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USAGOLD NewsGroup Alert
Aug 23rd Note:
 What
the Nickel Market Meltdown Means to Gold and More
This link will take you to
the latest USAGOLD Market Update. Please pass along to
friends and family if you so wish.
Regards, Mike Kosares
Aug 15th Note: Taking stock as the summer doldrums
grind toward conclusion, gold's already tread near the $730 level
(in May) after starting the year at $530. Even if you factor
in the current price ($625) and ignore the high, gold is up nearly
18% on the year. Over the past twelve months (year over year),
gold is up over 45%!! By way of comparison, The Dow Jones Industrial
Average is up about 5.5% and just over 2% over those two time
periods, respectively. Nothing like a little perspective to properly
orient one's thinking. The gold price could suddenly kick-start
at the end of this month and going into September as seasonal
buying pressure for the year-end festivals makes its annual appearance.
MK
_________________________
 GFMS' Paul Walker offers case for gold topping
$700 by year end
Miningmx - 8/15/06
"I'm convinced of that...
I'm still very, very confident that we will see the spot price
pushing towards $700, if not beyond that, by the end of the year."
USAGOLD Comment: After clicking the link you will need
to scroll down to see this article.
Related link (especially for newcomers) --
http://www.usagold.com/analysis/dow-jones-summer.html
What inflationary pressure means for gold
Justice Litle, MoneyWeek/The Daily Reckoning - 8/10/06
"At this debt-laden hour,
the only way for the world to avoid a deflationary endgame is
for global central bankers to get together and pull off a massively
coordinated reflationary effort...in which case, gold still wins.
Either way, inflation or deflation, gold comes out on top."
USAGOLD Comment: For the long term investor seeking
to hedge any of a long list of negative economic events (inflation,
deflation, stagflation, et al), gold remains the superior solution.
 Slower selloff by central banks keeps shine on
gold
Charlotte Matthews, Business Day - 8/15/06
"What was significant,
though, was that other central banks had not taken up Germany's
sales allocation. In the past six months, the gold price has
also been supported by big gold producers shrinking forward sales
commitments. Gold hedging in the second quarter of this year
fell 5.1-million ounces, the largest quarterly decline in Virtual
Metals records."
USAGOLD Comment: The combination of lower central bank
sales and increased de-hedging has been one of the fundamental
drivers in the gold market the past few years. According to this
article these trends are likely to continue with consequent effect
upon the price.
Will the Middle East crisis derail the global
economy?
Stephen Roach, Money Week - 7/31/06
"In an effort to do so
[assess the risks of escalating geopolitical tension], I've been
reading a fair amount of history lately. I am especially haunted
by Niall Ferguson's latest tome on the tragic continuum of wars
in the bloodiest of all centuries - the 20th century (see Ferguson's
The War of the World: History's Age of Hatred, Penguin,
London, 2006). I find Ferguson's framework particularly relevant
in attempting to put recent geopolitical developments in context.
In his view, the destructive tendencies of the last century are
traceable to the confluence of three powerful forces - ethnic
conflicts, declining empires, and economic volatility. Unfortunately,
there are worrisome signs on all three counts today."
USAGOLD Comment: Once again Stephen Roach adds longer-term
perspective to the overall financial analysis.
Traders puzzled as gold moves lower on terror
news
Ciara Linnane/CBS MarketWatch - 8/10/06
NEW YORK (MarketWatch) -- Gold
futures fell early Thursday as traders scrambled to assess the
news of a thwarted plot to blow up airlines en route from the
U.K. to the U.S. that sent oil and stock futures lower. "We
are puzzled as traders this morning with gold lower as it should
be up big," said Kevin Kerr, editor of Global Resources
Trader, a newsletter published by MarketWatch. "The news
is coming in so fast and furious that traders are almost in shock
and are getting thir bearings and deciding what to do next."
Kerr said he expects gold to rally once the gravity of the situation
has set in. "We see $700 gold as a major possibility should
these events escalate."
USAGOLD Comment: We had a counter-intuitive down-trend
like this a couple of days ago and the price recovered during
the course of the next 24-hours. There's resistance at the $650
mark, but confusion and deterioration on the international political
scene could be the impetus for an upside breakout soon, as Kevin
Kerr suggests above.
Aug 7th Note: This NewsGroup has several good
articles in it ranging from price calls to some thoughts on tomorrow's
[August 8th] Fed meeting and the state of California move into
the commodities markets in search of higher profits. One of the
more interesting pieces I've seen in awhile is the one profiling
the views of Mideast analyst Vali Nasr. If you want some
insights on the impending civil war[s] in that part of the world
between the Sunnis and Shiites this will bring the picture into
sharper focus for you. I also think the excerpts at the
bottom of this NewsGroup from Central Bank News worthy of attention. It
brings to the forefront the changing views on gold among central
bankers worldwide. A change of attitude likely to keep
gold reserves in the vaults and send central banks looking for
gold into the marketplace. We are grinding toward the close of
the doldrums. Much is happening. Happy reading!
Regards,
Mike Kosares
Top analysts calls for $1200 gold by 2015
Mining Weekly - 8/3/06
"[Credit Suisses' Dr. David] Davis argues that, while it
is evident that South Africa's reserve base is rapidly dwindling,
an upward trend in the gold price for the foreseeable future
will likely mitigate the downward trend in reserves. Credit Suisse
Standards Securities studies indicate that gold supply is falling
behind demand as the diminishing number of new reserves fails
to compensate for dying mines, worldwide. 'This has been happening
for some time but, until recently, the effect has been masked
by central-bank sales and producer hedging,' says Davis. 'However,
central-bank sales will likely whither, and these banks could
become net buyers of gold.'"
