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[verwijderd] 2 januari 2005 18:16

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Myths in the Silver Market CPM Group Precious Metals and Commodities
Uit een draadje in de koffiekamer bleek dat er nog steeds een aantal hardnekkige broodjes aap over zilver de ronde gaan.

The precious metals markets are secretive places. That is one of their attractions to many investors and others who value privacy. It poses problems for all market participants, however, because it makes these markets, so small and illiquid compared to other financial markets, susceptible to rumors and manipulation. While there is nothing new to this, in recent weeks and months the silver market has been repeatedly hit by rumors spread by traders and others seeking to scare users and investors. Market professionals cite the persistence of these rumors as a major factor in the decline in silver prices below $4.90 since
October 2000.
It is important to distinguish among myths, rumors, beliefs, and misinterpretations. In free markets, as in free
countries, everyone is entitled to his or her opinion and beliefs. The precious metals markets are no exception to this, with some individuals holding strong beliefs that do not necessarily measure up to empirical market evidence. The point of this brief discussion is not to seek to sway anyone from deeply held beliefs, but rather to set the record straight on certain fundamentals that have been distorted by persistent rumors and misrepresentations.

Myth 1: The Chinese government is selling large amounts of silver from its stocks
The issue of silver sales from Chinese government stocks has been one of the most pervasive topics of discussion in the silver market, and perhaps the most misunderstood. The topic came to a head in early 2000 when rumors were circulated of large amounts of silver entering the market. Not so coincidentally, these rumors began at the same time that the liberalization of the Chinese silver market was taking a great leap forward on January 1, 2000. The Chinese silver market has been closely controlled by the People's Bank of China since the Communist Revolution in 1949. The PBOC has been moving toward deregulating the gold and silver markets within the country, and extricating itself from the role of national market maker. This has led to massive shifts in the flow of silver around China, compounded by structural changes in the
Chinese photographic industry that has led to large amounts of silver that formerly went to Chinese film makers now being available for export. These changes have radically transformed the entire metals market within China, and have led to increased exports of silver, and gold, over the past few years.
The inaccuracy is the assumption that these exports represent here have been some sales from these stocks, but they are a small portion of the total amount of metal being exported. Some estimates by PBOC silver sales run as high as 60 million ounces. Chinese government sales actually have been around 10 million ounces or so per year in recent years, and are expected to be roughly 12.0 - 14.5 million ounces in 2001. Most silver exports have been by domestic refiners processing base metal concentrates and domestic scrap.
In the long run the new laws may lead to a decrease in exports as domestic refiners now can receive higher prices within China, reducing the incentive to smuggle metal out, and domestic consumers and investors now can pay lower prices for silver within China.

Myth 2: Digital photography already is sharply decreasing silver use in photography
It has been repeatedly suggested for nearly two decades that digital photography would one day replace traditional silver-halide based photography entirely. More recently, there have been suggestions that the declines are already in place and eroding photographic demand for silver. Again, this is not accurate.
Silver use in photographic materials—papers and films—is estimated to have risen about 6.0% worldwide in 2000.
Demand is estimated to have increased 8.3% in the United States, and 6.3% in Japan. Major photographic companies are increasing their manufacturing capacity in the face of stronger demand growth. From 1980 through 1998 the compounded annual growth rate in silver use in photography was around 4.0%. Last year's increase was 50% above that long term trend growth rate. This represents a definite acceleration in the demand for a silver-bearing photographic product that flies in the face of the rumors that digital is killing this market. One of the main reasons for the recent strength—ironically enough—has been the advent of digital photography, although most of the increased silver use reflects expanding traditional photography. Consumer appetites for conventional photography have been growing stronger world-wide. The Advanced Photo System introduced in the late 1990s has boosted both picture taking and the number of reprints being made, while rising disposable income from Asia to Latin America has increased demand in these countries. Also, most consumers are not ready for digital photography at this point, with the cost still prohibitively high for most people in the world and many consumers not yet computerized.
Many observers had presumed that pure digital photography, which does not use silver in actually capturing the image, would naturally lead to a decline in silver usage. However, just as the 'paperless office' has prompted a surge in paper use, digital photography is increasing the popularity of photography and of traditional photographic demand. Much of the digital imaging business is actually a combination of traditional imaging techniques and newer digital technologies. The images are captured on conventional film, and much of the final output still uses either conventional photographic papers or other silver-coated papers. In between, the images are digitized, edited, and manipulated. In sum, digital photography is not necessarily a negative for silver.
In fact, if one is objective about the impact of digital photography on silver, one needs to calculate both the possible long-term losses in silver demand on the consumption
side of the market and the reduction in supply that would occur due to reductions in silver recovery from spent photographic products, which accounts for around 85% of the 190 million ounces recycled each year.

Myth 3: Kodak has bought forward a year's worth of silver, removing the world's largest silver user as a source of demand for the next year.
Another report that circulated throughout the market had to do with Eastman Kodak, one of the world's largest silver users. In December 2000 a news item reported that Kodak had hedged its silver needs through 2001. This was perceived by some observers as bearish for the silver market, as these observers intimated that this source of demand for silver consequently would be absent the silver market. Actually, this fact was nothing new and can be found in the company's regular quarterly filings with the Securities and Exchange Commission. Most of the company's silver requirements are purchased through annual supply contracts, as has been the case for decades. Similar statements can be found in Kodak's previous filings with the SEC.

Myth 4: Berkshire Hathaway has sold its silver
Berkshire Hathaway has found itself at the center of intense public scrutiny since it announced in February 1998 that it had purchased 129.7 million ounces of silver between July 1997 and January 1998. Since then, it has often been suggested tha

[verwijderd] 2 januari 2005 18:19

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Myths in the Silver Market

. Since then, it has often been suggested that various periods of silver price weakness have been directly related to sales by Berkshire Hathaway.
First, one can look at why Berkshire Hathaway bought silver in the first place. In the February 1998 press release accompanying the announcement of the purchases, management stated that "the equilibrium between supply and demand was only likely to be established by a somewhat higher price." Moreover, Berkshire Hathaway has long hailed itself as a long-term investor, and does not seem likely to sell its recently acquired assets on relatively minor price fluctuations. The average purchase price of Berkshire Hathaway's silver was less than $5.00.
This, however, did not stop some observers from suggesting that Berkshire Hathaway had sold some or all of its silver position. Offered as evidence of these sales was the fact that a major refiner in Europe, which had been known to be storing silver for Berkshire Hathaway, told its clients and others that the bulk of the silver being stored at its facilities had recently been moved. Another piece of "evidence" was that Salomon Smith Barney recently delivered a net 1.8 million ounces of silver into the December 2000 Comex delivery period. (Berkshire Hathaway often is viewed as the major silver customer of Salomon.) These two factors do not necessarily mean that the silver has been sold. It may have been moved in an attempt for greater opacity.

Myth 5: Barrick hedging
In the third quarter of last year, market discourse focused on the prospects of current and future forward silver sales by producers. Barrick Gold was the target of much of the initial speculation, as some market reports focused on the fact that Barrick reported in a regular quarterly report that it had spot deferred silver sales contracts in place. As with Kodak, the existence of these positions was not new; the fact that the market decided to focus on it at that time was.
As of the end of 1999, Barrick had entered into spot deferred contracts to deliver 14.3 million ounces of silver
over the following five years. As of the end of 2000, Barrick had 20.0 million ounces of spot deferred silver
contracts at an average price of $5.32 per ounce, for 2001 and beyond. These hedges were for future output at the Pascua mine, development of which has been deferred, so further hedging is not expected until such time as gold and silver prices rise to levels that lead the project back toward development.

Myth 6: Other producers are selling forward
The focus on hedging data from various producers and manufacturers led some market observers to opine that other producers must also be selling large amounts of silver, and that this was contributing to the weakness in silver prices. This phenomenon is not new, as the gold market has constantly been plagued by suggestions that for-ward sales by producers have created conditions of 'over-supply.

Forward sales do not work this way. When a producer sells silver or gold forward, it commits to delivering a certain quantity of metal at some point in the future. At the time of the transaction, no extra metal actually enters the physical market.

Myth 7: Mexican output is rising sharply
Refined silver production in Mexico rose 8.4% in 2000. Many observers have trumpeted this as a cause of lower prices. Again, closer examination reveals the true under-lying causes. Mexican output was reduced in 1999 when the Torreon lead, zinc, and silver refining complex owned by Met-Mex Penoles was closed for a time due to a pollution problem. This reduced output in 1999. In 2000 the refinery was back on-stream. Not only did it operate fully processing 2000 mine production, but it produced additional amounts of refined silver from the back-logged 1999 mine output.

Myths in the Silver Market
Last year Mexican silver mine production is estimated to have totaled 90 million ounces. This was up from 83 million ounces in 1999, but only slightly higher than the 86 million ounces produced in 1998. The rate of increase was skewed in 2000 due to events at Torreon, which will not be repeated in 2001 and beyond.

