Sky-high gold price greets mine cos in mile-high city 20 Sep 2010 09:00

* Gold price up 25 pct in year, hits record high

* Bulls see gold piercing $1,300/ounce barrier soon

* Soros, Greenspan weigh in on precious metal

By Steve James

DENVER, Sept 19 (Reuters) - Small wonder that gold mining executives are smiling these days.

At the annual Denver Gold Forum industry meeting this week, the talk among gold company executives and buy-side fund managers is likely to be less about rising mining costs than about just how high the price of the precious metal might go.

The gold price has soared 25 percent since the industry's get-together a year ago, and it hit a record high on Friday.

Many gold bulls seem to think the sky's the limit. Even billionaire George Soros, who has warned that gold is "the ultimate bubble," has heavily invested in gold and gold-mining companies through his Soros Fund Management LLC hedge fund.

Perhaps coincidentally, the treasures of King Tutankhamun, featuring gilded artifacts of the "Golden King" and the Egyptian pharaohs, are on show at the Denver Art Museum at the same time as the Sept. 20-22 Gold Forum.

But you don't have to be an archeologist to uncover the fact that since last year's gathering in the mile-high city, spot gold <XAU=> has gone from about $1,020 per ounce to a record high of $1,280 on Friday.

That's what a recession will do for the metal, which is traditionally regarded as a safe haven for investors in times of economic uncertainty.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For a chart on the new gold price rush see

http://link.reuters.com/gup24p ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

"Gold is the only actual bull market currently," Soros said at a Reuters Newsmaker event last week. "In the present circumstances that may continue."

But Soros did hedge a little, saying, "It may go higher. But it's certainly not safe and it's not going to last forever." After asset classes set new highs, Soros observed, there are almost always immediate reversals that disappoint investors.

One closely watched industry report released last week saw gold above $1,300 this year, setting successive all-time highs, as uncertainty about economic recovery and a sovereign debt crisis stoke investment interest.

Investment demand in gold should benefit from the threat of inflation as central banks cut interest rates to battle double-dip recession and high unemployment, metals consultancy GFMS Ltd said in its Gold Survey 2010 Update.

"We could easily see gold spike comfortably above $1,300 before the year's out," said GFMS Chairman Philip Klapwijk. "Further gains in 2011 are far from out of the question."

Jeffrey Nichols, managing director of American Precious Metals Advisors, sees gold hitting $1,500 in the first half of 2011, or possibly even before the end of this year.

"Not only will prices move substantially higher in the months ahead, but the uptrend still has years to go ... with gold very likely reaching $2,000 and eventually $3,000 or even $5,000 before the gold-price cycle shifts into reverse," Nichols said.

"However, I also expect continued high gold-price volatility with big corrections along the way, so much so that some observers will prematurely declare the bull market over long before its time," he said.

Former Federal Reserve Chairman Alan Greenspan also talked gold at the Council on Foreign Relations last week.

"It is the ultimate means of payment and it is a signal that there is a problem with respect to currency markets globally. Now I don't think it's a serious problem -- unless you're short gold -- but it strikes me that it's the canary in the gold mine to keep an eye on."

With sky-high gold prices expanding profit margins, gold executives will likely focus on how their extra cash will fund future projects. In recent years, they have grappled with issues like renewing reserves, controlling costs and struggling to put projects into production.

Presenters at the Denver event, which runs through Wednesday, will include the world's biggest two producers, Barrick Gold <ABX.TO> <ABX.N> and Newmont Mining Corp <NEM.N>, which is based in Denver. South African giants AngloGold Ashanti <ANGJ.J> and Harmony Gold Mining Co <HARJ.J> are also set to be on hand. (Additional reporting by Frank Tang, Herb Lash and Ed Krudy in New York; Editing by Gary Hill)

Blogged with the Flock Browser

ANALYSIS-China to set gold market alight as it opens up 06 Aug 2010 09:50

(Repeats story issued on Thursday)

* China liberalises domestic market, lures foreign players

* China's move seen positive, government eyes 2nd tier banks

* Investors shift money out of property markets

By Lewa Pardomuan and Langi Chiang

SINGAPORE/BEIJING, Aug 5 (Reuters) - China's moves to free up its gold market open the way for foreign players and local banks to tap growing demand for the precious metal, offering citizens a more attractive investment and promising to boost the country's clout over global prices.

