Gold Price Looking For Direction

The last 7 days we have seen the price of gold level out to around about mid $1,300 P/oz, leaving gold in a position waiting for some sort of economic reports or result to give it a new direction.

Gold has settle back from its record high of late last year but I believe with in the next week or so the gold price will start to test these new levels. Time is now then the opportune time to make a Gold Investment an secure your savings against the inflation monster. 


If you would like more information on Gold investing or the current gold prices check out www.easygoldinvestment.com

World Bank chief calls for new gold standard

HONG KONG (MarketWatch) –- The president of the World Bank said in a newspaper editorial Monday that the Group of 20 leading economies should consider adopting a global reserve currency based on gold as part of structural reforms to the world’s foreign-exchange regime.

Reuters

World Bank President Robert Zoellick speaks at an event in Washington in October.

World Bank chief Robert Zoellick said in an article the Financial Times that leading economies should consider “employing gold as an international reference point of market expectations about inflation, deflation and future currency values.”

Zoellick made the proposal as part of reforms to be considered at this week’s G-20 meeting in Seoul.

“Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today,” said Zoellick.

He said such a reform would reflect economic realities and should be considered as a successor to the existing global currency paradigm known as “Bretton Woods II.”

Zoellick said a return to some sort of currency link to gold would be “practical and feasible, not radical.”Bretton Woods II refers to the system which began in 1971, when U.S. President Nixon ended the dollar’s link to gold as established under the Bretton Woods agreement.

“This new system is likely to need to involve the dollar, the euro, the yen, the pound and a renminbi that moves towards internationalization and then an open capital account,” he said.

Chris Oliver is MarketWatch's Asia bureau chief, based in Hong Kong.
Source

HANDS DOWN, THE CHEAPEST PLACE IN THE WORLD TO BUY GOLD COINS

For anyone looking to hold gold as a store of value or even medium of exchange, major gold coin mintages like the Eagle, Maple Leaf, and Krugerrand are advantageous because they’re recognizable worldwide.

You can do business in a coin shop anywhere in the world from Vancouver to Vanuatu with one of these coins; bulk bullion, on the other hand, needs to be specially weighed and assayed by experts before being traded.

For this reason, the premiums for which gold coins sell tend to rise substantially in crisis periods when demand for physical metal is high. In the initial days of the 2008 financial crisis, premiums shot up from 4% to well over 10%, even though the price of gold was simultaneously falling sharply.

Today, with gold routinely taking out its all-time highs, gold coin premiums around the world have remained fairly high– this is one of the things that we typically look at here at Sovereign Man as we constantly travel the globe… and why what I’m about to tell you might have you falling out of your chair:

Tim Staermose, one of our Asia partners, was in Hong Kong last week, and he conducted his normal rounds of the various banks in the Central business district that sell gold bullion coins over the counter to walk-in customers such as Hang Seng Bank, Bank of China, and Wing Lung Bank.

At Hang Seng Bank, Canadian 1 Oz Maple Leaf coins — in pure, 24 karat gold — were available for cash purchase in Hong Kong dollars at just 0.5% above the prevailing spot price of gold.

This is dirt-cheap… or as they say here in Chile, ‘precio de huevos’, and it certainly presents an interesting arbitrage opportunity. Depending on your objectives, however, there may be even better gold coin buys in Hong Kong at the moment.

Over at the Bank of China, for example, the Chinese Panda coins were quoted at 4.9% above spot gold.

Personally, I think the Panda is one of the most beautiful gold coins of all, and in North America they typically sell for much greater mark-ups above the spot gold price of gold than most other coins, often over 20%. In the UK it’s even more.

Many collectors value the Pandas simply for their aesthetic beauty; and it probably doesn’t hurt that the dealers authorized by the People’s Bank of China to sell Pandas in the US have a virtual monopoly on the market.

Still, this situation can be exploited to your advantage– the difference between the buy price in Hong Kong and the sell price in North America is roughly $275 per 1-ounce coin.

If I had nothing to do and were looking for some adventure, I’d raise some grubstake to fly to Hong Kong, buy coins, and sell them back home at a profit to pay for the trip… or better yet, offer a fee-based service to gold coin investors to buy cheap coins in Hong Kong on their behalf.

For other folks who haven’t yet built up a stash of gold bullion, I would urge you to consider taking a trip to Hong Kong to get started; I’m certain that the money you’ll save will more than pay for the flights, and a nice holiday for you and your loved ones as well.

