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Archive of Notable Stories and Gold News

News Worth Lingering (continued...)

Gold hits $1,000 on weak dollar (AP 3/13)
Gold briefly pushed past the psychologically important $1,000 mark Thursday, as investors poured money into the metal to hedge against a tumbling dollar, soaring crude prices and a shaky U.S. economy.

Bundesbank likely to hold on to gold reserves (Reuters 3/11)
Germany's Bundesbank will probably hold on to the vast bulk of its gold reserves in the next year of the central bank gold agreement, beginning in September, central bank president Axel Weber said on Tuesday. The Bundesbank, which is the second-largest holder of gold behind the U.S. Federal Reserve, announced in October it would sell a maximum of 8 tonnes of gold to the German finance ministry to mint coins in the fourth year of the deal.

Demand high even as gold nears $1,000 (Reuters 3/7)
Gold's near vertical climb to historic highs approaching the key $1,000 mark shows no sign of abating as bullish forces such as a sinking dollar and record high oil are not seen fading anytime soon. "And, with the right confluence of economic and geopolitical developments, we could see gold spike to $1,500 or even $2,000 in the next few years."

When gold breaks $1,000, then what? (Reuters 3/6)
"...fundamentals drive the market more than price targets." Should the the price of gold burst through the $1,000-per-ounce barrier, which it nearly did on Wednesday, experts predict it could reach higher records and even double this year, "...$1,500-$2,000 gold in the next 12 months is definitely possible. ...The Euro is too expensive and the dollar is not attractive, so gold is looking like the place to go for investors."

Gold will plough through $1,000 (FT 3/4)
John Reade, precious metals analyst at UBS, expects gold to reach $1,025 an ounce in one month's time and $1,075 in three months ... believes that investors and asset managers are turning to the metal as a safe haven against financial market stress and fears of stagflation -- evident from the very large volumes of physical investment buying, together with some large-scale transactions.

Gold beats financial assets (Bloomberg 3/3)
Gold, silver, platinum and palladium may be the best-performing financial assets this year as inflation and slowing growth erode the value of the world's major currencies, bonds and stocks. Precious metals have risen at least twice as fast as the euro and yen in 2008 and returned six to 20 times as much as U.S. Treasuries. The Standard & Poor's 500 Index and all other major gauges of equities are down.

Gilded Opinion
Value of gold and dollar in the eye of the beholder
The markets can easily handle $3,000 - $5,000 oz. gold in the near term horizon with minimal disturbance. It is when gold rises too much over $5,000 too fast that we might start to worry about global inflation panic. My take is that over the next few years gold will establish a new equilibrium to fiat currencies, albeit at much higher level than today's $950/oz.

Gold's Glittering: investors making the metal precious (redOrbit 2/29)
"Wall Street has to start changing its opinion with the way gold prices are going up," said Michael Kosares, author of The ABCs of Gold Investing. "I think it is the ultimate insurance policy or defensive mechanism against currency depreciation," Kosares said. "I see gold as a long-term portfolio item that protects you from local currency depreciation. ... Put some gold away, and take it out as if it was money you were taking out of your savings account. As long as we're in a fiat money system, I feel gold needs to be a permanent aspect of the portfolio."

Quantum's Jim Rogers expects $3,500 gold (TimesOnline 2/28)
Rogers told 750 global fund managers that America is "completely out of control", there will be a 20-year bull market in commodities, prices will be in turmoil, and that the price of gold, which hit an all-time high of $964 an ounce yesterday, will continue its surge to as much as $3,500 an ounce. The dollar may have declined recently, he added, "but you ain't seen nothing yet".

IMF gold sales -- a perspective (Mineweb 2/27)
It looks as though any sales by the IMF will be restricted to 400 tonnes used in a previous sale and repurchase agreement ­ and in any case would be made within the existing CBGA sales Agreement. "...we have emphasized that the sale should be undertaken in a very careful way in terms of their periodicity amounts and manner of sale such as not to disturb the market."

