~ thanks to Jesse for the chart
Friday, October 8, 2010
Vietnam Plan Would Allow Gold Imports
From the Wall St Journal:
By VU TRONG KHANH
HANOI—Vietnam's central bank said Thursday that it might allow local companies to import gold in order to stabilize the local gold market, after domestic prices rose to a record this week.
Gold is a popular investment in Vietnam, where a long period of strong consumer-price inflation and several devaluations in the Vietnamese dong have undermined confidence in the local currency.
Allowing gold imports could temper the domestic price of the precious metal, which has risen above global prices. But it could also push up the Southeast Asian country's total import bill, worsening a persistent trade deficit that has hurt the dong."Enterprises may be allowed to import gold in appropriate quantities and at appropriate times to stabilize the domestic market," Nguyen Quang Huy, head of foreign-exchange management at the State Bank of Vietnam, said in a statement on the bank's website.
Gold prices in Vietnam have exceeded world prices at times recently, as local investors place big bets on further increases in the global price, Mr. Huy said.
Gold reached a record of 33 million dong ($1,693) per tael Wednesday, about $1,405 a troy ounce. The spot gold price hit $1,349.80 per ounce Wednesday in Asia, a record. In the U.S., the most actively traded gold contract, for December delivery, settled at a record $1,347.70 a troy ounce Wednesday on the Comex division of the New York Mercantile Exchange. Thursday morning it was at $1,347.50 an ounce.
Under the proposed plan, Vietnamese companies wanting to import gold would need to obtain licenses from the government.
"Importing gold in appropriate quantities is the best option for now, though it may have collateral effects," said Le Tham Duong, an economist with the Banking University of Ho Chi Minh City.
He said that by stabilizing local prices, gold imports would help prevent speculation and gold smuggling from foreign countries.
"If speculation happens, it will be very bad for the economy as the capital will rest in gold, instead of being invested in production," he said.
He added that illicit gold imports would lead to outflows of dollars, potentially adding to downward pressure on the dong.
The dong has fallen more than 5% since January as the country's trade deficit has widened, and was trading around 19,498 dong per dollar Thursday.
Vietnam's trade deficit widened to $8.56 billion in the January-September period from $6.8 billion a year earlier, according to official data.
Gold is one of the four major investment options for Vietnamese citizens, besides stocks, real estate and U.S. dollars.
The Gold Symposium
 | 8th - 10th November 2010 |
s
The Gold Symposium being held at the Amora Jamison Hotel in Sydney, Australia.
In association with ABC Bullion.
Learn how high gold could go in Australian dollar terms?
When will we reach a top... and what will it be?
If gold really is to become the foundation of a new financial order... what will that mean for society and your investments?
What if this really is a bandwagon, and you’re the last to jump on? Gold stocks tend to lag behind the price. So if you’re still a gold bug, which Australian stocks could be the stand-outs in 2011?
| DAY ONE: Monday 8th November Showcasing ASX listed companies whose focus is on gold exploration and production. This is a perfect opportunity to invest in companies whose focus is on gold exploration and production Day One of the Symposium is designed to promote Australian GOLD companies to a wide variety of investors: from professional brokers, analysts and private investors who are current shareholders, to others who are keen to understand more about these companies whose focus is GOLD. DAY TWO & THREE: Tuesday 9th and Wednesday 10th November Featuring highly respected speakers from Canada, Australia and the USA, this event is set to be a sell out event and not to be missed. Hear speakers such as Dan Denning of the Daily Reckoning and Dr David Evans of Gold Nerds along with other incredible speakers Don’t miss the world renowned James Dines - one of the most famous gold bugs on the planet—when bullion is breaking records daily. This will be his first time speaking in Sydney since his sell out speaking tour at the Opera House and one not to be missed Moneyline called Mr Dines "one of the most extraordinary men in America today; a man with a long and glorious reputation in being one of the first people to call the real turns in the strategic moves that happened in our marketplaces over the years." If you’re familiar with his writings—and his take on gold—you’ll realise the timing couldn’t be better to hear what he’s thinking right now Program To download a copy of program please click here
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The Golden Gift – A Modern Solution to an Unsound Global Monetary System Gold & Silver: This Time it IS Different
From SmartknowledgeU:
With gold and silver bulls, since the beginning of this new PM bull in 2001, the four dreaded words that every gold/silver bull has been reluctant to say because it has served as the kiss of death every time gold/silver has been on the verge of a seemingly enormous breakout, is “This time is different.”
