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February Sees Gold Up 6% And Silver Up 19% On Inflation And Escalating Geopolitical Risk
From GoldCore
The paper-driven sell off in the gold market seen in January has
been trumped by continuing robust physical demand in January and
February. This has resulted in gold rising nearly 6% in February and
silver’s strong industrial and investment demand leading to a 19% rise
to new nominal 30-year highs.
Gold in USD – 6-Month (Daily) and 150-Day Moving Average
Political, and more importantly socioeconomic, revolutions in the
Middle East and North Africa are leading to a degree of geopolitical
instability and risk not seen in many years. This is leading to
concerns about oil supplies from the region and hence the 14% jump in US
crude oil just last week and deepening inflation concerns.
Hopes that the feudal Saudi regime will contain the situation by
increasing production and exporting more oil are misplaced as the
Saudis are already producing oil at maximum capacity and indeed are
likely to have been overstating their oil reserves for some years,
possibly considerably.
Ireland Government Bonds 10-Year – 1 Year (Daily)
With all eyes on the Middle East and North Africa, there has been less
focus on the continuing European sovereign debt crisis. However, the
crisis continues and recent days and weeks have seen government bonds
in Greece and Ireland again come under pressure.
The yield on Greek bonds (10-year) have risen to over 11.6% in
recent days and the yield on Ireland’s 10-year reached a new record
high of 9.40% this morning after the Irish electorate “liquidated” the
Fianna Fail/Green government over the weekend. While the new government
is likely to be a centrist Fine Gael and Labour one, there has been a
swing to the left with Sinn Fein, the Workers Party and many left
leaning independents elected.
The majority of Irish people are seeking that the massive debts of
the Irish and European banking systems, incurred against them, be
restructured or defaulted. Therefore, the new government will be under
pressure to negotiate a fairer, more equitable settlement with the
European Commission and the ECB with possible ramifications for the
many European banks who lent irresponsibly to Irish banks.
US Dollar Index – 10-Year (Weekly)
Political and economic instability in Europe is set to continue and
while the Irish used the ballot box, citizens in some EU countries may
not be as peaceful or passive. While the euro has bounced against the
beleaguered US dollar recently (the dollar looks very vulnerable to
breaking down technically (see chart above), gold above EUR 1,000/oz
(€1,020/oz this morning) is a sign that the euro’s troubles are far
from over and further euro weakness in the coming months will see gold
rise above the EUR 1,072/oz high seen at the end of 2010 (December
28th).
The move by the popular Egyptian Front for Reclaiming the People’s
Wealth to ban the export of gold in order to preserve the wealth of the
impoverished Egyptian people is a prudent one. The move may be
emulated in other countries in the coming months leading to a further
decline in scrap supply from emerging markets.
Conversely, mooted proposals by the Vietnamese Central Bank to ban
“gold bullion trading” (see news below) are somewhat bizarre. If true
this would be a very important development as the Vietnamese are some
of the largest buyers of gold bullion in the world. It is unclear
whether the proposed ban is simply to prevent “trading” or speculative
short term buying and selling, or actually a move to ban the buying of
gold bullion ingots and jewellery by Vietnamese households. If it is
the latter, it will be unworkable as buying will simply move to the
black market or Vietnamese will buy from overseas from bullion dealers.
News:
(Al-Masry Al-Youm) -- Egypt bans exporting gold in effort to curb illegal wealth transfers
The Minister of Trade and Industry Samir Sayyad banned the export of gold in all its forms from Sunday evening.
The minister said in a press statement that the ban will remain in effect from 27 February to 30 June, explaining that it comes during a time of “exceptional circumstances” and is necessary “to preserve the wealth of the country until the current situation stabilizes.”
Since the start of the 25 January uprising, fears have risen that individuals suspected of corruption or wanted for investigation have been smuggling money abroad in the form of gold.
Mohamed Mahsoub, secretary-general of the popular Egyptian Front for Reclaiming the People’s Wealth, said early last week that the group has documents in its possession proving that certain former officials had transferred large amounts of money to foreign banks, where they had also deposited quantities of gold and platinum ingots.
He also said that one former Egyptian official had transferred some US$620 million from Barclay's bank in England to UBS bank in Switzerland and that the Egyptian Attorney General had asked Egypt's foreign ministry to monitor foreign bank accounts belonging to ousted president Hosni Mubarak and his immediate family.
Egypt's Illicit Gains Authority previously requested that the relevant legal bodies investigate wealth accumulated by former government ministers, National Democratic Party officials, and former chief editors of state-run newspapers.
