Gold prices top $1,700 an ounce as Fed keeps interest rates low to encourage economic growth
Author: Associated Press
Posted: January 25
Gold prices rose Wednesday after the Federal Reserve said it will keep interest rates near zero until 2014 at the earliest to help jump-start economic growth.
The central bank said the economy is growing at a moderate pace but there has been slowing in global growth. It described inflation as “subdued” and held off on any further bond-buying programs.
The Fed’s new plan pushed back the date for any likely increase in its benchmark interest rate by at least a year and a half. Previously, the members of the monetary policy committee had said they would keep rates low until at least mid-2013.
The Fed wants to keep interest rates low to make loans more affordable for businesses and consumers in hopes that they will spend more to aid the economic recovery. That could lead to stronger demand for commodities such as oil and industrial metals.
The announcement prompted investors to buy gold as a hedge against inflation, which investors fear could be a result of the Fed’s extended low-interest rate policy.
Gold for February delivery rose $35.60, or 2.1 percent, to finish at $1,700.10 an ounce. It was the first time that the settlement price topped $1,700 an ounce since early December.
Most commodities followed gold’s lead and posted gains as the dollar weakened against other currencies. Since commodities are priced in dollars, a weaker dollar makes them cheaper for investors who trade with other currencies.
Full Article

Gold Prices Top $1,700 an Ounce as Fed Keeps Interest Rates low to Encourage Economic Growth

Author: Associated Press

Posted: January 25

Gold prices rose Wednesday after the Federal Reserve said it will keep interest rates near zero until 2014 at the earliest to help jump-start economic growth.

The central bank said the economy is growing at a moderate pace but there has been slowing in global growth. It described inflation as “subdued” and held off on any further bond-buying programs.

The Fed’s new plan pushed back the date for any likely increase in its benchmark interest rate by at least a year and a half. Previously, the members of the monetary policy committee had said they would keep rates low until at least mid-2013.

The Fed wants to keep interest rates low to make loans more affordable for businesses and consumers in hopes that they will spend more to aid the economic recovery. That could lead to stronger demand for commodities such as oil and industrial metals.

The announcement prompted investors to buy gold as a hedge against inflation, which investors fear could be a result of the Fed’s extended low-interest rate policy.

Gold for February delivery rose $35.60, or 2.1 percent, to finish at $1,700.10 an ounce. It was the first time that the settlement price topped $1,700 an ounce since early December.

Most commodities followed gold’s lead and posted gains as the dollar weakened against other currencies. Since commodities are priced in dollars, a weaker dollar makes them cheaper for investors who trade with other currencies.

In March metals contracts, silver jumped $1.146, or 3.6 percent, to finish at $33.121 per ounce, copper rose 2.2 cents to $3.8295 per pound and palladium increased $12.80 to $693.35 per ounce. April platinum finished up $27.20 at $1,579.60 an ounce.

Most energy products were higher. Benchmark oil rose 45 cents to end at $99.40 per barrel on the New York Mercantile Exchange. Heating oil fell 0.47 cent to finish at $3.0104 per gallon, gasoline futures increased 2.69 cents to $2.8374 per gallon and natural gas rose 16.8 cents to $2.769 per 1,000 cubic feet.

In March agriculture contracts, wheat rose 7.75 cents to end at $6.4125 per bushel, corn increased 4.25 cents to $6.345 per bushel and soybeans fell 6.5 cents to $12.135 per bushel.

