The Coming Gold Shortage

Brace Yourself for the Coming Gold Shortage

Zero Hedge
January 29, 2010

Brace yourself for the impending gold shortage. Gold shortage? Yup. With the launch of a flurry of ETF’s devoted to the barbaric relic recently, total ETF holdings have soared well past 60 million ounces worth $65 billion, more than total world production in 2009. The grand Daddy of them all, the SPDR Gold Shares (GLD), now has a staggering $42.7 billion of the yellow metal, making it the second largest ETF by market capitalization, and the fifth largest gold owner in the world.

When gold suffered a hair raising $150, 12% pull back from the all time high in December, I was deluged by traders asking if this was the peak, if it was the final blow off top, and if gold is finished as an asset class. My answers were no, never, and not on your life.

A tidal wave of fiat paper currencies is now flooding the world financial system at an increasingly alarming rate. Obama has not suddenly become a paragon of fiscal restraint. Bernanke has not morphed into a tightwad. When I pull a dollar bill out of my wallet, it’s as limp as ever.

In 2008, South Africa suffered its steepest decline in gold production since 1901, falling 14%, to a mere 232 tons. It now ranks only third in global production of the yellow metal, after China and the US. Severe electricity rationing, a shortage of skilled workers, and more stringent mine safety regulations have been blamed. Choked off credit has frozen the development of new capital intensive deep mines, as it has for everybody else. Rising production costs have driven the global breakeven cost of new gold production up to $500 an ounce.

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Jon Nadler Gold Rally is Short Lived

Gold's Rally is Short Lived

NEW YORK (TheStreet) - Jon Nadler, senior analyst at Kitco.com, argues that despite low interest rates and President Obama's State of the Union, gold prices will stay volatile as the carry trade and investor risk appetite battle over the precious metal.

Brian Hicks Time to Buy Gold

NEW YORK (TheStreet) -- Brian Hicks, co-manager of the U.S. Global Investors Global Resources Fund, says that gold will continue trading in a tight range and that long term investors should take this opportunity to buy.

Platinum Overtaking Gold as Metal of Choice With Rebounding Sales of Cars

Jan. 25 (Bloomberg) -- Even after a record 57 percent rally last year, platinum is cheap relative to gold, signaling more gains as demand grows from carmakers and exchange-traded funds.

An ounce of platinum buys 1.41 ounces of gold, down 42 percent from the record 2.43 ounces in 2001 and 23 percent less than the 10-year average, data compiled by Bloomberg show. Automakers, the biggest buyers, will expand output 20 percent this year, said Evan Smith, who helps manage $2 billion at U.S. Global Investors. Hedge funds raised their bets 163 percent in 2009, about twice gold’s increase. ETF Securities Ltd. funds lifted holdings to a record 598,104 ounces.
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Jon Nadler Gold Slumping after Obama proposed Banks Regulation

A Shift in Gold Sentiment

NEW YORK (TheStreet) -- Jon Nadler, senior analyst at Kitco.com, says investor enthusiasm for gold is slipping and although President Obama's regulations are far from law, they are still impacting markets.

Gold slumping

Platinum Better than Gold , Platinum Prices Could Rise 30%

Investors should ditch gold for platinum as the industrial metal has the potential to rise 30% from current levels, Chris Zwermann from Zwermann Financial told CNBC Wednesday. Zwermann also takes a technical look at the SMI, DAX and euro versus Australian dollar

Gold and oil flat while dollar strengthens slightly

Japanese and European stocks drift lower on concerns for earnings growth. Gold and oil are flat while dollar strengthens slightly.

Charts Gold Still Bullish Phil Roberts from Barclays Capital

The outlook for gold remains bullish and the price could rise as high as $1,500 per ounce, Phil Roberts from Barclays Capital told CNBC Thursday. Roberts also takes a technical look at the DAX and sterling

Fort Knox and Bank of England Fake Gold Bars

Fake gold bars in Bank of England and Fort Knox

Pakistan Daily
January 15, 2010

It’s one thing to counterfeit a twenty or hundred dollar bill. The amount of financial damage is usually limited to a specific region and only affects dozens of people and thousands of dollars. Secret Service agents quickly notify the banks on how to recognize these phony bills and retail outlets usually have procedures in place (such as special pens to test the paper) to stop their proliferation.

But what about gold? This is the most sacred of all commodities because it is thought to be the most trusted, reliable and valuable means of saving wealth.

A recent discovery — in October of 2009 — has been suppressed by the main stream media but has been circulating among the “big money” brokers and financial kingpins and is just now being revealed to the public. It involves the gold in Fort Knox — the US Treasury gold — that is the equity of our national wealth. In short, millions (with an “m”) of gold bars are fake!

