February 2008 Archives
By Saijel Kishan
Feb. 28 (Bloomberg) -- The California Public Employees' Retirement System, the largest U.S. pension fund, may increase its commodities investments 16-fold to $7.2 billion through 2010 as raw materials prices surge to records.
Calpers, which has about $240 billion in assets, agreed at a Feb. 19 board meeting to hold between 0.5 percent and 3 percent of its assets in commodities, spokesman Clark McKinley said. The Sacramento, California-based fund last year put $450 million into commodities, its first such investment.
The agreement is the fruit of Chief Investment Officer Russell Read's efforts since joining in 2006 to boost returns by shifting funds into raw materials and markets such as China and India. Oil has soared above $100 a barrel, wheat breached $13 a bushel for the first time, and gold and platinum climbed to the highest ever since Calpers began investing in commodities.
``We plan on ramping up the program by hiring additional staff,'' McKinley said by phone yesterday. ``We are excited about commodities, which have performed exceptionally well for us.''
The fund's commodity investments have so far tracked the Standard & Poor's GSCI index of 24 commodities, which returned 10 percent this year, adding to a 33 percent gain in 2007. In comparison, the Standard & Poor's 500 Index of stocks has fallen 6 percent in 2008, while U.S. Treasuries returned 2 percent, according to Merrill Lynch & Co. indexes.
20 Years of Growth
``Strength in commodity markets will be something we should see generally over the next 10 to 20 years,'' Read, 44, said in an interview in April, a year after he moved to Calpers from Deutsche Asset Management. ``The actual importance of the energy and materials sector we believe is going to explode.''
Investors from hedge funds to housewives have been putting their money into commodities such as gold, silver, copper, wheat and energy to help cover losses on stock investments and make up for historically low Treasury yields. Public pension plans in the U.S. hold on average about 81 percent of the funds they need for future retiree benefits, down from 100 percent in 2000, according to a study by Standard & Poor's.
Money managers plan to boost investments in commodities over the next three years, according to a survey by Barclays Capital published in December. About half of the 150 investors surveyed in New York aimed to expand commodities to more than 10 percent of their total assets, up from less than a fifth of respondents in 2005, Barclays said.
Read's Strategy
Calpers, under Read's strategy to change the way it parcels out funds, said in December it planned to switch about 11 percent of its portfolio from stocks and bonds into assets including investments linked to inflation.
The fund, also facing pressure from state and local governments to boost returns, would reduce its fixed-income investments to 19 percent from 26 percent. The yield on the 30- year U.S. Treasury bond last month fell to the lowest since regular sales of the debt began in 1977.
The fund's commodity program will come under the inflation- linked asset class, McKinley said. Calpers will decide on the proportion of assets invested in commodities ``depending on market opportunities,'' he added.
Calpers plans to allow its staff to actively manage some of
the commodity investments this year, McKinley said.
The Capital Gold Group, Calpers, gold, gold prices, commodities, commodity investments, hard assets,
NEW YORK (AP) -- Gold prices trekked higher Thursday, touching a record $970 an ounce as an inflationary combination of high oil prices and a falling dollar pointed investors to the relative safety of precious metals.
Other commodities traded mixed, with silver extending its highest gains since 1980 and wheat futures retreating further from record territory.
Soaring oil prices, a weak dollar and growing worries that the U.S. economy is sliding into a recession have fed investor appetite for gold, which traditionally is seen as a safe haven from inflation and economic uncertainty because it's known for holding its value. Gold rose nearly 32 percent in 2007 and has gained more than 13 percent so far this year.
Also weighing on investors were comments Thursday by Federal Reserve Chairman Ben Bernanke, who told Congress in a second day of testimony that rising inflation was complicating the central bank's job. Bernanke hued to his message that the Fed stands ready to lower its benchmark interest rate to boost the economy, putting further pressure on the dollar and boosting the allure of precious metals.
"You have an almost perfect storm for a bull market in precious metals," said Michael Gross, analyst with OptionSellers.com. "Bernanke's on television and he's pretty much saying the Fed is going to continue to cut rates, and that's really pressuring the dollar and fueling the bullish fire for gold and silver."
Lower interest rates can boost the economy but tend to depress the dollar, encouraging investors to shift funds into hard assets like precious metals and other commodities.
Gold for April delivery added $5.70 to fetch $966.70 an ounce on the New York Mercantile Exchange, after earlier touching an all-time high of $970 an ounce.
Other precious metals also rose. Silver for March delivery added 49 cents to $19.70 an ounce after rising to a 28-year high of $19.845. Nymex copper surged to a record $3.8965 a pound before easing back to $3.87 a pound, still up 3.2 cents.
The dollar's steep decline against the 15-nation euro has been a major driver behind gold's advance from less than $650 an ounce in January 2007. The dollar traded lower Thursday versus the euro, which fetched $1.5197.
