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Thomson Reuters GFMS Global Head: "Buy This Gold Dip" As $2,000/Oz Possible
From GoldCore
"Buy This Gold Dip" As $2,000/oz Possible - Thomson Reuters GFMS
Gold’s London AM fix this morning was USD 1,636.00, EUR 1,243.16, and GBP 1,035.97 per ounce. Yesterday's AM fix was USD 1,656.00, EUR 1,248.21 and GBP 1,042.95 per ounce.
Silver is trading at $31.80/oz, €24.17/oz and £20.14/oz. Platinum is trading at $1,617.50/oz, palladium at $669.75/oz and rhodium at $1,425/oz.
Cross Currency Table – (Bloomberg)
Gold rose 0.08% or $1.40 in New York yesterday and closed at $1,649.30/oz. Gold traded flat in Asia overnight and fell in European trading which now has gold now trading at $1,638.23/oz.
Gold has broken below recent support at $1,640/oz and reached as low as $1,632.45/oz this morning - below its recent low and its lowest price since January 16. Gold looks like it will go lower on technical weakness and the next level of support is $1,600/oz. Below that again support is at $1,523/oz - the low seen December 29.
Gold 1 Year - (Bloomberg)
Gold may be supported at these levels as demand in India is expected to increase due to the 5 day closure of jewelry shops which has led to pent up demand on the sub continent.
Gold is also likely to be supported by inflation pressures. Fed Chairman Ben Bernanke said before congress that rising oil prices could lead to “short-term inflation pressures”. Retail-gasoline prices have skyrocketed 18% this year to a 10 month high of $3.864/gallon.
Higher fuel costs “act as a tax on household purchasing power and reduce consumption spending, and that also is a drag on the economy”, the Fed chief said to the House Committee on Oversight and Government Reform.
Bernake also warned that Europe must further support its banks, and warns its financial and economic situation ‘‘remains difficult,’’ even as stresses have declined.
The global economy remains on shaky ground. China’s manufacturing activity contracted for its 5th straight month, the US recovery is still very early to call, and the euro zone debt crisis may not be finished. Eurozone PMI data is due later today which will show how the economy is doing after Greece averted default earlier this month.
Thomson Reuters GFMS have said that gold at $2,000/oz is possible - possibly in late 2012 or early 2013.
Thomson Reuters GFMS Global Head of metals analytics, Philip Klapwijk, featured on Insider this morning and advised investors to "buy this gold dip”.
Gold should be bought on this correction especially if we go lower still as we may need a shake-out of "less-committed investors."
Klapwijk suggested that a brief dip below $1,600 is on the cards but the global macro environment still favours investment, notably zero-to-negative real interest rates and he would not rule out further easing by either the ECB or the Fed before year end.
The Osborne gold comments were gold friendly despite the UK Treasury denying that the UK has any plans to rebuild their gold reserves.
Osborne was obviously scoring cheap political and economic points at his predecessor Gordon Brown and the opposition Labour party. However, the comments underlined the increasing importance of gold reserves to all nations - especially one's whose credit ratings are at risk due to appalling fiscal situations.
While the UK adding to its gold reserves seems a remote possibility now it is a possibility as gold reserves would help protect sterling from a currency crisis. Also, most of the UK's current foreign exchange reserves are in fiat currencies which also face the risk of devaluation in the coming years.
For breaking news and commentary on financial markets and gold, follow us on Twitter.
OTHER NEWS
(Bloomberg) -- Russian February Gold Holdings Fell to 28.3 Million Troy Ounces
Russia’s central bank reduced its gold holdings to 28.3 million troy ounces last month, from 28.4 million troy ounces at the end of January, according to a statement published on its website today.
The stockpile was valued at $50.2 billion as of March 1, compared with $48.8 billion a month earlier, Bank Rossii said.
(Bloomberg) -- India RBI Tightens Rules for Loan-Against-Gold Providers
Reserve Bank says non-banking finance cos that provide loans against gold need to maintain 12% tier-1 capital by 2014. RBI bars these NBFCs from lending against gold coins and bullion.
(Bloomberg) -- Gold May Jump to $2,050 on Dollar, Oil, Societe Generale Says
Gold may jump to $2,050 an ounce by the third quarter on a weaker U.S. dollar and higher oil prices, Societe Generale SA said.
Investors should “be wary” of silver, Michael Haigh, an analyst at the bank, said in a report dated today. Aluminum and zinc because they have large inventories will have a hard time rising above the marginal cost of production, and China’s gross domestic product growth will slow “substantially” in the second half, he wrote. Wheat may benefit as ranchers switch from corn for animal food, according to the report.
