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Updated: 9 hours 34 min ago

NY Fed's auxiliary gold vault may be JPM's and a device of foreign policy

Wed, 01/28/2015 - 17:37

4:35p ET Wednesday, January 28, 2015

Dear Friend of GATA and Gold:

In the second installment of his series about the gold vaults of the Federal Reserve Bank of New York, GATA consultant Ronan Manly compiles documentation indicating that the bank's auxiliary vault is operated jointly with JPMorganChase, whose own gold-vaulting facilities, regulated by the Commodity Futures Trading Commission, are adjacent and apparently being exempted from ordinary disclosure under federal freedom-of-information law because they implicate national defense or foreign policy. Manly's analysis is headlined "The Keys to the Gold Vaults at the New York Fed -- Part 2: The Auxiliary Vault" and it's posted at Bullion Star's Internet site here:

https://www.bullionstar.com/blog/ronan-manly/keys-gold-vaults-new-york-f...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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Singapore becomes ninth country to weaken currency this month

Wed, 01/28/2015 - 09:19

Singapore Dollar Is Weakest Since 2010

By Sharon Chen
Bloomberg News
Wednesday, January 28, 2015

SINGAPORE -- Singapore unexpectedly eased monetary policy, sending the currency to the weakest since 2010 against the U.S. dollar as the country joined global central banks in shoring up growth amid dwindling inflation.

The Monetary Authority of Singapore, which uses the exchange rate as its main policy tool, said in an unscheduled statement Wednesday it will seek a slower pace of appreciation against a basket of currencies. It cut the inflation forecast for 2015, predicting prices may fall as much as 0.5 percent.

The move was the first emergency policy change since one following the Sept. 11, 2001 attacks for the MAS -- which only has two scheduled policy announcements a year -- reflecting how the plunge in oil has changed the outlook in recent months. Singapore becomes at least the ninth nation to ease policy this month, as officials from Europe to Canada and India contend with escalating disinflation and faltering global growth. ...

... For the remainder of the report:

http://www.bloomberg.com/news/articles/2015-01-28/singapore-joins-global...

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German regulator sees only scattered, individual efforts to manipulate gold price

Tue, 01/27/2015 - 21:10

German Watchdog Sees No Signs of Gold, Forex Manipulation

By Thomas Atkins
Reuters
Tuesday, January 27, 2015

FRANKFURT, Germany -- Investigators at German financial watchdog Bafin have not discovered any signs of systemic efforts to manipulate currency benchmarks, rather, only individual efforts, banking supervisory head Raimund Roeseler said in a newspaper interview today.

In addition, Bafin is preparing to close its gold probe after not uncovering any signs of attempted benchmark price manipulation, Roeseler told daily Handelsblatt.

"We don't have the impression that there was a system behind the (currency) manipulation. Rather, it was simply the greed of individuals or groups in the most diverse places," he said.

Those places include Singapore, South America, Russia, and Poland, he said.

"Sometimes it wasn't even clear whether those being investigated really manipulated or whether they were simply boasting that they could do so," he said. ...

... For the remainder of the report:

http://www.reuters.com/article/2015/01/27/us-fx-investigation-bafin-idUS...

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Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

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Or by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

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Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

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To contribute to GATA, please visit:

http://www.gata.org/node/16

JPMorgan said to reap up to $300 million amid Swiss turmoil

Tue, 01/27/2015 - 16:38

By Julia Verlaine
Bloomberg News
Monday, January 27, 2015

JPMorgan Chase & Co.'s foreign-exchange traders reaped a gain of as much as $300 million after the Swiss central bank roiled markets by abolishing its cap on the franc, according to two people with knowledge of the matter.

The bank netted $250 million to $300 million on the day of the Swiss National Bank's surprise decision to scrap the franc ceiling of 1.20 against the euro, said the people, who asked not to be identified because they weren't authorized to speak publicly. A JPMorgan spokesman declined to comment.

The SNB's surprise decision on Jan. 15 to remove the three-year-old cap sent the franc soaring as much as 41 percent against the euro that day. JPMorgan is one of the few to emerge from the turmoil with a profit. Citigroup Inc., Deutsche Bank AG, and Barclays Plc suffered about $400 million in cumulative trading losses, people with knowledge of the matter have said. ...

