© n/a
Gold futures for December delivery rose to a record $1,088.50 an ounce at about 2:22 p.m. in after-hours trading on the New York Mercantile Exchange's Comex unit. Earlier, the most-active contract settled at $1,084.90, up $30.90, or 2.9 percent. It was the biggest gain since March 19.
"This will encourage other countries and other investors, especially Indians, who are big buyers anyway, to jump into the market," said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois.
The Reserve Bank of India paid $6.7 billion for the bullion, which it bought from Oct. 19 to Oct. 30. It was "the biggest single central-bank purchase that we know about for at least 30 years in such a short period," said Timothy Green, the author of The Ages of Gold. "The only comparable event was the U.S.'s steady purchases in the 1930s and 1940s."
Prices also rose to an all-time high in gold traded in Indian rupees. Central banks, the biggest holders of gold, may diversify out of the dollar and buy bullion as ballooning U.S. debt and low interest rates weaken the currency.
China May Buy
"It is but a matter of time until China and the IMF announce much of the same," said Dennis Gartman, an economist and the editor of the Gartman Letter in Suffolk, Virginia. China, now the sixth-largest holder of gold, has increased its gold reserves by 76 percent since 2003, to 1,054 tons, the official Xinhua News Agency reported in April.
In London, gold for immediate delivery also reached a record, touching $1,087.80 an ounce, and traded at $1,084.70, up $25.20, or 2.4 percent, at 7:51 p.m. local time.
Gold is up 23 percent this year while the U.S. Dollar Index, which measures the greenback's performance against six major currencies, has dropped 6.1 percent. The previous record for bullion traded in New York was $1,072, set on Oct. 14.
"The fall in the U.S. dollar seems to be pushing all the central banks to strengthen their portfolios with gold," said N.R. Bhanumurthy, a professor at the National Institute of Public Finance and Policy in New Delhi. "Gold is a safe store of value compared to the U.S. dollar."
India's purchase buoyed gold as industrial metals slumped on concern that governments will end economic-stimulus measures, curbing demand for raw materials. Copper and lead both fell more than 1.2 percent today on the London Metal Exchange.
India Moves Up
India held 350 tons of gold at the end of 2008, making it the 12th-largest government owner, according to the GFMS Ltd. 2009 Gold Survey. The additional 200 tons propels the country past Russia into ninth place, according to GFMS figures. India is the world's largest buyer of gold for jewelry and investment.
"You usually associate Indian consumers buying gold more than you do the central bank," said Mario Innecco, an MF Global Ltd. broker in London. Gold averaged about $1,049 in the two weeks when the IMF gold sale occurred. Prices may rise to $1,125 by year-end, Innecco said.
The IMF's executive board on Sept. 18 approved the sale of 403.3 tons of the metal, pledging to avoid disrupting the market. The lender said yesterday that India's purchases were made at market prices. The IMF board sought to use the sales of about an eighth of the organization's total stockpile to help shore up its finances.
Fed Meeting Begins
President Barack Obama has increased the nation's marketable debt to an unprecedented $7 trillion as the government borrows to fund spending programs intended to revive economic growth. The Federal Reserve, which began a meeting on monetary policy today in Washington, has kept the benchmark U.S. interest rate between zero and 0.25 percent since December.
Gold rose today even as the dollar index rallied to a four- week high, a bullish sign to investors, said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, have risen 41 percent this year.
"This is safe-haven buying," McGhee said. "Gold is decoupling from the dollar, which can make it even more bullish."
The metal has outperformed stocks and bonds this year as it heads for the ninth straight annual gain. The Standard & Poor's 500 Index climbed 15 percent in 2009 through yesterday while returns on the benchmark 10-year U.S. Treasury note declined 5.7 percent.
Price Outlook
Gold may average $1,125 next year, "with strong investment demand anchored by a negative real-interest-rate environment and probable central bank purchases," analysts at Toronto-based Desjardins Securities Inc. said in a report.
Among other precious metals traded in New York, silver futures for December delivery rose 74 cents, or 4.5 percent, to $17.18 an ounce on the Comex. The most-active contract has surged 52 percent this year.
Platinum futures for January delivery climbed $18.10, or 1.4 percent, to $1,356.20 an ounce, erasing an earlier decline on the Nymex. December palladium gained $1.40, or 0.4 percent, to $327.75 an ounce.
![[Valid Atom 1.0]](/images/valid-atom.png?1222505720 "Validate my Atom 1.0 feed")
![[Valid RSS 2.0]](/images/valid-rss.png?1222505756 "Validate my RSS 2.0 feed")
Here is an excerpt from last night's GATA's subscription newsletter, Le Metropole Cafe. There is more going on here than meets the eye:
"I see that gold is facing fierce resistance at $1,060 this morning-what a surprise, given that the Fed will conclude its FOMC meeting tomorrow with the usual pathetic utterances and then the NFP release is due on Friday morning. Remember the excerpt that I submitted to MIDAS not long ago, being the American Bureau of Econonmic Research Bulletin of Sept 1947 that stated that the IMFs alleged gold reserves of 2,800 tons were in fact only represented by (double counted) quota allocations from member nations, and that no physical vault transfers had ever taken place. The probability that the IMF's other gold reserves of 403 tons (emanating from trading transactions with Mexico and Brazil) were still in unencumbered vault custody had to be regarded as remote in the extreme. A few weeks ago I predicted that, over time, it would merely be announced, on an ex post facto basis, that a buyer had emerged for (a portion of) this IMF gold . I did not think that half the IMF gold sales would take place in this manner, in virtually the first month after all the protocols of authorization had been completed. But informed GATA members are hardly ever wrong! Wasn't this amount of 403 tons of IMF gold going to be the mainstay of WAG3 sales over the duration of the entire period of the new WAG 3 agreement? AND HALF OF THIS GOLD IS GONE IN THE FIRST MONTH!
But why India when China was forecast to be the principal purchaser? Remember Conny Lotze of the IMF and her interview with CP back in 2008? (She is now Deputy Division Chief, IMF Media Relations but back in 2008 she was styled a press officer). This lady confirmed that India was one of the custodians of the IMFs gold. No one was transferring vast gold hoardings to Indian custody back in the forties at the time of the implementation of the IMF's initial Charter. If India was a designated authorised depository of IMF gold, the obvious assumption would be that India was a custodian of (part of) the 403 tons of gold that accrued to the IMF after the signing of the founding charter. Clearly this IMF Indian custodial gold has long ago been mobilized as part of the gold suppression scheme. The IMF 403 tons of gold is long gone (to adorn the necks of Indian women), and now it is announced that the official sale of half of the IMF's gold has quickly been executed (without any disruption to the market of course) to the nation that was presumably the official IMF custodian. IT HAD TO BE LIKE THAT IN ORDER TO EXPLAIN THE LACK OF PHYSICAL SHIPMENTS OF PHYSICAL GOLD. Bad luck China! If I was an Indian citizen, I would be very keen to have the physical custodianship of my nation's new acquisition of 200 tons of vault gold physically audited (by tungsten detectable methodologies)"
[Tungsten detectable methodologies refers to the recently discovered "good delivery" bars of gold which were found to be gold plated tungsten. This is an indicator of the very real short supply of world gold... and the short squeeze now in progress.]