Wednesday, September 15, 2010

Gold Bullion - An Essential Part Of One's Investment Portfolio

By David Levenstein: Suddenly, as the price of gold is showing signs of strength again, analysts from many major financial institutions are talking about prices going to $1300 per ounce and higher. Yet, a few weeks ago, when the gold price was trading down, they were talking about lower prices in gold. Being able to correctly predict future prices of any commodity is one thing, giving a commentary on the current trend is another. As far as I am concerned I don't know who these analysts are and don't much care either. They all seem confused and unable to see that the primary trend is upwards and that there are certain fundamental reasons why this happening.

Many individuals still have the misconception that gold is used only for jewellery, and have forgotten that gold is also a monetary metal as well as a global currency. It is not a barbaric relic as it is often referred to by analysts who don't understand this metal.

Gold has always had value to humans, even before it was money. This is demonstrated by the extraordinary efforts made to obtain it. Prospecting for gold was a worldwide effort going back thousands of years, even before the first money in the form of gold coins appeared about 700 B.C. The first pure gold coins were struck by King Croesus of Lydia (present-day Turkey) during his reign between 560 and 547 BC and gold coins have continued as legal tender ever since. It changed the world of commerce as the yellow metal became a currency - a medium of exchange with a definite value - replacing barter and other commodities as on

Oprah trip "Down Under" surprises Australians - with a bill

(Reuters) - Oprah Winfrey might have surprised her talk show audience Monday by giving them all a free, eight-day trip to Australia but the trip also surprised Australians -- with a A$3 million (US$2.8 million) bill.

Tourism Minister Martin Ferguson said the federal and state New South Wales governments would spend more than $3 million helping to bring "The Oprah Winfrey Show" to Australia as a way to boost tourism.

He said it was money well spent as it would put Australia in the spotlight with the popular TV show watched by 40 million Americans and screened in 145 countries.

"Oprah is a household name and her star power has the potential to lift Australia's profile as a premier tourist destination," Ferguson said in a statement on

Aussie Dollar hits 1 YEAR HIGH against the US$

The Australian Dollar hit 1 year highs against the US$ overnight Oz time, hitting over 95cents intraday, on expectations of the US Fed again knifing the US$ by buying up to $1Trillion dollars worth of US Treasury Bonds in an attempt to Packer wack the brain dead US economy.

By Luca Di Leo:

The U.S. Federal Reserve could announce a new program of asset purchases to support a weak economy as early as November, according to Goldman Sachs Group Inc.

“We don’t expect this at the Sept. 21 meeting, but in November or December there’s certainly a possibility that it will be announced,” Jan Hatzius, chief economist at the bank, said Tuesday. He added the Fed is likely to buy U.S. Treasurys worth around $1.0 trillion to kick-start the economy.

To fight the financial crisis in 2008 and 2009, the Fed bought $1.7 trillion in mainly mortgage-backed securities, a move that helped to keep mortgage and other long-term borrowing rates low. That program ended in March. But with the recovery slowing, the Fed said Aug. 10 that it would reinvest the proceeds of mortgage bonds into U.S. Treasurys to prevent its portfolio of securities from shrinking. The question now is whether the central bank will start a new program of asset purchases that would increase the size of its $2.0 trillion balance sheet further.

Goldman Sachs expects this to happen soon given the weakness in the U.S. economy as a result of lower business inventory accumulation and a fading fiscal stimulus. The bank expects the U.S. unemployment rate to creep back up to 10% by early 2011 from 9.6% in August and to stay around that level for most of the year.

U.S. inflation is predicted to continue slowing to 0.5% by the end of next year from around 1.0% currently. That would be well below the Fed’s informal target of between 1.5% and 2.0%.

The upcoming meetings of the Fed’s policy-setting committee this year are Sept. 21, Nov. 2-3 and Dec. 14.

Also see the ABC News story - Aussie surges to pre-GFC levels amid Fed speculation


Gold has had its largest one-day rally in four months to hit a all time intra-day high of US$1275 off the back off increasing weaker US$ and ongoing concerns over Euro zone sovereign debt.

“After having reached a new record high price, gold seems to be reaching for the stars now,” MKS finance says. “Our eyes are on the $1,300 level, which we expect to see sooner than expected.” Silver, which has a role as both a monetary and industrial metal, also was supported by favorable economic news in China, comments from famed investor Warren Buffett that he does not see a double-dip recession, plus stronger-than-forecast U.S. retail sales. “Being in the precious metals group, it (silver) is used like gold as a safe-haven asset,” MKS says. And, “being part of the industrial metals group, silver attracts investors when risk appetite increases.”