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Gold Today News
Nov 12th
World Bank president Robert Zoellick has called on bickering G20 nations to bring gold back into the global monetary system as an anchor to guide currency movements.
Ahead of a Group of 20 summit this week in Seoul, Zoellick said an updated gold standard could help retool the world economy at a time of serious tensions over currencies and US monetary policy. He said the world needed a new regime to succeed the “Bretton Woods II” system of floating currencies, which has been in place since the fixed-rate currency system linked to gold broke down in 1971.
The new system “is likely to need to involve the dollar, the euro, the yen, the pound and a renminbi (Chinese yuan) that moves towards internationalisation and then an open capital account”, he wrote in Monday’s Financial Times. “The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values,” Zoellick said in a commentary piece.
“Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today.”
The original Bretton Woods agreement laid out a US-led framework for stability in the world financial system after World War II, with the US dollar pegged to gold and controls in place to limit the flow of capital. The gold standard is believed to help guard against inflation but does not allow for the flexible monetary policy that many economists believe is essential in counteracting economic shocks. It was abandoned by US president Richard Nixon in 1971 as the dollar’s value plummeted relative to gold. Today, gold prices are again riding as investors seek a timeless hedge against the risks of inflation and US indebtedness.
Zoellick acknowledged that forging a new monetary agreement to govern the world economy would take time, two years after the West’s worst financial crisis since the 1930s. “But we need to begin,” he wrote.
The World Bank chief’s comments came amid worries of a new “currency war”, when countries jostle for trade advantage by massaging their exchange rates lower.
The United States has led accusations that China cheats in world trade by artificially weakening its currency. But Washington also stands accused of tolerating a weak dollar, roiling emerging markets whose own currencies are rising strongly, hurting their export competitiveness. The complaints have intensified since the Federal Reserve last week announced a $US600 billion shot of monetary stimulus – in effect printing money that other economies worry will flood their markets.
Zoellick also called on the G20, whose leaders meet in the South Korean capital on Thursday and Friday, to forge structural reforms, including more domestic demand in China and more debt-reduction in the United States. Major economies “should agree to forego currency intervention, except in rare circumstances agreed to by others”, he added. The G20 could work out tools to help emerging economies cope with the kinds of hot-money flows that are now driving up their currencies and creating fears of asset bubbles. And the G20 should “support growth by focusing on supply-side bottlenecks in developing countries”, such as infrastructure, agriculture and a lack of skilled labour, Zoellick said.
“Perhaps most importantly, this package could get governments ahead of problems instead of reacting to economic, political and social storms,” the World Bank president said.
He argued that the G20 faced a choice between “drive or drift”.
“How the G20 decides could determine whether multilateral co-operation can achieve a strong economic recovery,” Zoellick concluded.
Source: ninemsn
Gold Price For QEII?
Nov 2nd
There’s been a lot of jawboning about a bubble in Gold Prices lately. And yesterday, just ahead of the Federal Reserve’s much-anticipated statement on QEII, bullion prices sank. Judging from Thursday morning’s price action, you’d hardly think so.
Financial advisers often caution investors about the volatility of commodities. That advice certainly seemed prescient with respect to gold over the past two trading sessions. After a tension-filled week awaiting a Fed announcement outlining the scope of QE2II, metal prices broke $19 lower per ounce on Wednesday, bringing Spot Gold bullion down to the $1337 level.
With the second round of quantitative easing defined – more or less as anticipated, actually – traders and investors adjusted their positions. A lot of the recently long were tossed from the ranks yesterday, helped by traders anticipating further weakening in bullion. Speaking of open interest, speculative long interest at Comex had actually been waning well ahead of this week’s events. Net speculative length in Gold Futureshad been shrinking for a month. The total of money managers’ net exposure to gold, together with large and small non-institutional traders’ positions, fell by more than 26,500 futures contract equivalents, or 8%, after 10 weeks of constant building.
That, coupled with negative money flows in the SPDRs Gold Shares Trust (NYSE Arca: GLD) and some pullout from the trust’s vault assets, gave bearish traders ideas. In October, the trust’s Money Flow Index – a volume-weighted metric of capital commitment – peaked and began a precipitous fall even as share prices continued to rise for another two weeks.
GLD’s smart money saw the rise in share prices above the $132 level as overextension, given the depth of the pivot-point turnaround in July. The trust’s price, which mimics gold’s trajectory, peaked near $135 in mid-October, after a 30% overshoot. More >
FAQ : Gold
Aug 31st
Alchemy: Can base metals be turned into gold?
All metal atoms are made of the same building blocks of protons, neutrons and electrons, but in different quantities, so in theory it could be possible to change base metals into gold or any other metal of value to mankind. In practice, it is achieved only in nuclear reactions, where heavy radioactive metals decay into other lighter elements, including some isotopes of gold. However, man’s ancient dream of turning base metals into gold is not a practical proposition. So it remains a dream!
Am I better off buying bullion bars or coins?
