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U.S. Treasury “Firm Believers In Gold", Will Not Sell Even To Avoid Default

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Today’s AM fix was USD 1,298.00, EUR 959.56 and GBP 814.51 per ounce.
Yesterday’s AM fix was USD 1,309.50, EUR 968.28 and GBP 819.77 per ounce.

Gold fell $13.10 or 0.99% yesterday, closing at $1,306.30/oz. Silver slipped $0.45 or 2.02% closing at $21.85. Platinum dropped $16.50 or 1.2% to $1,379.10/oz, while palladium fell $11.28 or 1.6% to $700.72/oz.


U.S. Debt & Debt Limit Versus Gold - (Sharelynx
)

Gold edged off, falling beneath $1,300/oz in London  as the dollar bounced from an eight-month low  on hopes that the considerable risks due to the U.S. government shutdown and debt ceiling are addressed.

COMEX selling continues to pressurise the price despite robust demand especially from China and India. Premiums in India were at $50 per ounce overnight and on the Shanghai Gold Exchange premiums were at $21 per ounce overnight.

President Barack Obama launched a series of White House meetings with lawmakers yesterday to search for a way to end a government shutdown and raise the debt limit. Congressional aides from both parties noted U.S. lawmakers are not opposed to a short term increase in the debt ceiling limit.

The U.S. will almost certainly raise the debt ceiling again, as it has done dozens of times since 1960, and this will be very bullish for gold as it has been in the last 10 years (see chart).

Gold fell despite monetary dove, Janet Yellen, being nominated as the next chief of the U.S. central bank. Her appointment is positive for gold and will be supportive.

Central banks remains net buyers and gold sales remain nearly non existent. Gold sales under the Central Bank Gold Agreement in the year to September 26 were the lowest of any year since the first version of the pact came into force in 1999, World Gold Council shows. 


Gold In US Dollars 1 Year - (Bloomberg)

China is on pace to consume a record amount of gold again this year, which may be partly due to the central bank diversifying its foreign-exchange reserves.

The People's Bank of China is likely continuing to quietly accumulate gold. They will announce it when they are ready as China does not want sharp price rises to effect their stealth gold diversification programme. 


Gold in US Dollars 5 Year - (Bloomberg)

The Chinese government and central bank realises, like the U.S. Treasury and Bundesbank that gold is an important store of value and diversification which protects against currency devaluations and systemic risks and a systemic crash.

An important, little noticed article published over the weekend pointed out that theUnited States Treasury "remain firm believers in gold". 

Brett Arends of the Wall Street Journal and Marketwatch asked the U.S. Treasury if they would consider selling some of the country’s gold reserves to pay the bills if the budget crisis escalates later this month.

Their response? Not a chance.

The Treasury has considered that option, among the many others, and rejected it.“Selling gold would undercut confidence in the U.S. both here and abroad,” a spokeswoman said, “and would be destabilizing to the world financial system.”She was quoting an official position laid out last year in a letter to Senator Orrin Hatch, but so far apparently little noticed on Wall Street.

The Treasury’s position is, in a word, extraordinary. We hear all this skepticism these days about gold. Yet the Treasury itself considers U.S. gold holdings to be a key element in maintaining confidence in the country’s soundness—and the stability of the international financial system.

In other words, according to the official position of the U.S. Treasury, the promises and commitments of the government, and its “full faith and credit,” are actually worth less than gold. They’d rather default than lose their bullion.

The federal government has about 8,100 metric tonnes of gold, held in places like Fort Knox. At current prices that’s worth about $340 billion. That would only keep the government going for about a month, which tells you how little gold we really have in relation to our commitments.

I confess I am a gold agnostic—neither a confirmed skeptic, nor a true believer. I try to keep an open mind. (I do see some value in owning it, since in the past it has often tended to do well when other assets, such as stocks and bonds, have done badly.)

But the Treasury’s comment is really remarkable. The Treasury suspects that if the government just sold its gold, all those “gold skeptics” who run the financial markets would panic.

What does that tell you?

The full article can be read  here.


Cross Currency Table - (Bloomberg)

A buy and hold strategy, while difficult in recent months, will continue to reward the prudent.

In these uncertain times, all owners of gold and those considering owning gold should acquaint themselves with the most appropriate storage options for their own particular circumstances. 

GoldCore’s ebook How To Store Gold Bullion- The Seven Key Must Haves is a must read in this regard Download here.

 


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Fri, 10/11/2013 - 09:21 | Link to Comment bullchit
bullchit's picture

Don't worry. The Fed's got gold aplenty. You're holding it for them. They'll come for it in their own sweet time.
Regards.

