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Gold Rises To 17-year High

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http://www.bloomberg.com/apps/news?pid=710...id=aTrRIi_JWAoo

Sept. 15 (Bloomberg) -- Gold prices rose to a 17-year high in New York as investors bought the precious metal as an alternative to currencies.

``It shows a growing lack of respect for all currencies,'' said Dennis Gartman, an economist and editor of the Gartman Letter. ``You can't have a bull market in gold until it starts going up in all currencies, and that's what it's doing now.''

Argentina's central bank may increase gold reserves as a hedge against inflation and protection against a financial crisis, Juan Ignacio Basco, bank head of market operations, said yesterday in London. Increased reserves helped South America's second-biggest economy stabilize its currency and revive investor confidence after a $95 billion debt default triggered a plunge in the peso in 2002.

Gold futures for December delivery rose $4.30, or 1 percent, to $458 at 8:59 a.m. an ounce on the Comex division of the New York Mercantile Exchange. Prices earlier reached $459, the highest since June 1988.

Gold has gained 5.4 percent since Aug. 30, climbing in 10 of the past 11 sessions.

A futures contract is an obligation to sell or buy a commodity at a set price by a specific date.

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Guest Riser

The Dollar could be heading for troubled waters as the Iranian Oil Bourse are planning to use the Euro rather than the Dollar for international oil trade next March.

I suspect this move could be enough to provoke Bush into military action. There was an interesting observation of Blair on Newsnight last night which allegedly showed his reaction to being told at the NATO conference that the USA were planning an emergency withdrawal of troops from Iraq. Blair's reaction was “are you sure, that would be bloody irresponsible”. Makes you wonder if Bush plans to redeploy them in Iran before oil supplies get out of hand and cause the dollar to tank.

One of the down sides of holding gold it thrives on bad news, war, inflation, or a tanking dollar is all good for gold, the worse it gets the higher it goes.

Will the Iranian Oil Bourse Threaten the Dollar?

Iran continues to push its weight around. Now it proposes to begin pricing oil in euros. Unfortunately, just about everyone would benefit—except the United States.

For half a century, the American dollar has been the reserve currency of the world. Seventy percent of all currency reserves are in American dollars.

This has a lot to do with the fact that oil, the most important commodity traded in the world, is mostly priced in U.S. dollars. The majority of countries, being oil importers, have to buy their oil in U.S. dollars. This, together with related economic considerations, encourages them keep most of their foreign currency in dollars.

The debt-burdened U.S. economy is dependent upon this high demand for its currency in order to remain afloat. The day this demand comes to end will portend disaster for the American economy.

There is a move underway, however, to effect just such a reversal of the dollar’s fortunes. In particular, the world’s second-largest producer of crude oil—and declared enemy of the United States—Iran, seeks to end the predominance of America’s currency.

Several weeks ago, Tehran reconfirmed that it plans to create a euro-based exchange in oil—to compete with the London and New York dollar-denominated oil exchanges, both American-owned.

The proposed March 2006 launch of the Iranian oil bourse (iob), if successful, would give the euro a foothold in the international oil trade, solidifying its status as an alternative oil transaction currency. This, in turn, could be a catalyst for a major currency flight from the dollar to the euro—and a disaster for America.

The iob will see crude oil, petrochemicals and other commodities of the same kind traded in euros.

Iran no doubt has multiple motives for making this move.

For one, it makes sense economically, especially since the European Union is Iran’s biggest trading partner. But more importantly, it would strike a blow to Iran’s archenemy America—and, by hoping to make Iran the main hub for oil deals in the region, help drive the Islamic Republic forward in its quest for regional supremacy.

George Perkovich, an Iran expert at the Carnegie Endowment for International Peace in Washington, stated it frankly: “It’s part of a very intelligent, creative Iranian strategy—to go on the offense in every way possible and mobilize other actors against the U.S.” (Christian Science Monitor, August 30).

Iran is eager to eliminate American influence. For Iran, which foresees a “clash of civilizations” between Islam and America—which holds the banner for the West—undermining the dollar could prove to be its best and most effective strike against a more capable military foe.

