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Gold Nears $1,900 - Venezuela Formally Requests Gold Holdings Held By BOE Ship By Sea
From GoldCore
Gold Nears $1,900 - Venezuela Formally Requests Gold Holdings Held by BOE Ship By Sea
All major currencies have fallen against gold and silver again today with gold reaching new record nominal highs in most fiat currencies including U.S. dollars. Gold reached a new record of $1,894.80/oz - just shy of $1,900.
Cross Currency Table
Gold is trading at 1,870.10 USD , 1,296.40 EUR , 1,132.40 GBP, 1,470.90 CHF and 143,670 JPY per ounce and has risen some 1% in all currencies. Gold is particularly strong against the yen and Swiss franc which have fallen in international markets on concerns of debasement.
The London AM fix was a fourth consecutive record nominal high in US dollars. Gold’s London AM fix this morning was USD 1,877.75, EUR 1303.17, GBP 1139.55 per ounce (from Friday’s USD 1,862, EUR 1299.28, GBP 1126.91 per ounce).
Silver is in all major currencies and has risen another 1.4% in dollars after last week’s 8% gain.
Gold’s 6.2% rise last week and silver’s 8.2% rise was barely reported in the press and media in Europe over the weekend – with all the focus continuing to be on equities and to a lesser extent bonds. The usual suspects in stockbrokerages and banks warned about gold being a bubble again.
Silver was not reported at all and remains almost completely taboo in the non specialist financial press. Besides the very occasional article warning that it is a bubble.
According to Bloomberg, the central bank of Venezuela has sent a statement by e-mail requesting its 99 tons of gold holdings from the Bank of England, citing the institution’s president Nelson Merentes.
“We’ve contacted the Bank of England and the corresponding protocols have been initiated to complete this operation as soon as possible,” Merentes said, according to the statement. “Once that’s done, the shipments will begin by sea.”
Chavez ordered the central bank Aug. 17 to repatriate $11 billion of gold reserves held in developed nations’ institutions. Chavez fears 'hostile countries' may seize the national patrimony.
Venezuela holds 211 tons of its 365 tons of gold reserves in U.S., European, Canadian and Swiss Banks.
40 shipments will be needed to carry the 17,000 400oz bars by sea. Piracy must be a real concern given the value of the bullion and Venezuala should ensure that the shipment is well protected.
While physical demand remains robust, sentiment in the trading pits remains muted. An indication that speculative sentiment remains lukewarm was seen in the U.S. Commodity Futures Trading Commission data released Friday evening.
Hedge-fund managers and other large speculators decreased their net-long position in New York gold futures in the week ended Aug. 16, according to the CFTC data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 200,086 contracts on the Comex division of the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions fell by 3,487 contracts, or 2 percent, from a week
The opposite was the case in the silver market where sentiment appears to be heating up somewhat with the risk of another short squeeze developing.
Hedge-fund managers and other large speculators increased their net-long position in New York silver futures in the week ended Aug. 16, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 21,928 contracts on the Comex division of the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 3,540 contracts, or 19 percent, from a week earlier.
The dumb money continues to warn that gold and silver are bubbles.
Their simplistic bubble thesis is based almost exclusively on the nominal US dollar price and recent price movements and on the assumption that (to paraphrase) ‘gold has gone up in price a lot - therefore it is a bubble’.
There is a continuing failure to look at the important supply and demand fundamentals of the gold and silver markets which leads to unsound reasoning and irrational conclusions. There is also a failure to adjust for inflation.
There is little knowledge of the very small size of the physical bullion markets vis-à-vis the stock, bond, currency and other markets.
There is also very little knowledge of financial, economic and monetary history and a continuing ignorance regarding ‘investment 101’ which is diversification.
Being prudent and having an allocation of 10% to gold will protect no matter what economic and monetary scenario develops in the coming months. If one is not leveraged and is prudently diversified and owns gold bullion (coins and bars in the safest way possible), it does not matter if gold is a bubble or not as you own a range of other quality assets.
From a purely investment point of view - an allocation of 5% to 10% makes sense.
From a financial insurance or store of wealth point of view – having a higher proportion of your overall net worth makes sense.
Especially given the risks posed to the dollar, euro, pound and fiat currencies and to deposits “guaranteed” by insolvent states.
Not putting 10% of your wealth in gold is extraordinarily imprudent today and a recipe for further financial destruction.
For the latest news and commentary on gold and financial markets please follow us on Twitter.
