South Korea buys more gold amid speculation on currency market intervention

By Christine Kim

SEOUL, South Korea -- South Korea's central bank said on Wednesday it bought 14 tonnes of gold in November using its
foreign reserves in order to spread its portfolio risks, while releasing data showing total reserves rose after talk of
market intervention.

The Bank of Korea bought the gold for $780 million, the fourth purchase in about 1 1/2 years, lifting the proportion of
gold in its total foreign reserves to 1.2 percent from the previous 0.9 percent, it said in a statement.

"Gold is a physical, safe asset and allows" the country "to deal with changes in the international financial environment
more effectively," it said in a statement, without providing more details on the purchase.
 
The Bank of Korea now holds 84.4 tonnes of gold, valued at $3.76 billion in terms of purchase prices, up nearly six-fold
from 14.4 tonnes before June last year.

The Bank of Korea made its first gold purchase in more than a decade between June and July last year, joining some
central banks in diversifying their increasing foreign reserves away from the U.S. dollar and low-yielding government
bonds.

Official-sector buying has become a key factor supporting gold demand and prices in recent years.

South Korea's gold buying "points to stronger support for gold prices from central banks," said Philip Klapwijk, global
head of metals analytics at Thomson Reuters GFMS, a
metals consultancy. "If private-sector investment falters and prices dip, central banks' buying supports prices at
higher levels than if this demand were not present. It is a substantial additional source of demand for gold bullion."

Central banks around the world bought a total of 351.8 tonnes of gold in the first nine months of 2013, up 2 percent
from a year earlier, data from the World Gold Council showed.

In comparison, private-sector gold investment demand during the period dropped nearly 8 percent on the year to 1,139.3
tonnes, the data also showed.

Spot gold traded just below $1,700 an ounce on Wednesday, up more than 8 percent so far this year.

The Bank of Korea said it now expected its ranking among central banks around the world in terms of gold holdings to
rise to 36th from 40th.

Meanwhile, the central bank said foreign reserves rose by $2.6 billion last month to a record $326.09 billion, extending
its record-breaking streak to a fourth consecutive month. It attributed the increase to investment gains but the data
came after reports by traders of dollar-buying intervention by South Korean authorities during the month to curb the
won's rapid appreciation.

On Nov. 22 alone, currency traders estimated authorities bought up to $1 billion in the local currency market to temper
a stronger won, which hurts the competitiveness of South Korean exporters.

Central bank officials declined to comment on the talk of intervention.

South Korea, which had the world's seventh-largest foreign exchange reserves as of the end of October, held 91.7 percent
of its reserves in the form of securities.

Source: http://www.24hgold.com

Malaysia's Perak finds potential Gold sources

Malaysian State of Perak claimed to have identified several potential gold sources but refused to name it fearing any 'gold rush'.

IPOH(BullionStreet): Malaysian State of Perak claimed to have identified several potential gold sources but refused to name it fearing any 'gold rush'.
According to a top official of the government, authorities would first need to determine whether the gold deposits had any commercial or considerable value.
He said Mineral and Geoscience Department will conduct further research at the spots and determine if there is any commercial value in them or if they only contain small amounts of gold.
Based on the preliminary report by a task force studying Perak's gold mining potential, the gold deposits could be commercially mined, he added.
Perak was also looking into refining the categorisation of minerals to facilitate the process of imposing royalty taxes on mining activities.
Perak had already increased its tax revenues from mining activities to about RM 30 mil this year through a royalty tax increase to 5% as compared to last year's revenue of less than RM 1mil.

 

Source: http://www.bullionstreet.com

How Gold can solve Europe's debt crisis

Central banks of the 17-nation euro currency union are sitting on more than 10,000 metric tons of gold.

By Stephen Fidler
Here's an idea that almost certainly wasn't discussed at Thursday night's European summit: using countries' gold reserves to lower the borrowing costs of euro-zone governments. Central banks of the 17-nation currency union are sitting on more than 10,000 metric tons of gold. At northward of $1,740 a troy ounce, that's a chunk of change. (There are 32,151 troy ounces in a metric ton.)
From the point of view of Europe's debt crisis, most of it is in the wrong place. Nearly a third of it belongs to Germany and almost a quarter of it is in France, neither of which is struggling with high debt-interest costs. For some countries burdened with debt—Spain, which holds 282 tons, Greece with 112 tons and Ireland with just six—their holdings are too small to make much of a difference.
But two countries have enough gold to make a difference to their financing costs. Italy, which has flirted with unsustainably high borrowing costs, is sitting on the second-largest holding of gold reserves in Europe: 2,450 tons. The small economy of Portugal, which is in a bailout program after it lost access to affordable government finance, has reserves of 382 tons.
The idea is not to sell the stuff. Instead, the proposal is to bring down borrowing costs by using gold to guarantee the partial repayment of bonds to investors in case of a default. Italy's gold reserves would cover 24% of its estimated borrowing needs over the next two years and Portugal 30%. If the two countries could issue some unsecured debt at the same time, they could bridge an even longer period.
First, some perspective on an idea that could hypothetically help Italy to avoid asking its neighbors for a bailout and aid Portugal to regain access to the bond markets. It is not from a disinterested party: The World Gold Council exists to promote the use of gold on behalf of the world's gold miners.
It is not in the current mix of ideas being discussed by senior policy makers, though it has been the subject of presentations in Brussels, for example to European parliamentarians, and has been put forward by Romano Prodi, the former Italian prime minister.
Moreover, a continuation of the current bond-market respite—inspired by the European Central Bank's pledge to buy the bonds of governments that request an official credit line and meet the conditions attached—would render it of only academic interest.
There are precedents for using gold as security. Ansgar Belke, an economist at the University of Duisburg-Essen in Germany, points out that in the 1970s Italy and Portugal both used gold reserves as collateral for loans from other central banks and the Bank for International Settlements.
In a paper commissioned by the WGC, he calculates that gold bonds could cut Portugal's borrowing costs for five-year bonds from 10% to 6%, if a third of the bonds' face value was guaranteed in gold, and to 5%, if half was guaranteed.
Such bonds, he said, would "surely attract investors such as emerging-market governments and sovereign-wealth funds." Using gold to back government debt could not happen overnight. For one thing, the gold reserves are not in the government's coffers but in those of the national central banks.
Though the reserves in question are separate from the gold these countries have placed with the ECB, the governing council of the ECB must agree to any transfers of gold to governments. Second, national central banks in the euro zone are meant to be independent. A transfer of gold to the government raises questions, says Mr. Belke, about whether such transfers breach the prohibition on central banks providing monetary finance to governments.
Third, euro-zone central banks are among those world-wide that have agreed to limit their collective gold sales to 400 tons a year, an agreement that persists until 2014. It's not clear whether using gold as collateral would be considered inside or outside the scope of this agreement.
Mr. Belke points out that current ECB operations—providing finance to banks which then buy their own governments' debt, and the ECB's government-bond-buying operations—are also viewed by some as breaking the prohibition against monetary financing, objections that have not proved an obstacle to the operations' going ahead.
In another paper for the WGC, Andrew Lilico of Europe Economics, a London-based economics consultancy, says the use of gold-backed bonds wouldn't be a case of central banks gearing up the printing press to bail out their governments. "As a real asset, the use of gold as collateral is not inflationary, any more than would be the use of historic buildings or military equipment or islands or any other of the forms of collateral that have been proposed for distressed sovereigns," he argues.
Justin Knight, a European bond strategist at UBS, says some investment institutions might struggle to buy gold-backed bonds because they invest according to bond indexes, some of which include only unsecured debt. Other investors may have rules forbidding them from holding asset-backed securities. "Bonds would need to be issued under international, rather than domestic law, and one could envisage a situation in which bonds secured against gold held outside of the country… might be seen as more valuable than that held in a central bank's own vaults," he said.