Silver Market Rumors are Not New Rumors have confounded the precious metals markets for centuries, dating back to the Lost city of Atlantis and the quest for El Dorado. There have been persistent
rumors floated by bulls and bears alike. In the late 1970s, after they had acquired the bulk of their silver position, the Hunt brothers began telling everyone they knew what a great investment silver was. Others entered the market as buyers, with several acquaintances of the Hunts even using the same floor traders as the Texans. It got to the point in late 1979 that the one agent for the Hunts only had to walk onto the
Comex trading floor for the buying to send silver prices higher.

Myth 8: Mine production is rising sharply worldwide
Total silver mine production rose at a 6.4% annual rate from 1997 to 1998 as several new mines came on-stream. The rate of increase slowed to 3.9% in 1999 and 4.6%in 2000. A few more new projects are slated to start in the next few years, but others have been deferred or delayed. Barrick’s deferral of the Pascua project already has been mentioned. Other projects in Argentina, Australia, Russia, and elsewhere have been delayed or scaled back. A few existing operating mines, particularly in North America, are at risk of being closed. Mine production will not rise as fast as had been expected, and in fact is projected to fall over the next couple of years. Not All Rumors Are Bearish The preponderance of the rumors floated in the silver market in recent months have been bearish, often circulated with the apparent intention of scaring investors and others into selling, or at least not buying, silver. There have been a few rumors floating around the silver market that have been primarily bullish, however.

Myth 9: Large secret silver stockpiles
Perhaps the most interesting rumor is one that could be called either bullish or bearish, depending on one's interpretation of it. This is the rumor that there are large secret stockpiles of silver held by wealthy investors. This could be interpreted as being bullish for silver prices, if one concluded that there are several savvy investors who are bullish on silver and, like Berkshire Hathaway, have purchased physical silver to profit from an inevitable price rise. It could be bearishly read, however, in that it would suggest there still is that much more silver around that ultimately can be sold to fabricators to meet industrial demand. Evidence suggest that such positions, purchased in the middle 1980s and middle 1990s, have been liquidated.

[verwijderd] 7 januari 2005 09:51

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Into a new golden age By Kevin Morrison Published: January 6 2005

When theWorld Gold Council, an industry body funded by mining groups accounting for about 35 per cent of global gold output, wanted to launch a new advertising campaign for gold jewellery, it turned to photographers from National Geographic rather than from the glossy fashion magazines.
Michael Yamashita, William Albert Allard, Jodi Cobb and Joel Sartore are more used to taking pictures of people and landscapes in all corners of the globe than going on fashion shoots.Steve Kershaw, creative director at Bartle Bogle Hegarty, the advertising agency that worked on the gold campaign, says the photographers were chosen because the aim was to have a campaign to show that ordinary people have a connection with gold.
"When you look inside a National Geographic magazine, the images of people are very real, whereas you open a fashion magazine and you have glamorous models in a very unnatural environment, overtly sexy women wearing diamonds or promoting luxury goods in a way that has no connection with ordinary people," he says.The need to project a certain look for gold is important as the metal has an image problem among consumers. Global gold jewellery sales were lower last year than a decade earlier; consumers are spending more of their disposable income on other luxury goods or on electronic gadgets and holidays. Gold has also lost its appeal to couples tying the knot in western Europe, North America and China, who have shown a growing preference in the past decade for platinum wedding and engagement rings."Gold's image has become tarnished - it has been used to promote other products from biscuits to credit cards, but these promotions do nothing for gold the metal and often devalue its brand from something that is unique," Mr Kershaw says. Kelvin Williams, executive director for marketing at Anglogold Ashanti, the South Africa-based gold miner, says the metal's image has also suffered from the lack of good new jewellery designs. Additionally, the experience of buying gold is not very satisfactory."Many of the traditional gold stores are pre-modern; they have not changed their retail concept for 50 to 60 years," he says.Anglogold, which is helping to finance the WGC campaign, has also launched a promotion of gold jewellery by South African designers. The Johannesburg-based mining company has taken a different tack from the World Gold Council by teaming up with the US edition of fashion magazine Harper's Bazaar. Mr Williams says the magazine "conveys fresh ideas and images".
Sarah Davanzo, chief executive of Gold R, a marketing company that specialises in promoting gold jewellery, says the link with Harper's Bazaar gives Anglogold access to the magazine's database of readers.
"We know how many 35-year olds are on $75,000, what perfume they wear, the toilet roll they use, how much TV they watch and what programmes," says Ms Davanzo. She adds that Gold R devised Anglogold's marketing strategy for gold jewellery without using an advertising agency."We found there was a market for gold jewellery with a good innovative design at prices that were not the prices paid in Bond Street, or Bulgari or Tiffany," she says.
Under the Anglogold-Harper's Bazaar tie-up, the mining company is selling its Saison range of gold jewellery through catalogues as well as direct marketing through its website, www.saisonfashiongold.com.Anglogold has attempted to market gold jewellery online before. It was a partner with JP Morgan and Pamp MKS, a gold dealer based in Geneva, in the GoldAvenue.com website.That website was set up five years ago during the dotcom mania to form a portal site, through which customers would be able to buy gold jewellery and invest in the precious metal. Neither the investment nor retailing activities of the site were commercially successful.Ms Davanzo says selling jewellery via the internet on the Saison website has become more sophisticated, consumers seem more comfortable buying such products electronically and the company's 30-day return option also provides them with the security of knowing their choices are not irreversible.

Another factor that pointed to the need for an online strategy was time. "I only had nine months to devise a plan, to market the product, create a brand, work out the distribution logistics, and there was no way I could do all that by hooking up with a jewellery store," she says.
Meanwhile, the WGC has teamed up with Sterling, the US division of Signet, the UK-listed jewellery store chain, as part of its strategy to position the WGC-sponsored range of gold jewellery under its "Speak Gold" campaign, on which it is spending some $10m (£5.3m).Philip Olden, the WGC's managing director of international jewellery and marketing, says an important part of the campaign is to be more inclusive with the jewellery retailers. "Our members and the retailers we work with now understand that the challenges we face are not necessarily what they buy when they are in the jewellery shop, it is getting them into the shop in the first place," he says.
He adds that the gold jewellery sector is very fragmented and rarely collaborates on co-ordinated advertising campaigns. This contrasts with the diamond industry where De Beers, which has a strong influence over the supply of diamonds, works closely with retailers.

Mr Kershaw at BBH says that the gold campaign is focused on the US, the largest gold jewellery market by value; India, the largest by volume; China, because it is a fast-developing market; Italy, because it is the larg est exporter and the centre for design innovation; and the Middle East, where gold is seen as a store of value as well as attractive to wear.

He says the marketing campaigns in each of these markets are similar in that they all use billboards and magazines, including Elle, Vogue and Marie Claire in the US and Italy, and are supported by point-of-sale marketing material and the website www.speakgold.com.The common approach was sought by Jim Burton, the WGC chairman, when he joined the council two years ago and was charged with boosting sales of gold jewellery. "The advertising platform focuses on the emotional bond that women have with gold and contrasts how it is used in different locations and different stages of life," says Mr Olden. Gold marks important moments in women's lives, such as the birth of children, marriage and anniversaries."People have a very strong connection with gold, but frankly the industry hasn't done a particularly good job of reinforcing that," he says.With the exception of Anglogold, no mining company has previously been directly involved in marketing jewellery, even though it accounts for about three-quarters of all new gold production each year. Ms Davanzo says more mining companies are interested in marketing jewellery.Mr Olden says that, unlike other precious metals such as platinum and silver, where most of the demand is for industrial applications, "gold is driven by consumer demand, and that is why we believe that what we are doing is more than running a nice advertising campaign".

HOW TO MAKE GOLD GOOD AGAIN

* Lost lustre: gold jewellery has been losing its shine for consumers as they spend on luxury goods, such as Cartier and LVMH brands, choose other precious metals for wedding rings, and see gold associated with such mundane objects as credit cards or biscuits.
* New setting: jewellery accounts for about 75 per c

[verwijderd] 8 januari 2005 17:12

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Silver could fly if China stops selling By Wendy Stueck
The Globe and Mail, Toronto Saturday, January 8, 2005

www.theglobeandmail.com/servlet/Artic...
8/RWATCHSILVER08/TPBusiness/Canadian

VANCOUVER -- It might be known as poor man's gold, but silver outpaced its more expensive cousin last year and analysts and producers say it has bright prospects for 2005.

One of the biggest factors behind that optimistic view is China, which has been selling excess silver -- amassed during decades when the only buyer for the country's mined silver output was the People's Bank of China --
on the open market, unloading millions of ounces a year each year since 1999.

But the amount sold each year has been gradually declining and there is now speculation that the Chinese stockpile may be gone.