(Bloomberg) -- H.K. Mercantile Bourse Plans RMB Gold, Silver, Copper Contracts
The Hong Kong Mercantile Exchange plans to introduce gold, silver and copper contracts that will denominated in Chinese yuan, Albert Helmig, president of the bourse, said in Shanghai today.
The copper futures will be settled in cash and trade in units of 5 metric tons between the hours of 9 a.m. to 11 p.m. local time, he said in a speech at an industry forum. The bourse has already filed an application with the Hong Kong regulator for the contracts, he said.
(Dow Jones)-- Russia Central Bank Gold And Forex Reserves $505.4B
Russia's gold and foreign-exchange reserves fell by $2.3 billion to $505.4 billion in the week to March 16, central bank data showed Thursday. The drop comes after a rise of $3.9 billion in the previous week. Russia holds the world's fourth-largest gold and foreign-exchange reserves, after China, Japan and Saudi Arabia.
(Dow Jones)-- Turkey Targets Gold Stashes
The Turkish government, facing a bloated current-account deficit that threatens to derail the country's rapid expansion, is trying to persuade Turks to transfer their vast personal holdings of gold into the country's banking system.
The push to tap into the individual gold reserves—the traditional form of savings here—is part of Ankara's efforts to reduce a finance gap that is currently about 10% of gross domestic product.
Gold shops at the Grand Bazaar in Istanbul, above. Many Turks hold a high
percentage of their personal wealth in gold, fearing economic volatility.
Government officials say the banking regulator will soon publish a plan to boost incentives for consumers to park their household wealth inside the financial system. Banking executives said they are considering new interest-yielding gold-deposit accounts that would allow savers to withdraw gold bars from specially designed automated teller machines.
The moves come after the central bank in November announced that lenders could hold up to 10% of their local-currency reserves in gold, in part to tempt Turkey's gold hoarders to deposit their jewelry, coins or bullion at banks.
Economists say the policy shift is designed to change Turks' historic preference for storing a high percentage of personal wealth outside the banking system as a way to protect themselves against the economic volatility that has periodically hit Turkey in recent decades.
The effort is one front in a broader battle to encourage more savings while curbing the ballooning current-account deficit—a pressure point many investors fear could upend a fast-growing economy, estimated to have expanded more than 8% last year. Turkey's current-account gap has expanded faster than expected in recent weeks amid a surge in oil prices and data showing unexpectedly high consumer demand.
"Turkey has historically been hit by crises and inflation, so the tradition of holding gold outside the system could be hard to shift," said Murat Ucer, an economist at Global Source Partners, an Istanbul-based research consultancy.
The size of the gold haul stored outside Turkey's banking system is hard to quantify; no data reliably capture the scale of the informal economy. The Istanbul Gold Refinery estimates the figure at 5,000 metric tons, valued at $270 billion. Recent numbers show many consumers have boosted home-held deposits even as the country's tightly regulated banking system won plaudits for comfortably weathering the financial crisis.
Last year, as the Turkish lira tumbled almost 20% against the dollar—the fastest fall of any currency in the world—Turkish demand for gold bars and coins surged 99% from the previous year, according to data from the World Gold Council.
That suggests that despite a tripling of incomes and a sharp reduction of unemployment in the past decade, Turks remain nervous that holding too much of their assets in banks could leave them exposed to losses.
Data also show savings held inside the financial system have declined sharply as the once-volatile economy entered a period of relative stability after a banking crisis in 2001. According to the International Monetary Fund, Turkey's savings rate last year plunged to the lowest level in the world for any economy larger than $100 billion—except Greece, Portugal and Ireland—as Turks ramped up personal spending and borrowing.
Some economists warn the government's initiative is a sideshow, saying policy makers should instead focus on overhauling Turkey's arcane tax regulation, and on boosting public coffers by effectively collecting taxes.
"The government should be focused on the Turkish tax code, but that would mean alienating people, and there seems little appetite to do that," said Mert Yildiz, an economist covering emerging Europe at Renaissance Capital, a Moscow-based investment bank.
For some Turks, the government will have to unveil a lot more sweeteners before they part with the family gold. "I'm keen to save, so keeping gold at home is easy for me; there is no complicated procedure," said Ayten Altin, a 70-year-old housewife in Istanbul. "In an emergency, I can convert it to cash and I don't have to wait for the bank to say the asset has matured."
NEWS
(Bloomberg)
Gold May Gain as a Weaker Dollar Spurs Investment Demand
(Reuters)
Gold sluggish after China factory activity falls
(Reuters)
UK Treasury says no plans to add to gold holdings
(Bloomberg)
Finance Council Should Speed Up Speculation Curbs, Chilton Says
COMMENTARY
(MarketWatch)
Gold would have to rise 10 times to back dollar: BBH
(Goldseek)
Have Gold, Silver Entered a Bear Market?
