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Gold sparkles in 'perfect storm

 

'ROLAND JACKSON

November 29, 2009 - 4:19PM

 

 

AFP

 

Gold prices have rocketed to record heights close to $US1,200 an ounce as a "perfect storm" of market conditions propels demand for the precious metal, analysts said.

 

Gold, whose two main drivers are jewellery and investment buyers, hit a record $US1,195.13 an ounce on the London Bullion Market on Thursday.

 

The glamorous metal has won major support in recent weeks and months from a weak dollar, inflationary fears and increasing moves by central banks to diversify assets away from the greenback and into the commodity.

 

"It's all things coming together at the same time - it's a perfect storm," Westhouse Securities mining sector analyst Mark Heyhoe told AFP, adding that gold could strike $US1,300 by the New Year.

 

The metal has now surged by around 50 per cent in value over the past 12 months, gaining about 14 per cent in November alone.

 

"What we have had happen in the last three months is a marked change in how gold is being treated," Heyhoe said.

 

"We have got central banks starting to buy gold again, after the huge sales we had a decade or so ago, and these are particularly the Asian central banks."

 

Gold hit the latest record after a purchase of IMF gold by Sri Lanka's central bank, before pulling lower as shock news from Dubai rattled world financial markets.

 

The International Monetary Fund (IMF) announced Wednesday it had sold 10 tonnes of gold to Sri Lanka's central bank for $US375 million as part of a restructuring of its financial resources.

 

India had bought 200 tonnes in October 30 for $US6.7 billion and Mauritius bought two tonnes in November for $US71.7 million.

 

"The IMF was selling gold, and we were expecting China to diversify out of dollars and increase their gold holdings, but actually India came in and bought 200 tonnes," Heyhoe added.

 

"That made people think there is more to this than just the effect of the weakening dollar."

 

A weaker greenback makes gold cheaper for buyers using other currencies, which tends to boost the metal's demand and eventually lift prices.

 

Earlier this month, meanwhile, the world's top gold producer, Barrick Gold of Canada, announced that it was reorganising its futures positions on gold.

 

Barrick decided to buy out its "forward" positions on gold - deals to sell gold at a certain price at a certain point in the future - because the actual price had soared even higher.

 

That gave a crucial clue that the gold industry's biggest player expected prices to rocket further.

 

"When you have got the world's biggest gold producer deleveraging at these prices, it's a strong indication that they think the gold price is going to go higher," added Heyhoe.

 

However, gold's latest record high point was eclipsed by news this week from Dubai.

 

The Gulf city state requested a debt moratorium for its Dubai World conglomerate to avoid default - sending world markets into turmoil and sparking fears of another phase of financial crisis.

 

By late Friday on the London Bullion Market, gold had pared gains on profit taking, to stand at $US1,166.50 an ounce.

 

"Panic profit-taking on the broader commodity markets saw a very stark correction in gold prices, finally breaking the uptrend," said VTB Capital analyst Andrey Kryuchenkov.

 

However, he added: "The case for gold remains very bullish, with increasing rhetoric over central bank diversifications and US inflation expectations still running high as we go into 2010.

 

"We are witnessing a dramatically changing environment with bullion becoming one of the favourite investment vehicles within the investment community," said Kryuchenkov.

 

The metal draws strength from fears of higher inflation because it is regarded as a "safe-haven" investment in times of economic uncertainty.

 

"For hundreds of years, the yellow metal has been widely seen as a universal currency where countries across the world have sought the precious metal as a store of wealth and of preservation of power," said analysts at Fyshe Horton Finney stockbrokers in London.

 

"Gold has seen a surge in its fundamental value in recent times and has just recently hit record highs ... and analysts believe this could rise well into next year."

© 2009 AFP

 

 

 

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http://economicedge.blogspot.com/2009/11/m...ve-to-high.html

 

Martin Armstong – Forced to Move to a High Security Prison to Silence Him?

 

Something fishy about this. People get less time in jail for murder. Whatever this guy did pales in comparison to some of the swindles we've seen commited by the pillars of society in the last 2 years.

 

I've read some of his articles and they seem a bit rambling and I can't see much in them that would threaten TPTB.

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Chinese to become world's biggest gold consumers

 

The country's rumbling hunger for gold is expected to grow in coming weeks amid predictions that the People's Bank of China could join other emerging market central banks by becoming a significant buyer of bullion for its reserves.