With the Shanghai Composite Index <.SSEC> down 20 percent this year, and gold prices <XAU=> still up 9 percent despite a correction from a lifetime high hit in June, more retail investors are buying bullion as they diversify their wealth.

A clampdown on rampant property speculation could also drive investors to shift some hot money into gold, which many see as a sign of status and good fortune, as hopes for more Chinese demand pushed gold to a two-week high above $1,200 an ounce this week.

"What's happening in China right now is that a lot of wealth is being switched out of the property markets into the gold market," said Mark Pervan, senior commodities analyst at ANZ in Melbourne.

"This is an ongoing theme. This theme is likely to put a very high floor of price on the gold market. The property investor is very concerned the government is trying to cool that market. They've made a lot of money in property."

Investors have long bet that China will eventually overtake India as the world's top consumer, and Beijing's move to allow more domestic banks to export and import bullion underscores the hunger for gold among the country's burgeoning middle class.

More foreign firms are likely to become members of the Shanghai Gold Exchange <SGE/MENU> and analysts also expect Beijing to ease curbs on gold investment products such as exchange traded funds.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For a graphic of gold prices versus the Shanghai Composite

Index, click:

http://graphics.thomsonreuters.com/gfx1/LWP_20100508120808.jpg

For a graphic of demand for gold jewellery and investment in

China and other main consumers, click:

http://graphics.thomsonreuters.com/F/08/CN_GOLD0810.jpg

For a six-week gold technical analysis, click [ID:nSGE66Q0DL]

For a factbox on the top 50 official sector gold holders,

click [ID:nLDE66C11E]

For a factbox on how to invest in gold and key price drivers,

click [ID:nLDE6600NC]

For a factbox on precious metals holdings of exchange-traded

products, click [ID:nLDE6721DV]

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

SHARE OF GLOBAL GOLD DEMAND JUMPS

Although China is the world's largest gold producer, it still requires imports as demand can easily outstrip domestic output by more than 100 tonnes annually.

China's share of global gold demand jumped to 11 percent in 2009 from 5 percent in 2002, when the Shanghai Gold Exchange opened, and consumption is likely to double in the next decade from around 420 tonnes as income grows, the World Gold Council says. [ID:nTOE62S01M]

The People's Bank of China said on Tuesday it would allow banks to hedge bullion positions in overseas markets, urge banks to lend more to domestic gold firms looking to go abroad, and actively develop more yuan-denominated gold derivatives. [ID:nTOE67207V]

China is likely to let second-tier institutions such as Minsheng Banking Corp <600016.SS> and China Merchants Bank <600036.SS> join forces with four major state banks, including Bank of China, that are already allowed to offer such services -- bringing the number to at least eight.

"China's gold market is going to play an important role in the global gold market," said Albert Cheng, Far East managing director of the World Gold Council.

"It will become more accessible for both international and domestic players. Investors in China will benefit from greater availability of physical gold and gold-related financial products. Naturally this is very positive for gold."

Analysts say China wants more banks to trade with overseas counterparts, reduce their reliance on the Shanghai Gold Exchange for hedging and invite more foreign banking institutions to trade on the Exchange, where trading volumes have risen by more than half in the first half of this year.

Five banks, including HSBC <HSBC.L> and Standard Chartered <STAN.L>, are members of the Shanghai Gold Exchange.

WILL CHINA BOOST RESERVES?

Most gold investors trade via the Exchange but banking sources say more clients are chasing products such as gold saving accounts and gold bars while hedging services to miners have gone up -- suggesting a shift from equities or property markets.

Beijing has repeatedly stressed its determination to curb speculative demand and rein in overly fast price rises in the real estate market despite a slowdown in economic growth. [ID:nBJ003894]

"Investment demand for gold is expanding very fast, as we are now in a bull market and prices will rise in the mid- and long-term," said a wealth manager specialising in precious metals at a state bank in Guangzhou.

"No matter if it's the stock, property or gold market, Chinese people always flock in when prices are rising."

Will China boost reserves after announcing the new measures? The answer may be no because Beijing will focus on bringing more gold into the country to satisfy demand, rather than stirring up global prices through official purchases.

China has increased its official gold holdings by more than 400 tonnes in the past few years to 1,054 tonnes -- the world's sixth largest.

