“Gold Will Prove A Haven From Currency Storms” – OMFIF Study

Tyler Durden's picture

From GoldCore

“Gold Will Prove A Haven From Currency Storms” – OMFIF Study

Today’s AM fix was U.S.D 1,690.00, EUR 1,265.82, and 1,060.49 GBP per ounce.
Yesterday’s AM fix was U.S.D 1,683.25, EUR 1,260.11 and GBP 1,050.85 per ounce.

Silver is trading at $31.79/oz, €23.91/oz and £20.04/oz. Platinum is trading at $1,695.25/oz, palladium at $723.00/oz and rhodium at $1,150/oz.

Cross Currency Table – (Bloomberg)


Gold rose $7.00 or 0.42% in New York yesterday and closed at $1,686.90/oz. Silver fell to a low of $31.038 in early New York trade, but then it surged to a high of $31.891 at about 1800 GMT and finished with a gain of 0.7%.

Gold in USD, 2 Months & 30 Minutes – (Bloomberg)

Gold is higher in all currencies this week. It is up 1.7% in dollar terms, 1.5% in euro terms, 2.4% in yen terms and 2.8% in pound terms.

Some investors see the recent sell off as overdone and are buying gold on the dip in anticipation of further gains in 2013. While gold looks poor from a technical point of view, after a series of weekly losses, its fundamentals of robust investment and central bank demand remain intact. 

The almost certain higher weekly close today may embolden bulls who are expected to come back into the market.

Gold will be supported by the U. S. political standoff about the debt ceiling and expectations of continual quantitative easing.

Gold trading on the Tokyo Commodity Exchange hit a new high of 4,911 yen a gram when the yen plummeted to a 2 ½ year low against the dollar and a 33 year low against gold. 

XAU/EUR, 2 Months & 30 Minutes  – (Bloomberg)

Silver has surged in all currencies this week. It is up 4.5% in dollar terms, 4.2% in euro terms, 5% in yen terms and 5.4% in pound terms.

Sterling’s sharp falls against gold and particularly silver are due to increasing concerns about the outlook for sterling – including concerns of a currency crisis. 

Palladium hit a 16 month high on Friday and platinum was near the 3 month high hit in the prior trading session.

Gold bullion approached a 1 month high on economic data from China and the U.S. yesterday and more importantly as traders digested the surprising German gold repatriation news. 

CNBC reports that traders are concerned about the German repatriation of gold (see video). 

The concern is that the U.S. Federal Reserve and other central bank gold reserves are not backed ounce for ounce. This is fertile ground for so called “conspiracy theorists” and the Bundesbanks’s actions have ironically highlighted the issue and led to deeper suspicions. 

Questions are being asked regarding the extremely long delay of 7 years to repatriate just some of their gold from the U.S. Federal Reserve's subterranean vault in flood prone lower Manhattan.

Venezuala managed to have all their reserves transferred from the Bank of England to Caracas in weeks.

A lack of trust regarding central bank gold reserves could lead to a form of a run on central banks gold reserves. The concern is and it is alleged that they are, in effect, fractional like our modern banking system.

U.S. housing and labour market data out yesterday were somewhat better than expected and China broke the pattern of 7 quarters of contraction – although the data out of China in particular is being examined more dubioU.S.ly recently.  

The U.S. Mint has already sold out its 2013 American Eagle silver bullion coins due to soaring demand in the first two weeks of January.   

The jump in the silver ETF holdings to a new all time high shows how some investor's see poor man's gold as a cheaper alternative to the yellow metal and are allocating to it. Yet, allocations to silver remain very small which suggests that the holdings could go higher resulting in higher silver prices again in 2013. 

XAU/GBP, 2 Months & 30 Minutes – (Bloomberg)

Demand for gold is likely to rise as the world heads towards a multi-currency reserve system under the impact of uncertainty about the stability of the dollar and the euro, the main official assets held by central banks and sovereign funds.

This is the conclusion of a wide-ranging analysis of the world monetary system by Official Monetary and Financial Institutions Forum, (OMFIF), the global monetary think-tank, in a report commissioned by the World Gold Council, the gold industry’s market development body.

The report warns of “twin shocks” to the dollar and the euro and of a “coming dollar shock” and points out how gold would be a safe haven in a dollar crisis.