"In the last five years, we reckon China has sold close to 300 million ounces of silver on the world market," says Ross Beaty, chairman of Vancouver-based Pan American Silver Corp. "The absolute amount of that
stockpile is not known. But we know it is seriously depleted and we think it may be completely depleted."

The buzz around silver has been building for at least the past 12 months. Silver futures contracts took off early in the year, soaring to 17-year highs of more than $8 a pound in April on the Comex division of the
New York Mercantile Exchange. Prices subsequently dropped, ending the year at $6.81, still substantially above the $5 mark where the metal has treaded water for most of the previous five years.

Silver closed yesterday at $6.43 on the Comex exchange.

In terms of price appreciation, silver outperformed gold last year, rising 13.6 percent in U.S. dollar terms,compared with 4 percent for gold, based on closing prices in London.

Over a five-year period, from 1999 to 2004, silver rose 27 percent and gold 50 percent.

Silver's biggest role is not as an investment but in the industrial, jewellery, and silverware, and photographic sectors, which account respectively for about 40, 30, and 20 percent of annual demand.

The photography sector, which accounted for 22 percent of silver demand in 2003, is shifting to digital technology, which has reduced demand for silver.

But that drop, about 4.7 per cent in 2003, according to
London-based consulting firm GFMS, has not been as
dramatic as some had expected. And as the usage of
silver in the film sector declines, it's picking up in the
printing sector, as consumers seek out high-quality
prints for their digital pictures.Silver is also being used in a growing number of applications, such as anti-bacterial medical dressings.

An improving outlook for silver has companies gearing up for exploration, especially in Mexico, the world's biggest silver producer.Vancouver-based First Majestic Resource Corp. has been snapping up silver projects in Mexico, and began producing the metal at its La Parilla mine in July.

Western Silver Corp., also based in Vancouver, announced Dec. 23 that it had wrapped up a C$64.8 illion financing to help develop its Penasquito project in Mexico.

There are relatively few pure silver plays and the handful that exist tend to trade at even loftier premiums than gold producers. The group includes Pan American, Idaho-based Coeur d'Alene Mines Corp., and Apex
Silver Mines Ltd. of Denver.

Vancouver-based gold producer Wheaton River Minerals Ltd. last year announced plans to spin off its silver production into a separate company, a move that will create another pure silver play.

Silver Standard Resources Inc., also based in Vancouver, does not currently mine silver but has built up a portfolio of silver projects with an eye to profiting from the metal's future price increases.

[verwijderd] 10 januari 2005 13:21

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Gold hasn't lost its shine Gareth Tredway '10-JAN-05 06:00'
JOHANNESBURG (Mineweb.com) -- A $39/oz fall in the gold price since the beginning of December may presage an end to the yellow metal’s amazing run as investors crave the greenback once more. But short memories could be prevailing, as a similar, if not more dramatic dollar rally happened only nine months ago. In the beginning of April last year, the dollar price of gold hit a new 16-year high of $427/oz, but then almost immediately started to retreat. Favourable US economic data, and statements by Alan Greenspan, the Federal Banks governor, pointing at interest rate hikes before year-end, resulted in a $52/oz tumble in the gold price over the next six-weeks following the high. It eventually bottomed at $374/oz. The $455.90/oz gold price achieved on December 3 last year was a clear recovery. And whether or not the same $52/oz will be shed this time round, still remains to be seen. The gold price also took a dip in the beginning of last year, when, after rising to an eight-year high of $426/oz by January 9, the price fell back below $400/oz by the end of that month. James Steel, head of Commodities at Refco in New York, told Mineweb on Friday, that the amount of liquidation in gold that has taken place recently is a bit of a surprise. Steel says the metal should consolidate around current levels, before getting stronger.
He says fundamentally gold is still strong, while the dollar, will still fall further. The US’s big budget deficit of almost half a trillion dollars is still seen as a medium to long term problem for the country and one that could still cause more weakening of the currency. “Despite what happens in China, the US dollar is still likely, in the long term to continue to retrace,” Steel told Mineweb, in the beginning of May last year. A daily note on Friday out of Standard Bank in London said the price could get back up to $430/oz again. “To say that gold looks over sold is not wrong but it could continue to drift below $420/oz. For now, $420/oz is supporting the market and if it manages to stablise above here next week, we could see some retracements back toward $430/oz.”
Gold still fundamentally strong
Philip Klapwijk, executive chairman at GFMS, the London-based precious metals consultancy, told the Moneyweb Power Hour in December that fundamentally gold remains strong.
“We’re seeing a situation where mine production is, if anything, off a bit compared to its 2003 levels, and that’s in spite of a much higher gold price,” said Klapwijk. GFMS recently launched its Mining projects alert service, which provides a quarterly update on advanced exploration to development stage gold and silver projects. In the first of these updates, released on December 1 2004, GFMS predicts that in spite of the higher price, world supply is set to trend lower.
New projects are set to generate 80 new tons of gold in 2005, and 140 in 2006, but the consultancy says this is not enough. It is anticipated, however, that this new gold production will not be sufficient to offset losses at existing operations,” said GFMS, “and despite an increase in global output expected in 2005 global output in the medium term is forecast to trend lower.”
European central banks also have an agreement of how many tons of gold they may sell over a period of years. The German Bundesbank, which owns 3,433 tons of gold, which is the second most behind the US, has indicated that it might not fill the allowances of the agreement.
“It’s potentially a very positive statement because we would have expected several hundred tons of Bundesbank gold sales over the life of the second gold agreement,” said Klapwijk, “I think it is further evidence that the sales quota limit of the second central bank gold agreement is unlikely to be met.” Demand for jewellery, is a fundamental that is now also being driven by the gold miners themselves. Rian Raghavjee, manager of marketing products at AngloGold Ashanti, told the Moneyweb Power Hour, that central bank selling and a change in attitudes towards gold were the reason for the company’s move towards marketing the metal. “Previously, all the gold that was produced was sold to the banks and there was a definitive buyer for this,” said Raghavjee, “With the advent of central bank selling, we find ourselves in a position where we had to go out and find acceptance for the product we were producing.” Raghavjee said that the drop off in demand for gold in jewellery from about 80 percent to 60 percent of production was also a concerning factor.
The World Gold Council (WGC) has also transformed itself into a marketer for gold. The Council’s efforts, coupled with other socio-economic conditions have shown improvements in global demand for gold jewellery. Last year demand was up 11 percent in volume terms, according to Philip Olden at the WGC, who says this is a significant change from the trend over the last five to six years.
The use of platinum in jewellery has been pointed out as a competitor to gold, but Sarah Davanzo, chief executive of GOLD, a marketing company that specialises in the promotion of gold jewellery says she does not see it as a threat. “We are not threatened by what platinum is doing presently,” said Davanzo, “We see a lot of opportunity in niche and targeted very, very highly focused markets in many countries around the world.” Global jeweller, Tiffany & Co., says it had a 12 percent increase in sales over the 2004 Christmas season. Michael Kowalski, the company’s chairman and chief executive, said in a statement that the company saw solid growth in all jewellery categories and watches over the period. "Looking toward 2005, our plans include opening at least three stores in the U.S. and several internationally which, in total, should increase worldwide retail square footage of company-operated TIFFANY & CO. stores by approximately 5 percent.” Said Kowalski, “Also, we intend to continue to introduce new jewellery designs to complement our classics.” Tiffany operates more than 150 TIFFANY & CO. retail stores and boutiques in the Americas, Asia-Pacific and Europe. www.mineweb.net/sections/whats_new/40...

[verwijderd] 10 januari 2005 17:17

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Clifton CFTN.PK vandaag: + 41 %
Koers: $ 0.91

Nog niet duidelijk waarom die koers zo veel UP is. Zag verklaring van patent ABL, maar dat lijkt me b.s., omdat dat al dagenlang bekend is.

DYODD...

[verwijderd] 12 januari 2005 08:52

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Each portfolio should have a heart of gold By Jennifer Hughes
Financial Times Monday, January 10, 2005

news.ft.com/cms/s/918f8a8c-60f0-11d9-...
2Cstream%3DFTSynd%2Cs01%3D2.htmlWall

"You should always, always, keep 10 percent of your portfolio in
gold," says Frank Holmes, chief investment officer of US Global
Investors, a Texas-based group of funds.

It sounds like an advertisement for one of the group's many natural
resource-based funds but there is sound reasoning, too.

"It's a natural hedge, uncorrelated with other asset classes. At the
moment, you will have a profit that can then be reinvested
elsewhere. If you had stuck to it during the dotcom boom [when gold
was falling] and kept re-topping it to 10 per cent each year, you
would have had fewer, and lost less on, tech stocks," he explains.

Gold prices troughed during the late 1990s when the focus was firmly
on spectacular equity market growth. The subsequent slide in stocks
shifted attention to alternative assets while, more recently, the
dollar's fall has helped boost gold, which tends to move in the
opposite direction. Spot prices for the metal have risen 57 per cent
since January 2002 and now stand at more than $414 a troy ounce from
$278.7 three years ago.

