Monday, November 02, 2009

IMF Sells Gold To India's Reserve Bank & Remembering The "Brown Bottom"

Good to be a GOLD-BUG .......Take a look at this excellent Graph to put today´s news when it comes to gold & central banks into perspective..... So much for the overhang of the "massive" IMF gold sale threatening the price of gold...... As discussed earlier it looks like the headwind has transformed into a tailwind.....The price is flirting with new highs today....And it´s not only a "weak US$ story" ( H/T The Privateer via Mish ).... The chances are very high that Gold will continue to outperform for some time to come ( not so sure obout the short term ).......

Schon schön wenn.. man ein GOLD-BUG ist..... Diese Grafik gibt einen erstklassigen Überblick wenn es um Gold und Zentralbanken geht..... Da Gold heute nahe neuer Hochs (und das nicht nur in US$ , H/TThe Privateer via Mish )notiert ist von dem vielbeschworenen Überhang der den Goldpreis angeblich extrem belasten wird wenn das Gold letztendlich verkauft wird nicht viel zu spüren....Wie bereits früher erwähnt sieht es ganz so aus als wenn aus dem jahrelangen Gegenwind von Verkäufen durch die Institutionen zunehmend ein Rückenwind geworden ist..... ;-) Die Chancen stehen mehr als gut das Gold auch weiterhin outperformen wird ( kurzfristig bin ich mir weniger sicher ) .....

IMF sells gold to India's Reserve Bank

The International Monetary Fund said Monday it's selling 200 metric tons of gold to the Reserve Bank of India, to help shore up the fund's finances. The sale is part of a total of 403.3 metric tons of gold approved for sale in September, the IMF said.

via Jesse

RBI’s decision to shore up its gold reserves needs to be seen in the context of other central banks across the globe increasing their gold reserves. Among them are the central banks of China, Russia and a few countries in the European Union.

In the last one year, China has increased its gold holdings, by weight, by 75.69%, Russia by 18.78%, the Philippines by 18.50% and Mexico by 108.91%.

Compared with this, India’s central bank did not add anything to its gold reserves in the last one year, according to Bloomberg data.

In fact, the share of gold in India’s total reserves has dwindled over the decade.

In March 1994, the share of gold in the total reserves of the country was 20.86%; by the end of June 2009, gold constituted only 3.7% of the total reserves.

“Gold is the ultimate currency. In fact, only gold came to our rescue during (the) 1991 crisis, so it makes sense that RBI should try to increase its gold holdings,” Patil said.

At the current market value of $1,054 an ounce, or per 28.5g, RBI would need to spend about $7.4 billion to buy 200 tonnes of gold. With this, its gold reserve will rise to $17.716 billion, or roughly 6.20% of the total reserves.

A committee set up by a group of central banks overseeing the gold sales by the IMF has allowed the fund to sell 400 tonnes of its gold annually and 2,000 tonnes in total during the five years starting 27 September.

According to a report by the Associated Press dated 20 September, India, along with China and Russia, had evinced interest in buying IMF-held gold.

IMF’s total holding at historical price is valued at about $9.2 billion on its balance sheet. At market prices, as of 28 August, the fund’s total gold holdings were worth $98.8 billion.
I just coudn´t resist......

Konnte mir den nachfolgenden Chart einfach nicht verkneifen......

Gold: Does Gordon Brown's regret selling half of Britains' gold reserves 10 years ago?

Gold chart: Price of gold since Britain sold half of its reserves in 1999

Adjusting to todays & future prices combined with the "rock solid" outlook for the pound the "Brown Bottom" will provide even more reasons for SCHADENFREUDE for years to come.....

Auf aktuelle und zukünftige Preise gemünzt und den mehr als soliden Ausblick für das "britische Pfund" dürfe der "Brown Bottom" noch jahrelang für gehörig SCHADENFREUDE sorgen......

The Mess That Greenspan Made

IMAGE Make sure you read The significance of the IMF-RBI gold sales also from Tim

Verweise zudem auf The significance of the IMF-RBI gold sales ebenfalls von Tim. Sehr gute Zusammenfassung

UPDATE:

Couldn´resist...... Nice call...... ;-)

Wohl ein Trade an dem Goldman kein Geld verdient...... ;-)

Goldman on Gold Prices: Central Bank Buying Something to Watch
MB WSJ

“In addition to this potential shift of central banks from being net sellers to net buyers of gold, the continued weakness in real interest rates continues to provide strong support to gold prices over the medium term,” Goldman analysts write.

IMF gold data - Goldman Sachs

Low interest rates could make for “upside risk” to Goldman’s price forecast of $960 a troy ounce.

But we can’t help but notice that they haven’t raised their forecast even though we’re already around $1,100. The obvious question is when does Goldman see a pullback coming?

The following chart via Rolfe Winkler sums it up...

Denke der nachfolgende Chart von Rolfe Winkler spricht Bände....

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3 Comments:

Blogger jmf said...

Nice Graph

What Backs the Buck? BR

5:22 AM  
Blogger jmf said...

The gold for SDR swap confirmed! WSJ

Back when gold began its first sharp ascent over $1000 per troy ounce in September, we at FT Alphaville wondered what, if anything, the move might have had to do with the IMF’s jumbo issue of $250bn worth of special drawing rights.

Now it seems India has provided the answer.

Payment is expected to be in major currencies that make up the SDR

6:28 AM  
Blogger GOld Bullion said...

I think gold is rallying because IMF sale of gold to India. Previously it was thought that planned sale could cause glut of gold in the market. Speculation!
Thanks for the great reading, we buy gold buy in a recession. I will pass this on to our Ira clients to read.

5:59 AM  

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