... For the remainder of the report:

http://www.bloomberg.com/news/2015-01-27/jpmorgan-said-to-reap-up-to-300...

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Monday-Friday, March 23-27, 2015
http://www.minesandmoney.com/hongkong/

* * *

Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

https://jeffersoncompanies.com/landing/2014-av-powell

Or by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

TF Metals Report: Inherent unfairness in the gold futures market

Tue, 01/27/2015 - 16:04

3:03p ET Tuesday, January 27, 2015

Dear Friend of GATA and Gold:

The TF Metals Report's Turd Ferguson today provides his own indictment of the gold futures market, where infinite imaginary supply can be created at any moment to suppress the price. Ferguson's commentary is headlined "Inherent Unfairness" and it's posted at the TF Metals Report here:

http://www.tfmetalsreport.com/blog/6566/inherent-unfairness

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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* * *

Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

https://jeffersoncompanies.com/landing/2014-av-powell

Or by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

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To contribute to GATA, please visit:

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Technical analysts have a right to be angry, but not at 'gold bugs'

Tue, 01/27/2015 - 15:33

2:42p ET Tuesday, January 27, 2015

Dear Friend of GATA and Gold:

In an essay headlined "Decoding the Gold COTs: Myth vs. Reality," market analyst Dan Norcini notes that futures markets have a huge influence on commodity prices and that market participants often place trades there first in anticipation of placing trades in the cash market:

http://news.goldseek.com/DanNorcini/1422282917.php

Norcini goes on to disparage complaints by "gold bugs" that the gold futures market particularly is corrupt.

But of course central banks and their agents, the huge investment banks -- entities that create or have access to essentially infinite money -- also recognize the influence of the futures markets and exploit it in pursuit of their objectives. Does Norcini really not understand this?

After all, it is now public record that central banks are secretly trading all futures markets in the United States, directly or through intermediaries:

http://www.gata.org/node/14385

http://www.gata.org/node/14411

http://www.gata.org/node/14818

It is also now public record that central banks are secretly trading the gold market "nearly on a daily basis." The director of market operations for the Banque de France proclaimed it a year and a half ago --

http://www.gata.org/node/13373

-- though it long has been acknowledged in the records of the Bank for International Settlements --

http://www.gata.org/node/11012

http://www.gata.org/node/12717

http://www.gata.org/node/8773

-- and those of the International Monetary Fund:

http://www.gata.org/node/12016

Since central banks are empowered to create infinite money as well as to trade in all markets in secret, and since they are trading gold so aggressively, are "gold bugs" or other traders really so crazy to resent having to trade against them? Can any market in which a central bank is trading so actively and so secretly be considered a free market at all? What is really being analyzed in such markets -- the conduct of a large number of participants or the conduct of central banks disguised by intermediaries?

... Dispatch continues below ...


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Further, does Norcini think that this surreptitious trading by central banks is undertaken just in fun? Or does it more likely have the historic policy objectives of central bank intervention in gold -- to control and usually suppress the monetary metal's price to support the value of government currencies and bonds?

Norcini is a technical analyst, and it's easy to understand why technical analysts do not want to address surreptitious trading and market intervention by central banks -- why technical analysts loathe the very subject of gold market manipulation. For such trading and intervention by central banks and their agents would mean that there really is no market to analyze, that technical analysis in such circumstances is a delusion.

Of course no one can be expected to admit cheerfully that his life's work has become obsolete. As a newspaper editor your secretary/treasurer feels this keenly, having spent most of his life in an occupation dependent on literacy and civic engagement, both of which are nearing obsolescence in the public mind in the United States.

But to call people "nitwits," as Norcini does, for complaining about something as comprehensively documented as the destruction of free markets seems awfully presumptuous. If GATA ever persuades enough people of this market rigging and thereby helps to end it, restoring free markets, maybe someday technical analysis will become useful again.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

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Monday-Friday, March 23-27, 2015
http://www.minesandmoney.com/hongkong/

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Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

https://jeffersoncompanies.com/landing/2014-av-powell

Or by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

German probe finds no signs of manipulation in gold market

Tue, 01/27/2015 - 13:33

By Shane Strowmatt and Nicholas Comfort
Bloomberg News
Tuesday, January 27, 2015

FRANKFURT, Germany -- Germany's financial regulator BaFin has found no evidence to support allegations of manipulation in the gold market or that currency exchange rates were systematically rigged, according to its head of banking supervision, Raimund Roeseler.