Original Post

GGold Remains Soft in Range, Despite Weak Dollar and Inflation Hints

Gold is maintaining a weak tone within the recent range after failing to regain the $1400 level yesterday. This softer tone emerged in the wake of decent bond auctions in Portugal, Spain and Italy this week, which have seemingly reduced the perceived risk of imminent default or bailout. That has taken some of the European risk premium out of the metals market. However, the downside in gold may prove to be limited for several reasons.
Most analysts seem to agree that this week's European auctions haven't fundamentally changed anything. I've said it before, and I'll say it again; 'countries don't extract themselves from debt crises by incurring more debt.' At best they have bought themselves some more time; a kick of the can as it were. There still seems to be a fairly broad consensus that Portugal will ultimately have to tap the EFSF bailout fund, like Greece and Ireland before it. At that point, the market will turn its attention to Spain, with Belgium perhaps providing and intervening diversion. Nevertheless, the euro has rebounded sharply, reaching a 4-week high. Euro strength has weighed on the dollar and a weak greenback tends to have a supportive affect on gold.
There is unquestionably rising concerns about inflation globally, which too tends to be supportive to gold. Today Dec HICP inflation in the eurozone was confirmed at an above-target 2.2% y/y. German and Spanish inflation were confirmed at 1.9% y/y and 2.9% y/y respectively, with accelerations in core inflation noted. I commented on the implications of hotter inflation in Spain in the 03-Jan Morning Report. ECB President Trichet expressed heightened concern about inflation on Thursday and those sentiments were echoed by Axel Weber today. The implication being that tighter monetary policy within the EU may be on the horizon. However, I'm having a hard time reconciling if inflation risks really do trump periphery default risks. If the ECB hikes, borrowing costs for the debt laden PIIGS would rise as well, pushing them closer to default or bailout.
UK PPI for Dec came in higher than expected, with input prices +3.4% m/m, +12.5% y/y. With output prices up a comparatively low 4.2% y/y, its abundantly clear that corporate profit margins continue to get squeezed. Given the still sorry state of the UK economy, companies remain reluctant to pass along higher input prices to cautious and price sensitive consumers. However, something has to give: Either prices must rise at the consumer level, or share prices must suffer due to reduced profit margins.
US CPI for Dec came in higher than expected as well at +0.5%. Core remained relatively tame at +0.1%, in-line with expectations. These data were tempered somewhat by a better than expected industrial production print for Dec.
China continues its efforts to tamp-down inflation, raising its bank reserve requirement another 50bp. This was the seventh such hike since early-2010. That pushed the yuan to a new record high versus dollar, a week before Chinese President Hu Jintao visits President Obama in Washington, DC. Well, isn't that convenient? Undoubtedly, further yuan appreciation will be a topic of discussion, which should contribute to weight on the dollar. Additionally, given China's recent efforts to single-handedly save Europe, one can imagine President Obama encouraging President Hu to keep the 'love' coming our way as well.
Inflation, specifically food price inflation, has taken a rather violent turn in a number of countries recently, reminiscent of the 2007/2008 global food crisis. Riots have broken out in Algeria, Tunisia, Bangladesh, India, and China. Unrest is North Africa has now reportedly spread to Morocco, Yemen and Jordan. Many countries are considering price controls and other measures to quell the unrest, but as we've seen in the past, various forms of price suppression can have a negative impact on supply, exacerbating the problem.


Gold Investment Tips


Original Post 

U.S Growth & Gold Prices

With late this year many economic analysis's are predicting a return to positive growth numbers in the U.S economy and many Gold investors are wondering where this leaves the gold price.

Firstly it is not for sure that the U.S economic numbers late this year will be in good shape, at present it is just pure speculation. If the growth in the U.S economy is nothing more than the injection of Q.E 2 helping push some rosy numbers through the statistical grinder this growth will be short lived. One thing that it may do is help the U.S dollar gain some strength against the other main currencies such as the Yen and the Euro. The interesting thing will be wether the Gold price will stay inverse to the movements of the dollar or will recouple and move forward inline with the rise of the dollar.

Let take the wait and see attitude but for long term investors I think that the gold price outlook is still bullish for sometime yet.

Gold Investment Tips

Indian Central Bank Gold Imports

India has been importing a record amount of gold over the last year but the indian central bank is losing it battle against inflation, spurring investors to sell government bonds.

