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Gold Rises for Fourth Day - IMF $500 Billion Hopes Create Concerns

Tyler Durden's picture




 

From GoldCore

Gold Rises for Fourth Day - IMF $500 Billion Hopes Create Concerns

Gold’s London AM fix this morning was USD 1,664.00, GBP 1,076.53, and EUR 1,289.62 per ounce.

Yesterday's AM fix was USD 1,657.00, GBP 1,077.09, and EUR 1,290.80 per ounce.


Cross Currency Table - Bloomberg

Spot gold rose on Thursday in Asia and has consolidated on those gains on somewhat subdued trading conditions.

There are hopes that new flows of funding from the International Monetary Fund will help contain the euro zone debt crisis. However, some investors are concerned that the funding is another form of short term debt based panacea and a further currency debasement.  

IMF officials from twenty nations are set to hammer out a plan at a meeting in Mexico on Thursday and Friday.  Another multibillion or even trillion dollar monetary injection into the global financial system may further boost demand for bullion.


XAU-GBP Exchange Rate - Bloomberg

The duty hike in India has decreased gold prices by 1% in Mumbai as the rupee gained 0.5% against the dollar.

Some jewellers think the recent duty may slow down demand and may result in a decrease in imports from the official channels of about thirty banks.  The increased tax may also lead to a tertiary market where people trade amongst themselves and not through dealers.

Traders still do not see the hike dampening the demand for the yellow metal.  India is the world’s largest importer of gold and its households have the largest holdings of the metal, according to data from the World Gold Council, although Chinese households appear to be catching up in their purchases of gold.


Global Gold Demand by World Gold Council - Reuters

In both China and India, gold is popular for cultural, historical and financial reasons.

Gold is seen as a safe haven that will preserve a family’s wealth over generations. There is more trust in gold bullion than paper assets such bank deposits, stocks and bonds as they have protected Chinese, Indian and people throughout the world from periods of deflation (banks and governments can go bust) stagflation (paper money and bonds lose value), and hyperinflation (paper money and bonds really lose value).

While western countries have not experienced the ravages of high inflation, many African (Zimbabwe recently), Middle Eastern (Iran today) and Asian (Thailand, Vietnam, Indonesia, India and many others) economies have.

It continues to be imprudent to ignore the real risk of today’s inflationary monetary policies by western central banks. 

With currency debasement continuing globally, gold remains an essential asset to own.

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

NEWS
(Reuters)
Gold up for 4th day on IMF funding hopes

(Bloomberg)
Gold Futures Rally as Slumping Dollar May Boost Demand for Precious Metal

(Bloomberg)
Gold May Climb on $1 Trillion Lending Increase for IMF, Weakening Dollar

(CNN)
Gingrich: US should reconsider gold standard‎

COMMENTARY
(MoneyWeek)
Frisby: How Will Gold Perform in 2012?

(NY Sun)
Gingrich Goes for Gold‎

(ZeroHedge)
"No Deal" - Greek Bondholders Do Not Think Agreement Can Be Reached Before "Crunch Date"

(KingWorldNews)
John Embry - Gold to Rapidly Triple in Price on This Move

(Reuters)
Analysis: China's banks 'lure' man on the street to Gold

 

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Thu, 01/19/2012 - 09:27 | 2077435 silver500
silver500's picture

"Central banks increased the amount of gold they lent for the first time in a decade in 2011, as they used their bullion reserves to help commercial banks raise US dollars.

Although central banks hold one-sixth of all the gold ever mined in their reserves, their activities in the bullion market are opaque, with not a single institution revealing its day-to-day operations. In addition to holding gold for their reserves, some central banks also trade the metal, lending it on the open market in order to obtain a yield.

As the squeeze in the dollar funding markets intensified, short-term interest rates for lending gold fell to record lows in late 2011. The rate for lending gold for one month fell to -0.57% in early December, implying that a bank would have to pay to swap it for dollars." - FT yesterday

Source: http://www.ft.com/cms/s/0/c2b92910-40fe-11e1-b521-00144feab49a.html

Thu, 01/19/2012 - 09:43 | 2077475 Oh regional Indian
Oh regional Indian's picture

Silver was money for the Chinese AND Indians long before gold mania caught. For the common man anyways.

More and more I feel what I wrote, almost 18 months ago. Gold will fold. 

The gold loan story in India points clearly to whre it is going....whether you like it or not.

ori

1460-days-ago-ensign-principles-world-view

Thu, 01/19/2012 - 09:49 | 2077486 jiggerjuice
jiggerjuice's picture

When you is on the interwebs long enough, you'll eventually find everyone here everywhere else too.

