"Bullion is on course for its biggest quarterly advance since the final three months of 2007 and has gained 13 percent this year, reaching a record $1,265.30 an ounce on June 21. Gold has outperformed the benchmark MSCI World Index by some 20% so far in 2010 (see chart below) and this outperformance was particularly noticeable in the last quarter. Gold has also been the top performing currency so far in 2010 with only the Japanese Yen showing gains and most currencies, especially the euro falling sharply (-14.87%)".
Goldcore 29.6.10
News of the Chinese allowing gradual appreciation in the yuan is expected to further bolster demand for gold in China as the Chinese consumers' and investors' purchasing power is increased. Chinese demand for gold has been growing at an average of 13% per annum over the past five years and it now has to import gold to meet national demand, despite being the largest producer of gold in the world.
GOLDCORE 22.6.10
Gold recorded its sixth consecutive higher quarterly close yesterday which is important from a technical perspective. Gold's medium and long trend remains up and gold remains in a bull market. The rise of gold has been quite gradual with periods of rising prices followed by lengthy periods of consolidation.
Unlike in the late 1970s when gold rose by more than 100% in three individual quarters. Gold's rise has been gradual and orderly and we have yet to see the speculative mania that was seen in the 1970s. Indeed gold is only marginally above the price that it was six months ago. The bull market in gold is likely to end with very high monthly and quarterly returns and with a parabolic spike and we are a long way from there today.
GOLDCORE 1.4.10
"Last year, central banks were net buyers of gold for the first time since 1988. In fact, they bought the most gold in any year since 1964. Total central bank holdings worldwide, according to the World Gold Council, grew by 425 metric tons last year".
Agora Financial March 2010.
GOLD DEMAND IN MAINLAND CHINA COULD OUTSTRIP INDIA
Full-year 2009 private demand in mainland China could outstrip India, the former No.1 buyer, by one quarter if not one third. Short of a (very unlikely) collapse in Q4 demand, full-year private gold buying - including jewelry and retail investment - is set to have grown 10% from 2008's record in volume terms, rising 26% by value to equal $13.5 billion or more.
On recent trends, that would equate to more than 2.0% of China's famously massive household savings (up from 1.0% ten years ago) and account for almost one ounce in every eight sold worldwide.
The Daily Reckoning 2nd January 2010
GOLDEN NEWS
Remember those 400 tonnes of gold that the International Monetary Fund was going to sell? I discussed this two months ago. I thought that the deal was wired for the IMF to sell the gold to China. That was one of the outlines of the deal at the G-20 meeting in Pittsburgh in September. And the Chinese certainly wanted to buy the gold.
But this morning, news broke that over a two-week period in October, the IMF sold 200 tonnes of gold to India, at an average price of $1,045 per ounce. Previously, the government of India held 350 tonnes of gold reserves. This 200 tonne purchase is a 57% increase in India's reserves. There's joy in India today, I'll bet.
The Indian transaction may be the largest single central bank purchase of gold ever. The only comparable event was the U.S. government seizure of gold from circulation within the nation back in 1933, along with steady U.S. government purchases in the 1930s and 1940s.
OUTSTANDING INVESTMENTS - 3rd Decemebr 2009
CHINA'S INCREASING GOLD DEMAND
China’s gold demand has likely increased 14% this year, said a report yesterday from the China Gold Association. Here’s the best way we can summarize their report, straight out of Econ 101: China, the world’s largest gold producer, expects national gold demand to have risen from 395 metric tons last year to 450 metric tons this year. Output, best-case scenario, has risen to 310 metric tons a year.
5 Min Forecast - Agora 30th November 2009
GOLD RISES WITH THE STOCK MARKET. THE YELLOW METAL HIT A NEW RECORD OVER $1,100 YESTERDAY.
Why is that important?
Well, it’s not important either. But gold still has another $1,000 or so to go before it equals the last bubble peak in gold, set in 1980 – on an inflation-adjusted basis.
The point is, there’s plenty of room on the upside for gold... and not much room left on the upside for stocks...
Stocks are going to be hit hard when people realise that the recovery is a fraud. When will that happen? We don’t know. But another big wave of repossessions may be the thing that sets it off.
Source: The Daily Reckoning 10th November 2009
THE BIG GOLD PICTURE
For much of 2009, gold traded in the range of low-mid $900 per ounce. There was a dip over the summer, with a strong upswing starting in September. Gold is now trading well over $1,000 per ounce, in fact just under $1,100.
Turns out that the government of India was buying gold in mid-October. Over a two-week span, the central bank of India bought 200 tonnes (metric tons) of gold from the International Monetary Fund (IMF) at an average price of $1,045. The IMF - over which the U.S. holds veto power for most actions - got approval to sell the gold from - where else? - the U.S. Congress, last spring.
