Germany's central bank has failed to properly oversee the country's massive gold reserves, which have been stored abroad since the Cold War in case of a Soviet invasion, independent auditors say.
The central bank must renegotiate its contracts to gain the right to inspect its gold bars, which are worth tens of billions of dollars and are stored in the United States, Britain and France, the Federal Auditors' Office said in a report to lawmakers obtained by The Associated Press on Monday.
This may be a bullish sign for precious metals, particularly gold. With the start of an unprecedented open-ended monetary expansion by the Fed last week (see post), the accumulation of excess reserves by the banking system will increase inflation expectations. And as a number of other central banks (BOE, BOJ, ECB, etc.) pursue similar policies, precious metals prices are likely to see some support. Certainly the heavily negative real dollar rates (see post) across the curve make any rate product and cash far less attractive on a relative basis.
“China’s appetite for gold seems to be growing,” said Jake Greenberg, mining specialist at Jefferies, pointing to China Gold’s interest in African Barrick, Zijin Mining’s A$180m (US$186m) offer for Australia’s Norton Gold Fields and Shandong Gold’s A$228m acquisition of a 51 per cent stake in Australia’s Focus Minerals
The supply side of gold is also bullish. A new extensive study was recently conducted by James Turk, the founder and chairman of GoldMoney, along with the assistance of Juan Castaneda, who has a PhD in Economics and currently teaches at the University of Buckingham in the United Kingdom. The study analyzes data between 1492 and 2011 to conclude that official estimates of the world’s gold stock is overstated by 10.3 percent. Turk estimates that the world gold stock at the end of 2011 was 155,244 tonnes, or 16,056 tonnes below the commonly used World Gold Council estimate.
4 cast --->
USDX ~85.5
Gold ~ lower 1600's
BUY THE DIP!
The pattern is called: 'Golden Cross', or 'Bull Cross'. Here is a chart (all charts courtesy Stockcharts.com unless specified), that has a blue arrow pointing to the pattern we are referring to.
Mostly for the doubters..........explains a few things.
http://www.plata.com.mx/mplata/articulos/articlesFilt.asp?fiidarticulo=194
.....difference in this monetary expansion cycle from the previous ones is that the new program is having a fairly slow start in terms of its impact on base money.
I read a report just earlier. One thing I never considered was option writers.
Apparently theres a number of 1750 calls with this week expiry.
So should the 1750 level be breached apparently this will mean lots of buying to cover the calls.
Not sure how much influence that would have on the overall scheme of things but I thought interesting nonetheless.
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