Yet this time IS different and here’s why. At the rate of currency devaluation being inflicted upon the world’s major currencies today by Central Bankers there are, and there will be, no real gains in any of the world’s leading stock markets. As every gold bull reader is aware of, if you price the world’s leading stock markets in gold, all Western government/banker engineered rises in stock markets are exposed for what they are – illusory gains, not real gains. Real gains for the last two months in most Western stock markets when priced in gold are firmly negative. The rigged rises in Western stock markets have been nothing more than shenanigans designed to fool the people into buying the economic recovery fable that bankers/politicians so desperately are attempting to sell, especially in the US, where November mid-term elections loom. For example, price the S&P 500 index in gold since early August, and one will discover that the S&P 500 has dropped more than 9.3%. Price the S&P 500 in silver and the losses are even more marked, at nearly 20%.
While is true that gold/silver are heavily overbought now and PM stocks are either in heavily overbought territory or rapidly approaching heavily overbought territory, during strong runs in past gold/silver bulls, the underlying metal prices and stock prices can remain in overbought territory for months on end. This alone is not a reason for a correction as Central Bankers have been fighting the fundamental weaknesses in their fraudulent global monetary system daily for quite some time now. When bankers legalize fraud through the legislation they sponsor/endorse, technical analysis is insufficient to ascertain the short-term direction of not only stock markets but also gold/silver markets. One must understand the history of Central Banker engineered attacks and price suppression schemes against gold and silver to estimate the probabilities of short-term corrections in addition to the use of technical analysis.
Today, Central Bankers are increasingly having a more and more difficult time suppressing the price of gold and silver. This is a marked departure from years past, even as recently as 2008, when they engineered a gold/silver crash to coincide with their engineered stock market crash. Though they still have the power to engineer short-term corrections in gold/silver markets, their power to do so has been fading this past year. They must resort to more and more trickery to engineer these collapses. If they decide to engineer a strong rapid decline in major US indexes in the near future, you can be sure that they will use this event to also use all of their abilities to engineer a simultaneous sell-off in gold and silver. Still, any correction we receive in gold/silver markets before the end of the year will be likely to be very short-lived as various global players will step in, stop the decline with buying, and continue the rising trend in gold/silver prices. In any event, the fading influence of the Bank of England and the US Federal Reserve over gold/silver markets has happened for a number of reasons.
Western Central Banks, specifically the US Federal Reserve, very likely possess much less gold than their “official numbers” indicate. Though the US Federal Reserve only owns paper certificates, these gold certificates give them ownership of the gold reserves at Fort Knox. The Fed’s price suppression schemes against gold and silver over the past several decades have involved leasing gold to bullion banks, who then sold the bullion into the market. Much of this gold has never been returned to the official US gold reserves. During periods when the Fed was known to be leasing gold via the cooperation of bullion banks, the reported US gold reserve numbers never changed, revealing the official numbers to be a total fraud. This, among numerous other instances of verifiable and exposed lies regarding the Federal Reserve statements regarding their official gold reserve figure, is why I am quite confident that the Fed currently owns much less physical gold than they claim. Selling physical gold into the market through leased gold to bullion banks was one of the most important mechanisms that the Fed used to suppress the price of gold and silver. With the efficacy of this mechanism largely gone as well as the desire of Central Bankers to sell gold almost non-existent, supply/demand dynamics for physical gold and silver are extremely different than they were just a mere five years ago. For a comprehensive list of acknowledged and proven US Federal Reserve gold price suppression schemes, visit this very well-researched GATA article, linked here, titled “Gold Price Suppression is Public Record and Public Policy, Not Conspiracy Theory”.........read on
George Soros and Jim Rogers warn on financial markets
From ArabianMoney.net:
Two old hedge fund partners who have long since gone their separate ways as billionaire investors, the legendary George Soros and Jim Rogers are buying commodities because they reckon stocks, bonds and real estate are not the place to be invested in current markets.