Previously, the government of India held 350 tonnes of gold reserves. This 200-tonne purchase is a 57% increase in India’s reserves. There’s joy in India, I’ll bet. (It makes me wonder what the Pakistanis think, now that their large neighbor has both nuclear weapons AND a growing gold hoard.)
Collapsing Economy?
Here’s what the Financial Times had to say. “Gold prices on Tuesday surged to an all-time high after India’s central bank bought 200 tonnes of the precious metal, swapping dollars for bullion as the country’s finance minister warned the economies of the U.S. and Europe had ‘collapsed.’ India’s decision to exchange $6.7 billion for gold equivalent to 8% of world annual mine production sent the strongest signal yet that Asian countries were moving away from the U.S. currency.” (Emphasis added.)
Have the economies of the U.S. and Europe really “collapsed”? As I sit here at my desk in Pittsburgh, I would not exactly say that the U.S. economy has collapsed around me. OK, so the economy isn’t booming, either.
Just yesterday, I saw that consumer powerhouse Johnson & Johnson foresees a long, continuing economic slump. J&J anticipates a slow recovery at best, contrary to the optimism of its namesake “No More Tears” brand. J&J management evidently believes that things will stay tough out there. And as if to add to the predicament, J&J is laying off about 8,000 employees.
Economic collapse or no, the point is that Indian gold purchases from the IMF are supporting the gold price. And the IMF has another 203.5 tonnes of gold yet to sell.
Who will buy the IMF gold? I’ve previously speculated that the Chinese are waiting in the wings. But now that the IMF has set a precedent for selling to a non-Chinese buyer, there are surely other players out there polishing their shoes and practicing their speech to the IMF bankers. We might see Arab countries buying. Or Russia. Maybe Brazil, with all its newfound energy wealth offshore.
Source: Whiskey and Gunpowder - 9th November 2009
INDIA BUYS 200 TONNES OF IMF GOLD
The International Monetary Fund has sold 200 tonnes of gold to the Reserve Bank of India for $6.7bn (£4.1bn). The sale represents almost half of the fund’s total gold holding.
"To see a central bank buy at this kind of level shows there are going to be a lot of other buyers out there," said David Beahm, vice-president of economic research at Blanchard & Co., a precious metals investment firm. "It signals that there are people out there that think the price is going to continue to go up," he said.
India, along with China and Russia, have indicated interest in buying gold as a way to diversify their holdings in dollar-denominated assets
The US dollar has weakened considerably this year amid record-low interest rates, which have encouraged investors to look for higher-yielding assets, like stocks and commodities. Buying gold is seen as a way to hedge against a weaker dollar and the threat of inflation.
Source: The Telegraph - 03rd November 2009
IF YOU'VE INVESTED IN GOLD, YOU'RE ABOUT TO GAIN A POWERFUL ALLY: PENSION FUNDS.
“I think the largest institutions like our own are realizing that we barely own any [gold]” Shayne McGuire, head of the Teacher Retirement System of Texas said in an interview in Hong Kong very early this morning. “The same thing applies to most of the pension funds which manage trillions of dollars in world wealth.”
McGuire, who oversees $95 billion, just opened an internally managed gold fund for his 1.3 million public education employees, and suggests other pension funds follow suit. Owning gold is “financial insurance,” he said, sounding a lot like David Einhorn at the Value Investing Congress earlier this week. “Consider the tremendous fiscal excess that major governments have made to prevent the world economy from collapsing… I don’t think the question really is what is gold worth but what are currencies not worth.”
According to the FT, there are 2,600 public pension plans in the U.S., worth over $2 trillion.
5 Minute forecast 23.10.09
GOLD AT 18 MONTH HIGH AND LOOKS SET FOR NEW RECORD HIGHS
Gold reached an 18 month high at $1,017.50/oz in early European trading this morning. Gold has found its footing in the low $1,000s/oz and looks set to launch an assault on the all time record nominal high of $1,033/oz (on March 17th 2008). 18 months ago tomorrow is when gold surged to its record high (in the aftermath of the Lehman's bankruptcy) and much consolidation and base building has been done in the last 18 months. Gold now looks very strong both from a technical point of view and a fundamental point of view.
From a technical point of view gold looks very bullish with a series of higher lows and higher highs and with the long term moving averages now again positive. Also the first weekly close above $1,000/oz was a bullish technical development noted by few.
From a fundamental point of view, the developments with regard to central bank becoming net buyers again in Q2 of 2009 and looking likely to be net buyers in all of 2009 is very bullish as they are most important players and likely to be able to overpower the sharp decline in jewellery purchases internationally. Central bank buying when combined with large institutional money will also overcome the very significant selling by the public in recent months with global gold scrap sales reaching a record of 1,218 tonnes last year alone.
