Gold was little changed in Asia after energy prices declined from a record and the euro eased against the dollar, eroding the precious metal's appeal as a hedge against inflation.
Interest in the precious metal as an alternative asset waned as crude-oil futures fell from a record $119.90 a barrel reached on April 22 and the euro traded below $1.60. Gold climbed to a record $1,032.70 on March 17, when crude and the euro set previous records.
``Gold hasn't been able to sustain a rally even in the face of record oil prices and a record-low dollar,'' Wang Xinyou, senior gold analyst at Agricultural Bank of China, said by phone from Beijing today. ``Gold may remain pressured when those two decline, especially as concerns over the credit crisis seem to be gradually diminishing.''
UBS AG said yesterday gold will sell for $850 an ounce in three months, down from a previous forecast of $1,000.
Bullion for immediate delivery was virtually unchanged at $904.20 an ounce at 9:38 a.m. in Singapore. The precious metal fell below $900 yesterday to $897.67 an ounce. Silver was up 0.2 percent to $17.18 an ounce.
Crude oil fell for the second day to trade at $117.90 a barrel at 9:39 a.m. in Singapore. The euro also fell for the second day against the dollar to $1.5859.
The weakness of the dollar in previous days ``provided some support for gold, but failed to stimulate the metal price movement,'' said Peter Fertig, consultant at Dresdner Kleinwort, in a report yesterday. Gains in the stock markets ``might weigh on gold'' as well, he added.
Gold for June delivery was little changed at $906.70 an ounce in after-hours electronic trading on the Comex division of the New York Mercantile Exchange at 9:18 a.m. Singapore time.
Gold for February 2009 delivery fell 1.5 percent to 3,028 yen a gram ($911 an ounce) at 10:19 a.m. local time on the Tokyo Commodity Exchange.
Courtesy : Bloomberg.com
Wednesday, April 23, 2008
Iraq warns oil majors on June deadline
Rome: Iraq may drop oil service deals with oil majors if they fail to sign the contracts by June, Iraqi oil minister Hussain Al Shahristani said.
Iraq is negotiating five short-term oilfield service contracts worth around $500 million each aimed at boosting its output by around a quarter. The Opec member had hoped to sign the contracts in March.
"June is a bit late, if they are not ready by then we might not really require technical service contracts... we may drop them if they are not signed soon," he said.
BP Royal Dutch Shell and ExxonMobil were negotiating a deal each. Shell is negotiating another deal together with BHP Billiton, while Chevron and Total together are working on a fifth deal.
Iraq is negotiating five short-term oilfield service contracts worth around $500 million each aimed at boosting its output by around a quarter. The Opec member had hoped to sign the contracts in March.
"June is a bit late, if they are not ready by then we might not really require technical service contracts... we may drop them if they are not signed soon," he said.
BP Royal Dutch Shell and ExxonMobil were negotiating a deal each. Shell is negotiating another deal together with BHP Billiton, while Chevron and Total together are working on a fifth deal.
Gold sheds 2% as dollar rises against euro
London: Gold shed more than two per cent yesterday as the dollar gained ground against the euro, traders said.
Spot gold sank to an intraday low of $897.10 an ounce before steadying around 900.20/$901.20 by 1428 GMT, well below levels of $920.65/$922.05 seen late in New York trade on Tuesday.
People were unwinding their long positions on gold, after the metal's recent rally, said analyst Daniel Hynes of Merrill Lynch. "We've seen net long positions on the Comex decrease recently and I think we're seeing a continuation of that movement out of gold just at the moment," he said.
Gold held in New York-listed StreetTRACKS Gold Shares, the world's largest gold-backed exchange-traded fund, fell to 623.41 tonnes on Tuesday from 641.82 tonnes the previous day.
Profit-taking
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The metal hit a three-week high of $952.60 last week but attempts to stay above $950 were met by profit-taking. Dealers noted some physical demand but it was not enough to trigger another rally towards last month's record high of $1,030.80. "In the near-term, gold is likely to continue to take its lead from dollar movements," said Suki Cooper, precious metals analyst at Barclays Capital.
The euro pulled back from a record peak versus the dollar after a fall in manufacturing activity suggested that economic growth in the euro zone is starting to slow.
A firmer dollar makes gold costlier for holders of other currencies and often lowers bullion demand. The metal is also generally seen as a hedge against oil-led inflation.
Oil eased to under $118 a barrel, but stayed on the boil due to supply disruptions in Nigeria and fears that a refinery strike in Scotland could hit production in the North Sea.
Inflation
"Higher oil prices should increase near-term inflation expectations, which might leave some room for near-term upside potential for commodities," analysts at Standard Bank said.
"However, continued fund liquidation signals that most investors remain on the sidelines because of uncertainty in financial markets. Precious metals should remain range-bound ahead of the Fed interest rate decision due next week."