Hi ORI!

http://www.scientificamerican.com/article.cfm?id=the-future-is-for-fools

Thu, 01/19/2012 - 10:18 | 2077561 GetZeeGold
GetZeeGold's picture

 

 

Once you're in.....you're in for life.

Thu, 01/19/2012 - 10:22 | 2077582 Pladizow
Pladizow's picture

To: ORI

More and more I feel what I wrote, almost 12 years ago. Gold will fold.

Beacause there are Indian Pawn Shops?

Thu, 01/19/2012 - 11:51 | 2077927 Oh regional Indian
Oh regional Indian's picture

Thanks for Asking Pladizow:

/shattering-midass-curse-gold-de-spell-ed/

ori

Thu, 01/19/2012 - 11:52 | 2077931 Oh regional Indian
Oh regional Indian's picture

howdy, JJ. Nice Avaatar.

Small world...:-)

ori

Thu, 01/19/2012 - 14:32 | 2078626 jiggerjuice
jiggerjuice's picture

from a roerich painting. he's my favorite.

www.roerich.org

Thu, 01/19/2012 - 15:12 | 2078799 Oh regional Indian
Oh regional Indian's picture

Awesome jj, thanks for sharing that.

ori

Thu, 01/19/2012 - 10:34 | 2077622 riphowardkatz
riphowardkatz's picture

I should take your word for it because you have made it obvious you are a very common man.  

Thu, 01/19/2012 - 10:45 | 2077655 sdmjake
sdmjake's picture

My common take [look at last 24 hrs por ejemplo]...when HongKong opens: the Price spikes and runs up until it closes. Then New York takes it back down.

 

Thu, 01/19/2012 - 10:53 | 2077694 HungrySeagull
HungrySeagull's picture

Sorta.

Kitco spot shows a slight dip midday. It's going to need to break through the next top.

However the Silver is range trading at the moment. Even some Platinum ounces are up. (1800+ASKS)

I am just being very "Quiet" and slowly, very slowly moving some dollars into where they need to be at a price point or lower.

The good news is the floor seems pretty solid, but we will see.

Thu, 01/19/2012 - 11:06 | 2077729 Bay of Pigs
Bay of Pigs's picture

Seems everyone is onto the COMEX story now. Short it when it opens as it always goes down. 

Just reinforces the years of documentation on that particular criminal enterprsie.

Thu, 01/19/2012 - 11:25 | 2077821 HungrySeagull
HungrySeagull's picture

It's hard to short it when the fees eat you alive.

I hope I said this correctly. There isn't enough... room for profit.

Thu, 01/19/2012 - 11:40 | 2077881 Bay of Pigs
Bay of Pigs's picture

Fees? You just need a bigger and faster computer. LOL...

Clown Show.

Thu, 01/19/2012 - 12:26 | 2078072 ActionFive
ActionFive's picture

They don't even bother providing a lie as to why PMs are not allowed to rise.

At least crude got the pipeline story.

Thu, 01/19/2012 - 10:01 | 2077519 disabledvet
disabledvet's picture

i did read that the Industrialized world's central banks are starting to do gold swaps for the first time in over a decade. http://www.ft.com/intl/cms/s/0/c2b92910-40fe-11e1-b521-00144feab49a.html...
according to the article "traders aren't concerned with it affecting price" since "at its peak central banks were swapping 5000 tons of gold for dollars." where it is estimated that this time "it's only 700 tons." if this is a sign of more than just a dollar shortage but a true deflation however then you want to start "abandoning ship" on the bulk of financial stocks...epsecially money center banks...or at least cherry pick them to the n'th degree as what we're dealing with to start the year could be one of the great suckers rally in that sector ever. still love the equity play in general however. Apple breaking out as "Apple TV" is on the way. Interest rates are at or near zero with the center of global capitalism inside Ben Bernanke's head. Soft commodities are getting HAMMERED (which should start to get reflected in real estate prices as they double dip MASSIVELY.)

Thu, 01/19/2012 - 11:20 | 2077802 Bansters-in-my-...
Bansters-in-my- feces's picture

Hi silver500, I read that article also. I have seen very recently where the 1 year and the 6 month lease rates on gold went down to less than negatve 8% for a one day stint.

Check the big dips on the kitco past charts.

And also why don't these banks that ,borrow the said gold and sell it for dollars,just borrow the dollars to start with.

And the central banks lend it out to get a return on there said gold...

At negative rates it's kinda hard to make money "lending" gold.

