London: Gold fell more than 1 per cent in Europe on Monday as the dollar changed course to rise against the euro and oil prices eased, analysts said.
Platinum slipped nearly four per cent to a one-month low below $1,950 an ounce, silver fell more than 3 per cent while palladium declined over 4 per cent to a three-week low.
Analysts said gold was likely to trade in a range ahead of a US Federal Reserve meeting next week, but expectations of further interest rate cuts in the US were likely to support the market over the medium to long-term. Spot gold fell as low as $961.80 an ounce and was $963.20/$964.10 at 1319 GMT against $972.60/$973.40 late in New York on Friday.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
"I wouldn't be surprised if prices didn't do a lot ahead of next week's Fed meeting and, the closer we get, the less likely that people are to take big positions," said Michael Widmer, metals analyst at Lehman Brothers.
People were cautious as the Fed meeting will give a lot of information on issues such as the interest rate outlook and the health of the economy, Widmer said.
Gold hit an historic high of $991.90 an ounce on March 6 before funds cashed in. The metal had gained nearly 20 per cent in 2008, on the top of a 32 per cent rise last year.
Momentum indicators
"The metal's failure to break higher on Friday suggests the market may, just for the short-term, be in need of a phase of consolidation before challenging $1,000," said James Moore, precious metals analyst at TheBullionDesk.com.
"Momentum indicators have turned negative over the past two trading days and a break below $968.50 would suggest a test back to $952 initially, although further liquidation could pressure gold back to $936/$924," he said in a market note.
Platinum suffered heavily and fell below $1,950 an ounce on news that mines in South Africa, the world's top platinum producer, would get 95 per cent electricity supply against 90 per cent. The metal has fallen 15 per cent in less than a week after hitting a record high of $2,290 on March 4.
Platinum fell to $1,945/$1,955 an ounce after rising 3 per cent to $2,085, against $2,020/$2,030 in New York.
Robin Bhar, metals strategist at UBS Investment Bank said platinum was under pressure from a combination of fundamental concerns - the news that the South African mines would get more power and de-leveraging as investors trimmed positions.
Tuesday, March 11, 2008
Oil prices hit $109
New York: Oil prices hit a record high of $109 for the first time Tuesday as investors sought refuge from the weakened dollar.
Light sweet crude for April delivery surged to $109.72 a barrel before falling back somewhat to trade at $109.34 a barrel by early afternoon in European trading on the New York Mercantile Exchange.
On Monday, crude futures rose $2.75 to settle at a record $107.90 a barrel.
Oil rallied even as the International Energy Agency cut its forecast for 2008 global oil demand for a second month because high prices and weaker economic growth in industrialised nations.
The agency, an adviser to 27 industrialised nations, reduced its forecast for 2008 demand by 80,000 barrels a day to 87.54 million barrels a day, leaving annual demand growth at 2 percent, the IEA said on Tuesday in a monthly report.
Light sweet crude for April delivery surged to $109.72 a barrel before falling back somewhat to trade at $109.34 a barrel by early afternoon in European trading on the New York Mercantile Exchange.
On Monday, crude futures rose $2.75 to settle at a record $107.90 a barrel.
Oil rallied even as the International Energy Agency cut its forecast for 2008 global oil demand for a second month because high prices and weaker economic growth in industrialised nations.
The agency, an adviser to 27 industrialised nations, reduced its forecast for 2008 demand by 80,000 barrels a day to 87.54 million barrels a day, leaving annual demand growth at 2 percent, the IEA said on Tuesday in a monthly report.
Why the Fed and bankers hate Gold
By Dan Denning
We are often bullish on Gold, however, because we live in a world where paper money backed by government promises is being exposed as the 37-year old fraud that it is.
And since Gold represents a marked challenge to that fraud, the confiscation or banning or private gold ownership is definitely something investors should consider.
As much as it wants to keep the bubble in US asset prices alive, the Fed is also in the business of manufacturing. The Fed's product is US Dollars. It sells them to the world, and it's been a good business for a long time.
The Fed – and the bankers who actually own and run it – will not want to lose that business, bad as it has been lately.
Gold, the Fed & Louis XIV
Today's bankers hate Gold because it does not allow fractional reserve banking. That is, bankers make money by putting people into debt and keeping them there. It's a profitable business, as long as citizens (whom we now call consumers) are willing to stay in perpetual financial servitude.
Wealth you can wear, take over the border with you, and exchange anywhere for virtually anything is intimately tied up with liberty – your freedom to move about as you choose. That is bad for governments too, who farm taxes from their citizens the way a farmer collects eggs from his hens.
If you fly the coop, there go the eggs.
The whole system of funding wars and welfare programs by securitizing future tax receipts (what else are government bonds?) is a product of the British and Scottish mind. Without the fiscal welfare-warfare state, the British would never have defeated Louis XIV and all his gold. The French eventually ran out of capital to confiscate, and without any more gold to steal from the people, Louis and his successors had to borrow from bankers.
That's when money was as good as Gold...because money was gold! When the French spent their treasury, they had no income-producing assets to draw on for more revenues. The British and the Dutch, on the other hand, had invented a system of commerce, finance and trade that relied on sound money and open borders.
The nation state has been perverting that system ever since, primarily through confiscatory taxes, regulation and – of course – a monopoly on money that has destroyed the purchasing power of savers as effectively as a cannonball through the guts.
But why do you now think governments the world over are making it harder and harder for individuals like you and me to take their capital and head off to places where there is a lower tax rate? To perpetuate the fraud and coercion of fractional banking, consumers have to be kept at home.
Gold, the Fed & the Warfare State
What government's really hate about gold, though, is that puts a real limit on their ability to make war and domestic policy. With hard money, you can't spend it if you don't have it. With paper money, you can tax and spend or borrow and spend.
The important feature of paper money – from the perspective of a so-called is public servant – is that it's a bottomless check book full of blank checks.
Doesn't that mean the money supply wouldn't grow as fast with gold-based money? Yes. And doesn't that mean prices would be stable? Yes. Does it also mean the economy would grow more slowly? Yes, that's true too. Growth would be slower...but capital would be allocated less wastefully, too.
The explosion in the supply of paper money has led to a massive mis-allocation of real resources. That's why the world has six billion people chasing the same rising prices for corn, wheat, oil, soybeans, and gold. There would probably be fewer people on the planet if the Federal Reserve System had never been invented.
As it is, there are plenty of people fighting for space on this old green ball, and quite a few of them find the future "very disturbing". Even fewer are going to figure out how to live in a world with higher energy prices, higher food prices, and truly limited resources – and they'll still make money into the bargain.
Formerly editor of Strategic Investment with Lord William Rees-Mogg, Dan Denning is an independent investment analyst now based in Melbourne, from where he edits the Australian edition of The Daily Reckoning. He is also author of the best-selling The Bull Hunter (Wiley & Sons).
Courtesy :BullionVault.com
We are often bullish on Gold, however, because we live in a world where paper money backed by government promises is being exposed as the 37-year old fraud that it is.
And since Gold represents a marked challenge to that fraud, the confiscation or banning or private gold ownership is definitely something investors should consider.
As much as it wants to keep the bubble in US asset prices alive, the Fed is also in the business of manufacturing. The Fed's product is US Dollars. It sells them to the world, and it's been a good business for a long time.
The Fed – and the bankers who actually own and run it – will not want to lose that business, bad as it has been lately.
Gold, the Fed & Louis XIV
Today's bankers hate Gold because it does not allow fractional reserve banking. That is, bankers make money by putting people into debt and keeping them there. It's a profitable business, as long as citizens (whom we now call consumers) are willing to stay in perpetual financial servitude.
Wealth you can wear, take over the border with you, and exchange anywhere for virtually anything is intimately tied up with liberty – your freedom to move about as you choose. That is bad for governments too, who farm taxes from their citizens the way a farmer collects eggs from his hens.
If you fly the coop, there go the eggs.