Roeseler also said the watchdog is close to concluding a probe into alleged attempts to rig the London Interbank Offered Rate, a benchmark for borrowing costs. He didn't comment on the results of that investigation.

The probe into currency markets is still under way, he said. Roeseler spoke to Handelsblatt newspaper in an interview published in Frankfurt Monday. Oliver Struck, a spokesman for BaFin, confirmed the comments in an e-mail to Bloomberg News. ...

... For the remainder of the report:

http://www.bloomberg.com/news/2015-01-26/german-regulator-found-no-signs...

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* * *

Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

https://jeffersoncompanies.com/landing/2014-av-powell

Or by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

https://jeffersoncompanies.com/landing/2014-av-powell

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

Russia buys gold for ninth month, but IMF was wrong about purchase by Netherlands

Tue, 01/27/2015 - 13:21

By A. Ananthalakshmi
Reuters
Tuesday, January 27, 2015

SINGAPORE -- Russia extended its buying spree of gold to a ninth straight month, and the price of gold rose for the first time in five months, data from the International Monetary Fund showed today.

The global financial institution later confirmed that the Netherlands did not increase its bullion holdings in December, contrary to the IMF's earlier report that the bank had raised gold holdings for the first time in 16 years. ...

... For the remainder of the report:

http://www.reuters.com/article/2015/01/27/gold-imf-holdings-idUSL4N0V60W...

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Monday-Friday, March 23-27, 2015
http://www.minesandmoney.com/hongkong/

* * *

Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

https://jeffersoncompanies.com/landing/2014-av-powell

Or by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

https://jeffersoncompanies.com/landing/2014-av-powell

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

Gold's bull ride of the 1970s looks increasingly like gold's position today, Turk tells KWN

Mon, 01/26/2015 - 22:16

9:15p ET Monday, January 26, 2015

Dear Friend of GATA and Gold:

GoldMoney founder and GATA consultant James Turk tells King World News today that the chart of gold's bull market of the 1970s seems increasingly to resemble the gold's chart of the last decade or so. The gold bull market of the 1970s, Turk says, was driven by central bank money printing, and there's even more of that today -- which is why the gold price will soar again. Turk's comments come in an interview with King World News that is excerpted here:

http://kingworldnews.com/gold-price-repeat-one-greatest-upside-moves-his...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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1 Expo Drive, Wan Chai
Hong Kong, China
Monday-Friday, March 23-27, 2015
http://www.minesandmoney.com/hongkong/

* * *

Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

https://jeffersoncompanies.com/landing/2014-av-powell

Or by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

Koos Jansen: India's silver exports rose to record in 2014

Mon, 01/26/2015 - 09:28

8:26a ET Monday, January 26, 2015

Dear Friend of GATA and Gold:

India's silver imports in 2014 rose 15 percent from 2013, the most since at least 2009, Bullion Star market analyst and GATA consultant Koos Jansen reports today, as investment and jewelry demand shifted from from gold. Jansen adds that Asia is draining Western supplies of silver as well as gold. His analysis is posted at Bullion Star here:

https://www.bullionstar.com/blog/koos-jansen/india-silver-import-2014-at...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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Bank of England governor warns of liquidity storm as currency system turns upside down

Mon, 01/26/2015 - 01:57

By Ambrose Evans-Pritchard and Szu Ping Chan
The Telegraph, London
Saturday, January 24, 2015

DAVOS, Switzerland -- The governor of the Bank of England has warned markets to brace for possible trouble in 2015 as the US Federal Reserve tightens monetary policy and liquidity evaporates, fearing that the new financial order has yet to face its first real test.

Mark Carney said diverging monetary policies in the US, Britain, Europe, and Japan may set off further currency turbulence and "test capital flows across the global economy, including to emerging markets."

It is the latest sign that officials at Threadneedle Street are worried about the global fallout from the rising dollar, which poses a mounting threat to companies in the developing world that have borrowed up to $9 trillion in US dollars.

Mr Carney said regulators have cleaned up the banks and tried to prepare for the tectonic shift taking place in the international currency structure but major risks remain.

"This will test the resilience of that new financial system. It has a potential feedback and we have to be aware of that," he told an elite group of central bankers at the World Economic Forum. ...