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Gold ETF Mass Exodus

by Gold Editor on January 27, 2012

Gold ETF Mass Exodus
Author: Adam Hamilton
Posted: January 27, 2012
Gold is enjoying an awesome January, rallying strongly out of its oversold late-December lows.  But last month’s hyper-pessimistic sentiment deserves some reflection before it totally fades from memory.  One of the core theses of the bears resolutely predicting sub-$1400 gold prices soon was the notion that there would be widespread liquidations in the flagship GLD gold ETF, a mass exodus of capital.
If it indeed came to pass, gold would almost certainly be considerably lower than we’ve seen in recent weeks.  But it didn’t, the stock traders owning GLD didn’t panic and rush for the exits as feared.  Instead they boldly stood their ground, continuing the long tradition of GLD shares being held in strong hands.  GLD’s entire history shows its owners largely want gold exposure for the long haul, they aren’t flighty.
Just as mass-GLD-liquidation fears captured mindshare in past gold corrections, they are certain to once again become popular bearish centerpieces in future ones.  So gold investors and speculators alike, whether they own GLD or not, need to understand this mighty ETF’s track record during gold corrections.  This critical knowledge will mitigate mass-exodus fears in future gold corrections, reducing the odds of getting suckered into selling low by the bears.
Thanks to wacky conspiracy theorists never ceasing to irresponsibly spout utter nonsense about GLD, it still isn’t as well understood as it ought to be by now.  Holding a staggering 1259.6 metric tons of physical gold bullion in trust for its owners these days, worth a colossal $69.3b, GLD is a massive force in the gold market.  Its price impact on gold since its birth 7 years ago in November 2004 has been enormous!
GLD acts as an incredibly-important conduit for the vast pools of stock-market capital to easily flow into and out of physical gold bullion.  It opened up gold investing to a huge new market, including pension funds, mutual funds, and hedge funds, that never would have gone through the considerable hassles and expenses of buying gold coins.  GLD is a frictionless, cheap, and easy way to get gold exposure.
The operational mechanisms of this conduit are easy to understand.  When a stock trader wants some gold exposure in his portfolio, he buys shares in GLD.  Each share represents 1/10th of an ounce of gold, less a modest 0.4% annual expense ratio necessary to move and store the physical gold bullion and pay the people running this ETF.  If there happens to be a GLD seller right then, the shares change hands without anything happening to GLD’s underlying bullion holdings.
But usually there are more buyers of GLD shares than sellers, or vice versa.  Remember that GLD’s mission is to track the gold price, so if this ETF’s real-time supply and demand isn’t synchronized with gold’s then their prices will disconnect.  In order to avoid failing, GLD’s custodians have to directly shunt excess GLD-share supply or demand directly into gold bullion.  They do this as necessary in 100k-share increments, which equalizes differential price pressure and keeps GLD shares synchronized with gold.
Most of the time since GLD’s launch, there has been more demand for GLD shares than supply.  If these buyers bid up GLD shares and the custodians do nothing, GLD’s share price would decouple from gold to the upside.  To bleed off this excess demand into gold itself, the custodians issue enough new GLD shares to sop up the differential demand.  Then they take the capital raised and promptly buy physical gold bullion to put in their vaults that very day.  So excess GLD demand shunts capital into gold itself.
But sometimes, and this is what the bears worry about during corrections, GLD-share supply exceeds demand.  If the GLD sellers dump their shares faster than gold itself is being sold, this ETF’s price will decouple from gold to the downside.  GLD’s custodians must quickly absorb this differential supply.  And the only way to raise the capital necessary to buy back the excess shares offered is by selling physical gold bullion.  As these funds repurchase GLD shares, excess GLD supply is shunted into gold itself.
So GLD’s holdings, the amount of physical gold bullion it holds in trust for its investors at any given time, are a reflection of the supply-and-demand dynamics of GLD shares relative to gold’s own.  Thankfully GLD has been extraordinarily transparent since its debut, publishing its physical-gold-bullion holdings in great detail (down to individual bars’ sizes and serial numbers) on a daily basis.  By charting this priceless data, we can better understand how stock traders interact with gold via the conduit of GLD.
This first chart looks at the entire history of GLD’s holdings along with the gold price.  The first thing that sticks out is the remarkable growth in this ETF’s gold hoard, it has been wildly popular with stock investors.  Note also that GLD’s holdings tend to be “sticky”.  Once they grow to any new level, they are rarely sold back down again.  GLD’s owners are some of the strongest hands in the whole gold realm.
Full Article

Gold ETF Mass Exodus

Author: Adam Hamilton

Posted: January 27, 2012

Gold is enjoying an awesome January, rallying strongly out of its oversold late-December lows.  But last month’s hyper-pessimistic sentiment deserves some reflection before it totally fades from memory.  One of the core theses of the bears resolutely predicting sub-$1400 gold prices soon was the notion that there would be widespread liquidations in the flagship GLD gold ETF, a mass exodus of capital.

