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Record demand for gold coins

May 24 2009 10:21

Johannesburg - The demand for gold coins has hit an all time high, the SA Gold Coin Exchange said on Friday.

"The rapidly growing demand for gold coins strongly suggests that the gold bull market is well set to extend itself strongly into the future," said chairperson Alan Demby in a statement.

An increasing number of analysts and commentators were predicting strong gold price advances, Demby added.

He said during the course of 2008, the value of the exchange's sales of gold coins, primarily Krugerrands, was a substantial 80% higher than in 2007.

"I accept that exchange has grown its market share, but this has played no more than a minor role in our headlong revenue growth, which I am convinced emanates from a belief that gold is the ultimate hedge against the uncertainty generated by the global financial meltdown," Demby said.

In the past few weeks the legendary Warren Buffet had expressed himself strongly in favour of investing in the yellow metal.

Furthermore, Demby said, UBS Investment Research forecasts gold to hit $2 500 an ounce in the next five years as prospects of either deflation or inflation become more extreme.

He added that Citigroup analysts Alan Heap and Alex Tonks had raised their gold forecast to an average $925 an ounce in 2010, from a previous estimate of $900.

Demby also noted that in the fourth quarter of 2008 compared with the equivalent 2007 quarter, total bullion demand in India, the world's largest gold market, was up 84%.

He added that gold demand in Greater China was up 21% while demand in Thailand soared over 100% and Middle Eastern gold bar and coin demand rocketed 139%.

"Record demand has also spilled into the first quarter of this year, sending total global demand for gold in the form of exchange-traded funds (ETFs), coins, bars and futures past the $100bn mark - for the first time ever," Demby said.

Moreover, gold demand via ETFs shot up by 469 tons - a full 223% over the previous record set in the third quarter of 2008.

According to Demby, coin and bullion demand was expected to be just as strong as the 396% surge in the fourth quarter of 2008. "It should be no surprise, then, that the price of gold continues to trade above its 1980 high of $850 - and rising.

"All the data clearly reveal that we are looking at a bull market more powerful than almost anyone is ready to admit - so powerful that it would not come as a surprise if the price hit US2 000 before the end of next year," Demby said.

[Fin24]

Alan Demby on CNBC 22/05/09

Gold supported by weak dollar

May 22 2009 09:24

Tokyo - Gold held steady on Friday near a two-month high, with investors turning to the safe-haven asset as the dollar remained weak and as US data on jobless claims and business conditions dented hopes for a quick return to growth.

Gold has risen about 2.6% this week, and traders said its upside was likely to become more limited as current prices prompt investors to take profit while wary investors halt investment in gold-backed exchange-traded funds.

Spot gold was steady at $952.65 per ounce at 02:42 GMT, little changed from New York's notional close of $953.40. Gold rose as high as $955.95 on Thursday, its highest since March 23. In March, gold prices rose as high as $966.

US gold futures for June delivery edged up 0.2% to $953.40 per ounce from $951.20 on the COMEX division of the New York Mercantile Exchange on Thursday.

Speculators have been boosting their holdings in US gold futures, another reason the market may be getting a bit stretched given that buying has been driven by external factors such as the currency and stocks, said a senior dealer at a Japanese trading house.

"The market is now at a level where technicals will set the direction, with traders watching if stop-loss orders above the highs for March will be hit," the dealer said, saying trend-following commodity trading advisers (CTAs) have been placing such orders at various levels.

The dealer said while players may wait to take action until the June gold futures contract rolls over next month, the dollar's further slide or sharp stock losses could hit the technical triggers.

Gold's relative strength index (RSI), a measure of whether the metal is overbought or oversold, stood at 76 at Thursday's close. The market views an RSI of 30 or less as oversold and 70 or more as overbought.

The Obama administration is preparing to steer General Motors into bankruptcy next week, The Washington Post reported on Thursday, citing sources familiar with the discussions.

Traders said the US automakers' bankruptcy, a factor which would normally spur more safe-haven buying of gold, was likely to have been factored in by market players and could even trigger profit taking given gold's current high price.

They also said gold had been weighed down by selling from India, the world's largest gold consumer, and Vietnam, when prices jumped.

But supportive of gold was data on Thursday suggesting that the US economic recovery, when it arrives, will be a long slog, with a key factory index showing only marginally less weakness and unemployment tipped to hit double-digit levels. Markets were also slammed by suggestions of the unthinkable - that the United States could lose its coveted triple-A credit rating.

Also buoying bullion was the dollar, which fell to its weakest in almost five years against a basket of currencies as concerns about growing US government debt prompted investors to sell dollar assets from stocks to bonds.

Cash flowing into the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, has paused since rising on May 13 for the first time since they began declining after hitting a record high on April 9. Its holdings were unchanged at 1 105.62 tonnes on May 21.

- Reuters

[fin24.com]

Gold coin demand soars

Fri, 22 May 2009 10:27

The demand for gold coins has hit an all time high, the SA Gold Coin Exchange said on Friday.

"The rapidly growing demand for gold coins strongly suggests that the gold bull market is well set to extend itself strongly into the future," said chairman Alan Demby in a statement.

An increasing number of analysts and commentators were predicting strong gold price advances, Demby added.

He said during the course of 2008, the value of the exchange's sales of gold coins, primarily Krugerrands, was a substantial 80 percent higher than in 2007.

"I accept that exchange has grown its market share, but this has played no more than a minor role in our headlong revenue growth, which I am convinced emanates from a belief that gold is the ultimate hedge against the uncertainty generated by the global financial meltdown," Demby said.

