Cross Currency Table – (Bloomberg)

Gold is slightly weaker today but hovering near a 7-month high, as the US Fed’s announcement of QE3 has led to some investors diversifying into bullion as a hedge against inflation risk.

The yellow metal rose as high as $1,777.51 on Friday, a high not seen since February 2012 when it hit this year’s peak.  Last September 2011, it reached a nominal high of nearly $1,920/oz.

QE3 will allow the Fed to print dollars to buy $40 billion worth of bonds every single month for the foreseeable future. Dollars, euros and pounds are being made to grow on trees – precious metals do not.

November marks the festival season of Diwali in India, the Hindu festival of lights; demand has picked up as both jewellers and investors scaled up purchases before prices rise any further.

Marc Faber, one of the few analysts to have predicted the current crisis correctly and to have protected his clients in the process, remains very bullish on gold.

In another excellent Bloomberg interview, Faber said that “the trend for gold prices will be steady but the trend for the dollar and other currencies will be down. So in other words gold in dollar terms will trend higher.”

Gold in Dollars, Euros, Pounds, Norwegian Krone – 1 Year

“How high it will go, you will have to call Mr Bernanke and at the Fed there are other people who actually make Mr Bernanke look like a hawk and so they are going to print money.”

Faber is on record as to the importance of owning physical gold and he again warned about the importance of owning gold but not storing it in the U.S.

Gold in Dollars, Euros, Pounds, Norwegian Krone – 5 Year

“You ought to own some gold but don’t store it in the U.S., the Fed will take it away from you one day,” Faber astutely noted.

He said that Bernanke is a money printer and this could lead to massive inflation and the Dow Jones at 20,000, 50,000 or 10 million.

Faber cheerily predicted that the “the Federal Reserve’s monetary policy will destroy the world” and “eventually we will have a systemic crisis and everything will collapse.”

Faber’s long term historical financial and economic perspective remains astute.

The full interview is a must see and can be seen in our commentary section today.

NEWSWIRE
(Bloomberg) -- Fed’s QE3 Signals Gold Rise to $2,000 by March: Chart of the Day
Gold may surge to a record $2,000 an ounce in the next six months as the Federal Reserve’s third attempt at economic stimulus stokes concern that inflation will accelerate, according to TD Securities Inc.

The CHART OF THE DAY shows that gold prices have moved almost in tandem with inflation expectations, which jumped to the highest in 16 months after the Fed announced a third round of bond buying. Investors may increase purchases of the precious metal to protect against rising consumer prices, said Bart Melek, the Toronto-based head of commodity strategy at TD Securities.

Gold soared 70 percent from the end of December 2008 to June 2011 as the Fed kept borrowing costs at a record low and bought $2.3 trillion of bonds in two rounds of so-called quantitative easing.



On Sept. 13, the central bank said it will expand holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month and keep the benchmark interest rate near zero “at least through mid-2015.”

“We are running the risk of inflation because of this highly accommodative monetary policy,” said Melek, the third- most accurate price forecaster for precious metals tracked by Bloomberg during the eight quarters through June 30. “The concern is that even as velocity in the banking system picks up, the Fed may not drain away liquidity fast enough.”

On Sept. 14, inflation expectations as measured by the break-even rate for five-year Treasury Inflation Protected Securities reached the highest since May 4, 2011. Gold futures climbed 1.9 percent last week to $1,772.70 on the Comex in New York. The precious metal surged to an all-time high of $1,923.70 on Sept. 6, 2011.

(Bloomberg) -- Credit Suisse Raises Gold Forecast to $1,850 an Ounce
Credit Suisse Group AG raised its gold forecast to $1,850 an ounce, according to a report from Nannette Hechler-Fayd’herbe, head of global financial markets research.

(Bloomberg) -- Gold Traders Increase Bets on Price Rise, CFTC Data Shows
Hedge-fund managers and other large speculators increased their net-long position in New York gold futures in the week ended Sept. 11, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 182,016 contracts on the Comex division of the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 11,552 contracts, or 7 percent, from a week earlier.

Gold futures rose this week, gaining 1.9 percent to $1,772.70 a troy ounce at today's close.

Miners, producers, jewelers and other commercial users were net-short 237,091 contracts, an increase of 17,705 contracts, or 8 percent, from the previous week.

Each Friday the CFTC publishes aggregate numbers for long and short positions for speculators such as hedge funds and institutional investors, as well as commercial companies that buy or sell futures to protect against price moves. Analysts and investors follow changes in speculators' positions because such transactions can reflect an expectation of a change in prices.

(Bloomberg) -- Silver Traders Trim Bets on Price Rise, CFTC Data Shows

Hedge-fund managers and other large speculators decreased their net-long position in New York silver futures in the week ended Sept. 11, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 31,482 contracts on the Comex division of the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions fell by 948 contracts, or 3 percent, from a week earlier.

Silver futures rose this week, gaining 2.9 percent to $34.66 a troy ounce at today's close.

Miners, producers, jewelers and other commercial users were net-short 47,272 contracts, an increase of 2,352 contracts, or 5 percent, from the previous week.

Each Friday the CFTC publishes aggregate numbers for long and short positions for speculators such as hedge funds and institutional investors, as well as commercial companies that buy or sell futures to protect against price moves. Analysts and investors follow changes in speculators' positions because such transactions can reflect an expectation of a change in prices.

(Bloomberg) --  BNP Paribas Says Fed’s Low Rates to 2015 Delays Gold’s Peak
Gold’s peak will be delayed because of the Federal Reserve’s decision to keep interest rates low for longer, BNP Paribas SA said.

BNP Paribas kept its annual gold and palladium price forecasts, Anne-Laure Tremblay of the bank said in an e-mailed report today.

NEWS

Gold hovers near highest in almost seven months after Fed - Reuters

Bullish Wagers at 16-Month High as Citi Sees Gains - Bloomberg

Amplats to resume S.Africa operations on Tuesday - Reuters

Gold, silver rise in electronic trading – Market Watch

COMMENTARY

Video: Gold's Global Outlook: The Drivers of Its Rally - Bloomberg

Video: Don't Store Gold In U.S. - Fed Will Take It From You - Bloomberg

When will these bankers learn: Stock markets have nothing to do with the real economy – The Daily Mail

BofA Sees Fed Assets Surpassing $5 Trillion By End Of 2014... Leading To $3350 Gold And $190 Crude -  Zero Hedge

GoldCore Limited
Ireland:
14 Fitzwilliam Square
Dublin

United Kingdom:
No. 1 Cornhill
EC3V 3ND UK

IRL +353 (0)1 632  5010
UK +44 (0)203 086 9200
US +1 (302)635 1160

Twitter, Facebook, YouTube, LinkedIn:

Linkedin - www.linkedin.com/pub/mark-o-byrne
Twitter - www.twitter.com/goldcore
Facebook - www.facebook.com/GoldCore
Youtube - www.youtube.com/GoldCoreLimited

-- Posted Monday, 17 September 2012 | Digg This Article