Gold shipments into India (Which is the 3rd largest economy in Asain) have risen to 800 m3 tons from 557 tons in 2009 and breaking through the previous limit high of 769 m3 tons in 2007, according to Rajef Patel, CEP for India and the Middle East at the World Gold Council. Forecast for this year are looking to push in excess of 800 m3 tons once again,, this will take INdia into the position of one of the worlds largest net buyers of gold, fight with China to hold that position.

Gold Price Analysis

The next couple of days should be very telling on which way GOLD is going.

Intermediate trend broke down and GOLD is trying to find support at the 50 day moving average.

Volume:   The down days are getting much more volume then the advancing days which is a sign there is more selling pressure then buying pressure.

MACD:  The momentum has been decreasing from mid October and currently we are crossing to the downside which can be interpreted as a sell signal.

Ultimate Oscillator: There has been a slight bearish divergence between the highs which further supports a top.

Conclusion: Watch the supports and see if they break down.  Some technical are pointing for prices to go lower so be cautious putting in long positions and be ready to take some money off the table if you are already long.

http://goldnews.com/?p=567

What is Gold?

Gold is a chemical element with the symbol Au (from Latin: aurum "gold", originally "shining dawn") and an atomic number of 79. It has been a highly sought-after precious metal for coinage, jewelry, and other arts since the beginning of recorded history. The native metal occurs as nuggets or grains in rocks, in veins and in alluvial deposits. Less commonly, it occurs in minerals as gold compounds, usually with tellurium. Gold metal is dense, soft, shiny and the most malleable and ductile pure metal known. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water. Gold is one of the coinage metals and has served as a symbol of wealth and a store of value throughout history. Gold standards have provided a basis for monetary policies. It also has been linked to a variety of symbolisms and ideologies.

A total of 165,000 tonnes of gold have been mined in human history, as of 2009. This is roughly equivalent to 5.3 billion troy ounces or, in terms of volume, about 8,500 m³, or a cube 20.4 m on a side. The world consumption of new gold produced is about 50% in jewelry, 40% in investments, and 10% in industry.

Although primarily used as a store of value, gold has many modern industrial uses including dentistry and electronics. Gold has traditionally found use because of its good resistance to oxidative corrosion and excellent quality as a conductor of electricity.

Chemically, gold is a transition metal. Compared with other metals, pure gold is chemically least reactive, resisting individual acids but being attacked by the acid mixture aqua regia, so named because it desolves gold. Gold also dissolves in alkaline solutions of cyanide, which have been used in mining. Gold dissolves in mercury, forming amalgam alloys. Gold is insoluble in nitric acid, which dissolves silver and base metals, a property that has long been used to confirm the presence of gold in items, and this is the origin of the colloquial term "acid test", referring to a gold standard test for genuine value.

Gold Information

Original Article

Teasco Now In Gold

Tesco, the large supermarket chain has now introduced the Tesco Gold Exchange, which is a cash-for-gold service, much the same as we see in Tesco's throughout Asia. In a nut shell it allows consumers swap their unwanted gold for cash . Tesco are offering £7.81 p/gram  of common 9ct gold. The exchange value it claims is more than some of the competing retailers in the market, reports say.
Cash-for-gold is fast catching up as a service offered by retailers to attract consumers, with consumers ready to exchange unused gold lured by the high gold prices - in November’10 it touched a record high of $1,424 per ounce and is still at $1,407.96.
Tesco’s cash-for-gold is accessible on its website and 15 of its 2,482 stores, as it is implementing this service on a trial basis to make the ‘process transparent and easy to understand for customers’, reports suggest.


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Gold - more than a twinkle in the eye

(SINGAPORE) Analysts believe that gold will shine even brighter this year, as the flight to safe-haven assets continues amid the weakening US dollar and euro, as well as rising demand in markets such as China, will keep gold in the limelight.

On the last day of trade for 2010, gold spot prices closed at US$1,412.63 an ounce, marking a 28 per cent surge this year - the 10th straight annual gain and the third consecutive year to see a double-digit rise. Gold has averaged US$1,227 per ounce in the last year, hitting a record US$1,426.45 on Dec 7.

It marked a spectacular end to a decade that began with trepidation, as industry players had feared a third straight decade of a bear market.

Analysts whom BT spoke to expect gold to reach new highs this year - with an average price of at least US$1,400 an ounce. Some have even touted prices hitting an average US$1,500.

This can happen, given that factors that lifted gold prices in 2010 are likely to linger, with increased demand for safe-haven assets and worries over the stalled US economy as key reasons, said analysts.