The whole system of funding wars and welfare programs by securitizing future tax receipts (what else are government bonds?) is a product of the British and Scottish mind. Without the fiscal welfare-warfare state, the British would never have defeated Louis XIV and all his gold. The French eventually ran out of capital to confiscate, and without any more gold to steal from the people, Louis and his successors had to borrow from bankers.
That's when money was as good as Gold...because money was gold! When the French spent their treasury, they had no income-producing assets to draw on for more revenues. The British and the Dutch, on the other hand, had invented a system of commerce, finance and trade that relied on sound money and open borders.
The nation state has been perverting that system ever since, primarily through confiscatory taxes, regulation and – of course – a monopoly on money that has destroyed the purchasing power of savers as effectively as a cannonball through the guts.
But why do you now think governments the world over are making it harder and harder for individuals like you and me to take their capital and head off to places where there is a lower tax rate? To perpetuate the fraud and coercion of fractional banking, consumers have to be kept at home.
Gold, the Fed & the Warfare State
What government's really hate about gold, though, is that puts a real limit on their ability to make war and domestic policy. With hard money, you can't spend it if you don't have it. With paper money, you can tax and spend or borrow and spend.
The important feature of paper money – from the perspective of a so-called is public servant – is that it's a bottomless check book full of blank checks.
Doesn't that mean the money supply wouldn't grow as fast with gold-based money? Yes. And doesn't that mean prices would be stable? Yes. Does it also mean the economy would grow more slowly? Yes, that's true too. Growth would be slower...but capital would be allocated less wastefully, too.
The explosion in the supply of paper money has led to a massive mis-allocation of real resources. That's why the world has six billion people chasing the same rising prices for corn, wheat, oil, soybeans, and gold. There would probably be fewer people on the planet if the Federal Reserve System had never been invented.
As it is, there are plenty of people fighting for space on this old green ball, and quite a few of them find the future "very disturbing". Even fewer are going to figure out how to live in a world with higher energy prices, higher food prices, and truly limited resources – and they'll still make money into the bargain.
Formerly editor of Strategic Investment with Lord William Rees-Mogg, Dan Denning is an independent investment analyst now based in Melbourne, from where he edits the Australian edition of The Daily Reckoning. He is also author of the best-selling The Bull Hunter (Wiley & Sons).
Courtesy :BullionVault.com
Gold at $1000 will create a psychological barrier...
By Julian Phillips
Once the Gold Price breaks $1,000 an ounce, who’s going to step in and keep buying? Gold prices, along with silver, are making new ground every day consolidating seemingly in preparation for an attack on $1,000 per ounce.
But thereafter, who will Buy Gold and pay over $1,000? It seems a daunting price for any new investor or even one with a sizeable holding already.
Why is $1,000 per ounce such a barrier? The move to four figures implies Gold is moving into a new league and can’t hold that level.
If one looks at the Gold Price in Euros, however, the picture changes. In those now distant days when the European single currency was worth $1.25 – rather than more than $1.50 today – the Euro price of gold battled heavily to get past €530 per ounce.
Now it sits at €640, however. So it seems that a 20% rise is not so outrageous as we thought.
Look at gold in the Australian Dollar or the Japanese Yen, and there hasn’t been any where near such a rise as we have seen in the US Dollar price of gold – and also in the Gold Price in British Pounds Sterling, too.
The big problem, particularly in the United States, is the thought that the Dollar is not rock solid. The US price of gold involves cultural as well as value measurement problems, both of which have to be considered too.
In other words: Is this really about the Dollar – and hence the global monetary system – or simply about gold in isolation?
Look at gold relative to the oil price and its performance pales to a more reasonable move. That’s why OPEC is talking about setting the price of oil in Euros. If we look at the oil price in the European currency, then its performance looks considerably more reasonable too.
If oil were priced in the Euro then its rise of the last five years would not focus attention on the producers so much as on the Dollar’s own managers – the US authorities, including the Fed and Treasury. The public outcry would be against these miscreants, not the oil producers.
With attention pointed this way, perhaps then the Fed and Treasury would actually do something about the Dollar’s international value. Something has to be done and soon, or confidence will not only be lost outside the US, but inside it as well. Inflation, after all, simply describes a dropping curency value all too clearly.
But this move to shore up the Dollar may well come only after Capital (and perhaps Exchange) Controls have been imposed. (Subscribers to Gold Forecaster should contact us for more information on beating such controls.)
To overcome the $1,000 barrier in Gold, in other words, look at gold through the Euro or Yen or Aussie Dollar. Your perspective will change.
$1000 Gold as a Thermometer
Why did gold go up to $990 in the first place? Was it simply demand versus supply, isolated from external factors? No, not at all!
Gold has risen as other investments have lost their glitter. The sapping of confidence, away from the Dollar and Wall Street, away from the subsidence of consumer confidence...the threat of ‘contagion’ caused by the sub-prime crisis, which metamorphosised into the ‘credit crunch’ where bankers became scared to lend to bankers right across the world...will really be seen now the reporting season is upon us.
When these and the other ancillary factors are synthesized, we have a structural crisis – and a structural crisis which the major Western central banks are finding it very difficult to fight, let alone conquer.
People choosing to Buy Gold today are merely looking for an investment that will not suffer when the alarm bells next ring. They are looking for something that will go the other way in terms of purchasing power – and go up!
Gold is doing that very well indeed. It has acted remarkably as a “thermometer”, rising as the investment temperature rises across the globe. When we read of the ripple caused by these crises in the system, each day carrying another consequence of the drama in the media, realistic investors put a little more into Gold.
And with major institutions now moving into commodities, an enormous tide of money is considering gold. As something that cannot be printed – and which is nobody’s obligation – just a small amount of Gold Investment would propel the price up beyond the market’s imagination.
Don’t just look at the last 20 years of the history of gold; look at why it went up in the 1970s. It was for the same reasons, only this time the power to hold it down has declined alongside the will to do so.
When you sell an investment you actually buy something else immediately, even if it is just the cash. When you sell gold, then as a rule – and not least in the United States – you buy the Dollar. When an oil producer sells oil, he buys the Dollar. The nifty of foot will quickly go elsewhere, but that now means selling the Dollar to buy something else.
One is trapped with an investment alternative that is just not doing the same job. Even if gold did not rise anymore, but held current levels, it would prevent the pernicious decline of either the Dollar or the alternative investments – such as equities or bonds – which one may choose.
You can hold gold simply to preserve your wealth. The question is: Will gold fall back at this point?
Most certainly yes; there will be pullbacks, then rises as with any consolidation. The trend, however, remains up, so its wealth preserving qualities look like they will persist.
A look at India paints the picture very well. Indian citizens love Gold for several reasons: financial security, religious reasons, avoidance of official prying eyes and the corruption that attends this.
They are long-term buyers of gold and this characteristic will not change. As more disposable money comes into their hands, they buy what they can. But with Gold Prices now above 13,000 Rupees per 10 grams, few Indians have the appetite to Buy Gold right now.
This loss of appetite will continue until gold has established its place around $1,000. The price at which Indian consumers will buy will continue to rise until they are convinced it will hold around $1,000. Should it fall, it will be seen as a buying opportunity at the levels it’s turned at, and Indians will be in there too.
But the bulk of Indian retail buyers need to be convinced that these prices will hold before they re-enter the market. You can be sure they will be back, as they have been all the way up from $275 to current levels. We believe the same will soon be true in the developed West as well.
$1000 Gold: Reasons for to Go Higher
Take a look at the fundamentals that have driven gold higher, up 50% vs. the Dollar in the last six months alone. Have they changed? Have they been exhausted? Not at all!
Has the Dollar’s fall terminated?
Has the oil price stopped rising?
Has the credit crunch been resolved?
Has the world’s money system been repaired and solidified?
Has wealth stopped moving from West to East? Has confidence in the US housing market and the global economy been restored?
Is it impossible for any of these matters to worsen?
Is the investment climate globally looking solid and worth more investment?
Will the potential tsunami of capital stay in one place only?
If the answer to these questions remains negative, then gold has good reason to rise further, far abour $1,000 per ounce.