The Capital Gold Group, gold, gold prices, gold investments, gold record high, falling dollar, dollar decline, bull market, precious metals bull market, spot gold, safe investment
NEW YORK (MarketWatch) -- Gold futures rose sharply Wednesday, touching a record $967.70 an ounce, propelled by the euro's surge to a new high against the U.S. dollar.
The Capital Gold Group, gold, gold prices, gold record high, gold investments, spot gold, weak U.S. Dollar, stagflation, commodities
NEW YORK (MarketWatch) -- Gold futures reversed earlier losses on Tuesday, as the dollar fell against major counterparts on bleak U.S. economic data, while traders reconsidered the importance of an expected sale of gold reserves by the International Monetary Fund.
The Capital Gold Group, gold, gold prices, gold demand, weak dollar, fallling dollar, demand for commodities, gold investments, gold IRA, IRA gold, spot gold
Reuters, Feb. 25, 2008
LONDON - Gold prices rose today as the dollar fell against the euro and oil prices moved up to almost $100 a barrel, while platinum held firm. Spot gold was up at $947,70/$948,50 a troy ounce in early trade from $943,70/944,50 late in New York on Friday. It hit an all-time high of $953.60 on Thursday.
The dollar was hovering near a three-week low against the euro, having slipped on renewed worries about recession in the US and expectations of further interest rate cuts by the US Federal Reserve.
"We’re back to watching the dollar and oil," a Europe-based trader said.
Traders said precious metals had also been boosted by news that SA’s Gold Fields had forecast gold production for the third quarter would fall between 20 and 25% compared with the December quarter.
Crude oil extended gains to above $99 a barrel, boosted by Iran’s warning that more UN sanctions would be "costly" to Western powers, and after Turkey’s incursion into northern Iraq.
"We believe that rising energy costs and subsequent inflation risk, and expected interest rate cuts from the Fed have been significant drivers of recent upward momentum in the gold price," Standard Bank said in a note.
Spot platinum was at $2,151/2,158 an ounce from $2,148/2,153 on Friday.
The metal used to make autocatalysts and jewellery has come under upward pressures from power shortages in SA, which produces 80% of the world’s platinum. Last week it rose to an all-time peak of $2,192 an ounce.
"Given the scale of volatility in the market and the heavily overbought conditions, platinum remains extremely vulnerable to a sizeable correction," TheBullionDesk.com said in a note.
"But with the metal set to move into a deeper supply deficit, further price gains seem inevitable."
Silver was at $18,08/18,13 an ounce from $17,98/18,03 late on Friday. Earlier today it hit a 27-year high of $18,13 an ounce. Palladium was at $513/517 from $498/503.
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The Capital Gold Group, gold, gold prices, spot gold, platinum, platinum prices, gold demand, platinum demand
by Shu-Ching Jean Chen
01.18.08, 4:30 AM ET
Hong Kong - As it has done in many other manufacturing industries, China has made the most of its cost advantage to become the world’s largest gold-producing country, replacing South Africa.
The news was confirmed by London precious metals consultancy GFMS when it announced on Thursday that China’s output for 2007 reached 276 metric tons of gold, or about 9.7 million ounces, a 12% increase over 2006 and slightly ahead of South Africa’s 272 metric tons. The GFMS figure came in slightly higher than an earlier estimate of 260 metric tons for 2007 by the China Gold Association, enabling China, which had been the No. 3 producer behind the United States, to end South Africa’s more than century-long rein at the top of the gold heap.
Chinese analysts had long anticipated taking the No. 2 position from the United States in 2007, but the rapid decline in output in the traditional major gold producer countries has given China the title about two years ahead of its own expectations.
Only last week, the deputy chairman of the China Gold Association, Hou Huimin, said in an interview with the weekly 21st Century Business Herald that he expected China to best South Africa’s production volume in about two years from now, helped by rapid step-up in production volumes by domestic companies--at an annual rate of about 15% in recent years, which ran counter to a global decline of about 3% in 2006.
He bemoaned the lack of scale among Chinese gold producers, whose number has consolidated to fewer than 800 from more than 1,200 in the year 2000. Top among them is the country’s oldest gold producer, China National Gold Group Corp., which boasts 20% of total gold production in China and controls more than 30% of domestic reserves. As well, it controls the first publicly listed gold mining firm in China, Zhongji Gold.
Gold production has been concentrated in the eastern provinces of Shandong, Henan, Fujian and Liaoning. Lately, remoter western provinces such as Guizhou and Yunnan have attracted keen investment from Australia and Canada, but the imbalance between investment for operations and measures to keep in check the pollution generated and to safeguard the natural environment is causing increased resentment among the largely ethnic minority residents of those regions.
China’s relatively small reserves, though, prompted a top mining official to declare to the state news agency, Xinhua News, in December that it was no longer encouraging foreign investment in gold, as it had been doing since 1995.
