Alan Demby on CNBC 22/05/09

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.

[via mineweb] [pics from goldismoney.info]

Warren Buffett's good news for gold

Warren Buffett's good news for gold

OMAHA - 

In the 44 years he's been building a reputation as the world's savviest investor, Warren Buffett has rarely offered any good news on gold. Until now.

The two key messages he delivered to 35,000 shareholders at Berkshire Hathaway's AGM in Omaha over the weekend were inflation is coming back; and the US Dollar is headed lower. Both predictions, if fulfilled, are powerfully positive for gold.

Buffett, who has delivered compounded returns exceeding 20% a year to shareholders for more than four decades, did not mention gold by name. But that will matter little to the yellow metal's continuously growing group of supporters. They are sure to interpret this as further evidence that gold's best days lie ahead.

After dabbling in precious metals in the 1960s, Buffett ignored them until a well publicized (but poor) trade in silver between mid-1997 and early 1998. The decision to accumulate 130m ounces was based on factors specific to silver's supply and demand at the time.

Once he'd closed out the position, Buffett jokingly describing it as "the perfect trade - except that we bought too early and sold too late." Since then he has publicly and consistently shunned precious metals, mainly because he prefers assets which generate dividends.

Despite his gloomy forecasts for inflation, Buffett hasn't exactly signed up to gold-supporting groups like GATA. Rather, he suggested to Berkshire shareholders their best protection was "invest in yourself; and as a second option, buy stock in a well run company."

Buffett explained that in the wake of the global financial sector meltdown, State officials have been forced to take the world into uncharted territory. Nobody knows the exact impact of unprecedented bailout and stimulation packages.

But he is convinced of one definite consequence: "You can bet on inflation." History suggests that higher inflation is an important trigger for a rise in the gold price.

During Saturday's six hour question and answer marathon, Buffett (78) and Berkshire Hathaway's vice chairman Charlie Munger (85) once again belied their advanced years through sharp wit and focused minds. They also referred often to their view that the US Dollar is headed south - another bull factor for gold.

Buffett believes US Government Bonds are one of the poorest choices for investors today, especially non-Americans. As he put it: "Anybody who holds (US) Dollar obligations from outside this country is going to get back less in purchasing power in future."

In his view the US is following policies that are bound to have inflationary consequences. Heading these is the heavy borrowing from, especially, the Chinese to fund the bailout and stimulus packages.

Says Buffett: "It's wrong for politicians and others to keep saying they're using (US) taxpayers money. My taxes haven't gone up and neither have yours. What we aredoing is borrowing from the rest of the world and building up Government debt. The classic way of reducing the impact and cost of foreign debt is by reducing the value of the dollars you're going to repay them with."

He added: "The people who are really going to pay (for the bailouts) are those who are buying fixed interest (US) Government bonds that will be worth less when they redeem them. The AIG bonuses," he quipped, "were actually paid by the Chinese."

While warning that shareholders should expect to see "plenty of inflation", Buffett said there was no need to despair: "The best protection against inflation is your own earning power. If you are the best at what you do, you will get your share of the national pie no matter what inflation does. The second best protection is owning a wonderful business that does not need capital. With these guidelines, I'd say invest in yourself. It's always been the best investment you could make."

G20 supports IMF's plan to sell 403 tons of gold

Endorsement signals plan likely to be approved by member countries this year

NEW YORK (MarketWatch) - Leaders from the Group of 20 nations Thursday endorsed the International Monetary Fund's plan to sell 403 tons of gold to raise funds to support the world's poorest countries.

The announcement from G20 leaders helped add pressures to Thursday's gold trading. Gold futures fell $20.30, or 2.2%, to $905.80 an ounce in recent trading on the Comex division of the New York Mercantile Exchange. See Metals Stocks.

The G20 vowed in its statement to "use the additional resources from agreed IMF gold sales for concessional finance for the poorest countries." Read more on G20.

The endorsement suggests that the IMF's gold sales plan is likely to be approved by its member countries later this year.

The IMF has been planning to sell gold since as early as 2007 to diversify its revenues and strengthen its balance sheet. But the plan needs to be approved by an 85% majority vote from its 185 members.

The U.S., which has 17% voting power in the fund, essentially holds veto power. The U.S. government has informed the IMF that Congressional authorization by law is required before it is able to support the plan.

The U.S. Treasury announced last year that it will seek authority from Congress.

Hussein Allidina, an analyst at Morgan Stanley, said in a note Thursday that he expects the IMF to implement the sales over the next few years, "but do not believe that this presents a strong negative risk to gold prices - as it will be 'orderly' and maybe even off market."