source: http://www.bullionstreet.com

Gold hits 4-month high on Fed stimulus hopes, Spain

Reuters) - Gold rose 1 percent to a four-month high above $1,670 an ounce on Thursday, bolstered by hopes for a new round of U.S. monetary stimulus and news that Spain is negotiating conditions for a possible aid package.
Silver surged 2 percent and platinum group metals also climbed on supply concerns due to labor unrest in South Africa.

Precious metals received a boost after sources told Reuters Spain is in talks with the euro zone over conditions for international aid, even though the country has made no final decision to request a bailout.

Bullion consolidated its breakout above a four-month trading range and technical resistance at the 150-day and 200-day moving averages. However, gold's relative strength index suggests the market might be slightly overbought following its seventh consecutive day of gains. (r.reuters.com/xub32t)

The move higher came amid already-bullish market sentiment, with Wednesday's minutes from the U.S. Federal Reserve's August meeting showing policymakers were ready to deliver more stimulus "fairly soon" unless the economy improves considerably.

"This is the first insight we've gotten in the marketplace to think that the Fed is committed to this new stimulus program, and that's the catalyst you need to break out of the range," said Jeffrey Sherman, commodities portfolio manager at DoubleLine Capital LP, which has over $40 billion in assets under management.

Spot gold gained 0.9 percent to $1,668.70 an ounce by 2:25 p.m. EDT (1825 GMT), having risen 3.5 percent so far this week.

That put gold on track to post its largest monthly rise since January's 11 percent increase.

U.S. gold futures for December delivery settled up $32.30 at $1,672.80 an ounce. Trading volume looked set to challenge its highest in almost a month, preliminary Reuters data showed.

Silver rose 2.2 percent to $30.49 an ounce.

Bullion broke ranks with U.S. equities, which fell after the number of Americans filing new claims for jobless benefits unexpectedly increased, and after St. Louis Federal Reserve President James Bullard played down the odds of imminent easing.

WEAKNESS SEEN IF FED DISAPPOINTS

Bullion is now up nearly 7 percent year to date, still below the 15 percent in January when the Fed signaled it might use more stimulus and would keep interest rates near zero until at least 2014.

"Market expectations on monetary easing might be too high and that could lead to pullbacks," said Nicolas Berge, a trader at Geneva-based hedge fund Absolute Capital Group which invests in commodities futures and currencies.

Gold's breakout above its downward trend confirms the potential start of a longer-term bull market, Berge said.

Bullion held in top exchange-traded funds monitored by Reuters hit a record by Wednesday's close, having risen by more than 600,000 ounces this week so far, marking the largest weekly rise since early February.

Gold investors also monitored news that Citi Private Bank deciding it will withdraw up to $500 million from long-time gold bull and prominent hedge fund manager John Paulson's flagship Advantage funds, which held some gold investments.

In platinum group metals (PGM), ETF Securities said that its U.S. PGM exchange-traded products added nearly $50 million in new assets in the last week due to supply worries following deadly violence and work stoppage in South African mines.

Platinum rose 0.4 percent to $1,536.75 an ounce and palladium was up 3.5 percent at $650.75 an ounce.

Source: http://www.reuters.com

Silver to hit $50 by end of 2012

NEW YORK (Commodity Online): Silver prices likely to reach $50 an ounce and gold prices to bounce back to $1900 levels, said Stephen Smith, managing member of Smith McKenna, LLC.

According to Smith, the precious metal boom that was cut short in 2011 could be making a strong comeback in late 2012 and over the next few years.

The metal to keep a watchful eye on is silver. Analysts and precious metal experts are in harmony on predictions of silver surpassing $50/oz. and gold edging above $1,900/oz by as early as year end.

Investing in silver ahead of the future outlook for both the global economy and manufacturing sector could prove to be very rewarding. 2011 marked the end to a bullish few years which made a lot of people very wealthy.

While gold is still expensive, silver is the commodity that investors should be paying special attention to. Silver in relation to gold is priced substantially lower; it's undervalued and is expected to respond bullishly over the next few years.

Those who don't currently invest in silver should at least be gathering all the information they can. Current precious metal investors have already shifted their support and focus on the white metal amid global cues and its exceptional properties with continuing limited supply. In short, precious metals should be a part of everyone's investment portfolio; it's all about diversification.

"Most people miss out on precious metal market booms and investing in silver because of uncertainty and lack of information. Potential wealth creation is all about the long term outlook with the right position and knowledge," Stephen Smith added.

Silver has both usage as an industrial metal and value as a precious commodity; making it sensitive to the economic outlook and global manufacturing. Silver has large ties and demand in the pharma industry, solar panel production and electronics.Limited bullion supply, increased demand and global easing could send the price of silver into the clouds.

As a society we're just not as educated on precious metals as an investment source. The banking industry and Wall Street want to remain in the spotlight, but they often have their own hidden agendas. According to Smith, "Silver could perform stronger and be a better investment vehicle than your IRA/401k."