Bullion bars and coins are priced on the basis of their fine gold content. However, different premiums may be charged by the same dealer, depending on the availability of each type of bar or coin. You may also want to check, at the time of purchase, how much commission would be charged to buy back any bars or coins should you wish to trade them in the future. Apart from your individual preferences for the way bullion coins and bars look, the premium charged over and above the gold price would probably be the deciding factor.
Are there likely to be new practical uses for gold discovered in the coming years?
Almost certainly. There is a very active network of university researchers studying the advanced scientific properties of gold, actively supported by the gold mining industry. The last international gathering of these researchers attracted over 250 delegates from around the world, Scientists are looking at how gold can be used effectively for a diverse range of new applications including advanced electronics, fuel cells, cancer treatments, and chemical catalysts. In the last 10 years over 39,000 patent applications were published relating to the technical use of gold in practical applications, so new uses for gold will soon emerge based on these patented technologies.
As well as electrical conductivity and corrosion resistance, what other properties of gold are useful?
Gold, like other important metals, has some unique physical, chemical, and optical attributes that mean it is the best material for a certain application. For example, gold is very ductile and for some electronic components like bonding wires, the ability to draw gold alloys into extremely thin diameters without breaking is a critical property in the manufacturing process.
Gold is also extremely malleable, so in the annealed state it can be hammered cold into a translucent wafer 0.000013 cm thick. One ounce of gold can be beaten into a sheet covering over 9 square metres and 0.000018 cm thick. Bulk gold has a familiar yellow colour of course. However, when particles of gold are small enough their colour is actually ruby red.
This effect has been used to colour glass red, even in Roman times, but if such tiny particles are allowed to coalesce in a controlled fashion, their colour can be varied from pink through violet to blue. This unique property has been used as a colorimetric indicator in home pregnancy tests. More >
Gold History : Modern (1800 onwards)
Jun 30th
The 19th aeon began, in some means absolutely prophetically, with gold actuality apparent at Little Meadow Creek, North Carolina in 1803, sparking the aboriginal US gold rush. For the abutting 25 years, North Carolina supplied all the calm gold coined for bill by the US. Mint in Philadelphia. In 1817, Britain alien the Sovereign, a baby gold bread admired at one batter sterling.
Perhaps the century’s cardinal ‘gold moment’ came in 1848, back John Marshall begin flakes of gold while architecture a sawmill for John Sutter abreast Sacramento, California, triggering the California Gold Blitz and dispatch the adjustment of the American West. But the furnishings weren’t bedfast to the United States; in 1850 Edward Hammond Hargraves, abiding to Australia from California, predicted he would acquisition gold in his home country aural a week. And he did, in Fresh South Wales. 1868 saw the abutting above discovery, in South Africa, area George Harrison baldheaded gold while digging up stones to body a house. Since then, South Africa has been the antecedent of about 40% of all gold anytime extracted from the earth.
In 1900, the Gold Accepted Act placed the United States clearly on the gold standard, committing the country to advance a anchored barter amount in affiliation to added countries on the gold standard. This lasted until 1919, back Apple War I affected both the USA and Britain to append it. But the aboriginal 20th aeon additionally saw fresh discoveries and developments in award out about the versatility of gold. The ancestor of avant-garde psychology, Sigmund Freud, alike speculated about our attraction with gold, which he of advance put bottomward to ‘the amative fantasies of aboriginal childhood’! More >
Gold History : Early avant-garde (1400 – 1800 AD)
Jun 20th
Throughout the aboriginal avant-garde aeon gold connected to comedy an important allotment in our cultural expression. Whether in the branch of religion, politics, education, architectonics or authentic entertainment, gold’s afterglow would consistently affect and inspire.
Battle of the tribes, watched by Majnun, c1492. (artist unknown) Majnun watches a action fought by men on band with swords and annular shields. Gold accomplishments with Persian calligraphy at top left. From a abundantly illustrated copy of “The Story of Leyla and Majnun” by the abundant Persian artist Nezami .
The 16th aeon saw no abatement in adamant leaders active afterwards gold. In 1511, King Ferdinand of Spain fabricated his acclaimed alarm to action: “Get gold, humanely if you can, but all hazards, get gold”, ablution massive expeditions to the anew apparent acreage of the Western Hemisphere. It wasn’t until about 200 years later, in 1700, that gold was apparent in Brazil, which by 1720 became the better producer, amenable for about two-thirds of the world’s gold output.
In 1700, Isaac Newton (as Master of the Mint) anchored the amount of gold in Abundant Britain at 84 shillings, 11.5 pence per troy ounce. The Royal Commission, composed of Newton, John Locke and Lord Somers, recommended a anamnesis of all old bill and the addition of fresh a coin, with a gold to argent arrangement of 16:1. The gold amount accustomed in Abundant Britain was to aftermost for over 200 years.
In 1744, the improvement of gold mining in Russia began with the analysis of a quartz bulge in Ekaterinburg. Forty years later, the aboriginal US gold bread was addled by Ephraim Brasher, a goldsmith, to be followed in 1792 by the United States actuality placed on a bimetallic silver-gold accepted beneath the Coinage Act, which authentic the dollar. However, it wasn’t until 1799 that the United States aboriginal apparent gold – a 17-pound asset in Cabarrus County, North Carolina.