Gold confiscation at $3,000 rumour is complete nonsense says ‘Mr. Gold’ Jim Sinclair

Gold confiscation at $3,000 rumour is complete nonsense says ‘Mr. Gold’ Jim Sinclair

By: Peter Cooper, Arabian Money

-- Posted Wednesday, 31 October 2012 | Share this article | Source: GoldSeek.com

The ‘Mr Gold’ of the 1970s and former adviser to the Hunt Brothers, Jim Sinclair is hopping mad over rumours that gold might be subject to confiscation above $3,000, something that happened in the US in the 1930s but would be totally impossible in the modern world. 

‘Apparently the Scottish hedge fund manager Hendrey, who is by his own admission ’short some gold shares,’ is warning about confiscation without remuneration of gold companies above gold $3,000′, says Mr. Sinclair in his latest missive. ‘Either he has never studied gold history, or totally 

misunderstood its role in the 1930s…

Gold was 30’s QE

‘In the 1930s gold was to the monetary system what QE is today, a means of increasing the supply of money for Fed and Treasury discretionary use. The US Secretary of the Treasury and President Roosevelt set the gold price higher at their daily breakfast together arbitrarily. 

‘Higher because to create money then the system required a higher value of gold to have more money outstanding. This is why Roosevelt ordered the confiscation of gold in order to unfold his type of monetary stimulation, his QE. This is what confiscationophiles simply do not know.

‘Your fears and the outrageous untrue statement by the Scottish hedge fund manager are based on totally wrong reasoning and misunderstanding. Gold was not confiscated because it was going up in price. Gold’s order of confiscation came as a tool of monetary stimulation in order to create monetary creation in order to attempt to increase employment. 

‘The order of gold confiscation had nothing whatsoever to do with punishment of the gold holders. It preceded the then big run up in the gold price. Believers in confiscation, because they are incorrect on its basis, are totally wrong in predicting it. Those that predict confiscation of anything gold love sensationalism and benefit somehow from scaring the dickens out of you unnecessarily.

Out of the question

‘Gold companies will not be confiscated any more than oil companies were when oil traded at $145. You think this is some sort of punishment for profit? You are thereby fearing something that simply will not happen. You are like an Apple stockholder fearing that the government will confiscate their company because of the popularity of the iPhone.’

He concludes: ‘Please, my friends, keep your feet on the ground. Fund Manager Hendrey is totally correct on the gold price at $3,000. I might add at $3,000 plus.’

The Economic Aftermath of Sandy

The Economic Aftermath of Sandy

By: Rick Ackerman, Rick's Picks

-- Posted Wednesday, 31 October 2012 | Share this article | Source: GoldSeek.com

The markets will be limping badly when they open for trading on Wednesday, numbed by the destructive power of Hurricane Sandy. The cleanup is going to take many weeks if not months, and cities up and down the East Coast will be in a daze until basic services have been restored. Pumping out the saltwater that gushed into tunnels and subways will be relatively easy compared to fixing and replacing electrical switches and components. Because New York’s subway system is very old, many of the parts that will be needed are no longer available. Of course, the trains will run again, and soon, but how smoothly is a question that looms large for those who live in, and commute to, New York City. 

Although it will be a while before we can know the extent of the economic damage, the markets themselves cannot but give an instant assessment when stocks start to trade Wednesday morning. The shares of property and casualty insurers are all but certain to dive, but there will be a bullish offset in stocks tied to the rebuilding effort. The cities themselves will be under enormous financial strain to rebuild transit systems, roads and beaches, and the logistical challenge to FEMA in particular will be considerable. President Obama has promised that there will be as little red tape as possible, and there is no doubting that he intends to make good on that promise.

A Keynesian’s Dream

On Wall Street, pent-up demand could cause the markets to be quite volatile in the days ahead, especially because the four-day trading hiatus has occurred in the middle of the Q3 earnings season. My hunch is that the remainder of the week will see a continuation of the bearish trend in stocks, perhaps with an added kicker from the storm. From a Keynesian perspective, restoring and rebuilding the Eastern Seaboard is as pure and powerful a stimulus as you could ask for. Tens of billions of dollars are going to be spent in the effort. But where will those dollars come from? There’s no getting around the fact that they will have to be borrowed. Ironically, the dollars when considered as an investment may have a much better chance of paying off than the Government’s bailout of General Motors. If so, the rebuilding of the Eastern Seaboard cannot begin soon enough.

