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- 17 January 2007
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Thar she blows - Aussie gold $1300/oz
It's their profit announcements that will win out.You can't beat a gold play for pure leverage, but it apparently needs more than logic and bare facts to convince the weak and/or irrational hands to hold tight to their goldies.
It's their profit announcements that will win out.
The Lihirs and NC Ms are cash cows in an otherwise tough market. While an equity's price might reflect market sentiment, it sometimes has diddly squat to do with a company's true value.
Low (or no) debt, low cost, unhedged producers has been my mantra for many years.
Gold may have a bit of downward pressure...but the possibility of a .50% rate cut happening in the US and Europe early next week should help when it happens.
Central banks all but stop lending bullion
By Javier Blas in London
Published: October 7 2008 21:44 | Last updated: October 7 2008 21:44
Central banks have all but stopped lending gold to commercial and investment banks and other participants in the precious metals market, in a move that on Tuesday sent the cost of borrowing bullion for one-month to more than twenty times its usual level.
The one-month gold lease rate rocketed to 2.649 per cent, its highest level since May 2001 and significantly above its five-year average of 0.12 per cent, according to data from the London Bullion Market Association.
Gold lease rates for two, three and six months and for a year also jumped to levels not seen in the last seven years.
Traders said the jump reflects the fact that central banks – mostly European – have almost completely stopped lending gold in the last few days and are not rolling forward old leases after maturity. This is because of fears that some borrowers might not repay their bullion loans if they are engulfed by the financial crisis.
“A number of central banks have been cutting back on their gold lending,” said Tom Kendall, a precious metals strategist at Mitsubishi in London.
John Reade, a commodities strategist at UBS, added that there had been a lot of talk about some central banks being unwilling to lend their gold because of a redoubled focus on the risk of borrowers not returning it.
“There is very little appetite for unsecured lending at the moment,” he said.
Central banks usually do not ask borrowers to post any guarantee – or collateral – to secure bullion loans. “The key word now is safety,” an official from a Europe-based central bank said.
In normal circumstances, central banks lend gold into the market – providing key liquidity – to earn a small return on what otherwise is a non-yielding asset.
Other factors are also pushing lease rates higher, including more investors’ positions no longer available for lending, according to Philipp Klapwijk, chairman of GFMS, the London-based precious metals consultants.
Traders said the general dysfunction in money markets, with US dollar rates significantly higher, was contributing to volatile gold lease rates. Demand for physical gold and small and medium-sized bars had been strong, removing supplies from the market that otherwise could have been lent, traders added.
The US Mint onTuesday said it had run out of half-ounce and quarter-ounce American Eagle gold coins following “unprecedented” demand.
Gold prices on Tuesday rose $19.3 to $880.6 a troy ounce, having hit an intraday high of $890.6 an ounce. Bullion prices hit an all-time high of $1,030.8 in March. In euro terms, gold prices rose on Tuesday to a record high of €654.22 an ounce, above March’s all-time high of €651.24 an ounce. It also hit a record in Australian dollars.
Investors are seeking refuge in actual gold coins and bars as fears about the safety of their savings increase. Some have even been selling their positions in gold futures, as this is a less tangible form of the metal. Since the collapse of Lehman Brothers three weeks ago, bullion prices have risen about 20 per cent.
The other important level is the Sep 18 highs labeled here as wave-1 or -A. Note the high volume and weak closes? This means sellers and therefore adds a slight risk of a reversal and possible failure of the pattern.
A quote from my post #5453...
Last nights high? $924.
Sep 18 high? $922
Last nights close? $906, on the lows.
Gold is now back at $894 so its a sign that the sellers seen back on Sep 18 are still active. Prices cannot go higher unless they are fulfilled or they back away. The day session can change dramatically, but an early 'red flag'.
Nick
Nick i have never seen the AU spot price move $100 in the daytime (usually its doormat) 3pm around $1355 to now $1255
Nick i have never seen the AU spot price move $100 in the daytime (usually its doormat) 3pm around $1355 to now $1255
It's what is quoted at the Perth Mint iirc.The thing about that is its really the move back up of the AUD that has resulted in that.
Another thing is where does the price of AUD gold come from
It seems to be a made up instrument for the bucket shops?? (I'm pretty sure)
There is no market for AUD gold like the futs USD gold.
Anyone?
It's what is quoted at the Perth Mint iirc.
But is there a 24 hr market that every one quotes and post charts for??
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