Is Gold considered as investment or insurance?

[Life is a game]

Sometimes I cannot comprehend. With stimulus printing and ultra low interest rate environment... how can the currencies be strong.

GOLD is priced in USD, not jap yen or euros. Markets participants generally react according to how they think the future will be and how much uncertainty it is, not what the present or past will be.

Talking about Gold, i wonder whether Mr John 'I am the biggest winner of GFC2008' Paulson is still holding to his stance? Soros is still the best - when the facts change, i change my mind.

Ic, thanks for the feedback.

[orangetea]

For contarian thots and going long, perhaps a quality company like Gold Corp (GG) seems good to go betting long.

http://www.fool.ca/2014/11/03/goldcorp-i...a-bargain/

http://www.fool.ca/2014/11/05/i-hate-gol...dcorp-inc/

[yewkim]

One good point about gold is it will never go to zero, unlike your stock, regardless of what happen. And the best thing is you can leave it to your children. But please buy physical gold because like they say, if you cannot hold it, you don't own it. Buy a little gold for insurance. We may not know what will happen next. Like insurance, they will become shiny when major event occur.

[greengiraffe]

Gold price hits three-week high on rising tensions
DOW JONES NOVEMBER 24, 2014 7:47AM

GOLD prices have closed at their highest level in nearly three weeks, spurred by a drop in the US dollar and tensions in Eastern Europe and the Middle East.

Gold for December delivery rose 1.2 per cent to $US1197.10 an ounce, the highest settlement since October 30 for the most actively traded gold contract on the Comex division of the New York Mercantile Exchange.

Germany’s ZEW index, a widely followed measure of economic confidence, rose in November for the first time in almost a year, suggesting an upturn in the region’s prospects after a year of weakness.

The unexpected gain gave the euro a boost and weighed on the US dollar. A weaker dollar helps lift prices for gold, which is priced in the US currency and becomes less expensive for foreign buyers when the greenback falls.

Political uncertainty also gave gold a boost. Two Palestinians attacked worshippers in a Jerusalem synagogue on Tuesday, killing four and sparking new fears about further unrest in Israel.

In Europe, German Chancellor Angela Merkel expressed concern late on Monday that Russia’s territorial ambitions could extend beyond Ukraine. Some investors believe gold holds its value better than other assets during turbulent times.

Some investors who had bet against gold may also be locking in profits before minutes from the Federal Reserve’s latest meeting are published on Wednesday. If the Fed has a less optimistic view of the US economy, that could push back expectations of when higher interest rates will kick in and boost gold prices. Gold yields nothing and struggles to compete with yield-bearing investments when rates rise.

Overall, “the mood in the gold market has improved somewhat,” said Bob Haberkorn, a broker at RJO Futures.

Still, he warned that expectations that the Federal Reserve would tighten monetary policy next year while other central banks continue to pump stimulus into their economies were likely to boost the US dollar and weigh on gold prices in the next few weeks.

Gold prices hit a four-and-a-half-year low earlier this month.

“We can go lower still,” Mr Haberkorn said.

[Caelitus]

Swiss voters rejected a measure in a referendum requiring their central bank to hold a portion of its assets in gold. The “Save Our Swiss Gold” proposal stipulating the Swiss National Bank hold at least 20 percent of its 520-billion-franc ($540 billion) balance sheet in gold and never sell any bullion was voted down by 77 percent to 23 percent. Voter participation was 49%.

It currently holds 1,040 tons of gold, or about 8 percent of its assets. The Swiss already have the world’s highest amount of bullion per capita.

Snippet extracted from Bloomberg.

[greengiraffe]

India scraps gold import curbs
AFP DECEMBER 01, 2014 1:30AM

Leading gold buyer India has announced it has eased controls on imports of the yellow metal after its current account deficit narrowed sharply.

India, the world's second-biggest gold buyer after China, imposed the import restrictions last year to avert a trade deficit crisis that pushed the rupee to record lows.

"Restrictions placed on import of gold... stand withdrawn with immediate effect," India's central bank said in a statement on its website on Saturday.

The so-called 80:20 import rule meant 20 per cent of all imported gold had to be exported before any new shipments could be brought in.

Jewellers use the gold and make it into jewellery for export.

"The falls in gold and more significantly oil prices over the past few months have substantially reduced India's import bill," said research house Capital Economics analyst Shilan Shah.

"Even if India's gold imports now pick up, the threat of the current account deficit ballooning to previous levels is slim," Mr Shah said.

But import duty on gold imposed by the government remains at a record 10 per cent.

India imports around 90 per cent of its gold needs and its 1.2 billion population is believed to have one of the world's biggest private gold hoards of up to 20,000 metric tonnes.

In the third quarter, Indian jewellery demand rose almost 60 per cent to 182.9 tonnes in the months to September, the World Gold Council, an industry organisation, reported.

That was the second-highest total on record, the council said.

