Dollar recovery pushes gold down from one-year high
Friday's 13-month high that North Korea did not conduct a missile test.
Demand for safer assets, including gold, was also weakened after hurricane Irma wreaked less damage than feared in Florida.
Gold jumped last week because of the fear trade.
"Both of these events failed to materialize in a major way," said Saxo Bank analyst Ole Hansen.
"The short term stage has been set for some consolidation.
Much depends on where the dollar and bonds decide to go."
Arizona state senators voted to allow gold and silver to be used as legal tender in the state.
Privately minted gold and silver will now be given the same authority and status as paper money in Arizona. That means the residents of Arizona will be able to pay their bills within the state boundaries using the two precious metals.
Along with Arizona, other states have already implemented or are looking into similar proposals. While the constitution doesn't allow states to create their own currencies, there is nothing to suggest a state can't allow coins minted by private companies to be used as legal tender.
There was some additional drama in the process of confirming the bill, which came of course from a Democrat, this one being someone named Sen. Steve Farley from Tucson,
I will hand him this, he got it right on when he attacked the approval of the proposal, seeing how it makes the failing U.S. dollar look. Farley said, "I believe the bill itself ridicules our financial system." Right you are Steve. It does all of that for sure.
What he's of course referring to is the implementation of an alternative underscores the disastrous and monstrous policies of the Federal Reserve and Ben Bernanke, where they work together to debase the currency in the name of saving the economy.
The inclusion of gold and silver as a currency, every day points to these failed policies and teaches those willing to listen that Keynesianism is dead, and printing or digitizing endless amounts of dollars to prop up an economic system that should be allowed to flush itself out so it can be really healed, is what people like this Farley oppose.
In order to work out the details of the initiative, the effective date to implement gold and silver as legal tender in Arizona was pushed out till after the 2014 legislative session.
Germany had moved much of its gold to overseas storage facilities during the years of the cold war in fears the Soviet Union may invade the country and seize all its gold. The central bank of Germany, according to a German newspaper, is beginning to bring the gold back home.
According to the Daily Handelsblatt, the Bundesbank has plans to bring home all of the 450 tons it has stored in the Bank of France in Paris, and an undisclosed portion of the 1,500 tons it has stored in the Federal Reserve in New York.
A growing number of people have openly questioned the amount of gold still on hand in New York, as well as Fort Knox in Kentucky, which the repatriation of only a portion of the 1,500 tons of gold stored in New York for Germany makes one wonder why it isn't all being brought home under the loose money policies of central banks and governments around the world.
Germany will apparently bring about $200 billion in gold back to the country as valued at today's prices.
Overall, Germany has about 3,400 tons of gold in reserve.
Teck Resources (NYSE:TCK) announced it'll be selling its 34 percent stake the Carrapateena deposit, located in Australia, for $134 million. The stake is being acquired by an affiliate of OZ Minerals Ltd.
Carrapateena is among the largest undeveloped copper and gold deposits in Australia.
There is an estimated 4.4 million tons of copper, 6 million ounces of gold, and 225 million pounds of uranium, along with some rare earths and haematite iron ore in the resource.
BHP Billiton (NYSE:BHP) has its Dam mine in the same geological structure as Carrapateena is located in.
Australia's privately held RMG Services has a 58 percent stake in the project.
Teck could also receive up to $25 million in the deal based on certain production milestones. They've spend about $30.3 million exploring the site over the last six years.
The deal should close in the second quarter.
Teck Resources closed in New York Tuesday at $54.23, gaining $0.21, or 0.39 percent.
While most investors know about the copper and gold reserves at Ivanhoe Mines' (NYSE:IVN) Oyu Tolgoi project in Mongolia, it extent of the silver reserves at the mine haven't been talked about much, until now.
According to Ivanhoe Chief Executive Robert Friedland, the project should produce an average of 3 million ounces of silver a year at the mine.
Friedland said, "The buoyant global silver market has fueled the interests of investors and has prompted us to more widely circulate the projections for silver production.
"Oyu Tolgoi will rank as a very substantial silver producer when commercial production begins in 2013."
Over the 27-year life of the mine, the miner said Oyu Tolgoi should produce about 78 million ounces of silver.
The company has said in the past that annual production of copper willl come in at 1.2 billion pounds, and gold at 650,000 ounces. Also being mined will be molybdenum.
Ivanhoe owns a 66 percent stake in the project, while the Mongolian government owns the rest. Rio Tinto (NYSE:RIO) has a 48.4 percent stake in Ivanhoe.
JPMorgan (NYSE:JPM) announced Monday it will start to allow physical gold bullion to be used as collateral with its counterparties.