JULIAN PHILLIPS – one half of the highly respected team at GoldForecaster.com – began his career in the financial markets back in 1970, when he left the British Army after serving as an Officer in the Light Infantry in Malaya, Mauritius, and Belfast.
Once the Gold Price breaks $1,000 an ounce, who’s going to step in and keep buying? Gold prices, along with silver, are making new ground every day consolidating seemingly in preparation for an attack on $1,000 per ounce.
But thereafter, who will Buy Gold and pay over $1,000? It seems a daunting price for any new investor or even one with a sizeable holding already.
Why is $1,000 per ounce such a barrier? The move to four figures implies Gold is moving into a new league and can’t hold that level.
If one looks at the Gold Price in Euros, however, the picture changes. In those now distant days when the European single currency was worth $1.25 – rather than more than $1.50 today – the Euro price of gold battled heavily to get past €530 per ounce.
Now it sits at €640, however. So it seems that a 20% rise is not so outrageous as we thought.
Look at gold in the Australian Dollar or the Japanese Yen, and there hasn’t been any where near such a rise as we have seen in the US Dollar price of gold – and also in the Gold Price in British Pounds Sterling, too.
The big problem, particularly in the United States, is the thought that the Dollar is not rock solid. The US price of gold involves cultural as well as value measurement problems, both of which have to be considered too.
In other words: Is this really about the Dollar – and hence the global monetary system – or simply about gold in isolation?
Look at gold relative to the oil price and its performance pales to a more reasonable move. That’s why OPEC is talking about setting the price of oil in Euros. If we look at the oil price in the European currency, then its performance looks considerably more reasonable too.
If oil were priced in the Euro then its rise of the last five years would not focus attention on the producers so much as on the Dollar’s own managers – the US authorities, including the Fed and Treasury. The public outcry would be against these miscreants, not the oil producers.
With attention pointed this way, perhaps then the Fed and Treasury would actually do something about the Dollar’s international value. Something has to be done and soon, or confidence will not only be lost outside the US, but inside it as well. Inflation, after all, simply describes a dropping curency value all too clearly.
But this move to shore up the Dollar may well come only after Capital (and perhaps Exchange) Controls have been imposed. (Subscribers to Gold Forecaster should contact us for more information on beating such controls.)
To overcome the $1,000 barrier in Gold, in other words, look at gold through the Euro or Yen or Aussie Dollar. Your perspective will change.
$1000 Gold as a Thermometer
Why did gold go up to $990 in the first place? Was it simply demand versus supply, isolated from external factors? No, not at all!
Gold has risen as other investments have lost their glitter. The sapping of confidence, away from the Dollar and Wall Street, away from the subsidence of consumer confidence...the threat of ‘contagion’ caused by the sub-prime crisis, which metamorphosised into the ‘credit crunch’ where bankers became scared to lend to bankers right across the world...will really be seen now the reporting season is upon us.
When these and the other ancillary factors are synthesized, we have a structural crisis – and a structural crisis which the major Western central banks are finding it very difficult to fight, let alone conquer.
People choosing to Buy Gold today are merely looking for an investment that will not suffer when the alarm bells next ring. They are looking for something that will go the other way in terms of purchasing power – and go up!
Gold is doing that very well indeed. It has acted remarkably as a “thermometer”, rising as the investment temperature rises across the globe. When we read of the ripple caused by these crises in the system, each day carrying another consequence of the drama in the media, realistic investors put a little more into Gold.
And with major institutions now moving into commodities, an enormous tide of money is considering gold. As something that cannot be printed – and which is nobody’s obligation – just a small amount of Gold Investment would propel the price up beyond the market’s imagination.
Don’t just look at the last 20 years of the history of gold; look at why it went up in the 1970s. It was for the same reasons, only this time the power to hold it down has declined alongside the will to do so.
When you sell an investment you actually buy something else immediately, even if it is just the cash. When you sell gold, then as a rule – and not least in the United States – you buy the Dollar. When an oil producer sells oil, he buys the Dollar. The nifty of foot will quickly go elsewhere, but that now means selling the Dollar to buy something else.
One is trapped with an investment alternative that is just not doing the same job. Even if gold did not rise anymore, but held current levels, it would prevent the pernicious decline of either the Dollar or the alternative investments – such as equities or bonds – which one may choose.
You can hold gold simply to preserve your wealth. The question is: Will gold fall back at this point?
Most certainly yes; there will be pullbacks, then rises as with any consolidation. The trend, however, remains up, so its wealth preserving qualities look like they will persist.
A look at India paints the picture very well. Indian citizens love Gold for several reasons: financial security, religious reasons, avoidance of official prying eyes and the corruption that attends this.
They are long-term buyers of gold and this characteristic will not change. As more disposable money comes into their hands, they buy what they can. But with Gold Prices now above 13,000 Rupees per 10 grams, few Indians have the appetite to Buy Gold right now.
This loss of appetite will continue until gold has established its place around $1,000. The price at which Indian consumers will buy will continue to rise until they are convinced it will hold around $1,000. Should it fall, it will be seen as a buying opportunity at the levels it’s turned at, and Indians will be in there too.
But the bulk of Indian retail buyers need to be convinced that these prices will hold before they re-enter the market. You can be sure they will be back, as they have been all the way up from $275 to current levels. We believe the same will soon be true in the developed West as well.
$1000 Gold: Reasons for to Go Higher
Take a look at the fundamentals that have driven gold higher, up 50% vs. the Dollar in the last six months alone. Have they changed? Have they been exhausted? Not at all!
Has the Dollar’s fall terminated?
Has the oil price stopped rising?
Has the credit crunch been resolved?
Has the world’s money system been repaired and solidified?
Has wealth stopped moving from West to East? Has confidence in the US housing market and the global economy been restored?
Is it impossible for any of these matters to worsen?
Is the investment climate globally looking solid and worth more investment?
Will the potential tsunami of capital stay in one place only?
If the answer to these questions remains negative, then gold has good reason to rise further, far abour $1,000 per ounce.
JULIAN PHILLIPS – one half of the highly respected team at GoldForecaster.com – began his career in the financial markets back in 1970, when he left the British Army after serving as an Officer in the Light Infantry in Malaya, Mauritius, and Belfast.
Gold continues its upward trend
SINGAPORE: The precious yellow metal rose nearly one percent on Monday while speculators bought platinum on dips.
Analysts said, expectations of further interest rate cuts in the United States and record high crude oil that raised fears of inflation, were likely to sustain investors' interest in gold, which may find good support around $960 an ounce.
Gold futures for April delivery on the COMEX division of the New York Mercantile Exchange added $7.1 an ounce to $981.4, but were off a record high of $995.2 it hit on March 5.
Gold roared to an historical high of $991.90 an ounce on March 6 before funds cashed in. The metal has gained nearly 20 percent in 2008, on the top of a 32 percent rise last year. Gold rose to $979.60/980.40 an ounce from $972.60/973.40 late in New York on Friday, after it swung between a low of $969.40 and a high at $988.00.
Silver rose to $20.33/20.38 an ounce from $20.11/20.16 an ounce. Spot palladium rose to $495/504 an ounce from $485/490 an ounce.
Spot platinum firmed to $2,068/2,078 an ounce from $2,020/2,030 an ounce in New York on bargain hunting, after a dip to $2,020, which matched Friday's 3-week low.
Platinum was moving away from a record high of $2,290 an ounce on March 4 on news that mines in South Africa, the world's top platinum producer, would get more electricity supply.
The benchmark platinum futures contract for February 2009 delivery on the Tokyo Commodity Exchange ended by its daily 300-yen limit to 6,707 yen a gram because of a surge in the yen.
Analysts said, expectations of further interest rate cuts in the United States and record high crude oil that raised fears of inflation, were likely to sustain investors' interest in gold, which may find good support around $960 an ounce.
Gold futures for April delivery on the COMEX division of the New York Mercantile Exchange added $7.1 an ounce to $981.4, but were off a record high of $995.2 it hit on March 5.