"The PBoC comments should not be taken as a sign the official sector will buy gold, but rather that current restrictions on gold imports and gold investment products, such as exchange-traded funds, will gradually ease," HSBC said in a report.

Indeed, business is booming in downtown Beijing.

"There has been a big jump in interest in gold over the past year," said Zhang Qi, a salesman surrounded by gold commemorative items on display in a store of China Golddeal, the country's only official minting company, on Financial Street.

"Everybody can see how the government is trying to control the real estate market, so there is more confidence that gold is something that will be able to hold its value. Parents want to pass gold on to their children because they think it is safe." (Additional reporting by Polly Yam in HONG KONG; Editing by Clarence Fernandez and Ramthan Hussain) ((lewa.pardomuan@thomson reuters.com; +65 6870 3834; Reuters Messaging: lewa.pardomuan.reuters.com@reuters.net)) ( (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))

Keywords: GOLD CHINA/

Blogged with the Flock Browser

FACTBOX-The top 10 country holders of gold reserves 18 Feb 2010 14:54

 SINGAPORE, Feb 18 (Reuters) - The International Monetary Fund 
on Wednesday said it would shortly begin selling 191.3 tonnes of 
gold in the open market under a program approved last year to 
boost its resources for lending. [ID:nSGE61H00R] 
    The open-market sales are a part of a programme launched last 
year and, until now, gold has been made available to central 
banks on a first-come-first-serve basis.  
    So far, India -- the world's biggest consumer of gold -- 
Mauritius and Sri Lanka have purchased a total of 212 tonnes of 
gold from the IMF. 
    The IMF announced last year it would sell 403.3 tonnes of 
gold, about one-eighth of its total stock, to diversify its 
sources of income and increase low-cost lending to poor.     
    For a graphic of gold as a percentage of total reserves for 
the top holders by country, see: 
   http://graphics.thomsonreuters.com/0210/GLD_TPHLD0210.gif 
    The 10 countries with the highest levels of gold holdings by 
December 2009 (in tonnes): 
     
               Dec 2009    March 2009      % of reserves 
All countries   26,780.0      26,349.4         10.2 
United States    8,133.5       8,133.5         68.7 
Germany          3,407.6       3,412.6         64.6 
Italy            2,451.8       2,451.8         63.4 
France           2,435.4       2,487.1         64.2 
China            1,054.0       1,054.0          1.5 
Switzerland      1,040.1       1,040.1         28.8 
Japan              765.2         765.2          2.4 
Netherlands        612.5         612.5         51.7 
Russia             607.7         523.7          4.7 
India              557.7         357.7          6.4 
     
 The percentage of reserves is as calculated by the World Gold 
Council. The value of gold holdings is calculated using the 
end-October gold price of $1,040 per troy ounce. 

Blogged with the Flock Browser

SPDR Gold Trust holdings flat at 1,077.63 tonnes 10 Sep 2009 07:16

TOKYO, Sept 10 (Reuters) - The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust <GLD>, said its holdings stood at 1,077.63 tonnes as of Sept. 9, unchanged from the previous day.

For details on the gold holdings of the ETF listed in New York and co-listed on other exchanges, click on:

http://www.exchangetradedgold.com/iframes/usa.php

The holdings of the trust, which issues securities backed by physical stocks of gold, have declined in recent months due to fading worries about inflation, which has sapped investors' appetite for bullion as a hedge. <XAUEXT-NYS-TT>

Following are changes in SPDR holdings;

Date: Total tonnes

Sept 4 1,077.63

Sept 3 1,078,01

Sept 2 1,063.36

Aug 25 1,061.83

Aug 21 1,066.41

Aug 11 1,065.49

Aug 10 1,068.55

Aug 7 1,068.90

July 29 1,072.87

July 28 1,083.25

July 22 1,086.61

July 21 1,092.41

July 17 1,094.54

July 16 1,094.85

July 14 1,094.54

July 8 1,109.81

July 6 1,120.19

June 30 1,120.55

June 25 1,125.74

June 22 1,131.24

June 5 1,132.15

June 3 1,132.50

June 1 1,134.03 -- record

Blogged with the Flock Browser

FACTBOX-World Gold Council Q2 2009 gold demand trends 19 Aug 2009 14:01

   LONDON, Aug 19 (Reuters) - Global gold demand fell 9 percent in the second quarter to 
719.5 tonnes as rising prices and the impact of the global recession curbed jewellery buying, 
a report released Wednesday by the World Gold Council showed. 
    However, a rise in investment demand for products such as gold-backed exchange-traded 
funds prevented a sharper drop in consumption, it added. 
    Below are the central findings of the World Gold Council's Gold Demand Trends report for 
the second quarter of 2009. 
     