... For the remainder of the report:

http://www.telegraph.co.uk/finance/mark-carney/11367570/Mark-Carney-warn...

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Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

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Biggest private fund in Finland says QE destroying price signals

Mon, 01/26/2015 - 01:37

By Kati Pohjanpalo
Bloomberg News
Sunday, January 25, 2015

HELSINKI, Finland -- Finland's biggest private investor with $45 billion under management said asset purchases by the European Central Bank are undermining investors' ability to price bonds.

"The value of market signals has in practice plummeted," Risto Murto, chief executive officer of Varma Mutual Pension Insurance Co., said in an interview in Helsinki on Friday. "The role of market forces is going to be particularly small in the near future." ...

... For the remainder of the report:

http://www.bloomberg.com/news/2015-01-25/biggest-private-fund-in-finland...

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New York Fed's gold vaults' depositors and metal have been declining steadily

Mon, 01/26/2015 - 01:22

12:20a ET Monday, January 26, 2015

Dear Friend of GATA and Gold:

In the first of a series of articles about the gold vaults of the Federal Reserve Bank of New York, GATA consultant Ronan Manly reports that the bank's documents indicate a huge decline over recent decades in the number of central banks vaulting gold there as well as the amount of gold vaulted. Further, Manly finds, the bank has gotten much more secretive about its gold vaulting over the years. Manly's study is titled "The Keys to the Gold Vaults at the New York Fed, Part 1" and it's posted at the Bullion Star Internet site here:

https://www.bullionstar.com/blog/ronan-manly/keys-gold-vaults-new-york-f...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

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Thailand bourse gearing up for gold exchange

Mon, 01/26/2015 - 00:03

By Nuntawun Polkuamdee
Bangkok Post, Thailand
Monday, January 26, 2015

The Stock Exchange of Thailand is gearing up for the establishment of the country's first physical gold exchange after major gold dealers agreed to become members of the new spot gold exchange.

Further details about shareholding between the gold dealers and the stock exchange are being discussed, said SET chairman Sathit Limpongpan. The creation of the spot gold market recently hit a snag due to disputes over management and shareholding between the SET and gold dealers, while some traders at the time said that they would refuse to join the new exchange.

Mr Sathit said the Securities and Exchange Commission had also thrown support behind the idea of setting up the spot gold exchange, but its implementation is pending the approval of the Finance Ministry could enact an organic law to allow the market to be priced and settled in major currencies, the US dollar in particular. ...

... For the remainder of the report:

http://www.bangkokpost.com/business/news/460262/bourse-gearing-up-for-go...

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Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

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http://www.goldrush21.com/order.html

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CME starts gold futures in Hong Kong in price-benchmark rivalry

Sun, 01/25/2015 - 23:58

By Glenys Sim
Bloomberg News
Sunday, January 25, 2015

CME Group Inc. started physically delivered kilobar gold futures in Hong Kong as it joins a slew of other exchanges vying to establish new price benchmarks in the biggest consuming region.

The contract listed on the Comex is tied directly to the price of bullion of 99.99 percent purity in Hong Kong and will be physically delivered to vaults in the special administrative region. CME, owner of the largest futures exchange, said in September that trading may begin in the fourth quarter of 2014.

The Shanghai Gold Exchange started bullion trading in the city’s free-trade zone on Sept. 18 while Singapore Exchange Ltd. began a wholesale kilobar contract on Oct. 13 as more of the world's gold is processed and used in the region and the 95-year-old fixing benchmark in London gets overhauled. Almost two-thirds of gold jewelry, bars, and coins were consumed in Asia in 2013, according to data from the World Gold Council. ...

... For the remainder of the report:

http://www.bloomberg.com/news/2015-01-26/cme-starts-gold-futures-in-hong...

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Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

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Or by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

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Precious metals coveted once more as Draghi acts

Sun, 01/25/2015 - 23:54

By Luzi Ann Javier
Bloomberg News
Sunday, January 25, 2015

Investors' desire for precious metals is deepening after Mario Draghi's $1.3 trillion pledge drove gold to a five-month high and silver to the brink of a bull market.

Their buying helped boost the value of exchange-traded products backed by gold and silver by $8.94 billion this month, the most since September 2012, data compiled by Bloomberg show. Hedge funds and other speculators in futures are the most bullish on gold in two years and have bet more on silver in all but two weeks since the start of November.

