Gold: The Fashion Statement

The World Gold Council has listed its list reasons for why its wise to invest in gold. Perhaps stating the obvious, that, "Gold has proved itself to be an effective way to manage wealth. For at least 200 years the price of gold has kept pace with inflation. In 1999, Alan Greenspan, then Chairman of the Federal Reserve Board of the United States of America, said: 'Gold still represents the ultimate form of payment in the world."

Enough said? Well maybe not. Given all of gold's recent attention in the media, it seems as though the commodity has become somewhat of a fashion trend. Despite the fact that it remains to be one of the world's oldest signs of status, it seems as though it's getting a bit of a makeover today, as younger generations are requiring more incentive.

Can we say that gold has become bullish on the fashion front this year? Some might argue yes. James Jefferson, a designer for the Jefferson Sukhoo label has commented that, "Gold evokes a feeling of wealth. It's symbolic of fashion's return to luxury."

Pam Danziger, Presdient of US Marketing firm Unity, has publicly stated that, "After years of catering to the Boomers' luxury appetites, luxury goods marketers need to tap the tremendous spending potential of Generation X-ers."

Oil on the Rise

Iran again in the news, reported that they will not halt their nuclear program. The country's decisions are having a marked influence on oil and commodity prices.

The reports are in- according to COMEX, "gold for June delivery rose $10 to $610.10 an ounce, near a fresh 25-year high. The rise in oil and gold prices was negative for overall investor sentiment. But it was good for the underlying stocks in those sectors."

According to the Economist online, "MAHMOUD Ahmadinejad, Iran's president, has advice for those who oppose Iran's nuclear programme: Be angry. The war of words between the Islamic Republic and a group of western countries worried that Iran is trying to make nuclear weapons has intensified sharply. The week began with a disputed report of American plans to use nuclear bunker-busters against Iran, and continued with Iran's announcement that it had enriched uranium..."

Such stark projections for Iran's nucelar policy future, could have wider implications for the market on the whole. In any case, the future for gold in terms of what might take place this summer, has been projected as we continue to face uncertainty within this region.

Gold Stoops Down Once More

Gold, as we all know, is not a free standing agent. Today as the price dipped down when oil took another tumble, due to increasing speculation on shortages in Iran and Nigeria, the precious metal did not take long to follow suit.

The instability that a country such as Nigeria has faced in the meantime, would take a long time to level as the government faces International speculation as to where N30bn Oil Proceeds have gotten to?

Additionally, an audit report out of the Nigeria Extractive Industry Transparency Initiative (NEITI) has uncovered sums from "N7.04 billion ($55million) to a whopping N30.720 billion ($240 million) as discrepancies in payment schedules of oil companies operating in the country to the Central Bank of Nigeria (CBN)." With these kinds of blemishes existing on the country's report card, the country ranks 152nd from 1st place on Transparency International's Corruption Perceptions Index, sharing a spot with Cote D'Invoire and Equatorial Guinea. Much in this regard, investors could be wise to show concern.

Gold Hedges on Concern Over Increase In Oil Prices

April 7th - For the first time since 1981, gold is seen to be taking a leap today up to $600 against concerns over oil prices. Sources at Bloomberg report that, "Gold for June delivery rose as much as $9.40, or 1.6 percent, to $601.90 an ounce on the Comex division of the New York Mercantile Exchange, surpassing $600 for the first time since Jan. 6, 1981. It was at $597.80 at 9:13 a.m. local time."

Christoph Eibl, head of commodities trading at Zug, Switzerland-based Tiberius Asset Management AG has said, "We're entering bubble territory... Prices have moved away from reality, and are no longer linked to fundamentals.''

RBC Capital Markets Offer 2006-2009 Outlook Perspectives

From the mouths of one of the world's biggest gold companies, Bobby Godsell, chief executive of AngloGold Ashanti, was recently reported to have, "predicted that worldwide gold production would stagnate, then fall in the coming years as large deposits of the precious metal become scarce," in an aritcle in the Financial Times.

After hitting a 25 year high last week, speculation around gold is a hot topic. Mr. Godsell also was reported to have said that, "“All of the gold majors are finding it difficult to replace their reserves. New mine production will be flat-to-declining.”

Even more telling, "RBC Capital Markets in London estimated that total gold production would rise slightly in 2006 and 2007, be flat in 2008 and start to fall in 2009. 'There hasn’t been a big gold discovery for years,' said an analyst."

Gold for June Delivery Takes a Minor Tumble

Sources at MarketWatch report that,"June gold fell $3.30 to $588.50 an ounce," as of March 31st, 2006. The reason one might ask? Quite simply it can be linked to the fact that, "Strength in the U.S. dollar eased some investment demand for the precious metal after gold touched a fresh 25-year high of $594.60 overnight."

On the other hand, May silver was reported to have gone down 8 cents at $11.58 an ounce, following on the heels of a 22-year high. As many were predicting, once the ETF had been approved, the price of silver may just be levelling for the near term period.