Commodity prices more generally have risen sharply as a result of
increased demand, particularly from China, as part of the global
recovery. Stocks linked to natural resources, in which Mr Holmes
specialises, have also outperformed. Last year the materials sector
of the S&P Global 1200 rose 16.2 per cent compared with 12.5 per
cent for the whole index.

The group's flagship funds, Global Resources and World Precious
Minerals, are well placed to capitalise on this. Global Resources
has returned 30.4 per cent last year and almost 24 per cent
annualised over the past five years. In 2003 it was ranked first in
its category by Morningstar but slipped to 35th last year as others
enjoyed the commodities boom.

World Precious Minerals has returned 18.9 per cent each year over
five years. Over three years it is ranked the best performing fund
in its sector by Morningstar. The group's Gold Shares fund was the
first precious metals fund in the US, evolving out of a fund that was the company's first offering in 1968. The fund is down 6.4 per cent in 2004 but has returned 17.2 per cent on an annualised basis since 1999.

"This is a different fund. It only invests in gold producers and not
in developing mines. It has to beat the XAU index which it did
comfortably," Mr Holmes says. The Philadelphia Gold and Silver Index
fell about14 per cent in 2004.

The global nature of many of the funds' investments means returns
have been flattered by the weakness of the dollar as well as the
strong gains in raw material prices. Copper prices rose34 per cent
last year, aluminium rose 21 per cent and there were double-digit
gains for lead, zinc and tin. To date this year, a rebound in the
dollar has weighed on commodity markets.

"We will see a correction in prices this year but the lows will be
higher than in previous corrections. I do not see prices
collapsing," Mr Holmes says. "Technology means inventory management
is much better than it used to be, so you won't see those huge build-
ups and overhangs, and when demand picks up again prices will rise
from a higher base."Another area where US Global is making a lot of money is eastern Europe. Last year its Eastern European fund returned 52.4 percent and was ranked first in its category by Morningstar.

San Antonio, Texas, is perhaps not the most natural place to run
funds heavy in mining and natural resource stocks.

"It is warm, and inexpensive to work and live in," explains Mr
Holmes, who reckons he spends at least six weeks of every quarter on
the road visiting companies, mines and analysts around the world.

Mr Holmes and the group's other analysts follow a very disciplined
approach to investing, based on a wide range of models.

"Monday, we look at macroeconomic models for the countries we are
involved in. Then we spend the rest of the week assessing all sorts
of factors cyclical, market, currencies, commodities, political to
find the best stocks to own," Mr Holmes explains.

His best investment?

"I really enjoy building a company from the bottom, like Wheaton
River. I saw that one from a $20 million start," he says. Wheaton
recently announced an all-share tie-up with fellow Canadian group
Goldcorp for $2.3 billion. Wheaton is the top holding of the group's
World Precious Minerals Fund which also has a stake in Goldcorp.

His worst investment?

"I was 28. It was in Canada with a guy who found it hard to accept
and pass on bad news I personally lost a quarter of a million on
this one," he says. "I was so angry, then I realised anger wasn't
going to help, that this person had a flaw that was quite common and
that I would see again."

"I now ask people what their best and worst bets are if they can't
disclose the bad stuff, then it reminds me of the guy that lost me
that money."

As chief investment officer he oversees all the funds in the group
after taking a controlling interest in the company in 1989. Before
that, he worked in investment management and the mining industry in
Canada, including time as a portfolio manager specialising in
emerging growth companies.

"I always felt I had good intuition and I am a hard worker," he
says. Then he grins. "I also didn't realise just how much work it
was." Mr Holmes's personal energy extends to running marathons,
mostly recently completing the New York one, and basketball. He also
sees links between sports and fund management.

"You need resilience like an athlete to have confidence in your
abilities and to get back in the game after taking a tumble," he
explains.

[verwijderd] 15 januari 2005 10:24

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Bullion expected to have big rally in 2005 $447 an ounce average predicted

By WENDY STUECK MINING REPORTER UPDATED AT 4:16 AM EST Friday,an 14, 2005
Gold is expected to bounce back from recent setbacks and show "renewed market vigour" in 2005, consulting firm GFMS Ltd. said yesterday.

GFMS expects the precious metal to rally over a 16-year high of $454.20 (U.S.) an ounce reached in early December and notch an average price of just below $450 an ounce for the first half of the year.

"We're not expecting to beat the 1988 high [of] $483.90," GFMS spokesman Bruce Alway said yesterday at a seminar in Toronto.

"But the recovery should be strong enough to give us a first-half average around $447."

U.S.-dollar-denominated gold prices have been rising since 2001 and went up by about five per cent last year, driven primarily by weakness in the greenback, which is coming under pressure due to record deficits in the U.S.

Jewellery making -- which typically accounts for well over half of gold fabrication in any given year, with dentistry and electronics comprising the remainder -- rose by 4 per cent last year, GFMS said.

Much of the increase occurred in India, Turkey and China, the firm added. Jewellery demand is expected to falter in the first half of 2005, dropping by six per cent in the face of expected higher prices.

Total fabrication demand rose by five per cent, reaching 3,179 tonnes in 2004. Jewellery fabrication accounted for 64 per cent of the total.

GFMS predicts that investment demand, rather than jewellery fabrication, will be the prime driver for a price rally in 2005 -- even though total investment demand slipped last year, when conditions for gold were seen by most to be at the most bullish in years.

Total gold investment demand in 2004 fell to 314 tonnes, down from 900 tonnes in 2003, GFMS reported.

The firm chalked up the decline to bumpy markets last year. Some investors dumped their holdings in April and May when prices slumped, crushing expectations that the metal was set to break through the $450 benchmark.

But as gold showed renewed signs of strength near the end of 2004, investors came back, with some attracted by the launch of an exchange-traded gold fund on the New York Stock Exchange.

Mine production dropped by just over 110 tonnes or four per cent last year, the firm said, the biggest drop since the 1940s.

Producer "dehedging" -- or unwinding forward sales agreements -- accounted for a sizable chunk of demand last year, GFMS reported.

Dehedging is estimated to have jumped by 52 per cent to more than 400 tonnes last year, the firm said.

The spectre of declining production and potentially higher prices has helped fuel a blizzard of would-be mergers in the gold sector, as producers attempt to bulk up in order to boost production and increase their appeal to institutional investors.

In Canada, Toronto-based Goldcorp Inc. and Wheaton River Minerals Ltd. are hoping to push through a proposed combination of their two companies to create a new, one-million-ounce producer.

Goldcorp unveiled its $2.4-billion takeover offer for Wheaton on Dec. 5.

Later last month, Reno, Nevada-based Glamis Gold Ltd. announced its own hostile offer for Goldcorp.

Goldcorp shareholders are to vote on the proposed Wheaton combination on January 31.

In South Africa, major gold producers Harmony Gold and Gold Fields Ltd. are locked in a nasty takeover battle, with Gold Fields attempting to fend off a bid from Harmony.
© 2005 Bell Globemedia Publishing Inc. All Rights Reserved.

[verwijderd] 18 januari 2005 08:48

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Repurchase agreements, securities lending, gold swaps and gold loans:

An update Prepared by the IMF for the December 2004
Meeting of the Advisory Expert Group on National Accounts

This paper is for the information of the members of the Advisory Expert Group (AEG), regarding the currently accepted treatment of repurchase agreements, securities lending without cash collateral1, gold loans, and gold swaps2. The paper also sets out areas where work is continuing by the IMF Committee on Balance of Payments (Committee) and on which the Committee will provide further reports in due course.

Gold swaps and Gold loans or deposits

Background

Gold swaps are usually undertaken between monetary authorities. The gold is exchanged for foreign exchange deposits (or other reserve assets) with an agreement that the transaction be unwound at an agreed future date, at an agreed price. The monetary authority acquiring the foreign exchange will pay interest on the foreign exchange received. Gold swaps are typically undertaken when the cash-taking monetary authority has need of foreign exchange but does not wish to sell outright its gold holdings. In that manner, gold is a leveraging device. Gold swaps sometimes involve transactions where one of the parties is not a monetary authority (usually it is another depository corporation). Gold swaps between monetary authorities do not usually involve the payment of margin.

Gold loans or deposits are undertaken by monetary authorities to obtain a non-holding gain return on gold which otherwise earns none. The gold is "lent to" (or "deposited with") a resident or nonresident financial institution (such as a bullion bank) or another party in the gold market with which the monetary authority has dealings and confidence and which is probably acting as an intermediary for a gold dealer or gold miner which has a temporary shortage of gold. The intermediary will, in turn, "lend" the gold to the dealer or miner – in effect, a change in ownership of nonmonetary gold then occurs. In return, the borrower may provide the monetary authorities with high quality collateral, usually securities (frequently, but not necessarily, substantially in excess of the value of the gold provided) but not cash, and will pay a "fee" thereby increasing the return from holding gold. The collateral does not change ownership and is treated as an off-balance sheet holding of the monetary authority8.