At a time when the price of almost every other commodity is sinking, silver and gold are having their best start to a year in more than three decades. The European Central Bank president's stimulus sent the euro to an 11-year low against the dollar, pushed government bond yields lower and raised the appeal of alternatives to currencies that are being revalued.

"Silver is tied to gold, and they move with trust," David Rosenberg, the Toronto-based chief economist at Gluskin Sheff & Associates, which oversees C$8 billion ($6.4 billion), said Jan. 22. "There's an increasing number of global investors who are starting to lose trust in the world's central banks." ...

... For the remainder of the report:

http://www.bloomberg.com/news/2015-01-25/precious-metals-coveted-once-mo...

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Monday-Friday, March 23-27, 2015
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* * *

Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

https://jeffersoncompanies.com/landing/2014-av-powell

Or by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

https://jeffersoncompanies.com/landing/2014-av-powell

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Financial Times begins to wonder if central banking is even crazier than gold

Sun, 01/25/2015 - 23:46

"Unconventional central bank policies have thoroughly distorted markets."

* * *

Lenin's Despised Gold Becomes the Ultimate Hedge

By John Plender
Financial Times, London
Sunday, January 25, 2015

http://www.ft.com/intl/cms/s/0/6a4655a6-a0c7-11e4-8ad8-00144feab7de.html

Lenin, the implacable Russian revolutionary, despised gold. He thought it should be used to build public lavatories. I was of much the same persuasion early in my career. The yellow metal's economic utility seemed to me minimal in the light of its declining industrial uses. As an investment it was and remains entirely speculative because it yields no income. And since the introduction of index-linked government bonds, any merits it might have as an inflation hedge have become less relevant.

Certainly gold has been a very erratic store of value in recent decades. Anyone who bought gold at the peak of the gold bull market in the early 1980s saw their investment lose 80 per cent of its value in real terms over the next 20 years. And as a protection against political and economic instability it has latterly become a less reliable bolt-hole, failing to rise in price consistently in response to each new geopolitical crisis.

... Dispatch continues below ...


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Yet some years ago I changed my mind about the metal.

The first reason was that gold, over millennia, has never defaulted. Humanity thus harbours a psychological commitment to the yellow metal that would probably take not just decades but centuries of terrible investment returns to unravel. That means it is unlikely to lose all its value in our lifetimes even if its industrial uses finally disappear in their entirely and people lose all interest in gold as jewellery.

The supply is relatively fixed and annual mine production is a minimal percentage of the outstanding stock of gold. A rise in the gold price prompts only a limited increase in annual production of the metal. There is thus no link to the economic cycle and a lack of correlation with other financial assets. The result is that gold offers very useful portfolio diversification.

The attractions become particularly compelling in periods of deflation. This is a piquant consideration at a time of global imbalances where parts of the world are suffering from deficient demand, including the eurozone. If prices are falling in depressed economies, the most obvious investment hedge is cash. Yet with currency wars, cash may be a lousy deflation hedge if central banks impose negative deposit rates to deter capital inflows.

That is one of the lessons of the Swiss National Bank's removal of the cap on the franc against the euro. In an (unsuccessful) attempt to mitigate the likely surge in the franc arising from this move, the central bank lowered the rate on sight deposit accounts to -0.75 per cent. Other countries that are perceived to be providers of ultra-safe assets will probably go down the same negative rate route in due course.

Fixed-interest bonds are likewise seen as a deflation hedge. This is undeniably true where yields are positive. Yet government bonds are showing signs of going the same way as interest on Swiss deposits.

At the short end of the market, government bond yields are negative, not just in deflation-prone Japan, but also in Germany, France, the Netherlands, Sweden, and Denmark. So to find a decent deflation hedge, investors in these countries have to take on more duration risk -- hardly appealing when economies are delicately poised between inflation and deflation. A reversion to the historic mean in bond yields would be a killer.

There lies the attraction of gold. With interest rates low or negative, the opportunity cost of holding the metal is negligible. When most other investments look expensive or simply unattractive, its lure is hard to resist. In effect, it provides a hedge against the mistakes of central bankers and monetary dysfunction. And what is the current market background if not dysfunctional?

Unconventional central bank policies have thoroughly distorted markets. Nobody can be sure that the central bankers will find a way out of this uncharted monetary maze without precipitating financial chaos. All we do know is that the recent experiment with forward guidance showed with painful clarity how little central bankers understand about the workings of the post-crisis economy.