For one thing, the US and Europe are likely to continue their currency-weakening policies this year. Most recently, the US Federal Reserve embarked on another round of quantitative easing - a move that has, and will continue, to put pressure on the dollar.

European governments have also moved to tighten fiscal policy because of the sovereign debt crisis that is spreading across the region. This means that the European Central Bank will have to keep interest rates 'extremely low, in order to prevent the eurozone economy from contracting', said Citigroup global metals researcher David Thurtell.

The weakening US dollar and euro has also made gold a sought-after hedge against currency losses, said Mr Thurtell.

Citi has a short-term price target of US$1,450 an ounce for gold, and a 6-12-month target of US$1,550. It expects an average gold price of US$1,500 an ounce this year.

The need for a safe harbour from financial storms has sparked renewed interest among retail investors in gold, which lost favour following its crash in January 1980.

Gold hit a then-record of US$850 an ounce on Jan 21 - equal to an inflation adjusted price of more than US$2,200 today - before crashing the next day.

But these investors are back. Christian Nolting, Asia-Pacific & regional head of portfolio management at Deutsche Bank private wealth management, said: 'Retail investor demand for gold has been quite resilient this year, given the environment of heightened macroeconomic uncertainty, as investors bought gold to diversify their portfolios and hedge against inflation risks.'

Deutsche Bank private wealth management expects gold to reach US$1,400 an ounce within the first quarter this year, and US$1,420 over 12 months. It has an average gold price of US$1,400 an ounce for 2011.

Gold's resurging popularity among retail investors worldwide can also be seen in much simpler, everyday terms, as opposed to a portfolio investment.

An upscale shopping mall in Florida state in the US installed an ATM that dispenses 24-carat gold bars and coins. The 'Gold To Go' machines - the brainchild of German firm Ex Oriente Lux's chief executive, Thomas Geissler - has also been installed in Abu Dhabi's Emirates Palace hotel, as well as countries such as Germany, Spain and Italy.

Firms promising attractive returns on gold investments have sprouted in Singapore. Pawnshops in the country have also seen a new trend: clients redeeming their gold items, only to pawn them later at a higher value.

Central banks - both from developed and developing countries - have also showed more interest in gold given the uncertainty over the future of the international monetary system, with the World Gold Council (WGC) saying that central banks have raised their gold holdings in order to diversify their foreign exchange reserves.

Albert Cheng, managing director of the far east region at WGC, said: 'This is something that won't go away in 2011, especially because the emerging markets will likely continue to look for diversification.'

For example, a WGC report issued in November 2010 showed that the gold holding of Russia's central bank rose 7 per cent in the third quarter of last year.

It is likely that central banks became net buyers in 2010 for the first time in decades, something that is expected to continue.

China, in particular, has thrown its weight behind gold. In 2010, the Chinese central bank moved to liberalise its local gold market and open its doors to local individual investors. This allowed Chinese banks to trade gold bullion on the global market and advertise gold-related investment products for locals.

Citi's Mr Thurtell said: 'China demand appears to have risen more than five-fold in 2010 from 2009, and is set to make further strong gains over 2011.'

WGC's Mr Cheng also believes that China's measures to curb price increases in its property market would make gold a more attractive option to investors.

The WGC thinks that China's investment-driven consumption of gold could have nearly doubled to 150 tonnes last year from 80.5 tonnes in 2009. Mr Cheng added that China's gold consumption is likely to be double in 10 years or earlier.

The jump in Chinese demand could even see China replace India as the world's largest gold consumer. In 2008, India's total gold consumption was 700 tonnes.

Dominic Schnider, head of commodities research at UBS wealth management, told BT: 'Chinese demand might be similar to India, which, by providing a type of base demand on top of financial demand from the developed world, can drive prices.'

UBS has a 12-month price target of US$1,650 an ounce for gold, with the year's average at US$1,500 an ounce.

Investors, however, should not be blinded by all that glitters. Peter O'Malley, HSBC head of resources and energy group, said: 'We suspect that given gold's significant run-up this past year or so, it will be difficult to maintain such momentum. Increasingly, many analysts on the Street see the beginnings of a turnaround in the US economy.'

This, he said, will push investors to look to US equities and the US dollar, thereby paring their gold exposure. HSBC's forecast price for gold in 2011 stands at US$1,425 an ounce.