“Gold has a lot going for it; it correlates negatively with the greenback, and no other reserve asset seems safe from the coming dollar shock.”

“The world is preparing for possible twin shocks from the parlous. position of the two main reserve currencies, the dollar and the euro. As China weighs up its options for joining in the reserve asset game, gold – the official asset that plays no formal part in the monetary system, yet has never really gone away – is poised, once again, to play a pivotal role. 

Many dismiss gold as a relic of the past or as an inadequate hedge against inflation. But from an asset management point of view, as well as on the basis of political analysis, gold has a lot going for it; it correlates negatively with the greenback, and no other reserve asset seems safe from the coming dollar shock.”

The OMFIF offers a confidential, convenient and discreet forum to a unique membership of central banks, sovereign funds, financial policy-makers and market participants who interact with them.

They note that “western economies have attempted to dismantle gold's monetary role. This has failed.”

The report says China's yuan is emerging as a genuine international currency.

“As China aspires to take the lead politically and economically, it is unlikely to be satisfied with storing its wealth simply in liabilities of other countries.”

"The world is headed toward uncharted waters of a durable multi-currency reserve system," it said. 

During this uncertain transition period, central banks around the world are expected to increase their interest in gold.

They believe “that the role of gold in the international monetary system will be further enhanced in the coming 10 years as a result of basic uncertainties over the dollar and the euro.”

“For central banks, concerned with preserving value and naturally politically cautious, gold will prove a haven from currency storms.”

GoldCore have long pointed out the real possibility that the world will return to some form of gold standard. Not through a decision of the U.S. Federal Reserve, ECB or BOE but rather through a decision by the People’s Bank of China or the Bank of Russia.  They may bring some form of gold backing to their currencies. This would force the hand of western central banks and make them follow suit in order to maintain faith in their currencies.

The unchartered waters and choppy seas of today’s international monetary system make owning physical gold more important than ever.   

For breaking news and commentary on financial markets and gold, follow U.S. on Twitter.


Investors See Silver As "Cheaper Alternative" To Gold - Bloomberg

Soaring investor demand halts Silver Eagle sales - Reuters

Gold to average record high in 2013 – GFMS – Financial Post

Gold Trades Near Highest in Month Before China Economic Report - Bloomberg

Platinum, palladium near multi-month highs on econ hopes - Reuters

Gold nugget worth $300,000 discovered in Australia - CNN


CNBC Video: German Gold Move out of New York Has Traders Worried - CNBC

New Gold Standard Is Being Born – The Telegraph

Global Gold Reserves Per Capita - Wikipedia

U.S. Mint Out Of Silver Coins - Suspends Sales – Zero Hedge

Outlook for Silver in 2013 and How to Own Silver Safely - SlideShare

Gold, The Renminbi and the Multi-Currency Reserve System - Official Monetary and Financial Institutions Forum, (OMFIF) via World Gold Council

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GetZeeGold's picture



This is sure to start an international incident.....actions have consequences bitchez

Harlequin001's picture

'the world heads towards a multi-currency reserve system under the impact of uncertainty about the stability of the dollar and the euro'

So name me that one stable currency that's going to sort this out will you?

Thanks in advance...

GetZeeGold's picture



The trillion dollar PT coins shows some promise........you're welcome.

Harlequin001's picture

Oh yeah, thanks, but I've already got one...

GetZeeGold's picture



There's always AR-15s and ammo.......gold I can get. That stuff.....not so much.

a growing concern's picture

You know what sucks?  In November I was in my local gun store and they had AK 47s out the whazoo.  They probably had 15-20, for $550 each.  I was actually considering buying several as a long term investment, because the price of firearms has been outpacing most other assets, at least as far as I can tell.  I didn't do it.  If I had, those would have doubled in value in about a month's time.  I'm kicking myself now.

CPL's picture

Two words.


Native Reserve.  Laws don't apply to the bands.  You can buy most anything.  It's the only reason next to treaties written in pencil that they are still around.



pupton's picture

PMAGs would have been the investment of the century.  Lightweight, so shipping is cheap, no background checks or paperwork...just pure profit.  300% in a few days aint bad.

new game's picture

quick mkt checks at gun broker and bullion

gun collection up 15 percent ytd

silv up 6 percent yr to date


sp6920 ^ 100 percent

ammo ^ytbd, but strong updise

largely being offset by tax increases

o effect neutral...