Asia Times reported that only one major actor stands to lose if oil-trading in euros takes hold: the U.S. By contrast, “Oil in euros would benefit millions … in the EU and its trading partners …. And it would loosen the grip the U.S. has on opec members” (August 26).

“One of the Federal Reserve’s nightmares may begin to unfold in the spring of 2006,” one expert on the subject stated, “when it appears that international buyers will have a choice of buying a barrel of oil for $60 on the nymex [New York Mercantile Exchange] and ipe [London’s International Petroleum Exchange] or purchase a barrel of oil for €45 to €50 via the Iranian bourse” (Global Politician, September 2).

If oil-trading in euros were to get going, the already-existent global trend of foreign currency reserves being shifted from dollars to euros would rapidly accelerate. In turn, “countries switching to euro reserves from dollar reserves would bring down the value of the U.S. currency. Imports would start to cost Americans a lot more …. As countries and businesses converted their dollar assets into euro assets, the U.S. property and stock market bubbles would, without doubt, burst” (The Foundation for the Economics of Sustainability, Nov. 15, 2004).

The snowballing effect of a reserve currency switch would be catastrophic for the U.S., according to the Global Politician. The U.S. “would simply have to stop importing” (op. cit.).

Considering America’s industrial and agricultural heartland has been gutted over the last half century, this possibility could be grave. As one commentator put it, the impact of the Iran oil bourse on the U.S. dollar—and the follow-on effect on the U.S. economy—could be worse than Iran launching a “direct nuclear attack.”

Should Iran’s planned euro-based oil-trading mechanism get off the ground and gain international popularity, the U.S. dollar will weaken and the euro strengthen—helping to hasten the economic decline of the U.S. and propelling the European Union into dominance.

Though many economists consider the chances of Iran’s ambitions being successful as remote, we can know from Bible prophecy that the U.S. financial system will be brought down—along with the U.S. dollar as the reserve currency.

Edited by Riser

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Guest wrongmove
Sept. 15 (Bloomberg) -- Gold prices rose to a 17-year high in New York as investors bought the precious metal as an alternative to currencies.

Good time to sell......?

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Guest wrongmove
far from it, ive just bought more, cost averaging et al.

Sorry, my tongue was firmly in my cheek. :)

I have enough trouble trying to understand the housing market! But I do understand that gold pays no interest, so rises in price are essential to avoid losing money.

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Sorry, my tongue was firmly in my cheek.  :)

I have enough trouble trying to understand the housing market! But I do understand that gold pays no interest, so rises in price are essential to avoid losing money.

Its my pension ffs!

:lol:

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Very interesting blog:

http://prudentinvestor.blogspot.com/

Comment on gold two or three down, but it all looks fascinating.

The member central banks of the Eurosystem have been absent from the physical gold market for the third week in a row after dumping their annual 500 tons of bullion by the end of August, the latest weekly consolidated financial statement of the ECB shows.

Their absence from the market can be clearly seen on the chart. Gold rose from $430 to $450 an ounce since then. The new central bank gold sales agreement will come into effect on September 26. Expect a good dose of bullion entering the market from this date onwards that could drive the gold price down to the $42x-level before it will resume its primary - and in my opinion unstoppable - uptrend.

Thanks for link. I'm expecting some profit taking on the recent increases and looking to buy in the next dip - if this info is good, it might not be far away.

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Thanks for link. I'm expecting some profit taking on the recent increases and looking to buy in the next dip - if this info is good, it might not be far away.

If this is correct I for one will be topping up!

My main play is still on Japan.....it has good corellation with the last gold upswing and very few people are focusing on it,the limelight is firmly on china(funny how shanghai stocks are some of the worst performers though!)

one analyst on bloomberg has gone on record saying he anticipates 40%+gain in nikkei over 3 years....I'm fine with that!

charts look good,currency play is good

toyota and honda are the top two hybrid car manufacurers.

no housing bubble and trade surplus

I'm comfortable with commies and japs for some time to come.

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Although the article posted above is very interesting, I am not so sure about the last sentence...

"Though many economists consider the chances of Iran’s ambitions being successful as remote, we can know from Bible prophecy that the U.S. financial system will be brought down—along with the U.S. dollar as the reserve currency."