The manipulation is sickening to the stomach.

Ps....

Fuck you's Timmy and Ben.

Thu, 01/19/2012 - 12:22 | 2078048 xela2200
xela2200's picture

More "Gold" in the market, lower price? From what I understand if the gold is leased both the lessor and the lessee have ownership of the gold. In fact, the "amount" of gold is increased. Maybe, I am wrong. However, the big thing that is expected from PAGE opening is a spot price based on gold where only one party can own the gold. If gold is leased ownership is not increased. The Chinese will allow foreign accounts, so that arbitrage will level out the comex (in theory). The BOC is trying to stop them which doesn't seem to have worked. Something to be said about central planning, they know how to put the bankers in their place. PAGE should open in July.

http://goldsilverreview.blogspot.com/2011/09/page-pacific-asia-gold-exchange.html

Thu, 01/19/2012 - 09:25 | 2077438 Buckaroo Banzai
Buckaroo Banzai's picture

Glod shrots curshed!

Thu, 01/19/2012 - 10:20 | 2077568 GetZeeGold
GetZeeGold's picture

 

 

 

You never forget the smell of musty smoldering shorts in the morning.

Thu, 01/19/2012 - 10:24 | 2077584 gmrpeabody
gmrpeabody's picture

Aer yuo suer?

Thu, 01/19/2012 - 10:38 | 2077637 GetZeeGold
GetZeeGold's picture

 

 

Siam sofa king stew fed.

 

 

Thu, 01/19/2012 - 10:58 | 2077707 i-dog
i-dog's picture

Well, oil beef hooked ... as they say in Dublin.

Thu, 01/19/2012 - 09:30 | 2077452 Josephine29
Josephine29's picture

No wonder the IMF expansion news is causing concern. Take a look at this thoughtful analysis of it.

An Inconvenient truth: Isn’t the IMF trying to raise more money anyway?

 

Yes it is and we are on something of a revolving carousel here as plans come and go and those who do not follow the situation closely make think that the IMF is getting stronger. However the IMF is supposed to be getting an emergency quota increase, but here’s the rub. The last time I checked this fewer than 20 of the 187 IMF members had actually approved it!

 

If we consider the wider problem we only need to look at the United States where its Congress is mired in continuing budget debates with no apparent solution. The chances of it passing an increase in contributions to the IMF seem minuscule.

 

Also there is a deeper problem as  my understanding is that around 20% of the quotas have never actually been paid as the currencies of some countries are considered to be untradeable and are not actually collected.

 

http://www.mindfulmoney.co.uk/wp/shaun-richards/the-international-monetary-fund-has-been-perverted-by-politicians-and-should-go-back-to-its-old-role/

Thu, 01/19/2012 - 09:41 | 2077472 Snidley Whipsnae
Snidley Whipsnae's picture

Josephine29... The IMF isn't going to get cooperation as long as it is a puppet of the US.

In order for the IMF to get cooperation from the other 'powerful currencies' of the world, the US will have to cede some IMF power to those countries that have strong economies, or lots of natural resources with potential to expand.

BTW, my use of the term 'powerful currency' and 'strong economies' is relative, since the entire world economy is on the verge of severe recession...imo.

Thu, 01/19/2012 - 10:09 | 2077540 disabledvet
disabledvet's picture

it's not that complicated. "turn over the gold euro phuckers...then we'll give you the money." Plan A of course is "tanks in Athens." and there is no doubt "whose tanks" either. so far so good. move along people! move along!

Thu, 01/19/2012 - 11:07 | 2077734 CuriousPasserby
CuriousPasserby's picture

Panzers.

Thu, 01/19/2012 - 11:26 | 2077829 HungrySeagull
HungrySeagull's picture

The Hun and his Leopard is quite dangerous in a forest and hill. But Greece is on the rocks....

Thu, 01/19/2012 - 09:31 | 2077455 kralizec
kralizec's picture

"With currency debasement continuing globally, gold remains an essential asset to own."

Master of the obvious.

Don't forget lead though, it protects the other, m'kay?!

Thu, 01/19/2012 - 10:11 | 2077542 disabledvet
disabledvet's picture

as long as its "mine not yours anymore" then tis obvious indeed.

Thu, 01/19/2012 - 09:35 | 2077463 Snidley Whipsnae
Snidley Whipsnae's picture

Gold is continuing to migrate from West to East.

For all we know central banks could be lending/leasing gold they do not have in their vaults or stored anywhere in the world. Naked leasing, in other words.