The US Federal Reserve is expected to lower interest rates from the current 2.25 per cent.
A rate cut tends to lower the dollar's appeal, which in turn often lifts bullion demand.
Platinum fell two per cent to $1,975.50 on the back of the declines in gold, and was later $2,002.50/$2012.50 against $2,017.50/$2,027.50 previously.
Spot gold sank to an intraday low of $897.10 an ounce before steadying around 900.20/$901.20 by 1428 GMT, well below levels of $920.65/$922.05 seen late in New York trade on Tuesday.
People were unwinding their long positions on gold, after the metal's recent rally, said analyst Daniel Hynes of Merrill Lynch. "We've seen net long positions on the Comex decrease recently and I think we're seeing a continuation of that movement out of gold just at the moment," he said.
Gold held in New York-listed StreetTRACKS Gold Shares, the world's largest gold-backed exchange-traded fund, fell to 623.41 tonnes on Tuesday from 641.82 tonnes the previous day.
Profit-taking
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The metal hit a three-week high of $952.60 last week but attempts to stay above $950 were met by profit-taking. Dealers noted some physical demand but it was not enough to trigger another rally towards last month's record high of $1,030.80. "In the near-term, gold is likely to continue to take its lead from dollar movements," said Suki Cooper, precious metals analyst at Barclays Capital.
The euro pulled back from a record peak versus the dollar after a fall in manufacturing activity suggested that economic growth in the euro zone is starting to slow.
A firmer dollar makes gold costlier for holders of other currencies and often lowers bullion demand. The metal is also generally seen as a hedge against oil-led inflation.
Oil eased to under $118 a barrel, but stayed on the boil due to supply disruptions in Nigeria and fears that a refinery strike in Scotland could hit production in the North Sea.
Inflation
"Higher oil prices should increase near-term inflation expectations, which might leave some room for near-term upside potential for commodities," analysts at Standard Bank said.
"However, continued fund liquidation signals that most investors remain on the sidelines because of uncertainty in financial markets. Precious metals should remain range-bound ahead of the Fed interest rate decision due next week."
The US Federal Reserve is expected to lower interest rates from the current 2.25 per cent.
A rate cut tends to lower the dollar's appeal, which in turn often lifts bullion demand.
Platinum fell two per cent to $1,975.50 on the back of the declines in gold, and was later $2,002.50/$2012.50 against $2,017.50/$2,027.50 previously.
Dubai diesel prices up 40% in six months
Dubai: The price of diesel at Dubai's filling stations has increased by 40 per cent in six months, making it almost 80 per cent more expensive than that sold by Adnoc-operated pumps in Abu Dhabi.
The price of diesel per gallon went up from Dh14.30 to Dh15.30 in Dubai last night, the single biggest increase since October. Diesel sold at Dh11.00 per gallon in the city on October 23, according to transport industry sources.
Dubai fuel retailers Emirates National Oil Company (Enoc), which operates Enoc and Eppco brand service stations, and Emarat have been raising diesel pricing for several months, citing high international crude prices.
The rate of diesel was unchanged at Dh8.60 per gallon in Abu Dhabi yesterday.
The price of diesel per gallon went up from Dh14.30 to Dh15.30 in Dubai last night, the single biggest increase since October. Diesel sold at Dh11.00 per gallon in the city on October 23, according to transport industry sources.
Dubai fuel retailers Emirates National Oil Company (Enoc), which operates Enoc and Eppco brand service stations, and Emarat have been raising diesel pricing for several months, citing high international crude prices.
The rate of diesel was unchanged at Dh8.60 per gallon in Abu Dhabi yesterday.
Peak Oil: Why Oil reserves are depleting
MUMBAI: Do you know what is Peak Oil and how the decline in oil production is affecting companies and countries across the globe?
The term Peak Oil refers to the maximum rate of the production of oil in any area under consideration, recognising that it is a finite natural resource, subject to depletion.
Here are some common jargons used in describing Peak Oil:
Cumulative production
The cumulative production is the sum of all oil that has ever been produced until a specific date. Cumulative production can be given for a field, oil basin, country or the world.
Decline rate
The decline rate refers to production only. It is defined as the negative relative change of production over a time period. Often a period of a year is used. The decline rate can be expressed as a fraction or as percent. Assume a production of 1 Gb in year 2007 and 0.95 Gb in year 2008. The decline rate for year 2008 would then be (1 - 0.95)/1 = 0.05 = 5%. If the production is rising, the decline rate becomes negative.
Depletion rate
The depletion differs from the decline rate in that it takes into account the amount of oil that is left. The depletion rate is defined as this year’s production divided by the amount of oil that is left
Depletion rate = This year's production / Oil left at start of this year
The amount of oil left is calculated by taking the URR minus last year’s cumulative production. The depletion rate depends on the estimated amount of oil left. As more oil is produced, less oil is left. At a constant production the depletion rate grows while the decline rate is zero. The depletion rate can never become negative.