(Al-Masry Al-Youm) -- Former Egypt officials transferred Gold and Platinum Bars to Western Banks
Mohamed Mahsoub, secretary-general of the popular "Egyptian Front for Reclaiming the People’s Wealth," said the group had documents in its possession proving that certain former Egyptian officials had transferred large amounts of money to foreign banks, where they had also deposited large numbers of gold and platinum ingots.
“We plan to submit these documents to the attorney-general and the prime minister,” Mahsoub said.
He also said that one former Egyptian official had transferred some US$620 million from Barclay's Bank in England to UBS Bank in Switzerland.
(Bloomberg) -- Bullish Gold Bets Rebound in February as Mideast Tensions Mount
Hedge funds boosted their bullish bets on gold to the highest since December, when the precious metal was headed to a record price, as tensions in the Middle East spurred investor demand for a haven.
Managed-money funds held net-long positions, or wagers on rising prices, totaling 182,739 futures and options contracts on the Comex as of Feb. 22, up 14 percent from a week earlier, U.S. Commodity Futures Trading Commission data showed last week. Holdings rose for a third straight week and are the highest since Dec. 7, the day gold reached a record $1,432.50 an ounce.
The price has rallied for five straight weeks as pro- democracy uprisings spread from the Middle East to North Africa. Gold is rebounding after a plunge in January that was the biggest in more than a year. Before then, the precious metal had rallied every year for the past decade.
“Gold has found support and buyers have been coming in in the past few weeks,” said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. “All the factors driving the price of gold higher are still there -- political instability, currency volatility and inflation. People are following through with their intentions after the dip in January.”
Gold has climbed 5.6 percent this month, after a 6.1 percent decline in January prompted by an investor shift into equities. Prices are up 27 percent in the past year.
Managed-money positions include hedge funds, commodity- trading advisers and commodity pools. Analysts and investors follow changes in speculator positions because such transactions may reflect an expectation of a shift in prices.
(Bloomberg) -- Rising Gold Output Keeps Australia in No. 2 Spot, Surbiton Says
Australia kept its position as the world’s second-largest producer of gold with a 17 percent increase in output of the precious metal last year, a research group said.
Production rose 38 metric tons to 266 tons in 2010 from a year earlier, Sandra Close, a director of Melbourne-based Surbiton Associates Pty, said in an e-mailed statement.
Gold is trading near record highs as investors seek to protect their wealth against accelerating inflation and intensifying violence in the Middle East. Prices have risen for 10 straight years to reach a record $1,432.50 an ounce on Dec. 7 on the Comex in New York. Gold’s role as an inflation hedge will grow as consumer prices increase worldwide, Credit Suisse AG analyst Stefan Graber said Feb. 22.
China was No. 1 with reported production of 341 tons and the U.S. would rank No. 3 with an output of about 240 tons, Close said.
Australian output gained 12 percent to 70 tons in the fourth quarter, Surbiton said.
Newmont Mining Corp.’s Boddington mine, southeast of Perth, was Australia’s largest single producer during the quarter with 206,000 ounces. The Superpit, 550 kilometers (342 miles) east of Perth and a joint venture of Newmont and Barrick Gold Corp., remained Australia’s largest producer for the year with 788,000 ounces, Surbiton said.
(Bloomberg) -- Goldman ‘Neutral’ on Commodities in the Near Term on Unrest
Goldman Sachs Group Inc. is staying “neutral” on commodities in the near term as the unrest in the Middle East and Africa has raised concerns that global growth may slow.
The bank reiterated an “overweight” recommendation on commodities for the longer term, analysts including Jeffrey Currie wrote in a report. Goldman pared its 12-month forecast for returns on the S&P GSCI Enhanced Commodity Index to 14.3 percent, from 18.6 percent previously.
Commodities last week capped their best weekly performance in almost three months after crude oil jumped 14 percent on concern that the turmoil, which began in Egypt and has cut output in Libya, may spread to other parts of the Middle East. The Enhanced Commodity Index gained 3.9 percent last week, the most since the week to Dec. 3.
“Once the current civil unrests settle down and the contagion risks subside, we expect that higher confidence in global economic growth will once again pave the way for cyclical commodities performance to resume,” the analysts wrote in the Feb. 25 report.
(Bloomberg) -- Vietnam Dong Strengthens at Gold Shops as Reserves Set to Rise
Vietnam’s dong strengthened against the dollar at money changers on speculation foreign-exchange reserves will rise after Prime Minister Nguyen Tan Dung ordered state-owned companies not to “hoard” the greenback.