Gold roared to an historical high of $991.90 an ounce on March 6 before funds cashed in. The metal has gained nearly 20 percent in 2008, on the top of a 32 percent rise last year. Gold rose to $979.60/980.40 an ounce from $972.60/973.40 late in New York on Friday, after it swung between a low of $969.40 and a high at $988.00.
Silver rose to $20.33/20.38 an ounce from $20.11/20.16 an ounce. Spot palladium rose to $495/504 an ounce from $485/490 an ounce.
Spot platinum firmed to $2,068/2,078 an ounce from $2,020/2,030 an ounce in New York on bargain hunting, after a dip to $2,020, which matched Friday's 3-week low.
Platinum was moving away from a record high of $2,290 an ounce on March 4 on news that mines in South Africa, the world's top platinum producer, would get more electricity supply.
The benchmark platinum futures contract for February 2009 delivery on the Tokyo Commodity Exchange ended by its daily 300-yen limit to 6,707 yen a gram because of a surge in the yen.
Does Gold shake the entire economy
By Adrian Ash
Last weekend in Basel, Switzerland, central bankers from the G-10 group of rich nations met up for one of their regular hoe-downs.
You can guess the main event in between canapés and champagne – academic chit-chat about interest rates, political pressure and banking supervision. The global financial crisis surely got plenty of air-time, too.
After all, Ambac Financial – the giant "monoline" bond insurance group – just issued and sold $1.5 billion in new shares and convertible bonds, raising cash to defend its credit rating but accepting a 9% discount to ABK's stock-market price.
"The stock offering nearly tripled the number of Ambac shares outstanding," according to Reuters. ABK closed the day 15% lower.
Real estate investment trusts also slumped last Thursday after Thornburg Mortgage – which lost 60% on the day – admitted to the New York authorities that it missed a $28 million margin call from J.P.Morgan Chase. And here in London, a number of major hedge funds were rumored to be right up against it after their brokers called in credit lines and forced a fresh wave of liquidations.
All told, says Nouriel Roubini – a former advisor to the US Treasury – "the risk of a systemic crisis is rising. The markets are becoming utterly unhinged, the financial system is broken and everybody's in de-levering mode..."
Hey gentlemen, let's clear the gloom! Who's for a break? Shall we say one hour for lunch...?
But wait! Who's that – already sitting in Ben Bernanke's place?
"Letting gold go to $850 per ounce was a mistake," wrote Paul Volcker – chairman of the US Federal Reserve during the last great Dollar crisis of the late 1970s – in his memoirs.
"We had to deal with inflation," he went on in a PBS interview of Sept. 2000. "There was a kind of great speculative pressure. It was the years when everybody wanted to buy collectibles from New York. The market was booming, and other markets of real things were booming – because people had got the feeling that things were inflating and there was no way you could stop it."
At one policy meeting in 1979, the Fed committee noted that "speculative activity" in the Gold Market was spilling over into other commodity markets. An official at the US Treasury called the gold rush "a symptom of growing concern about world-wide inflation."
What a mistake! Barely nine years after Richard Nixon floated the US Dollar free of that "barbarous relic" known as the Gold Standard – and scarcely 18 months after the International Monetary Fund "eliminated the use of gold" as money altogether (or so the IMF thought) – just mentioning the bull market in Gold Prices only served to push the gold price higher!
Would the policy wonks never learn? You can't dispense with gold as money and yet dare to speak its name.
Put another way, perhaps, you just can't dispense with gold as money. And maybe that's why the US government still can't breathe a word about the 8,500 tonnes of Gold Bullion it (claims that it) owns.
Acknowledging gold's place in US reserves would only spark a fresh flight of Dollars into the hard asset security of physical Gold Bullion.
"All of a sudden," writes Peter Bernstein of late 1979 in his tome The Power of Gold, "central banks began to make noises about restoring gold to its traditional role in the monetary system, a complete reversal of recent policies of selling gold out of their reserves.
"The US undersecretary of the Treasury declared before Congress that 'Gold remains a significant part of the reserves of the central banks available in times of need.'...Then Treasury secretary G.William Miller held a news conference at which he announced that the Treasury would hold no further gold auctions [saying] 'it doesn't seem an appropriate time to sell our gold.'
"This was a curious observation in light of the auctions that the Treasury had conducted at much lower prices since they began the practice five years earlier [and] within thirty minutes of Miller's remarks, the Gold Price shot up $30 an ounce to $715. The next day it was up to $760. The day after gold hit $820."
Of course, here in March 2007, thirty-dollar moves are a daily occurrence. Anyone choosing to Buy Gold today had better get used to this kind of volatility, too. But it's nothing next to the volatility now hitting world confidence in government money and financial debt.
The big difference between now and the 1970s bull market in gold is that even as the US Dollar is sinking to all-time record lows – both against gold and the rest of the world's currencies – the world's financial markets also face a genuine meltdown.
The reason? Credit default – or even the merest hint of it. This spook is now jumping out of cupboards and walking through walls right from Sydney to California, and all points in between.
That's why, last time they met, just after the Northern Rock collapse hit the United Kingdom (the world's fourth largest economy), the G-10 central bankers agreed in December to coordinate half-a-trillion in short-term loans to the US and European money markets.
Pumped into the private banks by the Federal Reserve, Bank of England and European Central Bank, this flood of emergency lending really did ease the panic in Western money markets, bringing open-market interest rates down from a seven-year high towards the central banks' "target" rates.
But still the ghost won't die! Because interbank lending rates have now shot higher again – a clear sign that "banks are hoarding cash because of fears of further hedge fund collapses," says the Financial Times.
Whereas physical Gold Bullion – if owned outright as your property, rather than via "trust" fund trickery or the counterparty risk of futures and options – still represents the only liquid financial asset that nobody can default on. And the danger of default is what's driving investors out of stocks and bonds into – oh no! – into Dollars!
"Boo!" says the spook, dancing on the dining table...
Three-month interbank lending rates have now hit 4.40% for Euros, up from 4.33% in mid-Feb. Three-month Sterling rates have risen to 5.77% – up from 5.48% in late Jan. – even after a 0.25% cut in the Bank of England's preferred rate last month.
"In the US," the FT says, the "three-month Dollar [rate] has fallen, but it still remains well above the expected Fed Funds rate, suggesting bankers view the outlook as extremely uncertain [after] the collapse of Focus Capital, the New York hedge fund, and the failure of Peloton Partners' asset-backed securities fund."
So put the surging oil price and war in the Middle East to one side, if you can. Try to forget about the US recession too...as well as the crisis now looming in Eurozone government debt, world food prices and Russian gas supplies.
Just take one Dollar crisis and add a global financial panic after five years of unprecedented credit expansion. What do you get? On one side of the table, a record bid for physical Gold.
And on the other, a gaggle of central bankers – holed up in Switzerland – pale and quaking like they just saw a ghost.
"Prithee, see there! Behold! Look! Lo! How say you?"
Courtesy : BullionVault.com
Last weekend in Basel, Switzerland, central bankers from the G-10 group of rich nations met up for one of their regular hoe-downs.
You can guess the main event in between canapés and champagne – academic chit-chat about interest rates, political pressure and banking supervision. The global financial crisis surely got plenty of air-time, too.
After all, Ambac Financial – the giant "monoline" bond insurance group – just issued and sold $1.5 billion in new shares and convertible bonds, raising cash to defend its credit rating but accepting a 9% discount to ABK's stock-market price.
"The stock offering nearly tripled the number of Ambac shares outstanding," according to Reuters. ABK closed the day 15% lower.
Real estate investment trusts also slumped last Thursday after Thornburg Mortgage – which lost 60% on the day – admitted to the New York authorities that it missed a $28 million margin call from J.P.Morgan Chase. And here in London, a number of major hedge funds were rumored to be right up against it after their brokers called in credit lines and forced a fresh wave of liquidations.
All told, says Nouriel Roubini – a former advisor to the US Treasury – "the risk of a systemic crisis is rising. The markets are becoming utterly unhinged, the financial system is broken and everybody's in de-levering mode..."