While small investors and jewellery owners have been selling, high net worth individuals, hedge funds, institutions and large banks are diversifying into gold in a more substantial way. The elephant in the room and one that is being studiously ignored by some bears and those who have been calling this market wrong is the 'China factor'. With the Chinese central bank worried about their vast dollar holdings and the Chinese government encouraging their citizens to own gold, Chinese demand alone could propel prices to much higher levels.
This sets the scene for gold to rise above $1,200/oz in the coming weeks and the inflation adjusted high of $2,300/oz remains a likely price target in the next 3 to 5 years.
Gold is currently trading at $1,016/oz. While there may be a pullback in the short term, those expecting a pullback to below the $970/oz level are likely to be disappointed.
GOLDCORE PRECIOUS METALS UPDATE -
16th SEPT 2009
CHINA LOVES GOLD
China loves gold in all its forms,” the FT reports, “as a reserve currency, jewelry, an investment.” I’ve mentioned in the past about how the Chinese central bank doubled its holdings of gold this year, but it’s more widespread than that.
The rising middle class in China also buys a lot of gold. Since 2007, Chinese consumers have been the second largest purchasers of gold jewelry in the world, behind only India. The FT points out those gold sales were up 28% year over year in May. Total gold demand for the year was up 21%, to 400 million tonnes. There are not too many sales of any kind going up that much in this financial crisis, but there it is.
The financial crisis and weak stock market have helped gold as people look for a place to park some money. I think gold will remain a good place to be for some time yet. And gold stocks have the stars lined up for them. Many are reporting falling cash costs, yet the price of gold is staying up here in the $900s — and is likely headed much higher. That means gold stocks are reporting good increases in cash flow, among the few sectors to do so".
SOURCE; Whiskey and Gunpowder, by Chris Mayer 2.9.2009
GOLDCORE PRECIOUS METALS UPDATE
Gold
Gold is testing resistance levels as the dollar remains under pressure. It is currently trading at $955.70/oz and if it breaks through $960/oz and sustains it, the possibility of a correction in gold may not materialise. The continuing weak data coming out of the U.S may make investors less likely to take profits on gold and or continue to diversify into gold.
Disappointing jobs and retail sales did not faze Wall Street yesterday but higher oil prices and a lower dollar led to a firm bid to gold. With interest rates set to remain low for the foreseeable future gold’s lack of yield is not an issue and investors are again taking a shine to its long term inflation hedging potential. The recent central bank agreement to slow down official sales and continuing producer dehedging shows a changing sentiment towards gold in the important official sector which is encouraging the bulls. Falling South African production figures yesterday (gold production down 12.2% year-on-year) also underline the strong supply demand fundamentals driving the gold market.
Gold has its seasonal low and bottomed this week last year and it is quite possible that we are at are soon to be at the seasonal lows prior to surpassing the significant resistance at the psychological $1,000/oz mark.
The raft of economic measures including the unprecedented quantitative easing introduced in most major economies to combat recession may turn out to be built on sand and investors may increasingly look to the yellow metal as being a more solid investment to safeguard their wealth.
BANK SAYS GOLD WILL GO TO $2,500
Yesterday, UBS, the Swiss bank most notably in the news for caving to U.S. regulators on tax issues and banking secrecy, issued a target of $2,500 an ounce for gold over the next five years.
“The current environment,” the UBS report said, “is one which can best be characterized as having a ‘low margin of error’ for central bankers, with the prospects for deflation or inflation becoming more extreme… Given the broad uncertainties in the current macro climate, we believe investors should look to gold, given its historic tendency to act as a hedge.”
AGORA FINANCIAL 5 MIN FORECAST 11.3.09
GOLD INVESTMENTS - 27th Feb. 2009
Importantly, one of the most important sources of gold supply In recent years (both in terms of volume and psychologically) has been central bank supply. This potential huge overhang in the market contributed to gold falling to massively undervalued levels in the late 1990s (Gordon Brown’s disastrous sales much of the UK’s gold reserves ironically marked the bottom of the market) and has contributed to gold’s very slow and orderly advance in recent years.
Gold has risen some 16% per annum or some 260% in the last 10 years. Without the large potential central bank supply, gold would have more likely replicated the performance of the 1970s when it rose from $35/oz to $850/oz in just 9 years for a return of some 2,400%.
With central banks becoming increasingly reluctant to part with their gold reserves and indeed some second and third tier central banks becoming buyers (notably the Russian Central Bank and the People’s Bank of China), gold prices look very fairly valued and have the potential to appreciate very significantly in the coming years.
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BEST PERFORMING ASSET OF 2008?
