This Says Gold Is Going To $2,500 In Two Years

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The China Gold Rush Story Bulls Are Throwing Around

Yesterday we mentioned how the World Gold Council was banging the drum on Chinese gold demand, even suggesting that China could exhaust its natural gold reserves in the ground in just six years.

Here's a chart of Chinese domestic gold production (supply) vs. Chinese demand for gold, courtesy of China Daily. It shows how demand has outstripped domestic production for nearly two decades, and how gold demand has almost doubled over the last ten years.

The World Gold Council believes that Chinese demand could double again over the next decade and that, in a rush to expand domestic production, thinks China fully deplete its known gold mining reserves.


Read more: http://www.businessinsider.com/here-it-is-the-china-gold-rush-story-bulls-are-throwing-around-2010-3#ixzz0jjglm9Df



Vincent Fernando writes for the Business Insider

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The Upcoming ETF Unwind Will Pummel Gold

Credit Suisse Standard Securities precious metals analyst David Davis has issued a warning for gold.

Basically, the market experienced a surge of gold ETF buying over the last year, which became the key driver for gold prices. It wasn't like this back in the pre-ETF days mind you, this is how the gold market has changed dramatically into something far more speculative than it used to be.

Now, should ETF demand dry up, the market's supply/demand could be horrendously skewed, according to Mr. Davis: “We believe that a major problem is looming on the horizon should investment demand remain muted and/or should investment demand start falling away over the next three to five months,” he said in a research note.

“We believe that the possible muted and/or decline in year-on-year investment demand for ETFs will play a pre-eminent role as a swing factor in our supply and demand balance for 2010.”

ETF demand was 85% higher for 2009 compared to the previous year at nearly 600 tonnes, driven largely by a strong performance in the first quarter. This demand dropped off sharply by the fourth quarter of the year, coming in two thirds lower compared to the same time a year earlier.

“We are of the view that there is increasing downward risk to the gold price should the pace of sales increase. We estimate that institutional divestment alone has the potential to release between 200 tonnes and 300 tonnes in 2010,” Davis said.


Reporter Vincent Fernando, CFA is a writer for The Business Insider



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Russia Accumulates Gold, BRIC Nations Sense The Age Of The Dollar Is Toast

As you know, Russia, India, China and some of the BRIC-like countries will continue to push hard for a gold and silver content in the new formulation of the SDR this year. The US and UK are vehemently opposed.

Europe is still wallowing in confusion and is virtually leaderless, as the most recent financial crisis in Greece shows. This may not be all bad, because it highlights the weaknesses in their union, and gives them the incentive to take it to the next step.

One cannot have a common currency with uncommon fiscal policies and laws. While there is some room for discretion, it is sorely tried in changing economic conditions and social attitudes. America went through a bloody Civil War for this reason.

This is why a one world currency, except for international trade only and at the discretion of trading partners, is so dangerous. One cannot maintain their sovereign freedom when someone else controls the supply of their money: either you cheat or you submit. All serious economists understand this; too few of the voting public do.

What Will the World Currency Become? The Stakes Are Enormous

And the Winner Is...the SDR?

This is the fallacy of the US dollar as the reserve currency for the world. It 'worked' as even Mr. Greenspan noted, as long as the US dollar was able to demonstrate the objective stability of an external gold standard relative to other currencies. That lasted for a few years, and the rest is foreign policy and currency wars. The time for its replacement is long past. The BRIC's understand this, and are playing their hands accordingly.

If one submits to a single world or regional currency for domestic use, they may as well take their constitutions and individual rights and throw them away. And globalization has been serving as a proxy for this, paving the way.

Gold and Economic Freedom: Did Greenspan Know What He Was Doing? - ZeroHedge

The moves here are slow and subtle, since great nations are involved. I get the impression, though, that most traders are playing checkers at a chess match. Well, that works for the daytrade. But only time will tell what will happen, and when. But sometimes events can break free and move quickly. Best to gather those nickles off the freeway before the rush hour commences.

Or as the man behind the .50 cal would say, 'Git some. Come git some.'


Read more market commentary at Jesse's Cafe Americain



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China Reveals That It's A Major Investor In US Oil Trust, Gold ETF

From Joe Weisenthal at The Business Insider....

It's well known that China has been making huge strategic purchases of commodities in order to support its rapidly growing economy over the coming years.

What's also interesting is that the country is placing financial bets on these commodities as well.

The nation's big sovereign wealth fund, the China Investment Corp, has revealed that it's the No. #4 investor in the US Oil Fund ETF (USO), as well as a major investor in the SPDR Gold Trust (GLD), both of which are the pre-eminent market traded vehicles for their respective commodities.

One theory put forth by an analyst to Bloomberg: these investments are basically a hedge. They know that when they buy into a commodity they push up the price, so these bets allow them to recoup some of that upside.

Of course, if deflation causes commodities to slump, then they've got trouble on both ends.


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