The sharp fall in the price of gold has sent Indians flocking to buy the metal.

Gold demand traditionally peaks during the August-to-November wedding season and the Hindu festival of Dhanteras, as the country's more than 800 million Hindus consider the festival season an auspicious time to buy or give gold as a gift.

[greengiraffe]

Swiss reject plan to buy more gold
AP DECEMBER 01, 2014 7:49AM

SWISS voters have overwhelmingly rejected three citizen-backed proposals to protect the country’s wealth by investing in gold, drastically limit immigration and eliminate a special tax that draws rich foreigners.

The separate proposals — put to voters nationwide yesterday by conservative politicians, ecologists and a liberal group — had needed a majority of voters and Switzerland’s 26 cantons (states) to pass.

A proposal to require the central bank to hold a fifth of its reserves in gold was opposed by 77.3 per cent of voters, according to final results from Swiss broadcaster SRF.

It would have forced the Swiss National Bank (SNB) to buy massive amounts of gold within five years, likely causing its global price to jump.

Finance Minister Eveline Widmer-Schlumpf said the vote reflects people’s confidence in the SNB and the view that gold is no longer as important as it once was as a tool to back up paper money.

The SNB praised the outcome because it said the initiative would have “severely constrained” its ability to protect the country’s interests through stable prices balanced with economic development.

A proposal to limit immigration to 0.2 per cent of Switzerland’s population — about 16,000 immigrants a year for a country of eight million — was opposed by 74.1 per cent of voters. None of the cantons came out in favour.

Currently, immigration is estimated at around 80,000 a year.

The “Ecopop” initiative would also have forced Switzerland to devote a large chunk of its foreign aid to programs aimed at reducing population growth in poor countries.

Andreas Thommen, a Green Party member who oversaw the campaign, told SRF it had been “a David and Goliath battle” against the establishment, and Switzerland “missed the opportunity to set the course for a sustainable future”.

A third national referendum, which would have abolished special tax discounts for rich foreigners living in Switzerland, was also defeated.

About 59.2 per cent voted against the measure, and only one of the country’s 26 cantons said yes to getting rid of a flat tax rate that helps attract the super wealthy.

Swiss voters rejected a measure in a referendum requiring their central bank to hold a portion of its assets in gold. The “Save Our Swiss Gold” proposal stipulating the Swiss National Bank hold at least 20 percent of its 520-billion-franc ($540 billion) balance sheet in gold and never sell any bullion was voted down by 77 percent to 23 percent. Voter participation was 49%.

It currently holds 1,040 tons of gold, or about 8 percent of its assets. The Swiss already have the world’s highest amount of bullion per capita.

Snippet extracted from Bloomberg.

[specuvestor]

Sentimental gold bugs still have no idea why a gold standard doesn't work. Fiat is not perfect and honestly CBs are still experimenting with it but seems like the best we've got.

Issue with currency is that unlike stocks, there is no absolute value but only relative. That's why people are always trying to search for an anchor

[greengiraffe]

Gold jumps price 3.6 per cent to one-month high
DOW JONES DECEMBER 02, 2014 8:00AM

GOLD prices surged to a one-month high overnight as a rush of safe-haven buying sparked by Japan’s credit rating downgrade forced bearish investors to clamour for the exit.

Gold for February delivery, the most actively traded contract, rose $US42.60, or 3.6 per cent, to settle at $US1218.10 an ounce on the Comex division of the New York Mercantile Exchange. This was the highest settlement since October 29, when futures closed at $US1224.90 an ounce.

Moody’s Investors Service cut Japan’s government debt rating by one notch yesterday, sparking a rally in gold during electronic trading overnight. The credit ratings firm flagged delays to planned tax increases as fuelling uncertainty over Japan’s ability to reduce its fiscal deficit.

“Any sort of major downgrade raises questions about credit quality, and we’re having a rush back into basics,” George Gero, a senior vice president with RBC Capital Markets Global Futures, said.

Gold is viewed by some investors as a safe place to stash their wealth on the belief that the precious metal will retain more of its value than cash or paper assets like stocks and bonds during periods of instability.

A tumultuous day in the currency markets, which saw the yen and the US dollar pull lower, also lent support to gold prices. As the US dollar eases, dollar-denominated gold becomes less expensive for buyers using other currencies.

“The dollar being off and Japan being downgraded together is helping push the gold prices back up,” Thomas Capalbo, a broker with Newedge in New York, said.

Gold’s gains accelerated as prices broke above $US1190 an ounce, triggering automatic buying orders, brokers said. Bearish traders who wagered on further losses in gold often put automatic buying orders to limit potential losses if the market moves higher.

The flurry of purchases helped gold and silver futures post their biggest one-day gain since September 19, 2013. Silver for March delivery ended 7.3 per cent, or $1.136, higher at $US16.692 a troy ounce.