Jim Rogers commented this week: ‘Whether the world gets better or does not get better, commodities are going to do well. If the world economy does not get better, stocks are going to fall apart. We have a bubble forming in bonds. Bonds are selling at much higher price and that bubble is going to burst some day. So if I would do any defensive buying, I would start in the commodities market, not the stock market.’
Hot Commodities
The author of ‘Hot Commodities’ (click here) Jim Rogers first bet on the start of a secular bull market in commodities back in 1998. And as The Daily Reckoning points out today the index he developed at the time is up 15.5 per cent since early July.
Meantime, his old partner George Soros who is believed to be one of the models for the fictional Gordon Gekko and has approximately $25 billion under management , has recently slashed his US equity investments by 42 per cent to $5.1 billion. But actually it is the situation in Europe that troubles him most.
In remarks prepared for a speech to Columbia University today, Soros will say: ‘Deficit reduction by a creditor country such as Germany is in direct contradiction of the lessons learned from the Great Depression of the 1930s, and will set in motion a deflationary spiral in debtor countries. It is liable to push Europe into a period of prolonged stagnation or worse.’
German depression
Recent press comment has focused on record GDP growth in Germany but total GDP is still running at seven per cent below pre-crsis levels. This has produced the illusion of a recovery that has not actually happened.
Soros warns: ‘Under duress, the euro has begun to remedy its main shortcoming, the lack of a common treasury. But it is far too early to celebrate because the emerging common fiscal policy is dictated by Germany and Germany is wedded to a false doctrine of macro-economic stability, which recognizes only the threat of inflation and ignores the possibility of deflation.’
The man who broke the Bank of England in 1993 has also become a gold bug doubling his gold holdings (click here) while his former business partner Jim Rogers reckons silver offers even more upside (click here). Looking at the price of gold and silver this morning these old guys are still ahead of the game.
Gold strikes new record before settling, markets await key interest rate, jobs data
London 07/10/2010 - Spot gold struck another lifetime high during Thursday morning trading on persistent inflationary fears before settling lower, as investors await key European interest rate and US jobs data this afternoon for further guidance on the direction of the global economy.
Spot gold strode to yet another record peak at $1,364.90 per ounce this morning – beating the previous summit of $1,350.10 seen yesterday - before retracing to $1,357/1,357.80, still $9.10 higher. On the charts, next resistance levels stand at $1,365 and then further out at $1,400 and $1,500, with support back at $1,320 and $1,300.
"Speculation over further quantitative easing keeps driving down the US dollar, making gold the more attractive asset class," analyst John Meyer of Fairfax said.
Inflationary fears have remained firmly in place this week, as an unexpected interest rate cut by the Bank of Japan at the beginning of the week exacerbated growing expectations of imminent quantitative easing (QE) in the US. These in turn have powered precious metals higher as a hedge against a deterioration in the value of paper currencies.
The US currency plunged to another multi-month low this morning, reaching its lowest since February 3 at 1.3994 and was last at 1.3972, still half a cent down on the day. Meanwhile the US dollar index slumped to a new low since mid-January at 77.07 before also paring losses.
With fears of growing inflation across the Atlantic showing little sign of letting up, the dollar looks set to incur further heavy losses – at least in the short term – and push interest in store-of-value assets such as precious metals.
Later today the European Central Bank (ECB) and Bank of England are due to announce their interest rate decisions which, given the strong reaction to the Bank of Japan's rate cut move by financial markets earlier this week, could prompt further volatility.
Additional volatility could follow the latest US weekly jobs release due this afternoon given the reaction to jobs data yesterday afternoon - poor September ADP employment numbers showed a fall of 39,000 last month after a rise of 10,000 in August and versus an expected increase of 23,000. This worsened the already weak dollar, as the market viewed the numbers as another indication of the need for additional QE measures in the near future.
Elsewhere, silver surged to a fresh high since March 1980 at $23.52 per ounce this morning, following gold upwards before cutting advances to $23.33/23.38, still up 19 cents.
In the platinum group metals (PGMs), palladium broke through the $600 barrier to strike a new peak since June 2001 at $603 per ounce and was last at $598/603, a $10 advance.
Platinum climbed to a new peak since May 14 at $1,725 per ounce – it was last at $1,718/1,722, still up $7.
The three industrial precious metals have benefitted from their dual-role nature as both investment and industrial assets and which, in the present environment, should keep prices bubbly over the near term, analysts said.