Geological basin
A large geological area in which sedimentation is occurring or has occurred. Certain parts of the basin might therefore have the required geological conditions to trap oil. Consists of many oil fields.
Oil
In context of oil production, the definition from BP Statistical Review (B.4) is used: crude oil, shale oil, oil sands and NGLs (natural gas liquids - the liquid content of natural gas where this is recovered separately).
In context of oil consumption, the definition from World Energy Outlook (A.6) is used: crude oil, condensates, natural gas liquids, refinery feedstocks and additives, other hydrocarbons and petroleum products (refinery gas, ethane, LPG, aviation gasoline, motor gasoline, jet fuels, kerosene, gas/diesel oil, heavy fuel oil, naphtha, white spirit, lubricants, bitumen, paraffin waxes, petroleum coke and other petroleum products).
Oil-in-place / Recovery factor
Oil-in-place is the estimated total amount of oil that is in the ground before production has started. For various reasons far from all of this oil can be recovered. Oil-in-place is usually calculated on a field basis and in an early stage. The oil-in-place value is multiplied by a valuecalled recovery factor and results in an estimated URR for a single field (see below). Later in a field’s production phase the URR is usually calculated with other techniques>
Oil reservoir
A subsurface porous and permeable rock body that contains oil, gas or both.
Oil field
An area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same individual geological structural feature or stratigraphic condition.
Production
Production refers to the amount of oil that is produced during a certain time period (most often a day or a year). The following units are common in litterature:
kb/d (1 000 barrels per day)
Mb/d (1 000 000 barrels per day)
Gb/y (1 000 000 000 barrels per year)
1 Mb/d = 365/1000 = 0.365 Gb/y
1 Gb/y = 1000/365 = 2.74 Mb/d
Recoverable Reserves (Estimated future production from known fields)
The recoverable reserves are an estimate of how much recoverable oil is still left in the already found oil fields. It can only be an estimate since it’s impossible to know exactly how much oil is still in the ground.
Because of this uncertainty, reserves are calculated with a certain probability. A reserve estimate followed with, for instance, ‘P90’ means that there is a 90% chance that there is at least as much recoverable oil as the reserve estimate claims.
The term Peak Oil refers to the maximum rate of the production of oil in any area under consideration, recognising that it is a finite natural resource, subject to depletion.
Here are some common jargons used in describing Peak Oil:
Cumulative production
The cumulative production is the sum of all oil that has ever been produced until a specific date. Cumulative production can be given for a field, oil basin, country or the world.
Decline rate
The decline rate refers to production only. It is defined as the negative relative change of production over a time period. Often a period of a year is used. The decline rate can be expressed as a fraction or as percent. Assume a production of 1 Gb in year 2007 and 0.95 Gb in year 2008. The decline rate for year 2008 would then be (1 - 0.95)/1 = 0.05 = 5%. If the production is rising, the decline rate becomes negative.
Depletion rate
The depletion differs from the decline rate in that it takes into account the amount of oil that is left. The depletion rate is defined as this year’s production divided by the amount of oil that is left
Depletion rate = This year's production / Oil left at start of this year
The amount of oil left is calculated by taking the URR minus last year’s cumulative production. The depletion rate depends on the estimated amount of oil left. As more oil is produced, less oil is left. At a constant production the depletion rate grows while the decline rate is zero. The depletion rate can never become negative.
Geological basin
A large geological area in which sedimentation is occurring or has occurred. Certain parts of the basin might therefore have the required geological conditions to trap oil. Consists of many oil fields.
Oil
In context of oil production, the definition from BP Statistical Review (B.4) is used: crude oil, shale oil, oil sands and NGLs (natural gas liquids - the liquid content of natural gas where this is recovered separately).
In context of oil consumption, the definition from World Energy Outlook (A.6) is used: crude oil, condensates, natural gas liquids, refinery feedstocks and additives, other hydrocarbons and petroleum products (refinery gas, ethane, LPG, aviation gasoline, motor gasoline, jet fuels, kerosene, gas/diesel oil, heavy fuel oil, naphtha, white spirit, lubricants, bitumen, paraffin waxes, petroleum coke and other petroleum products).
Oil-in-place / Recovery factor
Oil-in-place is the estimated total amount of oil that is in the ground before production has started. For various reasons far from all of this oil can be recovered. Oil-in-place is usually calculated on a field basis and in an early stage. The oil-in-place value is multiplied by a valuecalled recovery factor and results in an estimated URR for a single field (see below). Later in a field’s production phase the URR is usually calculated with other techniques>
Oil reservoir
A subsurface porous and permeable rock body that contains oil, gas or both.