The nature of gold swaps and gold loans/deposits is similar to that of repos and securities lending in that the market risk toward the underlying asset (in this case, gold) remains with the original holder: if gold prices increase, the volume of gold returned is the same as that swapped, while the same value of the foreign exchange (as defined at the time of the initiation of the swap, plus any accrued interest) is returned.

Statistical treatment

The statistical implications of gold swaps and gold loans/deposits are complex and have not been fully worked through. Work is still being undertaken by the Committee to address the implications. In particular, gold may be double counted with either a gold swap or gold loan/deposit if the party acquiring the gold were to on-sell it outright, because both the original owner and the outright purchaser would report ownership of the gold. In addition, there is the difficulty of having monetary gold being used in these transactions for purposes other than for reserve assets, and how (de)monetization would apply if the gold is sold for industrial purposes. Moreover, there is a proposal to treat (some) nonmonetary gold as a financial asset, rather than a commodity, and the outcome of that discussion may have further implications on the treatment of gold swaps and gold loans/deposits.

Finally, how the "fee" for gold swaps and gold loans/deposits should be treated has yet to be resolved. All these matters are being considered by the Committee and a report will be taken to the AEG in due course.

[verwijderd] 20 januari 2005 10:14

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Jason Hommel
silverstockreport.com
19543 Explorer Dr., Penn Valley, CA 95946 (530) 432-9671

STORY IDEAS:

--Major Frauds of the U.S. Monetary system. --see essay summary, page 2
--How does our monetary system help and hurt people? --see essay summary, page 3
--With no overhead, no boss, no employees, one man made "investment banking" type money from home.
--Make 300 times your money with nearly zero risk.
--How to profit from the war in Iraq without buying arms companies.
--Have you ever wondered how money is created?
--Can you afford not to protect your savings with gold and silver?
--Everyone who has any money is in danger due to the overvalued dollar!
--Can the dollar lose 3/4 of its value if 1% of the people bought gold or silver in 2005?
--Would everything cost 3 times as much if China bought gold?
--Wal-Mart: The scapegoat of the overvalued dollar. Wal-Mart is not to blame for jobs going to China. The problem is the overvalued dollar.
--Total monetary collapse if 1% of the people bought gold or silver in 2005?
--Gold has been going up for 3 years since 2001. Is it too late to buy gold?
--Will Fannie Mae or Freddie Mac go bankrupt?
--What will happen if General Motors or Ford goes bankrupt?
--How to control of your financial future with gold and silver.
--Why is honest money the best money?
--Why are so many Americans struggling with debt?
--The ongoing dollar devaluation: how to profit from it, how it will help or hurt your investments, and how to funnel your money in the right direction--------------------------------------------------------------
Jason Hommel / silverstockreport.com / 19543 Explorer Dr., Penn Valley, CA 95946 (530) 432-9671
Major Frauds of the U.S. Monetary System
If you do not know why the following are frauds, then see the full 3000-word essay at silverstockreport.com

Paper Money
--Not backed by gold or silver, it is a defaulted promise
Unchecked Borrowing and Printing of more Paper Money
--The amount of money in U.S. banks is about $9.3 Trillion.
The Debt of the U.S. Federal Government
--The $7.5 trillion debt is "borrowed fraud".
Fractional Reserve Banking
--The banks don't even have the paper cash to back the money in your account. The reserve requirement is less than half of 1%.
The FDIC, or Federal Deposit Insurance Corporation
--There is no insurance pool.
Central bank gold-leasing
--U.S. official gold has not been independently audited since the 1960's.
Bonds
--A promise to pay more paper, but it's at less value if inflation is greater than the interest rate.
Inflation indexed bonds
--If they lie about the inflation rate, these don't help, either.
Paper futures contracts, and derivatives, especially when created to excess
--The price of commodities is set by promises to deliver in the future. But they create too many promises here, too, just like too many dollars. They create way too many paper contracts especially in the gold and silver markets.
Options
--These are a way to own futures contracts more cheaply. But they expire, whereas gold and silver do not.
Position limits on longs
--How can you limit what a person can buy if there is freedom?
Delivery delays for COMEX silver --also known as defaults
--A default is evidence that fraud has been done.
Banking hold times
--They don't let you get your money.
Legal tender laws
--They try to force you to accept the paper.
Tax on gold and silver purchases
--It's really a tax on taking your money out of the system. Imagine a fee to withdraw cash, or a tax if you exchange a $100 bill for five $20 bills!
The Income Tax
--There was no income tax before they created the Federal Reserve in 1913.
The Social Security Number & System
--It’s not funded, it’s raided, and thus is a fraudulent ponzi scheme, and should be illegal.

I believe that the best way to protect yourself from the frauds and excesses of the U.S. monetary system is to own real silver bullion. I also invest in silver stocks, which I think have the potential to continue to provide a greater return on investment than silver bullion. For example, silver is up about 50%, and silver stocks are up about 350% since June of 2003.

How our monetary system helps and hurts people...How it helps:

1. Imports are cheaper. Cheap imports available at Wal-Mart.
2. Extra paper money creates a "boom" of extra economic activity; higher housing prices create a housing boom & more construction jobs. More investment dollars can create a "tech boom" as we saw with internet stocks.
3. Government spending creates a "source" of new money into the economy, and thus, jobs. The closer you are to the source of new money, the better you will do. Examples: Home mortgage broker, or government contractor.
4. Booming housing prices allow people to refinance, at lower rates, and benefit if they own housing as it booms upwards in price.
5. Creates the opportunity to buy gold and silver very cheaply.

How it hurts:

1. Exports are relatively expensive, so we can't compete with overseas manufacturing, & we lose industrial jobs, and lose our industrial might to be able to supply our armies with things like homemade tanks, jets, and boats.
2. All dollars are now vulnerable to losing 95% of value, overnight.
3. The U.S. is vulnerable to other nations selling dollars for gold (China, or Japan).
4. Bankrupt companies who borrow money to stay alive make it hard to compete. (GM & Ford)
5. Easy money leads to making bad investments; houses, stocks, and bonds are all overvalued.
6. "Capital gains" on housing, stocks, bonds, are really no gain at all, but a symptom of the inflation and devaluation of the dollar.
7. Those who have invested in gold and silver have lost much since the peak in 1980.
8. Unjust weights and measures hurt all of society, as justice and values are perverted, and long term business planning becomes extremely difficult with continual booms and busts created not by capitalism, but by monetary fraud.

Important Facts about silver:

1. Silver is more rare than gold.
--There are a few hundred million oz. of refined silver, 60 million to 600 million oz. Source: silverinstitute.org and cpmgroup.com
--There is 4.6 billion oz. of gold. Source: gold.org
2. More silver is consumed than produced.
--600 million oz. of silver is mined each year.
--900 million oz. of silver is consumed by industry.
Source: silverinstitute.org and cpmgroup.com
3. 1964 was the last year they made coins out of 90% silver. Source: look at the coins!
4. Like all commodities, Silver can never go to zero value. Unlike most commodities, silver does not spoil, and it has high value in a small space, like gold, platinum, and palladium. All other paper investments, stocks, bonds, and paper money, can go to zero value. Source: common knowledge.
5. Silver has been proven as money for 4000 years of human history. Source: history. See Greek & Roman coins in your local coin shop.
6. Since the end of World War II, silver has been consumed in industrial nations at a rate of 7/10ths of an ounce per person due to electronics, while its use as money has ceased. Today, there is about 1/10th to 1/100th of an ounce of refined silver per person in the world.
6. The real story of silver is as money. Today, there has been an explosion of paper money all over the world. The amount of U.S. dollars in the banks alone totals over $9 trillion. S

[verwijderd] 20 januari 2005 10:18

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6. The real story of silver is as money. Today, there has been an explosion of paper money all over the world. The amount of U.S. dollars in the banks alone totals over $9 trillion. Source: federalreserve.gov While the bond market is $20 trillion! All of this money is potentially "monetary demand" for gold and silver. But the available silver is only about $300 million, well under a single billion dollars. Also, annual investment (or monetary) demand is a miniscule 25 million ounces, out of the 900 million ounces of silver demanded by industry.

7. The silver market is so small, and is so tight, that there is no room for any significant monetary demand for silver, without a massive move upwards in price.

--------------------------------------------------------------
Jason Hommel
silverstockreport.com
19543 Explorer Dr., Penn Valley, CA 95946 (530) 432-9671

Important Facts about dollars:

"The money chart".

