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From: Number Sleuth

“Integra Mining (ASX: IGR) achieved a gold production milestone of 100,000 ounces in early January at its Randalls Gold Project located 60-130 kilometres east of Kalgoorlie in Australia’s most prolific goldfield. ” I hold IGR

Is this a reaction to the increase in the USA’s debt ceiling?

Gold Can Build on Its 2011 Gains Next Year, Dillon Gage Metals Says

Targets include $2,000 an ounce and an inflation-adjusted 1980 high of $2,300

ADDISON, Texas–(BUSINESS WIRE)–In a turbulent year for world economies and markets, the price of gold reached an all-time high in September, and after a setback is recovering. The yellow metal looks poised for loftier levels next year, says Terry Hanlon, President of Dillon Gage Metals, dealers in Dallas.

“Gold’s long-term prospects remain strong as demand continues to rise, while growth in world supplies should remain limited.”

As 2011 winds down, what exactly happened this year? Traders rushed into gold in the spring during unrest in the Middle East and North Africa and Japan’s worst struggles since World War II, Hanlon says. Some traders exited gold in the first week of May, however, and values retreated. The market rebounded in the summer, reaching a record $1,895 an ounce in early September as investors evaluated Standard & Poor’s U.S. credit downgrading. But from there, gold set back again, dropping $100 in one late-September day as nervous investors fled many assets.

Gold is inching back up now, and in early December is $350 an ounce above a year ago, Hanlon notes. Precious metals traders are waiting for the European Union’s December 9 summit meeting–expected to result in treaty changes that will affect currencies and other markets.

In 2011, gold prices have traversed a $550 range, influenced by many factors, including: Political and economic uncertainty- Investors see gold as a haven for their money in unsettled times. Interest rates- Generally the lower real rates are, the better gold and other commodities do. The Federal Reserve has publicly promised to keep interest rates low until mid-2013. The U.S. dollar’s value- The price of gold tends to move against the dollar, meaning a weaker greenback sends gold higher and a stronger dollar weighs on gold. The dollar fell in 2011’s first half but recovered in the second half. Inflation- Consumer prices moderated in the U.S. in late 2011 but are increasing in a number of other countries. Gold rises with inflation.

Also critical to gold’s value are: Central bank reserves- As major central banks continue to replace other reserves with gold, demand for the metal has increased. Net gold purchases by central banks exceeded 148 tons in third-quarter 2011, according to the London-based World Gold Council in November. Supply and demand- Global gold supplies rose 2% in third-quarter 2011 from a year earlier as mine output and metals recycling grew, while gold demand expanded 6%, according to the WGC. The world’s third-quarter gold demand reached 1,054 tons, or $57.7 billion, an all-time high in value terms.

In the WGC’s most recent data, world third-quarter investment demand for gold surged 33% on the year to 468 tons. European third-quarter investment was a record 118 tons, up 135% on the year. Demand for gold bars and coins swelled in markets across the globe, growing 29% to 391 tons in the third quarter from 303 tons a year earlier. In value terms, third-quarter 2011 purchases of bars and coins totaled $21.4 billion, well above $12 billion in the corresponding 2010 quarter.

Chinese jewelry demand grew 13% on the year in third-quarter 2011, according to the WGC. Purchases grew in smaller Chinese cities as retail chains expanded to meet rising income levels. China’s demand for gold bars and coins swelled by 24% in the quarter from a year earlier to 60 tons.

Inflows into gold ETFs or exchange-traded funds and similar products totaled 77.6 tons globally in the third quarter, 58% above year-earlier levels.

“Gold’s long-term prospects remain strong as demand continues to rise, while growth in world supplies should remain limited.” Hanlon says. ”Uncertainty about U.S., European and other economies will clearly keep investors interested in precious metals in 2012.” Gold could reach $2,000 an ounce next year, and many traders are looking at $2,300, the metal’s 1980, inflation-adjusted high as a target, he says.

Dillon Gage Metals offers bullion trading, online trading of physical metal and futures, jewelry trading and liquidation, refining services, and rare coins and estate liquidations.

With gold grades like those represented below it is not hard to see why. (The co-credits are of great interest…. Tellurium is used for thin film cadmium-tellurium based solar applications and Australia has only two other companies with published deposits.)

And adding to the excitement CDU has now gone into a trading halt. I wonder how many $millions are going to be added to the coffers?

I hold CDU

“My thesis being that even though the last decade has been the decade of gold, this decade will be the decade of silver. I can only imagine that it will go back to its historical relationship to gold of 16 to one in term of price. And as an example of 16 to one, with gold at $1600 it would suggest that the silver price should be $100.”
read article

Visit http://www.australian-shares.com and search for ASX companies with silver resources

“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