Since no central bank will allow an inventory of their gold, and their 'leasing into the market' is secretive, how do we know that they have 20% of total world gold? We don't.

As long as the central banks will not allow an inventory they can continue to 'lease' gold that they might not have, and continue to suppress the price of physical gold with phantom gold.

How about an inventory?... Let's see the gold!

Thu, 01/19/2012 - 10:13 | 2077549 disabledvet
disabledvet's picture

wtf are you talking about? ohhh, i get it. "this is the real play":
http://www.youtube.com/watch?v=TihVuwF1mVw&feature=player_detailpage

Thu, 01/19/2012 - 09:38 | 2077466 falak pema
falak pema's picture

The "hope we can" economy of 2012, its on a roll :

 

CHART: Here's How Every Major Asset Class Is Doing So Far This Year Sam Ro | Jan. 19, 2012, 4:33 AM | http://static5.businessinsider.com/assets/images/icons/icons.png); background-attachment: initial; background-origin: initial; background-clip: initial; background-color: initial; color: #f3502a; background-position: -200px 0px; background-repeat: no-repeat no-repeat;" title="views">1,057

Read more: http://www.businessinsider.com/chart-heres-how-every-major-asset-class-is-doing-so-far-this-year-2012-1#ixzz1juXim8hv

 

Thu, 01/19/2012 - 09:49 | 2077479 doomandbloom
doomandbloom's picture

Indians are eating Gold. 

http://divanee.com/2011/12/27/24-karat-dosa-restaurant-in-bangalore-india-serves-up-gold-plated-food/

"The restaurant, called Raj Bhog, says it adds the gold foil as a finishing touch that specifically targets India’s growing middle class."


They were already eating silver earlier

http://www.jainworld.com/jainbooks/images/20/UNIVERSAL_DECLARATION_OF_TH.htm

Thu, 01/19/2012 - 10:21 | 2077571 GetZeeGold
GetZeeGold's picture

 

 

 

That's because they're barbaric.

Thu, 01/19/2012 - 09:47 | 2077481 mayhem_korner
mayhem_korner's picture

The duty hike in India has decreased gold prices by 1% in Mumbai as the rupee gained 0.5% against the dollar.

 

Price of gold has not decreased - it's just that a portion of the price has been transferred (siphoned off, if you will) from the sellers to the Indian Govt's coffers.  Think about how significant this move is in terms of an acknowledgement of the importance of the physical market.  If we see these duties increasing regularly, they will in effect serve the same purpose margin hikes have had - hammer down the paper price and obscure the paper-physical decoupling that the CBs don't want to become visible.

Just my 2 oz.

Thu, 01/19/2012 - 10:15 | 2077555 disabledvet
disabledvet's picture

how about "the gold itself is being transferred from physical location "India" to physical location "where's my money bitch"?" is that also a possibility?

Thu, 01/19/2012 - 09:55 | 2077505 Long-John-Silver
Long-John-Silver's picture

The increased tax may also lead to a tertiary market where people trade amongst themselves and not through dealers.

 

Why not just say they have an active Black Market?

Thu, 01/19/2012 - 10:17 | 2077560 disabledvet
disabledvet's picture

cuz i can walk down to the local jewelry store and buy a gold watch with..."my dollars" that's why.

Thu, 01/19/2012 - 10:52 | 2077690 Chicken_Little
Chicken_Little's picture

L-J-S, please tell me if I'm wrong. I watch the goldseek.com charts that have the USD and gold and silver paper prices. Even when CRIMEX is closed, it appears to be an algo trading thing. It's probably much more complicated than I can understand, but it appears that there's an algo switch they flip. Is it a risk on, risk off switch with HFT computers? Anyone that has watched this BS for years should have physical and a goldmoney.com account. Anyone that checks the 3 goldseek.com charts can see that algo's are not discovering prices, they're skimming. The huge and sudden drops are done manually from the JPM and HSBC USA traders (same bad guys that are in bed with Blythe Masters). I think I've only found the tip of an iceberg, please help me get to the top :))

 

 

Thu, 01/19/2012 - 12:13 | 2078013 4horse
4horse's picture

HFT  __algos. colocation. flashtrades. Discovery?  . . .  Suppression! surveillance. surprise. enslavement__  HFT nth

adventures in the skin trade, ffrom Fractional Reserve/unto Fed TIA TOEtalitarianism

 

all tolled,told = all owned

 

Has GoldmanSachs Been Using PROMIS to Play the Market (and the US Economy)?