“Sentiment improved on the foreign-exchange market on expectations reserves will increase once companies sell their dollars to the state bank,” Marc Djandji, the Ho Chi Minh City- based head of research at Viet Capital Securities, wrote in a report today.
The dong advanced in the unofficial market, trading between 21,900 and 21,960 as of 3 p.m. at gold shops in Hanoi, compared with between 21,960 and 22,080 on Feb. 25, according to an information service run by state-owned Vietnam Posts & Telecommunications.
The official rate for the currency dropped 0.04 percent to 20,878, taking losses for the month to 6.6 percent, according to prices from banks compiled by Bloomberg.
“How can you hoard U.S. dollars when we are in this difficult situation?” Dung said at a meeting with ministries in Hanoi on Feb. 24.
The State Bank of Vietnam set the daily reference rate at 20,673, compared with 20,683 on Feb. 25, according to its website. The currency is allowed to trade up to 1 percent on either side of that rate.
The yield on the benchmark five-year bond fell four basis points to 11.55 percent, according to a daily fixing from banks compiled by Bloomberg. A basis point is 0.01 percentage point.
(Dow Jones)-- Vietnam Central Bank Proposes Banning Gold Bullion Trading – Report
Vietnam's central bank is proposing that the government issue regulations to ban the trade of gold bullion from the second quarter of this year, state media reported Monday, citing the State Bank of Vietnam.
"The State Bank of Vietnam in the second quarter will request the government issue a decree on management of gold trading, aiming to control imports and exports of gold and to ban the trading of gold bullion in the free market," the state-run Vietnam News Agency said.
"Trading of gold bullion is only seen in Vietnam but not in other countries," it said.
"It is bad for the economy because (the country) has to import gold, which causes trade deficits."
The elimination of gold bullion trading is "necessary and timely," as the government is rolling out measures to tame inflation and stabilize macroeconomic conditions, it said.
(Bloomberg) -- China Gold Imports Topped 300 Tons Last Year, PBOC’s Yi Says
China imported more than 300 metric tons of gold last year, People’s Bank of China Vice Governor Yi Gang said today in Beijing.
(Financial Times)-- Go for Gold: It is Far Ahead of Electronic Money
Mostly, when you buy insurance, you hope it won’t ever turn out to be necessary.
You pay annual premiums for your car insurance. But that doesn’t mean you secretly hope someone will knock you off the M25. You pay a fortune to insure your house. But that doesn’t mean you want it to be burnt to the ground during your summer holidays (mostly).
The same goes for gold. When I started buying it back in 2002 or so, I did so largely because the supply and demand balance seemed out of whack. But as the decade wore on, I began to see my holdings much more as an insurance – against pretty much all the things that have always gone wrong in the past and that will almost definitely do so at some point in the future. (For this and other important articles see the Commentary section on our website today).
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Haah ahah - he said "dong"...
Talk about instability - I would have guessed that the neocons would have been playing up this news whereas it seems to have been somewhat buried:
http://www.portstrategy.com/news101/europe/dirty-bomb-fears-in-genoa
its D Day Blythe, lets see what damage you have caused the rest of the world again...
www.silvergoldsilver.blogspot.com
The most powerful social networking web site never mentioned in the main stream media is Meetup.
http://www.meetup.com/
During the Ron Paul 2008 campaign, there were Meetup groups promoting his campaign all over the world.
If you are interested in starting a Meetup group in your neighborhood to organize on the ground action against the Fed, go for it.
You could call it; Audit the Fed-Audit Fort Knox-End the Fed.
Here is a screen shot of the Ron Paul meetup groups all over the world.
http://farm3.static.flickr.com/2306/2117233726_edf16fef70_o.jpg
If Ron Paul was a real threat to the Fed, he would have been eliminated by now.
He's too popular to eliminate, it would backfire on them and all hell would break loose.
You see how the Minnesota protests are backfiring on the AWOL legislators?
They gave the MSM 2 extra weeks to analyze every conceivable aspect of what the public sector unions are all about. It would have been better for the democrats to have just voted on the issue and be done with it.
My point is, once the message is out, there's no putting it back in the box.
That would also explain why Julian Assange is still drawing breath.
Billionaire Koch Brothers Next Target of "Anonymous" Hacker Group:
http://www.alternet.org/teaparty/150064/billionaire_koch_brothers_next_t...
The hacker group says they are going after tea party financiers Charles and David Koch for their attempts "to usurp American Democracy."
The group was responsible for taking MasterCard Worldwide offline for an entire day.
Things go better without Koch
Good luck with that. The Tea parity groups I belong to never got a dime from the Kock brothers.