NEWS
Gold Seen Heading for Biggest Gain in 32 Years on Investment
http://www.businessweek.com/news/2011-08-22/gold-seen-heading-for-biggest-gain-in-32-years-on-investment.html
Bulls pounce on European stocks as gold hits record
http://www.ft.com/intl/cms/s/0/eb843958-cc6d-11e0-9176-00144feabdc0.html#axzz1Vk2VwGdR
Gold soars to record high on economic woes
http://www.reuters.com/article/2011/08/22/us-markets-precious-idUSTRE7781Q420110822
Summer malaise helps gold to fresh record
http://www.ft.com/intl/cms/s/0/eb843958-cc6d-11e0-9176-00144feabdc0.html#axzz1Vk2VwGdR
Hedge Funds Buying Corn to Silver to Soy as Commodities Tumble
http://www.businessweek.com/news/2011-08-22/hedge-funds-buying-corn-to-silver-to-soy-as-commodities-tumble.html
BLOOMBERG WIRE
- Thai Exchange Temporarily Halts Silver Futures After Price Jump (20%)
- China’s July Silver Imports Were 284 Tons, Customs Says
- Venezuela Gold Repatriation Won’t Mean Metal Scramble, UBS Says
- Gold is strong in all currencies and is entering a stage when prices go “parabolic,” Dennis Gartman says
COMMENTARY
Things That Make You Go Hmmm.... Such As A Venezuelan Dictator Bringing Down The Global Gold Cartel
http://www.zerohedge.com/news/things-make-you-go-hmmm-such-venezuelan-dictator-bringing-down-global-gold-cartel
Gold, Silver SOAR, Gold Cartel In Shambles
http://news.goldseek.com/LemetropoleCafe/1313960280.php
The Battle For Libya Is Almost Over... As Is The Battle For Its 144 Tons Of Gold
http://www.zerohedge.com/news/battle-libya-almost-over-battle-its-144-tons-gold
David McWilliams: The Future - Tax the Rich
http://www.sbpost.ie/commentandanalysis/the-future-tax-the-rich-58155.html
Should You Sell Your Gold Now? – Dominic Frisby
http://www.moneyweek.com/investments/precious-metals-and-gems/gold/money-morning-should-you-sell-your-gold-13501
Gold Standards: FT’s Lex Column
http://www.ft.com/intl/cms/s/3/0f98ae0c-ca50-11e0-a0dc-00144feabdc0.html#axzz1Vk2VwGdR
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I'm in Buddy. I think the Supreme Court would find it's YOURS! YES!
But you're a good American CItizen to donate it to the USA for
'historic' value. Wink wink.
http://en.wikipedia.org/wiki/Privateer
I would show up at Fort Knox with the Boyz and say open it up! we have more to add to the pile.. minus a handling charge, of course.
But you have to think.. that there are people in the World that are not as thoguhtful as myself with regard to participating out the fruits of their labors.
There are people in the world who are Not! as liberal as myself with regard to safety of all involved, either.
so, by sea thru the carribean should be fun! for the captian.. are they offering protection for the crossing? with their row boats? LOL!!
There is no and will not be a bubble in gold. Why? The average Joe and Mary Beercan US citizen is too tapped out to buy gold. They can't make the mortgage, pay for food and put the kids through college. Besides that, the are illeterate when it comes to economics. All you see is a rush to sell their old class rings from high school and a chance to hock grandma's gold baubles that mother never liked. They are SELLING gold and silver, not BUYING. Everything has been too cushy in the gold old US of A and they have been promised by Washington that that will be continued.... no worries! :)
This will NOT end well. Make sure you are adding ample lead to your collection of metals, boys and girls! Juan the out of work leafblower and Chaika, the out of work grocery cashier want what YOU have... and its just for their taking when the rioting breaks out. Coming to America! ... and you won't be laughing at Eddie Murphy!
You have just illustrated the "store of wealth" function of gold. It gets sold when the medium of exchange is needed to survive. Ask anybody who has had a margin call. What do they sell first? Just because destitute people are selling actually proves your point. No bubble can exist when buyers are there no matter the price. More buyers at lower prices precludes a bubble argument.
This is your capitain speaking, we will be making a brief unscheduled stop at Gitmo.
I smell LBMA default before 4AM opening.
That's a lot of $$$ to pay for shipping. Makes the prices at APMEX start to look cheap. Makes Tulving look like a super hero. Makes Sprott look like a God.
ALF FIELD: GOLD TO $10,000
www.usagold.com/gildedopinion/alf_field.html
[$700 was the low on 23 October 2008]
ONE $ 256 to $ 1,015 (4X the $255 low)
TWO $ 1,015 to $ 700 (decline of 31%)
THREE $ 700 to $ 3,500 (Fibonacci 5X $700)
FOUR $ 3,500 to $ 2,500 (29% decline)
FIVE $ 2,500 to $10,000 (4X, same as ONE)
O.K. crew, just a few points of interest before we head out:
1-It’s hurricane season in the Caribbean.
2-Only approximately 20% of all the treasure ships sunk in the region over the last 500 years have ever been found and their riches recovered.
Why would it possibly take "FORTY SHIPMENTS" to move 100 tonnes of material?
That makes absolutely no sense.
As anyone knows, one tonne of gold is only the size of a small suitcase. So bulk is no problem.