Yet gold is a fickle mistress. Without the underpin of a yield, the price can be volatile. And for all its current attractions, it unmistakably belongs to the world of least-bad options.

* * *

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* * *

Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

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Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

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Help keep GATA going

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To contribute to GATA, please visit:

http://www.gata.org/node/16

Mike Kosares: Gold spike in major currencies is a remarkable start to 2015

Sat, 01/24/2015 - 17:06

By Michael J. Kosares
USAGold.com, Denver
Saturday, January 24, 2015

The new year has ushered in a remarkable and unexpected turn of events for gold. It is up significantly in four of the seven top currencies (the euro, British pound, and Australian and Canadian dollars), up respectably in two others (U.S. dollar and Japanese yen), and down slightly in the last (Swiss franc).

These charts and the significant gains in gold's value in a very short time demonstrate amply the value of gold as a hedge, not just against inflation but against sudden currency devaluation and systemic financial and economic risks as well. ...

... Though it appears that gold and quantitative easing might be directly correlated, what is really going on is that both simply are reacting to the same problem -- a bad economy with the potential systemic breakdown, not the prospect of inflation. Central banks respond by printing money. Investors respond by buying gold.

... For the full commentary:

http://www.usagold.com/cpmforum/2015/01/24/238943/

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http://www.goldrush21.com/order.html

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Koos Jansen: Amazingly heavy withdrawals from Shanghai Gold Exchange

Sat, 01/24/2015 - 16:08

3:05p ET Saturday, January 24, 2015

Dear Friend of GATA and Gold:

China's gold demand as measured by withdrawals from the Shanghai Gold Exchange for the week ending January 16 were "amazing" at 70 metric tonnes, Bullion Star market analyst and GATA consultant Koos Jansen writes today. He adds that it was unusual for China to do so much buying as the gold price was rising. Jansen's analysis is headlined "Booming SGE withdrawals In Week 2, 2015: 70 Tonnes" and it's posted at Bullion Star here:

https://www.bullionstar.com/blog/koos-jansen/booming-sge-withdrawals-in-...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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Resorts World Convention Centre
8 Sentosa Gateway, Sentosa Island
Singapore
Wednesday-Friday, March 18-20, 2015

http://www.mininginvestmentasia.com/

Mines and Money Conference
Hong Kong Convention and Exhibition Centre
1 Expo Drive, Wan Chai
Hong Kong Special Administrative Region, China
Monday-Friday, March 23-27, 2015
http://www.minesandmoney.com/hongkong/

* * *

Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

https://jeffersoncompanies.com/landing/2014-av-powell

Or by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

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To contribute to GATA, please visit:

http://www.gata.org/node/16

First commercial gold mine planned in Scotland

Sat, 01/24/2015 - 15:16

Scots Village of Tyndrum Is Braced to Become Modern Klondike as L200 Million of Gold Is Discovered in Hills

By David Taylor
The Daily Record, Glasgow, Scotland
Friday, January 23, 2015

A tiny Scots village is bracing itself for a gold rush after L200 million of the precious metal was discovered in its hills.

Tyndrum, famed for its Green Welly Stop restaurant and shop, is believed to have more of the rare metal than previously thought.

Australian firm Scotgold Resources is trying to establish Scotland's first commercial gold mine around the popular tourist village, in the picturesque Loch Lomond and Trossachs National Park.

The Cononish mine was excavated in the 1990s but was never opened for business after Scotgold suffered financial issues, and the price of gold plummeted. ...

... For the remainder of the report:

http://www.dailyrecord.co.uk/news/scottish-news/scots-village-tyndrum-br...

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http://fmturl.com/gata/


Join GATA here:

Mining Investment Asia Conference
Resorts World Convention Centre
8 Sentosa Gateway, Sentosa Island
Singapore
Wednesday-Friday, March 18-20, 2015

http://www.mininginvestmentasia.com/

Mines and Money Conference
Hong Kong Convention and Exhibition Centre
1 Expo Drive, Wan Chai
Hong Kong Special Administrative Region, China
Monday-Friday, March 23-27, 2015
http://www.minesandmoney.com/hongkong/

* * *

Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

https://jeffersoncompanies.com/landing/2014-av-powell

Or by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

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