Tuesday's Q2 2012 Euro GDP report showed expected economist predictions with little impact on the silver market.Analysts are still expecting further easing amid high interest rates, debt crises, budget cuts, and limited spending. Money printing and easing could once again send precious silver and gold on a wild ride to new highs.

Silver was seen around $28/oz last week with analysts holding to their notions of silver sitting on the cusp of a strong rebound.There's a reason why investors are currently shifting their focus and doing their homework on precious silver. Its value ratio to gold is heavily skewed and stimulus efforts and economic rebounding could prove to be the recipe that silver has been patiently waiting for.

Silver is a historical form of currency and store of value. Precious metals are a physical asset meaning they are not manufactured but rather limited in supply, making their value exceptionally strong. Owning physical silver is one of the keys to investing in the white metal, staying away from ETFs, Futures and Options.
Source: http://www.commodityonline.com

Silver Price Psychology

People have a natural tendency to seek and understand value. The currently dominant baby boomer generation has a speculative mindset with regard to investment. The relatively frugal generation that lived through the first great depression is now fading in influence, along with their collective memory of harder times.

Both professional and individual traders tend to chase momentum, with pros often using technical analysis to justify market movements and their positioning in the market. Individual investors also listen to professionals talking their book, rather than to more objective experts.

Silver Prices Spikes

Nevertheless, in the silver market, any significant spike higher tends to feed on itself. This is not only due to speculative buying momentum, but also due to short covering buying as the truly limited supply of physical silver exerts its upward influence on the metal’s price.

While inevitable does not imply imminent, the longer the current price suppression paradigm lasts in the silver market, the tighter the spring becomes coiled, and the higher will be the price’s ultimate release upward.

Understanding Silver’s Value

The main point here is that silver’s intrinsic value is currently understood and accepted by only the few who got into the market early. Those who get into it once the inevitable rally has started will be buying on impulse or out of fear, only rationalizing their investment after the fact.

Some might believe that silver’s price spiking higher will suddenly and magically bring out all of the physical silver ever mined throughout history, including the billions of ounces currently sequestered in technological components, silverware and jewelry.

While some recovery of metallic silver from these recycling sources is likely, the most probable outcome will be an increasing scarcity of physical silver that will fail to meet the growing demand.

Although the masses might be manipulated into seeing spiking silver prices as a selling opportunity before the ‘inevitable’ crash — perhaps because 16 ounces of silver historically could buy one ounce of gold — the likelihood remains that silver’s price will ultimately rise both in U.S. dollar terms and relative to the price of gold.

For more articles like this, and to stay updated on the most important economic, financial, political and market events related to silver and precious metals visit http://www.silver-coin-investor.com

source: silverseek.com

Gold Prices To Be Higher Next Year, U.S. Dollar Dramatically

Gold prices should be higher next year, but corn and the U.S. dollar should see dramatic gains, said an influential newsletter editor.
Dennis Gartman, editor of the newsletter, The Gartman Letter, said he’s most bullish on corn and the “English-speaking” currencies, including the U.S. dollar, but also the Canadian, Australian and New Zealand dollar, plus the British pound.
Gartman wouldn’t give a specific forecast for gold, only to say that he expected prices to be higher than they currently are a year from now, but not “demonstratively so.”
“I really don’t like to put numbers on things. If you say gold is going to $2,100 and it goes to $2,085, I’m telling you, you taken to the rack because you missed it. The best that you can do in this business is to get the direction right…. If you get the direction right 45% of the time you’re going to beat everybody else,” he said.
Gartman spoke to Kitco News Thursday on the sidelines of the Executives’ Club of Chicago’s Annual Economic Outlook.
He said gold is still in a bull market, but right now he is holding a neutral stance. “There are only three positions you can take in a bull market: really long, long and neutral. Right now I think neutral is the place to be,” he said.
Gartman is famous for trading gold in currencies other than the dollar, which gold is denominated in. He frequently trades gold in euro and yen terms. To do so he has said that buys gold and simultaneously sells the other currency, trying best to match equal dollar sums on both sides of the trade.
“Too many people have thought of gold as being an anti-dollar trade. If it is, by buying it in euro terms, I’ve effectively hedged out the dollar risk. Quite honestly under most circumstances – not all – but on days that gold would get whacked, then the euro would get whacked. That has allowed me to breathe on down days in gold,” he said.
He told the audience at the Executive’s Club outlook panel that other markets he’s bullish on are corn, coal – both thermal and metallurgical – and dollars, whether U.S., Canadian, Australian and New Zealand, but did not elaborate.
He added that the U.S. dollar will be “dramatically higher” by next year and said it will remain as the world’s reserve currency, saying it’s “idiocy” not to think so. He said the U.S. military superiority guarantees that dominance. “No one else comes close to the U.S. defense capability,” he said.
He’s also very bullish stock markets, both U.S. and other stock markets, saying that the amount of fiscal stimulus via quantitative easing by the Federal Reserve and ultra-low interest rates in many other countries will benefit equities. When the moderator of the panel asked what his forecast for the Dow Jones Industrial Average would be in a year’s time, he said 16,500. It is now around 12,350.
He also told the Executive’s Club audience that he has no love for “gold bugs,” saying that they remind him of Ted Kaczynski, a recluse survivalist who was known as the “Unabomber” for his letter bombs than spanned 20 years. Gold bugs, he said, have their gold holdings, “dried food, water and live up in caves.”
Gold is “nothing more than another currency. It’s the second reserve currency,” he told the audience.
He’s bearish on the euro overall, but given the rise Friday in the single currency, he said in his newsletter Friday he is standing aside for now.
In the Kitco News interview he said with West Texas Intermediate crude oil at $105 a barrel, the type of oil traded at the New York Mercantile Exchange, that it brings an “awful lot” of new drilling, but he is not “overtly bullish” on energy.
Gartman wouldn’t say if he was shorting any particular trade or market, but he said he would avoid European stocks on the balance, and would prefer to own U.S., Canadian or Australian equities.
CONSIDERS HIMSELF A TECHNICAL TRADER
Regarding his trading technique, he told Kitco News that he considers himself to be 55% a technical trader and 45% a fundamentalist. “The first thing I do is look at a chart. I want to buy things that are going up. I spend weekends leafing through charts to find things that are interesting,” he said. “Do I approach things from a fundamental view first? No, not really. I find that to be a great waste of time. I’ll find out the fundamentals later. If I find a chart that looks bullish, I’ll go find out the fundamentals of whatever it is and if I can understand the bullish fundamentals, if they make sense to me, then I’ll trade.”
He said he trades “a lot” of stocks, but he doesn’t talk about it because of regulatory limitations.
He recommended to those who are new to the market to understand technical analysis before they get started. “I don’t think you can be a ‘trader/investor’ without having some cursory knowledge of technical matters. I do find that people who get esoteric about … chats … I find those people really don’t really very well. Keep it simple,” he said.
He said his job is to be the “liberal arts major of the capital markets,” saying that he knows a little bit about the different markets.
“Grain guys don’t know anything about foreign exchange. Foreign exchange guys don’t know anything about oil. Oil guys don’t know anything about grains. My job is to, one, trade them all and two, be the liberal arts major of the capital markets. Do I know more about the grains than a grain guy does? Oh, God, no. But I know more than a bond guy does,” he said.
Source:http://www.forbes.com