IDENTIFIABLE GOLD DEMAND (TONNES) 
     
                              2007     2008  Q1'08  Q2'08  Q3'08  Q4'08   Q1'09  Q2'09   %Ch 
                                                                                       Q2'09 
                                                                                    vs Q2'08 
Jewellery Consumption       2404.4  2185.8  446.7  517.8  673.1  548.3   345.1  404.1    -22 
Industrial & Dental          461.7   435.6  116.0  117.6  112.2   89.7    78.8   93.1    -21 
  -Electronics               310.6   292.7   80.5   81.3   76.4   54.5    50.2   60.4    -26 
  -Other Industrial           93.2    86.9   21.3   22.2   22.0   21.5    15.8   20.2     -9 
  -Dentistry                  57.8    55.9   14.3   14.1   13.8   13.7   12.8    12.5    -11 
Identifiable Investment      685.9  1183.0  170.7  151.9  420.1  440.2  600.0   222.4     46 
Net Retail Investment        432.5   862.1   98.1  147.9  270.6  345.5  134.9   165.7     12 
  -Bar Hoarding              236.5   391.8   49.4   92.2  126.4  123.9  -33.1    59.4    -36 
  -Official Coins            137.0   191.3   28.6   36.5   61.8   64.4   72.9    59.2     62 
  -Medals/Imitation Coins     72.6    69.6   10.7   14.5   25.0   19.4    2.4     8.3    -43 
  -Other Id'd Retail Invest. -13.6   209.3    9.3    4.7   57.4  137.9    92.7   38.7    720 
ETFs & Similar Products      253.3   320.9   72.7    4.0  149.5   94.7   465.1   56.7   1315 
 
Total Identifiable Demand   3551.9  3804.4  733.4  787.3 1205.4 1078.3 1023.9   719.5     -9 
     
    Source: World Gold Council Gold Demand Trends report, Q2 2009 
     

Blogged with the Flock Browser

INTERVIEW-Goldcorp CEO bullish on gold, unhurried on M&A 30 Jul 2009 07:30

     * Sees gold topping $1,050/oz this year 
    * Focused on growth pipeline, not on acquisitions 
    
 (In U.S dollars, unless noted) 
    By Cameron French 
    TORONTO, July 29 (Reuters) - Goldcorp <G.TO> Chief 
Executive Chuck Jeannes expects gold to break out of its recent 
pattern and top last year's record highs, but he isn't planning 
to rush out and buy up new assets to take advantage of the 
expected price gains. 
    With the massive Penasquito mine set to open in Mexico and 
$1.5 billion in capital spending already committed for the 
year, Jeannes considers the pipeline well stocked and his hands 
full. 
    "We always continue to look for opportunities, but with a 
50 percent growth profile over the next five years, we're not 
pressed to run out and buy anything right now," Jeannes said in 
an interview shortly after the miner released its 
second-quarter results. 
    The company, the world's No. 2 gold miner by market 
capitalization, expects to produce 2.3 million ounces of gold 
this year, and sees that figure rising to about 3.5 million 
ounces once Penasquito gets going at full tilt in five years or 
so. The mine is expected to produce 500,000 ounces a year over 
its 22-year life. 
    "Our primary focus is on the growth projects that we've 
already got," Jeannes said. 
    Regarding the metal, which has retreated since briefly 
piercing the $1,000-an-ounce market in February, Jeannes 
believes it will break out after escaping the low summer 
volumes that often lead to sideways trading. 
    "It's my belief that we're going to get back over the 
$1,050 level in the year," he said. The metal hit a record 
intraday high of $1,030.80 in March 2008. 
    While the price this year has been volatile, it has stayed 
mostly above $900 per ounce over the last several months. 
    Costs, meanwhile, have mostly been down a bit from last 
year's levels due to decreases in costs of fuel and other 
consumables, although Jeannes cautioned that the relief has 
been less than some investors may have liked to see. 
    "In the unit costs, we're probably not seeing as much 
reduction as many would have hoped," he said. 
    "We did see some of our consumables come down for the 
quarter, but they were offset by a turnaround in the fuel 
price." 
    Nevertheless, Goldcorp's cash costs in the first six months 
of the year came in at $299 an ounce, which Jeannes noted is 
below the company's 2009 guidance of $345 an ounce. 
    The company took a net loss of $231.6 million, or 32 cents 
a share, in the quarter, due to $326 million non-cash foreign 
exchange revaluation of future income tax liabilities. 
[ID:nN29298270] 
    Cash flow rose 22 percent, while core earnings were 14 
cents a share, 1 cent shy of analysts' expectations. 
    ($1=$1.09 Canadian) 

