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Friday, February 13, 2009
Thursday, February 12, 2009
Gold Soars to Six-Month High on Investor Demand for a Haven
By Halia Pavliva
Feb. 11 (Bloomberg) -- Gold jumped to a six-month high as investors sought a safe harbor in precious metals on concern that the U.S. government’s plan to rescue banks may fail to revive the economy. Silver and platinum jumped to four-month highs.
The Standard & Poor’s 500 Index fell 4.9 percent yesterday after Treasury Secretary Timothy Geithner sketched out a $2 trillion plan to fix the financial system that left many unanswered questions about its mechanics. Crude oil has dropped 19 percent this year, including today’s 4.3 percent tumble, while gold has climbed 6.8 percent.
“This uncertainty increased risk aversion and continued a flight to a safe haven of gold and platinum investments,” Bayram Dincer, a commodity analyst at Dresdner Bank in Zurich, said in an e-mailed comment.
Gold futures for April delivery rose $30.30, or 3.3 percent, to $944.50 an ounce on the New York Mercantile Exchange’s Comex division. Earlier, the price reached $949, the highest for a most-active contract since July 23. The metal touched a record $1,033.90 on March 17.
Yesterday, investment in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, jumped 1.5 percent to a record 894.7 metric tons.
“Support will continue to come from investment flows,” said Tom Pawlicki, an analyst at MF Global Ltd. in Chicago.
Silver futures for March delivery gained 39 cents, or 3 percent, to $13.52 an ounce. Earlier, the metal reached $13.67, the highest since Sept. 26.
Platinum futures for April delivery rose $45.80, or 4.4 percent, to $1,080.70 on the Nymex. Earlier, the price reached $1,085, the highest since Sept. 30.
Price Outlook
Gold’s rally “sparks trending moves to $950 to $955, as well as holding potential for an extreme spike to $980,” Ralph Preston, a commodity analyst with Heritage West Futures Inc. in San Diego, said in an e-mail.
Palladium futures for March delivery climbed $3.80, or 1.8 percent, to $215.80 an ounce in New York. The price has gained 14 percent this year.
Platinum and palladium are used mostly in jewelry and pollution-control devices in cars. Prices tumbled last year as metal consumption by the auto industry plunged.
Congress reached an agreement this afternoon on a $789 billion stimulus bill, sought by President Barack Obama. Obama said the measure will create or save as many as 4 million jobs.
Tax Cuts
About 35 percent of the bill’s value is in tax cuts, according to Senator Max Baucus, a Montana Democrat who chairs the chamber’s finance panel. Obama traveled to Virginia to promote the plan before the deal was reached in Washington.
Gains in platinum and palladium may be limited should investment demand stall, Miguel Perez-Santalla, a sales vice president at Heraeus Precious Metals Management in New York, said in an e-mail.
“This thing can turn on a dime,” he said. “It is all investment money. There remains to be seen any demand from industry.”
To contact the reporter on this story: Halia Pavliva in New York at hpavliva@bloomberg.net.
Last Updated: February 11, 2009 16:06 ESTNo 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 HarveyPosted: 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
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 | |||
Wednesday, February 11, 2009
By Matthew Hill
This year is set to be a scorcher for SA's gold miners. Just as AngloGold
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
"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
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
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.
Tuesday, February 10, 2009
What Value Has A Mandela Collectible Coin?
I just found this interesting article written by Erin and Isabel. They speak about the values of Mandela gold coins and how not every Coin with Mandela on will make you rich...
What Value Has A Mandela Collectible Coin?
By: Erin-And-Isabel
Friday, 8 February 2008
As I was leaving the recently renamed Oliver Tambo airport in Johannesburg last month, I couldn t help noticing an advert for a new gold coin. Now
we re familiar with South Africa s gold Krugerrand. Allegedly it is one of the top 300 brands in the world. Krugerrands were the first 1oz gold coin to
be produced - but that was back in 1967. Of course, the Krugerrand has the head of President Paul Kruger on one side, and a leaping springbok on the
other.
But this coin, which was advertised all over the airport I might add, was not a Krugerrand.
A lot has happened in South Africa since 1967, not least the release of Nelson Mandela from prison in 1990. Now some would say Mr Mandela s
release was down to the vision of South Africa s then white Afrikaans president, FW de Klerk. Others would disagree, arguing that Mr De Klerk s
actions were not visionary but necessary. Personal opinions aside, the two men were jointly awarded the Nobel Peace Prize in 1993 for their
contribution to democracy in South Africa.