"Silver, platinum and palladium are still in strong demand at present," broker Commerzbank said. "The present high momentum suggests prices will continue to rise in the short term."
Also, the PGMs were given a boost by news yesterday afternoon that unionised workers at Northam Platinum's Zondereinde mine in South Africa have rejected the firm's latest wage offer and are continuing industrial action that began on September 6.
The company is losing in the region of 1,000 ounces of PGMs and gold per day because of the strike.
Thursday, October 7, 2010
Will South Africa Nationalize its Gold and Platinum Mines?
From Mineweb:
The possibility of possible nationalization of South Africa's key mining sector rumbles on. Is this likely to happen? Julian Phillips looks at the politics behind the rhetoric.
Author: Julian PhillipsPosted: Thursday , 07 Oct 2010
BENONI (SOUTH AFRICA) -
The argument that South African mines will be nationalized stems from Julius Malema, the head of the Youth League of the ANC. It has been rumbling on for some time now. Mrs. Shabangu the Mines Minister previously stated that it would not happen in her lifetime. This was ignored by the Youth League who held to their position. At that time it was not on the Agenda of the ANC and was treated with a measure of derision by the ANC. Then the ANC conference happened and the ANC placed the issue on the Agenda to be discussed in 2012.
As in most countries internal national issues rise in importance far above international ones. The issue of whether the "previously disadvantaged classes" in South Africa are getting their ‘fair' portion of the country's wealth has been a burning issue since 1994 and is unlikely to go away.
THIS IS AFRICA
The quote from the film "Blood Diamonds" - "T. I. S. -This is Africa, is often used to highlight that thinking is different in Africa to the rest of the world. The developed world concepts that laws rule governments, good economic sense will prevail, education and understanding of western capitalism pervade all walks of economic life, do not apply in Africa, as history amply demonstrates. So, before taking this issue further in this article, readers must factor in certain sub-Saharan cultural differences that they are unaware of when it comes to such discussions.
Glance at the history of sub-Saharan history and you will see an overriding description of rulership by individual tribal leaders. Names like Robert Mugabe, Mobutu Sese-Seko, Hastings Banda, Idi Amin and in the past Shaka Zulu spring to mind. How did they get so much power? In that part of the world, an African chief is considered the father of the tribe. He has the right to everything and as a father, he is expected to look after his children. As such, it is deemed right that he should own everything. His word is law and that law may change from time to time, according to the situation he finds. Any Cabinet he may surround himself with is there to advise him, for he makes the decisions, not the Cabinet or party. In South Africa and Zambia's case this outlook has been modified to some extent, for in Zambia the government is a mixture of several tribes. In South Africa, while the Xhosa tribe is dominant, politics via the Unions has diluted the sole leader's power. Nevertheless, even there, government reflects the pressures of power and sees legislation as subject to those pressures. Government can alter legislation any time in these almost one-party nations. It is against this background that mining legislation should be seen.
The author experience this attitude first hand in Mozambique, when he quoted a regulation agreed with the World Bank on Debt Conversion. He pointed out to officials of that central bank that particular regulation, whereupon he got the reply, "Oh, that's only what's written". The top official in charge of the application, made it clear that his opinion at that time would override any such regulations.
As we have all seen repeatedly, since Robert Mugabe took the reins in Zimbabwe, the desire to control and own the wealth of their own country by the current leaders has been relentless, oblivious to the destruction of their own people's wealth and welfare, a repeat of what happened in Angola, the Congo, Rwanda and so on and on.
SOUTH AFRICA
With this in mind one looks at South Africa, which to its credit has seen the reins of power held in ANC hands since 1994 and the overall shape of the economy is still much the same as it was prior to 1994. In that time there has been the pervasive policy of "Black Empowerment" steadily creeping into all walks of life. To date this has not sprinted to its objectives too quickly, in the hopes that the economic engine will run at the pace it did before 1994. The intention of the government there has been that the city should come to the village, but slowly we've seen the village come to the city. It is this process that will dictate the future of South Africa.
In South Africa. the fattest goose has always been the mining sector and the object of avaricious government eyes. But this goose has thinned tremendously in the past decade, as a rising Rand has choked off new growth in the gold sector and the tonnage produced has fallen from a peak of over 1,000 tonnes of gold to the present around 170 tonnes. Shallow mining of platinum is faring much better, so just as vulnerable.