Oil field
An area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same individual geological structural feature or stratigraphic condition.
Production
Production refers to the amount of oil that is produced during a certain time period (most often a day or a year). The following units are common in litterature:
kb/d (1 000 barrels per day)
Mb/d (1 000 000 barrels per day)
Gb/y (1 000 000 000 barrels per year)
1 Mb/d = 365/1000 = 0.365 Gb/y
1 Gb/y = 1000/365 = 2.74 Mb/d
Recoverable Reserves (Estimated future production from known fields)
The recoverable reserves are an estimate of how much recoverable oil is still left in the already found oil fields. It can only be an estimate since it’s impossible to know exactly how much oil is still in the ground.
Because of this uncertainty, reserves are calculated with a certain probability. A reserve estimate followed with, for instance, ‘P90’ means that there is a 90% chance that there is at least as much recoverable oil as the reserve estimate claims.
Dow Jones/Gold Ratio says gold could go $5000
How far will gold prices go? By any stretch of imagination can it go to $5000 per ounce? Let’s face it: Anyone can pick a number for where they think the price of gold will be so many years down the road.
But here’s a time-tested way to figure out how far the bull market in gold has yet to go: It’s called the Dow Jones / Gold ratio: It’s simple to calculate. Take the price or value level of the Dow Jones and divide it by the price of gold.
That is what Richard Russel's chart shows us. Whenever the ratio has slipped below $5 (meaning stocks are priced low compared to gold), a major bull market in stocks typically followed.
This was true at the beginning of the 20th century, during the thirties and during the late Seventies. But when the ratio turned down sharply after a protracted rise (meaning stocks became expensive compared to gold), it was time to buy gold.
If you bought gold in 1965 at $35 an ounce and held on to your investment, you would have seen gold rise to $800 an ounce—an return of 2,185%! Right now, the ratio is at $13. As you can see it has a long way to go before it falls below $5 again. That means gold has plenty of room to roam to the upside. Plenty…
In fact, Richard Russell reckons that the Dow Jones / Gold ratio might trade as low as 1:1 before the bull market in gold and the bear market in stocks is over.
If that is true and the Dow declines to less than half of what is now, from 12,800 to— let’s say—5,000, then gold could conceivably trade at $5,000 an ounce before the bull market in gold is over. (Dow Jones 5,000 divided by $5,000 per ounce of gold equals a1:1 ratio)
But here’s a time-tested way to figure out how far the bull market in gold has yet to go: It’s called the Dow Jones / Gold ratio: It’s simple to calculate. Take the price or value level of the Dow Jones and divide it by the price of gold.
That is what Richard Russel's chart shows us. Whenever the ratio has slipped below $5 (meaning stocks are priced low compared to gold), a major bull market in stocks typically followed.
This was true at the beginning of the 20th century, during the thirties and during the late Seventies. But when the ratio turned down sharply after a protracted rise (meaning stocks became expensive compared to gold), it was time to buy gold.
If you bought gold in 1965 at $35 an ounce and held on to your investment, you would have seen gold rise to $800 an ounce—an return of 2,185%! Right now, the ratio is at $13. As you can see it has a long way to go before it falls below $5 again. That means gold has plenty of room to roam to the upside. Plenty…
In fact, Richard Russell reckons that the Dow Jones / Gold ratio might trade as low as 1:1 before the bull market in gold and the bear market in stocks is over.
If that is true and the Dow declines to less than half of what is now, from 12,800 to— let’s say—5,000, then gold could conceivably trade at $5,000 an ounce before the bull market in gold is over. (Dow Jones 5,000 divided by $5,000 per ounce of gold equals a1:1 ratio)
Crude Oil supplies up in US
NEW YORK: The U.S. Department of Energy (DOE) said that crude oil supplies were up 2.4 million barrels to 316.1 million barrels.
Supplies of gasoline were down 3.2 million barrels and heating oil supplies were up 700,000 barrels. June crude oil was up .23 at $118.30.
The DOE also said that refinery use jumped up from 81.4% to 85.6% of capacity last week. Over the past four weeks, gasoline demand was up .9% from a year ago while distillate demand was up .5% from a year ago. June reformulated gasoline closed up 3.23 cents at another new contract high of $3.0424.
Grains
July wheat fell 34.5 cents to $8.315, the lowest close in over three months, helped by reports of good growing weather in the world's wheat regions.
Livestock
Japan suspended imports from National Beef after a shipment of beef was found to contain a spinal column, against Japan's trade rules. June cattle closed up .77 anyway, at 92.87, the highest close in over a month.
June hogs jumped up 1.75 cents to 75.42, the highest close in seven weeks. Pork production has been running high this year, but exports have been stronger than anticipated, helped by the weak dollar.
Lumber
July lumber was down $2.60 at another new contract low of $233.90, plagued by ongoing weakness in the U.S. housing market.