Oh regional Indian's picture

Errrr.....yup, we are the spokespeople for the gold producers of the world and we comissioned this study that says YOU SHOULD BUY MORE GOLD.

No vested interest here at all. Only those terrible manipulators...

That should be akin to Coke/Pepsi funding an FDA study to say that carbonated drinks are Good for you. Trust us!

Even the most die-hard gold-bug should be able to look beyond this....

Oh My F'in IFers...


francis_sawyer's picture

 "No vested interest here at all"


No 'vested' interest?... So it wasn't YOU that had that gold shirt made?

Oh regional Indian's picture

Hahhh... nope.

Anyways, are we talking vests or shirts? ;-)

But seriously, junkers anon.... can't you see you're being had here?

Budwiser says Beer is good for you. Drink more beer!

Too funny...



a growing concern's picture

Gold has been money for millenia.  Small denominated FRNs will be useful in wiping your ass.  Depends on what your needs are, really.

awakening's picture

Not too many of them, ZH had a nice pic from Zimbabwe telling people not to use theirs as it clogs the sewage system.

AlaricBalth's picture

While I agree with the premise of the report from the Official Monetary and Financial Institutions Forum, Oh regional Indian brings up a salient point. 

When the documentary Inside Job was released, Frederick Mishkin of Columbia University was criticized (rightfully so) for authoring a favorable report concerning the Iceland economy. This report was commissioned (paid for) by the Iceland Chamber of Commerce. Shortly after the report was issued the Icelandic economy imploded. As a result ZeroHedge skewered Mishkin and he well deserved it. http://www.zerohedge.com/article/mishkin-iceland-nothing-fed-here-dude 

The World Gold Council also commissioned (paid for) a study by the OMFIF. This report advanced the cause of its commissioner. The WGC's purpose is to stimulate and sustain demand for gold (taken from their website: http://www.gold.org/about_us/who_we_are/ ). The WGC and the OMFIF have also worked closely on numerous occasions, and recently co-sponsored a gold symposium in Beijing,China. 


As I said before, the report makes a very good argument for gold. However, when a report is "commissioned", it is always good to consider who is paying for it.


CPL's picture

Your 'fans' are out again.  lol

Oh regional Indian's picture

:-) All fair CPL, to each his own, eh?

new game's picture

ori with all due respect, u might be just over thinkin it again.

hey, keep er simple as it is.

u engineers are all the same...

pupton's picture

You make a valid point about the people who paid for the study having an interest in the result being biased.  However, I still agree with the overall findings and article.

Waterman Jim's picture

The "Worldo". The New World Order Currency.



CPL's picture

But Brondo has electrolytes...

Pullmyfinger's picture

I highly recommend a thorough reading of the discussions on FOFOA that answer this question with respect to the meaning of "freegold" and the rise of currencies that will utilize the market value of gold, rather than some arbitrarily fixed value.

Snakeeyes's picture

Look at gold prices in the US since the Democrats seized control of Congress in 2007 and Obama became President in 2009. The market understood that the USA going Euro-socialist was a BAD idea and gold roared up in prices.


Shell Game's picture

Look at the price of gold beginning in 2001, the market understood that the USA going control-freak Fascist was a BAD idea and gold roared up in price. 

Hey... it just occurred to me, maybe both parties are heroin addicts...   



fonzannoon's picture

so Rickards is right.....first we go the SDR route....

Sean7k's picture

I would suggest that the reason Rickards MAY be right is he is part of the apparatus. He highlighted a phrase that is becoming very popular amongst leadership. Phrases like "fiscal cliff", that once said take on a new dimension through media massage. 

Rickards was ASKED to participate in a pentagon exercise. That doesn't happen because you are a rebel. 

The Elites would love the SDR route, so much easier if the opponent acquieces because they have been foretold. 

"Currency Wars" is another laughable device. As if all the CB's of the world are in competition with each other. The purpose of CB's is global control of the exchange function. They have accomplished this. If the fantasy of a war moves them to a single means of draconian control through the concept that it is "fairer" and "more efficient", then see how easy that works?

Phophets usually have backers. Like politicians, they serve as front men for the manipulation of the populace. 

