LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Gold Miners’ Q2’19 Preview
By: Adam Hamilton, CPA, Zeal Research

GoldSeek Radio: Bob Hoye
By: Chris Waltzek, GoldSeek Radio

Precious Metals Big Picture, as Silver Gets on Its Horse
By: Gary Tanashian

Why This Gold Rally Feels Different
By: Rick Ackerman, Rick's Picks

Currencies, the most manipulated markets in the world, and gold technical update video
By: Gary Savage

THE SILVER PRICE: Setting Up For A Breakout?
By: Steve St. Angelo, SRSrocco Report

With Willem Middelkoop essay, central bank forum takes a shine to gold
By: Willem Middelkoop

Precious Metals Update Video: Big upside to the breakout in the metals markets?
By: Ira Epstein

Gold Resource Corporation Reports Preliminary Second Quarter Production and Positioned to Increase 2019 Annual Outlook
By: Gold Resource Corporation

Asian Metals Market Update: July-18-2019
By: Chintan Karnani, Insignia Consultants

 
Search

GoldSeek Web

 
Gold Investments Market Update - FT Reports that Counter Party Risk May Lead to Potential Squeeze in Gold Market by End of Year



-- Posted Monday, 15 December 2008 | Digg This ArticleDigg It! | Source: GoldSeek.com

 

 

 

  

Gold rallied sharply last week and was up nearly 9% despite continuing uncertainty and a very mixed performance in stock markets. The US dollar index fell some 4% on the week and it looks increasingly likely that the dollar may have topped out and may soon resume its bear market. For the year, gold is now up by more than 4% in dollar terms and by much larger amounts in euros (+11.7%) and pounds (+40.4%).

Gold rallied sharply on the open in Asia and has remained elevated as oil is stronger (up some 4%) and the dollar remains weak.

The FT reported late Friday on the potential for squeeze in the gold market by year end which would see prices rise materially.

The FT’s Chris Flood reported that "Traders have been hearing talk that the gold market could face a potential squeeze at the end of this year if market participants with futures position on New York's Comex exchange decide not to roll over their positions, because of concerns about counterparty risk and opt for physical delivery instead.

But dealers dismissed the threat of a squeeze, pointing out that Comex gold stocks stand at 8.5 million ounces, well above the five-year average of almost 6 million ounces. ..."

15-Dec-08

 

Last

 

1 Month

YTD

1 Year

5 Year

Gold $

 

     828.70

 

11.93%

-0.55%

4.29%

102.67%

Silver

 

      10.43

 

9.75%

-29.37%

-24.46%

85.95%

Oil

 

      48.38

 

-14.29%

-51.21%

-47.17%

45.81%

FTSE

 

      4,312

 

1.85%

-33.22%

-32.60%

-0.83%

Nikkei

 

      8,665

 

2.39%

-43.24%

-44.15%

-17.40%

S&P 500

 

         880

 

-3.46%

-40.08%

-40.89%

-18.10%

ISEQ

 

      2,555

 

-4.43%

-63.15%

-63.96%

-46.80%

EUR/USD

 

     1.3473

 

6.89%

-7.62%

-6.62%

9.42%

© 2008 Goldassets.co.uk

 

 

 

 

 
The 8.5 million ounce figure cited by the FT are actually the total Comex gold inventory which includes gold that belongs to customers who are storing it on the exchange which is not available for delivery. The amount that is registered to dealers, and therefore available for delivery is only 2.846 million ounces. The delivery notices that have been issued so far in December total 1.26 million ounces, which is 44 percent of the available deliverable gold. There is also the possibility that some of the gold may be encumbered in lending/swap operations.

According to the Gold Anti-Trust Action committee (GATA)  the Comex authorities themselves have been alerting various futures firms about the potential of a squeeze on the December contract. The Comex is allegedly advising the $840 December shorts to exit their remaining open positions. There have been 12,636 notices of delivery. The shorts have until December 31 to make delivery. Normally they deliver early to take in cash and earn the interest.

This represents about 43 percent of the gold available at the Comex. Some speculate that concerned futures players could  buy the February gold contract and then spread into December, which would shock the shorts and lead to a massive short squeeze sending prices markedly higher in a short period of time.

Former Federal Reserve Governor Says Fed’s Gold is Important Asset
Another bullish development for the gold market was former Federal Reserve Governor, Lyle Gramley reassuring that the Federal Reserve’s solvency was not at risk (due to its rapidly deteriorating balance sheet). Gramley denied such concerns were valid as he said the Fed has significant assets in the form of undervalued government gold certificates.

