Friday, October 8, 2010
From the Wall St Journal:
By VU TRONG KHANH
HANOI—Vietnam's central bank said Thursday that it might allow local companies to import gold in order to stabilize the local gold market, after domestic prices rose to a record this week.
Gold is a popular investment in Vietnam, where a long period of strong consumer-price inflation and several devaluations in the Vietnamese dong have undermined confidence in the local currency.Allowing gold imports could temper the domestic price of the precious metal, which has risen above global prices. But it could also push up the Southeast Asian country's total import bill, worsening a persistent trade deficit that has hurt the dong.
"Enterprises may be allowed to import gold in appropriate quantities and at appropriate times to stabilize the domestic market," Nguyen Quang Huy, head of foreign-exchange management at the State Bank of Vietnam, said in a statement on the bank's website.
Gold prices in Vietnam have exceeded world prices at times recently, as local investors place big bets on further increases in the global price, Mr. Huy said.
Gold reached a record of 33 million dong ($1,693) per tael Wednesday, about $1,405 a troy ounce. The spot gold price hit $1,349.80 per ounce Wednesday in Asia, a record. In the U.S., the most actively traded gold contract, for December delivery, settled at a record $1,347.70 a troy ounce Wednesday on the Comex division of the New York Mercantile Exchange. Thursday morning it was at $1,347.50 an ounce.
Under the proposed plan, Vietnamese companies wanting to import gold would need to obtain licenses from the government.
"Importing gold in appropriate quantities is the best option for now, though it may have collateral effects," said Le Tham Duong, an economist with the Banking University of Ho Chi Minh City.
He said that by stabilizing local prices, gold imports would help prevent speculation and gold smuggling from foreign countries.
"If speculation happens, it will be very bad for the economy as the capital will rest in gold, instead of being invested in production," he said.
He added that illicit gold imports would lead to outflows of dollars, potentially adding to downward pressure on the dong.
The dong has fallen more than 5% since January as the country's trade deficit has widened, and was trading around 19,498 dong per dollar Thursday.
Vietnam's trade deficit widened to $8.56 billion in the January-September period from $6.8 billion a year earlier, according to official data.
Gold is one of the four major investment options for Vietnamese citizens, besides stocks, real estate and U.S. dollars.
8th - 10th November 2010
The Gold Symposium being held at the Amora Jamison Hotel in Sydney, Australia.
In association with ABC Bullion.
Learn how high gold could go in Australian dollar terms?
When will we reach a top... and what will it be?
If gold really is to become the foundation of a new financial order... what will that mean for society and your investments?
What if this really is a bandwagon, and you’re the last to jump on? Gold stocks tend to lag behind the price. So if you’re still a gold bug, which Australian stocks could be the stand-outs in 2011?
|DAY ONE: Monday 8th November |
Showcasing ASX listed companies whose focus is on gold exploration and production. This is a perfect opportunity to invest in companies whose focus is on gold exploration and production
Day One of the Symposium is designed to promote Australian GOLD companies to a wide variety of investors: from professional brokers, analysts and private investors who are current shareholders, to others who are keen to understand more about these companies whose focus is GOLD.
DAY TWO & THREE: Tuesday 9th and Wednesday 10th November
Featuring highly respected speakers from Canada, Australia and the USA, this event is set to be a sell out event and not to be missed.
Hear speakers such as Dan Denning of the Daily Reckoning and Dr David Evans of Gold Nerds along with other incredible speakers
Don’t miss the world renowned James Dines - one of the most famous gold bugs on the planet—when bullion is breaking records daily. This will be his first time speaking in Sydney since his sell out speaking tour at the Opera House and one not to be missed
Moneyline called Mr Dines "one of the most extraordinary men in America today; a man with a long and glorious reputation in being one of the first people to call the real turns in the strategic moves that happened in our marketplaces over the years."
If you’re familiar with his writings—and his take on gold—you’ll realise the timing couldn’t be better to hear what he’s thinking right now
To download a copy of program please click here
The Golden Gift – A Modern Solution to an Unsound Global Monetary System Gold & Silver: This Time it IS Different
With gold and silver bulls, since the beginning of this new PM bull in 2001, the four dreaded words that every gold/silver bull has been reluctant to say because it has served as the kiss of death every time gold/silver has been on the verge of a seemingly enormous breakout, is “This time is different.”