Sudan nets $603m in gold exports to April 1

KHARTOUM (REUTERS) - Sudan has exported about 13.2 tonnes of gold in the year to April 1, netting it about $603 million in a push to build up the minerals industry to make up for lost oil revenues, the mining ministry said on Monday.
Sudan has been struggling with a severe economic crisis since South Sudan seceded a year ago, taking with it about three quarters of the country's oil production, previously Khartoum's main source of exports and state revenues.
Officials have said bolstering agricultural and mining exports can help Sudan compensate for a resulting shortfall of foreign currency, which has fuelled soaring inflation over the past year.
Sudan exported about 33.7 tonnes of gold for about $1.5 billion in 2011, and 30.3 tonnes for about $1 billion in 2010, the ministry said in a presentation delivered to parliament.
While many experts say Sudan has great mining potential, many also say it is hard to verify overall production figures because unofficial or "artisanal" gold seekers so far account for a large part of Sudan's gold industry.
The government was working to control smuggling and "illegitimate" exports to help develop the industry, the ministry presentation said.
Sudan was supposed to continue receiving some oil revenues via fees paid by the landlocked South to export its oil through pipelines running through the north, but the two have failed to agree on fees.
In January, South Sudan shut down its entire output of about 350,000 barrels per day to stop Khartoum from taking some crude to make up for what it said were unpaid fees.
The dispute has helped create a $2.4 billion gap in Sudan's public finances and caused exports to plunge 83 percent, the finance minister said in May.
Source : http://www.mineweb.com

Is the Table Set for a Mania in Gold and Silver?

By: Jeff Clark
It may feel like I'm out of touch with the precious metals markets to broach the subject of a mania today, but I think the table is being set now for a huge move into gold and silver.
There are, however, very valid reasons to reasonably expect a mania in our sector. For one thing, manias have occurred many times before, but the main issue is that a mania in gold and gold stocks is the likely result of the absolute balloon in government debt, deficit spending, and money printing. Saying all that profligacy will go away without inflationary consequences seems naive or foolish. Inflation may not attract investors to gold and silver as much as force them to it.
Now, one could make the argument that any rush into gold and silver will be muted if no one has any savings, especially given that demographers say a quarter of the developed world will soon be retired. But even if individuals are wiped out, the world's money supply isn't getting any smaller, and all that cash has to go somewhere.
I wanted to look at cash levels among various investor groups to get a feel for what's out there, as well as how money supply compares to our industry. Data from some institutional investors are hard to come by, but below is a sliver of information about available cash levels. I compared the cash and short-term investments of S&P 500 corporations, along with M1, to gold and silver ETFs, coins, and equities. While the picture might be what you'd expect, the contrast is still rather striking.


Naturally, not all this money or even a big chunk of it will be used to buy GLD, Barrick, or American Eagles, but it's clear that if any significant fraction of the cash sloshing around the economy were to be used to buy gold, it would have a major impact on the price of gold - which would trigger the mania I fully expect. Let's take a quick look at what kind of impact our sector could experience if just a small amount of available funds were devoted to various forms of gold and silver.

The entire worldwide value of all gold exchange-traded products (ETPs) currently represents just 2.1% of the cash and short-term investments held by S&P 500 corporations. If 20% of these companies decided to put a mere 5% of their available holdings into these precious metals vehicles, their value would more than double.
If just 1% of the physical currency (M1) floating around the system were used to buy gold Eagles, it would be 13 times more than the entire value of all coins purchased last year.
If corporations chose to invest 1% of their cash in silver ETFs, it would surpass the total current value of all such ETFs.
If corporations moved 5% of their "short-term investments" evenly into gold stocks, the market cap of every gold company would increase by 20%.
If they chose silver stocks, they'd each grow by a factor of six.
Five percent of M1 would increase the market cap of gold producers by 14%. The same fraction would be 3.4 times bigger than the entire current value of all primary silver producers.
This is just S&P 500 corporations - there are many more corporations in the world, as well as pension funds, hedge funds, sovereign wealth funds, mutual funds, private equity funds, private wealth funds, insurance companies, and other ETFs.
It's striking, when you really stop to think about just how big the impact could be if some significant fraction of the larger financial world started chasing the small niche market that is gold. Such cash inflows will send our industry to the moon.
In the meantime, keeping our eye on the big-picture forces that have yet to play out is the plan to follow. Sooner or later, though, I'm convinced the catalysts will kick in that will pull/push/drag/compel/force the mainstream into our sector. I suggest beating them to it.
And when the mania arrives, we'll all wonder why anyone doubted it in the first place.
Source : http://www.marketoracle.co.uk

Gold, Silver Prices Continue To Decline On US Dollar Strength

European markets traded lower today as European Commission stated that European economy will shrink in the current year with negative outlook after countries from Spain to Italy faced recession. According to the commission, GDP will increase by 1 percent in 2013 after declining by 0.3 percent in 2012. Additionally, escalating political turmoil in Europe also led to rise in risk aversion in the global markets.

India’s industrial output unexpectedly declined by 3.5 percent (y-o-y) in March as against an annual rise of 4.1 percent in February. Manufacturing output declined by 4.4 percent (y-o-y) in March from a rise of 4 percent a month ago.

Strength in the US Dollar Index (DXM2) coupled with a rise in risk aversion in the global markets due to worsening tensions in the eurozone exerted downside pressure on the gold and silver prices today. Silver, being an industrial metal also took cues from downside in base metals pack today.

The base metals complex traded on a negative note today on the back of rising worries over Europe’s debt crisis, coupled with strength in the US Dollar IIndex. Additionally, weak sentiments in the markets also acted as a negative factor for metal prices.