The US administration has seemed supportive, both for expanding the IMF's role as well as helping its long-term funding challenges. This makes the proposed IMF gold sales much more likely, as the US Congress effectively has a veto on this decision, with the US having a 17% vote on an IMF decision that needs 85% to pass.

Minimize market impact

The IMF, which holds more than 3,200 tons of gold, is the third-largest holder in the world after the U.S. and Germany.

Most of the IMF's gold holdings come from the fund's member countries, which are required to commit 25% of their quota in gold. The fund can't sell those holdings into the markets.

But an additional 403.3 tons of gold the fund acquired through off-market transactions in 1999 and 2000 - such as interest payment from countries that received IMF loans - are not subject to the restriction.

If member countries approved the gold sales, the IMF can find ready buyers in countries with low gold reserves, especially Russia and some Asian countries such as China, Taiwan, and India.

China, with less than 1% of its $2 trillion reserves held in gold, has expressed interest in buying more gold, crude oil, and other strategic commodities.

According to the IMF's plan, the gold selling will be implemented in coordination with major central banks to minimize the impact on the market.

The European Central Bank said Wednesday it had completed the sale of 35.5 tons of gold.

The gold sales were in full conformity with the second Central Banks Gold Agreement, which was signed in 2004 by the ECB and other European major official gold holders.

The second CBGA, which caps total gold sales of the signatories at 500 tons a year, expires in September. Some analysts expect a third CBGA to be signed before September.

Moming Zhou is a MarketWatch reporter based in New York.

Gold in line for a run

Gold set for 'decisive move' 
March 26, 2009

Johannesburg - Gold is poised for a decisive move upwards, the SA Gold Coin Exchange (SAGCE) said in a statement on Thursday.

The SAGCE said the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund had identified a chart pattern showing that gold's short-term downtrend was about to clash with its intermediate-term uptrend.

The clash pointed to a decisive near-term price move - either up or down.

"We’ve noticed a similar picture on our charts," said Alan Demby, executive chairman of the SAGCE.

He added that it was his prediction that the gold price would move up.

Several factors, he said, prompted such a decision.

This included the fact that the intermediate-term uptrend has been tested on two occasions - in November last year and mid-January this year - with the likely result that it would hold again on this occasion.

Demby said there had been an unprecedented surge in demand for gold coins, which had resulted in the US Mint having had to stop producing its 2009 American Gold Eagle coin for collectors, reflecting determined global buying.

Demby said that as a proven inflation hedge, gold was starting to offer itself as a safe haven from the trillions of fiat dollars that had been created by the world's leading central banks. - Sapa

The Gold and Silver Bull Market Won't End Before 2014 or 2015

It's more than a little odd and bewildering that both SILVER and GOLD PRICES have been correcting for more time than the 2004 and 2006 crashes, but so far at less price loss. In other words, the correction ought to be complete in time, but not in price. This jumps to the conclusion that 2008's correction has finished, and will be shallower in price than 2004 and 2006.

By way of comparison, the gold price has dropped 15.4% so far from its 18 March 2008 high, against 12.4% in 2004 and 21.9% in 2006. The silver price as of 1 May had dropped 21.6% from its high, but in 2004 dropped 32.8% and 35.4% in 2006.

Trying to mesh this with the metals' seasonal patterns leads to more bewilderment. Usually metals drop into end-June/July for a low after a high in May, then make another high in October/November. Sometimes, just to mess with your mind, they peak & trough in the opposite seasons. This year they peaked in mid-March(huh?) and looks like they will trough by mid-May, end-May latest. Will they then rise into the summer, the usual seasonal low? Or will they trade sideways until August and then begin climbing?

About the only near-certainty here is that this correction will have ended by May 31. Mercy -- it may have already bottomed. Proof of that will only come, however, by a successful test of the lows so far.

Now everybody has his head turned down, so what are the maximum lows we might expect? US$785 on gold and $13.29 on silver. But I've been through this enough times to know that bending over looking for a bottom you'll get a crick in your neck that puts a crick in your trading. You are looking for a bottom so hard that you miss it when it comes, looking for one further down. That's silly. Silver & gold are in a bull market. What if you buy today and they drop another 10%? The bull market's rising tide will bail you out. I've worried and vexed myself about every one of these drops since 1999, and now the difference between $4.05 and $4.50, or US$342 and US$310 seems like no difference at all.

