Swiss People's Party (SVP) Forces Gold Referendum

The conservative Swiss People's Party (SVP) has garnered enough signatures concerning a ban on the selling of gold reserves in the country to force a referendum on the issue.

Called "Save our Swiss Gold," the proposal would disallow the central bank of Switzerland from selling any of the gold it holds in reserve, as well as keeping a minimum of 20 percent of its assets in gold.

"Gold reserves aren't speculative objects for the SNB or politicians. They belong to the people," said SVP politician Luzi Stamm.

During 2007 through 2008 the Swiss National Bank (SNB) sold about 250 tons of gold, resulting in an outcry from citizens. While promising it won't sell any more of its gold holdings (laughter in the background), it still is threatened by the idea of rules being put into place which would hinder it from taking steps in shaping the monetary policy of the nation.

SNB spokesman Walter Meier said this: "The SNB has considerable concerns, in particular of a monetary policy nature, about the initiative's demands."

Of course if the SNB had no intention of reneging on its promise, it makes one wonder why it is it's concerned about the demands of the SVP.

Near the close of 2012 the SNB had a total of 1,040 tons of gold in reserve. That equaled about 50.8 billion ($54 billion) Swiss francs at the time.

Another provision of the initiative is that the Swiss National Bank must store all of its gold reserves within the borders of the country.

At this time it is alleged most Swiss gold is stored in the country, although some is stored in other parts of the world in light of crisis scenarios envisioned by the bank.

I wonder if Swiss citizens look at Germany's demand for the repatriation of its gold from America, which it'll have to wait years to get.

Gold: U.S. Audit of New York Fed isn't U.S. Gold

The alleged audit of gold in the Federal Reserve Bank of New York is a hoax, based upon the fact that the gold held in the Federal Reserve Bank of New York isn't held on behalf of the U.S., but mostly on behalf of foreign governments.

U.S. gold reserves are reportedly held at Fort Knox, which has never been audited. So the question becomes, why did the U.S. go through this meaningless exercise? The answer is to confuse the general public as to the real gold reserves held by the U.S. and to take pressure off of the Fed and the government.

Those critics of the Fed will now probably believe there has been a full audit of gold held by the U.S., when in fact only gold held in New York was audited, with the real alleged U.S. gold reserves held in Fort Knox receiving no attention; it isn't even allowed to be seen.

The other issue is this is an audit by the government. There should have been an independent auditing firm brought in.

Finally, the audit didn't include any claims that are made against the gold, which is another way of saying there wasn't a full audit done at all.

All of this speaks to the fact this was all done for the purpose of public consumption, which now will largely believe the gold reserves of the U.S. have been audited, while the real gold in New York was gold held by other countries.

Gold Sales Stopped at EU Central Banks

In adherence to the guidelines of the Central Bank Gold Agreement of Europe, in addition to Switzerland and Sweden, central banks in the region will stop selling gold reserves.

That will put an end to over ten years of selling the gold by the banks.

The CBGA puts a cap on collective sales by the banks.

This could provide even more support to gold, which already enjoys strong support, and is another piece of the underlying fundamentals which are driving gold prices up, taking supply out of the gold market.

Although there will probably be some instances of relatively small sales, expectations are the central banks will follow the overall Central Bank Gold Agreement they made.

Sales from the banks have already plummeted over the last CBGA year, dropping 96 percent to 6.2 tons.

Ivanhoe (NYSE:IVN) Constructing Mongolia Gold, Copper Mine

Ivanhoe Mines (NYSE:IVN) development of their Oyu Tolgoi gold and copper project is about to begin, with a price tag of approximately $5.5 billion committed to the construction.

Production at the mine is estimated to begin in 2013, and an initial investment of $758 million will be put toward the project this year.

Ivanhoe has a strong partner in Rio Tinto (ASE:RIO), which has increased their stake in Ivanhoe in anticipation of the eventual haul the largest gold and copper mine in the world yet to be worked will produce.

Rio Tinto will finance the equipment to use at the project.

Estimates are Oyu Tolgoi has 46 million ounces of gold and 81 billion pound of copper reserves.

Gammon Gold (NYSE: GRS) Weaknesses Exposed

Gammon Gold in for a couple of tough years

When you consider we're in one of the most significant bull markets in history, the performance of Gammon Gold (NYSE: GRS), say, over the last five years, reveals an enormous amount of weaknesses in the company, and none of them bode well for them going forward.

The primary short-term problem has been the results of its drilling, which caused estimated gold reserves to plunge by 18 percent last year. That seems to be the primary reason TD Newcrest analyst Steven Green slashed his 12-month target on the share price to $7. He originally had it at $9. As of this writing shares are at $7.19.

Gold mining isn't rocket science as far as understanding it goes. You find gold in the ground and extract it for less than you can sell it for; the end result is profits or losses, like any other business.

The decline in reserves came from the disappointing results at the Ocampo mine in Mexico where drilling over a range of over 115 meters left reserves less than before they started.

Another problem is the reserves they do had has been upwardly revised as to the costs to extract the gold, bringing production guidance down 24 percent in 2010 and 18 percent in 2011.

It's going to be a tough couple of years for Gammon Gold, and other than better cost management, there doesn't seem to be much they can do about it to turn it around.

One thing the company asserts it's going to do is increase production going forward. They'll have to do more than say that though, and come through on the promise.

China Downplaying Interest in Gold

As many following China and its acquisition of gold have noted, it has shown they are nervous about their holdings of U.S. Treasury's, and China is now attempting to spin they're not as interested in gold as they were before, seeming to attempt to shore up their interest in U.S. Treasury's, even though they are a very poor investment at this time, and will be long into the future.

More than likely it is also a nod that China may be buying gold again, but doesn't want to show its hand so prices don't skyrocket and make it more expensive to acquire.

Another problem for China is it'll have to ease off buying Treasury's slowly, as it would have a detrimental impact on their manufacturing base and exports.

China has been working up growing its domestic economy in order to not need to buy into U.S Treasury's to grow its markets.

With U.S. consumers having slowed down their spending, even if China buys Treasury's it may not be that helpful to them if Americans don't turn around and buy products from the country.

So while gold is probably the better investment taking into consideration the economic climate, China has to continue playing a balancing game until their domestic economy matures more.

Until then, gold will be better for them to invest in, but for the sake of their manufacturers and exports they'll probably be forced to buy U.S. Treasury's until that changes.

So investing in gold will continue, but it'll probably be much quieter and probably not at former levels, although it's hard to tell with the Chinese which way they'll go and how they're going to do it.

Eldorado Gold (NYSE:EGO) 42 Percent Increase Gold Reserves

Eldorado Gold Eastern Dragon Project

In case you didn't catch the recent news concerning Eldorado Gold (NYSE:EGO), they reported a huge 42 percent increase in proven and probable gold reserves, equal to 747,000 ounces, at its Eastern Dragon Project in China.

With that data in hand, the mining company has increased it drilling budget by $2.4 million to get a better idea of what they have and to secure the find.

They also want to do more exploring of the mine to confirm vein structures and to see if there are additional gold resources.

Eldorado Gold Eastern Dragon Project