However, depreciation in the Indian rupee cushioned further losses on the domestic bourses. Copper is the worst performer amongst the base metals complex today, as the metal declined by 1.6 percent on the LME and by 0.8 percent on the MCX till 4.30 pm IST. The red metal touched an intra-day low of $7981/ton and was hovering around $7985/ton until 4.30 pm IST.

Nymex crude oil prices declined more than 1 percent today on account of worsening European debt crisis coupled with rise in crude oil production from the Organization of Petroleum Exporting Countries (OPEC). Additionally, a stronger Dollar Index exerted further downside pressure on prices. Crude oil touched an intra-day low of $ 95.74/bbl and hovered at $96.04/bbl today till 4:30pm IST.

Re-emergence of the uncertainty over eurozone debt crisis coupled with weak sentiments in the global markets will exert downside pressure on precious metals and base metal prices in the evening session. Additionally, strength in the US Dollar Index will also act as a negative factor for prices.

Markets will also take cues from US economic data to be released later in the evening and if the data come on a negative note then this will further lead to further downside in commodity prices. Crude oil prices are expected to trade lower in the evening session on the back of rise in OPEC’s oil production, increasing worries over eurozone debt crisis and strength in the US Dollar Index.

Source: http://www.forexpros.com

Gold Investment in 2012: The Bullish and Bearish Signals

1. Gold investment demand is expected to set a new record in 2012
GFMS expects gold investment demand to be the main driver of gold price this year, as it was in 2011. Furthermore, the consultancy expects investment demand for gold to set a fresh all-time high of close to 2000 tonnes in gold bullion terms.
A key driver of Gold Investment, says GFMS, is likely to be ongoing loose monetary policies adopted by the world's central banks.
"A corollary of all this monetary largesse," says GFMS's global head of metals analytics Philip Klapwijk, "is fears about resurgent inflation, and that becomes all the more likely if oil prices motor higher should tensions get any worse between Iran and the US."
2. Physical Gold Investment demand continued to be strong last year
Investment demand for physical gold saw "an excellent performance" last year, Klapwijk told the audience at the London launch of 'Gold Survey 2012'.
Europe, China, Thailand and the Indian subcontinent all saw growth in physical gold bar investment (investors in North America, as Klapwijk pointed out, tend to prefer Gold Coins to Gold Bars).
On a global level, combined demand for coins and bars was 1543 tonnes – a 30% gain on 2010, and a new all-time record. Indeed, the majority of Gold Investment in 2011 took the form of physical investment, GFMS says.
The significance of this is that investments in physical gold tend to represents "stickier" investments than other forms of getting exposure to the metal (for example buying Gold Futures) – meaning it would probably take more for such investors to exit the positions they've built.
That said, there is obviously a limit to most investors' stickiness. A lot will depend on whether, as GFMS expects, the economic environment will continue to be supportive of Gold Investment, with negative real interest rates and fears of inflation prevailing in most parts of the world.
3. Scrap supply appears to be flat
On a global level, scrap supply fell by around 50 tonnes 2011 – equivalent to almost two thirds of the year's Gold Mining production growth. This was the second consecutive year-on-year fall for scrap supply.
Only Europe saw significant growth in scrap Gold Bullion supply last year (old jewelry, gold watches etc.), most likely the result of distressed selling prompted by the Eurozone crisis.
North America and Latin America meantime posted modest scrap supply growth. East Asia and the Indian subcontinent meantime saw scrap supply fall, as did the Middle East, where it dropped by over 100 tonnes.
Although GFMS says it expects scrap supply to rise this year, another traditional source of supply – central banks – is expected to be absent (see below). GFMS points out there was a "secular increase" in supply from scrap, producer hedging and official central bank sales between 1987 and 1999 – a factor which it reckons contributed to the lackluster Gold Price during that period.
By contrast, supply from these sources has been flat since 2000, despite a sharp jump in scrap supplies at the onset of the financial crisis. This period in flat supply has broadly coincided with gold's bull market.
4. Central banks are expected to keep Buying Gold
GFMS expects central banks to remain net gold buyers this year, although there may be a slight dip on last year's figure, with net official sector buying having risen 491% year-on-year in 2011.
The swing to net buying by central banks is a key factor behind the flat supply picture of recent years that was noted above. Signatories to the Central Bank Gold Agreement have made what GFMS calls "trivial sales" in recent years, while emerging market central banks have been Buying Gold in significant quantities.