Mandela coins certainly generate interest
This brings me to the shiny gold coin advertised at OT airport. It is called the Mandela/De Klerk medallion and is a oz 24 carat gold coin that is part of
the Nobel Peace prize commemorative medallion programme.
Needless to say, one side sports the head of the iconic Nelson Rohlilala Mandela with the inscription "A long walk to Freedom." The other depicts
that of Frederik Willem De Klerk and is inscribed with the words "To bring justice to everybody". The good news is the coin, which was minted in
Norway, has been given the nod of approval by the Nobel Institute and the Nelson Mandela Foundation.
This 1oz gold coin and variations on the Mandela theme are now actively marketed by the South African Gold Coin Exchange. There are other
Mandela coin productions too, in varying weights, but no pure De Klerk medallions! Just for the record, the Exchange is currently South Africa s
biggest distributor of gold investment, bullion and collectable coins. And its current chairman Alan Demby has strong views on coin collecting.
Well, surprise surprise, the cynics ( Erin included!) among you might say. "Be careful with coins," Erin says. "Many of them are a rip-off, bearing little
relationship to gold, and have large spreads in the buy/sell price so that getting in and getting out is not that profitable!"
But Mr Demby claims to have a close eye on who is buying gold coins. In his view smart investors have 10 to 20% of their investment portfolio in
coins. Around 70% of that should be in Krugerrands or sovereigns, the remaining 30% in collectible coins (coins that are of interest to collectors
rather than gold bugs). Mr Demby also says that there has been huge interest from around the world in the 1oz Mandela commemorative coins. They
currently sell for around $2,500 (edit jb)
It goes without saying that this is not the first time that Mandela s head has appeared on a coin. The Presidential Inauguration Medallion was minted
in South Africa in May 1994 and has become pretty sought after by coin collectors, according to Mr Demby.
But not one is a winner...
So does a Mandela image on a coin always equate with financial rewards? The seemingly obvious answer is that all coins sporting a Mandela bust will
become increasingly valuable with time. After all this is an iconic man revered as one of history s most extraordinary men. Right?
Well, one South African coin dealer had a fine old time spinning this yarn. It put out a statement claiming that "all legal tender coins with a Mandela
theme have shown the highest rates of financial performance in the shortest period of time". Back in 2006 this dealer started a marketing campaign for
the Mandela ZAR inauguration coins. An advertisement on its website claimed that one of these coins had sold for a staggering R100,000 ($15,000)!
That equates with a1.9m percentage rise in value in just six years!
What the advert didn t say was that this happened to be a proof coin rather than a coin you might find in your purse. A proof coin is an early sample
of a coin issue - this used to be done to check things like dyes but now more are struck for the purposes of coin collectors (otherwise known as
numismatists). You will never find a proof coin in circulation.
Predictably this dealer was rapped over the knuckles for a misleading advertising. The man on the street might be led to believe that any old coin with
Mandela s smiling face on it might sell for ZAR 100,000. And that is simply not true.
According to figures from the SA Mint in 2000 5.2 million Mandela ZAR5 coins were issued. At the end of 2003, due to a shortage of the coins, a
further 1.024 million Mandela coins were struck. But only a few thousand were sold as "proofs"
If the law that rarity makes a coin a "collectible" applies, then the circulating Mandela coins have no great intrinsic value. But that hasn t stopped
many people hanging on to them.
There is a simple rule to apply when buying collectible coins. The fewer there are, the rarer they are - and the more likely they are to appreciate. Add to
that the face of one of the world s most iconic men and there is a chance of a winning formula.
If this floats your boat, the limited edition Nobel Prestige Set with two 1oz gold coins and one 1oz silver coin may be for you. Only 1500 have been
minted around the world, so these are considered to be scarce Mandela coins. This set is currently selling for 42,000 (+/-$4,300)(edit jb).
Happy collecting,
Erin and Isabel
What Value Has A Mandela Collectible Coin?
By: Erin-And-Isabel
Friday, 8 February 2008
As I was leaving the recently renamed Oliver Tambo airport in Johannesburg last month, I couldn t help noticing an advert for a new gold coin. Now
we re familiar with South Africa s gold Krugerrand. Allegedly it is one of the top 300 brands in the world. Krugerrands were the first 1oz gold coin to
be produced - but that was back in 1967. Of course, the Krugerrand has the head of President Paul Kruger on one side, and a leaping springbok on the
other.