Many countries, from the United States to Australia to Canada, are more naturally blessed with plentiful gold reserves than China (which has 7% of the planetary total), but it is in China where low costs of labor and production--abetted by rapid capital expansion, and partly a heavy dose of foreign investment--are ideally matched with rising domestic demand as the world’s No. 4 consuming country. Chinese market demand accounts for 9.2% of worldwide gold consumption.
Early this month, China opened its first gold futures market in Shanghai, in response to its citizens’ zeal for gold, allowing its producers to hedge risks from the daily price fluctuations.
China’s gold producers also gain from the blistering record market price for gold. GFMS predicted gold prices would average $840 over the first half of the year, with still higher prices possible later in the year. “Investor appetite for gold at the moment seems undimmed and this should push gold higher over the year. Predicting the top is never easy but we always thought the $900 barrier could easily fall quite soon and then we have to start viewing $1,000 as a clear possibility for later this year,” remarked Philip Klapwijk, executive chairman of GFMS, speaking Thursday at a seminar in Toronto.
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Feb 22, 2008 - 04:58:00 HKT
NEW YORK (AP) - Precious metals prices soared Thursday, with gold, silver
and platinum hitting record highs after a drop in the dollar led traders to
shift funds into hard assets as safe-haven investments.
Other commodities traded mixed, with crude oil retreating from $100 a barrel
and agriculture futures rising.
The dollar's decline versus the 15-nation euro has been a major driver of
precious metals, which are seen as safer alternative investments used to hedge
against inflation and economic and political uncertainty. Platinum has gained 38
percent this year, gold 11 percent and silver 19 percent.
"It's a dollar play today. Every day there's a new reason to worry, and
there seems to be a drive toward owning hard assets such as precious metals,"
said George Gero, senior vice president at RBC Capital Markets Global Futures in
New York.
The dollar fell Thursday against the euro, which fetched $1.4818 in trading
in New York. A weaker greenback encourages U.S. investors to turn to gold
because the metal is known for holding its value. It also encourages foreign
investors to buy the dollar-denominated metal, because the cost is not as high
for those with stronger currencies.
Gold jumped on the dollar's drop, with the April contract rising $11.40 to
settle at $949.20 an ounce on the New York Mercantile Exchange, after earlier
touching an all-time high of $958.40. Gold broke the $950 barrier for the first
time Wednesday, raising expectations that the metal could breach the
psychologically important $1,000 mark in coming weeks or months.
Silver rose to its highest level since 1980, with the March contract hitting
a record $18.075 an ounce on the Nymex before settling at $17.835, up 19 cents.
Platinum also extended its record-setting rally amid supply concerns fed by
a power shortage in South Africa. An ounce of platinum for April delivery surged
$49.40 to settle at $2,188.20 on the Nymex, after earlier pushing to an all-time
high of $2,194.80.
Nymex copper for March delivery added 10.20 cents to settle at $3.8105 a
pound after falling back from a record $3.8465.
The bullish run by precious metals has been boosted by a rally in oil, which
on Wednesday closed at a record $100.74 a barrel. Oil prices fell Thursday after
the U.S. government reported that national crude oil supplies rose more than
expected last week.
Copyright 2007 Associated Press.
The Capital Gold Group, gold, gold prices, gold record high, gold demand, gold supply, precious metals bull run, hedge against inflation, safe haven investments
Business Times
China's love of solid gold could be fueling the sharp rise in the precious metal's price.
In the week beginning February 18th, gold prices rose to $948.60 (£482)per ounce.
This coincided with China usurping the US as the second largest gold consumer last year, after India. Gold enjoyed a 26 per cent increase in demand.
Commenting on the rise in China's gold acquisitions, the Business Times (BT) wrote: "A larger class of new rich created by a booming economy is on the hunt for new investment opportunities and the rising price of gold has proved a powerful lure."
In addition, new wealth in the country is fuelling the desire for gold jewellery and traditional symbols of the new year – this year saw a flurry on sales of solid gold rats, BT added.
The newspaper reported that, according to the World Gold Council, China "played a significant role" in the world gold market.
Forbes stated that trading volume at the Shanghai Gold Exchange reached 1828.13 tons last year, a rise of 46.3 per cent year-on-year.
The Capital Gold Group, Capital Gold Group, gold, gold prices, gold demand, China gold demand
Speaking from Dallas, Texas, Sperandeo told HardAssetsInvestor.com that he worked out the numbers by watching the public’s reaction to the new streetTRACKS Gold Shares (NYSE Arca: GLD), an exchange-traded fund [ETF]. People want to hold gold, not necessarily companies that mine or use gold, he says, and the ETF has already contributed to a rise in the price of gold. GLD shares were trading at $89.51/share at press time; the ETF holds over $16 billion in gold bullion.
