The International Monetary Fund (IMF) said it had no comment on a rumor that China is the buyer of the remaining 191.3 tons of gold the IMF is selling.
Alistair Thomson of the IMF's Press Office told Kitco.com that the agency does not comment on speculative stories, calling this a "sensitive area" of discussion.
The unconfirmed rumor was based on Russian news reports and some sources said it boosted gold futures prices.
In his daily commentary, Jon Nadler, Senior Analyst for Kitco Metals Inc. wrote, “According to the Russian FinMarket news Agency, Chinese officials have confirmed the intention for China to buy the remaining 191.3 tones of IMF gold that are still for sale. The rumors have however not yet been confirmed. “
The IMF announced the sale of its remaining 191.3 tons to the open market in mid-February. Reportedly the IMF couldn't sell its gold to central banks like China and India, traditional big buyers, so it had to resort to the open market.
In September 2009, the IMF announced an intention to sell 403.3 tons of gold; India, Mauritius and Sri Lanka purchased close to 212 tons by the end of the year.
Posted: Feb 25 2010 By: Dan Norcini Post Edited: February 25, 2010 at 2:07 pm
Filed under: Trader Dan Norcini
Dear CIGAs,
You have to be really impressed by gold’s performance today. It had three, no, make that four, strikes against it. First, the equity markets dropped sharply. Second, bonds ran strongly higher in a flight to safety. Thirdly, the Dollar was marginally higher. Fourthly, crude oil dropped nearly $3.00 barrel while copper was hit hard. In other words, all of the usual deflation trades were back on today with investors/traders moving towards the risk aversion plays. Yet, gold refused to break down and around mid morning began climbing back into positive territory. At the same time, the mining shares also moved well of their lows helping to further confirm the strength at the Comex. As the session wore on, gold gained more upside momentum closing the pit session trade just off its best level of the day.
The price action in gold indicates that it is trading on its own merits for at least today and acting like the proverbial safe haven that it has always been historically. The fund algorithms have seriously distorted this role recently because those computer generated trades just jettison nearly everything in sight when their set of various inputs signal sells. The notion that gold is a “risky” asset that should get sold during such times when risk is being avoided contradicts history yet that is exactly what has tended to occur with the metal particularly when equities were being sold off. Remember, these computer generated trades are just that, “computer generated”. As such they are generally not selective but are rather quite indiscriminate as there is no human thinking or analysis involved. All that these infernal things are designed to do is to front run other orders coming in or jam prices higher or lower in the pursuit of ultra short term profits. That is what makes today’s move higher in gold so telling. Someone is buying in sufficient size to absorb any algorithm selling along with the usual bullion bank price capping efforts.
That brings me to the Dollar – it continues to gain at the expense of the Euro, the Swiss Franc, and the British Pound (read that as Europe land) as it is winning by default rather than any bullish scenario. Even at that, I keep mentioning its deteriorating price chart. The bearish divergence continues to show itself and momentum is waning but the bears just cannot seem to break it down technically. We will need to watch the 80 level on the USDX to see if the shorts can knock it below there. If so, they have a legitimate shot at taking it down to 79.75 where a large number of technical sell stop orders are waiting. With the kind of strength gold has been demonstrating by its refusal to break down, a technical sell off in the Dollar should easily allow gold to break through the barrier erected at $1,130. We will have to wait and see how things develop.
I mentioned yesterday that the bulls in the mining sector need to hold the line near the 390 level in the HUI to prevent a move down towards the 375 level. They are digging in admirably this morning but will still need to push the shares high enough to move the index back above the 405 level to generate increased nervousness among the shorts, who have got to be disappointed that they could not build on yesterday’s downside momentum. They were certainly running to cover this morning once price took out yesterday’s high. Support in the HUI lies at today’s low near 380 with stronger support at 375.
The long bond is back above the major moving averages climbing above the resistance barrier corresponding to the 20 day moving average having flipped the technical indicators back to the buy side. We will need to see how they act the next few sessions to see if they too are ranging. As you can probably tell by now, there are not a lot of these major markets that are trending right now in the short term but are rather bouncing back and forth in a range trade as players try to figure out what is next (inflation or deflation).
Ignore the IMF sales – Soros is right about gold
By Dominic Frisby Feb 24, 2010
George Soros is a man who has outwitted governments before. In 1992 he made more than $1bn by short-selling sterling, as the UK government was eventually forced to withdraw the pound from the European Exchange Rate Mechanism. So when he speaks, investors listen.
Last month, at the World Economic Forum in Davos, Switzerland, he declared that gold is "the ultimate bubble". Fears were quickly sparked that the precious metal would tumble.
Various writers, fund managers and investors worked themselves into a frenzy. Many jumped ship and within a week we were trading down to levels last seen in October, almost $1,050 an ounce.
But one canny investor, it seems, was buying. George Soros…
A fortnight or so after his "ultimate bubble" quote hit the headlines, it emerges that George Soros has actually more than doubled his investment in gold. He now owns some 6.2 million shares in the US-listed gold exchange traded fund, SPDR Gold Trust (NYSE: GLD), worth some $680m. His investment vehicle Soros Fund Management also increased its holding in the Canadian gold miner Yamana (LSE:YAU) .
following the script so far
World Gold Council said:Total gold supply during the year was up 11% on 2008 levels. As shown in the graph below, a significant rise in the supply of recycled gold and a modest rise in mine supply were partly offset by lower levels of producer dehedging and significantly lower official sector sales. It therefore appears that supply had a negative impact on the gold price during 2009. However, this annual analysis misses one crucial point - supply spiked higher in the first quarter, but dropped very sharply over the following two quarters. Despite a modest rise in the final quarter, total supply in Q4 was 27% below the levels of Q1.
The yellow metal –according to technical analysts at Commerzbank – might rise towards the $1150 to $1162.00 level if it manages sustained closings above previous resistance at $1135.50 an ounce. The $1150 number represents a 61.8% retracement from December’s $1226 high, and it is of interest to those who are Fibonacci sequence followers, while the $1162 figure harks back to gold’s January high.
So, what you're saying sem0s (admittedly in a very fancy way) is ...that we could go down from here...and if we don't then we will go up from here?
I better add that to my trading plan...
Just on golds swings and round-a-bouts.
Are we seeing some under performance here. Oil, risk currencies, equities etc have all kicked up the last two days yet gold been going down the last 4.
Interesting.
one for the physical bugs. interesting read, reckon he must be long tho
http://www.zerohedge.com/article/its-going-implode-buy-physical-gold-now
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