 

The forecast of record gold demand in China this year emerged at a weekend conference of the China Gold Association. Demand in 2008 was 395.6 tons, senior figures in the trade body said, but the total figure by the end of 2009 could be well over the 450-ton mark.
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This should get you guys salivating.

 

Dubai Crisis Gives China Chance to Buy Oil, Gold: Report

 

http://abcnews.go.com/Business/wireStory?id=9205569

 

BEIJING (Reuters) - Dubai's debt crisis could be China's opportunity to snap up gold and oil assets, a senior Chinese official said in remarks published on Monday.

 

No Chinese banks have yet reported exposure to debt from Dubai World, a flagship firm that last week said it was seeking to delay debt payments by six months. Some Chinese real estate and construction firms have limited exposure to projects in the emirate, state television reported this weekend.

 

 

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I FEEL GooD !!!!! CAUSE I GoT GoLD!!!!! HoW Y'ALL FEELIN??????

 

 

From:

 

 

Price/oz Gold

Chg Gold

Chg%

US Dollar -- 11/30-15:24 -- -- 1179.00 +2.30 +0.20%

Australian Dollar +0.87% 11/30-15:20 1.0926 0.9153 1288.12 -8.72 -0.67%

Brazilian Real -0.77% 11/30-15:00 1.7510 0.5711 2064.43 +19.68 +0.96%

British Pound -0.40% 11/30-15:24 0.6079 1.6451 716.66 +4.22 +0.59%

Canadian Dollar +0.50% 11/30-15:24 1.0566 0.9465 1245.67 -3.81 -0.30%

Chinese Yuan -0.02% 11/30-12:22 6.8240 0.1465 8045.50 +17.46 +0.22%

Euro +0.12% 11/30-15:23 0.6659 1.5018 785.04 +0.59 +0.08%

Hong Kong Dollar +0.01% 11/30-11:43 7.7545 0.1290 9142.56 +17.25 +0.19%

Indian Rupee +0.21% 11/30-12:01 46.4550 0.0215 54770.45 -10.82 -0.02%

Japanese Yen +0.10% 11/30-15:24 86.3650 0.0116 101824.34 +98.62 +0.10%

Mexican Pesos -0.22% 11/30-15:24 12.9625 0.0771 15282.79 +62.94 +0.41%

Russian Ruble +0.29% 11/30-15:20 29.2287 0.0342 34460.64 -31.38 -0.09%

S.African Rand -0.03% 11/30-15:20 7.4070 0.1350 8732.85 +19.39 +0.22%

Swiss Franc +0.15% 11/30-15:24 1.0047 0.9954 1184.48 +0.49 +0.04%

 

 

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Typical, we came into some long-awaited funds (Sell to Let) on Monday and after months of trying I've managed to convince the wife to put her savings into metals too. Are people still buying at these prices or waiting for further pullbacks? (I'm buying in GBP). Part of me wants to average in, part of me wants to go in feet first, and the other part wants to wait til Jan.

 

For the record, I already have a core position in Gold + Silver.

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Typical, we came into some long-awaited funds (Sell to Let) on Monday and after months of trying I've managed to convince the wife to put her savings into metals too. Are people still buying at these prices or waiting for further pullbacks? (I'm buying in GBP). Part of me wants to average in, part of me wants to go in feet first, and the other part wants to wait til Jan.

 

For the record, I already have a core position in Gold + Silver.

Just how many parts of there are you?

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IMO the upwards trend will continue for gold, so buying the dips would be the way forward, but I suspect we will get a pullback at some point and typically (assuming it doesn't go parabolic) things slow down or drop a bit after March. So if I was a gambling man (which I'm not!) then I would hold back with the majority of my money until Q1 2010. Silver will (as you know) at somepoint offer massive returns, it's a just a question of when. Personally I'm going to buy some more silver which I'll set aside for 14 years or so to pay for my son's university fees, long term it will certainly pay.

 

Good luck!

 

Typical, we came into some long-awaited funds (Sell to Let) on Monday and after months of trying I've managed to convince the wife to put her savings into metals too. Are people still buying at these prices or waiting for further pullbacks? (I'm buying in GBP). Part of me wants to average in, part of me wants to go in feet first, and the other part wants to wait til Jan.

 

For the record, I already have a core position in Gold + Silver.

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