Why Bernanke's recession will last 'til 2001 (MrktWatch 2/25)
Forget paper money and IOUs. Commodities are the world's new "currency:" Hard stuff like oil, grains, metals, gold.

The ultimate sell signal for stocks (MrktWatch 2/25)
The resignation of America's unheeded and under-funded chief accountant and watchdog, along with the billion-dollar bullhorn he's been given, are the ultimate sell signals for America's stock investors. This is an once-in-a-lifetime opportunity, both for the foundation to work toward solutions and for you to invest accordingly as they progress. That means sell domestic stocks short as the crisis expands, invest in commodities and foreign-stock ETFs that take advantage of a weakened U.S. dollar and economy, and build your retirement reserves with open-minded investing. This is the time to review your entire portfolio and invest decisively.

America's economy risks mother of all meltdowns (M.Wolf 2/25)
Nouriel Roubini of New York University's Stern School of Business states that there is "a rising probability of a 'catastrophic' financial and economic outcome". The risks are high and the ability of the authorities to deal with them more limited than most people hope.

Junk-grade Fed? (NTSun 2/21)
The new Term Auction Facility's purpose is to lend to banks under stress in the sub-prime credit crisis. The banks front collateral against which the Fed advances money. "The rub," Grant's writes, "is the quality of the collateral." It quotes a Financial Times interview with one financial strategist, Christopher Wood, as saying that banks "are increasingly giving the Fed the garbage collateral nobody else wants." ...if the salvation of the Fed is all the gold it has in its basement, what does that tell us about the monetary system on which the rest of the world is relying?

Markets assess costs of monoline meltdown (FT 2/21)
An analyst at Barclays Capital likens current events to nothing less than the "demise of the shadow banking system" that has sprung up in recent years around the structured world. Policymakers pray that this chain reaction of financial implosions can still be contained without sending the economy into a tailspin... however, there are now rising fears that problems that have already unfolded in relation to mortgages could be replayed in the corporate debt world, with potentially painful implications for growth.

Citigroup forecasts gold at $1000 (Platts 2/13)
The latest Citigroup North America Mining & Precious Metals report: "We remain positive on gold, based on a mix of macro and supply-demand drivers; the forces that have propelled gold for the past five years are in place, and intensifying," said the report. "Corrections are expected along the way, and buying on weakness is recommended, which seems to be the central lesson of the past five years. ... Coordinated Fed and central bank action to thaw credit markets and boost liquidity should be positive for hard assets and gold." Gold has been attracting new groups of powerful investors, institutional asset allocations to commodities, and Citi expects this trend to continue.

Depression risk might force U.S. to buy assets (Reuters 2/12)
Fear that a hobbled banking sector may set off another Great Depression could force the U.S. government and Federal Reserve to take the unprecedented step of buying a broad range of assets. That would be reminiscent of some steps the U.S. government took in the 1930s when the economy was mired in deflation and high unemployment. One turning point came when agricultural prices were restored to their pre-slump levels. Such measures were among the New Deal programs that President Franklin D. Roosevelt launched to bolster the economy.

G7 approves IMF gold sales (Reuters 2/9)
The Group of Seven rich nations on Saturday approved the sale of gold by the International Monetary Fund from April as part of a broad reform of its budget... that resources should be raised by selling gold. "The IMF is rich, if it wants to be."

G7 can't stop freight train of unwinding risk (Reuters 2/7)
"Risk is being reassessed globally." Investors have become skittish about having risk in their portfolios as a credit crisis and fears of a U.S. recession have lopped off $5.3 trillion, or 10 percent, of value from global stock markets.

Rocket School of Economics --
The Financial Equivalent of Faulty Towers
by Professor von Braun, February 6th

Investors rush to gold... (Wall Street Journal 1/31)
...in places like India, where banks aren't always trusted and currencies can be unstable. Today, a different class entirely is powering gold's rise: mainstream investors and money managers who once shunned it. They hope adding gold to their portfolios will help soften the blows of inflation, possible recession, the sagging dollar and gyrating stock prices. What we have seen in the last few years is a fundamental shift in attitudes toward the gold markets by Western investors.