Judging by the first day of gold futures trading on the Shanghai Exchange, on Jan. 9, Sperandeo may be right: the contract prices for June, July and December all surged to their maximum possible gain on the first day of trading. At this writing, gold was trading on the spot market for $905.60/oz.
To hear Trader Vic tell it, it’s really a no-brainer. “There has been a lot of success in China’s stock market, as you know,” he says. “Whoever owns that stock will want gold for diversification as a chaos hedge.”
And the futures allow them an easy way to access that gold … in a sense. The standard trading contract for gold futures on the Shanghai Futures Exchange is 1000 grams per lot, with a 5% limit on daily price movements and a minimum margin of 7% of the gold contract value.
The catch is that, to discourage speculation by individual investors, Shanghai has put a number of restrictions on the futures contract. For one, the relatively large size of the contract is designed to tilt the scales in favor of institutional interest. But just as importantly, individual investors cannot take physical delivery of the underlying gold; only institutions can.
Still, net-net, the impact on gold demand could be significant if (as expected) it becomes a favored trading tool for all types of investors. Consider this quote from the China-based People’s Daily:
Trade at the Shanghai Gold Exchange, the country's spot market, was 1,828 tons last year, with a total value of 316.5 billion yuan. Based on that figure, said [Zheng Xueqin, a Chicago Board Options Exchange senior counselor], the futures market could hit 10.5 trillion yuan, because international experience showed that futures trade was usually 33 times spot trade.
In other words, $1.5 trillion.
Of course, it’ll take a while to get there. At press time, there were over 30,000 contracts in open interest for the June contract.
“Obviously the World Gold Council welcomes any new development that
allows more investors in more countries to have appropriate access to
gold's investment benefits,” says Roland Wang, the general manager of
the Greater China office of the World Gold Council. “The Chinese
government is to be congratulated on this latest step in the process of
deregulation it embarked upon several years ago.”
Gold futures are sold on many other exchanges, including the COMEX,
division of the NY Mercantile Exchange, the Tokyo Commodity Exchange,
and exchanges in Australia and South Africa. Gold bullion ETFs are also
available on many markets.
“China’s fascination in gold stems from the fact that for centuries the nation has been a large gold producer,” says Andrew Wilkinson, senior market analyst with Interactive Brokers [IB], in Greenwich, Conn. “Given the ongoing industrial revolution in China, it seems that there is an even greater ability to physically recover more ounces of gold. In typical smart Chinese style, producers are fast-teaming up with international partners to learn how to execute the recovery of deeper and more difficult areas. The city of Zhaoyuan, known as the gold capital of China, produces around one-seventh of Chinese gold output and has spent much of this decade shaping the region to become a globally recognized jewelry producer.
“Meanwhile existing action [trading volume] in the currently listed gold contract in Shanghai has more than doubled from below 30,000 contracts, to more than 73,000, according to the exchange’s website,” Wilkinson continues. “It’s likely that the Chinese fascination for speculation is equally as responsible for increased investor interest as is last year’s surge in the price.
“With the price of gold reaching close to $900 per ounce, it’s moving independently of a slightly stronger dollar these days. Whether this trend continues will be crucial. Gold, which is seen as an alternative to fiat money, generally climbs when the value of the dollar erodes. But it seems as though stronger final demand from population growth is finally extracting greater value from gold, which is pushing up record highs. There possibly couldn’t be a better time to launch a new contract.”
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NEW YORK
(MarketWatch) -- Gold futures soared to a new record high of $958.40 an
ounce Thursday, boosted by weakness in the dollar and the metal's
appeal as a hedge against inflation.The Capital Gold Group, Capital Gold Group, precious metals bull market, gold, gold prices, platinum, platinum prices, palladium, silver
SHANGHAI: Gold demand in China grew 26 per cent in 2007 from a year earlier to 326.1 tonnes, boosted by booming jewellery consumption, the World Gold Council said on Tuesday.
Chinese jewellery demand reached 302.2 tonnes in 2007, the council said in a news release, making China the world's second-largest retail jewellery market after India. Booming Chinese demand for the precious metal helped to boost its price in London to a record high of $936.50 an ounce in early February.
Gold was quoted at $911.60/912.40 an ounce on Tuesday.
The Capital Gold Group, gold, gold prices, gold demand.
NEW YORK (MarketWatch) -- Gold futures rallied nearly 3% in a broad-based advance for commodities Tuesday, as platinum surged by more than 4% and hit another record high -- $2,174 an ounce -- in electronic trading.
Capital Gold Group, gold, gold prices, platinum, platinum prices, platinum record high
Demand could slow down quite a few things but will gold be affected? That is a key question and there are a few factors to ponder over. On the other hand, we have to keep in mind that inflation in the US is turning out to be real. The US Fed Commission is talking of cutting interest rates further but such a monetary policy is not seen as a panacea by economists to save Washington.
