your attack on WM's fallacies.

 

Funny how it reads like a normal high-rate forum post no? It reminds me of the heated debates in HPC where you could play fallacy bingo. The credentials one in particular was regularly trotted out.

 

http://en.wikipedia.org/wiki/Logical_fallacy

 

It is I who should apologies - I thought I was being funny.

 

[SoylentGreen]

My response was just a light hearted attempt to use fallacies to attack your attack on WM's fallacies.

 

Funny how it reads like a normal high-rate forum post no? It reminds me of the heated debates in HPC where you could play fallacy bingo. The credentials one in particular was regularly trotted out.

 

http://en.wikipedia.org/wiki/Logical_fallacy

 

It is I who should apologies - I thought I was being funny.

Man, I so appreciate where you are coming from! I try to be funny all the time and just come across as a complete tit.

 

..........actually maybe there's a reason for that :blink:

[G0ldfinger]

...

Also, some goldbugs do frequently allude to secret organisions - the "PPT" primarily. The only PPT I know of is the "Paulson P1ss Take ", but selling gold is not in that remit, and not is propping up the DOW by trading, let alone the S&P, Russel 2000, Nasdaq and all the other markets. And all this stuff about a lack of physical gold causing these premiums in coins, rather than simply a lack of coins (mining output is 2,500 tons a year, Eagles are about 20 tons this year, which is high. Some mints only stamp about 1 ton a year, in a good year)

(1) Plunge Protection Team (PPT) is a term used for the President's Working Group for the Financial Markets. What is the problem acknowledging them? They're not at all secret, and they have in fact very recently announced over and over again that they will actively manipulate the markets with the money they get granted (buying banks, insurers, commercial paper etc.). Also, how can you disregard that they are active in gold if Greenspan repeatedly publicly said that central banks stand ready to lease gold should the price rise?

 

(2) There is first of all a retail product scarcity in gold and silver. There is also a potential that this could feed through to the LBM and the COMEX, including a possible short squeeze or defaults on the COMEX. For this to happen we would need to see some big money moving back into sector, maybe even some central bank buying. It is not unlikely that this could happen sometime in the future. I wouldn't disregard it. Also keep in mind that it isn't only coins that are difficult to obtain now.

[Rikk03]

Did anyone see that program Friday evening about gold deposits in Northern Ireland? It featured info about N Irelands first commercial gold mine - first of many it would seem.

 

Northern Ireland has potentially the highest gold concentrated mineable reserves (still in the ground) than anywhere else in the world. Great boon for the British economy. Could eventually overtake South Africa as primary source.

[G0ldfinger]

Did anyone see that program Friday evening about gold deposits in Northern Ireland? It featured info about N Irelands first commercial gold mine - first of many it would seem.

 

Northern Ireland has potentially the highest gold concentrated mineable reserves (still in the ground) than anywhere else in the world. Great boon for the British economy.

I think this was also mentioned already quite some time ago in "Britain from above", or so.

[Steve Netwriter]

We seem to be getting off topic

 

Gold.........demand

 

It’s gold rush, even at premium

26 Oct 2008, 0155 hrs IST, Shishir Arya,TNN

http://timesofindia.indiatimes.com/Cities/...how/3641561.cms

 

NAGPUR: The global slowdown brought a Dhanteras bonanza for Indian consumers. Gold prices crashed right amidst the festive season and consumers rushed to make Dhanteras purchases. So heavy has been the demand that in Nagpur gold was being quoted at a premium of Rs 400 against its basic market rate of Rs 12,000 per tola (10 grams) on Saturday. Traders say the situation will continue on Sunday too. World Gold Council claimed that 50 tonnes of gold was sold in the last 20 days in the country.

 

Gold is weak in the international market for a host of factors. Firstly, financial institutions in the West are resorting to selling off their gold holdings to tide over the liquidity crisis. “This has proved a boon for Indian consumer as the yellow metal has become cheaper at home,” said Ashok Minawala president of All India Gems and Jewellery Federation. Many harried speculators in the US had squared off their trades, pulling down the rates too, add traders.

 

Gold rates fell to $699 per ounce on Friday before settling at $732. This was a god-sent for Indian consumers, who are eager to buy gold on Dhanteras. Just before the auspicious day, prices dwindled to Rs 12,000 per tola (10 grams) as compared to an all-time high of Rs 14,000. Even traders who were expecting a dull Dhanteras had their cash registers ringing.

 

In fact, jewellers are now faced with a supply crunch and wholesalers are charging a premium over and above the base price, which is calculated by adding the local taxes to the dollar rates.

 

Gold sales shoots up phenomenally in this festive season

http://www.livemint.com/2008/10/26171420/G...-phenomena.html

 

New Delhi: Gold sales have picked up phenomenally after a fall in its prices to 12,000-level following consistent steep fall in equity markets which has boosted the demand for the metal as a safe investment option.

As per the All-India Gems and Jewellery Trade Federation (GJF) study, about 50 tonnes of the metal has been consumed during 1-20 October against over 80 tonnes sold in whole of October-December quarter last year.

“Gold prices are correcting in the last few days and business is booming since last 2-3 days. This trend is likely to continue till the end of this year,” World Gold Council Director Dharmesh Sodah said.

Gold prices had plunged to Rs11,500-level per 10 grams last week before closing at Rs12,210 per 10 grams yesterday.

[UpTheKhyber]

If I'm not mistaken the cost of gold production at present varies typically from $300 to £600. I should be very grateful if anybody could provide more accurate information, and especially on the weighted cost.

This is the most recent information i've seen:

 

"US dollar denominated total cash, and total production costs rose by a similar 25%; rose by $45/oz versus $160/oz rise in the gold price. Weighted average cash costs

$317/oz. Simple cash margins widened by $13/oz.

 

Average total production costs in Q4 2007 = $518/oz."

 

See also the graph at the bottom of page 8 -

http://www.gfms.co.uk/Market%20Commentary/...resentation.pdf