Gold Price - Where is it heading?

[numbercruncher]

Do the central banks have any gold left ? maybe only paper sitting in those vaults

 

[ithatheekret]

Do the central banks have any gold left ? maybe only paper sitting in those vaults

They must have NC , all Central interbank settlements are transacted in gold bullion . Have done since Adam was a boy , even if he was a naughty one .

 

[Kauri]

A bit of boxing on the stairs?? how many rounds I wonder???
Cheers
............kauri

 

[cuttlefish]

They must have NC , all Central interbank settlements are transacted in gold bullion . Have done since Adam was a boy , even if he was a naughty one .

ithatheekret - could you clarify what you mean by this statement? What type of central bank intrabank settlements are done in gold bullion? (I thought the abolition of the gold standard did away with this sort of thing)

 

[explod]

A bit of boxing on the stairs?? how many rounds I wonder???
Cheers
............kauri

Maybe it is reaching for the sky hook, everything else is having a bit of swing. "The trend is your friend untill the bend" or similar. Enjoy the ride while it goes.

Our market down about 60, primary gold stocks up about 5%, not bad for the start of the game.

 

[ithatheekret]

ithatheekret - could you clarify what you mean by this statement? What type of central bank intrabank settlements are done in gold bullion? (I thought the abolition of the gold standard did away with this sort of thing)

Hi Cuttlefish ,

It's a pretty basic principal , mainly due to levels of autonomy in Central Banks some are owned and governed by the State , some are mildly independent , others like the Reserve and the ECB have greater degrees of independence .

Some nations are not exactly AAA stuff and we need an insurance policy for the goods they order etc. , just to put it in a simple theory .

They need their central bank to settle all trades , which goes through BIS and due to their status BIS would have reserves held and swapped in association with each transaction .

BIS is the Bank for International Settlements or the Central Bankers , Central Banker . Its a settlement house much like London for trade goods etc., but for Central Banks , where they get together over a few beers every couple of months and get sub committee after sub committee to nut things out . It's been around since the 30's just after the Hague Agreements and head office is in Basel , Switzerland .

There are other similar entities set up to carry out the same stabilization as BIS , but it would be the more prominent, I would presume , unless they've rewritten the rule book again .

Below is a link C/- Wikipedia on more info related to its structuring and duties etc. etc.

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

 

[Uncle Festivus]

Must be a sign of the times, but I remember the last time gold was at this level it was making the news almost every night. Stories about old grannies bringing out the family heirlooms to be melted down etc. Today, doesn't even get a mention on TV, maybe the odd newspaper snippet. Just shows the effects of inflation that gold @ $850 still doesn't elicit a reaction from the general public - only buys half an LCD TV these days.

Now $1000 would be a nice big number to grab attention maybe, but $2000 (the inflation adjusted price) would ensure a frenzy.

The fundamentals continue to improve for gold, if not for humanity in general. If the central banks 'loan' frenzy end up turning into bail outs then monetary debasement will not only continue but accelerate. Rumours about a hedge fund in trouble again.

One last correlation yet to be broken, that with the oil price.

Scumbag "run of the mill" stocks dragging the secondary golds down with them today, another disconnection required apon THE big number being breached?

I just hope Today Tonight or A Current Affair don't do a story on the "gold mania" any time soon - it would surely indicate it would be time to sell .

 

[So_Cynical]

I remember the Metal detector craze back in the 80,s when gold was this price...i suppose the difference
is the buying power of $850 has changed significantly.

Anyway great day for me and my heavily gold slanted portfolio
up about 5% for the day...

 

[cuttlefish]

Hi Cuttlefish ,

It's a pretty basic principal , mainly due to levels of autonomy in Central Banks some are owned and governed by the State , some are mildly independent , others like the Reserve and the ECB have greater degrees of independence .

Some nations are not exactly AAA stuff and we need an insurance policy for the goods they order etc. , just to put it in a simple theory .

They need their central bank to settle all trades , which goes through BIS and due to their status BIS would have reserves held and swapped in association with each transaction .

BIS is the Bank for International Settlements or the Central Bankers , Central Banker . Its a settlement house much like London for trade goods etc., but for Central Banks , where they get together over a few beers every couple of months and get sub committee after sub committee to nut things out . It's been around since the 30's just after the Hague Agreements and head office is in Basel , Switzerland .

There are other similar entities set up to carry out the same stabilization as BIS , but it would be the more prominent, I would presume , unless they've rewritten the rule book again .

Below is a link C/- Wikipedia on more info related to its structuring and duties etc. etc.

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

thanks - but do the settlements have to be in gold? (the BIS only has reserves of 700 tonnes of gold according to the wikipedia article). I thought they were more frequency settled in other currencies (as I understood it the US dollar was a reserve currency and this was the change that occurred when the gold standard was abolished).

 

[ithatheekret]

The gold doesn't have to move from certain countries , take for example the BoE it has its own reserves as many Central Banks do . ( And holds reserves for other countries it trades with etc. )

I think your referring to the RTGS ( real time gross settlements ) these are performed through each countries system . ie. England has CHAP , US has FedWire , Canada has LVTS , Israel has Zahav and we have RITS in Aust.

It is used primarily to subdue risk in settlements of high value , it is electronic settlement , but not designed for massive volume .