Gold may have come off from a record high of $942.20 a ounce seen on January 30 but we have to bear in mind what happened earlier when gold touched $900. Then, it slid only to bounce back stronger. No one can rule out that happening, though currently it is seen gathering strength sideways before making its move upwards.
India factorNewer theories are emerging on why gold is seen holding stronger. Not the least is the Indian factor. India’s rabi or winter crop harvest is round the corner during which marriages also take place. Farm products in India are currently on an upswing and most of the crops’ prices are much above the minimum support price announced by the Government.
And sugar is seen bullish again. Besides, the Commission for Agricultural Costs and Prices has recommended remunerative prices for farmers and among various crops, the minimum hike it has recommended is 20 per cent.
All this means more money in the hands of the farmers and gold is the first thing that will strike them for investment. Therefore, gold purchase in India could resume with the wedding season round the corner. No Indian marriage is complete without gold and that should prove a trigger point for the yellow metal’s move in the next couple of weeks. Globally, there are two other factors that can hold gold firm. One is the low interest rates for loans and the other inflation.
At three per cent, loans are cheap and the best possibility, according to analyst Mr Bill Bonner, for speculators is to buy gold.
Better assetAccording to another analyst, Mr Krassimir Petrov, inflation doesn’t erode the value assets and gold is seen as a better asset than real estate.
Let’s look like this. Not all investors can invest huge amounts required to buy a real estate asset, whereas gold can be bought in small lots! There then, is the promise of gold.
Capital Gold Group, gold, gold prices, gold investment, gold demand, gold record high
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www.chinaview.cn
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BEIJING, Feb. 15 -- China surpassed the United States as the world's second-biggest retail gold market after India in 2007 by volume despite rocketing prices of the metal. Total consumer demand in China's mainland, Hong Kong and Taiwan reached 363.3 tons, up 23.5 percent from a year earlier, the World Gold Council said in a research report. India had a gold demand of 773.6 tons last year, while the figure in the US sat at 278.1 tons. Mainland gold demand, including jewelry and retail investment, topped 326 tons, up 26 percent from 2006, and the first time it surpassed the 300-ton level. Mainland gold-jewelry demand reached 302 tons in 2007, a year-on-year growth of 23.5 percent. What makes the Chinese market stand out is the growing demand in the fourth quarter, when most other markets saw demand drop as costs soared. Gold prices hit a three-decade high and topped more than US$900 an ounce on concerns over inflation, global economic uncertainty, the likelihood of an American recession and a weak US dollar. In the fourth quarter, mainland gold demand rose 18 percent to 94.3 tons. In India gold demand tumbled 64 percent to 83.9 tons and in the US it fell 15 percent to 110.7 tons. "It's a milestone for China's gold industry with demand surpassing the 300-ton level," an industry veteran said yesterday. Concerns over domestic inflation and the volatile stock market also added to the investment drawing power of gold as a haven. China's gold demand this year is again unlikely to be affected by rising prices as Chinese tend to buy at high prices in the hope of even further increases, World Gold Council veterans said in January. Chinese gold demand was stagnant during the late 1990s and early 2000s but started going upward from 2003. China's gold sales volume stood at 207.6 tons in 2003, a 2.0 percent rise to end a five-year wane. The gold-sale rise is also in line with the country's economic take-off. China is expected to have a gold consumption of 600 tons in 2010, according to industry insiders. The nation last year surpassed South Africa as the world's biggest gold-mining country.
The Capital Gold Group, Capital Gold Group, gold, gold prices, gold demand, gold supply |
By Atul Prakash
LONDON (Reuters) - Platinum surged 3 percent to hit a record high for the 12th successive day on Friday, with acute power problems in top producer South Africa encouraging investors and consumers to buy up the metal.
Spot metal hit a high of $2,060 an ounce before easing to $2,054/2,064 at 3:52 p.m., against $1,997/2,007 in New York late on Thursday. It has jumped more than 34 percent this year on the top of 37 percent gains recorded in 2007.
"It's panic, panic, panic. If you are a platinum consumer, you are not going to sleep at night," said Robin Bhar, metals analyst at UBS Investment Bank.
"The price move shows you the unprecedented nature of the market. People can see actual physical shortages somewhere down the road and prices moving away from them. It's not a case of just speculation. There is genuine demand coming through."
South Africa, which accounts for 80 percent of global platinum supply, has been hard hit by power cuts since early January, forcing mines to shut for five days last month.
South Africa's state power firm Eskom said on Thursday it would increase coal purchases and buy back electricity from those industrial users able to reduce consumption under a plan to address crippling shortages.
Analysts say the platinum deficit could widen to 400,000 to 500,000 ounces by the end of 2008, compared with about 265,000 ounces in 2007. The market had a surplus of 65,000 ounces in 2006 following seven successive years of deficits.
