Bloomberg Television interview with Mr T.

Price of gold continues to rise and shine

16TH OCT Price of gold continues to rise and shine

By Ellen Kelleher
Published: October 15 2010 18:07 | Last updated: October 15 2010 18:07

The gold price hit another high this week as concerns mounted about the economic outlook, leaving investors facing the question whether to buy gold bullion or shares from the mining companies themselves.
Mining companies across Australia, South Africa and Latin America are drawing attention from buy-and-hold investors who subscribe to the theory that metal prices will be driven higher for decades to come, thanks to soaring demand from the emerging middle-classes in China, India and Brazil. Scores of speculators, meanwhile, are buying into gold-backed exchange-traded funds, hoping to see further upside in the gold spot price, which set another high of $1.387 a troy ounce this week.

Opinions vary on whether mining or bullion is the superior bet. “At times, mining stocks and the gold price behave in very different ways,” points out Justin Urquhart Stewart, director with Seven Investment Management, who has turned bearish on the gold price. While rising spot gold prices push up mining companies’ revenues, their profit margins can be impacted by new taxes and regulations, higher costs and production problems. Just this week African Barrick Gold, the FTSE 100 miner, drew attention to the difficulties miners face when it cut its gold production forecast again after uncovering “organised and systematic” fuel theft at a Tanzanian mine.

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Indeed, the rally in gold is helping other precious metals, with silver hitting a 30-year high of $24.90 per troy ounce this week. Base metals have also performed well, with forecasts for the copper price looking increasingly rosy thanks to shrinkage in supply.

http://www.ft.com/cms/s/2/e5a7cfb6-d87d-11df-8e05-00144feabdc0.html

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BIS taking in more gold - who are the counterparties this time?

Author: Rhona O'Connell
Posted:  Wednesday , 13 Oct 2010 

The latest figures from the IMF show that the Bank for International Settlements' declared gold holdings are on the increase again.  The BIS hit the headlines earlier this year when analyst Matthew Turner spotted figures in the BIS' Annual Report that showed the Bank's holdings of gold had soared as the Bank had carried out swaps with what turned out to be commercial counterparties (the initial interpretation was that it had come from other central banks).  By the end of April, the BIS' net gold holdings stood at 468 tonnes, having been just 119 tonnes as recently as the end of November.
The BIS' gold holdings were more or less unchanged over the next three months, but they have been increasing again since June, rising from approximately 467t to 512t over the months to end-August, an increase of 45t.
As shown in the chart below, the nominal value of the gold at the end of August stood at almost $21 Bn, more than five times as much as at the end of October 2009, reflecting a four-fold increase in the tonnage held, allied to a 20% increase in the gold price.


[Continued]

WIN SILVER BULLION! 'Why Gold & Silver?' Giveaway

Gold moves higher as investors bet on QE2

By Carole Vaporean and Jan Harvey

NEW YORK/LONDON | Tue Oct 12, 2010 2:32am IST

 

NEW YORK/LONDON (Reuters) - Gold moved back toward its all-time high on Monday, despite late gains in the dollar, as investors prepared for what many see as a likely second round of economic stimulus by the U.S. Federal Reserve.
The U.S. dollar regained strength against the euro and yen in late buying by investors who viewed its recent decline as too far, too fast.
But gold buyers looked past the short term, betting instead that the Federal Reserve would almost certainly implement so-called QE2 -- a second round of quantitative easing to stimulate sputtering economic growth.
By 3:40 p.m. EDT (1940 GMT) spot gold had risen to $1,353 an ounce, above Friday's closing bid at $1,343.25 but below the all-time high of $1,364.60.
In New York, COMEX December gold futures closed $9.10 higher at $1,354.40 an ounce, setting a session peak at $1,356.30 as they approached their record at $1,366.
Many players think the Fed will implement QE2 at its next meeting after mid-term congressional elections, said Sterling Smith, a Country Hedging Inc analyst in St Paul, Minnesota.
To boost the economy, the Fed is expected to print money in order to buy U.S. government debt, which would be dilutive to the dollar, Smith said.

THE FEDERAL RESERVE is SELLING PAPER GOLD and BUYING PHYSICAL GOLD

Monday, 4 October 2010

By Rob Kirby

A couple of weeks ago, I pitched an idea to some associates of mine who are involved in SERIOUS [tonnage] PRECIOUS METALS procurement – physical metal only – let’s just say HUGE money.  I asked them if they would be interested in purchasing an “option” – cash up front - for the exclusive rights [first right of refusal on off-take] of a gold producer [miner] for a set number of ounces for 3 – 5 years “at the market” – using LBMA pricing [a.m. / p.m. fixes] in the future.  The answer I got back from my associates was “show us a terms sheet, we definitely have interest”.

So, I spoke to a friend who is very close to an intermediate producer who is in the mode of raising money right now.  I had them ask the producer if they would have interest – the producer said, “YES, we are interested - but just to let you know – J.P. Morgan has been asking us if we would sell them the same option”.  So, while gold producers have shuttered their “gold hedge books” – the Bullion Banks are ‘synthetically’ trying to keep physical output captive – I would suggest FOR THE EXPRESSED REASON THAT THEY SELL EVERY PHYSICAL OUNCE AT LEAST 100 TIMES OVER.

Gold is going to get EXTREMELY scarce in the future folks.  Big money interests are now cutting off [or bidding for / gaining exclusive access to] the traditional bullion supply chain “at the pit”.

The shorts of ‘paper gold’ at J.P. Morgan [the Fed in drag] are selling the daylights out of the paper market and simultaneously buying exclusive rights to producers’ future production so they can try to fudge their way through an unmitigated fraud and settle a big enough chunk of their bad bets to keep this ‘systemically ruinous’ precious metals ponzi-scheme alive.  

Price of Gold and Interest Rates Are Joined at the Hip

The academic research that outlines the inter-relatedness of gold and interest rates is succinctly laid out in a 2001 treatise, Gibson's Paradox Revisited, by Reg Howe.  From this one can deduct that ANY rigging of the gold price must go hand-in-hand with simultaneous rigging of interest rates.

Folks would do well to realize how neatly emerging details of Fed surrogate Morgan’s  ‘stealth’ activity in the bullion market dovetails with their obscene, obsequious activity elsewhere in their derivatives book – particularly their JUMBO TRILLIONS sized interest rate swap positions.  

[continued] http://news.goldseek.com/GoldSeek/1286223866.php

09/29/10 - European Central Bank Gold Sales Down 96%

09/29/10 Stockholm, Sweden – The year to September reporting is in for the European Central Bank Gold Agreement (CBGA), the group that controls the aggregate gold sales for the eurozone, Sweden, and Switzerland. The results are not that surprising — the group sold only a meager 6.2 tonnes. However, the precipitous drop in sales from the year prior period is staggering… the members’ gold sales are down 96 percent.



According to the Financial Times:

“The central banks of the eurozone plus Sweden and Switzerland are bound by the Central Bank Gold Agreement, which caps their collective sales. In the CBGA’s year to September, which expired on Sunday, the signatories sold 6.2 tonnes, down 96 per cent, according to provisional data.

“The sales are the lowest since the agreement was signed in 1999 and well below the peak of 497 tonnes in 2004-05. The shift away from gold selling comes as European central banks reassess gold amid the financial crisis and Europe’s sovereign debt crisis.

“In the 1990s and 2000s, central banks swapped their non-yielding bullion for sovereign debt, which gives a steady annual return. But now, central banks and investors are seeking the security of gold.”

[contunied]

http://dailyreckoning.com/european-central-bank-gold-sales-down-96/