If it indeed came to pass, gold would almost certainly be considerably lower than we’ve seen in recent weeks.  But it didn’t, the stock traders owning GLD didn’t panic and rush for the exits as feared.  Instead they boldly stood their ground, continuing the long tradition of GLD shares being held in strong hands.  GLD’s entire history shows its owners largely want gold exposure for the long haul, they aren’t flighty.

Just as mass-GLD-liquidation fears captured mindshare in past gold corrections, they are certain to once again become popular bearish centerpieces in future ones.  So gold investors and speculators alike, whether they own GLD or not, need to understand this mighty ETF’s track record during gold corrections.  This critical knowledge will mitigate mass-exodus fears in future gold corrections, reducing the odds of getting suckered into selling low by the bears.

Thanks to wacky conspiracy theorists never ceasing to irresponsibly spout utter nonsense about GLD, it still isn’t as well understood as it ought to be by now.  Holding a staggering 1259.6 metric tons of physical gold bullion in trust for its owners these days, worth a colossal $69.3b, GLD is a massive force in the gold market.  Its price impact on gold since its birth 7 years ago in November 2004 has been enormous!

GLD acts as an incredibly-important conduit for the vast pools of stock-market capital to easily flow into and out of physical gold bullion.  It opened up gold investing to a huge new market, including pension funds, mutual funds, and hedge funds, that never would have gone through the considerable hassles and expenses of buying gold coins.  GLD is a frictionless, cheap, and easy way to get gold exposure.

The operational mechanisms of this conduit are easy to understand.  When a stock trader wants some gold exposure in his portfolio, he buys shares in GLD.  Each share represents 1/10th of an ounce of gold, less a modest 0.4% annual expense ratio necessary to move and store the physical gold bullion and pay the people running this ETF.  If there happens to be a GLD seller right then, the shares change hands without anything happening to GLD’s underlying bullion holdings.

But usually there are more buyers of GLD shares than sellers, or vice versa.  Remember that GLD’s mission is to track the gold price, so if this ETF’s real-time supply and demand isn’t synchronized with gold’s then their prices will disconnect.  In order to avoid failing, GLD’s custodians have to directly shunt excess GLD-share supply or demand directly into gold bullion.  They do this as necessary in 100k-share increments, which equalizes differential price pressure and keeps GLD shares synchronized with gold.

Most of the time since GLD’s launch, there has been more demand for GLD shares than supply.  If these buyers bid up GLD shares and the custodians do nothing, GLD’s share price would decouple from gold to the upside.  To bleed off this excess demand into gold itself, the custodians issue enough new GLD shares to sop up the differential demand.  Then they take the capital raised and promptly buy physical gold bullion to put in their vaults that very day.  So excess GLD demand shunts capital into gold itself.

But sometimes, and this is what the bears worry about during corrections, GLD-share supply exceeds demand.  If the GLD sellers dump their shares faster than gold itself is being sold, this ETF’s price will decouple from gold to the downside.  GLD’s custodians must quickly absorb this differential supply.  And the only way to raise the capital necessary to buy back the excess shares offered is by selling physical gold bullion.  As these funds repurchase GLD shares, excess GLD supply is shunted into gold itself.

So GLD’s holdings, the amount of physical gold bullion it holds in trust for its investors at any given time, are a reflection of the supply-and-demand dynamics of GLD shares relative to gold’s own.  Thankfully GLD has been extraordinarily transparent since its debut, publishing its physical-gold-bullion holdings in great detail (down to individual bars’ sizes and serial numbers) on a daily basis.  By charting this priceless data, we can better understand how stock traders interact with gold via the conduit of GLD.