(ZeroHedge)
Catching The "Silver Crusher" Algorithm In The Act
(Mineweb)
Gold from Thailand, China flood Indian markets
(The Daily Mail)
BUDGET 2012: Revealed - How we lost out on £9BILLION by Gordon Brown selling gold on the cheap
(NY Sun)
Bernanke 101
»
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No no no.....deny that crap!
Who's the muppet here?
We muppets buy the dips in equities.
There shall be no hearsay!
$2000 gold is inevidable and over due by years.
$2,000 simply Possible? Is it possible that the Fed just let the 30 years bonds at 3.48 YTM go to their fair value given inflation in basic necessities at 8% at least? How would the Fed prevent that without printing? Here is the trade: you decide to use your dollars today to buy some basket of wheat, corn, soy beans, beef, pork, gasoline you then count the UNITs not the dollar. And you record the number of units on a piece of paper. Now you decide to put the same amount of dollars invest them in 30 years STRIP and wait to maturity and then you just try to see if you can buy the number of units in 30 years that were recorded in the first half of the expirement using today´s dollar. If you believe that you will buy the same amount of units, go ahead sell your Gold, if you believe that you will not be able to buy anything close to the same amount of units, you know that the 30 years are the biggest bubble out there. Now if you believe that the Fed will have to repress again and again to prevent the true yield to surface and crush the mortgage back securities price and by the same token the books of the banks, you know that the Fed will have to print and maintain this curve artificially low for years. Now the "possibility" turns into very high probability.
I'll buy the current options expiry drive down dip .... I am just trying to figure out how far down it goes before 3/30/12.
"The Turkish government, facing a bloated current-account deficit that threatens to derail the country's rapid expansion, is trying to persuade Turks to transfer their vast personal holdings of gold into the country's banking system."
LOL. Doesn't the Turkish government know that gold is just a rock?
"The moves come after the central bank in November announced that lenders could hold up to 10% of their local-currency reserves in gold, in part to tempt Turkey's gold hoarders to deposit their jewelry, coins or bullion at banks."
Gold hoarders? Fuck you.
As a contrarian who realises that the wonks do not understand what gold trades on (i.e. they believe it it is commodity demand, and not global fragility) I can only say that this is another bearish call for gold. I was overjoyed earlier this year to hear various Keynesians screaming "WORTHLESS BARBAROUS SCRAP, LESS THAN $1000 AN OUNCE". Sadly all these bullish bank calls make me a little more bearish.
I'm with you on that but now I worry that a China coup means they are pulling out of the ponzi and revaluing everything to gold.. now that would be one spectacular ramp fest the likes of which the world has never seen.
Focus on the long term and you know that there is no way the dollar is not in a bubble, and there is no way the Fed can let the long term treasuries trade at fair value without massive crushing on banks, then you know thye have to print, the other thing is measuring the ratio of future 30 years commodities prices and understand if those will increase at 3.48% over the next 30 years. You can just know that there is no way this yield curve represents anything close to neutral money between depositors and borrowers. If you believe the market can withstand neutral money today, that is the Fed is perfectly ok with the 30 years trading at 8-9% yield to maturity then you know the Gold trade is dead. Sell your Gold when we are getting close to new monetary standard like Yuan floating or Gold convertibility of Yuan, than buy equities and get out of commodities, is it going to happen this year? I doubt it.
https://www.youtube.com/watch?v=_qO66Rmi1Mw
bring it
If you have to ask...
my neighbor's aunt makes $67 hourly on the laptop. She has been fired from work for ten months but last month her check was $20142 just working on the laptop for a few hours. Here's the site to read more .... http://lazycash9.com
The question of whether or not gold is money or a commodity is a tough one, as ultimately our ability to spend on goods and services is dictated by force. We can be forced to hand over our gold, we can be forced to use this worthless paper known as fiat.
Interest rates are the real deciding factor here. Wont black swan events that are highly likely in the near future put huge downward pressure on the stock market, gold and commodities, and upward pressure on the US dollar?
If the Fed continues to print, ultimately interest rates will have to rise and pop all the associated bubbles caused by low interest. Gold is one of those likely to be effected.
The ultimate question is, 'will interest rates eventually rise'? If you can time this question, your investment in gold will be successful.
They cannot keep inflating prices indefinately, eventually the lowest classes will be priced completely out of the market and will create civil unrest.