Interviewed Monday last week on the "Trading Day" program of Business News Network in Canada, Gramley hinted that a big upward revaluation of gold may figure heavily in the Fed's attempt to rescue the U.S. economy. Gramley, now senior adviser at Stanford Group in Houston, was asked about the seemingly grotesque expansion of the Fed's balance sheet in recent months by the program's guest host, Niall Ferguson, an author and history professor at Harvard.

Ferguson asked: "I've heard it said that the Fed has turned into a government-owned hedge fund, leveraged at 50 to 1. Do you feel nervous about what this might actually do to the Fed's reputation?" Gramley reponse was: "I think you have to reckon with the fact that one of the Fed's assets is gold certificates, which are priced, as I remember, at $42 an ounce, and if we were to price them at market prices, the Fed's leverage would look a lot less than it is now."

More signs that gold is increasingly being viewed as the potential savior of central banks internationally from the global deflation gripping the world. The Federal Reserve is one of the largest holders of gold in the world with most of its foreign currency reserves in gold. A devaluation of the dollar and revaluation of gold may help the U.S. government and the Federal Reserve to protect their solvency and inflate their way out of a Depression.

World Central Bank Gold Holding (June 2008)

Rank

Country/Organization

Gold
(ones)

Gold’s share of reserves
(%)

-

World

29,813.1

-

1

United States

8,133.5

78.2%

2

Germany

3,417.4

66.3%

3

International Monetary Fund

3,217.3

-

4

France

2,562.3

59.4%

5

Italy

2,451.8

68.1%

6

Switzerland

1,100.7

39.8%

7

Japan

765.2

2.1%

8

Netherlands

621.4

61.2%

9

People’s Republic of China

600.0

1.0%

10

European Central Bank

563.6

24.8%

11

Russia

457.9

2.4%

12

Taiwan

423.3

4.0%

13

Portugal

382.5

86.8%

14

India

357.7

3.3%

15

Venezuela

356.8

33.3%

16

United Kingdom

310.3

14.8%

17

Lebanon

286.8

36.9%

18

Spain

281.6

40.4%

19

Austria

280.0

41.7%

20

Belgium

227.6

37.2%

 

73

Ireland

5.5

16.8%


http://en.wikipedia.org/wiki/Official_gold_reserves

 

Financial Regulation: Gold & Silver Investments Limited trading as Gold Investments is regulated by the Financial Regulator as a multi-agency intermediary. Our Financial Regulator Reference Number is 39656. Gold Investments is registered in the Companies Registration Office under Company number 377252. Registered for VAT under number 6397252A. Codes of Conduct are imposed by the Financial Regulator and can be accessed at www.financialregulator.ie or from the Financial Regulator at PO Box 9138, College Green, Dublin 2, Ireland. Property, Commodities and Precious Metals are not regulated by the Financial Regulator

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: The value of investments may fall or rise against investors’ interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. Past experience is not necessarily a guide to future performance.

All the opinions expressed herein are solely those of Gold & Silver Investments Limited and not those of the Perth Mint. They do not reflect the views of the Perth Mint and the Perth Mint accepts no legal liability or responsibility for any claims made or opinions expressed herein.


Fair Use Notice: This newsletter contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of issues of financial and economic significance. At all times we credit and attribute the copywrite owner and publication.We believe this constitutes a 'fair use' of any such copyrighted material as provided for in Copyright Law. The material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for economic research purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.

Gold Investments
63 Fitzwilliam Square
Dublin 2
Ireland

Ph +353 1 6325010
Fax  +353 1 6619664
Email info@gold.ie
Web www.gold.ie


Gold Investments
No. 1 Cornhill
London
EC3V 3ND
United Kingdom
Ph +44 (0) 207 060 4653
Fax +44 (0) 207 8770708
Email info@goldassets.co.uk
Web www.goldassets.co.uk
Mission Statement
Gold and Silver Investments Limited hope to inform our clientele of important financial and economic developments and thus help our clientele and prospective clientele understand our rapidly changing global economy and the implications for their livelihoods and wealth.
We focus on the medium and long term global macroeconomic trends and how they pertain to the precious metal markets and our clienteles savings, investments and livelihoods. We emphasise prudence, safety and security as they are of paramount importance in the preservation of wealth.

Gold and Silver Investments Ltd. have been awarded the MoneyMate and Investor Magazine Financial Analyst of 2006.


-- Posted Monday, 15 December 2008 | Digg This Article | Source: GoldSeek.com




 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.