USAGOLD Comment: Davis adds his voice to that
of Newmont's Pierre Lassonde in warning that the mining companies
do not have sufficient reserves to meet future demand.
Harry Schultz says gold market ready for major
breakout
Peter Brimelow, CBS MarketWatch - 8/7/06
"[Veteran newsletter writer Harry Schultz's message was
clear: PS: If U don't buy gold today, go away & forget
this mkt. Tuesday's close filled in the missing bits needed to
give a trader's buy signal. I've never seen a day like it. Breakouts
all over the place ... XAU in clear B/O...U can't win a jackpot
unless u put a coin in the machine first."
USAGOLD Comment: Brimelow brings us up to date
on the thinking of newsletter mavens Harry Schultz, James Turk,
Dennis Gartman, Martin Pring and Bill Murphy.
Jobs report gives Bernanke room to pause
Bloomberg - 8/4/06
"This cements the pause,'' said Paul Kasriel, director of
economic research at Northern Trust Securities in Chicago and
a former Fed economist.
USAGOLD Comment: The gold market has more directly
reacted to interest rates in recent months than it ever has in
the past. Likely, this is due to Wall Street's newly found
interest in gold. Wall Street is interest rate sensitive.
In the 1970s-1980s bull market in gold the big players
were generally on the sidelines. This time around Wall
Street is an active participant through the various ETFs, the
London market, et al. Thus interest rates have come to
play an increasingly important role in day to day market activity.
State of California pension fund to invest in
commodities
Mark Lifsher, Los Angeles Times - 8/7/06
"The financial wizard hired to invest billions of dollars
for the state pension system is about to take the nation's largest
pension fund where it's never gone before: into commodities."
USAGOLD Comment: Though the word "gold"
is not mentioned, it is difficult to believe that the yellow
metal would be overlooked by anyone with an interest in commodities.
Rising academic sees sectarian split inflaming
Mideast
Peter Waldman, Wall Street Journal - 8/6/06
"Mr. Nasr's analysis begins with the idea that the removal
of Saddam Hussein in Iraq has transformed the Mideast, but not
in the ways promised by President Bush. By replacing Iraq's Sunni-led
dictatorship with an elected government dominated by the country's
Shiite majority, the U.S. destroyed the Sunni wall that had contained
the restless Shiite power to the east, Iran. The clerical regime
in Tehran was immeasurably strengthened. This power shift, Mr.
Nasr argues, has reopened an ancient fault line between Shiites
and Sunnis that crosses the entire region. The schism dates back
to the prophet Muhammad's death in 632 . . "
USAGOLD Comment: What happens when you start a democracy
and the wrong side wins? That's what happened to the United
States in Iraq, according to Mideast expert Vali Nassr. In
this article published in the Wall Street Journal over the weekend,
Nasr says the U.S. sponsored elections put the Shiites in control
of Iraq's government. The Shiites also control Iran's government.
The net result is that Iran's has gained considerable leverage
in Iraq and given the Shiites new impetus (Hezbollah is also
a Shiite organization) -- an unforeseen consequence of the Bush
doctrine. The point of the article is that the entire Mideast
is primed for a civil war between the Shiites and Sunnis. This
will be a conflict which transcends national boundaries exacerbating
an already complicated situation in the Mideast.
On the Central Bank Gold Agreement
(Excerpts from recent Central Bank News)
"Meanwhile total sales of gold by the members of the Central
Bank Gold Agreement since last October come to about 320 tonnes.
This means that they have to dispose of at least 180 tonnes
if they are to sell the full annual 500 tonnes allowed under
the present agreement; the current year runs out on September
26.
[A]nalysts have begun to wonder
if [the central banks] will sell the full quota. Any shortfall
would be interpreted as suggesting that European central banks
want to retain a higher proportion of their massive gold holdings
than seemed likely a few years ago."
"When an asset that previously
seemed pretty useless doubles in value, funny how it changes
one's view; somehow, one looks at it more fondly. Even central
bankers are human. Neither the Italians nor Germans have sold
any gold yet, and even the French will probably stop selling
next year. They have all made massive paper profits from their
gold stocks. Sales from toddlers like Portugal don't change the
big picture."
Recommended visit: http://www.centralbanknews.com
Gold dagger dating to 3000 BC called 'sensational
discovery'
Ottawa Citizen - 8/7/06
"A golden dagger dating to 3000 BC, plus 500 golden ornaments,
have been found in a Thracian tomb in central Bulgaria, an archeologist
said yesterday."
USAGOLD comment: Not to overlook the more significant
elements of this discovery, but a quick point is in order. The
purchasing power -- the wealth component -- of these golden items
has survived this travel through the ages. Can you think of any
contractual financial instruments that could have fared as well
after so long a trip?
It seems to me that anything
that could be such a reliable companion for a journey of five
thousand years is surely a good companion too for any shorter
span of intermediate steps along the way. In other words, gold
works as well in your vault during a lifetime as it does in the
tomb-to-museum cycle spanning many millennia.
To be sure, certain bullion
banking operations have done their duty to try to take the shine
off of gold's value in the present age, but that, too, is only
but to be likened to a brief covering of dirt -- to be swept
aside all in good time like the unearthing of an ancient tomb
to reveal unimaginable, priceless wealth.
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