Fri, 10/11/2013 - 08:38 | Link to Comment Its_the_economy...
Its_the_economy_stupid's picture

Like almost every situation, by the time one figures out one needs a horse, the barn door is wide open and the animal gone.

Fri, 10/11/2013 - 07:42 | Link to Comment CJHames
CJHames's picture

There were a few hilarious comments made in this story:

1) The fact that the Treasury is still holding firm to the idea that there is any gold left in Ft. Knox.

2) The insane notion that the U.S Gov't under Owebama still has the confidence amongst people "here and abroad."

Get real.

Fri, 10/11/2013 - 07:58 | Link to Comment JPMorgan
JPMorgan's picture

Yup what bullion?

They won't even allow an full independent audit of the gold they are meant to be holding on behalf of the American people.

The only conclusion that can be drawn is there is something to hide.

Fri, 10/11/2013 - 05:59 | Link to Comment redd_green
redd_green's picture

they can't sell what they don't have.  The gold in Fort Knox was stolen decades ago.

Fri, 10/11/2013 - 05:54 | Link to Comment Sufiy
Sufiy's picture


Catalyst: Uncovering China’s Rush for Gold


While a lot of people are still wondering why the Gold is beaten down again, it is important to keep the big picture in front of you. As it is happening with Copper now the main player in this market is the same - China is on track to implement state level plan to diversify US Dollar based assets.   We would like to share with you brilliant report conducted by Jan Skoyles on this subject. http://sufiy.blogspot.co.uk/2013/10/catalyst-uncovering-chinas-rush-for.html#

Fri, 10/11/2013 - 05:12 | Link to Comment Ckierst1
Ckierst1's picture

Firm believers in tungsten!  Old Mother Hubbard syndrome.

Fri, 10/11/2013 - 03:35 | Link to Comment basho
basho's picture

' United States Treasury "remain firm believers in gold". '

that doesn't mean they own any of it. if they did they'd be flaunting it. more bulls..t

Boris got it right.

 

Fri, 10/11/2013 - 02:44 | Link to Comment CheapBastard
CheapBastard's picture

The CBs and Powerful Elites hate when the Hoi Poloi think they are good enuff to hold the Shiny Metal.

Fri, 10/11/2013 - 01:52 | Link to Comment are we there yet
are we there yet's picture

So obvious. The fed refuses to sell the gold that they refuse to show, that has not been audited since Eisenhower. Then there is the German gold in eternal transit. Hmmmmm.... If Fort Knox was full they would flaunt it like Miley Cyrus flaunts her assets.

Thu, 10/10/2013 - 22:46 | Link to Comment tony bonn
tony bonn's picture

"...Their response? Not a chance..."

lmao....they don't have any to sell!!!!!!!!!!!!!!!!!!!!!!!!!!!

Thu, 10/10/2013 - 21:33 | Link to Comment doMiKY
doMiKY's picture

excellent point - truly gold is still backing currency.

Thu, 10/10/2013 - 21:30 | Link to Comment chindit13
chindit13's picture

As part of the new Immigration Bill, this cherry-picker from GoldCore was granted immunity and allowed to use his conveniently deceptive chart from 2000-2013.

Hey, let's try 1980-2013 and see how that one looks!  Let me see....$1 trillion of debt to $16.8 trillion, and $850 gold to $1288.  Nah, not as convincing. 

How about S&P 500, 102-1682 (not counting dividends)?  Gee, that seems like a much better correlation.

Thu, 10/10/2013 - 21:27 | Link to Comment RafterManFMJ
RafterManFMJ's picture

Pay no attention what-so-fucking ever to how gold is treated; pay attention to the sounds and colors coming from the idiot rectangle in your banker/local government owned living room; there now, let go ... relax. It's all going to be OK.

Trust us! Isn't there some sort of sports game on, or noisy vehicles competing, perhaps by driving in an oval? Remember, when some millionaire stranger who would just as soon shit in your mouth as say hello! wins, you do too! Go, team, go! Beat that other team of millionairs!

Thu, 10/10/2013 - 20:50 | Link to Comment PartofOne
PartofOne's picture

I see a lot of ignorant comments about the lack of gold...  If we want more, we'll just make it.

http://en.wikipedia.org/wiki/Synthesis_of_precious_metals

 

People really do need to read.

Fri, 10/11/2013 - 05:19 | Link to Comment Ckierst1
Ckierst1's picture

Alchemists haven't fared all that well in this millennium.  Perhaps you need to sacrifice a virgin to kick start the thing.  

Fri, 10/11/2013 - 00:19 | Link to Comment pbppbp
pbppbp's picture

@PartofOne,

You really need to read it again.