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Will Gordon Do It?

And the question still remains, will Gordon Brown take the plunge and sell off the majority of Britain's gold reserves? As the price of the commodity continues to near the $600 mark, the heat under Brown's collar could be just enough to lift the golden latch.

According to Gabriel Rozenburg, reporter for the Times, "The Chancellor sold 395 tonnes of Britain’s gold reserves between 1999 and 2002, generating $3.5 billion. At yesterday’s London closing price of $554.10 he would have generated more than $7 billion (£4 billion)."

With all the speculation factored in, that gold will peak at around $800 by the end of the year, keeping an eye on Mr. Gordon's temperament, could prove useful.

Bill Jamieson, reporter for the Scotsman newspaper exclaims of gold's upsurge: "This is all deeply embarrassing for our Chancellor, Gordon Brown." Brown has been known for his poor timing in the past, selling off the country's gold reserves at inopportune moments. Will he step in and lay a correction for his past actions? Stay tuned.

ETF Ruling Is Here

The long awaited news that silver will become and Exchange Traded Fund is in. Reuters is reporting that: "U.S. benchmark silver futures shot to a 22-year high on speculative buying on Tuesday after the U.S. Securities and Exchange Commission approved rule changes for a silver exchange-traded fund." Silver for May delivery also is reported to have received a shot in the arm.

One the other side of the equation, critics are toting that silver has been overvalued in its own right, irregarldess of the outcome of the ETF ruling. The proof will be in the pudding, whether or not this will be the case over the upcoming months, once the fever has finished breaking.

Gold at Highest Rate Since December 8th, 2005

As of Friday, March 10th, gold took a rise not seen since late last year. What did analysts attribute to this recent increase? Oil and the Euro seem to be what lies behind the scenes, as we see gold make a slight adjustment. More from The News International, in Pakistan.
___________________________________________________________________

"GOLD: Gold climbed to its highest level this year, amid a plunging US dollar and surging oil prices.

An ounce of gold climbed to $446.76 Thursday spot price and $443.70 Friday for the fixed price — its highest level since December 8. "A stronger euro and new highs of crude lifted the yellow metal back above 440 dollars," said UBS analyst John Reade.

The dollar plunged to a two-month low point against the euro this week on structural concerns over the US twin deficits, making gold — priced in dollars — cheaper to buyers using other currencies. Record oil prices boost gold as it is deemed a less risky investment."

A Recipe for Portfolio Success?

This check list, prepared by Chairman of Weiss Ratings, Mark Weiss, was recently posted on "Precious Metals Warrants." Weiss' advice to include gold in one's portfolio to balance things out, could need further examining. Taking a look at how the mining industry is shaping up after last year's trend in mergers and acquisitions amongst some of the world's leading gold mining companies (ie.Barrick/Placer Dome), Robin Bennett of Hunter Dickinson Inc. says, "once the waves of post merger integration have smoothed, we will see a further increase in appetite amongst majors, to earn into junior mining assets that have projects close to production."

Keeping an eye out for this trend, could help aid in understanding how these markets will turn.


Warning! Fiscal Hurricane Approaching! Is Your Portfolio Secure? Part 1

Martin Weiss, Chairman of Weiss Ratings, Inc. and author of ‘The Ultimate Safe Money Guide,’ has said:

1. “Get out of the stock market."
2. Put up to 60% into short term treasury bills.
3. Put up to 20% in 3-5 year treasury notes.
4. Put 10% to 20% into gold bullion and/or gold mining shares (Editor’s Note: and other precious metals and energy stocks and/or the warrants of those that expire in more than 3 years) depending on how bullish you are on this sector.
5. Put 10% to 25% in one of a variety of hedge funds depending on how aggressive you want to play the market.
6. Be patient and wait for the bottom of the stock market and then buy with both hands but beware of false bottoms. Include gold, etc in such a portfolio because gold is negatively correlated with other asset classes. It is a great way to balance your portfolio.
7. Pay off all your debts including the mortgage on your home.
8. If you are mortgaged to the hilt then sell NOW and rent for a few years and then buy back in, if you wish, once prices have dropped (and they will!) or once the danger of the decline has blown over."

USD and JPY Currency Pair Could Show Signs of a Larger Turn, March 2

"Lien recommended as technically strategy that USD/JPY has broken below a 2 month trend line as well as its shorter term 20-day SMA and longer term 100-day SMA. The breakdown signals a possible shift in trend, but we would need to a close below 115.00 to get the real confirmation that USD/JPY uptrend has no run its course and is essentially over. However, if the currency pair manages to close back above 117.50, then the downtrend is negated and the uptrend in USD/JPY remains intact. "

Gold Futures Are Up In This Morning's Trading, March 2

SAN FRANCISCO (AFX) -- Gold futures edged higher Thursday on the heels of a two-session climb, with the April contract up $1.10 at $566.90 an ounce. The contract touched a three-week high of $569 on Wednesday. "There's little reason to be overly concerned about any major retracement, but there's also little evidence that the market will break out to new highs anytime soon either," said Dale Doelling, chief market technician at Trends In Commodities. "Traders' patience will likely be tested over the next several weeks and one side will finally cry 'uncle'," he said

Iraq Influence on Gold Prices Once Again

The technicals are looking down, but the fundamentals have hormones," said Julian Phillips, an analyst at GoldForecaster.com.