Of course, this sort of weather also brings out the really gigantic croakers. They're now singing that the deflationary depression is coming that will take gold down to $35 again and silver to 25 cents, etc., etc. and the bull market in silver and gold has ended. Well,suum quique, to each his own, but I doubt it. The metals bull market began in 2001. It won't end before 2014 or 2015, if then. Stay with your positions, add to them while metals are correcting and low, and shut your ears to the croakers like Ulysses shut his crews' ears to the Sirens. His own he left open, but he tied himself to the mast.

STOCKS are rallying, and the Dow industrials should carry to 14,000. Dow Transports made a new all-time high on 30 April, and whether the Industrials confirm that or not, for now that fuels stock optimism. Rallying stocks helps silver, so don't complain, just don't get suckered into buying or keeping stocks. Stock rally seems destined to carry into summer, again, differing from the usual flat summer pattern.

The US DOLLAR INDEX is just a-rallyin' and a-rallyin', picking up all the easy money off the inflexible & unwary shorts. Look for this rally to work its way toward 77 before it ends, but it won't hurt silver or gold too much. They've already established themselves as the alternative currencies to all fiat national currencies. 

By : Franklin Sanders

www.the-moneychanger.com

Investors pile into gold coins

Investors pile into gold coins

Johannesburg - Aware that gold is the ultimate store of value, concerned South Africans are piling into Krugerrands and Nelson Mandela gold medallions, the SA Gold Coin Exchange said on Friday.

"On the back of global financial turmoil, the ever-popular Krugerrand has soared through the R10 000 mark, handsomely rewarding investors who several months back anticipated the global financial turmoil that has driven the rand price of the yellow metal into orbit," Alan Demby, executive chairperson of the SA Gold Coin Exchange said in a statement.

Technically, the surge could be directly ascribed to a combination of an advancing dollar gold price and a weakening rand.

"Based on current demand levels, the SA Gold Coin Exchange's sales have been running at levels in excess of R100m a month.

"We have accordingly increased our 2009 sales target to an admittedly conservative R1bn," said Demby.

Reord stock market lows were translating into record highs for gold and Krugerrands, and Demby suggested that in the last six months, a large number of investors had switched from equities into gold coins.

"The smart money has carefully digested the fact that in the past six months the JSE all-share index has slumped by 30%, while the price of a Krugerrand has soared by 64% over the same period," he said.

Demby said it had to be remembered that the all-share was somewhat buffered by "a firm gold share index".

He said that British media had been carrying reports on the flight from cash to gold in the wake of concern over the safety of the banking system.

"Here the concern is more over the value of the currency than the banking system.

"Even so, widespread uncertainty is prompting investors the world over to accumulate gold as the only tried and tested safe haven."

Looking ahead, he predicted ongoing Krugerrand strength.

"Prospective investors in Krugerrands have not missed the boat.

"As the global financial crisis deepens, as it is surely bound to do, gold bullion will continue to advance," he said.

At the same time, South Africa's inflation differential and the risk perceptions attaching to emerging market economies would likely witness ongoing rand weakness, Demby said.

- Sapa

gold on its way back to the far from far-fetched $1,000 oz

As I write this I am watching gold sit just under $970/0z.

I read this article on Moneyweb this morning.

As a matter  of intrest we saw this morning, the highest price for a Krugerrand ever! R10,320.

Where is the price going to go? experts are saying that it will hit $1,100 + by the middle of the year. What does this mean for us? Well if the R/$ stays at around R10 we are looking for a Krugerrand price of atleast R12,000 

Global Gold Drying Up...

Click above to read the article

No plans to change position on gold sales - IMF

n response to speculation that the IMF might cancel its proposed gold sales programme, it has denied that any such change of plans is under consideration.

Author: Jan Harvey
Posted:  Thursday , 12 Feb 2009

LONDON (Reuters) - 

The International Monetary Fund said it does not intend to alter plans to sell just over 400 tonnes of gold to fund changes to its financing base, an IMF spokeswoman said on Wednesday.

A recent surge in IMF lending to countries facing balance of payments crises related to the global economic slowdown and financial turmoil has led analysts to question whether the Washington-based institution will proceed with the plan.

But a spokeswoman for the IMF -- the third largest official holder of gold -- said the sale would still go ahead.

"There are no plans to change the proposal for a new income model," she said.

"The package of IMF governance reforms, including gold sales, was submitted to the U.S. Congress last November, but will need to be reintroduced as a formality," the IMF spokeswoman said. "The timeline will depend on the Congress' schedule."

The IMF agreed in May last year to create an endowment with the profits from the proposed sale of the gold as part of a broader makeover of the IMF's financial structure and investment strategy.