Hey gentlemen, let's clear the gloom! Who's for a break? Shall we say one hour for lunch...?
But wait! Who's that – already sitting in Ben Bernanke's place?
"Letting gold go to $850 per ounce was a mistake," wrote Paul Volcker – chairman of the US Federal Reserve during the last great Dollar crisis of the late 1970s – in his memoirs.
"We had to deal with inflation," he went on in a PBS interview of Sept. 2000. "There was a kind of great speculative pressure. It was the years when everybody wanted to buy collectibles from New York. The market was booming, and other markets of real things were booming – because people had got the feeling that things were inflating and there was no way you could stop it."
At one policy meeting in 1979, the Fed committee noted that "speculative activity" in the Gold Market was spilling over into other commodity markets. An official at the US Treasury called the gold rush "a symptom of growing concern about world-wide inflation."
What a mistake! Barely nine years after Richard Nixon floated the US Dollar free of that "barbarous relic" known as the Gold Standard – and scarcely 18 months after the International Monetary Fund "eliminated the use of gold" as money altogether (or so the IMF thought) – just mentioning the bull market in Gold Prices only served to push the gold price higher!
Would the policy wonks never learn? You can't dispense with gold as money and yet dare to speak its name.
Put another way, perhaps, you just can't dispense with gold as money. And maybe that's why the US government still can't breathe a word about the 8,500 tonnes of Gold Bullion it (claims that it) owns.
Acknowledging gold's place in US reserves would only spark a fresh flight of Dollars into the hard asset security of physical Gold Bullion.
"All of a sudden," writes Peter Bernstein of late 1979 in his tome The Power of Gold, "central banks began to make noises about restoring gold to its traditional role in the monetary system, a complete reversal of recent policies of selling gold out of their reserves.
"The US undersecretary of the Treasury declared before Congress that 'Gold remains a significant part of the reserves of the central banks available in times of need.'...Then Treasury secretary G.William Miller held a news conference at which he announced that the Treasury would hold no further gold auctions [saying] 'it doesn't seem an appropriate time to sell our gold.'
"This was a curious observation in light of the auctions that the Treasury had conducted at much lower prices since they began the practice five years earlier [and] within thirty minutes of Miller's remarks, the Gold Price shot up $30 an ounce to $715. The next day it was up to $760. The day after gold hit $820."
Of course, here in March 2007, thirty-dollar moves are a daily occurrence. Anyone choosing to Buy Gold today had better get used to this kind of volatility, too. But it's nothing next to the volatility now hitting world confidence in government money and financial debt.
The big difference between now and the 1970s bull market in gold is that even as the US Dollar is sinking to all-time record lows – both against gold and the rest of the world's currencies – the world's financial markets also face a genuine meltdown.
The reason? Credit default – or even the merest hint of it. This spook is now jumping out of cupboards and walking through walls right from Sydney to California, and all points in between.
That's why, last time they met, just after the Northern Rock collapse hit the United Kingdom (the world's fourth largest economy), the G-10 central bankers agreed in December to coordinate half-a-trillion in short-term loans to the US and European money markets.
Pumped into the private banks by the Federal Reserve, Bank of England and European Central Bank, this flood of emergency lending really did ease the panic in Western money markets, bringing open-market interest rates down from a seven-year high towards the central banks' "target" rates.
But still the ghost won't die! Because interbank lending rates have now shot higher again – a clear sign that "banks are hoarding cash because of fears of further hedge fund collapses," says the Financial Times.
Whereas physical Gold Bullion – if owned outright as your property, rather than via "trust" fund trickery or the counterparty risk of futures and options – still represents the only liquid financial asset that nobody can default on. And the danger of default is what's driving investors out of stocks and bonds into – oh no! – into Dollars!
"Boo!" says the spook, dancing on the dining table...
Three-month interbank lending rates have now hit 4.40% for Euros, up from 4.33% in mid-Feb. Three-month Sterling rates have risen to 5.77% – up from 5.48% in late Jan. – even after a 0.25% cut in the Bank of England's preferred rate last month.
"In the US," the FT says, the "three-month Dollar [rate] has fallen, but it still remains well above the expected Fed Funds rate, suggesting bankers view the outlook as extremely uncertain [after] the collapse of Focus Capital, the New York hedge fund, and the failure of Peloton Partners' asset-backed securities fund."
So put the surging oil price and war in the Middle East to one side, if you can. Try to forget about the US recession too...as well as the crisis now looming in Eurozone government debt, world food prices and Russian gas supplies.
Just take one Dollar crisis and add a global financial panic after five years of unprecedented credit expansion. What do you get? On one side of the table, a record bid for physical Gold.
And on the other, a gaggle of central bankers – holed up in Switzerland – pale and quaking like they just saw a ghost.
"Prithee, see there! Behold! Look! Lo! How say you?"
Courtesy : BullionVault.com
Who has benefited from Gold at $ 1000
By Stephen Clayson
Who has benefited more out of the rise in the gold price from $650 an ounce this time last year to almost $1,000 now? Is it a company producing gold for $300 an ounce, or one producing for $500 an ounce?
The answer is the $500 producer, because he is now making good money whereas before he was only just breaking even.
The $300 producer was making good money before, and now he is doing even better, but he should already have been trading at a premium. His business has not been transformed.
Our $500 producer on the other hand has seen a transformational change. In fact, he suddenly looks a lot more interesting.
An example of just such a company is Mercator Gold [AIM:MCR]. Mercator has consolidated under single ownership for the first time the Meekatharra goldfield in Western Australia.
Meekatharra has supported historic production of in excess of 2 million ounces of gold, all extracted without going below 300 metres depth, which of course is not very deep by modern standards.
As an example of Meekatharra’s track record, the Paddy’s Flat line of lode, which contains the Prohibition and Vivian-Consols lodes, can boast historic productivity per vertical metre of 9,000 ounces – an impressive number.
Mercator commenced production from its Surprise open pit in October of last year, although it only managed to produce 9,479 ounces of gold by the end of December as it ploughed through low grade material left in the pit’s ramps and access ways by a previous operator.
However, Mercator produced almost 4,000 ounces of gold in January as it started processing newly mined ore from the Surprise pit, and what is notable is that the grade at Surprise improves significantly as the pit gets deeper, so later this year the company should see some +10,000 ounce months.
The Surprise pit will be exhausted later this year, and a second pit, Bluebird, will then support production into 2009 before underground mining of the Prohibition and Vivian-Consols lodes commences. Construction of a decline to access these lodes, which contain the bulk of Mercator’s reserves and its highest grade ounces, is planned to begin later this year, and this should allow the company to boost its production to 150,000-170,000 ounces of gold in 2010, up from the 80,000-100,000 ounces targeted for 2008.
Mercator is not a low cost producer. The company recently raised its life of mine cash cost estimate for the Surprise pit to A$570 an ounce, or slightly less (A$530 an ounce) if more ounces are produced from the pit than is assumed under Mercator’s model – which is a possibility as past data show that deposits at Meekatharra tend to outperform their models. At the time of writing, A$1 equals US$0.92.
Mercator has gotten itself into production without the need for debt finance, and remains debt free aside from an A$6 million working capital facility. This is largely down to the 2005 acquisition of a mill and carbon-in-leach (CIL) processing plant from St Barbara Mines [ASX:SBM], for A$21 million when the replacement value of the complex would be circa A$130 million. This also means that Mercator’s non-cash costs of production are very low.
Mercator has total probable reserves of 504,000 ounces and resources of 2.42 million ounces, with significant potential for increase, particularly once underground exploration becomes feasible from the planned decline.
The focus of Mercator’s surface based exploration is currently the Euro project, which has returned encouraging drill intersections. Drilling continues, and Euro may have the potential to become a low cost open pit, as it is hosted at reasonable depth in very soft oxide material.
The company’s feeling is that previous operators only scratched the surface of Meekatharra, and that the goldfield will reward its exploration and development efforts.
Australia
The flip side to Australia’s high labour costs is a rare degree of political stability and security of tenure, an accumulation of mining expertise and decent infrastructure.