Yet this time IS different and here’s why. At the rate of currency devaluation being inflicted upon the world’s major currencies today by Central Bankers there are, and there will be, no real gains in any of the world’s leading stock markets. As every gold bull reader is aware of, if you price the world’s leading stock markets in gold, all Western government/banker engineered rises in stock markets are exposed for what they are – illusory gains, not real gains. Real gains for the last two months in most Western stock markets when priced in gold are firmly negative. The rigged rises in Western stock markets have been nothing more than shenanigans designed to fool the people into buying the economic recovery fable that bankers/politicians so desperately are attempting to sell, especially in the US, where November mid-term elections loom. For example, price the S&P 500 index in gold since early August, and one will discover that the S&P 500 has dropped more than 9.3%. Price the S&P 500 in silver and the losses are even more marked, at nearly 20%.
While is true that gold/silver are heavily overbought now and PM stocks are either in heavily overbought territory or rapidly approaching heavily overbought territory, during strong runs in past gold/silver bulls, the underlying metal prices and stock prices can remain in overbought territory for months on end. This alone is not a reason for a correction as Central Bankers have been fighting the fundamental weaknesses in their fraudulent global monetary system daily for quite some time now. When bankers legalize fraud through the legislation they sponsor/endorse, technical analysis is insufficient to ascertain the short-term direction of not only stock markets but also gold/silver markets. One must understand the history of Central Banker engineered attacks and price suppression schemes against gold and silver to estimate the probabilities of short-term corrections in addition to the use of technical analysis.
Today, Central Bankers are increasingly having a more and more difficult time suppressing the price of gold and silver. This is a marked departure from years past, even as recently as 2008, when they engineered a gold/silver crash to coincide with their engineered stock market crash. Though they still have the power to engineer short-term corrections in gold/silver markets, their power to do so has been fading this past year. They must resort to more and more trickery to engineer these collapses. If they decide to engineer a strong rapid decline in major US indexes in the near future, you can be sure that they will use this event to also use all of their abilities to engineer a simultaneous sell-off in gold and silver. Still, any correction we receive in gold/silver markets before the end of the year will be likely to be very short-lived as various global players will step in, stop the decline with buying, and continue the rising trend in gold/silver prices. In any event, the fading influence of the Bank of England and the US Federal Reserve over gold/silver markets has happened for a number of reasons.
Western Central Banks, specifically the US Federal Reserve, very likely possess much less gold than their “official numbers” indicate. Though the US Federal Reserve only owns paper certificates, these gold certificates give them ownership of the gold reserves at Fort Knox. The Fed’s price suppression schemes against gold and silver over the past several decades have involved leasing gold to bullion banks, who then sold the bullion into the market. Much of this gold has never been returned to the official US gold reserves. During periods when the Fed was known to be leasing gold via the cooperation of bullion banks, the reported US gold reserve numbers never changed, revealing the official numbers to be a total fraud. This, among numerous other instances of verifiable and exposed lies regarding the Federal Reserve statements regarding their official gold reserve figure, is why I am quite confident that the Fed currently owns much less physical gold than they claim. Selling physical gold into the market through leased gold to bullion banks was one of the most important mechanisms that the Fed used to suppress the price of gold and silver. With the efficacy of this mechanism largely gone as well as the desire of Central Bankers to sell gold almost non-existent, supply/demand dynamics for physical gold and silver are extremely different than they were just a mere five years ago. For a comprehensive list of acknowledged and proven US Federal Reserve gold price suppression schemes, visit this very well-researched GATA article, linked here, titled “Gold Price Suppression is Public Record and Public Policy, Not Conspiracy Theory”.........read on
Two old hedge fund partners who have long since gone their separate ways as billionaire investors, the legendary George Soros and Jim Rogers are buying commodities because they reckon stocks, bonds and real estate are not the place to be invested in current markets.
Jim Rogers commented this week: ‘Whether the world gets better or does not get better, commodities are going to do well. If the world economy does not get better, stocks are going to fall apart. We have a bubble forming in bonds. Bonds are selling at much higher price and that bubble is going to burst some day. So if I would do any defensive buying, I would start in the commodities market, not the stock market.’
The author of ‘Hot Commodities’ (click here) Jim Rogers first bet on the start of a secular bull market in commodities back in 1998. And as The Daily Reckoning points out today the index he developed at the time is up 15.5 per cent since early July.