Such a move, however, depends on approval by member countries' legislatures, including the U.S. Congress. With a change of administration in Washington and a focus in the United States on the economic turmoil, the issue of gold sales and more general IMF reform has been pushed to the back burner.

The sale of 403.3 tonnes of gold was originally proposed in 2007 after a committee chaired by Andrew Crockett recommended the IMF adopt a new funding model. The IMF said on its website its finances had become unsustainable after a decline in its lending business.

With more countries now seeking IMF assistance to ward off the effects of the global financial crisis, there is speculation that as this business picks up, it will roll back its plans to sell bullion.

"It is possible that the issue of gold sales to plug a funding gap that is disappearing ... and which are already two years down the line from the Crockett Committee's report, could be put on the back burner," metals consultancy VM Group said in a report.

"At the very least, the IMF's renewed relevance has strengthened the case of those who oppose such sales," it said.

Gold was quoted at $946.25/8.25 at 1821 GMT on Wednesday.

The fund has said repeatedly that sales would be made under the umbrella of a central bank gold agreement to avoid disruption to the market.

The existing Central Bank Gold Agreement, which limits gold sales by central banks to ensure the market is not flooded with bullion, is in its final year and is due to expire in September.

Analysts say the IMF's desire to sell gold is a major indicator that a further agreement will be signed, despite sales hitting a historic low last year as central banks hung onto the precious metal as a 'safe' reserve asset.

Members sold 357 tonnes of gold in the year to September 2008, well below the annual limit of 500 tonnes.

Gold: nothing succeeds like success

Author: Barry Sergeant
Posted:  Thursday , 12 Feb 2009

CAPE TOWN - 

Listed gold stocks continue to lead the attempted recovery in global stock markets, supported on Wednesday by a dollar gold bullion price that moved to seven-month highs, above USD 945 an ounce. Measured on an absolute basis, the market value of gold stocks listed around the world moved to well above USD 200bn, the highest level seen since October 2008, a month after erstwhile Wall Street investment bank Lehman Bros. filed for bankruptcy, triggering yet another stage of the most intense crisis in world credit and equity markets seen in decades.

Seen as a commodity, gold bullion has surrendered the least of its record price, seen in March 2008, and currently trades just 9% below that record price of just short of USD 1,033 an ounce. The ongoing recovery of gold bullion prices -which have moved below USD 700 an ounce since making record highs - has underpinned a recovery in listed stock prices for companies representing the metal, from explorers to miners. The extent of the recovery has left the vast majority of other mining stocks (with the narrow exception of silver stocks), and stocks of any other kind, far behind. While the MSCI Barra dollar index for all global equities has moved 12% above its lows, seen late in 2008, and emerging market stocks have "bounced" up by 26% from lows, gold stocks, measured on the weighted average value of 250 listed names, have risen 128% from low points, seen just months ago.

The Tier II gold stock grouping, led by names such as JSC Polymetal, Centerra, and heavyweights such as Yamana and Agnico-Eagle, has risen by a fantastic 173% from low points, also within just a few months. Silver stocks have outperformed gold stocks as an overall group, with a weighted average increase of 147% from lows, led by the likes of Fresnillo, and Silver Standard.

Spot silver prices are trading 36% below record highs, also seen in March 2008, but listed silver stocks have long traded in sympathy with trends in gold stocks, tending, however, to overshoot on the rise and also on the fall. However, while the global market value of listed gold stocks runs at well above USD 200bn, silver stocks are worth well short of USD 20bn.The majority of silver is produced as a by-product at mines primarily focused on other metals.

Seen as a grouping, listed uranium stocks are also outperforming most mining stocks, with First Uranium among those names that continue to deliver exceptional price increases. Meanwhile, the SPDR Gold Shares exchange traded fund (ETF), a security that holds physical gold on behalf of its investors, continues to attract significant investor inflows. The security, the biggest gold bullion EFT in the world, currently holds nearly 900 tons of physical gold, valued at nearly USD 27bn. In line with the price performance of dollar gold bullion, the SPDR Gold Shares ETF is currently just 8% below its record highs.