There is also much untapped potential waiting to be taken advantage of in Australia, in contrast to its perception as a pretty fully explored country. The easy finds have been made for sure, but that is not to say that exploration cannot yield results, or that historic goldfields such as Meekatharra cannot be rejuvenated.
The Australian dollar though is a potential fly in the ointment. Australia’s booming, resource based economy means high interest rates and a strong Australian dollar, which causes problems for gold mining companies, who all have to deal with costs in Australian dollars and a gold price set in U.S. dollars.
ASX Listing
Mercator is currently preparing for a listing on the Australian Stock Exchange, which is scheduled by May. An associated equity fundraising will, it is hoped, bring in the necessary funding for the establishment of underground production from the Prohibition and Vivian-Consols lodes and for additional exploration.
Price Protection
Mercator has adopted a modest programme of price protection, selling calls over some 35,000 ounces at A$906 and securing puts over another 35,000 ounces at a similar price.
This might not have pleased all Mercator’s shareholders, some of whom may have been holding partly because of the company’s un-hedged status
But it isn’t just a fall in the gold price that Mercator is protecting itself from. There is also an additional risk factor in that the Australian dollar could continue to appreciate. If that were combined with a gold price fall, then Mercator could find itself with problems. It can also be said that committed deliveries stand at only around 7% of the company’s reserves.
Therefore it seems a prudent move for the company to have taken this level of protection.
Investment Outlook
As Mercator increases its annual production from this year’s expected 80-100,000 ounces to an anticipated 150,000-170,000 ounces in 2010, it should start getting noticed.
Whilst Mercator is not a low cost producer, if gold continues its rise or even just holds where it is, Mercator will make decent money. And a proportion of Mercator’s cash flow is protected against a fall in the price of gold.
Mercator should also benefit from its coming ASX listing, which might provide the retail shareholder interest and daily trading activity that all companies of this size (market capitalisation £50 million/US$100 million), and bigger, struggle to achieve on London’s AIM.
Courtesy: www.resourceinvestor.com
Who has benefited more out of the rise in the gold price from $650 an ounce this time last year to almost $1,000 now? Is it a company producing gold for $300 an ounce, or one producing for $500 an ounce?
The answer is the $500 producer, because he is now making good money whereas before he was only just breaking even.
The $300 producer was making good money before, and now he is doing even better, but he should already have been trading at a premium. His business has not been transformed.
Our $500 producer on the other hand has seen a transformational change. In fact, he suddenly looks a lot more interesting.
An example of just such a company is Mercator Gold [AIM:MCR]. Mercator has consolidated under single ownership for the first time the Meekatharra goldfield in Western Australia.
Meekatharra has supported historic production of in excess of 2 million ounces of gold, all extracted without going below 300 metres depth, which of course is not very deep by modern standards.
As an example of Meekatharra’s track record, the Paddy’s Flat line of lode, which contains the Prohibition and Vivian-Consols lodes, can boast historic productivity per vertical metre of 9,000 ounces – an impressive number.
Mercator commenced production from its Surprise open pit in October of last year, although it only managed to produce 9,479 ounces of gold by the end of December as it ploughed through low grade material left in the pit’s ramps and access ways by a previous operator.
However, Mercator produced almost 4,000 ounces of gold in January as it started processing newly mined ore from the Surprise pit, and what is notable is that the grade at Surprise improves significantly as the pit gets deeper, so later this year the company should see some +10,000 ounce months.
The Surprise pit will be exhausted later this year, and a second pit, Bluebird, will then support production into 2009 before underground mining of the Prohibition and Vivian-Consols lodes commences. Construction of a decline to access these lodes, which contain the bulk of Mercator’s reserves and its highest grade ounces, is planned to begin later this year, and this should allow the company to boost its production to 150,000-170,000 ounces of gold in 2010, up from the 80,000-100,000 ounces targeted for 2008.
Mercator is not a low cost producer. The company recently raised its life of mine cash cost estimate for the Surprise pit to A$570 an ounce, or slightly less (A$530 an ounce) if more ounces are produced from the pit than is assumed under Mercator’s model – which is a possibility as past data show that deposits at Meekatharra tend to outperform their models. At the time of writing, A$1 equals US$0.92.
Mercator has gotten itself into production without the need for debt finance, and remains debt free aside from an A$6 million working capital facility. This is largely down to the 2005 acquisition of a mill and carbon-in-leach (CIL) processing plant from St Barbara Mines [ASX:SBM], for A$21 million when the replacement value of the complex would be circa A$130 million. This also means that Mercator’s non-cash costs of production are very low.
Mercator has total probable reserves of 504,000 ounces and resources of 2.42 million ounces, with significant potential for increase, particularly once underground exploration becomes feasible from the planned decline.
The focus of Mercator’s surface based exploration is currently the Euro project, which has returned encouraging drill intersections. Drilling continues, and Euro may have the potential to become a low cost open pit, as it is hosted at reasonable depth in very soft oxide material.
The company’s feeling is that previous operators only scratched the surface of Meekatharra, and that the goldfield will reward its exploration and development efforts.
Australia
The flip side to Australia’s high labour costs is a rare degree of political stability and security of tenure, an accumulation of mining expertise and decent infrastructure.
There is also much untapped potential waiting to be taken advantage of in Australia, in contrast to its perception as a pretty fully explored country. The easy finds have been made for sure, but that is not to say that exploration cannot yield results, or that historic goldfields such as Meekatharra cannot be rejuvenated.
The Australian dollar though is a potential fly in the ointment. Australia’s booming, resource based economy means high interest rates and a strong Australian dollar, which causes problems for gold mining companies, who all have to deal with costs in Australian dollars and a gold price set in U.S. dollars.
ASX Listing
Mercator is currently preparing for a listing on the Australian Stock Exchange, which is scheduled by May. An associated equity fundraising will, it is hoped, bring in the necessary funding for the establishment of underground production from the Prohibition and Vivian-Consols lodes and for additional exploration.
Price Protection
Mercator has adopted a modest programme of price protection, selling calls over some 35,000 ounces at A$906 and securing puts over another 35,000 ounces at a similar price.
This might not have pleased all Mercator’s shareholders, some of whom may have been holding partly because of the company’s un-hedged status
But it isn’t just a fall in the gold price that Mercator is protecting itself from. There is also an additional risk factor in that the Australian dollar could continue to appreciate. If that were combined with a gold price fall, then Mercator could find itself with problems. It can also be said that committed deliveries stand at only around 7% of the company’s reserves.
Therefore it seems a prudent move for the company to have taken this level of protection.
Investment Outlook
As Mercator increases its annual production from this year’s expected 80-100,000 ounces to an anticipated 150,000-170,000 ounces in 2010, it should start getting noticed.
Whilst Mercator is not a low cost producer, if gold continues its rise or even just holds where it is, Mercator will make decent money. And a proportion of Mercator’s cash flow is protected against a fall in the price of gold.
Mercator should also benefit from its coming ASX listing, which might provide the retail shareholder interest and daily trading activity that all companies of this size (market capitalisation £50 million/US$100 million), and bigger, struggle to achieve on London’s AIM.
Courtesy: www.resourceinvestor.com
India's Crude Oil basket is 'overflowing'
MUMBAI: India's crude basket has begun 'overflowing.' On Tuesday, it crossed $100 a barrel mark, pushing up the under recoveries on fuel sale.
Petroleum Ministry officials said the price of basket of crude oil imports surged to $100.17 a barrel on Monday, the highest ever.
With the spike in oil prices, the losses of public sector oil companies on sale of petrol, diesel, kerosene and LPG have touched Rs 360 crore a day. The Indian basket of crude oil has averaged $98.46 a barrel in March, against February average of $92.37 a barrel. The current year average at $77.98 a barrel is a significant jump over $62.46 a barrel average in 2006-07.
In international markets, crude oil prices rose to an all-time high of over $108 a barrel due to a weakening dollar, which fell against major currencies.
