IMF announces sale of 2nd half of gold tonnage.
Gold had hit as high as $1,125 today, but then lost $25 after the IMF announced that they would "shortly" sell the remaining 191.3 tonnes of previously approved sellable gold.
I've noticed there isn't much gold talk lately; is everyone afraid to jinx something? lol
Zyll's bottom held up fairly well and I think we are back on track for the climb to the top. I will never understand how anyone thinks we are out of the darkness.
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Replies to This Discussion
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Permalink Reply by Lureuin on -
If this is true, and I was holding a bunch of US paper as my reserves, I'd be feeling pretty dumb.
http://graphics.thomsonreuters.com/0210/GLD_TPHLD0210.gif
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Permalink Reply by Buffalo on -
I notice the IMF says they intend to sell the remainder on the gold market although they will still respond to interest from "official holders". They also say they will do phased sales to avoid market disruption. It's really difficult to say what the overall effects will be until it is seen who buys what and at what prices. If China, India, or some other country steps in and does a major buy I think it could actually push prices up, again depending on the prices they pay. I think the prices paid for the IMF gold so far have surprised many including China who I think were expecting to be able to buy at $900-1000 per ounce. India reportedly paid an average of $1045 per ounce.
Overall I still think gold will do well this year and I am doubtful the IMF sales will drop prices very much, or long term.
IMF Statement
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Permalink Reply by Lureuin on
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Yesterday the IMF gold sale announcement- a $20 drop. Right back up again in the morning. Today the rate hike announcement- a $20 drop.
I'm gonna laugh if it climbs right back up tomorrow; though it may not. If it does, then $1,300 is a real possibility this summer.
I don't know if they have anymore water left to throw on the fire. Another rate hike would doom the economic recovery.
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Permalink Reply by Buffalo on
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I think the hike announced today only applies to the so-called discount rate banks pay for emergency loans. It seems like it was more of a symbolic "return to normal" and a warning that other rates may change in the future than anything with major immediate effects. I think the price drop was kind of a knee-jerk reaction that won't last for long.
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Permalink Reply by Lureuin on
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You are correct Buff; but the overnight markets are responding like it was the prime rate. These are the same markets that say "the dollar is getting stronger, wait weaker, no stronger, ok- maybe weaker, hold on- let's look at this some more". Either a bunch of clods, or people using the media to make profits in a down market. Either way; they can't fool what constitutes real money and gauges the value of fluttering paper- GOLD!
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Permalink Reply by Buffalo on
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You're right Lureuin. More than anything it seems investors are all afraid to be the last one to jump and panic when anything bad or unexpected is released. Everyone is afraid to get burnt again. It seems to me that is causing investors to overeact to just about every piece of news that comes along whether it's good or bad. Many of the economic reports are somewhat questionable too due to frequent revisions a month or two after they are released. There is still a great deal of uncertaintity about the world's economies and that shows in these reactions we are seeing.
Overall I still think gold will trend up and may set a new high by late March or into April.
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Permalink Reply by Lureuin on
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You're right again Buff; but it didn't fool gold. The masses can only stay stupid for so long. After having bubbles bursting all around them and losing their retirement and savings over and over, people from all over this planet have to come to the realization that they are being played. I'm beginning to think that gold may not go below 1k ever again; or at least not during the next 20 years. I'm interested to see what the next big "try to bring it down" move will be.
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Permalink Reply by Buffalo on
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I think the 200 ton purchase by India at an average $1045 per ounce was in many ways a statement of the new reality. In effect it set a realistic floor that I believe will hold up. That's one reason I am not overly concerned about negative effects from additional IMF sales. I know some speculate the sales are designed to hold the price of gold down, but it is also intended to convert that gold into working capital so the IMF has a vested interest in selling at the best prices they can. No doubt there are other considerations and I won't argue that many have reasons to suppress gold prices. I am not big on conspiracy theories but I think it is pretty obvious a lot of manipulation has taken place. I just personally don't think these sales can lower prices for any length of time.
The biggest concerns I see right now for gold prices are all economic issues more than supply issues. What happens with the situation with Greece and the EU by mid-March will possibly have a major impact on the Euro. The fallout from that situation could also have a big impact on other currencies including the dollar, and other markets which will include gold. I am doubtful that Greece can solve their problems without a bailout of some type from the EU, and I don't think the EU has the option of not taking action whether they really want to or not. It will be interesting to see what happens and maybe give a pretty good idea of how committed the EU members are to holding it all together long term. My concern has always been that the EU really needs authority that the member nations will never be likely to give up to a governing body. Will we eventually see the EU break apart or will it become the "United States of Europe" with a real central government to enforce rules and policies? Or even just continue on as it is?
One other comment about the IMF sales. As far as I know, no countries have actually ruled out the possibilty of a purchase and the IMF says it will still respond to interest. There are many smaller nations that could buy some amount of the remaining gold so personally I think it is unlikely that all of it will reach the public market and there is always the possibility of another big buy by India, China, Germany, etc.
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Permalink Reply by Lee Grant on -
All the anti-gold activity lately seems to be related to the IMF pronouncement, the Fed rediscount rate, the national financial problems of Greece, Portugal, Spain, Ireland, etc. and the fictitious dollar strength, which is only a function of the disarray of the Euro. If the manipulative crooks stay out of the market, gold still looks like a good bet. I don't use the word "bet" loosely.
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Permalink Reply by Buffalo on
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The AP is reporting that China has again taken actions to tighten lending. Any guesses what this will do to the price of gold?
AP Article
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Permalink Reply by Lureuin on
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If China tightens lending, it's to make the dollar gain value so they're not holding junk. If the dollar goes higher, gold goes down on our exchange. Even if China makes that move, I don't think there will be a long term affect on gold. If they make the dollar gain value, we can turn around and raise our rates to bring it back down.
I think there will be a lot of back and forth over the next few month's, but don't think it will have a major impact on gold continuing to move upwards. I think the world in general has lost a lot of faith in the fiat money systems.
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