1,000,000,000,000: 1 Trillion dollars
1,000,000,000: 1 Billion dollars
1,000,000: 1 Million dollars
$200,000,000,000,000: Estimated total derivative exposure of all banks in the entire world. (20 x U.S. GDP)
$75,000,000,000,000: U.S. Govt. unfunded liabilities; social security, etc.
$45,153,000,000,000: U.S. Household wealth, as of first quarter, 2004. (Includes Real Estate, and investments)
$33,000,000,000,000: World bond market, yr end, '01: tinyurl.com/vr7u
$26,400,000,000,000: World stock market, June 2002: www.nyse.com/press/1044027443845.html
$20,200,000,000,000: U.S. bond market, yr end, '02: tinyurl.com/vr7g
$11,447,800,000,000: U.S. GDP, 2004 q1 www.bea.doc.gov/bea/dn/home/gdp.htm
$11,300,000,000,000: NYSE U.S. stock market, April, '04 (363 bill/s x $31.14/s ave.) nyse.com (See: Market info: quick facts)
$9,391,000,000,000: M3 (money in U.S. banks) Nov, '04 tinyurl.com/vra0
$7,595,000,000,000: US debt, 1-06-2005 www.publicdebt.treas.gov/opd/opdpenny...
$2,360,000,000,000: U.S. annual budget 2005 tinyurl.com/3xbd2
$1,860,000,000,000: World "official" gold mined in all of history, 145,000 T (4.6 bil oz.) @ $400/oz. tinyurl.com/vrcc
$400,000,000,000: Estimated silver mined in all of history: 40 billion oz? @ $10/oz. snipurl.com/93j1
$738,000,000,000: Total U.S. paper currency & coin in circulation, Sept. '04 www.fms.treas.gov/bulletin/index.html
$700,000,000,000: Annual U.S. budget deficit (2004).
$700,000,000,000: Annual U.S. current account deficit (trade deficit) for 2004.
$380,000,000,000: Market Cap of General Electric (biggest U.S. company) tinyurl.com/vrcn
$290,000,000,000: Debt of General Motors (biggest U.S. car company) Jan 2005
$164,700,000,000: Debt of Ford Motor Co. (2005) tinyurl.com/vrd1
$109,600,000,000: US gold, 261 mil oz., @ $420/oz. tinyurl.com/vsr9
$100,000,000,000: all the world's gold stocks/equities (estimated?)
$75,000,000,000: Money flowed into Equity funds in the first quarter, 2004
$18,000,000,000: Market Cap of Newmont Jan '05 (biggest gold company in the world)
$8,226,000,000: all the world's "primary" silver stocks (80 of them on this list, as of June 25, 2004)
$6,710,000,000: 671 mil oz. of "identifiable" silver bullion left in the entire world, according to GFMS @ $10/oz.
$265,000,000: 41.5 mil oz. of "registered" COMEX silver bullion (1-05-05) @ $6.4/oz. tinyurl.com/vrcw

To receive my weekly silver report in email, sign up at:
silverstockreport.com

Sincerely,

Jason Hommel

You can unsubscribe to this report at
www.goldismoney.com/subscription-ss.php

[verwijderd] 22 januari 2005 09:48

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Abolish the IMF, and get a load of those derivative positions

Marshall Auerback of PrudentBear.com examines
Argentina's experience to show how the International
Monetary Fund is mainly the insurance company for
big international banks, protecting them against
their own stupidity and rapaciousness, and should
be abolished. His analysis, "Abolish the IMF," can
be found at Gold Colony here:

www.goldcolony.com/viewarticle.asp?ar...

Over at MineWeb there's more recognition of the
danger of the growing derivatives position at the
three big U.S. banks:

www.mineweb.net/sections/whats_new/40...

[verwijderd] 24 januari 2005 21:05

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JP Morgan punts silver too By: Allan Seccombe Posted: '24-JAN-05 18:34' GMT © Mineweb 1997-2004

JOHANNESBURG (Mineweb.com) -- Silver prices are expected to be volatile this year, trading in a range of $6.50 to $7.80 an ounce in a market that will see speculative activity, albeit at a lower level than before, dollar weakness and a tight market situation. That, at least, is the view of JPMorgan.

Silver will cost an average of $7.10 in 2005, JPMorgan reckons in an 80-page base and precious metals report. The fundamentals for silver are positive, with a number of mine closures combining with reduced output to offset increased production in China, Chile and the Commonwealth of Independent States (CIS), the report said.

In 2006, the production of silver as a byproduct from zinc and lead mining is expected to be a major factor in the market, but not so in 2005 because of the lag time as new mines come on stream. “We expect Chinese official sales to continue at decreasing rates, gradually easing the impact of mass government sales on the silver spot and forward prices.”

The inability of silver to hold onto higher price levels reached last year obscured the improving fundamentals of the market. “We believe that the significant price volatility has diverted attention from the fact that the underlying fundamentals of silver are improving and that lower prices have fully discounted earlier perceived threats from the surge in digital camera usage.”

Speculators locking in profits and a reduction in the overall base metals prices after April last year led to silver drifting down after a period of volatility in that month. However, the fundamentals of the metal were such that the price remained above $6 an ounce.

“We expect renewed speculative interest in silver in 2005, but with the level of speculation being somewhat more subdued, with open interest numbers peaking at the 15,000 mark,” JPMorgan said. There has been a petition to the US Attorney General to investigate a cartel shorting the April price rally. This may play a factor in stemming speculative interest in the market, it argued.

The demand for silver in the photographic film sector in developed nations is expected to continue declining, falling five percent year on year in 2005 because of the uptake in digital cameras. However, photographic film is seen growing at more than 12 percent in China and India.

Silver jewellery growth is expected to be in the region of four percent globally.

Industrial uses of silver are forecast to slip below the four-percent growth band because of an expected slowing of Chinese demand as the government there enters a period of fiscal tightening, the report said.

[verwijderd] 29 januari 2005 10:33

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Secret £1.55bn gold pile backs new trading funds By Patrick Hosking, Investment Editor January 29, 2005

ONE of the largest hoards of gold ever gathered outside a central bank has been accumulated at a secret address in London over the past few months.

Gold bars with a value of £1.55 billion are understood to have been collected in a single vault in an anonymous building owned by HSBC. If melted into a single block, the 212 tonnes of solid gold would take up 11 cubic metres — roughly the size of a Transit Van.

But the gold is so dense that it would require 104 Transit Vans to cart it away. The quantity of metal is 21 times the amount stolen in the Brinks-Mat robbery in 1983.

Ironically, the reason for the accumulation of this hoard is the popularity of a new gold investment product that does away with the expense, risk and hassle of taking delivery of the metal.
business.timesonline.co.uk/article/0,,8209-1460595,00.html

People and institutions in Britain, the US and Australia have been queueing to buy gold-backed, exchange-traded funds (ETF) — listed shares tradeable on the stock exchange but backed by actual gold.

Gold Bullion Securities (GBS), the British and Australian ETF that listed in London in December 2003, has 60 tonnes of gold in the vault — a 30 per cent increase in the past four months. StreetTRACKS, its sister ETF in the US, which was launched in November, is now backed by 152 tonnes of gold deposited in the same vault.

Both ETFs are supported by the World Gold Council, the marketing body for the goldmining industry.

Simon Village, joint managing director of GBS, said: “Exchange-traded gold has very quickly become an important investment vehicle for investors seeking exposure to the metal or seeking to diversify their holdings in other assets.”

In the past 12 months, 7.5 per cent of the world’s goldmine production had gone into ETF products, Mr Village said.

Barclays yesterday launched a rival gold-backed ETF on Wall Street using Bank of Nova Scotia as custodian.

Gold-backed ETFs closely track the physical gold price, less a small commission for administration and gold storage costs. Additional securities are created or old ones redeemed so that supply matches demand.

Most of the demand has come from institutional investors. Strong publicity for the streetTRACKS product in the US has boosted demand, as has the slide in the gold price during the past few weeks, which some investors see as a buying opportunity.

The gold stockpile in London is said to be secure. But it is not clear what would happen in the unlikely event that the hoard was stolen.

GBS does not insure the gold and said it is HSBC’s responsibility to keep it safe. Investors might have to rely on a claim against the bank in the unlikely event of a robbery, GBS said.

HSBC is under no obligation to insure the gold. But the bank said it would be responsible for any gold lost through its negligence, fraud or wilful deceit.

[verwijderd] 30 januari 2005 17:06

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Dear Friend of GATA and Gold:

When it sends you news stories and commentaries,please remember that GATA does not necessarily endorse them. Sometimes they are dispatched simply because they seem likely to be of interest, or they may be like television news -- important not for anything what they report but rather for showing what the world is being told.

Having the privilege of holding the key to the GATA dispatch list, I sometimes will take the
liberty of attaching introductory comments to these stories and commentaries, or just wisecracks and sneers, to put GATA's spin on them or to try to unspin them. Sometimes this may go too far, and sometimes the omission of comment may be negligent, as with yesterday's dispatch of the London Times story about a secret vault at an
"anonymous" building in London occupied by Hong Kong Shanghai Banking Corp. The vault was said to hold bullion owned by the new exchange-traded gold bullion funds.