I thought this too but then I asked myself who I would trust with 100 tonnes of my gold and I could only come up with myself. And since Chazez can't fly a plane or drive a boat the seemingly stupid 40 shipments begins to make sense.
Is he going to ship the gold via container vessels?
Comex now closed. Lets see what price discovery in asia does tonight.
Hey, Hugo - you can pick your friends, and you can pick your nose, but you can;t wipe your friends on the couch..... so, send Ghadaffi packing when he shows up panhandling for "spare change". And, where are the margin hikes in the volatile silver market, just in time to save JP Morgan's shorts? SARC
and to those that can't get to a local coin shop, gold is over $2000/oz now....
http://store.scottsdalesilver.com/product/17/1-Oz-PAMP-Suisse-Gold-Bar-....
I am intensely reminded of J. Conrad's Nostromo, where the incorruptible capataz de los cargadoes robs his employer of a small barge full of silver. A hilarious book for anyone here who can still read beyond bullet points.
Gold is NOW, only $100-/+ less than Platnium; any one wanna explain this? If gold surpasses Paltimun in a per oz. is that a GOLD BUBBLE?
Platinum makes for great jewelry and auto parts but is too rare and too hard to make for good money as long as gold is available. It looks to me that platinum price is contracting with the auto and wider luxury goods market and that gold is just sucking the wind out of platinum.
I think it will snap back as gold gets a bit more pricey and more scarce.
I am holding on to my small position.
I have a dilemma.
Seems I took a flyer on a few Sept 17 GLD 199 calls for pennies a few weeks back thinking that if anything popped it might be worth a nice dinner. Well, since then the market tanked, Chavez got paranoid and gold is soaring, that little bet stands 1,800 per cent up and it is three weeks and about $100 from actually being in the money (I had not even a wild expectation that could be possible).
It would be interesting to hear, given the time left, the interesting news cycle and market we are in, what some of you more seasoned ZH types might do if you had this little problem.
Would you let the 50 dollar bet ride for what's behind curtain number 3, or would choose the box with the $1000 cash in it now?
Any ideas?
take the money now.. but I'm the guy who sold 20% up on my NFLX at $50
The 5 contracts are up 2,013% as of the close today.
There are things about the time premium decay in this kind of a market I do not have a good handle on right now.
I've got a similar situation with October $49 and $59 SLV calls.
I nailed it in and out in a week with a Sep $450 PCLN Put for 100% that straddled the market drop. It was a bigger bet but I had the time left to justify laying down a grand.
This GLD thing though.. I'm just looking for opinions as to how real something like the Ben Davies call for $2100 gold in a few weeks (on KWN) might look especially considering the Jim Sinclair call for parabolic after $1764 and the craziness going on now.
BTW, whatever I make from playing the paper game helps fund the stack(s).
...oops, from today's venezuelan "El Mundo"
THE CHINESE WANT THE GOLD RESERVES-
An expert, former director of the BCV who prefers anonymity says that "the bringing of gold may be a requirement of the Chinese in order to sell more easily at home security credits given to Chavez and oil investments" .
This source explains the reason why the Beijing government could have done such a requirement in Caracas: "The Chinese are very careful in terms of image and is not the same report at home that gold is in the Barclay's to say that gold is in the vaults of the Central Bank, where it can eventually be moved to China in case of such loans and investments at risk.
"The aim Confidential fears Friday that the Chinese harbor. Realized the encounter between an envoy of the Chinese government with two opposition leaders. It is looking shield in case Chavez leaves office. And there is greater assurance that the gold reserves. Not only in the event of a change of power in Venezuela, but also to continue paying the Chavez government, assuming it continues at the helm. Since Chavez administration is treading on fragile image and serious about their commitments and debt issues. Hence the high interest paid by the Republic on its bonds.
According to the source, it is urgent for the disclosure of credit agreements with China. What say the same about warranties? What kind of warranty? Do you see the gold among the guarantees required? As you know, Chávez himself has announced that ask for more money to China this weekend, PDVSA announced the joint construction of refineries on Chinese soil.
Well worth mentioning here that the statement of the School of Economics of the UCV last Friday says: With the transfer to the vaults of Russia and China, gold reserves "would be under the direct control of those who today are precisely our creditors main opaque through loans of dubious legality. ".
With Google Transl.To read the article (in spanish):
http://www.elmundo.com.ve/noticias/mercados/analisis/analisis---los-chin...
Can anyone explain how 99 tons = 17000 400 ounce bars = $11 billion? My math sees a problem here...
99 (tons) * 32150 (troy ounces in ton) = 3182850 * 1900 (gold price estimate) = $6,047,415,000
17000 (stated # of 400 ounce bars) * 400 = 6800000 * 1900 = 12,920,000,000 (that's a little more accurate)
It sounds to me like they are talking about moving 200 tons, not 99 tons.
Currently forming an investor group looking into hiring Somalian pirates.
Just make sure you don't send it the long way around Somalia...right BOE?