INDICES		From	From
	Points	high*	low*
MSCI world equities USD	846.42	-46.0%	11.5%
MSCI emerging markets USD	561.38	-55.2%	25.9%
S+P 500	828.08	-42.5%	11.7%
DJ Stoxx 600	192.11	-42.3%	7.9%
KBW banks	27.41	-69.5%	9.9%
STOCK	Value	From	From
GROUPS	USD bn	high*	low*
Dow Jones Industrial	2598.66	-42.6%	17.4%
Top 100 miners	873.36	-63.4%	78.7%
Oil stocks	1998.86	-48.4%	33.2%
S + P 500 Energy	1039.73	-46.3%	33.4%
Gold Tier I	160.36	-44.4%	117.2%
Gold Tier II	41.58	-45.3%	173.3%
Gold overall	225.39	-46.7%	127.7%
Silver stocks	12.46	-63.0%	147.4%
World banks (80)	1713.03	-62.6%	30.1%
Uranium stocks	14.95	-58.0%	81.8%
* 12-month
Source: market data; analysis by Barry Sergeant

By Matthew Hill

This year is set to be a scorcher for SA's gold miners. Just as AngloGold Ashanti, Harmony Gold and Gold Fields get ready to reap the benefits of hefty restructuring exercises, the rand gold price scaled R300 000/kg for the first time ever this year in January, and again in February.

While none of the trio reported results that blew investors' hair back, they all enter 2009 with a strong wind at their backs.

Harmony reported headline earnings of R492m for the quarter ended December 31. That was with an average gold price of R253 441. With the rand gold price hovering just below R300 000/kg, profit rises significantly.

This brings about a "huge number of opportunities" for SA's third-biggest gold miner, says CEO Graham Briggs. The company has more than 1bn t of mine dumps in the Free State that can be processed at attractive margins.

"We are asking ourselves why didn't we start producing yesterday?' "

Harmony is also scouting for acquisition opportunities, of which Briggs says there are many. Stingy banks and wary investors mean companies are struggling to find funding for new projects.

AngloGold, the world's third-biggest producer and SA's largest, suffered a nearly R170m loss for the last quarter of 2008, as its hedge book continued to swipe profits. A hedge book is a contract where a company sells future production at a set price.

This led to AngloGold's getting about 17% less for its gold than the average gold price. CEO Mark Cutifani wants to reduce this to 6% of spot this year. Gold hit a high of US$1 030 in March 2008.

Second only to safety, perhaps, AngloGold's onerous hedge book has been a top priority of Cutifani's since he replaced Bobby Godsell.

While Harmony's gold production for the December quarter was down, AngloGold managed to hold its production steady at 1,27m oz.

Gold Fields increased production for the same quarter by 5% to 839 000 oz, but this was off the previous quarter's low base.

CEO Nick Holland says Gold Fields has decided to go it alone in developing its uranium-containing mine dumps. This, he says, will effectively add a fifth mine to the group's SA production. It will reach a final investment decision by the end of the year.

Gold Fields managed headline earnings of R484m for the December quarter. This was during a period when the company closed the main shaft at one of its biggest mines, Kloof, west of Johannesburg, to replace old steel structures.

The department of minerals & energy warned last week in its safety audit that other gold mines may well have to undertake similar operations.

"Most of the key mining installations have a design life of 20-25 years. Given that most of the country's deep-level mines are much older than 20 years, there is a need for huge capital investment in refurbishing, replacing and improving the current installations."

But despite the risks, SA's gold miners have hot prospects for the next two years.

Speaking at the Mining Indaba in Cape Town, precious metals consultancy GFMS CEO Paul Walker said the gold price was in for a "hell of a ride". During both 2009 and 2010 there should be a rise in the price of the yellow metal as investors look to it as a value store.

However, he cautioned sentiment could turn in the longer term, giving a period of five to 10 years.

For the first time this decade, SA's gold miners can scoff at their platinum counterparts.

While the price of the two precious metals is almost on par (gold just above $900/oz and platinum at about $970/oz) most of SA's platinum producers have been careless with costs as the metals price soared. Despite announcing record profits for 2008, Anglo Platinum announced this week it was laying off 10 000 workers in an effort to cut costs at its mines.

The gold sector, on the other hand, has had to be vigilant with costs in a low-price environment. Now the pendulum has swung in its favour, it will reap the benefits along with shareholders. 

Gold could come into its own as true safe haven--Scotiabank

Scotiabank's Patricia Mohr notes that record gold ETF inflows have boosted gold prices, as gold regains its luster as a true "safe haven."

Author: Dorothy Kosich
Posted: Friday , 30 Jan 2009
click here for original article

RENO, NV -

Scotiabank economist Patricia Mohr says the big picture outlook for gold remains bullish, suggesting "gold could come into its own as a true ‘safe haven' in coming months."

Noting that gold prices have outperformed base metals in the past six month, Mohr advised, "In view of a massive U.S. budgetary deficit likely to surpass US$1.25 trillion in FY2009, Asian and Middle Eastern central banks and sovereign wealth funds may seek to diversify away from U.S. Treasury Bonds and agency debt."