Gold Resource Corporation Declares October Monthly Dividend

Gold Resource Corporation Declares October Monthly Dividend

-- Posted Wednesday, 31 October 2012 | Share this article | Source: GoldSeek.com

COLORADO SPRINGS, CO--(Marketwire - Oct 31, 2012) - Gold Resource Corporation ( NYSE MKT : GORO ) declares its instituted monthly dividend of $0.06 per common share for October 2012 payable on November 23, 2012 to shareholders of record as of November 12, 2012. Gold Resource Corporation is a low-cost gold producer with operations in southern Mexico.

Gold Resource Corporation offers shareholders the option to convert their monthly cash dividends into physical gold and / or silver and take delivery of their precious metals. For more information on Gold Resource Corporation's physical dividend program visit the Company website at http://goldresourcecorp.com/gold-silver-dividends.php. 

About GRC:Gold Resource Corporation is a mining company focused on production and pursuing development of gold and silver projects that feature low operating costs and produce high returns on capital. The Company has 100% interest in six potential high-grade gold and silver properties in Mexico's southern state of Oaxaca. The Company has 52,742,198 shares outstanding, no warrants and no debt. Gold Resource Corporation may be the only Company to offer its shareholders a dividend option to obtain physical gold or silver in addition to cash. For more information, please visit GRC's website, located at www.Goldresourcecorp.com and read the Company's 10-K for an understanding of the risk factors involved.

Cautionary Statements:This press release contains forward-looking statements that involve risks and uncertainties. The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. When used in this press release, the words "plan," "target," "anticipate," "believe," "estimate," "intend" and "expect" and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements include, without limitation, the statements regarding Gold Resource Corporation's strategy, future plans for production, future expenses and costs, future liquidity and capital resources, and estimates of mineralized material. All forward-looking statements in this press release are based upon information available to Gold Resource Corporation on the date of this press release, and the company assumes no obligation to update any such forward-looking statements. Forward-looking statements involve a number of risks and uncertainties, and there can be no assurance that such statements will prove to be accurate. The Company's actual results could differ materially from those discussed in this press release. In particular, there can be no assurance that production will continue at any specific rate. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the Company's 10-K filed with the SEC.

Gold & Silver Market Morning

Gold & Silver Market Morning

By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch - GoldForecaster.com

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-- Posted Wednesday, 31 October 2012 | Share this article | Source: GoldSeek.com

Gold Today –New York closed at $1,709.50 up $0.5. This morning, Asia and London dealers drove it higher through the $1,712 area then higher. It then Fixed at $1,718.00 up $4.50 and in the euro at €1,321.538 down €1 while the euro was higher at €1: $1.3000. Ahead of New York’s opening gold stood at $1,719.25 and in the euro at €1,323.61.

Silver Today – Silver closed higher at $31.77 barely changed in New York yesterday. It then rose to $32.20 in London. Ahead of New York’s opening it stood at $32.21.

Gold _{(very short-term)}

Gold will consolidate with a stronger bias, in New York today.

Silver _{(very short-term)}

Silver will consolidate with a stronger bias, in New York today.

Price Drivers

Gold & Silver – The solid currents of underlying demand from central banks and Asia lifted the gold and silver prices higher today as the economic news worldwide continues to point to a slowing global economy. In the Eurozone the news worsens as Portugal, in the light of a slowing economy decides to impose further austerity and a lifting of taxes. At a time when there should be an acceleration of economic growth we are seeing a deceleration. This is not the time to apply more brakes!