As soon as the velocity of money increases, inflation will occur very quickly, but im certain the fed will be forced to tap the brakes by raising interest rates aggressively. Either that or watch the US dollar be destroyed.
i would love to hear other people opinions on this matter.
Reuters = Captain Obvious
Although I have to say the timing is usually bullshit.
Not sure what to make of this. For a long time, GFMS and Klapwijk were a joke, practically permabears on PMs. This was the outfit that removed central bank purchases from gold demand a couple of years ago, claiming that it was an aberration. Should they be seen as a contrary indicator, or as confirmation that the bull market is solidly in phase 2, where more money is moving in?
selling to muppets?
We have much to learn from the Turkish people.
Do you do anything other than pimp Gold and Silver?
I might have a couple ounces of Rhodium laying around.......were you looking?
Who? Goldcore?
I think their name would suggest the answer to your question.
I tried pimping your mom, but I'm not cut out for that scale of hard labor.
http://www.americanelements.com/wmbbr.html
oops...I see a corn kernel on your chin...yikes, you test em before you pimp em don't you?
If we are expecting a margin flush of all assets triggered by cds pay outs should we be waiting for that sort of dump (for those that want to add to existing holdings) before reloading?
I would say keep some cash for buying cheap miners. We just don't know when the market falls, but gold and silver may suddenly get too scarce to buy more.
I'm too paranoid to buy anything paper related. My plan would be to buy physical on any massively over done dump in the middle of a shit storm and then walk away from the ponzi markets and never look back... lots of little things I should be doing in the garden.
Conduct a thought experiment: take this "analysis" and replace all 2000/2050/3000 prices with 1300/1500/whatever you like, and all "will raise" with "will fall" and so on.
You get an idea.
Head of metal analytics, my ass.
If you don't have a trading or investing strategy, and your balance is showing a loss, then BuyingTFD is just a form of doubling down. I've been doubling down these past six months after absorbing all this recycled bullshit confirmation bias.
If I'm out 100 million personally on the "euro welching of the Greek CDs's" then what exactly what will I be "buying zee gold" with? There's still a couple trillion more of that CDS stuff to go...
Perfect choice of words. The Great Greek Welching of 2011/2012 (you need to distinguish it from the many other times they've gone 'tango uniform').
The "problem" I have with precious metals is not so much that there is a store of intrinsic value in something so scarce that wars were fought over it in the 1100s...It is more that this commodity's price like all others has been so badly manipulated and margined by the financial community, who really knows what it is worth...every time there is a big selloff, PMs selloff as well because people have to ring the bell to pay off other margin debts so if things got bad enough...gold could be at $1200 or lower before it started up again...perhaps this is just short term thinking as there are few alternatives except for ammunition, energy and arable land.
"every time there is a big selloff, PMs selloff as well because people have to ring the bell to pay off other margin debts so if things got bad enough...gold could be at $1200 or lower before it started up again"
Since gold began to move freely in the late 60s, it is completely uncorrelated to the S&P over time.
http://www.resourceinvestor.com/2012/03/16/golds-bullish-would-be-bears
I'm with you. I kinda want to buy more PMs, but true value is confusing. Particularly when you see charts floating around which indicate that PM price peaks (in constant 1998 $$ ) occured around the time of Columbus' voyage to the New World. What does that mean?
With all the manipulation (known and unknown), I cant tell if PMs are a bargain or a ripoff. It freezes me as a buyer or seller.
You're right about alternatives, too. For us 7 billion souls on this rotating hunk of dirt, flying though space, food stockpiles are frighteningly small. An acre or two of arable land, and a dozen cases of .22 LR stored up may provide astounding barter power in the not-too-distant future. If a few things continue their sideways trajectory, a decent, single-shot .22 rifle & a couple boxes of ammo may fetch an ounce of gold someday.
Gold & Silver are not the only precious metals. Brass, lead & steel are right up there, now, too.
Ok. fine. I am still long gold big time. But I am not a bug. All I do is ask myself where the fuck else can I hide.. Equities???? You guys suggest I buy stocks at these levels? Every firm out there is doing a debt-4-equity swap or increasing dividends to cash out on this window, thanks to Draghi/Ben.
Did you hear Ben yesterday when asked by Rep. Burton about the swaps?
The UK is about to lose its AAA rating. The US will follow. The Europeans are going towards EXACTLY the same situation they faced in 1931 with the Creditanstalt....
Buy corporate credit because funding is cheap?
I don't know man...gold has been there for centuries....When all this shit ends, some sort of convertibility of fiat ccy will be needed. There's no other way out.
So, what do I do? I sit tight. Will I quit because it is volatile just like central bankers want? To do what? To ride the same vol elsewhere?