Thu, 10/10/2013 - 20:44 | Link to Comment NFX
NFX's picture

So even if I were to believe the U.S. has 8100 tons of gold held in various and sundry places, my question would be is it REAL gold? can we have it assayed?  They can show stuff that LOOKS like gold bars but prove it is real.... The way the U.S. lies and distorts facts would you believe it is real and not have been leased/sold out over the years?

Thu, 10/10/2013 - 20:39 | Link to Comment jharry
jharry's picture

You guys need to calm down.  We have all the gold we need.

Thu, 10/10/2013 - 19:22 | Link to Comment lasvegaspersona
lasvegaspersona's picture

Lets say China wants another 5000 tons of gold. The current POG is 50,000,000 per ton. For 250,000,000,000 they could have it...except they can't. No where on this planet is there that much gold for sale at that price. The price must rise if gold is really to be used as a reserve.

China could get 5 times that with just it's treasury reserves alone...but they can't. They can't buy 10 tons easily. No one can. The current POG is for paper gold. The promise of gold from those who do not have it. GLD is down 450 tons since January...to 898 tons...and that is the biggest stash on the planet outside of what countries have. It is believed there are 170,000 tons above ground.

Gold remains an important wealth asset all over the world. I wonder what price China is paying for all the gold they are supposedly getting. Scrap is gone, mining is down...if China is really getting gold my bet is they are paying more than current market price...way more.

Thu, 10/10/2013 - 19:24 | Link to Comment Swarmee
Swarmee's picture

Well of course selling US gold would undermine confidence, because it would expose the fact that the country doesn't have physical possession of the 8100 metric tons claimed. If we actually had that much on hand then Germany's gold repatriation request would have taken seven weeks, not seven years.

And while we're on the topic, perhaps the "transparent" Fed would like to get on the same page as treasury about the importance of gold in today's fiscal climate? One says it is more important than debt default, the other claims it is a "barbarous relic" which has no place in modern finance. Get your stories straight, boys, your conspiracy is showing.

Audit the Fed. (Then shut it down.)
Audit Ft Knox. (Public assets should be accounted for transparently.)

Thu, 10/10/2013 - 19:08 | Link to Comment the wet spot
the wet spot's picture

The United States Treasury has full faith in gold it just doesn't actually *have* any.

Thu, 10/10/2013 - 19:54 | Link to Comment it aint easy
it aint easy's picture

4 months of QE is equal to the US gold reserve (yea, if there is anything left at all).

Fri, 10/11/2013 - 00:00 | Link to Comment mt paul
mt paul's picture

circle the above commet

in red ink..

 

simple logic 101

Thu, 10/10/2013 - 18:45 | Link to Comment blindman
blindman's picture

Chuck Berry. 05 - She Was The Beer Drinkin' Woman - BBC Theatre,
http://www.youtube.com/watch?v=45MYIE3MgJ8

Thu, 10/10/2013 - 18:41 | Link to Comment q99x2
q99x2's picture

"Selling gold would undercut confidence in the U.S. both here and abroad,” 

Not only that she went on to say. Nobody can even audit the US Gold Reserves because Jamie Dimon sold it all to China and Russia with the rest going into vaults on his new island.

Thu, 10/10/2013 - 17:50 | Link to Comment Stuck on Zero
Stuck on Zero's picture

The actual quote from the Treasury was: "We won't sell off the remaining $4900 in gold because that would undercut confidence in the U.S. both here and abroad."

 

Thu, 10/10/2013 - 17:45 | Link to Comment Broomer
Broomer's picture

Well, it's not the first time America refuses to sell gold to avoid default.

Thu, 10/10/2013 - 17:05 | Link to Comment Yellowhoard
Yellowhoard's picture

They refuse to sell what they do not have.

And I refuse to show my 18 inch penis.

Thu, 10/10/2013 - 20:39 | Link to Comment GeezerGeek
GeezerGeek's picture

Clearly your real name is not Carlos Danger.

Thu, 10/10/2013 - 17:35 | Link to Comment rubiconsolutions
rubiconsolutions's picture

What did you do, measure it 9 times?

Thu, 10/10/2013 - 16:39 | Link to Comment Fox-Scully
Fox-Scully's picture

I thought it was gold-leafed tungsten in the treasury.

Thu, 10/10/2013 - 16:49 | Link to Comment johnQpublic
johnQpublic's picture

if they even have that

i'm thinking heavily guarded empty room

Thu, 10/10/2013 - 16:36 | Link to Comment Fox-Scully
Fox-Scully's picture

I thought it was gold-leafed tungsten in the treasury.

