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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: sea_urchin who wrote (19509)	11/5/2003 3:21:50 PM
From: sea_urchin	Respond to of 81884

> gold "fundamentalists", like myself, believe that the gold price should be the result of actual demand for the metal Here is the opinion of Tim Spencer, an analyst for Goldfields Mineral Services, a company specialising in the movements of precious metals for the world's bullion banks and gold companies: abc.net.au >>>He's just returned from Saudi Arabia, Thailand, Dubai and Singapore; some of the biggest gold-buying centres in the world; and he found at these prices Asian traders are not buying physical gold. In India, for example, hoarding of gold bars in down significantly, but on the other side of the globe fear about the world's political situation has driven high net worth individuals with Swiss bank accounts to invest in gold. But overall, Mr Spencer said physical demand for gold has decreased in the past two years. He argues the supply and demand fundamentals for a gold price above four hundred is simply not there. We like to base our forecasts on our fundamentals, the research that we do. So to call four-fifty is more of a sentiment-driven response and so it's difficult for us to say that. We could see that perhaps this year it may reach towards four hundred, but it may well come back from that and perhaps even drop down to as low as three-fifty. There's quite a broad range there. ...physical demand for gold has been falling this year, and it's been falling for the last two years, almost in reverse of what the gold price has been doing. So you could say that at the moment gold is driven by sentiment. However, it's also important to consider that a lot of gold ends up in jewellery and jewellery is price-sensitive but it also adjusts quickly to a new level. So while the price has risen dramatically in the last two years, the price that people will pay for jewellery has also risen.<<< And this is what happened in India, in May this year, when the gold price was under $360. rediff.com >>>India, the world's largest gold consumer, has virtually stopped importing the yellow metal, with global prices soaring in the past week and domestic demand falling after the marriage season, traders said. Gold demand in the country, which accounts for one-fifth of global consumption, is now almost entirely met by recycled metal and sales by small investors who had bought stock when prices were much lower, they said. "There is hardly any import demand at current prices. Supply of recycled metal will keep growing if global prices rise further," said Suresh Hundia, president of the Bombay Bullion Association. India imports an average of 1.6 tonnes of gold a day to meet 70 per cent of its annual needs of about 800 tonnes. But imports are now negligible.<<<

To: sea_urchin who wrote (19509)	11/6/2003 6:36:39 PM
From: sea_urchin	Read Replies (1) \| Respond to of 81884

> taking the gold/derivative situation to its extreme conclusion, it will ultimately resemble the Cheshire cat, in Alice in Wonderland, where the cat vanished and all that was left was its smile Cheshire cat minus cat = smile gifs.net Gold price minus gold = price And so we have the smiling face of the gold investor. gifs.net

To: sea_urchin who wrote (19509)	11/6/2003 9:29:08 PM
From: The Vet	Read Replies (1) \| Respond to of 81884

Searle, I don't disagree with your observation that "The tail is wagging the dog rather than the dog wagging its tail. In other words, actual gold sales, despite your contention, have become increasingly irrelevant to the gold price. In fact most gold is traded as "paper gold" including the majority traded by Mr Kaplan. There is simply no need to move gold sold for investment purposes and the actual gold (if it even exists) can be transferred by a book entry often without the physical metal moving within a bank vault or other depository. So if the metal remains in place but ownership is changed, has the physical gold been traded at all, or was it just a paper trade? In reality only gold removed for manufacture or new gold added from mining actually trades, so unless the buyer has the real metal in his own physical possession he has simply made a paper trade. If any transaction has the provision that either party can substitute a cash settlement in place of the either delivery or acceptance of actual metal then the trade is a completely "paper" derivative trade which could have been made (and probably was made) without either the seller owning gold or the buyer intending to take delivery. But this must be true of anything that professes to be a store of value, even fiat currency. We all trade and exchange electronic numbers that represent value even though we know that the only physical representation of that value comes in paper notes which don't exist and even when they do, are intrinsically valueless. They can be produced or destroyed in unlimited quantities at the whim of a central bank or their masters at any time. Of course unlike fiat, gold does have a value and cost of production and physical limitations on the quantities that can be produced. While the world is prepared to continue to accept both paper and electronic fiat currency on faith without question, it will probably accept paper gold on faith as well. That is likely to remain the case until some major trader reneges on their implied promise that what they profess to have owned and sold was real but they cannot deliver the gold in the circumstance where the buyer will not accept a substitute.