This was too much for GATA Chairman Bill Murphy, who replied:

"This is really bugging me. I know I am prejudiced, but how can it be that we have had this supposedly massive buying of gold for the EFTs and the gold price has gone nowhere over the past couple of months? It makes no sense.

"How can it be that the speculators are leaving the Comex in droves and yet are supposedly buying the ETFs like crazy?

"How can it be that even Mitsui's Andy Smith, GATA's antagonist, smells a rat with the EFTs?

"How do people explain all this gold demand with no rise in the gold price, on top of the documented demand in the Middle and East and India?

"Why doesn't anyone else ask these questions?"

GATA consultant James Turk, founder of GoldMoney and editor of the Freemarket Gold & Money Report, concurred:

"I think this article in The Times is complete nonsense. The GLD exchange-traded fund does not disclose where its gold is stored. To assume that it sits somewhere within HSBC is pure speculation, just as it is pure speculation that it even exists at all, given that GLD's gold held by subcustodians and sub-subcustodians is not audited. And for all we know, all the gold may be stored with HSBC.

"Unfortunately, like so many things concerning gold, we have to appeal to logic, as central banks make it nearly impossible for us to find the essential facts. Consequently, ignorance about gold prevails, because rather than spend some time thinking and working to analyze gold, the public swallows stories like this one hook, line, and sinker."

Also dispatched to you without comment yesterday was a Reuters story reporting that a German delegate to the economic conference in Davos, Switzerland, expressed support for a vague British proposal to use gold owned by the International Monetary Fund to finance debt relief for poor countries. We've been over this stuff many times but perhaps not lately, so here goes again:

1) Of course IMF gold sales, leasing, and revaluation aren't necessary to finance debt relief; Western governments could simply cancel any debts without any golden legerdemain.

2) If the IMF and central banks tire of holding assets in gold, they can sell them or lease them at any time; they hardly need to relieve themselves of their gold under the supposed pressure of developing-world debt.

3) Most likely the recurring talk by the IMF and central banks about gold sales is, like the sales themselves, simply a disguise for writing off as sold the massive amounts of gold that already have been leased and have left central bank vaults and cannot be recovered in any practical way without triggering a short squeeze that would collapse the bullion banks that have been the central banks' eager agents in the gold carry trade, which is also the currency support trade.

4) As Turk implied, the whole world financial system has come to be based on the concealment of the amount and location of gold held by central banks and governments. That is, gold is the secret knowledge of the universe, and the control of its price is the foremost lever of political power.

5) While remaining central bank gold reserves are not known exactly, because of gold leasing they are vastly smaller than reported reserves. That is probably why the central banks seem to be staging a controlled retreat with the gold price -- allowing it to rise steadily but gradually lest they exhaust their reserves and lose their grip on political power.

6) If they have enough gold left and want to spend enough of it, central banks can drive the gold price down $50, $100, $200, or all the way back to $35 per ounce -- for a while, but not for long. Indeed, the lower they drive it, the faster they will exhaust their reserves, not just because of their own spending of gold but also because their lower gold price will cause a curtailment in gold production by mines. This curtailment is already well under way, since an equilibrium price for gold -- a price that matches production costs (including exploration costs) with demand -- is likely to be above $600 per ounce. A price that restored any sort of realistic ratio between gold and the volume of fiat money in
circulation would be quite beyond that.

7) GATA doesn't know exactly what is going to happen. We advocate free markets in the precious metals and seek to explose the rigging of the metals markets. We're not investment advisers. But when the fiat hits the fan, as it always does, nothing will have changed about the enduring value of the metals, except that they will be better appreciated.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

[verwijderd] 1 februari 2005 17:49

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SILVER TECHNICALS AND PROJECTIONS
Before I begin discussing the technical situation on Silver, I want to make a few statements:

1. In searching for profitable investments in the futures markets, I will not take a position unless I have thoroughly analyzed the fundamentals on a given market as well as the technicals. I am greatly indebted to the team at Midas ( including guest writers ) for the wealth of fundamental information that they continuously provide on gold and silver. This saves me innumerable hours of exhaustive research. I will assume that we all know that the fundamentals on silver are quite bullish and therefore will not rehash them here.

2. I have almost finished reading one of the most fascinating books that I have ever read. It is titled " Confessions of an Economic Hit Man " by John Perkins. It details with dates and facts the ECONOMIC foreign policy of the US since 1945 to the present and if you ever doubted the collusion of multinationals with the US government for greed and monetary gain at all costs ( to the DETRIMENT of many nations ), you will have a change of heart after reading this book. Perkins was at the top level of the schemes perpetrated on many nations. Once you read this, you will no longer have any doubt as to the manipulation of the gold price as John Embry so eloquently said recently : " It appears that central banks are unwilling to allow the gold price to repudiate their excessively loose monetary policies ".

SILVER TECHNICALS AND PROJECTIONS:

1. Please reread my previous posting on Silver of Jan. 4, 2005. That day, March Silver had reached a low of $6.35 and I strongly suggested that this was a buying opportunity ( it was the low on this move down so far ). The market since then reached a high of $6.89 and yesterday had a reaction low of $6.62. All in all, it would not seem very impressive to the casual observer but I think this will change very soon.

2. Silver has to be the least talked about and least appreciated commodity by the financial media. I don't recall Bloomberg or CNBC ever mentioning the price of silver at any given time. For all intense and purposes, it is not on the radar screen of the investment public receiving their cues from the financial media. If the technicals and funadamentals are bullish for this commodity ( which I believe they are ), this lack of interest at this time is very bullish. Remember, the way to invest successfully is when noone is focusing on a commodity or stock which has superb fundamentals and whose price has very little downside risk with large upside potential. This is the case for silver today.

3. When the cash silver price went to $6.30 ( $6.35 on March Silver ) on Jan. 4, it went slightly below its 200 DMA which implies that the probability of the correction on silver is very close to being completed. The cash 200 DMA stands today at $6.61 and the 50 DMA at $6.97. The cash price is $6.69 as of today.

4. The market is deeply oversold on the weekly momentums but in overbought territory on the daily so maybe there is some downside left in the short term and after that, big moves up.

5. The Elliot Wave analysis says that the correction from $4.015 ( Nov 2001 ) to $8.50 ( April 1, 2004 ) ended at $6.35 on Jan. 4. 2005 or that we still have one more shot down challenging or taking out by a few cents the $6.35 low. In view that the price is at $6.74 ( close on Feb. 1, 2005 ), it really doesn't matter very much in the larger picture.

6. Technically, gold is the one holding up silver at the moment since theoretically it could have another leg down to the $404 to $416 basis cash gold ( 200 DMA now stands at $412.22 ) - add about $1.50 to get equivalent April Gold price ( I am not predicting that this will happen only that my technical work suggests that it does have a possibility ). But as with silver, we are talking about relatively small moves since cash gold is trading at $421.

7. The Open Interest on silver has dropped from 125,104 ( March Silver 8.235 ) on Dec. 2, 2004 to 96,662 on Jan. 28, 2005. This is a net drop of 28,442 contracts or 22.7% of the open interest that existed on Dec. 2, 2004. Seems to be like a lot of long liquidation, i.e. retail investors getting stopped out. This is bullish.

8. As described above, from an Elliott Wave perspective we are completing what is called a " 2 " wave down. Having been in this business for 24 years and studied tens of thousands of charts using Elliott Wave, I have observed that often times, at major turning points in a market like the currencies for example, that this 2 wave low is DEEP taking out many previously bullish longs who now give up their positions due to the depth of the correction which they had not expected also taking out many Fibonacci retracements along the way. On the " 2 " wave correction, the market usually does everything to take out most traders/investors before starting an extremely powerful move to the upside - as an example, take a look at a monthly crude oil chart which shows a " 1 " wave up from $10.35 ( Dec. 1998 ) to $37.80 ( Sept. 2000 ) and a wave " 2 " low of $16.70 ( Nov. 2001 ) - in this case " 2 " wave retracement was 60.8%, almost the 61.8% extreme Fib retracement. If you looked at the Euro on the monthly chart, you would see that the " 2 " wave correction that occurred from Jan. 2001 to July 2001 was a 91% retracement of the previous " 1 " wave ( leg ) up which had started at the all time lows of 82.25 on Oct. 2000. After this 91% correction, it was straight up for the Euro.

9. My MINIMUM projection price in the intermediate term for silver is $9.00 to $9.12.

I will write to you about the HUI ( which has not violated the previous important support levels of 195 to 197 I posted on Jan. 6, 2005 ), Gold, and the cash Dollar Index in the next couple of days.

Wishing you successful investing,

Michel de Chabert-Ostland
royalpalmtrading@adelphia.net

[verwijderd] 3 februari 2005 09:17

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Silver ETF in the Works
By Ben Abelson
02 Feb 2005 at 07:47 PM

Since the launch of the World Gold Council's gold-indexed exchange traded fund in late November 2004, whispers have been in the air about a ETFs for other commodities - especially silver and crude oil. Now, with commodity-linked ETFs gaining traction, ETF market leader Barclays Global Investors appears to be looking into launching a silver-based ETF - as rumors on resource related sites have suggested in the past several months.