Risks undermining the rest of it IMO.

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Damn right

Ive been hesitating, but I'm going 10% GOLD at the bottom of the next dip.

Japan is a good call,I'm also bullish on the DAX in the longer term, but wonder how much strength in Japan is fueled by Chinese consumers in an overheated economy; and Germany too for that matter.

Cheers; its a really educational thread.

C.P.

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Although the article posted above is very interesting, I am not so sure about the last sentence...

"Though many economists consider the chances of Iran’s ambitions being successful as remote, we can know from Bible prophecy that the U.S. financial system will be brought down—along with the U.S. dollar as the reserve currency."

Risks undermining the rest of it IMO.

I don't think it should be ignored either!!....I know I hark on about nostradamus sometimes,but the US vs Islam stuff is spookily accurate,so I would not be in the slightest bit surprised to see iran kick off next year(also in the torah)

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Damn right

Ive been hesitating, but I'm going 10% GOLD at the bottom of the next dip.

Japan is a good call,I'm also bullish on the DAX in the longer term, but wonder how much strength in Japan is fueled by Chinese consumers in an overheated economy; and Germany too for that matter.

Cheers; its a really educational thread.

C.P.

Japan growth is mainly coming from the US,on the back of a high oil price.

The run-up in oil has given firms like toyota an edge in fuel-efficient cars,also gaining market share in europe.As asia hots up and the US gets into hybrids,the japs are being hired and spending in the shops again(and they do love their gadgets!)

but on top of this,many firms have MASSIVELY increased cap-ex in japan.Firms tend do this at the beginning of a long-term recovery cycle.

Eurozone is a tougher one to call as the result of german electons is looking like a coalition,which will stifle change.At least Koizumi has virtually carte blanche to force through reforms.

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Eurozone is a tougher one to call as the result of german electons is looking like a coalition,which will stifle change.At least Koizumi has virtually carte blanche to force through reforms.

Yeah, it's a shame that. They're going to end up with a hung parliament and get bugger all done.

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One day I'll understand what Dr B's saying :D

And that day is getting closer and closer all the time. If nothing else the coming HPC has resulted in my striving to get a financial education. Even if HPC doesn't happen I'll still come out of this richer in that sense :)

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The member central banks of the Eurosystem have been absent from the physical gold market for the third week in a row after dumping their annual 500 tons of bullion by the end of August, the latest weekly consolidated financial statement of the ECB shows.

Their absence from the market can be clearly seen on the chart. Gold rose from $430 to $450 an ounce since then. The new central bank gold sales agreement will come into effect on September 26. Expect a good dose of bullion entering the market from this date onwards that could drive the gold price down to the $42x-level before it will resume its primary - and in my opinion unstoppable - uptrend.

This central bank thing reminds me of an older post of mine (July), which didn't receive much interest at the time.... You might be interested to read it now....

Are central banks running out of gold?

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Guest wrongmove

Interesting Economist article for gold fans

Pump panic, gold glee

".....For at the end of the day, the price of gold reflects confidence, more than anything. When people are confident that their central banks will control inflation while permitting the economy to grow, when they believe that paper assets are worth something approaching their face value, they buy gold to wear but not to put in a safe. Alan Greenspan has achieved the remarkable feat of suspending disbelief in America’s gerrymandered finances for the past few years. On his departure, watch the gold price soar."

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I dont own gold, but Im winning big on this move.

How?  I own gold mining and exploration shares.

Following is my second largest holding:

ASA Corp., a goldfund concentrating on South African producers:

asa9fo.png

This fund trades at an approximate 13% discount to its NAV,

and i hold my position through in-the-money Call options

Got any idea how Minmet are doing or if they still even exsist ?

Your post just reminded me I bought some of their shares about 4 - 5 years ago, but have lost track of the paperwork, must try and find it sometime !!