The underlying belief in the heart of the Unions, that workers should get a bigger share of the profits through wages [rising faster than inflation] will see costs rising at an accelerating pace, making future growth in gold mining slow continuously.
NATIONALIZATION - A SOCIALIST POLICY OR AN AFRICAN ONE?
Please note that African Communism has little to do with Russian or Chinese Communism. Hence the above question. You have to blend the above attitudes to ownership with the unionism of the largest labor union in South Africa COSATU. The government has to rely to a great extent on COSATU's support to continue to rule unchallenged. There have been signs of deep discord between the two of late, for Black Empowerment appears to follow the traditions of tribal Africa more than it does Socialism, much to the annoyance of the Unions. The number of newly empowered Africans [and often related to political leaders] is very few, with the principles of the process broken repeatedly as a small number of nepotisticly linked individuals have gained great wealth while the poor majority remain as poor as ever.
[There is the tale of Wisdom Mbutu and Happy Boy Mtwetwe digging holes in the road and Happy Boy turns to Wisdom and says, "after the revolution the bosses will dig the holes in the road". Ten years later and after the ANC had power for many years, there they are, both still digging the holes and Wisdom says to Happy Boy, "I thought you said the bosses would be digging the roads after the revolution" to which Happy Boy replies, "We are!"]
The driving force behind the discussion on nationalization is the Black Empowerment process. However, as the efficiency of the system declines [you saw that in electricity and it's coming in hospitals, water and a host of state run or para-state run enterprises] it is clear to all, including the ANC, that such a step would mean a disaster for production and profits. It would also mean the end of foreign investments in South Africa. The nation cannot grow without foreign investments in the country. Despite all this, the issue is now on the agenda. It is the political shape of the country that will dictate whether nationalization will happen. We cannot rule it out as we felt we could a month ago. With BEE already demanding the 26% of South African mining be handed [almost free] to black ‘investors', there is a distinct possibility that nationalization could happen!
The conclusion of the discussion may well be two years away still, but the fact that it is on the Agenda of the ANC then will delay or deter foreign investment on a broad front in South Africa. Should it become a reality thereafter you will see South Africa slide down a very steep slope towards the state that Zimbabwe is in now. The lower prices South African shares have relative to their U.S. and Canadian counterparts, reflects this possibility.
India's rich throng to gold
From Mineweb:
As concerned investors look for a hedge against inflation and a weakening dollar, even slight dips in the high price of the yellow metal are being seen as a buy signal.
Author: Shivom Seth
Posted: Thursday , 07 Oct 2010
MUMBAI -
It is a gold rush the likes of which the country has not witnessed in a long time. Fears of double dip recession in the US and the subsequent global fallout of such an event has caused high net-worth individuals in India thronging to precious metal counters.
"The way this class (read wealthy investors) responds to a fear situation is by buying bars and kilos of gold,'' said A L Adjaniawala, precious metals analyst at KJMC Capital, a Mumbai-based research firm. "Given the firming up of bank deposit rates in India, consumers in the world's biggest buyer of the precious metal are keen to increase the share of gold in their investment portfolio to 20%-25% over the following year, from the current 10%-12%,'' he added.
Last year, bullion gained 34% and investors in India had realised the benefits of holding the yellow metal. With investors currently seeking a hedge against inflation and a weakening dollar, even a slight price drop is an opportunity that cannot be missed.
On Tuesday, Comex gold soared to an all-time high against a weakening dollar. Last Friday, the dollar fell to the lowest level since January, against a basket of currencies, partly on speculation that the Federal Reserve would ease the monetary policy to stimulate the US economy.
Data had showed that growth in US manufacturing had slowed. Inflation too was subdued; reason enough to spike the Indian market.
"Not just the richie-rich, even small investors have started buying gold coins. Most of them say they collect it for their children,'' said Harmesh Arora, director of NIBR Bullion, a Mumbai-based gold refinery that sells coins.
He adds, the corporate sector too has started gifting coins to their staff and dealers, "Knowing its intrinsic value, many retail stores are giving a gold coin as a free gift with the purchase of high value products, especially in the forthcoming festive season.''