This first chart looks at the entire history of GLD’s holdings along with the gold price.  The first thing that sticks out is the remarkable growth in this ETF’s gold hoard, it has been wildly popular with stock investors.  Note also that GLD’s holdings tend to be “sticky”.  Once they grow to any new level, they are rarely sold back down again.  GLD’s owners are some of the strongest hands in the whole gold realm.

Full Article

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Should Apple Buy Gold?

January 27, 2012

Should Apple Buy Gold?
Author: Eric McWhinnie
Posted: January 26, 2012
Gold is a very controversial object.  Many investors view the precious metal as a storage of wealth and a hedge against uncertainty. However, critics claim gold is a bubble and has no intrinsic value,  especially since you can not eat it.  The tech giant Apple Inc. also [...]

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Gold Bulls Ascendant on Biggest Rally Since ’80

January 27, 2012

Gold Bulls Ascendant on Biggest Rally Since ’80
Author: Nicholas Larkin
Posted: January 27, 2012
Gold traders are bullish for a fourth consecutive week, betting that the Federal Reserve’s pledge to keep interest rates low until late 2014 will extend the metal’s best start to a year in more than three decades.
Nine of 15 surveyed by Bloomberg expect [...]

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Resource Opportunities on West African Iron Ore

January 25, 2012

Resource Opportunities on West African Iron Ore
Author: Lawrence Roulston 
 
WAI is exploring two large iron ore concessions in Guinea, West Africa. Other companies, including one of the majors, are developing iron mines in Guinea. WAI will benefit from the infrastructure developed for those mines.

Very importantly, the WAI projects are near the port that would ship the [...]

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Indians to Pay for Iranian Oil With Gold

January 25, 2012

 Indians to Pay for Iranian Oil With Gold
Author: Press TV
Posted: January 24, 2012
India has agreed to pay the price of crude oil it imports from Iran in gold, which makes it the first country to drop the US dollar for purchasing the Iranian oil.
According to a report published by DEBKAfile news website, unnamed sources have [...]

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Signs Of The Times

January 25, 2012

Signs Of The Times
Author: Bob Hoye
Posted: Jan 22, 2012
“The Worst Economic Recovery Since The Great Depression”– Forbes, January 12
This emphasizes our thesis that the big action to 2007 accomplished another great Financial Mania. The first example was the infamous South Sea Bubble of 1720 and the fifth was the equally infamous 1929 Bubble.
One of the [...]

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Commodities: Gold Equities Could Finally Start to Perform

January 25, 2012

Commodities: Gold Equities Could Finally Start to Perform
Author: Garry White, and Emma Rowley
Posted: January 23, 2012

Gold equities have underperformed for more than a year despite the gold price hitting a series of new all-time highs. But things could be about to change.
Investors have preferred to invest in physical gold, despite the storage costs, and exchange-traded [...]

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Money Explosion

January 25, 2012

Money Explosion
Author:  Richard Reinhard
Posted:   January 25, 2012
Editor’s comments: The multi-decade build-up of debt worldwide promises to be the most epic financial bubble the world has ever seen. Certainly the unwinding process has been very dislocating for many Americans, Greeks, Spanish, Portuguese, Irish … probably most of the developed world that had cheap access to credit. [...]

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Encanto Potash in Gold Newsletter

January 12, 2012

Encanto Potash in Gold Newsletter
Author: Brien Lundin (Gold Newsletter)
Encanto Potash (EpO.V; ENcTF.pK; c$0.275) is working closely with The Muskowekwan First Nation (MFN) to move forward on the Treaty land Entitlement (TlE) designation process for its potash projects in Saskatchewan.
The first designation vote by the MFN failed to achieve the necessary participation threshold for a valid [...]

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