While gold prices have been stabilising in recent weeks, the number of open contracts has dropped 21 per cent between November 20 and Friday. This is a sign that bearish investors are leaving the market, rather than new buyers flocking to gold, analysts said.

Still, investors won’t know for sure what drove gold prices higher until Monday’s open-interest figures are published on Tuesday, according to James Cordier, a principal with Liberty Trading Group.

“All eyes will be on whether these are new longs or previously covered positions,” he said.

The outlook for gold has brightened as a result of Monday’s move higher, Mr Cordier said.

The global economy stands on a firmer footing than it has in years, and with central banks likely to be slow to raise interest rates in 2015, it sets the stage for gold prices to rally, he said.

Platinum futures tracked gold higher, ending near a one-month high. Platinum for January delivery rose 2.5 per cent to $US1,241.60 an ounce, the highest since November 3.

[greengiraffe]

HK gold sales fall as China tackles corruption
DOW JONES DECEMBER 02, 2014 2:30PM

HONG KONG-For years, Wo Shing Goldsmith has warmly ushered in eager buyers from mainland China, with customer traffic peaking at year-end. But shoppers are few and far between this year as Beijing’s anti-corruption drive damps spending.

“There was a sudden drop in gold price last year, which fuelled high demand from China. So we sold a good amount last year,” says Cheung Wai Nam, the 68-year-old co-owner of Wo Shing. “But this year...there is not too much demand.”

The store, opened in 1892 in Yau Ma Tei , part of the shopping district of Kowloon, displays chunky gold jewellery, with an old work bench scattered with tools and an ancient-looking metal vault in the back. The shop, next to a dried-seafood store on a busy street, deals mainly in accessories such as rings, bracelets and golden-pig necklaces.

On a recent afternoon, fewer shoppers than normal could be seen entering neighbouring stores.

Mr. Cheung says sales are down by about 20 per cent from last year, and that more expensive items are suffering the most. That marks a shift from 2013, when prices “didn’t matter at all, so long as it was made of gold,” he says.

Falling demand in Hong Kong is a serious blow to gold. The city is the trading hub for China, the world’s largest consumer. Buyers typically step up purchases in late November to use as gifts for Lunar New Year celebrations early in the following year. The decline comes as investors elsewhere are also ditching the safe-haven metal for riskier assets such as equities, sending gold plummeting in recent months.

Gifts of solid gold bars, jewellery and even images of ancient Chinese figures are common enough among members of wealthy families and Chinese businessmen looking to sweeten deals. But a crackdown on these golden gifts that began early this year and intensified in early summer-part of a broader effort to eliminate corruption on the mainland-has vaporized demand, analysts say.

“They want to capture not only the tigers, but also flies,” Edmund Moy, chief strategist at U.S-based Fortress Gold Group, says of the crackdown, referring to top officials as well as those lower down. Fortress Gold provides investment products linked to the metal.

A report on third-quarter demand by the World Gold Council, an industry group, said Chinese consumers are increasingly buying 18-carat gold jewellery, rather than rings and necklaces in pure 24-carat gold, a shift that it said may have resulted in part from the effort to fight corruption. Eighteen-carat jewellery is often purchased to wear, while 24-carat products are seen more as a financial investment.

China’s gold demand is expected to be no more than 850-950 tons this year, compared to a record of more than 1,000 tons last year. So far this year, demand is 39 per cent below the level in 2013, and is more in line with demand in 2012, according to the Council.

As demand weakened, the price of gold in China, usually $3-$5 an ounce higher than on the international market, slid to a discount in early November. Buying has picked up slightly since then, leaving the price $1-$2 above international levels.

Premium levels aren’t pointing to an upsurge in demand, traders and analyst say. They argue that the pickup in demand is likely to really strengthen only in January, but that seasonal buying isn’t likely to push gold prices out of their current trough.

Prices of gold hit a four-and-a-half-year low of $1,138.24 an ounce in early November. Monday afternoon in Hong Kong, it was at around $1,151, weighed down by a vote in Switzerland rejecting a proposal that would have barred the central bank from selling gold in the future.

Anita Limbu, a Hong Kong-based manager at Indra Baraha Jewellery, an international jewelry chain, said big swings in prices are cutting into demand for gold. “People are hoping that prices will fall further,” she said.

Kevin Yu, a jeweller in the Mong Kok area, where traffic had been disrupted by Hong Kong’s ongoing pro-democracy protests, said confrontations between police and demonstrators have hurt demand as well.

“Because what we sell are luxury goods, people are less likely to buy them if they are not in a good mood,” he says. “The business is getting better this month, but last month was the worst as our revenues decreased by half.”

Chow Tai Fook Jewellery Group Ltd. , one of the world’s largest jewellers, shut as many as one-third of its stores during the height of the protests in early October. It recently said that October same-store sales in Hong Kong fell 24 per cent compared with a year earlier.