Petroleum Ministry officials said the price of basket of crude oil imports surged to $100.17 a barrel on Monday, the highest ever.
With the spike in oil prices, the losses of public sector oil companies on sale of petrol, diesel, kerosene and LPG have touched Rs 360 crore a day. The Indian basket of crude oil has averaged $98.46 a barrel in March, against February average of $92.37 a barrel. The current year average at $77.98 a barrel is a significant jump over $62.46 a barrel average in 2006-07.
In international markets, crude oil prices rose to an all-time high of over $108 a barrel due to a weakening dollar, which fell against major currencies.
Gold or Oil: Which is the cheapest commodity?
Commodity Online
MUMBAI: Gold prices have been going up through the roof all these days. And oil prices are also rising and rising, day by day. But among these two hot commodities, which one is cheap--Gold or Oil?
Globally, many analysts have pointed out that gold is vastly undervalued as compared to oil.
Oil prices topped $104 a barrel Wednesday for the first time ever today. U.S. light crude for April delivery reached $104.56, beating the previous all-time intraday high of $103.95 set Monday. It eased to $103.73, still up $4.21 on the session.
Gold futures closed with strong gains, after hitting $995.20 an ounce Wednesday, boosted by the rally in crude oil. Gold for April delivery rallied $22.20 to end at $988.50 an ounce on the New York Mercantile Exchange. Earlier it surged to a record high of $995.20 an ounce.
For those that follow the gold to oil ratio, today's figures show that oil gold ounce will buy 9.6 barrels of oil.
The 36-year average is closer to 15 bbl/oz, but in the last few years the average has been in the 9-10 bbl/oz range.
MUMBAI: Gold prices have been going up through the roof all these days. And oil prices are also rising and rising, day by day. But among these two hot commodities, which one is cheap--Gold or Oil?
Globally, many analysts have pointed out that gold is vastly undervalued as compared to oil.
Oil prices topped $104 a barrel Wednesday for the first time ever today. U.S. light crude for April delivery reached $104.56, beating the previous all-time intraday high of $103.95 set Monday. It eased to $103.73, still up $4.21 on the session.
Gold futures closed with strong gains, after hitting $995.20 an ounce Wednesday, boosted by the rally in crude oil. Gold for April delivery rallied $22.20 to end at $988.50 an ounce on the New York Mercantile Exchange. Earlier it surged to a record high of $995.20 an ounce.
For those that follow the gold to oil ratio, today's figures show that oil gold ounce will buy 9.6 barrels of oil.
The 36-year average is closer to 15 bbl/oz, but in the last few years the average has been in the 9-10 bbl/oz range.
India gold prices fall mainly on slow demand
MUMBAI: Three major factors combined together to push down gold prices in India by over 100 rupees per 10 gram in the bullion market on Tuesday.
Fresh arrival of the precious metal coupled with slowdown in retail demand and fall in global rates pushed down the prices by Rs 110 to 12,880 per 10 gram.
Silver prices also plunged by Rs 800 to Rs 24,000 per kg on heavy selling sparked by reports of a weakening global trend.
Standard gold and ornaments dropped by Rs 110 each to Rs 12,880 and Rs 12,730 per 10 gram respectively. Sovereign was unchanged at Rs 10,050 per piece of eight gram.
Silver ready tumbled by Rs 800 to Rs 24,000 per kg and weekly-based delivery by a same m argin at Rs 25,400 per kg. Silver coins followed suit and lost Rs 100 to Rs 26,000 for buying and Rs 26,900 for selling of 100 pieces.
Traders said selling pressure in silver gathered momentum on reports that the white metal fell below $20 an ounce in global markets, which normally set prices in domestic markets.
Fresh arrival of the precious metal coupled with slowdown in retail demand and fall in global rates pushed down the prices by Rs 110 to 12,880 per 10 gram.
Silver prices also plunged by Rs 800 to Rs 24,000 per kg on heavy selling sparked by reports of a weakening global trend.
Standard gold and ornaments dropped by Rs 110 each to Rs 12,880 and Rs 12,730 per 10 gram respectively. Sovereign was unchanged at Rs 10,050 per piece of eight gram.
Silver ready tumbled by Rs 800 to Rs 24,000 per kg and weekly-based delivery by a same m argin at Rs 25,400 per kg. Silver coins followed suit and lost Rs 100 to Rs 26,000 for buying and Rs 26,900 for selling of 100 pieces.
Traders said selling pressure in silver gathered momentum on reports that the white metal fell below $20 an ounce in global markets, which normally set prices in domestic markets.
Will Gold prices zoom to $2,500?
Gold prices will hit the $1,000 an ounce mark - and stay above that level for a significant period of time, it has been claimed.
Speaking to Reuters at the Global Mining Summit, Goldcorp chief executive Kevin McArthur said there is a case for the yellow metal to breach the psychological $1,000 milestone and remain above it for some time.
A number of experts have recently put forward predictions of gold not only surpassing $1,000 an ounce in the near future, but perhaps soaring as high as $2,500 an ounce in the longer-term.
According to the Daily Reckoning, gold prices have soared by 37 per cent since US interest rates were first cut in the current cycle in September 2007.
The website states: "Adjusted for inflation, [gold] will have to go up to $2,500 or so, just to match the peak set in 1980. Most likely, it will go far further."
courtesy : BullionVault.com
Speaking to Reuters at the Global Mining Summit, Goldcorp chief executive Kevin McArthur said there is a case for the yellow metal to breach the psychological $1,000 milestone and remain above it for some time.
A number of experts have recently put forward predictions of gold not only surpassing $1,000 an ounce in the near future, but perhaps soaring as high as $2,500 an ounce in the longer-term.
According to the Daily Reckoning, gold prices have soared by 37 per cent since US interest rates were first cut in the current cycle in September 2007.
The website states: "Adjusted for inflation, [gold] will have to go up to $2,500 or so, just to match the peak set in 1980. Most likely, it will go far further."
courtesy : BullionVault.com
Crude Oil surges to new record, Dollar plunges
By Jon Nones
April light, sweet, crude on the New York Mercantile Exchange was trading $1.53 higher at $109.43 a barrel, just off its latest peak of $109.72 a barrel.
April Brent contract on London's ICE futures exchange was up $1.44 at $105.60 a barrel, having set a new record high at $105.82 a barrel earlier.
The U.S. dollar fell to a new record low against the euro Tuesday, and was trading lower against most major currencies. The euro rose to a record high of $1.5495 and traded at $1.5470 by 7:27 a.m. in New York, from $1.5343 yesterday. The U.S. dollar index was last down 0.024 at 72.971.
Also supporting prices was a statement by the International Energy Agency that crude demand in China and other emerging markets is likely to remain brisk despite higher prices.
The agency revised down 2008 crude consumption in the U.S., Europe and other developed markets but revised up its 2008 oil demand forecast for China and other non-OECD countries, leaving its demand growth forecast little changed at 2%.
April light, sweet, crude on the New York Mercantile Exchange was trading $1.53 higher at $109.43 a barrel, just off its latest peak of $109.72 a barrel.
April Brent contract on London's ICE futures exchange was up $1.44 at $105.60 a barrel, having set a new record high at $105.82 a barrel earlier.
The U.S. dollar fell to a new record low against the euro Tuesday, and was trading lower against most major currencies. The euro rose to a record high of $1.5495 and traded at $1.5470 by 7:27 a.m. in New York, from $1.5343 yesterday. The U.S. dollar index was last down 0.024 at 72.971.
Also supporting prices was a statement by the International Energy Agency that crude demand in China and other emerging markets is likely to remain brisk despite higher prices.
The agency revised down 2008 crude consumption in the U.S., Europe and other developed markets but revised up its 2008 oil demand forecast for China and other non-OECD countries, leaving its demand growth forecast little changed at 2%.
How Middle East is building empires in desert
For 3,881 years, the Great Pyramid of Giza was the tallest structure ever built. The Seven Wonders of the Ancient World had a lot to live up to even then. The Great Pyramid and its cohorts remain something to see: a feat of strength and wealth shouting to the world, “Look at me!”