In her monthly analysis of the Scotiabank Commodity Price Index, Mohr highlighted "record investor inflows into gold ETFs...have also lifted precious metals prices, as retail and institutional investors seek a ‘safe haven' from volatile currency and equity markets."

Meanwhile, while commodity prices have not yet hit the floor, Mohr said the pace of their decline is slowing and "the forced, indiscriminate selling by funds-triggered by investor redemptions and tight-credit appears to be subsiding. Many prices are approaching average world cash costs, triggering substantial production cuts, new project deferral and tighter supplies."

Mohr's research revealed the rapid decline in base metals prices "has been unprecedented and reflects in part the forced exit of hedge funds from commodity market positions due to fund redemptions and curtailed credit in 2008:Q4."

However, Mohr noted copper prices have lifted off the recent low, although they remain vulnerable to poor global economic activity and a "huge OECD inventory correction in 2009:Q1."

"Zinc prices have also been supported b pro-active and very unusual production cuts by twenty smelters (including Zhuzhou in Chiba -20%, Trail in B.C. -20% to mid-2009 and Kidd Creek in Ontario -30% to mid-2009," she said. However, zinc prices still remain just below average world cash costs.

Meanwhile, spot potash prices at the Port of Vancouver remained at record levels of $872.50 per tonne last month, "though new business has come to a virtual halt," Mohr said. She suggested that stronger nitrogen fertilizer prices next spring may rekindle interest in potash.

Mohr's research revealed that Scotiabank's Commodity Price Index lost further ground in December for the fifth consecutive month, falling -5.5% m/m.

AngloGold has a strong view on the future of the gold price - Mark Cutifani, CEO

In an interview on SAfm @ 18:25 on 28 January 2009

[miningmx.com] -- ANGLOGOLD ASHANTI is bullish on the gold price and it is positioning the company to take advantage of that, said CEO Mark Cutifani.

"We have a strong view on the gold price going forward, and last year we had a view that gold would trade north of $800/oz on fundamentals, and so we decided to get rid of the hedge book," Cutifani said on SAfm Market Update. "I'd have to say at this stage that decision looks like it's what we've indicated, and so instead of a 20% discount to the prevailing spot price of the day, we are now down to 6% coming the end of this quarter," he said. "And, given our cash cost position, and the very modest discount, we are the most competitive gold business in South Africa, and one of the most competitive in the world," he added. AngloGold said on Wednesday it had sold its one-third stake in Australia's Boddington mine to its joint venture partner Newmont for $1.1bn and the sale means the $200m it had earmarked towards the completion of the development project has now been freed up. "Wat this does now is really position us to again continue to improve returns and look more opportunistically both in terms of our brownfields development opportunities and also other opportunities in the marketplace where some of these smaller companies are struggling," Cutifani said.

Sees strongest level in more than three months.

Jan Harvey
26 January 2009 14:45

click here

LONDON -

Gold climbed above $900 an ounce to its strongest level in more than three months in Europe on Monday, lifted by interest in bullion as a haven from risk.

Spot gold was $905.90/907.90 an ounce at 1046 GMT, up from $898.10 in New York late on Friday. Earlier in the session the precious metal hit $907.40, its highest since Oct 10.

Gold priced in sterling hit a record 661.55 pounds, while euro-priced gold remained near the all-time high it hit on Friday, as fears over the global economic slowdown and volatility in other asset prices spurred buying.

RBS Global Banking & Markets' head of commodity strategy Nick Moore said factors including falling interest rates, the reinflation of Western economies and the prospect of lower supply both from mines and via central bank sales were supporting gold.

"There is an insatiable thirst for gold at the moment," he said.

The dollar, whose strength usually weighs on gold, climbed to a six-week high against the euro on Monday, as investors worried about the outlook for the banking sector. [ID:nLQ139147]

However, other factors outweighed the dollar-euro exchange rate to support the precious metal. Demand for physical gold both from investors in smaller products such as coins and bars and from exchange-traded funds remains firm.

Investors were seeking the safety of physical bullion as other asset prices met fresh volatility, analysts said.

"In times of economic crisis, falling equity markets and mounting aversion to risk, physical gold is preferred as the safest form of investment," Commerzbank analyst Eugen Weinberg said.

The world's largest gold-backed ETF, New York's SPDR Gold Trust GLD, which issues securities backed by physical stocks of the precious metal, said its holdings rose 1.6 percent to an all-time high of 832.57 tonnes on Friday. [ID:nT293191]

The trust's bullion holdings have climbed more than 52 tonnes or nearly 7 percent since the beginning of the year.