An article in Radar magazine in May 2008, citing three unnamed former government officials, reported that "8 million Americans are now listed in Main Core as potentially suspect" and, in the event of a national emergency, "could be subject to everything from heightened surveillance and tracking to direct questioning and even detention.

The alleged use of Main Core by the Bush administration for domestic surveillance, if confirmed to be true, would indicate a much deeper level of secretive government intrusion into Americans' lives than has been previously known.

The Inslaw case points to what may be an extensive role played in FINANCIAL ESPIONAGE.  According to reports over the years in the U.S. and foreign press, Inslaw's PROMIS software was embedded surreptitiously in systems sold to foreign and global banks as a way to give the [U.S.] secret "backdoor" access to the electronic flow of money around the world.

According to Norman Bailey, a private financial consultant with years of government intelligence experience dating from the George W. Bush administration back to the Reagan administration, who from 2006 to 2007 headed a special unit within the Office of the Director of National Intelligence focused on financial intelligence on Cuba and Venezuela -- the NSA has been using <PROMIS?> to track financial transactions around the world since the 1980s."

http://groups.yahoo.com/group/cia-drugs/message/52183

Thu, 01/19/2012 - 09:56 | 2077508 847328_3527
847328_3527's picture

ECB's QE printing boosts the commodities:

"The 'credit freeze' the World Bank mentioned is off the table for the time being. Mario Draghi, new ECB boss who completed his monetary apprenticeship at Goldman Sachs, has conjured up a sneaky way to print money while giving the impression he's doing nothing of the sort.

-- As soon as Draghi took the helm in November last year he began talking out of the corner of his mouth. Like all good central bankers, he believes words speak just as loud as actions. Here's a snippet of what he had to say at his first public appearance as ECB head:

Gaining credibility is a long and laborious process. Maintaining it is a permanent challenge. But losing credibility can happen quickly - and history shows that regaining it has huge economic and social costs.

-- Six weeks later he opens the ECB's balance sheet up for all of the European banking sector to dump their toxic debt into. And he handed out nearly €500 billion euros in return. As Dan wrote yesterday, rumour has it the next 'long term refinancing operation' will see the ECB's balance sheet take on another €1 trillion of garbage debt. "

 

The Daily Reckoning by Bill Bonner

 

Very Bullish for oil, silver and gold.

 

Thu, 01/19/2012 - 10:19 | 2077565 disabledvet
disabledvet's picture

and dollars and Treasuries and Army divisions as well. Nice avatar btw. I think you're on to something.

Thu, 01/19/2012 - 10:37 | 2077633 SwimmininNawlins
SwimmininNawlins's picture

how can you see avatar?  It's so small on my screen.

Thu, 01/19/2012 - 10:01 | 2077523 new game
new game's picture

all going as the plan shall be by TPTB.

ask one question; would you take it in the a$$ if you had the power to not?

well; that is how simple all this is. they will continue to fuck whomever, however to cover their debt laid out for all you to use up and enjoy.

hope you approved of your fellow mankind sitting on their a$$ while you worked your a$$ off.  Haha. come on get on the bus gus. fuckem and get the free ride b/4 no ride...

Thu, 01/19/2012 - 10:04 | 2077529 GMadScientist
GMadScientist's picture

There is still hope that the tissue paper can stem the tide of explosive European diarrhea.

 

Thu, 01/19/2012 - 10:55 | 2077698 HungrySeagull
HungrySeagull's picture

I don't think Gold priced in Euro can hold, there is no floor.

Gold in Yuan is rising while US Dollar seems flat.

 

Take out the Euro and what do you have? That will be the big question I think for the year.

Thu, 01/19/2012 - 11:39 | 2077879 Bahamas
Bahamas's picture

Nowadays when burglers break into houses to steal, all they take is gold. They do not steal anything else..unless they find cash, they take that too. Some years ago they used to steal clothes and electronics also. I don't know if they still shit on the rug though.

Thu, 01/19/2012 - 12:13 | 2078012 _underscore
_underscore's picture

..only if they can find money to wipe their ar$e with.

Thu, 01/19/2012 - 12:35 | 2078112 HungrySeagull
HungrySeagull's picture

I have already solved that issue.

There is no money in the home. Everything is binary now.

 

However the invader will still get dead, and they know it. May even be a small mercy.

Thu, 01/19/2012 - 12:25 | 2078069 xela2200
xela2200's picture

When the IMF starts lending to the US, the game is over. Argentina 101

Thu, 01/19/2012 - 13:48 | 2078438 calgal
calgal's picture

and now we know why they are biometrically scanning everyone there......

Do NOT follow this link or you will be banned from the site!