Gold Information 

http://news.asiaone.com/News/The%2BBusiness%2BTimes/Story/A1Story20110103-256187.html

Gold Price Information - India

Mumbai, Jan 2


In 2010, all precious metals performed exceptionally well in terms of price appreciation, and with the exception of platinum, all others have actually surpassed the 2008 peak. Undoubtedly, silver and palladium have been outstanding performers with the former hitting 30-year highs.
A remarkable feature of 2010 was that ETF holdings of precious metals rose significantly. Gold ETF holdings were up about 300 tonnes which is well short of the 617 tonnes of ETF buying in 2009. Silver inflows were heavy too, especially in the second half. Platinum and palladium inflows and holding also expanded.


Base metals ended the year strongly. Over the week, lead and zinc showed the largest gains of 6 per cent and 7 per cent respectively. LME copper stocks ended the year at 377,550 tonnes, a fourth below end-2009 levels.


Gold: Interestingly, gold has continued to perform incredibly well reaching newer all-time highs during the year in terms of a number of currencies including the Euro, British pound, the Indian rupee and of course the USD. In London on Friday, the last day of 2010, gold PM Fix was at $1,410.25 an ounce, up 0.3 per cent from previous day's $1,405.50/oz. However, silver edged lower by 0.2 per cent to AM Fix of $30.63/oz on Friday, from the previous day's $30.70/oz.
Platinum had a PM Fix of $1,731/oz and palladium $791/oz, both declining from the previous day.
Gold's Fix above the psychological level of $1,400/oz is seen a positive sign for the New Year. For 2011, gold continues to remain a safe bet. All background conditions are gold positive - lingering growth concern, unresolved European sovereign debt crisis, easy money policy and inflation fears. Central bank purchases and popularity of physically backed ETFs (Exchange Traded Funds) have helped propel the market higher.


Investment demand continues to be strong and the metal's safe haven status is unchallenged. Most experts remain positive on the yellow metal in the near-term. For instance, Barclays Capital has forecast an annual average spot price of $1,445/oz for 2011. From the current level of close to $1,400/oz, prices are expected venture further into unchartered territory quarter after quarter, peaking at a quarterly average all-time high in Q3 at $1,490/oz, it is forecast. At that point in time, it is speculated that the market will start to price in prospects of a potential interest rate increase.
What are the risks to gold prices? Because the metal is overwhelmingly driven by investment demand, a mass exodus of investors will exert tremendous price pressure downward. The second risk is jewellery demand destruction because of exorbitant prices, especially in price-conscious markets such as India.


However, there is reason to believe, given the supportive background, investment demand will continue to remain robust. Potential loss of physical demand may be neutralised by rising incomes and higher purchasing power. Consumers may realign their price expectations as is borne out by India's gold jewellery demand in the first three quarters of 2010 which exceeded demand for the whole of 2009.


“Given that gold jewellery is also bought as a store of value, higher prices also act as a purchase incentive”, Barclays commented.


Despite weak fundamentals, silver outperformed gold in 2010 and reached highs not seen since 1980. Silver is riding on the positive sentiment towards gold. If investor appetite were to decline for any reason, silver will be the first precious metal to head southward and suffer a sharp correction.
For 2011, the annual average spot price forecast made by Barclays Capital is $28.1/oz, with price peaking at the quarterly average of $30.9 in Q3.


In India, currently, gold is traded at around Rs 20,600 for 10 grams and silver at about Rs 46,000 a kg. Domestic market prices closely track global price trends. Given the positive outlook for bullion in 2011, investment even at current levels would bring good returns.


As a note of caution it must be mentioned that the market will continue to remain volatile and there will be price fluctuations. It is absolutely important that investors have a clear exit strategy. It is also highly likely that import tariffs on gold and silver will be raised in the New Year so that the exchequer garners additional revenue.


Gold Information
Gold Price


Information Source www.thehindubusinessline.comhttp://www.thehindubusinessline.com/2011/01/03/stories/2011010350731200.htm

Gold - U.S Dollar 50/50 Investment Strategy

I was talking to a friend of mine yesterday and he is working on the strategy of having a 50/50 Gold to U.S dollar portfolio, interesting I thought.

His basic idea on the way he is investing is at present gold and the U.S dollar have an inverse relationship, i.e as one rises the other will drop in price. My point to him was simply that you are in a no loose technical position, you can neither loose or gain in this situation and personally I think its a little crazy!

Well we all have our different trading systems and ideas but I am still a gold bull and will be for some time yet, roll on the gold price for 2011 I say.

I hope that everyone is over the worst of their hangovers from the NYE parties and in the coming days we will see the markets start up strong and find direction for 2011.

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