That's in response to clients of the giant financial institution and their increasing demand for investing in gold as a hedge against inflation.
John Rivett, collateral management executive for J.P. Morgan Worldwide Securities Services, noted, “Many clients are holding gold on their balance sheets as an inflation hedge and are looking to make these assets work for them as collateral…By combining our collateral management and vaulting capabilities, we provide clients with greater flexibility in how they mobilise collateral.”
JPMorgan added it doesn't matter what the "underlying obligation, to extract maximum value and manage risk,” is, gold can be used as collateral in it.
At this time, JPMorgan is now the only "tri-party collateral manager in the world to accept physical gold as collateral to satisfy securities lending and repo obligations with counterparties," according to Gold Alert.
JPMorgan added clients will now be able to use gold as collateral across international borders.
Investors have been increasingly gravitating toward gold to protect their capital as the Federal Reserve and other central banks continue to print money, debasing paper currencies around the world, including the U.S. dollar.
Alexco Resource Corp. (AMEX:AXU) is worth taking a look at, as the mineral exploration and development company has doubled its share price over the last 12 months, and seems to have continual support under the current levels.
The company mines, for the most part, in the Yukon Territory of Canada, and its properties are thought to hold gold, silver, lead and zinc ores.
They also generate secondary revenue from project management services and consulting on environmental permitting.
Alexco was trading at $6.42, up by $0.11, or 1.74 percent. Trading volume is above its 3-month daily average.
With the endless amount of economic news coming out which reiterates the volatility in the market, along with continuing government attempts to manipulate things behind the scenes, like the charges of fraud against Goldman Sachs (NYSE:GS) in order to push forward their regulatory agenda, gold has a lot of opportunities to present buying opportunities, and we need to be vigilant in watching for them.
We need to largely neglect the Goldman Sachs story, as that's completely irrelevant to the price of gold, no matter what clueless media outlets state.
More important is the debt of governments and the horrid monetary policies of central banks around the world and the amount of paper money they've thrown out into the market.
Inflation and a place of safety is what is driving investors in relationship to gold, and we need to keep from getting sidetracked by the ignorance of so-called financial reporters who simply regurgitate what the official Obama administration line is concerning Goldman Sachs.
They have no effect on gold, and only the continual assertion they do is what makes some people believe it does, not the reality. So even when media continue to assert this, ignore them, and focus on what is really driving the price of gold, and not the lie that charges against Goldman Sachs has the markets reeling.
The Goldman Sachs incident is related to something from 3 years ago, not anything related to the current market. Just understand this is a hoax as far as it relates to today, and is only, as mentioned, a tool the government is using in attempts to put pressure on other lawmakers to pass their regulatory agenda.
Don't get caught up in the politics of it and neglect the underlying fundamentals driving the price of gold.
Jim Rogers on Gold
Jim Rogers reminded investors in gold to hold onto it and not sell, as he maintains gold could go as high as $2,000 over the next 10 years, and those discarding it will miss out on a lot of profits.
Of course it also must be considered as the best place of safety at this time, and there is no paper currency close to it for those who understand the staying power of gold.
For the first time in a long time, gold has fought the U.S. dollar as the haven of choice, and even when the dollar goes up, there have been days where gold has risen with it, defying the usual inverse relationship between the two where gold will go up when the dollar goes down, and the opposite.
When they go up together, that means a sizable number of people and/or institutions consider gold to be safer than the dollar, and that's quite a change from the normal behavior of those looking for safety.
Ivanhoe Mines, Rio Tinto and Oyu Tolgoi Project
Ivanhoe Mines (TSE:IVN) and Rio Tinto (ASE:RIO) have finished the preliminary requirements concerning the Oyu Tolgoi project in Mongolia, and are ready to begin construction in the second quarter.
The paperwork required to advance to the construction phase has been completed, and the project, consisting of copper and gold, is ready to begin.
The Oyu Tolgoi project is one of the largest untapped deposits of gold and copper known in the world today, and it should bring huge dividends to Ivanhoe and Rio Tinto for a long time to come.
Ivanhoe Mines will own 66 percent of the project while state-owned Erdenes MGL LLC will own the remaining 34 percent. Rio Tinto's role is one of technical and financial support.
Rio Tinto also has a 22.4 percent stake in Ivanhoe Mines, along with options to acquire a stake up to 46.6 percent over the next 19 months.
For the beginning of full-scale construction, a committee consisting of representatives from Ivanhoe Mines and Rio Tinto have approved an initial financial outlay of $758 million.
The mine is expected to be operational in 2012 and commercial production to begin in 2013 for both copper and gold. Total costs to get things up and running are estimated to eventually reach about $5 billion.
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