"Platinum supplies are heavily dependent on this market, and the delicate power supply situation as well as concerns about mine safety leave mine output extremely susceptible to potential disruptions," Barclays Capital said.
"The market is set to retain its deficit, further eroding the low level of above ground inventories thus further buoying platinum prices," it said in a report.
Impala Platinum, the world's No. 2 producer, on Thursday forecast "very tight market conditions". The top producer Anglo Platinum said this week the power problem alone would cut output by 120,000 ounces in 2008. It has shut it Polokwane smelter for weeks of repairs.
"Given the continued problems in South Africa, we expect platinum to extend recent gains," said Michael Widmer, metals analyst at Lehman Brothers.
GOLD GAINS
Gold also advanced, helped by a weaker dollar and Thursday's comments from Federal Reserve Chairman Ben Bernanke reinforcing the impression it will cut its benchmark rate by 50 basis points in the U.S. central bank's next policy meeting in March.
Spot gold rose as high as $915.20 an ounce and was last quoted at $908.60/909.30 an ounce, against $907.10/907.90 in New York late on Thursday.
U.S. gold futures rose $1.3 an ounce to $912.10.
"The return of the weak dollar/strong oil scenario should prove support for gold in the coming sessions. As well, traders again interpreted Bernanke's comments to suggest a further rate cut may be in the pipeline," said James Moore, metals analyst at THeBullionDesk.com.
"Gold now needs to conquer chart resistance at $913 and $927 or else the metal will remain vulnerable to a deeper correction back to the $875-$882 area."
Bernanke told the U.S. Senate Banking Committee the central bank "will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks."
A rate cut tends to boost gold' appeal as an alternative investment to currencies and bonds.
Harmony Gold, the world's fifth-biggest producer, posted a wider second-quarter loss per share after an accident closed a mine and warned the power crisis was hitting output.
Palladium firmed to $438.50/442.50 an ounce from $433/437, while silver rose to $17.33/17.38 an ounce from $17.24/17.29.
(Reporting by Atul Prakash; editing by Chris Johnson)
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NEW YORK, Feb 14 (Reuters) - New York platinum futures
firmly breached the $2,000 level on Thursday, as news of
South Africa's power crisis could persist for years fed
fears of a worsening market deficit for the white metal.
Gold contracts erased initial losses on inflation concerns
after crude oil resumed a rally toward $100 a barrel as energy
prices rose sharply on supply worries.
Carlos Sanchez, associate director of research with CPM
Group in New York, said that the South Africa news prompted
platinum's end users -- including automakers, jewelers as well
as investors from banks to exchange-traded funds -- to scramble
for the metal, bidding up prices in an already tight market.
"All along, there has been strong investment demand for
platinum. There's been strong industrial and fabrication demand
because of the autocatalyst sector and the rising production of
automobiles in the developing countries. I think we are still
heading higher," Sanchez said.
At 10:43 a.m. EST (1543 GMT), the active NYMEX platinum
contract for April delivery PLJ8 was up $21.30, or 1.1
percent, to $2,005 an ounce, after hitting a record high of
$2,030.60 in overnight trade. Spot platinum fetched
$1,997/2,007.
South Africa's state power firm set out plans on Thursday
to address crippling shortages, saying it would increase coal
purchases and buy back electricity from those industrial users
able to reduce their consumption.
Since early January, South Africa has been hit hard by
power cuts that forced mines to shut for five days last month
as well as stoking public anger, sending the rand sharply lower
and weakening investor confidence in Africa's biggest economy.
Platinum's major industrial use is in catalysts,
particularly in diesel vehicle catalysts, as it helps clean
environmentally damaging fumes from motor exhausts. Its
popularity in jewelry has expanded in recent years, especially
in China.
The April contract has now rocketed more than $500, or 35
percent, after hitting a bottom of $1,506.10 on Jan 22.
For sister-metal palladium, the NYMEX March contract PAH8
gained $1.95 to $441 an ounce. Spot palladium fetched
$435/439.
GOLD TURNS HIGHER
Platinum's rally and strengthened crude oil prices boosted
gold futures on Thursday.
The gold contract for April delivery at the COMEX division
of the New York Mercantile Exchange GCJ8 climbed $2.90 to
$913.10 an ounce. It peaked at $917.30 after bottoming at
$904.80.
Sharply higher crude oil boosted bullion's appeal as a
hedge against inflation. U.S. crude futures CLc1 rallied $2
to trade above $95 a barrel by midmorning.
Sanchez said that gold pulled back recently because of
lower flight-to-quality demand as the financial and economic
concerns of the U.S. economy had temporarily disappeared.
"People are still seeing gold as a safe haven and as a
hedge against a volatile stock market, volatile currency
markets, and a hedge against economic and financial
uncertainties," Sanchez said.