Bearish Signals
1. Gold Mining supply is expected to continue growing this year
Worldwide gold mine production rose for the third year running in 2011. Last year saw an annual gain of 2.8%, or 78 tonnes.
New Gold Mining operations contributed 47 tonnes of supply, while Africa was the region that saw the strongest growth, increasing production by 51 tonnes (despite its largest player, South Africa, seeing a five tonne drop).
Gold mine production has entered a "new era", Klapwijk told the London launch, with GFMS expecting a further 3% growth this year.
2. A lot of Gold Investment is required just to maintain current prices
Rising mine supply contributes to what GFMS terms the gold market "surplus" – the difference between combined mining and scrap supply and fabrication demand (jewelry plus industrial uses).
GFMS estimates that this leaves a "surplus" of gold supply equivalent to around 110 tonnes. Gold Investment therefore needs to take up that slack.
At current prices "purchasers of bullion need to take gold to the tune of $130 billion out of the market for it to clear," said Klapwijk this week. One attendee at the launch asked whether there might be a case for saying many western investors are now overinvested in gold.
Klapwijk agreed such a case could be argued, and that many wealth investors interested in gold have probably already built their positions. He also pointed out that institutions such as pension funds and sovereign wealth funds – where Gold Investment remains relatively rare – could still offer some scope for growth.
3. Hedging activity by miners can now only be a source of supply
For much of the 1980s and 1990s, gold miners would hedge their price risk by selling future production forward to lock in the current price, adding to current supply and putting downwards pressure on the Gold price.
This process went into reverse as the bull market got underway. With Gold Prices rising, producers began to de-hedge, buying back positions and thus contributing to gold demand.
Measured as the total outstanding forwards and loans, plus gold options positions weighted according to their sensitivity to movements in Gold Futures (i.e. an option's delta), producers' overall hedging position last year was equivalent to 157 tonnes of Gold Bullion. Last year was the first year in over a decade that net hedging was positive, the producers in aggregate adding six tonnes to their combined position.
By contrast, hedging positions were equivalent to around 3000 tonnes in 1999 and 2000. Most of the de-hedging – which contributed to the demand side – appears to have been done.
"[Producer hedging] cannot be a source of demand in future," said Klapwijk.
"It can only be a source of supply. The question is: how much supply?"
Klapwijk noted, however, the most of the hedging seen last year appeared to be related to specific mining projects, adding that there seemed little appetite for strategic hedging against a fall in Gold Prices.
4. Gold jewelry demand is expected to fall again
Gold jewelry fabrication demand fell 2.2% in 2011 – though given the rise in Gold Prices, the fact that the fall wasn't larger led GFMS to describe this source of demand as "resilient".
The bulk of fabrication demand was again accounted for by developing countries, where gold jewelry is often bought for investment as much as adornment purposes.
Although most of the world's regions saw a fall in gold jewelry fabrication in tonnage terms, there was a slight gain in Russia and more significant growth of around 40 tonnes in East Asia, which "boils down to China" said Klapwijk.
Despite this eastwards demand pull, though, GFMS expects gold jewelry consumption to fall again this year, citing high Gold Prices and a slowdown in global growth. Jewelry consumption however "is still expected to remain above 2009's historically depressed level" says GFMS.
The Outlook for Gold Prices
Weighing up the above factors, and many more besides, GFMS forecasts an average Gold Price in 2012 of $1731 per ounce, with a range of $1530 to $1920.
Klapwijk adds that "a push towards $2000 is definitely on the cards before the year is out, although a clear breach of that mark is arguably a more likely event for the first half of the year".
Of course, short-term gains are not the primary reason most people make a Gold Investment, especially not those Buying Gold in physical bullion form. From developing nations in the East to the quantitatively eased economies of the West, people are turning to gold as a vehicle for defending the value of their wealth and an insurance hedge against tail risks.
The dynamics behind most Gold Investment will continue to play out well beyond the end of this year.
Source: http://www.bullionvault.com/

Gold & Silver Market Morning

After New York closed at $1,711 Asia at week’s beginning at first saw gold move to $1,713, but London took it down to $1,706 as the euro slipped back to just above €1: $1.31. The morning Fix in London set it at $1,705.25 and in the euro at €1,299.931 up €14 higher, while the euro stood at €1: 3118. Ahead of New York’s opening it stood at $1,704.15 and in the euro €1,299.99 while the euro was at €1: $1.3109. Silver slipped back in line with gold to just under $34 in London. Ahead of New York’s opening it stood at $33.92.

Gold(very short-term)
 Gold is expected to tighten its consolidation range before a large move, in New York today.

Silver(very short-term)
 Silver will tighten its consolidation range before a large move, in New York today.


Price Drivers
 At week’s start, the final acceptance of the Greek bailout package is being completed. Private bondholders who refused to accept the offer from Greece will get a 100% payout from their Credit Default Swaps, setting a dangerous precedent for any future situation in another country. For E.U. leaders the key achievement is the prevention of a full blow banking crisis. Few believe that Greece can avoid a full default at some point in the future. But gold and silver investors should not just focus on the Greek situation but on what the European quantitative easing mean for the value of the euro. Well managed currencies have risen in value while the value of both the dollar and the euro have fallen. But the damage done to well managed currencies as they rise in value precipitated the weakening of those currencies, so as to keep international competitiveness. But this has defeated the wisdom of managing an economy in a prudent fashion. This has left currencies an unreliable measure of prices. We see this reflected in part in the price of oil now and in the rising prices of silver and gold. Will this change? No, the priorities of European Union members will swing to promoting growth which implies more currency weakening [alongside the U.S. dollar].


We reiterate what we have pointed out before and that is that there is a reduction in systemic liquidity that demands freshly printed money to fill the gaps left by these deflationary influences. ECB President Mario Draghi gave banks more than €1 trillion ($1.31 trillion) of three-year loans in December and February. Until deflation is turned back to growth, this process will continue. As the oil price rises, so that deflationary influence persists, sucking money out of countries that import oil. The entire process is gold positive. More than that, the process itself throws doubts of the system’s ability to retain value or stability. Gold and silver become retreats from the uncertainty spawned by these dangers. There is no sign of a change in system needed to give currencies dependable values. [To get more of the right perspectives on the gold and silver markets and where gold and silver prices are going, subscribe through www.GoldForecaster.comorwww.SilverForecaster.com].


source: http://news.goldseek.com

Prepare for Dollar Collapse

THE NOTION that the very same economic forces currently plaguing Greece et al are somehow not relevant to America does not hold water. As goes the rest of the world, so goes the US, writes Chris Martenson.

When we back up far enough, it is clear that money and debt are there to reflect and be in service to the production of real things by real people, not the other way around. With too much debt relative to production, it is the debt that will suffer. The same is true of money. Neither are magical substances; they are merely markers for real things. When they get out of balance with reality, they lose value, and sometimes even their entire meaning.

The US is irretrievably down the rabbit hole of deficits and debt, and that, even if there were endless natural resources of increasing quality available at this point, servicing the debt loads and liabilities of the nation will require both austerity and a pretty serious fall in living standards for most people. 

Of course, the age of cheap oil is over. And as Jim Puplava says, the oil price is the new Fed funds rate, meaning that it is now the price of oil that sets the pace of economic movement, not interest rates established by the Fed. 

However, of all the challenges that catch my eye right now, the one most worrisome is the shredding of our national narrative to the point that it no longer makes any sense whatsoever. I'm a big believer that our actions are guided by the stories we tell ourselves. To progress as a society, having a grand vision that aligns and inspires is essential.

But when words emphasize one set of priorities and actions support another, any narrative falls apart. At a personal level, if someone touts their punctuality but chronically shows up hours late, the narrative that says "this person is reliable" begins to fall apart.

Likewise, if a company boasts about being green but its track record belies them as a major polluter, the "green" narrative fizzles.

And at the national level, if we say we are a nation of laws, but the Justice Department selectively prosecutes only the weak and relatively powerless while leaving the well-connected and moneyed entirely alone, then the narrative that says "we are a nation of blind justice and equal laws" falls apart.

I wish this was just some idle rumination, but I see more and more examples validating the importance of alignment of narrative and behavior. Because when there is a disconnect between words and actions, anxiety and fear take root.

Unfortunately, there is quite a lot to fear and be anxious about in the most recent State of the Union address and GOP response.