Any comments?
BTFD and keep stacking, your reasoning is sound and Gold and Silver are sounder.
Protocol #1 (of 24)
GOLD7. In our day the power which has replaced that of the rulers who were liberal is the power of Gold
It's kinda like Einstein's station leaving the train. How much money will a loaf of bread buy? As more dollars are produced the more dollars a loaf of bread will purchase. As gold is pretty stable in quantity, as more dollars are printed the more dollars an ounce of gold will buy. But paper money is actually worthless -- it has no value -- it's just a medium of exchange -- its not permanent --- gold is permanent --- it will always exist. Not paper money. That's a big difference.
0AU is going to 5K.
Protocol #2
5. In the hands of the States of to-day there is a great force that creates the movement of thought in the people, and that is the Press. The part played by the Press is to keep pointing out requirements supposed to be indispensable, to give voice to the complaints of the people, to express and to create discontent. It is in the Press that the triumph of freedom of speech finds its incarnation. But the GOYIM States have not known how to make use of this force; and it has fallen into our hands. Through the Press we have gained the power to influence while remaining ourselves in the shade; thanks to the Press we have got the GOLD in our hands, notwithstanding that we have had to gather it out of the oceans of blood and tears. But it has paid us, though we have sacrificed many of our people. Each victim on our side is worth in the sight of God a thousand GOYIM.
Late in his Q & A Bernanke was asked what each Euro Nation, with a stake in the currency swaps, was ultimately pledging to back the swap?
Ben's answer,"blah blah blah....gold reserves...blah blah blah"
I am watching China and this COup story......they are the real buyers of gold...we in the western world just buy the paper gold.....they buy the real metal...so as this coup goes if there is one...will help or hurt the gold market....tehy say the coup is getting out the old communists...and turning the country into a more market...capitalist based economy...if so ...I think that will be good for gold.....as the new wealth will buy it...and the government will too as they want their currency to be a world leader....if not the new reserve currency...I am listening to CNBC...they are all spewing that China is so important to US corporations profits...that is where the growth is...not here in the Western world...LOL...my how times have changed...
$2K? Not unless more crap hits the fan that prevents the Central Bankers from beating the price down and grabbing their share. But, eventually it will get there. It has to get there, before confiscation.
All my supply suffered a tragic boating accident.
Protocol #3
11. THIS HATRED WILL BE STILL FURTHER MAGNIFIED BY THE EFFECTS of an ECONOMIC CRISES, which will stop dealing on the exchanges and bring industry to a standstill. We shall create by all the secret subterranean methods open to us and with the aid of gold, which is all in our hands, A UNIVERSAL ECONOMIC CRISES WHEREBY WE SHALL THROW UPON THE STREETS WHOLE MOBS OF WORKERS SIMULTANEOUSLY IN ALL THE COUNTRIES OF EUROPE. These mobs will rush delightedly to shed the blood of those whom, in the simplicity of their ignorance, they have envied from their cradles, and whose property they will then be able to loot
russians didnt decrease their gold holdings, they just transferred it to their vodka manufacturing......
http://www.youtube.com/watch?v=5Y2OE65oOHM
(hiccup!) More Stoli!
Protocol #5
6. PER ME REGES REGNANT. "It is through me that Kings reign." And it was said by the prophets that we were chosen by God Himself to rule over the whole earth. God has endowed us with genius that we may be equal to our task. Were genius in the opposite camp it would still struggle against us, but even so, a newcomer is no match for the old-established settler: the struggle would be merciless between us, such a fight as the world has never seen. Aye, and the genius on their side would have arrived too late. All the wheels of the machinery of all States go by the force of the engine, which is in our hands, and that engine of the machinery of States is - Gold. The science of political economy invented by our learned elders has for long past been giving royal prestige to capital.
"Ok. fine. I am still long gold big time. But I am not a bug."
You're not a Bug and I'm not a Stocksucker, aren't we cool?
2k is way more than a possibility. Bernanke says there is not enough infinitely divisible gold for a gold standard. That statement is ridiculous. What he is really saying is that gold is incredibly underpriced. The physical market always wins.
In 1980 dollars, gold is somewhere between $50 and $100 based on Federal money creation and debt. It depends what numbers you look at. Gold has become cheaper in terms relative to money creation since 2008, not more expensive. Gold's price rise is simply unable to match the velocity of money creation.
And as far as this Turkey thing goes, if the Turks are unwilling to put their paper into a bank, why the Hell would they put their gold into one?
I hear Beaker screaming from the fire. He was a silverbugz too.
don't buy gold til it goes into the low 1500s. i love gold, i buy golds. i like buying gold on the cheap.