More Evidence Gold is Being Hoarded as Comex Fulfills Gold Contracts With Paper

By Duncan Davidson|Dec 2, 2009, 1:31 PM|Author's Website

My bet that by 2020 we will return to some form of gold standard is looking better. Something is up when gold is being hoarded to such an extent that the futures exchanges cannot fulfill with metal but have to try to stiff the contract holder with paper. Now, they have done this in the past, and gotten away with it, but according to this story, never so aggressively.

Prof. Antal Fekete has been on this story for several months, and has set forth in some detail how the gold basis is being manipulated, perhaps because of hoarding. (The basis is the delta between the cash price and the next futures price.) Yves has had several posts on Gold Panic, and it is consistent with the good Professor’s analysis.

Another aspect of this story is the collapse of Barrick’s hedging strategy. Barrick Gold (ABX) is the largest gold mining company and had been following a really dumb hedging strategy which had been to take naked short positions (shorting gold they did not possess). In a world of gold hoarding, they may not be able to cover, even at a loss. The strategy was so risky that a conspiracy theory had evolved that Barrick was front-running the US government to keep the gold price down. Lending support to this is the question: why would a gold production firm try to cap the gold price? An answer which does not require the conspiracy is that Barrick had less gold in the ground than it wanted to reveal, and so was engaged in a confidence game of the first order. The weak Dollar (driving gold up) and the hoarding has called their bluff.

con.

http://wallstreetpit.com/12586-more-evi ... with-paper

U.S. Mint now suspends all one ounce gold coin sales due to shortage of physical gold!

Once again the U.S. mint has had to suspend sales of all its one-ounce gold coins, and some fractional ones too, as its supplies of physical gold cannot meet the demand.
Author: Lawrence Williams
Posted: Monday , 07 Dec 2009

LONDON -

"The United States Mint has depleted its inventory of 2009 American Buffalo One Ounce Gold Bullion Coins. ... No additional inventory will be made available. As additional information becomes available regarding 2010-dated American Buffalo One Once Gold Bullion Coins, you will be notified." So said a memorandum issued Friday to authorized purchasers of U.S. Mint gold coins and reported by Jim Sinclair..

Mineweb reported only two weeks ago, on November 25th, the suspension of sales of American Gold Eagle coins by the Mint - U.S. Mint suspends American Eagle 1-ounce gold coin sales - again, which, at the time, reckoned such sales would be resumed early this month - but in the event, not only is the suspension of the Gold Eagle coin sales continuing, but also now the American Buffalo one ounce gold coin sales have also been suspended, with no new sales now planned until some time in 2010 - although the current sharp fall in the gold price may provide the Mint with a bit of respite from its supply/demand woes.

But supply problems also persist with smaller gold coins, particularly given the enormous demand for fractional sized gold coins following the suspension of the one ounce Gold Eagles. Thus the Mint was forced to issue a second memo on Friday saying "the American Eagle Gold Tenth-Ounce Coin inventory was depleted" and that "inventory for the half-ounce and quarter-ounce coins remains very limited." Following the sale of these remaining gold coins on Friday, the Mint anticipated that it would again offer all fractional sizes by mid-December, but in an allocation process.

On a more positive note for the Mint, the resumption of American Silver Eagle bullion sales will resume today. These silver coins were suspended along with the one ounce gold coins a week ago - also due to depletion.

The Mint had been trying to control sales by not releasing the 2009 coins for sale until late in the year - they are usually available throughout the year, but demand has proven to be enormous. This doesn't mean though that coins are not available to the U.S. public as some authorized dealers will continue to hold stocks, although these are being depleted rapidly and premiums charged on sales are increasing.

According to a report on website Coinupdate.com "The US Mint began sales of fractional weight American Gold Eagle bullion coins on December 3, 2009.... These fractional Gold Eagles are typically available throughout the year, but this year the Mint delayed the release to focus production on the one ounce bullion coins. After only one day of availability, the US Mint recorded sales of 56,000 of the one-half ounce coins, 58,000 of the one-quarter ounce coins, and 260,000 of the one-tenth ounce coins. They have indicated that the inventory for one-tenth ounce coins has already been depleted and the inventory for one-half and one-quarter ounce coins is limited. The remaining limited inventory will be offered via the US Mint's standard allocation process and additional inventory is expected to be available in mid-December."

While the shortage of U.S. Mint offerings due to demand exceeding supply is, in reality, not that significant in terms of global gold sales it does demonstrate the extent to which demand for easily available physical gold has increased over the past two years. Some of this has been the ever increasing interest by the U.S. public in gold in general and also a certain amount of distrust generated by some commentators as to whether the various ‘paper gold' offerings were secure.

http://mineweb.co.za/mineweb/view/minew ... &sn=Detail

Pssst - wanna know how scared investors (especially da big boys) are?

Gold continues record-breaking rally
By Annalyn Censky, staff reporterMay 12, 2010: 7:44 AM ET


NEW YORK (CNNMoney.com) -- Gold continued its record-breaking climb in global markets Wednesday, after settling at an all-time high during volatile trading the day before.

What prices are doing: Gold for June delivery was up as much as $25.10, or about 2% before U.S. markets opened, putting the precious metal at a new intra-day high of $1,245.40 an ounce. It eased to $1,240.80, up $20.50.

It reached its previous intra-day high, $1,226.10, on Dec. 3, 2009.

What's moving the market: Uneasiness about a volatile stock market is a boon for the precious metal, which is considered a safe-haven investment in times of economic uncertainty. On the day of the stock market's so-called "flash crash" last week, gold rallied 2%, settling at $1,197.30.

Choppy trading since then has further boosted the metal's upward momentum, as gold went on to settle at a new all-time high of $1,220.30 on Tuesday.

Concerns about the European debt crisis, which have kept markets seesawing since the Dow's near 1,000-point drop last Thursday, have amplified uncertainties about a global economic recovery. In turn, that has boosted the appeal of tangible commodities over paper currencies or equities, which are seen as higher risk, analysts said.

Investors are also wary that Europe's nearly $1 trillion rescue package announced over the weekend will speed up inflation and weaken the euro, analysts saidy.

What analysts are saying: Jeffrey Nichols, managing director of American Precious Metals Advisors and senior economic adviser to Rosland Capital, has for the last year predicted that gold would reach a new high by the middle of 2010. He expects it to continue its upward trend and reach a $1,500 high by the end of the year.

http://money.cnn.com/2010/05/12/markets/gold/index.htm?hpt=T2