Posts tagged gold
We are asking for your opinion, do you think Gold will keep on increasing or do you think its beginning to fall?
It is still the highest it has ever been but how long can Gold be worth this much?
Tell us what you think, comment on the post in the comment box below!
Gold declined today as the dollar, an alternative asset to the yellow metal, was on the rise thanks to renewed concerns about Europe’s ability to resolve its fiscal problems, which the euro and boosted the grenback’s safe haven appeal.
Standard & Poor’s yesterday warned that 15 members of the 17-national euro zone could see their credit ratings cut if the EU fails to make changes to the EU treaty to tighten budget discipline within the monetary union.
Among these 15 countries were Germany and France, the euro zone’s two largest economies and the main contributors to aid packages for struggling countries. Both currently have top notch AAA ratings.
S&P went further and today placed the rating of Europe’s bailout fund, the European Financial Stability Facility (EFSF), under review for a possible downgrade, which would also depend on the outcome of Friday’s summit.
Germany and France have agreed to make joint proposals to change the EU treaty, which would make it possible to penalise countries that fail to keep their budget deficits within certain limits.
In addition, gold was pressured by reports that demand for the yellow metal from the world’s largest gold consumer India was weak despite the ongoing wedding season.
but was still on track for its largest weekly loss since September as euro zone debt contagion worries spooked investors.
A weaker dollar makes dollar-priced commodities such as precious metals more affordable for holders of other currencies.
“I think it’s a bit of a bounce back after a shock yesterday but I wouldn’t get too excited,” Matthew Turner, an analyst at Mitsubishi said.
“There is a bit of bargain-hunting going on; the euro prices are flat and that implies that the dollar gains are to do with the (weaker) dollar.”
Gold has confounded market watchers by refusing to behave like a safe-haven and instead has tracked equities over the past few weeks, but the escalating European debt crisis could see bullion ditch its risk-asset mantle and return to record highs.
“There is a strong argument that this euro crisis should support gold, especially if the solution to it will involve printing money and easing monetary policies, which are inflationary measures. On the other hand these big shocks are making investors nervous,” Turner said.
Bullion is often used as an inflation hedge by investors.
“The longer uncertainty dwells, the more chance there is for bullion to bounce back up, given ultra-low currency yields globally,” VTB Capital said in a research note.
National Park convener Linda McKay said: “Without question, this has been the largest and most complicated planning application we have ever had to consider. “As guardians of some of the most stunning scenery in Scotland, it would have been easy to refuse the second application if we were considering the short-term impact on the landscape, but this National Park plans for long-term conservation management, and that includes having the vision to see beyond the temporary life of the gold mine.” Scotgold Resources originally applied for planning permission to explore the mine last year but it was rejected due to concerns over the size and shape of the tailings management facility (TMF) and poor restoration proposals for the long-term future on Glen Cononish. Scotgold and the National Park Authority worked together to find solutions to the objections. Ms McKay said: “We also have a 30-year commitment to improve the wider Glen Cononish. The Greater Cononish Glen Management Plan will include extending existing native Caledonian pine forest and improving habitats and access tracks. “This legally-binding agreement means the glen will regain its quiet, remote character following closure of the mine and the landscape will be improved from its current state.”
Silver, which usually tracks gold because of the safe-haven appeal of both, has massively fallen 27 percent over the last 7 days.”I’m just a little surprised by just how far gold has gone, but it’s something that we have warned about,” Paul Walker global head of precious metals said yesterday. For the past five years, the gold price has been propped up by investor interest, and over the last few days that interest has moved back to the world’s reserve currency, the dollar, he said. “In times of real fundamental uncertainty, the currency of choice is still the dollar,” Mr Walker said.
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‘The white metal is also 40 times cheaper than gold. It doubles as both a precious and industrial metal and most of the silver used in industrial applications is consumed rather than recycled’.
Year to date, silver prices have increased roughly 26%. Gold’s 12% rise pales in comparison.
Silver is known as a “poor man’s gold,” so as gold prices rise and begin to price out many investors, “silver becomes a good and cheaper alternative,” said Mark Leibovit, chief market strategist at VRTrader.com
“The rising Chinese demand of gold and silver is one of the reasons why we continue investing in these metals, even at today’s prices, coupled with the fact that underground reserves that can be mined at reasonable costs have become fewer and harder to find,” said Martin Hennecke, associate director at Tyche Group in Hong Kong.
Its said that the action, which was scheduled to begin with the night shift and could involve tens of thousands of workers, will affect 3 main mines other smaller miners operating in the world’s fifth-largest producer of gold.
Basically ‘the strike was called when wage talks broke down after the National Union of Mineworkers, which has been demanding 14 per cent pay rises, rejected the companies’ offers of between 7 per cent and 9 per cent increases. The industrial action comes at a time when gold prices have soared to record highs of more than $1,600 per ounce’.
AngloGold Ashanti, South Africa’s biggest gold producer, said “it would be forced to cease mining operations because of the industrial action, with only essential services continuing”.“We are trying to resolve it as quickly as possible,” the company said. “The economic damage will depend on how long it goes on.”“We definitely have seen an increase in sellers. … But there are still quite a few buyers out there,” said Mike Anderson, a salesman with Tulsa Gold & Silver.
Mike Orr, manager of Top Dollar Jewelry & Pawn, said he’s been surprised about how strong the price of gold has remained and noted that interest started rising a few months ago when it reached about $1,500 an ounce.
He said most people are selling things they don’t wear anymore.
“It’s surprising how fast it adds up. A few pieces can turn into several hundred dollars very quickly,” Orr said.
A 3-gram, 18-karat gold ring might fetch $75, while a heavier 12-gram, 18-karat ring could go for $300, Anderson said.
“Obviously, when you’re trading at an all-time, world-time record high you’ve got a whole lot of sellers and few who want to purchase because it’s so expensive,” said Tom Dixon, co-owner of Don’s Coin & Jewelry.
“There are so many different indicators that people try to watch, but it’s really hard to say,” Orr said. “As long as there is unrest abroad in the Middle East and problems in Japan with their catastrophe - those sorts of things worldwide typically have gold staying high or continuing to inch up.”
Indonesia’s central government is offering a quarter of its 7 percent stake in the local unit of Newmont Mining Corp to the regional government where the company’s copper and gold mine is located, the finance minister said on Tuesday. “The reason is for the national interest. And we believe this is a step further to build the nation,” said Martowardojo, without giving further details on why he is making the offer. “This is a smart way from Agus Martowardojo to shame Bakrie because Golkar will now be forced to accept the scheme,” said political analyst Burhanuddin Muhtadi from the polling agency Indonesian Survey Institute. “With this gesture, Martowardojo is accommodating the local government’s wish as well as Bakrie’s.”