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Popular Platinum and Palladium ETFs

NEW YORK (TheStreet) - Will Rhind, head of U.S. operations at ETF Securities, say investor demand is soaring for the first U.S. physically backed platinum and palladium ETFs as traders look for riskier allocations in the precious metals market.

David Morgan no more bullish on Gold if it goes to $1,000 level

Is Gold's Sell Off Scary?

David Morgan rethinks his bullish stance on Gold if it goes to $1,000 level

NEW YORK (TheStreet) - David Morgan, founder of Silver-Investor.com, says if gold prices dip to the $1,000 level he will have to rethink his bullish stance.

ETF Gold vs Physical Gold , Richard Daughty be careful with the ETFs

Richard Daughty the "Mogambo Guru" on Gold Seek Radio dated January 13th, 2010

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Introduction To Precious Metals Silver & Gold

In this video you will hopefully learn what is the difference between paper money and precious metals like gold and silver , how gold and silver can be a hedge against inflation but also a great way to make profit , , paper money and stocks can go to practically zero anytime , while gold and silver always retain their value ...

Housing Market 2010

"We would, in essence, be dousing the entire Canadian economy

with cold water, just as it emerges from recession," Wolf said in an Edmonton speech delivered on behalf of deputy governor Timothy Lane, who could not travel to the Alberta capital for personal reasons.

"As a result, it would take longer for economic growth to return to potential and for inflation to get back to target," he added.

Finance Minister Jim Flaherty has also openly discussed policy measures to cool the housing market, including raising the minimum down payment requirement above five per cent, or reducing the maximum length a residential mortgage can be amortized from the current 35 years.

Monday's speech came hours after Canada Mortgage and Housing Corp. released a report indicating the annual rate of housing starts reached 174,500 units in December, up nearly 10,000 from November.

The organization said the improvement in housing starts was broad-based, with solid increases in both single and multiple starts to end the year.

Klump said the rise in new supply in market as well as increase in resale market will let some of the air out of tires in the balance between supply and demand, adding that as 2010 progresses price increases will shrink to the rate of inflation.

Wolf said that even if the bank judged that housing prices were getting out of hand, raising interest rates is too blunt an instrument since it would have the effect of cooling off the entire economy.

Statistics Canada also released figures Monday that pointed toward growth in the housing sector, showing construction intentions in the residential sector are starting to approach their pre-downturn levels, rising 9.1 per cent in November to $3.8 billion.

Contractors took out $5.9 billion in building permits in November, down 4.6 per cent from October.

But Statistics Canada reports that they were 23.1 per cent higher than November 2008 and 62.8 per cent above February 2009, when their value bottomed out amid the economic downturn.

Klump said the current hot market is unlikely to cause a bubble because the economy is on an upward swing, reducing the probability of a massive decline in housing demand.

"I don't see where the catalyst is going to come from for some kind of massive decline or popping of any quote unquote bubble," he said.

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Housing Market In The Beggining Of 2010

Accelerated activity in the housing market is part of the natural flow of economic recovery, according to the Bank of Canada and housing economists working to deflate theories about a new housing bubble that could drive the Canadian economy back into recession.

The Bank of Canada indicated it was premature to be talking about a housing bubble in Canada in a speech delivered Monday by bank official David Wolf. His remarks came after months of highlighting the danger of Canadians getting in over their heads in purchasing homes.

"Recent house price increases do not appear to be out of line with the underlying supply/demand fundamentals," Wolf said. "We see the housing market requiring vigilance, not alarm."

Wolf said the bank considers the current hot market to be a phenomenon based on temporary factors, such as pent-up demand from the recession, and low mortgage rates.

Moreover, he noted that with starts below long-term demographic requirements, the number of houses on the market is still declining.

The Canadian Real Estate Association reports housing prices increased about 4.4 per cent over the first 11 months of 2009, and predicts a further increase of 4.7 per cent in 2010.

The association's chief economist, Gregory Klump, said the year-over-year increase has been "turbocharged" by a combination of today's strong market and the weak year-ago market, which skews average prices.

He added that the current increase is part of natural real estate cycle.

"One would expect that when the worst of a recession is behind us and we've got emergency low interest rates, that would draw buyers back to the market," he said. "A lot of the supply that moved to the sidelines is coming back to the market and is expected to continue to come back, making for a balanced market and smaller price increases going forward."

Bank of Canada governor Mark Carney has warned for months that Canadians are amassing too much consumer and mortgage debt and that could be a problem for the broader economic recovery if rates rise and debt payments begin to increase for millions of Canadian households.

The Bank of Canada has said interest rates will probably rise after the middle of the year as the economic recovery takes hold and the impact of stimulus spending creates potential inflationary pressures in the economy. However, Monday's comments suggest the central bank won't push rates higher just to cool the housing market.

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