ASIA

Japan's biggest bullion house Tanaka Kikinzoku said its gold coin sales more than doubled in 2008 as the global financial crisis unfolded. [ID:nT252802]

Asian precious metals trading is likely to be muted by the closure of the Shanghai Gold Exchange on Monday due to the Lunar New Year holiday.

On the supply side, AIM-listed gold miner Peter Hambro Mining (POG.L: Quote) said its 2008 attributable gold production was up 36 percent at 393,600 ounces, and that it expects its 2009 production to be 460,000-510,000 ounces. [ID:nWLA5793]

Among other precious metals, silver rose in line with gold to $12.03/12.11 an ounce from $11.92.

Platinum firmed to $965/970 an ounce from $955.50 an ounce in New York late on Friday.

"We would not be surprised to see the gap between platinum and gold narrow: the ratio stands at about 1.07 at the time of writing and we have a standing recommendation to buy the platinum gold spread when the ratio falls below 1.05," UBS strategist John Reade said in a daily note.

"We believe that in the long term platinum should trade at a considerable premium to gold and we observe that periods of platinum's discount to gold tend to be measured in days or weeks rather than months and years," he added.

Palladium eased to $191.50/196.50 an ounce from $195.00. (Editing by Sue Thomas)

© Thomson Reuters 2009 All rights reserved

Gold's 2 year cycle

A Mineweb reader has noticed a recent two-year cycle for gold price behaviour which, if it continues will likely give some guidance to price movements this year and next.
Author: Joseph Cafariello
Posted: Tuesday , 06 Jan 2009
view original article here

EDMONTON, CANADA -

There seems to be a two-year cycle in the gold price which has been repeating itself since about 2004. The even years follow one pattern, while the odd years follow another pattern. The even years tend to reach exaggerated extremes to the upside and to the downside on a percentage basis, while the odd years tend to be a little calmer with less volatility.

For example, 2008 went very much like 2006, with exaggerated highs reached in the spring of each year, and a late start to the traditional autumn-winter-spring upswing, which began around October/November of 06 and 08. On the odd-number side, 2007 went much like 2005, with moderate highs reached in May of each year, and an early start to the traditional autumn-winter-spring upswing, which began around August/September of 05 and 07.

If this is indeed a reliable cycle, we can expect 2009 to be much like 2005 and 2007 all throughout the year. The first half of 2009 should see gold follow the same pattern as the first halves of 2005 and 2007. In the springs of 05 and 07, gold kept hitting its head against the previous year's high all throughout the spring. More than once during the spring of 2007, gold topped out at about $690, coming to within about 5% of the 2006 high of $735. Similarly, the spring of 09 should see gold hitting its head against 2008's high of $1,035, coming to within 5% of it, or up to about $985. That will be the high for the first half of 2009 at around the beginning of May, though this will not be the high for 2009 as a whole.

Given the odd-number year pattern, we might also expect the back half of 2009 to be much like the back halves of 2005 and 2007. In both 2005 and 2007, the summertime pull-backs were modest, and the autumn-winter-spring upswings started early, at around August/September of 05 and 07. The latter half of 2009, then, should see a modest summer-time pull-back of about 5% to 7% of its spring 09 high, taking gold down from $985 in May 09 to about $925 by August 09. However, the low for 2009 will still be the upcoming January low of $800, which is now only about a week or two away. The lows of January 2005 and January 2007 were also "the" or "close to the" annual lows for those years. So the low of 2009 will be at around $800 in January.

The high for 2009 will come in December. The traditional autumn-winter-spring upswing in 2009-10 will be much as it was in 2005-06 and 2007-08, with an early start. The year-end run for 09 will begin around August or the beginning of September, jumping from about $925 in Aug/Sep 09 and rising steadily until the end of December 09. The annual highs for 2005 and 2007 were hit in or near December of each year, and each high was about 20% higher than the average of their first halves. Thus, the annual high of 2009 will be hit in or near December, and will be 20% higher than the average of its first half, putting the 2009 high at about $1,150 in December.

The traditional autumn-winter-spring upswing, however, will certainly not end in 2009, but will spill over into the spring of 2010 much as it did in the springs of 2006 and 2008. The high in the spring of 2008 was about 40% higher than high in the spring of 2006. Hence, the high in the spring of 2010 will be about 40% higher than 2008's high of $1,035, putting gold at about $1,450 in the spring of 2010. Then, the summertime pull back of 2010 will be just as stark as were the summertime pullbacks of 2006 and 2008.