But this coin, which was advertised all over the airport I might add, was not a Krugerrand.
A lot has happened in South Africa since 1967, not least the release of Nelson Mandela from prison in 1990. Now some would say Mr Mandela s
release was down to the vision of South Africa s then white Afrikaans president, FW de Klerk. Others would disagree, arguing that Mr De Klerk s
actions were not visionary but necessary. Personal opinions aside, the two men were jointly awarded the Nobel Peace Prize in 1993 for their
contribution to democracy in South Africa.
Mandela coins certainly generate interest
This brings me to the shiny gold coin advertised at OT airport. It is called the Mandela/De Klerk medallion and is a oz 24 carat gold coin that is part of
the Nobel Peace prize commemorative medallion programme.
Needless to say, one side sports the head of the iconic Nelson Rohlilala Mandela with the inscription "A long walk to Freedom." The other depicts
that of Frederik Willem De Klerk and is inscribed with the words "To bring justice to everybody". The good news is the coin, which was minted in
Norway, has been given the nod of approval by the Nobel Institute and the Nelson Mandela Foundation.
This 1oz gold coin and variations on the Mandela theme are now actively marketed by the South African Gold Coin Exchange. There are other
Mandela coin productions too, in varying weights, but no pure De Klerk medallions! Just for the record, the Exchange is currently South Africa s
biggest distributor of gold investment, bullion and collectable coins. And its current chairman Alan Demby has strong views on coin collecting.
Well, surprise surprise, the cynics ( Erin included!) among you might say. "Be careful with coins," Erin says. "Many of them are a rip-off, bearing little
relationship to gold, and have large spreads in the buy/sell price so that getting in and getting out is not that profitable!"
But Mr Demby claims to have a close eye on who is buying gold coins. In his view smart investors have 10 to 20% of their investment portfolio in
coins. Around 70% of that should be in Krugerrands or sovereigns, the remaining 30% in collectible coins (coins that are of interest to collectors
rather than gold bugs). Mr Demby also says that there has been huge interest from around the world in the 1oz Mandela commemorative coins. They
currently sell for around $2,500 (edit jb)
It goes without saying that this is not the first time that Mandela s head has appeared on a coin. The Presidential Inauguration Medallion was minted
in South Africa in May 1994 and has become pretty sought after by coin collectors, according to Mr Demby.
But not one is a winner...
So does a Mandela image on a coin always equate with financial rewards? The seemingly obvious answer is that all coins sporting a Mandela bust will
become increasingly valuable with time. After all this is an iconic man revered as one of history s most extraordinary men. Right?
Well, one South African coin dealer had a fine old time spinning this yarn. It put out a statement claiming that "all legal tender coins with a Mandela
theme have shown the highest rates of financial performance in the shortest period of time". Back in 2006 this dealer started a marketing campaign for
the Mandela ZAR inauguration coins. An advertisement on its website claimed that one of these coins had sold for a staggering R100,000 ($15,000)!
That equates with a1.9m percentage rise in value in just six years!
What the advert didn t say was that this happened to be a proof coin rather than a coin you might find in your purse. A proof coin is an early sample
of a coin issue - this used to be done to check things like dyes but now more are struck for the purposes of coin collectors (otherwise known as
numismatists). You will never find a proof coin in circulation.
Predictably this dealer was rapped over the knuckles for a misleading advertising. The man on the street might be led to believe that any old coin with
Mandela s smiling face on it might sell for ZAR 100,000. And that is simply not true.
According to figures from the SA Mint in 2000 5.2 million Mandela ZAR5 coins were issued. At the end of 2003, due to a shortage of the coins, a
further 1.024 million Mandela coins were struck. But only a few thousand were sold as "proofs"
If the law that rarity makes a coin a "collectible" applies, then the circulating Mandela coins have no great intrinsic value. But that hasn t stopped
many people hanging on to them.
There is a simple rule to apply when buying collectible coins. The fewer there are, the rarer they are - and the more likely they are to appreciate. Add to
that the face of one of the world s most iconic men and there is a chance of a winning formula.
If this floats your boat, the limited edition Nobel Prestige Set with two 1oz gold coins and one 1oz silver coin may be for you. Only 1500 have been
minted around the world, so these are considered to be scarce Mandela coins. This set is currently selling for 42,000 (+/-$4,300)(edit jb).
Happy collecting,
Erin and Isabel
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