Spot gold was quoted at $910.80/911.70, versus
Wednesday's New York close of $906.70/907.50. London bullion
dealers fixed the afternoon spot price at $906.00.
COMEX March silver SIH8 was up 5.70 cents at $17.410 an
ounce, trading between $17.150 and $17.520.
Spot silver was at $17.37/17.42, compared with its
last Wednesday quote of $17.28/17.33. London silver was fixed
at $17.26.
CAPITAL GOLD GROUP, GOLD, GOLD PRICES, PLATINUM, SPOT GOLD,
SPOT SILVER, SAFE HAVEN, HEDGE
MUMBAI (Reuters) - India's gold demand in 2007 rose 7 percent to 773.6 metric tonnes from the previous year, World Gold Council said on Wednesday.
Demand for gold as investment stood at 215.4 tonnes, up 10 percent from 2006, WGC's detailed statement showed.
Jewellery demand grew at a smaller pace to 558.2 tonnes from 526.2 tonnes in the previous year, it showed.
WGC officials say that the figures mainly comprise gold imports into India by licensed agencies like banks and trading companies.
The demand figure for 2007 is just under a record 774.4 tonnes gold demand in 1998, according to data acquired earlier from WGC.
Capital Gold Group, gold prices, gold, gold demand
High gold prices, supported by supply and demand fundamentals, has prompted Merrill Lynch analysts Monday to substantially increase gold price forecasts to an annual average of $1,000/oz by 2009.
Author: Dorothy KosichPosted: Tuesday , 12 Feb 2008
Mineweb - RENO, NV -
Citing broadening investor demand, a weak U.S. dollar, record oil prices and ongoing geopolitical tension, Merrill Lynch Monday substantially raised their 2008-2012 gold forecasts, while also predicting increased silver prices.
Research analysts Michael Jalonen and Jeffrey Schok said they expect gold to average $925/oz this year and $1,000/oz in 2009 (up from $750/oz and $800/oz respectively). They raised the long-term gold price forecast from $600/oz to $650/oz, beginning in 2013. "Due to higher forecasts for the 2008-2012 period, our 10-year average gold price has jumped from $655 to $800/oz," they said.
"Notwithstanding the possibility of short-term strength in the US$, higher gold prices should be supported by positive supply-demand fundamentals including stagnant mine production and robust jewellery demand in emerging markets, in our opinion."
ML also made significant increases in EPS and CFPS forecasts for all North American gold producers under the broker's coverage. The companies with the largest EPS changes included Gammon Gold, Gold Star Resources and Centerra. The smallest changes to 2008 EPS forecasts are generally drawn from the lowest cost producers including Goldcorp, Yamana Gold, and Royal Gold.
The analysts also changed net assets values (NAV) for both North American gold and silver producers, based on upgraded gold and silver price assumptions. The gold producers reporting the largest change in estimated NAVs include Kinross, Centerra, and Golden Star. "The main drivers for the above average sensitivity to gold prices changes include higher than average cash costs and/or substantial reserve and resource positions which become economic at higher gold prices," according to Jalonen and Schok.
Gold Supply/Demand
"Looking ahead, we expect global mine production to be effectively stable in 2008, chiefly as a result of lower than anticipated supply from new mines and lower grades at maturing operations," they wrote. "Thereafter we are forecasting volumes to increase in 2009, 2010 and 2011 with average annual growth over this relatively short period of expansion at around 2%. Given extended delays in mine development reported across the sector, however, this may present a somewhat optimistic outlook."
Nevertheless, ML added that they don't anticipate that future gold production will be the historic high of 2,645 tonnes achieved in 2001. "The decline in global output from 2011 onwards is chiefly due to ore depletion at operating mines (defined as mines in production in 2007. Mine closures begin to have an impact in 2009, with losses accelerating from 2012."
Merrill Lynch's research identified France, Switzerland and the ECB to be the main central bank gold sellers from 2007-2009. The Netherlands, Sweden, Germany and Australia are expected to have smaller disposals.
"Given the projected shortfall from the 500 tonne maximum, it is possible that the ECB could accelerate disposals," the analysts suggested, adding that a less likely scenario would involve sales to benefit the IMF.
The Capital Gold Group, gold prices, gold forecast, gold
The Capital Gold Group, gold, gold prices
By Stuart Wallace
Jan. 16 (Bloomberg) -- Goldman Sachs Group Inc., the world's largest securities firm, increased its gold forecast for 2008 through 2010 because of expectations for a U.S. recession in the second and third quarters and a weaker dollar.
The metal will average $915 an ounce this year, compared with an earlier estimate of $800, the bank said in an e-mailed report today. Gold will average $870 next year and $940 in 2010, from earlier forecasts of $852 and $907, the bank said.