And so the two-year cycle will continue, where even-number years follow a pattern of extremes, while the odd-number years are calmer, but with a nice upward kick at the end. This two-year cycle with even-number years on the extreme side and odd-number years on the moderate side will continue until the commodity boom is over (say around the year 2030, when the populations of China and India finally achieve a 75% middle-class), and until the US dollar recovers at around the same year (2030), when the rest of the world will be looking to the US as a nice place to shop given its then-to-be dirt-cheap dollar.

The above comment was contributed by Mineweb reader Joseph Cafariello who describes himself as "A raving gold bug and proud of it"

I just found this article, its quite old but has some great points fo investing, especially in gold. You can find the article in its original context here

A beginner's guide to investing in gold

Sep 19, 2007 By Mark O'Byrne

For centuries gold has been coveted for its unique blend of near indestructibility, beauty, rarity and because of its status as a universal currency. Empires and nations have sought to possess gold as a medium of international exchange, as a store of wealth and in order to increase and preserve power. Individuals have used gold as a store of wealth and as insurance against the fluctuations and depreciation of paper money and other macroeconomic and geopolitical risks. Perhaps no other market in the world has the universal appeal of the gold market.Successful investing is about the diversification and management of risk. In layman's terms this means not having all your eggs in one basket. We know from history that markets can and do crash and if you are not diversified your entire nest egg can be wiped out.

JSE takes a dive

Johannesburg - The JSE had sunk into the red by noon on Wednesday as investors around the world took profits and markets consolidated after the recent big moves.

By noon, the JSE all share index had given up 0.84% with resources losing 0.82% and platinum counters falling 0.53%. However, gold miners collected 3.87%. Banks weakened 0.72%, financials were flat (down 0.08%) and industrials lost 1.21%.

The rand was last bid at R9.34 to the dollar, from R9.31 when the JSE closed on Tuesday, while gold was last quoted at $863.87 a troy ounce from $848.65/oz at the JSE's last close.

Platinum was at $986.50/oz from its previous close of $964.50/oz.

"It's really not surprising that we are down at the moment. We have had some very big moves," an equities trader said.

"Shares have been over done in the short term. There is profit-taking and markets are consolidating.

"Metals have moved a long way and we could see them come off a bit more," he said.

"The worldwide rally seems to have run out of steam. Dow futures are down at the moment and it wouldn't be surprising if we close lower as well," he added.

Dow Jones Newswires reports that London stocks moved lower as investors consolidated gains from the recent run.

The FTSE was last down 1.32%.

US stocks are expected to fall at the open, caught in the downward momentum of lower trading in Europe. Martin Slaney, trader at GFT Global Markets, calls the DJIA to open down 86 points and the S&P 500 down 8.4 points.

- I-Net Bridge

In an interview on SAfm @ 18:25 on 08 December 2008

Krugerrands hit record prices and there is a shortage of the coins - Alan Demby

In an interview on SAfm @ 18:25 on 08 December 2008

[miningmx.com] -- THERE is a shortage of Krugerrands as trade in the gold coin picks up, said Alan Demby, the executive chairman of the South African Gold Coin Exchange.

"Our turnover has increased dramatically in the last couple of months. I suppose the best hedge, if you will, against the turmoil has really been gold coins and Krugerrands," Demby said on SAfm Market Update. "Of course, gold has come off its highs, but our saving grace in the South African context has really been the rand/dollar exchange rate which, as you all know, has fallen out of bed. So in the last month or two the Krugerrand has reached an all-time high of just over R9,000," he said. In 1986, six million Krugerrands were minted, but that has come down to between 50 000-100 000 coins a year. "But, you know, when the proverbial hits the fan, everyone goes for what really counts, and that's Krugerrands. In fact, today there is a shortage of Krugerrands and the guys can't keep up with minting Krugerrands. So after all is said and done, Krugerrands are still the most popular coin." The exchange-traded fund market is not really a competitor for gold coins, Demby said. "I think we deal with the retail investor, or collector if you will, much like clients buy between, say, one and 2,000 coins. And I think the big institutional buyers really trade in the ETFs," he said. "I like to see that we work alongside each other, and I think that the institutional investors probably trade that market much more aggressively and more frequently than our clients do," he said. "Our clients tend to be on average long-term hoarders, if you will, for want of a better word, and at some stage they might wish to sell or hand it over to their children, grandchildren," he said. "There are over 55 million Krugerrands. It's really easy to buy and sell anywhere from one Krugerrand to a couple of thousand Krugerrands. It's really a very liquid market."