Orange juice
July orange juice closed up 4.55 cents at $1.1955, blamed on bargain-hunting.
Currencies
Statistics Canada reported that retail sales totaled C$35.5 billion in February, down .7% on the month and weaker than expected. The June Canadian dollar fell .88 to 98.25 after the Bank of Canada reduced the interest rate yesterday from 3.50% to 3.00%.
An index of industrial new orders for the Euro area 15 was up .6% in February. Also, an index of services increased from 51.6 to 51.8 in March, better than expected. The June euro was down 1.05 cents at $1.5859.
Australia's Bureau of Statistics said that the consumer price index was up 4.2% in the first quarter from a year ago, increasing expectations for another rise in the interest rate. The June Australian dollar closed up .48 at a new contract high of 94.32.
Supplies of gasoline were down 3.2 million barrels and heating oil supplies were up 700,000 barrels. June crude oil was up .23 at $118.30.
The DOE also said that refinery use jumped up from 81.4% to 85.6% of capacity last week. Over the past four weeks, gasoline demand was up .9% from a year ago while distillate demand was up .5% from a year ago. June reformulated gasoline closed up 3.23 cents at another new contract high of $3.0424.
Grains
July wheat fell 34.5 cents to $8.315, the lowest close in over three months, helped by reports of good growing weather in the world's wheat regions.
Livestock
Japan suspended imports from National Beef after a shipment of beef was found to contain a spinal column, against Japan's trade rules. June cattle closed up .77 anyway, at 92.87, the highest close in over a month.
June hogs jumped up 1.75 cents to 75.42, the highest close in seven weeks. Pork production has been running high this year, but exports have been stronger than anticipated, helped by the weak dollar.
Lumber
July lumber was down $2.60 at another new contract low of $233.90, plagued by ongoing weakness in the U.S. housing market.
Orange juice
July orange juice closed up 4.55 cents at $1.1955, blamed on bargain-hunting.
Currencies
Statistics Canada reported that retail sales totaled C$35.5 billion in February, down .7% on the month and weaker than expected. The June Canadian dollar fell .88 to 98.25 after the Bank of Canada reduced the interest rate yesterday from 3.50% to 3.00%.
An index of industrial new orders for the Euro area 15 was up .6% in February. Also, an index of services increased from 51.6 to 51.8 in March, better than expected. The June euro was down 1.05 cents at $1.5859.
Australia's Bureau of Statistics said that the consumer price index was up 4.2% in the first quarter from a year ago, increasing expectations for another rise in the interest rate. The June Australian dollar closed up .48 at a new contract high of 94.32.
Investment: Silver is a hot commodity
Mankind’s timeless fascination with silver stretches back 6,000 years. As early as 700 B.C., the Mesopotamian merchants used silver as a form of exchange. Later, many other civilizations also came to recognize the inherent value of silver as a trading metal.
The ancient Greeks minted the drachma, which contained 1/8th ounce of silver; and in Rome, the basic coin was the denarius, weighing 1/7th ounce. And let’s not forget the English shilling "sterling," originally denoting a specific weight of silver, which has come to mean excellence.
Today, millions of people throughout the world recognize silver’s intrinsic value and have made it popular as an affordable investment. In the United States, Individual Retirement Account (IRA) participants can invest a portion of their investment portfolio in silver bullion coins and silver bullion bars provided that they are of a fineness equal to or exceeding 99.9 percent silver. Contact your IRA plan administrator for further information.
This page explains how to use silver to diversify your investments and hedge against inflation. It will also introduce you to some of the most widely accepted silver investment products.
Although silver is relatively scarce, it is the most plentiful and least expensive of the precious metals.
Precious metals are valued for their beauty and relative scarcity in the Earth’s crust, and their superior properties. They are very malleable, highly resistant to corrosion, superior reflectors of light and are unsurpassed as conductors of heat and electricity.
Besides signifying status and wealth, silver has been one of the most romantic and sought after of all the precious metals. Mystified by its beauty from the beginning of time, people have been drawn to remote areas of the world in search of this white, reflective metal.
Silver has often been surrounded by mystery. The Incas of Peru called it "the tears of the moon" because they were awed by silver’s strange gleam, and the Chinese believed that a silver locket hung around a child’s neck would ward off evil spirits.
For the average investor, silver can be an effective means of diversifying investment assets and preserving wealth against the ravages of inflation.
Although the value of silver may vary, it has an intrinsic value that is immutable and permanent. Accordingly, many experts suggest that investors should include it among their investment assets.
Why?
Because silver can be an important store of value. For example, between 1971 and 1981, the U.S. dollar lost more than half of its value, while silver prices rose nearly five times.
But what about the future? Nobody knows; but many financial planners still suggest including silver among the investments of their clients.