In the past few weeks the legendary Warren Buffet had expressed himself strongly in favour of investing in the yellow metal.

Furthermore, Demby said, UBS Investment Research forecasts gold to hit US$2500 an ounce in the next five years as prospects of either deflation or inflation become more extreme.

He added that Citigroup analysts Alan Heap and Alex Tonks had raised their gold forecast to an average $925 an ounce in 2010, from a previous estimate of $900.

Demby also noted that in the fourth quarter of 2008 compared with the equivalent 2007 quarter, total bullion demand in India, the world's largest gold market, was up 84 percent.

He added that gold demand in Greater China was up 21 percent while demand in Thailand soared over 100 percent and Middle Eastern gold bar and coin demand rocketed 139 percent.

"Record demand has also spilled into the first quarter of this year, sending total global demand for gold in the form of exchange-traded funds (ETFs), coins, bars and futures past the $100-billion mark – for the first time ever," Demby said.

Moreover, gold demand via ETFs shot up by 469 tons – a full 223 percent over the previous record set in the third quarter of 2008.

According to Demby, coin and bullion demand was expected to be just as strong as the 396 percent surge in the fourth quarter of 2008.

"It should be no surprise, then, that the price of gold continues to trade above its 1980 high of $850 – and rising.

"All the data clearly reveal that we are looking at a bull market more powerful than almost anyone is ready to admit – so powerful that it would not come as a surprise if the price hit $2000 before the end of next year," Demby said.

Sapa 

[Via Iafrica]

Gold to trade above $1,000 next year - Mark Cutifani, AngloGold

| Tue, 19 May 2009 11:01In an interview on ClassicFM @ 18.15 on 15 May[miningmx.com] -- AngloGold Ashanti believes it delivered on its promise to give shareholders a leverage to the gold price in its financial results and CEO Mark Cutifani is optimistic about the future of the yellow metal.

"We’ve come off a big year of restructuring and we promised that shareholders would see leverage to the gold price. They’ve seen it with a significant increase in realised gold price itself and so from our point of view, a big change in earnings so we’re very happy to report that leverage we’ve been promising," Cutifani said on ClassicFM's Classic Business.

He said there have been significant improvements in the gold holdings in exchange traded funds. "Demand for our product has been significant. People are now starting to recognise that if you don’t have gold in your investment portfolio, you’ve made a big mistake," Cutifani said.

AngloGold has seen a strong gold price, despite it traditionally being the weakest part of the year.

"We’re very optimistic about gold and I wouldn’t be surprised to see gold trade above $1,000 consistently next year," Cutifani said. 

[mining mx]

German firm to install Gold ATMs

This post is a little more offbeat than our usual posts, but totally amazing! 

German firm plans gold ATMs to feed explosive growth in physical gold demand

A German asset management firm plans to set up 500 gold automatic teller machines across Germany, Austria and Switzerland as appetite for physical gold surges.

Author: Peter Starck
Posted:  Wednesday , 20 May 2009 

FRANKFURT (REUTERS) - 

Private investors should hold up to 15 percent of their wealth in physical gold, according to a German asset management company which plans to set up 500 "Gold-To-Go" ATMs in Germany, Switzerland and Austria this year.

A gold-dispensing automatic teller machine (ATM) was on display at Frankfurt's main railway station for a one-day marketing test on Tuesday.

A one-gram (0.0353 ounce) piece of gold, the size of a child's little fingernail and about as thin, cost 31 euros ($42.25) -- a 30 percent premium to the spot market price.

The flat rectangular piece, bearing the imprint of Belgian metals and speciality materials firm Umicore (UMI.BR: Quote), came out of the cash-only ATM in a tin box, including a certificate of authenticity.

"This is more than a marketing gimmick," said Thomas Geissler, chief executive of TG-Gold-Super-Markt.de, the company planning to set up the 500 gold ATMs at a cost of 20,000 euros apiece.

"It is an appetizer for a strategic investment in precious metals. Gold is an asset everyone should have, between 5 and 15 percent of your liquid assets in physical gold," he told Reuters in an interview.

DEMAND

Private investor demand for gold is on the rise in Germany and elsewhere as a result of the financial markets crisis, which has made many investors wary of holding traditional assets such as equities, bonds or mutual funds investing in such securities.

"In absolute numbers, the demand for physical gold is still tiny in Germany," Geissler said. "But in relative terms, the growth is explosive, inquiries have been doubling every six weeks," Geissler said of the trend in recent months.

TG-Gold-Super-Mark.de's main precious metals business idea is based on online commerce.

The gold ATMs to be set up at central locations such as airports, railway stations and shopping malls are intended to gradually accustom people to the idea of investing in physical gold, Geissler said.

The ATMs will dispense 1-gram, 5-gram and 10-gram pieces of gold as well as Krugerrand gold coins. Each ATM can hold up to 1,500 pieces, he said.

The company's internet website (www.gold-super-mark.de), through which investors can purchase units between 1 gram and 1,000 grams, is updating precious metals prices every 10 minuntes.

The ATMs will be equipped with technology ensuring that the prices charged by the ATMs keep pace with those on the website.

TG-Gold-Super-Markt.de is a subsidiary of German online investment fund company INFOS GmbH founded in 1994. INFOS now manages 170 million euros worth of assets on behalf of about 5,000 customers.

© Thomson Reuters 2009. All rights reserved.

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