There's another system too . Which settles at the end of each day , but RTGS is settled through a Central Bank as an interbank exchange , much like a sponsored trading account .

Gold stays in play because of variations in Intraday Liquidity and Cash Reserve Ratios along with a few other hiccups they [Banks] don't like to talk about publicly . Along with the troubles of dealing with unstable countries .

You can be sure that since Bretton Woods and before , gold has been strategically sidelined . Imagine if they devalued it completely ..... they got darn close to , until the US had accumulated enough @ $35 .
Bretton Woods was suppose to help stabilize currency swaps etc. then they strayed again , and are in a worst place than back then .

Would the last financial crisis happened had the regime of Bretton Woods been upheld ? That's a question I doubt we could ever really get the nittys on , if we did , sub-prime would be like a stumped toe rather than the axing it is.

Do we have accurate data and figures from every country that likes printers ?


Devaluation cries by Treasurers , means they can't afford to pay their bills and would prefer just to print money . This is where the pen is mightier than the sword , one signature can send basic goods and services haywire .

 

[cuttlefish]

thanks ithatheekrat. I just read the wikipedia entry on brenton woods - a very interesting read, though I'm now totally confused as to the current state of play! (especially the china fixed exchange rate situation for example and how that ties into it all). I'll sleep on it and read through it again tomorrow.

 

[refined silver]

Gold up another $9, COT open interest near record levels.

The Commercial shorts also at near record levels and every single one is under water and bleeding badly and gettign worse. So much for the suposed "smart" and ïnfallible" Commercials.

When they have to cover then you'll see some fireworks.

 

[barrett]

Gold up another $9, COT open interest near record levels.

The Commercial shorts also at near record levels and every single one is under water and bleeding badly and gettign worse. So much for the suposed "smart" and ïnfallible" Commercials.

When they have to cover then you'll see some fireworks.

In nearly all cases the commercials produce gold and the shorts just mean they've just settled for a lower price to sell it at.. bit of a letdown for shareholders but that's about it, no? Except for the odd basket case situation like Croesus or Highland where they're forced to pull stumps, or Anglo with a massive hedge book. Those have mainly been weeded out and for every short-coverer I reckon there'll be two selling short. I expect by this Friday's COT report the commercials will have increased their net short position.

Anglogold is one of the last few with big hedging problems, last reported mark to market value of their hedge book was negative US$3.8 bil on Oct 31’s $784/oz, & they've finally decided to buy it all back.. ouch. But I don't see the commercials short covering just for the most part selling gold into their contracts

 

[refined silver]

In nearly all cases the commercials produce gold and the shorts just mean they've just settled for a lower price to sell it at..

Sorry, Barrett, thats totally incorrect. Bullion banks and the like are the major shorts, not gold producers. For the last 7 years producers have been reducing hedges put on in the 90s and early 00s, In the last 6 months NCM have had to raise funds to buy back $2b worth of hedges, Barrick the same, but still have huge hedging left (their last Q report was misread by many as closing out all hedges, that isn't what it said at all.) So with all these gold miners reducing hedges drastically the increase in open interest in the Commercials can't and didn't come from the miners.

I expect by this Friday's COT report the commercials will have increased their net short position.

Yes I agree. Many of the shorts are working for the Central Banks, monetary authorities and powers that be and don't want an out of control gold price signalling the system is breaking down. I doubt they are throwing in the towel yet, I just said it would be fireworks when they do. And when they do they will just retreat to another line in the sand and try to take a stand there. I doubt this is the final capitulation by any means. There is a loooooong way to go yet.

 

[refined silver]

Sorry, posted an answer inside a quotation in the last post, which makes for more difficult reading.

 

[chops_a_must]

Looked like a massive selling spike right at the top. Wouldn't want to be long gold into tomorrow I am thinking...

 

[ithatheekret]

I moved out of my mini $804 took 868.55 , said thankyou too .

It doesn't feel the same as holding the real thing to me though .

Crappers on , I mean Cramer

 

[ithatheekret]

PS.. should be a good day here tom.( lol today ) a batch of base metals have risen , oils off 50cents or so around $99 . The S&P safety net came out and there's still at least a $5-$7 rise to be knocked off gold yet .

Don't know about banks though , only got the courage up to look at two majors .

 

[Whiskers]

The US still has a good hoard of gold according to this. They have not reduced their holding as much as some eg the UK, while Russia and China have considerably increased.

It seems Aus disposed of a lot in 1997. Was that one of the Howard gov's first sacrifical lambs to feed the pork barrel? What are the ramifications of that?

For a country supposedly running as a debt based banking system, the US seems to have a high percentage of gold in reserves. Can someone elaaborate on this?

I presume there might be more 'unoffical' gold stocks at the disposal of the PPT.

 

[ithatheekret]

PS.. should be a good day here tom.( lol today ) a batch of base metals have risen , oils off 50cents or so around $99 . The S&P safety net came out and there's still at least a $5-$7 rise to be knocked off gold yet .

Don't know about banks though , only got the courage up to look at two majors .

Scratch the safety net on the S&P , gone negative and just 5 points off that 1440 region , just below that , is their chit , shock and shudder territory and a breach of 11425 is sphincter reactions , fainting and pants soiling material .