Temporalist's picture

Maybe he was asked because he doesn't pull punches, gives it straight, thinks outside the box, is highly respected, knows how to talk to the brass...etc.

I don't doubt that he may have an agenda but who doesn't?  People say the same things about Jim Grant, Peter Schiff, Ron Paul...  The system wants you to trust NOBODY.  When you don't know which direction to choose you're already trapped.

Rickards "agenda" that I see is his faith in faith and more specifically that there is not enough faith and there needs to be a resurgence in Judeo-Christian worship because THAT is the problem with the world.  Of course that is illogical because if that were the case how did the problems arise when there was more "faith" in the past and why isn't there more morality as a residual of that faith as a result?  To me it's similar to the Keynesian fallacy...we had high liquidity (faith) and now we need more to restore the economy (morals)...both confidence games.

Sean7k's picture

If everyone has an agenda, then the right course would be to trust no one. To do your own due diligence. For example, everyone says to buy gold and silver to break the bankers, but this couldn't be farther from the truth and why the bankers can continue to play paper games. We must USE gold and silver and exploit black markets if we want to break the bankers. They need us to use and value commodities in currency. If we stop doing that- then, they lose power.

viahj's picture

i think China is keeping two options available to them.  one is to include the Yuan into the SDR basket, the other is to challenge the SDR and go it alone.  they have been acquiring gold because both options will require gold holdings.  also, as China is bypassing the USD in bi-lateral trade agreements they are not writing those contracts in SDRs but in Yuan/x. 

Temporalist's picture

I think there will be a separate system than the SDR based on BRICS and South-East Asian as well as MENA countries (Australia would potentially be included eventually) agreeing that they don't want to trade in the Western dominated banking cartel and will choose to create one based on their own economics and geography.

GetZeeGold's picture



The bubble headed bleach blonde comes on at 5:00.......almost like clockwork. Of course sometimes they have black hair.

fonzannoon's picture

go to cnbs web page right now and you can watch one of their traders say the same thing.

francis_sawyer's picture

Ha!... Out of habit, I just searched 'CNB S' & got a failed link...

hapless's picture

I hope she saved a copy of the video to show her grandkids.

SmallerGovNow2's picture

Thanks for the link...  From the site...

There has been a surge in wholesale demand for Australian Kangaroo gold bullion coins.

Since being released on 1 October, sales for 2013 Kangaroos are 35% ahead of sales of 2012 Kangaroos at this time last year.

HD's picture

I already know what happens to gold in a currency war. What happens to equities?

GetZeeGold's picture



I'm not sure.....my teacher's union stopped me from learning history.

Harlequin001's picture

Rumour has it that in 1923 you could have bought Mercedes Benz for the price of around 60 cars.

Great buying opportunity, if you don't get in too early.

HD's picture

I missed something...

BandGap's picture

Pinballing through currencies.

Never in my wildest dreams did I think countries would be debasing their currencies this fast. The paper rollercoaster goes faster and faster. We may speak of "paper" value but we are now at the LOWEST imaginable "currency" - words. World leaders are trying to sway with words. Talk about zero value. You can wipe your ass with paper, with words you don't even get that.

GetZeeGold's picture



The trick is to do it all at once......so no one notices.

edifice's picture

Wiping your ass with a crisp, fresh FRN would be quite uncomfortable. The old used ones, on the other hand...

americanspirit's picture

Have you ever seen the research on the bacterial and viral load on used paper money? You go ahead and wipe your ass with a used FRN - I prefer corncobs. Fresh. Then straight down the outhouse hole. Or whatever.

The exception is $100 FRNs. They are all carrying a bit of cocaine. So if your ass is sore you might get some relief. Then go buy gold with the used note.

AgAu_man's picture

Most politicians are (failed) lawyers.

Expensive paper and expensive words is ALL that lawyers have to offer. We can't seem to get enough of them. Unless we take Napoleon's advice:"First thing we do, is kyll all the lawyers".

Politicians in this country have a Carte Blanche, since 90% of them got re-elected. 'The other ones are bad, but our guy not so bad'. LMFAO.

WmMcK's picture

+1 Napolean aka Dick the butcher (Henry VI).

urbanelf's picture

Oh.  Goldcore.