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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: gladman who wrote (98374)	6/23/2006 10:28:12 AM
From: IngotWeTrust	Respond to of 116752

Gladman, I wish to share some of the graphics of one of those more well versed in the Longer Term view in gold, whose name carries a great deal of weight, and his words parsed for nuance as well as content whenever he speaks. These are graphic slides from a recent presentation at the 2006 New York Hard Assets Conference, and released June 8, 2006. While the cut-off as noted on the accompanying graphic (Feb 2006) would imply the "current dataset is missing," I believe the speaker made a case for the direction of the overvalued US$ to wit I referred in my earlier response to your query. I've enlarged these slides in my attempt to make them easier to read for older eyes such as mine, when I return to reveiw their import which continues to influence my perspective on this topic. ===================== RE: >>Message #98374 from gladman at 6/22/2006 3:02:33 PM >>Thanks for the Tutor! That was really good info. You're entirely welcome. G_T

To: gladman who wrote (98374)	6/23/2006 10:52:51 AM
From: IngotWeTrust	Respond to of 116752

Gladman, I confess to skepticism re: foreign nations reallocation of US$ reserves into gold we hear rumblings about. This presenter whose slides I'm posting here, has made the clearest case for what seems to be prudent advice to foreign central bankers. U.S. dollar reserves have risen sharply precisely because central banks have intervened so heavily in foreign exchange markets. Central banks, mostly Asian central banks in fact, buy dollars in the foreign exchange market with their own currency in order to keep their own currencies from rising, and the dollar from falling. These dollars are then reinvested in the U.S. financial market. This slide shows Asian central banks now hold a collective $2400 billion in foreign exchange reserves. This level is “excessive” according to many observers including some central bankers! Asian central banks only hold 1932 tonnes of gold however, meaning only about 1.5% of their total reserves is in gold. Many observers and analysts have suggested that some of these dollar reserves should be diversified into gold. Indeed, were China and Japan to adopt the ECB’s 15% rule for gold reserves, then: China would have to buy 6890 tonnes of gold Japan 6850 tonnes of gold. (These tonnages vary with the precise price of gold and the level of foreign exchange reserves.) I think these Asian central banks should purchase the gold the CBGA signatories want to sell; it would represent no more than a “petty cash” outlay to these banks! ==================== G_T

To: gladman who wrote (98374)	6/23/2006 11:21:30 AM
From: IngotWeTrust	Respond to of 116752

Gladman, in this slide, the speaker presents a case for the divergence of mine output vs. increasing price forecast. This divergence is primarily attributed to "lag time," such as I referred to in our earlier exchange whereby even the SEC enforces a 3yr Price average to state drill proven reserves upon any given company's reserves valuations/calculations. However, this should not cause one to forget to include the customary lag time between discovery and actual mining. According to Barrick's CEO (and believe me, Mr. Munk should know what he's talking about), he provided these stats on CNBC not too long back)...of 10 years and approximately $1BILLION between discovery and actual, saleable mine output. I find it especially of keen interest to note in a period of competition for already above ground supply--yes, including those tonnes residing in Western "Influenced" Central Banks--that the forecast diminished mined supply of gold continues to diminish in a period of increased clamor for FX diversification, etc. Sounds like solid underpinnings for LT gold price improvement as I stated yesterday. G_T

To: gladman who wrote (98374)	6/23/2006 11:52:51 AM
From: IngotWeTrust	Respond to of 116752

Gladman, the last 2 slides I wish to highlight basically state the case for 2 other sectors presenting the possibility of HUGE demand for physical gold, besides his making the case for Foreign Exchange diversification of a mere 1% in Asian CB allocation from US$ currently held to Gold. One slide suggests OPEC members themselves may be a source of heavy Gold buying demand as they previously responded to similar geo-political circumstances in 73-82. Gladman, I have ONE large reservation as I look at this particular chart: While the first "oil shock" found OPEC also awash in US$ and diversifying into Gold in a large chunk, I am of the opinion that OPEC knows that Oil will breach $100per bbl sooner rather than later. So, why then anticipate a huge buying blip anytime soon? Wouldn't it be prudent for OPEC who are NO DUMMIES, to 'dollar cost average" and diversify by buying into a 15% backed EURO currency which did NOT exist in 73-82? ANNNND, also purchase SOME physical gold tonneage as they did in 73-82? Those personal musings have cushioned my enthusiasm for anticipating a huge tonnage competitive demand offtake of physical gold by OPEC members "this time 'round." ========\\\\\\\\\\\\\////////////=========== The second slide visually presents the impact of at least 5 global ETF funds purchases available above ground supply, representing, obviously, competition for CBs who might wish to diversify their US$ foreign exchange holdings, OR OPEC awash in US$ for their barrels of crude. G_T