Gold! Gold! Gold! Gold!

“Gold will lead a rally in commodities in 2012 as Europe’s sovereign-debt crisis continues to roil financial markets, spurring demand for the metal as a haven asset, according to Morgan Stanley.

“There’s a very strong chance that gold will re-challenge successfully the all-time high,” said Peter Richardson, chief metals economist at Morgan Stanley Australia Ltd., who has studied the metals markets for more than two decades. Bullion may climb to a record $2,200 an ounce in the first half, he said in an interview. He also backed copper. ”

Read the full story here at http://www.bloomberg.com/news/2011-11-17/gold-top-pick-at-morgan-stanley-as-europe-crisis-drives-demand.html

A snippet from R Bromby’s article in today’s the Australian:

“CHINA’S gold imports are now greater than the entire output of Australian goldmines.

Last year, China mined 341 tonnes (top in the world) but in 2011 so far it has imported another 350 tonnes; last year, Australia, the second-largest producer, mined 266 tonnes. Join the dots re the gold price.”

Could it be that China doesn’t trust the US$?

Read article

I wonder why the rest of the world seems to have so little influence?

“Chairman Ben Bernanke has sent his troops to drum up support for the next QE. Just last week, two senior Federal Reserve officials, Fed Vice-Chairman Janet Yellen and Fed Governor Tarullo, have strongly hinted that QE III was a distinct possibility. The Fed wants to reduce the stubbornly high unemployment. Chairman Bernanke is probably also getting pressures from the White House to do more in an election year as the President’s hands are tied on the fiscal front.” Read full article

The shop seller told me the same thing I’ve heard in Australia (and other parts of the world). Bullion dealers can’t keep up with demand. According to her, sellers are buying increasingly large amounts of gold – particularly on the dips. And she can hardly get her hands on any silver to sell. Read full article

I greatly enjoyed the article: Transcription of Finance News Network Interview with Sprott Asset Management CEO and chief investment officer, Eric Sprott. My enjoyment was most likely boosted by my being a long term precious metal bug and having acquired a largish amount of silver at $5 many years ago I have been wondering when to cash in. In the article Sprott suggests that there is plenty more upside to come.

My first brush with silver was just before the Hunt brothers started their now famous attempt at cornering the market… I then re-entered the market using long dated silver call options and around a year ago I converted the “hefty” gains into silver metal.

My wife says we came in on silver and it is likely several decades on that we will go out on silver…. so the article seemed to be written for me as it re-enforces my viewpoint/bias. The great thing about owning the precious metals is that they are capable of giving wonderful gains if you are patient.

The Perth Mint has unveiled the world’s largest and most valuable gold coin.

Weighing in at just over one tonne, the 99.99 per cent pure gold coin has been valued at more than $60 million.

A team of a dozen people have worked since late last year to create the coin which measures 80 centimetres wide and 12 centimetres deep.

Mint chief executive Ed Harbuz says the idea was to make it the biggest and best in the world.

“Well the largest coin in the world up to now has been 100 kilograms, made by a competitor mint and we thought well, we’d better make it so much bigger that it’ll stay the biggest coin in the world for a long time,” he said.

I guess we are still just a colony

Several weeks ago I suggested that the rush to Africa and other developing countries (Peru) etc could be hazardous for gold explorers and producers in my post titled “Out of the (African) Fat and into the Fire?“.

Today’s Reuters article that outlines the emerging risks in Ghana Africa’s second largest gold producer: “Ghana is in talks with gold miners in the country, Africa’s second-biggest producer, over additional taxes so as to benefit from the soaring price of the precious metal, the government said on Tuesday.” suggests to me that there is still plenty to worry about when it comes to who owns what and the stability of those companies that have shifted to the sovereign risk heavy countries. True countries like Burkina Faso etc have some excellent resources with high grades. But time will tell if they are going to end up taking a disproportionate stake or even worse like Bougainvillea.

In the meantime some ASX listed companies are making some excellent finds in our relatively safe Australian region and after factoring in the above seem to make more sense.

For the complete Focus Minerals announcement including figures and tables, please view the following link:
http://media.abnnewswire.net/media/en/docs/ASX-FML-560104.pdf

“Former hedge fund manager William Fleckenstein believes that “it is a virtual certainty that the FOMC will unveil QE3, a third round of quantitative easing. And there is a reasonably higher probability that, whatever form this latest round takes, it will be fairly dramatic and involve a real commitment to more money printing” - and not just the operation twist.” http://wallstreetwindow.com/node/3583