The recent State of the Union speech by Obama, and its Republican response, are both remarkable for what they say as well as what they don't say. The summary is this: The status quo will be preserved at all costs.

Here are a few examples of the sorts of disconnects between rhetoric and reality that are absolutely toxic to the morale of all who are paying the slightest bit of attention.

Obama
Let's never forget: Millions of Americans who work hard and play by the rules every day deserve a government and a financial system that do the same. It's time to apply the same rules from top to bottom. No bailouts, no handouts, and no copouts. An America built to last insists on responsibility from everybody.
We've all paid the price for lenders who sold mortgages to people who couldn't afford them, and buyers who knew they couldn't afford them. That's why we need smart regulations to prevent irresponsible behavior.

It's time to apply the same rules from top to bottom? Is Obama aware of what Erik Holder is up to over there in the Justice Department? The robo-signing scandal alone has thousands and thousands of open and shut cases of felony forgery that can and should be applied to as many individuals as were directly involved, from top to bottom in every organization that was engaged in the practice.

Here's the reality. Under Obama, criminal prosecution of financial fraud fell to multi-decade lows during what is and remains one of the most target-rich environments in living memory.

(Source)

Obama
And I will not go back to the days when Wall Street was allowed to play by its own set of rules.
So if you are a big bank or financial institution, you're no longer allowed to make risky bets with your customers' deposits. You're required to write out a "living will" that details exactly how you'll pay the bills if you fail – because the rest of us are not bailing you out ever again.

Has Obama checked with the Federal Reserve to assure they are on board with the new 'no bail out' policy? Because last I checked, they were the ones mainly involved in bailing out the big banks and providing swap lines and free credit to anyone and everyone that needed help, US or foreign. 

To be fair, Obama can make no statement or claim about what the Federal Reserve can or can't or will or won't do. It is not under executive nor even legislative control. If, or I should say when, the Federal Reserve bails out the next bank or country or whomever, it's "the rest of us" who will be paying the bill – in the form of eventual inflation. 

Obama
[W]orking with our military leaders, I've proposed a new defense strategy that ensures we maintain the finest military in the world, while saving nearly half a trillion Dollars in our budget.

Let's review the proposals for military spending then. The language above is nearly impossible to decode. What is really being said is that proposed defense increases have been scaled back, and that this is what is being called savings.

In 2000, Defense spending was $312 billion Dollars. In 2012, the proposed budget calls for $703 billion, a 125% increase in 12 years. 

What the plan he mentions really calls for is spending increases in 5 out of the next 6 years. The lone holdout is 2013, when the plan calls for cutting spending by a whopping $6 billion less than the amount already approved for 2012. 

Somehow that all translates into rhetoric that implies cuts of "nearly half a trillion Dollars."

As Lily Tomlin used to say, "As cynical as I am, I find it hard to keep up."

GOP Response
"The routes back to an America of promise, and to a solvent America that can pay its bills and protect its vulnerable, start in the same place. The only way up for those suffering tonight, and the only way out of the dead end of debt into which we have driven, is a private economy that begins to grow and create jobs, real jobs, at a much faster rate than today."

This platitude-laden set of ideas is blissfully blind to the role of energy in the story, the amount of debt in the system, and the fact that both parties have contributed equally over the years to the predicament at hand.

How exactly is it that the private economy is supposed to flourish here, with the Federal government borrowing more than a trillion Dollars a year and oil at $100 per barrel? The simple truth is that the US government needs to begin borrowing at a rate lower than the previous year's economic growth. If GDP grows at 2%, then the total debt pile must not grow by anything more than 2%. That is the only way that the official debts can shrink relative to the economy. 

GOP Response
"We will advance our positive suggestions with confidence, because we know that Americans are still a people born to liberty. There is nothing wrong with the state of our Union that the American people, addressed as free-born, mature citizens, cannot set right."

Last I checked, the original vote tally in the Senate on the National Defense Authorization Act, which empowered the armed forces to engage in civilian law enforcement activities and selectively suspended the habeas corpus and due process rights (as guaranteed by the 5th and 6th amendments to the Constitution), passed by a voice vote of 93 to 7 in the Senate.

It's kind of hard to swallow the idea that the GOP stands with Americans as "a people born to liberty" when their members are in perfect lock-step with the Democrats, chipping away at the most basic and cherished freedoms. There's no difference between the parties when both seem intent on limiting individual freedom and increasing the power of the government to reach into and examine our daily lives. 

The above examples are not meant to pick on any one person or party or set of ideas, but to illuminate the profound gap that exists between what we are telling ourselves at the national level and the actions we are undertaking. 

Again, it is the gap between what we tell ourselves and what we do that creates a sense of unease, anxiety, and oftentimes fear. When we hear words "X" but see actions "Y" over and over again, it is hard not to come to the conclusion that the words are meaningless; empty rhetoric designed with polls and focus groups in mind, but little else. 

It is the blind obedience to the status quo that worries me the most, as it raises the likelihood that nothing of any substance will be done until forced by circumstances, at which point, like Greece, we will discover that the remaining menu of options ranges from bad to worse.

In neither Obama's address nor the GOP response do we hear anything about Peak Oil, a stock market that has gone nowhere in ten years, or the fact that with two wars winding down there ought to be massive savings from defense cuts that we can capture. There's lip service to the idea of using more natural gas to begin weaning us off our imported oil dependence, but no commensurate trillion-Dollar program offered to rapidly build out the infrastructure necessary to utilize that gas in a meaningful way.

A more honest set of messages would note that mistakes were made, opportunities squandered, and priorities misplaced. It would note that the US is on an unsustainable course with respect to spending, debts, and liabilities. There would be an explicit admission that having your central bank print trillions in "thin air" money in order to enable runaway deficit spending is a dangerous and foolish thing to entertain.

Most obviously missing is a national narrative that is coherent and comports with the facts. Both parties basically imply that if we elect a few more of their type, do a little of this and then tweak a little of that, then we will get our nation back on track. 

There is no call to a shared sacrifice for something greater. There is nothing to rally around except a laundry list of disconnected programs; a little something for everyone. There is no overarching theme under which everything else can be hung, such as a space race, a civil rights movement, or a massive upgrading of our national infrastructure.

A good narrative is one that inspires people and is based in reality but also asks something larger of us that we can share in. What is our vision for this country? Where do we want to be in ten years? How about twenty? How will we get there, and what will be required? What should we stop doing, what should we start doing, and what should we continue doing?