Gold was up $5.90 to $906.40 per ounce in trading in New York yesterday and silver was up 23 cents to $16.74 per ounce. Gold continued to rally in Asia and surged in early trading in Europe and is up to $915 per ounce. Silver has also surged and is up to $17.02 per ounce.
Gold again
rose in the other major currencies and surged to new near record highs
in euro and sterling. The London AM Fix at 1030 GMT this morning was at
$914 (up from $908.25 yesterday). Gold fixed at £468.96 (up from
£465.53 yesterday) and €631.17 (up from €620.516 yesterday). (See table
of record highs in various currencies below.)Gold looks set to challenge last week’s $936.80 record high and once again confound the skeptics. Gold is surging in all major currencies as it seems likely that major Central banks are set to cut interest rates in order to prevent a global recession. Even the ECB, the most hawkish and inflation conscious of all the central banks, is faltering in its resolve to target and fight inflation which is negative for the euro and indeed for all fiat currencies and indeed the asset classes denominated in those currencies.
Capital Gold Group, gold, gold prices, gold demand, euro v. dollar, fiat currencies, gold record high, gold currency, Central Banks, hard asset class, global recession, U.S. recession, inflation, silver
Bullion added $9 an ounce on Thursday amid some choppy trading. The metal snapped a six-session losing streak on Wednesday, rising by $14.70 and moving back above the $900 mark. The metal plunged on Tuesday in U.S. trading and closed below $900 an ounce for the first time in more than two weeks. April-dated gold finished at $890.30, down $19.10 on the session. Prices slipped as low as $888.40 in the early going, gold's lowest level since Jan. 23. Gold dropped on Monday in U.S. trading amid some profit-taking after last week's recent rate cut-led rally.
Gold's hedge value received a boost from a sharp rise in oil prices. Prices have been pushed higher after Royal Dutch Shell's announcement that it is halting output by 130,000 barrels a day because of a pipeline leak.
NEW YORK (Reuters) - In the latest example that the U.S. dollar just ain't what it used to be, some shops in New York City have begun accepting euros and other foreign currency as payment for merchandise.
"We had decided that money is money and we'll take it and just do the exchange whenever we can with our bank," Robert Chu, owner of East Village Wines, told Reuters television.
The increasingly weak U.S. dollar, once considered the king among currencies, has brought waves of European tourists to New York with money to burn and looking to take advantage of hugely favorable exchange rates.
"We didn't realize we would take so much in and there were that many people traveling or having euros to bring in. But some days, you'd be surprised at how many euros you get," Chu said.
"Now we have to get familiar with other currencies and the (British) pound and the Canadian dollars we take," he said.
While shops in many U.S. towns on the Canadian border have long accepted Canadian currency and some stores on the Texas-Mexico border take pesos, the acceptance of foreign money in Manhattan was unheard of until recently.
Not far from Chu's downtown wine emporium, Billy Leroy of Billy's Antiques & Props said the vast numbers of Europeans shopping in the neighborhood got him thinking, "My God, I should take euros in at the store."
Leroy doesn't even bother to exchange them.
"I'm happy if I take in 200 euros, because what I do is keep them," he said. "So when I go back to Paris, I don't have to go through the nightmare of going to an exchange place."
There have been enough dips and outright plunges to make gold traders feel like they're riding the devil's own roller coaster. But one strategy has worked time and time again: Buy the dips.
NEW YORK, Feb 5 (Reuters) - The price of gold will average $900 an ounce with a test of the historic $1,000 level possible this year based on strong investment buying amid a weak dollar, inflation concerns and safe-haven demand, a Citigroup metals analyst said.
John Hill, director, metals research, at Citi in San Francisco, told clients in a note dated Monday that the ongoing credit crisis and the threat of a U.S. recession and a global slowdown could further boost gold.
"Should inflation accelerate while (interest) rates are locked under economic weakness, gold could spike near past inflation-adjusted highs," Hill said.
"We view this as an extremely hospitable macro environment and
believe the ongoing investment-driven demand phase will continue for
gold, particularly as the broader investor base is not yet fully
involved," he added. . .
Saturday February 2, 12:12 AM
LONDON (AFP) - Gold prices hit a historic 936.92 dollars per ounce on Friday as the yellow metal was boosted by strains in the US economy and weakness of the dollar, analysts said.
The record-breaking run on the London Bullion Market beat the previous high of $933.33 set on Tuesday.
Platinum meanwhile soared to an historic high of $1,760 an ounce on the London Platinum and Palladium Market.
Precious metals are in demand by investors seek a safe haven for their cash amid deepening concerns that the US economy could be heading for a recession.
Weakness of the dollar encourages demand for dollar-priced commodities because it makes them cheaper for buyers using stronger currencies.
In recent days, power shortages in South Africa -- the world's biggest gold producer -- have also paralyzed mining activity and put even more pressure on prices.