From CBS Market Watch:

"Gold futures closed out last week with a 1% gain, prompting some traders to take profits, but fresh violence in Iraq and the recent bombing at an oil refinery in Saudi Arabia -- among other things -- continue to boost the metal's safe-haven status. "
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BE50DD819%2D8526%2D4DE1%2D8915%2D2E98280178BA%7D&dist=newsfinder&siteid=mktw&link=&keyword=gold

Technical Talk, With Merv Burak

In his weekly spot on Kitco.com, Merv gives us the goods, on where he sees gold for the short and long haul:

For week ending 24 Feb 2006

"Despite a few volatile days the four days of trading this past week were basically lateral. Unfortunately, we may be in for a period when sudden world events may command the attention of gold speculators so be prepared for possibly more than normal volatility."

GOLDLONG TERM

"Well, the sky still hasn’t fallen so disaster is still not yet upon us, but who knows what tomorrow will bring. Looking at the long term charts of gold, P&F or the various bar charts, they all seem to look the same with barely any hint of trouble ahead. It’s only when you look deeper that things start to get murky. The P&F chart is still far from any reversal point but also some distance from new highs. The trend may be more lateral for some time, within wide up and down yo-yo moves. Despite what I may think, we still have that very bullish momentum reading that has caused previous moves to come to an end and take several months before recovering. When will it really start its reaction period? All indications are that it has started but the charts are just not highlighting it yet. Things are more obvious on shorter term charts."

What's Happening with the Silver ETF?

From 'Safehaven Preservation of Capital'

"Will the SEC approve the ETF? I think so. The reason is that since the gold ETF's were approved, there is little legal justification for a denial. Without legal grounds upon which to base a denial, how can the SEC deny it? The Silver User's Association's plea contained no legal basis for a denial, just a whining anti-free-market hypocritical, self-serving, short-sighted, wrong-headed, rant.

When will it be approved? I don't know.

Is it overdue? I don't think so. Barclays filed in the summer of 2005, and we might have to wait until the spring or summer of 2006!"

What's Happening with the Silver ETF?

From Safehaven Preservation of Capital

"Will the SEC approve the ETF? I think so. The reason is that since the gold ETF's were approved, there is little legal justification for a denial. Without legal grounds upon which to base a denial, how can the SEC deny it? The Silver User's Association's plea contained no legal basis for a denial, just a whining anti-free-market hypocritical, self-serving, short-sighted, wrong-headed, rant.

When will it be approved? I don't know.

Is it overdue? I don't think so. Barclays filed in the summer of 2005, and we might have to wait until the spring or summer of 2006!"

CNN Money Reports

Two weeks of gains

Markets manage second 'up' week on bets that war is delayed; next week heavy on economic data.February 21, 2003: 8:03 PM EST

NEW YORK (CNN/Money) - U.S. stocks managed to close higher for the second week in a row on gains Friday, as investors bet that a U.S.-led military attack on Iraq is still a few weeks away. But next week's market may not be so lucky.

Although few analysts expect any Iraq resolution in the next few weeks, market participants will have plenty of other issues to keep them distracted.

Next week is again heavy on economic reports. Existing home sales and consumer confidence data are both due Tuesday. Thursday brings reports on durable goods orders and new home sales. Friday is a doozy: reports are due on preliminary fourth-quarter gross domestic product, the revision of the University of Michigan's consumer sentiment index, and regional manufacturing activity.

Gold and Silver Futures Article Featured on Silver Strategies.com

Where the New Money Is: A Snapshot of Gold and Silver Futures
By Jennifer Lee
Feb 13, 2006

There’s no doubt about it, gold and silver are on the rise. Gold futures were sitting at a 25 year high by mid January of this year, with current rates resting at around 553.80 an ounce. Silver is not too far behind this hurdle, reaching a 22 year high at the end of this month, now up to $9.44 an ounce, with talk of it reaching the $10.00 mark in the none too distant future. ...

Source: http://www.silverstrategies.com/defaultIE.aspx
http://www.gold-miningstocks.com/Articles/Gold_Silver.asp

News from FX Street

Metals

Nice rebound on Gold (GCJ6) yesterday to retest the $572 level but we had some heavy profit taking during the Asian session sending the metal back to the $560 level. Look for direction to come from crude Oil and Iran developments. We could see a usual short covering before the week end. Intraday: We suggest to Buy at $560.50; target $567 stop $559.30.

source: http://futures.fxstreet.com/Futures/content/100290/content.asp?menu=commodities&banner=saxo