None of these things are on display, and all are badly needed if we are going to make the most of the next twenty years.

Of all the facts that got skimmed over or avoided in the State of the Union extravaganza, the fiscal nightmare in DC was probably the most glaring. Yes, both parties have decided to talk about the deficit, but neither is giving the appropriate context. 

For FY 2012, the federal government is projected to run a $1.1 trillion deficit. Let's compare that number to the projected revenues:

 (Source) 

The $1.1 trillion deficit is 42% of total revenues and 73% of all income taxes. That is, in order to spend what the US currently spends without going further into debt (i.e., to have no deficit), income taxes must immediately increase by 73%(!).

This is the sort of territory that, were the US any other country, would have already landed its debt markets – and likely its currency, too – in very hot water.

Historically, countries that have run deficits 40% greater than revenue for more than two years have experienced profound financial and political crises. The US is now in its fourth year of inhabiting this rare territory.

How can it keep doing this when every other country that has tried has gotten into trouble? Simple. The Federal Reserve has enabled such egregious deficit spending by buying up mind-boggling amounts of government debt. This has both kept rates low and created a lot of additional buying demand for Treasuries.

Exactly how much US debt is the Fed buying? Under Operation Twist, the Fed has bought anywhere from 51% to 91% of all gross issuance of bonds dated six years or longer in maturity. 

(Source) 

It is quite obvious that the Fed has been a major participant in the bond markets and a major reason why Treasurys are priced so high and offer so low a yield. 

It seems that it is well past time to speak directly to the enormous fiscal deficits in a credible way, not merely bemoaning them being too high. And we're also overdue for an adult national conversation that it's unwise and unsustainable for a country to lean on its central bank to print up the difference between receipts and outlays.

There is a clear relationship between high oil prices and recessions, confirming the idea that the price of oil has the same impact on the economy as higher interest rates (perhaps even more so nowadays). Both are a source of friction. With higher interest rates, less lending and less consuming happens. With a higher price of oil, more money gets spent on energy, much of it sent to foreign producers of oil, and thus less money is available for other consumption.

Both higher oil prices and higher interest rates cause people to think a bit more before pulling the trigger on either ordinary spending or a big capital project.

Note that all of the six prior recessions were preceded by a spike in oil prices. In the case of the double-dip 1980s twin recessions, oil remained elevated after the first recession was (allegedly) over. Don't be fooled by the logarithmic nature of the chart below – note that the typical decline in oil prices between the recession-inducing peak (blue lines) and the recovery-enabling trough (green lines) was a substantial 30%-50%:

(Source) 

Also note in the most recent data that oil prices happen to be at roughly the same level that triggered the first recession in 2008 (the purple dotted line). 

If we needed one simple chart to help us understand why trillions of Dollars of stimulus and handouts are not causing the economy to soar, this is the chart that explains the most. High oil prices and recessions are highly correlated, and it's not too much of a stretch to postulate that economic recoveries and high oil prices are inversely correlated.

Note also that the above chart is not inflation-adjusted. If it were, it would show that there have been exactly zero recoveries when oil prices are near or over $100 per barrel. 

For those counting on an economic recovery here to lift all boats and assist the bailout efforts, the burden of history is upon them to explain why this time we should ignore the price of oil. 

I say we cannot. Policy planners and citizens alike should be ready for disappointing market and economic activity in response to the usual bag of printing, borrowing and delaying tricks.

The State of the Union speech and GOP response neither accurately portray the true fiscal condition of the US, nor present a compelling narrative that speaks either to the realities of today or a future we might like to head towards.

The US is simply on a fiscally ruinous path, and neither party seems up to the task of laying out the story in a way that is mature, clear, and direct. 

No recovery has ever been possible from oil prices this high, nor with debt levels this extreme, and it is quite improbable to think that both conditions could be overcome with anything less than a completely clear-eyed view of the true nature of the predicament faced.

Decades ago, Ludwig Von Mises captured everything discussed here elegantly:

There is no means of avoiding the final collapse of a boom brought about by credit expansion.
The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.

Our current dire fiscal condition, our leaders' dysfunctional unwillingness to address the flawed behavior that caused it, plus many other recent events both in the US and in Europe, point to the idea that a voluntary abandonment of further credit expansion is just not on the menu.

That leaves us with some final and total catastrophe of the involved currency system(s) as the inevitable outcome.

Source: http://goldnews.bullionvault.com

Gold prices may touch $ 2,000 an ounce in 2012: Study

NEW DELHI: Gold prices are likely to increase for the third consecutive year and would touch a record high of USD 2,000 an ounce in 2012, said a survey.

According to the annual London Bullion Market Association (LBMA) survey which covered 26 precious metal analysts, the average forecast for the precious metal for 2012 is USD 1,766 per ounce.

The average forecast for gold this year (USD 1,766 per ounce), a 12.34 per cent rise from average price in 2011 and a 10.2 per cent increase compared to the price in the first week of January, 2012.

Out of the 26 contributors to the survey, 19 expect gold to cross the USD 2,000 per ounce level in 2012.

Gold soared to an all time high in 2011 on strong demand as precious metals are considered as a 'safe-haven investment' in times of economic turmoil and rising inflation.

In India, gold (99.5 per cent purity) crossed the Rs 29,000 per 10 grams-level to a historic high of Rs 29,155 per 10 grams in December, 2011 (one ounce equals to 28.35 grams).

While analysts predict a jump in gold prices and expect it to hit record high levels, they are not so optimistic about other precious metals like silver, palladium and platinum.

"If we compare the average 2012 forecasts with actual average prices in 2011, we can see that analysts are less bullish about the prospects for precious metals (excluding gold) during the next 12 months," LBMA Commercial Director Ruth Crowell said.

Whilst analysts predict a rise in the price of gold (12.3 per cent) and price of palladium to remain broadly unchanged (0.3 per cent).

They are forecasting a fall in the price of both silver (-3.2 per cent) and platinum (-5.6 per cent).

Silver (.999 fineness) prices hit an all-time high of Rs 75,020 per kg on April 25, 2011, on heavy speculative and investment-driven buying in line with global markets, where the metal rose to a fresh 31-year high.

The LBMA is the international trade association that represents the wholesale over-the-counter market for gold and silver.

The aim of the LBMA Forecast survey is to predict the average, high and low price for each metal as accurately as possible. 

source: http://economictimes.indiatimes.com