Better to go after the unions for paying hundreds of millions to democrat candidates.
Bullshit, follow the money.
>> follow the money.
Michael is obviously too blindly partisan to question his handlers. Kill the Jews, Kill the Democrats. Problem solved (in Michael's twisted world).
And to add to those worries....as posted earlier
http://www.news.com.au/business/bigger-bubble-is-building-says-rba-direc...So there seems to be worldwide expectations of inflation at this point, contrary to our Fed statements. "Although rice has gone up world wide, the price of a patch of ground to sleep on in Bangladesh has remained stable".
I think that when the Fed recognizes inflation, we should be well into a currency crisis.
Our two weapons are fear and surprise...and ruthless efficiency...
The next few days will set precedent, as "things are about to get very interesting."
Over the weekend, I spoke with a very knowledgable individual on the subject of global currencies, more specifically, the Euro single monetary currency and the dollar which make up the largest part of the SDR basket. He says the Euro has little chance to last through spring, let alone the summer and that once the Euro crumbles, so goes the EU and eventually the USD. That will really shake up the price of food and oil. Go long silver, gold and nonperishable food items.
My advice has been the same since last year. Silver to $40 in ~3 weeks.
Lb of rice = 250,000.00 dong
Ounce of gold = 29,260,000.00 Dong
Would the population want to carry 20lbs of paper dong or 1 gram of gold.
Most gold in Vietnam is black market already.
Gov't can't mandate CONfidence in worthless paper.
Yeah. But will Vietnam experience a revolution soon like in Egypt and Libya?
No, the reason is that there is no infrastructure and ways of communication for the people to form a coalition.
Notice what all the rioting countries had in common:
A united way to communicate though blogs.
You don't have that in Azia (besides the postal brides sites).
Also, in Vietnam, there is Buddhism. That religion preaches poverty and acceptance of their destiny.
Small change.
Sudden Debt, you do not know what you are talking about. I won't even bother to ask whether you have been to VN or not.
Thailand rolls over its mobster leadership once every few years; and they have a much better currency. And Buddhism is the religion of Thailand and Burma, as well.
True Saxxon. The recent, fierce riots in Bangkok come to mind (outside inspired or otherwise, pretty well organized).
And Vietnam kicked US imperial ass in a little war some years ago.
SD is skating on thin ice.
ORI
And Vietnam kicked US imperial ass in a little war some years ago.
well no..US pols played at war in that one and did not have a plan for victory or in end even consider it.
read McNamara et al..
was with the 101st 69-71..there was nothing left of the vc and n vietnam army at that time in S vietnam they were beat just like TET was a disaster for them but W Cronkite could not report the truth so he lied surprised CNBC has not brought him back he's so skilled at it..
we pulled out then congress pulled the plug on funding and the north rolled in.
yeah, you can try to explain defeat, but it´s still just a defeat
It was the country's defeat, but not the military's... we won on the field of battle... we lost in the halls of congress. Personally, I don't consider this a defeat... especially considering our respective kill to death ratios... as well as our RoE and general policies.
About all you can say is that we left... if that means we get a +1 in the loss category, then it should definitely come with an asterisk.
That reminds me of the Beijing olympics... usually, the overall nation score is calculated as such:
Of course, when China overtook the US, American newspapers simply started just adding the number of medals (i.e. unweighted), and suddenly the US was back at number one.
overmed, it was a drug war disguised as an anti-commie war. Well known.
All of the wars of the 20th century were contrived with pre-determined outcomes.
Same with the Korean War as an example.
Given the imbalance, the napalming, agent oranging, the sheer difference in every aspect of the countries involved et. al., I'd still say the VC won.
And I think Crokite is Conked-ite.
ORI
ORI,
You might be right, but VC weren't around to enjoy the victory, they were wiped out. Several attempts to invade conventionally (stopped by Linebackers) until NVA attacked with more armor than Germans used in the blitz into France.
Then "Pappa Bear" got to play in the mess again.
- Ned
Ned, unfortunately true.
Scorched earth, quite a tell-all, eh?
ORI
ORI-built into the pattern, see my comment below. - Ned
OR Indian, enjoy your posts agree with many.
the riddle of that war, many views can be held on Viet Nam and all can be very true - let's hope the world avoids the greed of the elite who" Know not what they do" in leading us down more such paths.
Brahmans do not abound.
[ed. @ Overmed:] Welcome home, brotha' - Ned
{TET=="Operation Hummingbird," VC==SA}
New Meat, ..those who served deserved better, but life ain't fair and the less damaged of us moved on to productive lives.
welcome home. I hope we can keep it.