Well, there’s a new Pharaoh in town, and he’s building the world’s tallest buildings on the backs of foreign workers and foreign cash, just like old times. The Middle East once again holds the distinction of being home to the tallest structure on earth.
Dubai alone has more than 270 high-rises and is in the midst of constructing an additional 339. Furthermore, 330 high-rise construction projects have already been approved.
In fact, by 2015, Dubai will have more buildings of 100-plus floors than any other city in the world.
As mind-boggling as that sounds, Pharaoh’s only just begun…
The top 10 tallest buildings are a cumulative 4,918 feet. That’s not even counting Dubai’s newest skyscraper, Burj Dubai. That one, to be completed this year, is expected to be more than 2,000 feet.
The Burj Dubai alone will be more than the height of four Great Pyramids… more than all the Seven Wonders of the Ancient World, stacked on top of each other.
Remember, too, that the Great Pyramid took 20 years to build. The Temple of Artemis at Ephesus took six times that -- well over a century.
In contrast, the mighty Burj Dubai will be completed on December 30, 2008 -- less than four years from the time they broke ground.
Indeed, the Pharaohs live again.
What’s even more astounding than the heights of these new “Colossi” of Rhodes are the price tags. The top two towers in Dubai rang in at $650 million and $4.1 billion, or more than the entire GDPs of Belize and Barbados combined.
You haven’t seen anything, though, until you’ve looked at Dubai with a wide-angle lens.
Burj Dubai, the tower that will exceed 2,000 feet, is part of a larger development called “Downtown Burj Dubai.” It will be home to 30,000 citizens, with 19 residential towers and nine hotels.
And it will cost $20 billion to build.
If I stopped now, you’d probably be reasonably amazed at the amount of money these projects cost, at their sheer sizes and ambitions. But I have to tell you, Downtown Burj Dubai is small potatoes.
Another city, to be named Masdar City and constructed less than 100 miles from Dubai on the outskirts of Abu Dhabi, will cost $22 billion and will be the first “green” city ever built. (I’ll be dedicating a full article to this masterful plan at a later time, so stay tuned.)
But even these two massive projects combined don’t equal half the cost of Kuwait’s Silk City. This immense city will be home to 700,000 people and the 1,001-meter-tall Mubarak Tower -- the centerpiece of the Silk City skyline.
To channel Robin Leech for a moment, “The price tag for these champagne wishes and caviar dreams is an eye-watering $86 billion.”
I could spend an untold amount of time telling you all the amazing things this city will include, like a resort, a 200-hectare desert preserve, a new international airport, a new railway, and a bridge linking it to Kuwait City.
Instead, I’ll just send you to the official website, and move on to an even bigger project.
Yes, bigger…
Saudi Arabia is in the midst of constructing a city costing nearly more than these three huge projects (Downtown Burj Dubai, Masdar City and Silk City).
King Abdullah Economic City will cost more than $120 billion. That’s 16% more than Kuwait’s entire GDP.
It will be home to 2 million people in six distinct cities within 168 million square meters of prime coastal land.
A 14 million square-meter port on the Red Sea will make this mega-city a hub for trade with Europe, Africa and Asia. A central business district promises to be a new financial capital of the world. Sea resorts will offer some of the best tourist destinations in the Middle East.
The Industrial, Residential and Education zones are expected to be second to none.
I don’t mean to sound like a cheerleader. I just can’t help but stand in awe of these countries that are able to pump hundreds of billions of dollars into these massive “pleasure projects.”
For example, the United Arab Emirates is putting $60 billion into Dubailand, an entertainment district that will cover 3 billion square feet and include some of the largest, most expensive attractions ever built.
How big is a 3-billion-square-foot amusement park exactly? First, take every single Disney-owned theme park and resort in the world. Then imagine them all in one place. Then double that.
Middle Eastern countries are literally creating Empires in the Desert, building them on a scale never before seen or even imagined. Their only limits are the depths of their pockets. And right now, those pockets seem to have no bottom at all.
Courtesy: www.taipanfinancialnews.com
Well, there’s a new Pharaoh in town, and he’s building the world’s tallest buildings on the backs of foreign workers and foreign cash, just like old times. The Middle East once again holds the distinction of being home to the tallest structure on earth.
Dubai alone has more than 270 high-rises and is in the midst of constructing an additional 339. Furthermore, 330 high-rise construction projects have already been approved.
In fact, by 2015, Dubai will have more buildings of 100-plus floors than any other city in the world.
As mind-boggling as that sounds, Pharaoh’s only just begun…
The top 10 tallest buildings are a cumulative 4,918 feet. That’s not even counting Dubai’s newest skyscraper, Burj Dubai. That one, to be completed this year, is expected to be more than 2,000 feet.
The Burj Dubai alone will be more than the height of four Great Pyramids… more than all the Seven Wonders of the Ancient World, stacked on top of each other.
Remember, too, that the Great Pyramid took 20 years to build. The Temple of Artemis at Ephesus took six times that -- well over a century.
In contrast, the mighty Burj Dubai will be completed on December 30, 2008 -- less than four years from the time they broke ground.
Indeed, the Pharaohs live again.
What’s even more astounding than the heights of these new “Colossi” of Rhodes are the price tags. The top two towers in Dubai rang in at $650 million and $4.1 billion, or more than the entire GDPs of Belize and Barbados combined.
You haven’t seen anything, though, until you’ve looked at Dubai with a wide-angle lens.
Burj Dubai, the tower that will exceed 2,000 feet, is part of a larger development called “Downtown Burj Dubai.” It will be home to 30,000 citizens, with 19 residential towers and nine hotels.
And it will cost $20 billion to build.
If I stopped now, you’d probably be reasonably amazed at the amount of money these projects cost, at their sheer sizes and ambitions. But I have to tell you, Downtown Burj Dubai is small potatoes.
Another city, to be named Masdar City and constructed less than 100 miles from Dubai on the outskirts of Abu Dhabi, will cost $22 billion and will be the first “green” city ever built. (I’ll be dedicating a full article to this masterful plan at a later time, so stay tuned.)
But even these two massive projects combined don’t equal half the cost of Kuwait’s Silk City. This immense city will be home to 700,000 people and the 1,001-meter-tall Mubarak Tower -- the centerpiece of the Silk City skyline.
To channel Robin Leech for a moment, “The price tag for these champagne wishes and caviar dreams is an eye-watering $86 billion.”
I could spend an untold amount of time telling you all the amazing things this city will include, like a resort, a 200-hectare desert preserve, a new international airport, a new railway, and a bridge linking it to Kuwait City.
Instead, I’ll just send you to the official website, and move on to an even bigger project.
Yes, bigger…
Saudi Arabia is in the midst of constructing a city costing nearly more than these three huge projects (Downtown Burj Dubai, Masdar City and Silk City).
King Abdullah Economic City will cost more than $120 billion. That’s 16% more than Kuwait’s entire GDP.
It will be home to 2 million people in six distinct cities within 168 million square meters of prime coastal land.
A 14 million square-meter port on the Red Sea will make this mega-city a hub for trade with Europe, Africa and Asia. A central business district promises to be a new financial capital of the world. Sea resorts will offer some of the best tourist destinations in the Middle East.
The Industrial, Residential and Education zones are expected to be second to none.
I don’t mean to sound like a cheerleader. I just can’t help but stand in awe of these countries that are able to pump hundreds of billions of dollars into these massive “pleasure projects.”
For example, the United Arab Emirates is putting $60 billion into Dubailand, an entertainment district that will cover 3 billion square feet and include some of the largest, most expensive attractions ever built.
How big is a 3-billion-square-foot amusement park exactly? First, take every single Disney-owned theme park and resort in the world. Then imagine them all in one place. Then double that.
Middle Eastern countries are literally creating Empires in the Desert, building them on a scale never before seen or even imagined. Their only limits are the depths of their pockets. And right now, those pockets seem to have no bottom at all.
Courtesy: www.taipanfinancialnews.com
Subscribe to:
Posts (Atom)