I could be a paper millionaire without even knowing it !! :D:D

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Guest Riser

Looks like Gold if off again. B)

$458 £253

A couple of months ago I followed one of Dr Bubb's links and listened to a US radio programme discussing gold. There was a guy on there who believed Gold was about to enter a second wave of increasing prices. He said something like the first wave was small and lead by insiders, the second and largest wave would be lead by smart investors, and the third wave would be lead by the wider public panic buying, smart investors should sell into this third wave as it would be short lived and end in the buble bursting.

This latest move in gold may be enough for it to come onto the radar screens of investors around the world rather than just in the States were gold has seen increases due to the falling dollar. Earlier this year moneyweek were talking about $1100 gold by the end of the decade although I hope it comes much sooner, that would mark the end of the second wave for me and I would start to consider selling at those levels.

Edited by Riser

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Gold at 17-year peak in Europe

Fri Sep 16, 2005 10:45 AM BST

By Clare Black

LONDON (Reuters) - Gold soared to its highest level since June 1988 in Europe on Friday as inflation concerns, uncertainty about the U.S. economy and robust physical demand sparked a buying spree by funds.

Traders said an absence of central bank selling over the past three weeks as European banks had reached the limit of a sales pact, had removed an important price cap.

Spot gold <XAU=> was quoted at $457.80/458.50 an ounce at 0926 GMT (10:26 a.m. British time), from $455.10/455.80 last quoted in New York.

"Gold is really looking good now and seems to have a clear upside objective," said Mark Keenan, fund manager at MPC Commodity Fund.

"You've got three of the strongest fundamental drivers of gold that are currently converging so it is very difficult to make a bearish case for it at the moment."

He was referring to a weak dollar, rising inflationary expectations due to strong oil prices and the seasonal upturn in physical demand.

It was the surprising strength of demand for gold to make jewellery, notably in the world's biggest consumer India, in the first half of this year that triggered the latest leg up in gold's impressive rally -- now in its fourth year.

$500 EYED

Many analysts are looking for gold to target $500 and above next year for the first time since 1987.

That still remains well off gold's 1980 high of $850, when it was bought as a hedge to protect against high inflation.

"It (inflation) doesn't have the importance it had in the past. But for a couple of weeks now, it has become a topic again on the back of the high oil price," said Wolfgang Wrzesniok-Rossbach, head of metals marketing at Heraeus.

"I think the discussion for gold being a hedge against rising inflation has intensified and that could be why we are seeing buying now, here in the Western world."

Bullion's rise has not been limited to dollar-gold. Prices have set a record high in euros and 14-year peaks in yen. New York's COMEX gold futures hit a 17-year high on Thursday.

"I would expect more buying certainly from the trend-following fund community, a new high will attract a degree of momentum buying," MPC's Keenan said.

INTEREST RATES

Some were still opting for caution, waiting to see whether the Fed would extend its 14-month stretch of raising interest rates on September 20.

Financial markets had been debating whether the U.S. central bank would continue to raise interest rates after the hurricane.

"I think that one of the main keys to the market's direction over the coming months will come from next week's FOMC meetings," said Simon Weeks, director precious metals at ScotiaMocatta.

"And on this basis people are unlikely to turn major buyers until the outcome of these meetings and their associated impact on interest rates and the economic picture are known."

Silver <XAG=> rose to $7.06/7.09 an ounce from $7.01/7.04 last quoted in New York. Platinum <XPT=> fell to $914/917 an ounce from $916/920, while palladium <XPD=> was steady at

$184/187.

(Additional reporting by Lewa Pardomuan in Singapore)

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minmet was a scam- a share for idiot speculators.

not something to hold in size, i always avoided it.

i do get caught from time-to-time, but when it comes to smaller companies, i have learned the hard way to meet management before you invest big sums.  after a while you will develop an ability to spot the good ones.

ASA corp. trades on the New York Stock Exchange and has a Net Asset Value appoaching $500million.  It has been around for decades, holds a transparent portfolio of major mining shares.  Goldfields, Anglogold, and Harmony are its bigget holdings.

By now, I have researched it "to death" and feel like I know what I am investing in.  My largest position is a £60million company, which I invested in bfoe it went public, and is up over 10 times in 8-9 years

Hmmm... Thanks ..I think. So i'm not a millionaire then.

Oh well this time next year ...

Now I know why they call penny shares junk stock !!

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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