Courtesy: silverinstitute.org
The ancient Greeks minted the drachma, which contained 1/8th ounce of silver; and in Rome, the basic coin was the denarius, weighing 1/7th ounce. And let’s not forget the English shilling "sterling," originally denoting a specific weight of silver, which has come to mean excellence.
Today, millions of people throughout the world recognize silver’s intrinsic value and have made it popular as an affordable investment. In the United States, Individual Retirement Account (IRA) participants can invest a portion of their investment portfolio in silver bullion coins and silver bullion bars provided that they are of a fineness equal to or exceeding 99.9 percent silver. Contact your IRA plan administrator for further information.
This page explains how to use silver to diversify your investments and hedge against inflation. It will also introduce you to some of the most widely accepted silver investment products.
Although silver is relatively scarce, it is the most plentiful and least expensive of the precious metals.
Precious metals are valued for their beauty and relative scarcity in the Earth’s crust, and their superior properties. They are very malleable, highly resistant to corrosion, superior reflectors of light and are unsurpassed as conductors of heat and electricity.
Besides signifying status and wealth, silver has been one of the most romantic and sought after of all the precious metals. Mystified by its beauty from the beginning of time, people have been drawn to remote areas of the world in search of this white, reflective metal.
Silver has often been surrounded by mystery. The Incas of Peru called it "the tears of the moon" because they were awed by silver’s strange gleam, and the Chinese believed that a silver locket hung around a child’s neck would ward off evil spirits.
For the average investor, silver can be an effective means of diversifying investment assets and preserving wealth against the ravages of inflation.
Although the value of silver may vary, it has an intrinsic value that is immutable and permanent. Accordingly, many experts suggest that investors should include it among their investment assets.
Why?
Because silver can be an important store of value. For example, between 1971 and 1981, the U.S. dollar lost more than half of its value, while silver prices rose nearly five times.
But what about the future? Nobody knows; but many financial planners still suggest including silver among the investments of their clients.
Courtesy: silverinstitute.org
'Gold is a currency that will go up to touch $ 1650'
By Jim Sinclair
All this has happened before. Have patience as the price of gold is going to $1650 and probably beyond. Please read Dan's letter to an inquiring CIGA concerning the present action of the gold price.
Please read Monty's fundamental update on Global and unstoppable inflation.
Please know that monetary inflation causes price inflation regardless of the state of business activity.
Gold is a currency and that cannot be erased no matter how hard any person, central bank, or group of central banks may try.
There is a feeling that the euro cannot surpass $1.60, so gold hesitates. Today $1.60 was hit and the euro fell back slightly.
Yesterday I showed why the interest rate talk will not prevent the dollar from falling against the euro beyond $1.60.
The 35 year synthetic euro chart screams that the euro will go above USD$2.00
Seasonality only applies to gold when the price of gold is wholly dependent on commodity demand to make price.
Whatever gold has in it on the downside will exhaust itself in terms of potential by early May.
I have recently made an offer to prove to you my firmness in belief that gold will go to $1650. I expect an agreement to be announced soon.
Relax. This has happened before and will again. Look at how far we have come since $248 - now above $900. In the not too distant future we will be at $1650.
Courtesy: www.jsmineset.com
All this has happened before. Have patience as the price of gold is going to $1650 and probably beyond. Please read Dan's letter to an inquiring CIGA concerning the present action of the gold price.
Please read Monty's fundamental update on Global and unstoppable inflation.
Please know that monetary inflation causes price inflation regardless of the state of business activity.
Gold is a currency and that cannot be erased no matter how hard any person, central bank, or group of central banks may try.
There is a feeling that the euro cannot surpass $1.60, so gold hesitates. Today $1.60 was hit and the euro fell back slightly.
Yesterday I showed why the interest rate talk will not prevent the dollar from falling against the euro beyond $1.60.
The 35 year synthetic euro chart screams that the euro will go above USD$2.00
Seasonality only applies to gold when the price of gold is wholly dependent on commodity demand to make price.
Whatever gold has in it on the downside will exhaust itself in terms of potential by early May.
I have recently made an offer to prove to you my firmness in belief that gold will go to $1650. I expect an agreement to be announced soon.
Relax. This has happened before and will again. Look at how far we have come since $248 - now above $900. In the not too distant future we will be at $1650.
Courtesy: www.jsmineset.com
Ban futures trading in Gold & Silver: Indian traders
A traders' body in India on Wednesday asked the government to ban futures trading in gold and silver in the view of the fluctuations in the precious metals market.
All India Sarafa Association, an apex body of the bullion and jewellery traders, said that the government should ban futures trading in gold and silver on the Multi Commodity Exchange.
The association, at its annual general meeting, unanimously passed a resolution asking the government that in the interest of the traders and consumers gold and silver trading should be banned on the MCX.