Blogged with the Flock Browser

GOLD - SPDR Dold Trust

TOKYO, Feb 20 (Reuters) - The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust <GLD>, said holdings hit a record 1,028.98 tonnes as of Feb. 19, up 4.89 tonnes or 0.5 percent from the previous day.

For details on gold holdings by the ETF listed in New York and also co-listed on other exchanges, click on:

http://www.exchangetradedgold.com/iframes/usa.php

Holdings in the trust, which issues securities backed by physical stocks of gold, began climbing again in December as worries about the economic crisis drove investors to seek the metal as a safe-haven asset. <XAUEXT-NYS-TT>.

Following are changes in SPDR holdings

Date: Total tonnes

Feb 19 1,028.98

Feb 18 1,024.09

Feb 17 1,008.80

Feb 13 985.86

Feb 12 970.57

Blogged with the Flock Browser

Demand for Gold - Jewellery and Investment

   Demand for gold for jewellery and investment in key consumer 
nations (in tonnes): 
     
                         2008                     2007 
                Jewellery   Investment    Jewellery   Investment 
 India         469.7         190.5       551.7       217.5 
Greater China   353.5          78.6       331.1        34.0 
 China           326.7          68.9       302.2        25.6 
 Japan            28.2         -39.4        30.6       -56.3 
 Indonesia        55.9           2.9        55.2         0.3 
 Vietnam          19.6          96.2        21.4        56.1 
 Middle East     311.4          28.2       325.5        20.1 
 Turkey          153.2          57.1       188.1        61.1 
 Russia           96.1          N/A         85.7        N/A 
 USA             179.1          77.8       257.9        16.6 
     

Blogged with the Flock Browser

The Bull's Case for Investing in Gold

Next stop $1,000? Gold has climbed more than $160, about twenty percent, in the last four weeks, and no matter where it goes from here over the short-term, some bulls think the long-term price is headed higher.

The price of the shiny yellow metal, now trading around $970 an ounce, is dependent, for the most part, on the value of the dollar. When the buck falls, gold rises, and vice versa. Some experts predict that even though the U.S. dollar has rallied since the financial crisis began, the greenback will resume its decline later this year or in 2010, for a couple of reasons.

First, the obvious: the supersize U.S. budget deficit, which has gone from a $128 billion surplus seven years ago to a to a more than $1 trillion deficit now. The government’s inability to pay off its debts each year has led to inflation, the devaluing of the dollar and a seven-year rally in the price of gold. But some analysts say the second reason, President Obama’s $787 billion stimulus plan and other spending to prop up the economy, could have a bigger impact on the value of the dollar. To pay for that stimulus, the U.S. will have to print a lot more money, rack up an even higher deficit (potentially $1.6 trillion by the end of this year, some economists predict) and likely bring inflation back with a vengeance. “In the long run, there are more negative than positive forces on the dollar,” says Geoff Somes, senior economist with State Street Global Advisors.

All that sounds great for gold, but it’s still not a sure thing. Deflation, not inflation, is what worries some analysts in the short term. And when the dollar rose last fall, gold lost around 20 percent of its value. Still, many pros recommend gold as a kind of insurance policy against losses elsewhere in one’s portfolio. The SPDR Gold (GLD¹) exchange-traded fund offers fractional shares of bullion held in a London vault. But gold-mining stocks may be the better value. Many of these companies, such as Agnico-Eagle Mines (AEM²) and Newmont Mining (NEM³), are now valued cheaply relative to the price of gold itself, says John Hathaway, manager of the Tocqueville Gold fund.

¹http://www.smartmoney.com/quote/GLD/
²http://www.smartmoney.com/quote/AEM/
³http://www.smartmoney.com/quote/NEM/

Blogged with the Flock Browser