Shwetambur Shah of Choksi Vimalkumar, a jeweller in Mumbai's Kalbadevi area noted that Indians traditionally buy gold jewellery during festival time. "It is the most common gift during religious events and an essential wedding present, but buyers are becoming increasingly aware of the benefits of holding gold in other forms too. So, from coins to bars, several people are now coming in asking for larger quantities of gold,'' he added.
However, the high price is playing spoilsport in some areas. An official of Riddisiddhi Bullions, a large wholesaler in Mumbai, said sales may fall slightly before they pick up again. "Usually by this time, most of our stocks get lifted. This year, people are nervous about the high price,'' he added.
In the April to June quarter, India's investment demand for gold was at 41.5 tonnes, up 7% year-on-year, while jewellery demand stood at 123 tonnes, down 2% year-on-year, data from the World Gold Council has shown. Sunil Solanki of M H Karbawala & Co said the retail rate of gold jewellery at Rs 19,700 was too high for the normal consumer to jump in. "It is a wait and watch policy that is being adopted by most people. We do receive enquiry sales practically every hour on whether the rate has reduced, which would entice people to come in and buy some jewellery for the Navratri festive season ahead,'' he added.
Gold surges to record 1,356.50 US US dollars an ounce
From the Sydney Morning Herald:
Gold surged to a record 1,356.50 US US dollars an ounce in Hong Kong trade on Thursday.
The precious metal is well up from Wednesday's 1,349.80 US dollars reached in New York trade. It opened at 1,347.00.
Dealers are buying as the dollar remains under pressure amid concerns over the global economy and as dealers look to invest in the safe haven in times of uncertainty.
The dollar fetched 82.84 yen in Tokyo trade, close to a 15-year low 82.75 hit briefly in New York on Wednesday and below the level at which Japan intervened for the first time since 2004 on September 15.
The euro was trading at a near eight-month high 1.3921 US dollars.
Comex gold punches through $1,350/OZ on currency instability
By Tom Jennemann of Fast Markets:
New York 06/10/2010 - Gold on the Comex division of the New York Mercantile Exchange touched an all-time record of $1,351 an ounce on Wednesday as the dollar wobbled and a Federal Reserve official suggested that additional monetary stimulus is needed to curb unemployment.
Gold futures for December delivery closed Wednesday at $1347.70, up $7.40, for the day. The yellow metal traded in a range of $1,340.00 to $1,351.00, which was a new lifetime record.
"You're starting to hear that $1,400 is within reach now that we've taken out $1,350, where there was some resistance from a Fibonacci basis," Tom Pawlicki, an analyst at MF Global Holdings Ltd. in Chicago, said.
"The main focus is still on currency weakness and prospect that the Fed will conduct quantitative easing on Nov. 3," he added.
The dollar fell to a fresh eight-month low of 1.3947 against the euro on the back of a lacklustre jobs report.
Payroll processing company ADP reported that private US employers shed 39,000 jobs during September, after gaining a revised 10,000 in August. Estimates were for an increase of 23,000 new jobs.
The dollar also reacted negatively to comments made by Chicago Federal Reserve Bank President Charles Evans, who said he favours "much more accommodation than we've put in place."
"In the last several months I've stared at our unemployment forecast and come to the conclusion that it's just not coming down nearly as quickly as it should...This is a far grimmer forecast than we ought to have," Evans said in an interview with the Wall Street Journal.
Evens added that Fed should push interest rates down in order to move inflation higher and to even tolerate inflation above target of 2 percent to make up for lost ground.
"Until the Fed moves away from QE and towards a more normalized interest rate policy, gold is going to rally," Pawlicki said.
MKS Finance SA said in a note that currency-hedge buying continued today with long-term macro concerns lending support to gold.
"The outlook still seemed bullish considering the already high prices. Nevertheless, one should remain cautious ahead of numbers awaited tomorrow and Friday regarding Band and England and European Central Bank rate decision and non-farm payrolls in the US. Should the numbers add to speculation on further quantitative easing by the FED gold could fly to the moon and beyond," MKS said.
Comex silver for December delivery added 31 cents, or 1.4 percent, to close at $23.04 an ounce. Earlier in the day, the grey metal posted a fresh 30-year high of $23.09.
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