Vietnam's victory would not have been possible without considerable "aid and comfort" from Commiecrat allies in the U.S. Congress.
"That religion preaches poverty..."
Haha, good joke. Ever heard of Japan?
That's a lot of dong for rice and gold...sorry couldn't resist...lol
They get no bang for their dong...
I think it's less of the point that gold and silver are chasing along side of inflation. If anyone has been noticing gold and silver are trading more like forex instead of commodities. Do a 1 year chart comparison on USD and SLV and check it out
The Head And Shoulders in the USDX chart looks pronounced-ly bearish.
I think this might be the start of a hard leg down, because them shoulders are looking mighty tired. Such a load, so many decades of fiat world stewardship.
And by the way, bullion investment in India is way up and the signs for Loans against Gold (not silver, I wonder why) schemes proliferate.
So here is the question, if they think gold is going way up, why would they lend against it, since the collateral is appreciating so fast as to make up for anywhere from the 7-10% interest rate they charge (annual).
The only heavy metal I like.
ORI
http://aadivaahan.wordpress.com/2011/02/27/the-fascinating-dr-chippalone/
Technically you're right.
But we've seen this already happen to many times to bet money against it.
I'd rather day that if the euro goes to 1,395$ that it would be good to short the euro.
I figure 1.40 before it drops - One thing where ORI could be right is dollar has failed to move with risk off last couple of weeks . I don't know what kind of event could rally the dollar but it will have to be pretty freakin huge
There are 2 reasons why the dollar will rally again:
1. If QE3 gets approved.
2. If QE3 doesn't get approved.
You can pick one.
What I find funny is that here in Europe, every country blames something else for inflation but not even once is money printed a reason mentioned.
So true. Inflation isn't even mentioned that often here in Germany. Maybe two article/quarter.
Food for votes bribes are getting commomplace. The final straw.
http://www.cnbc.com/id/41820653
Here is a weird rumor - Saudi King is making an offer to take over facebook for 150 billion to end revolts in his kingdom. I dont know how reliable this source is ,for all I know it could be the equivalent to weekly world news .
http://www.tehrantimes.com/index_View.asp?code=236523
What's to stop the Saudi's from blocking FB? What's to stop protestors moving to other sites?
I dont know ? I am just putting the info I found up and i am as confused as anyone by it.
150 billion :)
That would make Goldman happy :)
It's a rumor that just can't be true.
If the King would give 5.600$ to everybody in his country I think most of the citizens would be all to happy and it would also cost him 150 billion.
And what would be next? Twitter? Linkedin?
From Tehran Times. I'll have to decide how much credence needs to be given to their reporting -- just as I do the NYT, or my local rag for that matter.
Tyler , can you put up a clip of Rick rolling Bullard on CNBC around 10 minutes ago.
Sure thing. He ain't got nothin' better to do than search the comments for every whim of the readers. Is your time too valuable to get on that chore?
It is so funny how so many economic analyst are saying gold is going to drop and stay away from it. Including good ole Jon Nadler with Kitco. He likes to say that it will go back down to 800 and that is the real value of it.
I wonder how many people actually listen to the Goldman Squid and Jp Morgue people about where to put their money now? They come out and say the dumbest stuff about commodities and metals. If I listened to them, I would not buy metals and only put my money in equities. Of course they get paid the big bucks to steer the people wrong and make the companies money.
The government, the experts and the media are all in a conspiracy to try and supress the price of gold. So far the general population hasn't caught on. The elite are all buying carefully behind the scenes. That's why we see a floor.
watching for the "Wynter Benton" moment..
PM's up so far this AM.
Blythe I hope they get you.
The Australian government just set a date for a 'carbon tax'. I wonder how much this will increase the cost of Newmont getting all that gold out of the ground?
Oil and gold are all you need to know as the Federal reserve's Ben Bernank prints ad infinitum to bail out the Bankers.
It would appear that the dollar is no longer a flight to safety. If this were 10-20 years ago, these Middle East conflagrations would have pushed capital out of equities and into US treasuries and cash dollars. Dollar weakness on the heels of global "risk-off" conditions is a harbinger of further declines. Add the fact that the dollar index just measures the dollar vs. other fiat currencies (and not hard assets) and you realize that the days of the dollar as reserve currency are numbered. It could take 5-10 years to roll out SDRs en masse, but that day is coming if the NWO and global banking cartel gets their way. http://therookiecynic.wordpress.com/2010/10/05/the-race-to-the-bottom-be...
Swiss francs anyone?
Your local AAA office/store is a good source.
Buy over $1000 worth -- best exchange rate and lower commission.
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