Thu, 10/10/2013 - 16:25 | Link to Comment logicalman
logicalman's picture

Once default occurs there gold & silver will be the only things worth calling money.

Those guards had better not smile or they'll get their teeth knocked out.

Thu, 10/10/2013 - 21:34 | Link to Comment n8dawg84
n8dawg84's picture

Can anyone tell me if the US Treasury still holds silver?

Thu, 10/10/2013 - 16:25 | Link to Comment MrBoompi
MrBoompi's picture

Maybe there's another explanation for the Treasury refusing to sell their gold.  They don't own any.

Thu, 10/10/2013 - 16:33 | Link to Comment Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Exactly you can't sell what you don't have unless you can leverage it with paper promises instead without allowing an audit of inventory.

Thu, 10/10/2013 - 16:07 | Link to Comment ejmoosa
ejmoosa's picture

Not hard to say you won't be selling it if you don't actually have any.

I won't be selling my virginity anytime soon.

See how easy that was?

 

Thu, 10/10/2013 - 18:01 | Link to Comment knukles
knukles's picture

Gringo, you want to buy my seeeisters donkey?  Eet has bean virgin many times.  Just for you, Senor...

Thu, 10/10/2013 - 14:27 | Link to Comment lunaticfringe
lunaticfringe's picture

At one time, America had nearly three times the amount of gold we have now. About 21,000 tons. It was sold off.

Years ago, I came across an article that stated that the US Treasury could liquidate gold without reporting it- anywhere. Since Treasury refuses to allow anyone to see OUR gold- for the last 40 years- and can't deliver a menial amount to Germany in a timely manner...

I suspect that Treasury has liquidated a great deal of it. Like everything else in this fucking country, it is a government "secret." 

Fri, 10/11/2013 - 08:02 | Link to Comment GubbermintWorker
GubbermintWorker's picture

And that is why its stated that they would refuse to sell it. Can't sell what you don't have.

 

Oh, unless it's strictly done on paper ;)

Thu, 10/10/2013 - 18:41 | Link to Comment Landrew
Landrew's picture

As I understand it, the U.S. Treasury does not hold Germany's gold, the Fed does. Two different depositories if in name only. If I am wrong please let me know.

Thu, 10/10/2013 - 19:47 | Link to Comment Swarmee
Swarmee's picture

Sorry, friend, I believe you are wrong, but only because it's a trick question. Neither one holds Germany's gold, that shite is looooong gone!

Isn't it interesting though, that a private bank was entrusted with the gold of another sovereign nation, and not the US itself? Or at the very least that our government abdicated - sorry, deligated - that responsibility? This transaction occurred long before I was a tadpole in my dad's sack, but surely it must have raised a few eyebrows back then that Germany's gold was handed over to a non-government agency? How did that ever pass the smell test?

Thu, 10/10/2013 - 16:21 | Link to Comment el Gallinazo
el Gallinazo's picture

and can't deliver a menial amount to Germany in a timely manner...

 

Technically, it is the NY Fed, a private bankster cartel,  that can't give Germany back its gold, not the peoples' (sarc) Treasury.  If asked, I am sure that the Treasury could replace the German gold with gold plated tungsten from Fort Knox in a timely manner, and tungsten is just so practical.  As good as gold if you don't scratch the ingots :-)

Thu, 10/10/2013 - 18:54 | Link to Comment buyingsterling
buyingsterling's picture

Technically, the NY Fed is the government.

Thu, 10/10/2013 - 14:37 | Link to Comment bank guy in Brussels
bank guy in Brussels's picture

The only gold left in Fort Knox is in the security guards' teeth !

It was sold off long ago to help prop up the dollar ! To keep up the CON - fidence !

The Fort Knox - New York - London gold has gone East to China, and is not coming back !

GOLD BITCHEZ !!!

Thu, 10/10/2013 - 23:57 | Link to Comment mt paul
mt paul's picture

amerika has a gold defict

they owe gold to everybody...

Thu, 10/10/2013 - 17:04 | Link to Comment seataka
seataka's picture

That seems to be the word on the streets of Ft Knox Kentucky itself, I have family near Elizabethtown just south of there.

There is no gold in Ft Knox.

 

Thu, 10/10/2013 - 16:10 | Link to Comment Manthong
Manthong's picture

OK, so I read the article..

http://www.marketwatch.com/story/why-uncle-sam-is-hoarding-gold-2013-10-04

What I find funny is that not only won’t the US sell the gold it purports to have, it won’t give any of the gold back to the countries that entrusted it to the US for safekeeping.

How do you say ha.. ha.. ha.. in German?

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