Keeping in mind that it took the World Gold Council some two years to bring their gold ETF to fruition, however, it wouldn't be surprising to see this process take a little while to pan out....

Barclays silver ETF seen in early stages -trade
Wed Feb 2, 2005 04:26 PM ET

By Zachary Howard
NEW YORK, Feb 2 (Reuters) - Barclays Global Investors may be seeking to branch out in commodity-based exchange-traded funds, such as silver and broad-based commodity ETFs, on the heels of the debut of its iShares COMEX Gold Trust last week.

Silver industry sources familiar with Barclays' ETF projects said on Wednesday that the company hopes to come out with a silver-backed fund this year.

Barclays has started to analyze the silver market in preparation for developing an ETF, though it still appeared to be in the early stages, one contact said.

San Francisco-based Barclays has not yet filed a registration for such a product with the U.S. Securities and Exchange Commission.

A Barclays spokeswoman said she was not able to discuss the company's involvement in a silver ETF. But she confirmed Barclays' interest in additional funds backed by metals or groups of commodities, adding the iShares product development team saw commodities and fixed income as its top priorities.

"We are exploring other commodity opportunities because our clients are certainly expressing a lot of interest in this area," the Barclays spokeswoman said.

She said she could not be more specific due to the "quiet period" that typically surrounds SEC registration filings.

Commodity-based ETFs are designed as investment alternatives to the physical goods themselves, which are difficult and costly for the nonprofessional to move, store and insure.

Big institutional investors such as hedge funds and pension funds are increasingly making ETFs part of their strategies, due to the securities' low cost and high liquidity.

ETFs are also proving popular with financial advisors and some individual investors who can buy them through a brokerage account.

Barclays' iShares COMEX Gold Trust (IAU.A: Quote, Profile, Research) , which is the second gold-backed security to launch in the United States, was listed last Friday on the American Stock Exchange.

Barclays Global Investors manages assets of around $1.3 trillion.

[verwijderd] 6 februari 2005 10:13

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Centralized banking is a modern day Moloch that must be REFORMED!

But how?????????

- More Keynesianism?
- Rothbard's 100% Gold Dollar?
- A World Central Bank?

No, these are not the solutions! But there IS a solution! Check out:
***************************************************************************
THE FUTURE OF GOLD AS MONEY by Nelson Hultberg
<http://www.afr.org/Hultberg/013105.html>

***************************************************************************
This is one of the most important articles you will read this decade!

It is an analysis of Antal Fekete's revolutionary plan for a PARALLEL
Gold-Coin Standard. Dr. Fekete's plan:

1. Phases the Federal Reserve out of existence slowly over time.
2. Eliminates the flaws of the 19th century gold standard.
3. Solves the problems that the Austrian School economists overlook.
4. Relegates Keynesian fiat money to the dustbin of history.
5. Can be implemented right now.

WHO IS ANTAL FEKETE? He is a brilliant Hungarian born economist who learned from Mises, Hayek, Rand, etc. and possesses the independence of thought to challenge the entrenched shibboleths of both the left and the right.

Go to: <http://www.afr.org/Hultberg/013105.html>

If you have a website, reprint permission is granted. Please provide the
appropriate credits and links.

Yours sincerely,
AMERICANS FOR A FREE REPUBLIC
Dallas, Texas
<http://www.afr.org>

[verwijderd] 8 februari 2005 22:38

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Gung Ho,

Goud rollt nog wel.... maar dan lichtelijk bergafwaarts !
En de mijntjes nog wat harder naar beneden... :-(

Rob

[verwijderd] 11 februari 2005 23:38

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Nick Goodwin: Gold analyst, T-Sec Mineweb '11-FEB-05 07:08'

MINEWEB: We’ve got Nick Goodwin from T-Sec on the line with us. He’s our regular gold guru, and we are speaking this evening about the potential for gold sales by the International Monetary Fund. Some background to this Nick – the G7 nations calling for the IMF to help alleviate the debt burden of the world’s poorest, and suggesting that maybe the IMF could help by selling some of its gold. Do you think this is a good option?

NICK GOODWIN: Not really, because I think the people that they are trying to help are actually generally quite gold producers. Africa combined produces about 20% of the annual supply of gold. So, if you start selling gold – the thing is, the gold market is very finely balanced. The central banks sell about between 400 and 500 tons a year, the IMF has got about 3,300 tons, which is worth about $40bn. If they start putting extra gold onto the market, it could swing the whole bull cycle we’ve got on the gold price now around into a bear cycle, and we could have gold going to $400 again, which will have major negative effects on our mines in South Africa, and also the mines in the rest of Africa. And those are the people we are trying to help. So I don’t think it’s really the proven thing to do.

MINEWEB: What are the other options? How else could they help?

NICK GOODWIN: Well, what I don’t understand – they’re talking about writing off the debt. Now, if you write of somebody’s debt, then you actually forgive him the debt. But they now want to sell gold – I mean that’s not writing off debt. So they are selling gold to get money in so they can pay that money to the banks, and they have so-called written off the debt. I mean, if somebody writes off a debt, they must write if off. So I don’t really understand the logic of this lot. It’s not actually writing it off. Which means that the whole world then actually is contributing to this. The IMF has got about 184 member companies, of which the US has got the biggest voting rights, about 17%. In order to get this through the IMF they have to have a 85% "yes" vote, and if the US decides to block it they won’t get that. So I don’t think it will go through, actually.

DAVID SHAPIRO: Nick, the actual deal was conceived, put forward, by Gordon Brown. I think the proposal was that the IMF gold is valued in the books of the IMP at around about $40 an ounce, something like 10 times less than the current price. They are hoping, with the revaluation, that the balance sheet would look a little better, and then you could just pile off a little gold. And it seems so naïve in terms of what you are proposing now, with Africa producing 20% of the gold. Gordon Brown and Tony Blair and the UK know that market very well. They have been trading in there for many years, so it seems rather naïve.

NICK GOODWIN: Yes, it does. As you know, the British central bank sold about 400 tons of their own gold. And the average price was in the $200s, it was about $240 or so. Had they kept it, it would have actually been worth more now. But I just don’t understand the logic of this.

MINEWEB: Why do you think we had mixed responses out from government? We had Finance Minister Trevor Manuel saying he would go along with it, as long as it was done responsibly. Then we had the Minister of Minerals and Energy saying, no, you can’t go ahead with this at all. Why such a mixed response, do you think?

NICK GOODWIN: Yes, well I don’t think it was completely thought through because afterwards, once it was announced, I think various people started looking at it and analysing it properly. And then they started noticing the negative implications of this. So maybe I think in the beginning it wasn’t really thought through properly. But obviously our government will have to decide what they want to do. But, you know, when you talk about something being done in a responsible manner, what does it mean? I think the most you could put onto the market is about 100 tons a year, which is really not a lot of gold. I mean that would be about $130m dollars. So how’s it going to help in solving anybody’s debt problems? I’m not quite sure what Africa’s debt is, but the total value of the IMF gold is about $40bn. So if you really want to help, you are virtually going to have to sell all this gold. If you put 100 tons on a year, you are talking about a hell of a lot of time to sell it. If you put 500 tons, well, you will just kill the market. So I don’t think that the market can actually absorb more than 100 tons.

MINEWEB: Chris Hart from Absa, who in the studio for our discussion on interest rates, is begging to have his say.

CHRIS HART: Well, I just think a lot of that African debt was incurred under the Cold War, and paid over to despots at the time. A lot of it has landed up in Switzerland. Why don’t they raid the Swiss banks to recover that money?

MINEWEB: Nick, your thoughts – is that a better solution?

NICK GOODWIN: That sounds extremely logical to me. [Laughter.]

MINEWEB: That was Nick Goodwin from T-Sec, our gold guru, taking us through the possibility of IMF gold sales – and he doesn’t think it’s an option.

AEX	882,27	-0,04%
EUR/USD	1,0714	+0,18%
FTSE 100	8.147,03	+0,09%
Germany40^	18.128,90	+0,06%
Gold spot	2.333,08	-0,12%
NY-Nasdaq Composite	15.983,08	+0,35%

Philip...	+5,80 +29,35% 5.795 29.3492
Alfen ...	+5,28 +14,76% 5.28 14.761
EBUSCO...	+0,19 +6,88% 0.192 6.8817
FASTNED	+1,05 +4,79% 1.05 4.7945
EXOR NV	+4,00 +3,96% 4 3.9565

Vastned	-1,55 -6,87% -1.55 -6.8736
VIVORY...	-0,05 -5,88% -0.047 -5.875
ASMI	-27,40 -4,39% -27.4 -4.3924
ADYEN NV	-28,60 -2,42% -28.6 -2.4246
BESI	-3,15 -2,42% -3.15 -2.4156

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