Meantime, his old partner George Soros who is believed to be one of the models for the fictional Gordon Gekko and has approximately $25 billion under management , has recently slashed his US equity investments by 42 per cent to $5.1 billion. But actually it is the situation in Europe that troubles him most.
In remarks prepared for a speech to Columbia University today, Soros will say: ‘Deficit reduction by a creditor country such as Germany is in direct contradiction of the lessons learned from the Great Depression of the 1930s, and will set in motion a deflationary spiral in debtor countries. It is liable to push Europe into a period of prolonged stagnation or worse.’
Recent press comment has focused on record GDP growth in Germany but total GDP is still running at seven per cent below pre-crsis levels. This has produced the illusion of a recovery that has not actually happened.
Soros warns: ‘Under duress, the euro has begun to remedy its main shortcoming, the lack of a common treasury. But it is far too early to celebrate because the emerging common fiscal policy is dictated by Germany and Germany is wedded to a false doctrine of macro-economic stability, which recognizes only the threat of inflation and ignores the possibility of deflation.’
The man who broke the Bank of England in 1993 has also become a gold bug doubling his gold holdings (click here) while his former business partner Jim Rogers reckons silver offers even more upside (click here). Looking at the price of gold and silver this morning these old guys are still ahead of the game.
London 07/10/2010 - Spot gold struck another lifetime high during Thursday morning trading on persistent inflationary fears before settling lower, as investors await key European interest rate and US jobs data this afternoon for further guidance on the direction of the global economy.
Spot gold strode to yet another record peak at $1,364.90 per ounce this morning – beating the previous summit of $1,350.10 seen yesterday - before retracing to $1,357/1,357.80, still $9.10 higher. On the charts, next resistance levels stand at $1,365 and then further out at $1,400 and $1,500, with support back at $1,320 and $1,300.
"Speculation over further quantitative easing keeps driving down the US dollar, making gold the more attractive asset class," analyst John Meyer of Fairfax said.
Inflationary fears have remained firmly in place this week, as an unexpected interest rate cut by the Bank of Japan at the beginning of the week exacerbated growing expectations of imminent quantitative easing (QE) in the US. These in turn have powered precious metals higher as a hedge against a deterioration in the value of paper currencies.
The US currency plunged to another multi-month low this morning, reaching its lowest since February 3 at 1.3994 and was last at 1.3972, still half a cent down on the day. Meanwhile the US dollar index slumped to a new low since mid-January at 77.07 before also paring losses.
With fears of growing inflation across the Atlantic showing little sign of letting up, the dollar looks set to incur further heavy losses – at least in the short term – and push interest in store-of-value assets such as precious metals.
Later today the European Central Bank (ECB) and Bank of England are due to announce their interest rate decisions which, given the strong reaction to the Bank of Japan's rate cut move by financial markets earlier this week, could prompt further volatility.
Additional volatility could follow the latest US weekly jobs release due this afternoon given the reaction to jobs data yesterday afternoon - poor September ADP employment numbers showed a fall of 39,000 last month after a rise of 10,000 in August and versus an expected increase of 23,000. This worsened the already weak dollar, as the market viewed the numbers as another indication of the need for additional QE measures in the near future.
Elsewhere, silver surged to a fresh high since March 1980 at $23.52 per ounce this morning, following gold upwards before cutting advances to $23.33/23.38, still up 19 cents.
In the platinum group metals (PGMs), palladium broke through the $600 barrier to strike a new peak since June 2001 at $603 per ounce and was last at $598/603, a $10 advance.
Platinum climbed to a new peak since May 14 at $1,725 per ounce – it was last at $1,718/1,722, still up $7.
The three industrial precious metals have benefitted from their dual-role nature as both investment and industrial assets and which, in the present environment, should keep prices bubbly over the near term, analysts said.
"Silver, platinum and palladium are still in strong demand at present," broker Commerzbank said. "The present high momentum suggests prices will continue to rise in the short term."
Also, the PGMs were given a boost by news yesterday afternoon that unionised workers at Northam Platinum's Zondereinde mine in South Africa have rejected the firm's latest wage offer and are continuing industrial action that began on September 6.
The company is losing in the region of 1,000 ounces of PGMs and gold per day because of the strike.