The association's President Sheel Chand Jain submitted a memorandum to the Prime Minister Manmohan Singh and Finance Minister P Chidambaram to take initiatives to stop futures trading in precious metals. In the last one year from April 2007-2008 prices of gold surged by about 45 per cent from around Rs 9,000 to the over 13,000 recently, while silver rose by around 35 per cent from about Rs 19,500 to over 26,500 per cent.
In view of a vast fluctuation in the gold and silver prices, which created both confusion and panic in the minds of consumers, the government should take an immediate step, Jain said. He said the futures trading ruined bullion trade as prices rose mostly on speculative base with hardly any physical buyer in the market.
"There is no reason for such volatile fluctuations in the gold and silver prices where a large number of small traders indulging in the future trading throughout the country," Jain added.
All India Sarafa Association, an apex body of the bullion and jewellery traders, said that the government should ban futures trading in gold and silver on the Multi Commodity Exchange.
The association, at its annual general meeting, unanimously passed a resolution asking the government that in the interest of the traders and consumers gold and silver trading should be banned on the MCX.
The association's President Sheel Chand Jain submitted a memorandum to the Prime Minister Manmohan Singh and Finance Minister P Chidambaram to take initiatives to stop futures trading in precious metals. In the last one year from April 2007-2008 prices of gold surged by about 45 per cent from around Rs 9,000 to the over 13,000 recently, while silver rose by around 35 per cent from about Rs 19,500 to over 26,500 per cent.
In view of a vast fluctuation in the gold and silver prices, which created both confusion and panic in the minds of consumers, the government should take an immediate step, Jain said. He said the futures trading ruined bullion trade as prices rose mostly on speculative base with hardly any physical buyer in the market.
"There is no reason for such volatile fluctuations in the gold and silver prices where a large number of small traders indulging in the future trading throughout the country," Jain added.
Old is Gold: 'Titanic' gold ring sold for record price
LONDON: Old is gold; and when the 'old' is a precious gold ring belonging to a survivor of the ill-fated Titanic ship that sank in 1912, its value becomes big.
A report published in the World Gold Council web site says a gold ring kept in a shoe box by a Titanic survivor has been sold at auction for 3000 Euro.
The item was among an array of memorabilia from the fated ship auctioned at the weekend for a collective value of Euro 100,000, the web site quoted BBC as saying.
Lillian Asplund's treasures included a pocket watch that stopped at the exact moment the ship sank and sold for Euro 31,000.
Meanwhile, the gold ring was the wedding band that belonged to Miss Asplund's father, Carl, who was in a photo with his wife that sold for Euro 5,000.
Andrew Aldridge, who runs Henry Aldridge and Son in Devizes, Wiltshire with his father Alan, told the publication: "There were bidders from China, America, Sweden, Ireland and the UK calling in and the room itself was so packed we had to fetch more chairs."
On April 10, 1912, the RMS Titanic set sail from Southampton on her maiden voyage to New York. At that time, she was the largest and most luxurious ship ever built. At 11:40 PM on April 14, 1912, she struck an iceberg about 400 miles off Newfoundland, Canada. Although her crew had been warned about icebergs several times that evening by other ships navigating through that region, she was traveling at near top speed of about 20.5 knots when one grazed her side.
Less than three hours later, the Titanic plunged to the bottom of the sea, taking more than 1500 people with her. Only a fraction of her passengers were saved. The world was stunned to learn of the fate of the unsinkable Titanic. It carried some of the richest, most powerful industrialists of her day.
Together, their personal fortunes were worth $600 million in 1912! In addition to wealthy and the middle class passengers, she carried poor emigrants from Europe and the Middle East seeking economic and social freedom in the New World.
A report published in the World Gold Council web site says a gold ring kept in a shoe box by a Titanic survivor has been sold at auction for 3000 Euro.
The item was among an array of memorabilia from the fated ship auctioned at the weekend for a collective value of Euro 100,000, the web site quoted BBC as saying.
Lillian Asplund's treasures included a pocket watch that stopped at the exact moment the ship sank and sold for Euro 31,000.
Meanwhile, the gold ring was the wedding band that belonged to Miss Asplund's father, Carl, who was in a photo with his wife that sold for Euro 5,000.
Andrew Aldridge, who runs Henry Aldridge and Son in Devizes, Wiltshire with his father Alan, told the publication: "There were bidders from China, America, Sweden, Ireland and the UK calling in and the room itself was so packed we had to fetch more chairs."
On April 10, 1912, the RMS Titanic set sail from Southampton on her maiden voyage to New York. At that time, she was the largest and most luxurious ship ever built. At 11:40 PM on April 14, 1912, she struck an iceberg about 400 miles off Newfoundland, Canada. Although her crew had been warned about icebergs several times that evening by other ships navigating through that region, she was traveling at near top speed of about 20.5 knots when one grazed her side.
