India Buys 403 Tonnes of IMF Gold

By: GoldCore

Gold is continuing its strong upward run and is currently trading at $1.061.40/oz. In EUR and GBP terms, gold has risen again and is trading at €720/oz and £650/oz respectively.

The majority of participants at the LBMA Precious Metals Conference in Edinburgh were bullish for gold's outlook going forward. The chairman of the London Bullion Market Association, Kevin Crisp, said that the environment for gold prices is set to stay positive as concerns over the stability of other markets fuel investment into hard assets.

The conference heard how the European Central Bank believe that gold will remain an important asset for European central banks as risk diversification becomes a more significant issue. Paul Mercier, deputy director general of market operations at the ECB, said that “gold makes sense as a contributor to risk diversification." He said the Eurosystem holds 10,800 metric tons of gold, roughly one third of world gold reserves.

The news that India has bought 200 tonnes of a potential 403.3 tonnes of gold from the IMF is very bullish. The sales occurred over two weeks prior to October 30th when gold was trading between $1,030/oz and $1,070/oz showing that physical demand for gold is very robust at these levels (reports that an IMF official said that the sale was concluded at an average price of about $1,045 an ounce and that the transaction would be paid in dollars and not in IMF Special Drawing Rights).

The Chinese are on record as wanting to increase their gold reserves significantly as their gold constitutes less than 2% of their foreign exchange reserves (compared to over 60% for most major European countries and nearly 79% of US foreign exchange reserves). Chinese and other large US creditor nations foreign exchange diversification is likely a primary reason for the robust performance of gold in recent weeks.

Smart money internationally, including central banks and the more astute hedge funds, are buying on the dips in anticipation of much higher prices. $1,200/oz remains a possibly target by year end and contrary to some simplistic analysis the recent rally in prices is sustainable.

Silver
Silver is currently trading at $16.46/oz, €11.14/oz and £10.09/oz.

Platinum Group Metals
Platinum is trading at $1,343/oz and rhodium is trading at $1,950/oz. Palladium is currently trading at $324/oz.

This update can be found on the GoldCore blog here.

The Bullion Services Team

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.

GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.