DEZ - Summary #1
Zulauf:
Lets look at 2005 supply and demand.
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Demand
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2,950 jewelery
300 central banks in emerging countries
250 hoarding
300 ETF
130 Coins
200 Hedge Funds
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4,130 Total
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Supply =
DEFICIT of 280 tons
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Countries planning to
increase 2006 Gold Reserves
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China - Increase Reserves by 200 tonnes
China may keep 200 tonnes of GOLD off the
market in 2006 ....
But the impact of this on global gold markets would be heavy. 200 tonnes of gold would not appear in the supply side of the market, with the Chinese market taking off that amount from the global market and more. This would exert more pressure on a market where supplies have dropped not only through lower gold supplies from Producers, but from fewer and smaller sales of gold into the market. As a result prices would continue on their upward path for some years to come.
financialsense.com
China
Few talk about what central banks are going to do
with their hoards of depreciating dollars or for
that matter most currencies.
For starters there is only one thing they can
easily do with them and that is buy gold.
In China’s case they could put away 3,000 tonnes
without even skipping a heartbeat.
Russia + double their reserves
Friday, November 25, 2005
RUSSIAn Central Bank Gold Reserves to Double
The RUSSIAn Central Bank has announced that it is to double its gold reserves.
a move that Michael Kosares of USA Gold says is "the equivalent of the Washington Agreement in 1999, which kick-started the current gold bull market."
Kosares predicts the announcement could have a major impact on the gold price and may be the driving force for the second leg of this gold bull market.
Message 22131630
Russia
At the same time, demand for gold is also clearly accelerating. While central banks have been net sellers of gold for much of the past two decades, there are indications that some, including those in Russia, Argentina and South Africa, plan to increase the gold portion of their reserves.
fortwayne.com
India
Malaysia
Germany
Central Banks as Gold Buyers
"At some point, probably when U.S. rate increases stop, those Asian economies that have been competing to keep their currencies low may question whether it's worth their while and may wean themselves off the dollar," he said.
If a flight from US dollar does take place, some participants see gold as better positioned than other paper currencies to benefit, given its historical role as monetary system anchor.
Central banks are likely to become net buyers of gold as a consequence, said Euro Pacific Capital's Schiff.
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Goldman Sachs Shorting Gold?
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Goldman Sachs continues to be an aggressive short seller on TOCOM. Last Friday they increased shorts 2928 contracts to 35,297. This and their shorting on Comex were used to suppress mining shares. About 500,000 call option contracts on gold-mining shares were due for expiry with 75% in-the-money. They wanted to make sure they expired worthless. There can be no other reason except suppression of share prices, especially with the Iran situation going on and violence in Nigeria.
Goldman Sachs on Tuesday increased their net short position again on TOCOM by 1760 contracts to be net short 32,642 contracts.
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The shorts for the major participants are:
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Sumitmo or Sumitomo -64,396 contracts;
Mitsui -58,408;
Goldman -32,642
and Mitsubishi -31,419.
Out of 77 trading companies seven companies make up 94.2%.
If the general US market folds here, which we believe it will, these shorts and those on Comex will be destroyed.
We believe that is about to happen.
We see gold at $850 soon and then higher.
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The European Banks have already stopped selling
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For the first time since last September the ECB did not sell any gold from its banks’ reserves. We believe the Washington Agreement sellers realize they cannot stop the gold rally so they’ll wait for an overbought spot or weakness at higher prices and aggressively sell, which is to be expected.
If $562.50 is broken on the upside, then we are in for an upward run to $610-$620.
Few talk about what central banks are going to do with their hoards of depreciating dollars or for that matter most currencies.
For starters there is only one thing they can easily do with them and that is buy gold.
In China’s case they could put away 3,000 tonnes without even skipping a heartbeat. |