Less than three hours later, the Titanic plunged to the bottom of the sea, taking more than 1500 people with her. Only a fraction of her passengers were saved. The world was stunned to learn of the fate of the unsinkable Titanic. It carried some of the richest, most powerful industrialists of her day.
Together, their personal fortunes were worth $600 million in 1912! In addition to wealthy and the middle class passengers, she carried poor emigrants from Europe and the Middle East seeking economic and social freedom in the New World.
Holding Gold is the best investment these days
Gold is playing a decisive role in the present economic scenario as inflation and recession have eaten the vital parts of every country’s economy.
Most investors prefer to invest their money in gold these days. Most traders think that this is the good time to squeeze maximum benefit from the collapsing economy. So they prefer to hold on to their dear gold possessions.
Recently, Indian Finance Minister P Chidambaram said that the inflationary expectation is worse than inflation. Inflationary expectation occures when people think the prices will rise in which case they will have to pay more and buy more.
Meanwhile globally inflation and high price have been affecting every sector. Thanks to all these reasons, gold has become a safe investment bet these days. Gold's role as a hedge against inflation is unparalleled, although for much of the late 1980s and during the 1990s, following the Plaza Agreement that ushered in monetary policy, this philosophy was challenged in the west on the basis that it wasn't working.
What was being overlooked, of course, was that in Europe and North America at that point inflation had been brought under control and gold was not, at that time, needed as an inflation hedge. In other countries where inflation was running much higher (or out of control - Turkey was a particular case in point), it was doing its job perfectly well.
With the markets now increasingly concerned about inflationary trends, gold has posted its credentials once more, quite separately from its role as a mitigator of financial and political risk.
While inflation is nowhere near the levels of the early 1980s (in the first quarter of 1980, inflation in the United States was 14 percent), inflationary expectations combined with an unprepossessing growth outlook have reinforced gold's defensive qualities. In the United States, in China in particular and also in Japan real interest rates are negative and, therefore, holding gold does not incur an opportunity cost.
Given the fears swirling around the financial sector at the moment, the fact that physical gold, held either in person or in an "allocated account", carries no counterparty risk - and counterparty risk is as we all know, is at the forefront right now.
Most investors prefer to invest their money in gold these days. Most traders think that this is the good time to squeeze maximum benefit from the collapsing economy. So they prefer to hold on to their dear gold possessions.
Recently, Indian Finance Minister P Chidambaram said that the inflationary expectation is worse than inflation. Inflationary expectation occures when people think the prices will rise in which case they will have to pay more and buy more.
Meanwhile globally inflation and high price have been affecting every sector. Thanks to all these reasons, gold has become a safe investment bet these days. Gold's role as a hedge against inflation is unparalleled, although for much of the late 1980s and during the 1990s, following the Plaza Agreement that ushered in monetary policy, this philosophy was challenged in the west on the basis that it wasn't working.
What was being overlooked, of course, was that in Europe and North America at that point inflation had been brought under control and gold was not, at that time, needed as an inflation hedge. In other countries where inflation was running much higher (or out of control - Turkey was a particular case in point), it was doing its job perfectly well.
With the markets now increasingly concerned about inflationary trends, gold has posted its credentials once more, quite separately from its role as a mitigator of financial and political risk.
While inflation is nowhere near the levels of the early 1980s (in the first quarter of 1980, inflation in the United States was 14 percent), inflationary expectations combined with an unprepossessing growth outlook have reinforced gold's defensive qualities. In the United States, in China in particular and also in Japan real interest rates are negative and, therefore, holding gold does not incur an opportunity cost.
Given the fears swirling around the financial sector at the moment, the fact that physical gold, held either in person or in an "allocated account", carries no counterparty risk - and counterparty risk is as we all know, is at the forefront right now.
Gold lose early gains to close at $ 917.60
NEW YORK: Following crude oil in its journey upward north, gold futures finished $ 2.40 higher at $ 917.60 a troy ounce on the Comex division of NYMEX on Monday
The yellow metal fumbled on its way to the top and even reached $US931.40 an ounce at one stage.
May silver fell US46 cents to $US17.36 an ounce, July platinum finished $US44 weaker at $US2027.30 an ounce.
June palladium tumbled $US10.90 to $US462.50 an ounce, and the most-active July copper contract fell US2.6c to settle at $US3.8665 a pound.
The yellow metal fumbled on its way to the top and even reached $US931.40 an ounce at one stage.
May silver fell US46 cents to $US17.36 an ounce, July platinum finished $US44 weaker at $US2027.30 an ounce.
June palladium tumbled $US10.90 to $US462.50 an ounce, and the most-active July copper contract fell US2.6c to settle at $US3.8665 a pound.
Subscribe to:
Posts (Atom)