When governments print money, buy gold (The Business 1/18)
The price of gold tells us a lot about ourselves. It holds up a mirror to the way we are governed, our economy and its prospects. In that sense, the gold price's journey towards $1,000 is a resounding vote of no confidence in authority. It's the market flashing a red light. Currencies come and go, but gold has been a store of value for more than 5,000 years. Gold is rare, but, thanks to Gutenberg, paper money is not. Presented with an opportunity to churn out extra cash at little expense, it takes a special kind of government to resist. Few seem able to do so.

FINANCIAL TIMES Gold price surges above $900 as investors seek refuges from dollar "Prices could explode to multiples of these levels in the event of a full-blown U.S. recession." Gold is the new global currency In today's uncertain world, gold is back in fashion Video interview of Javier Blas Bullish on bullion "Still the latest surge looks much less impressive if adjusted for inflation. In real terms bullion would need to be well above $2000 to match the price achieved in 1980."

Gold at $1,250 possible in 2008 (The Independent 1/13)
In 2007, a gold investor would have enjoyed a 32 per cent gain on top of the 20 per cent-plus increases seen for most of the previous five years. So what does this year have in store? The gold chart up to mid-2007 was "constructive" before going exponential. The-BullionDesk forecasts an average price of $976 in 2008 with a possible high of $1,250.

Turkish appetite for gold unfazed by record prices (Reuters 1/14)
People want a guarantee for their savings because of the problems in the world economy and they have found this guarantee in gold now. ... Given the problems in the world economy I believe gold's appeal will continue, and since the habit of always investing in the dollar has been broken, and consumers have started to think of it [gold] as an indispensable part of their portfolio, it is not that price-sensitive anymore.

Gold's Next Hurdle Of $1,000 Puts Inflation Risks In Sharp Focus (DJ 1/14)
Global inflation, stock volatility, the upcoming Chinese New Year holiday - you name it, there's a reason out there for gold's rapid rise and the likelihood it will hit a new eyeball-popping level of $1,000 an ounce.

BlackRock says gold a better 2008 bet than oil (Reuters 1/14)
Gold is likely to prove a better bet than oil in 2008 given the prospect of falling U.S. interest rates and further U.S. dollar weakness, the head of asset allocation at BlackRock Inc said.

Bully for bullion (FT 1/11)
Fundamental changes in the gold market have taken hold that suggest higher prices might last a lot longer. The dynamics have begun to change "inexorably towards a diminishing supply of gold and increasing investment demand, which will ultimately impact on the gold price". Among the factors that experts cite are rising global inflation, concerns about the health of the financial system - and the weakness of the dollar, which could be aggravated by further Federal Reserve interest rate cuts to cushion the American economy against the impact of the credit squeeze.

China launches gold futures (CSC 1/10)
The official debut of China's gold futures ignited the new frenzy of speculation that may stir up international gold price. By 9 o'clock on January 9th, gold futures contracts for June were finally offered in the Shanghai Futures Exchange (SFE). Minutes after their official debut, 7 contracts purchased climbed to the daily 10 percent limit before dropping back down a bit. Taking the dollar-yuan exchange rate of 8th of January at 7.2791, the benchmark price of Chinese gold futures would be $897.28 per ounce, with an upper limit of $987.02. This benchmark price was the highest price in the international market. By contrast, on the same day, the price of gold in London reached $876.8 and COMEX gold futures reached $892.

Gold breaks 28-year record high, oil hits $100 (AFP 1/2)
Unrest in Pakistan, a faltering dollar and surging oil futures sent the price of gold soaring to a record high on Wednesday, beating its previous highest level set 28 years ago. The precious metal rose to $859.20 an ounce, smashing its peak of $850 reached on January 21, 1980. ...The price of crude hit 100 dollars per barrel in New York for the first time in history...

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