With a continuation of QE in the world’s leading economies [now joined again by Japan] and evidence that it is not promoting growth, ‘stagflation’ prospects raises its ugly head once more. For gold this means that we are close to pulling the trigger on a heady decline on the buying power of currencies. Once this takes off, it is almost impossible to stop before it causes full-on systemic damage. The political and economic structures in the world are not designed to handle such events.  [To follow our weekly commentary, please subscribe to our newsletters at www.GoldForecaster.com  and www.SilverForecaster.com]. All financial markets across the globe are presently ignoring this probability. Once it begins to be factored in the whole tenor of markets will change.  Volatility will increase and become the norm.

Silver – Silver is still fighting the battle of $32.

Regards,

Julian D.W. Phillips for the Gold & Silver Forecasters

Global Gold Price (1 ounce)
	Today	3 days ago
Franc	Sf1,596.84	Sf1,604.52
US	$1,719.25	$1,712.31
EU	1,322.25	€1,326.75
India	Rs.92,607.40	Rs.92,490.42

Gold "Now in Consolidation Phase", US Markets Prepare to Open Again

Gold "Now in Consolidation Phase", US Markets Prepare to Open Again



By: Ben Traynor, BullionVault

-- Posted Wednesday, 31 October 2012 | Share this article | Source: GoldSeek.com

London Gold Market Report

WHOLESALE gold bullion prices rallied to a one-week high at $1720 an ounce Wednesday morning in London, though they still looked set to record a loss on the month, while European stocks opened higher before losing some ground and US markets prepared to re-open after being closed for two days.

Silver bullion climbed to $32.37 an ounce, also up on the week, while oil and copper ticked higher and US Treasury bonds fell.

By Wednesday lunchtime in London, gold bullion looked set to record its first monthly loss since May, with spot gold trading nearly 3% below where it started October.

"There are those who are still looking for another dip, perhaps one that offers an opportunity to jump in sub-$1700, between now and year-end," says a note from UBS.

"The clear downtrend from earlier in the month has now been replaced by this consolidation phase. But the possibility of another attempt on the downside certainly cannot be ruled out."

"There are a lot of event risks [for the gold market]," one trader in Singapore told newswire Reuters this morning.

"Nonfarm payrolls, the US election, a change of power in China, plus the routine policy meetings of various central banks."

"People wonder if Romney is going to be in power and what kind of monetary policy we will have," adds UBS analyst Dominic Schnider, adding that the Republican candidate would likely replace Ben Bernanke as chairman of the Federal Reserve.

"[Romney] is clearly not in favor of what the Fed is doing."

A piece published by the Financial Times yesterday argued that a change in fed leadership following a Romney win would be bad for gold bullion prices, since the US dollar would strengthen.

"There's really no clear indication that Republican presidents are better or worse for the Dollar than the Democrats," counters a note from Standard Bank currency analyst Steve barrow this morning.

"We don't doubt that a strong Romney win, with victory in the Senate as well, would boost the Dollar while, if Obama narrowly hangs on to the presidency and loses the Senate, it would probably produce the worst possible knee-jerk response in the Dollar. However, in terms of the longevity of these reactions we'd be somewhat skeptical."

US markets are set to reopen Wednesday, following two days of closure caused by Superstorm Sandy.

"In the early trade I expect an overreaction regardless of the direction," says Art Hogan, New York-based managing director at Lazard Capital Markets.

"I expect to see a lot of volume at least in the first hour."

Wednesday marks the end of the financial year for many US mutual funds, which have been unable to trade many securities since last Friday.

"That could be the wild card, how much [trading] they have to cram in," says Donald Selkin, chief market strategist at National Securities, which manages around $3 billion.

Eurozone finance ministers meantime, who meet today, may grant Greece extra time to meet its austerity commitments, although disagreement remains on whether to write off more Greek debt, Bloomberg reports.

"The decisive phase for Greece has started," reckons Carsten Bzerski, Brussels-based senior economist at ING Group.

An earlier deal to restructure Greece's debt was agreed back in February. Losses were imposed on private sector creditors with the aim of bringing Greece's debt-to-GDP ratio down to around 120% by 2020. Since then, however, Greece has missed a series of deficit tsrgets. 

"Filling the funding gap for Greece will again require some creativity," says Bzerski.

"A possible way out, at least in the short term, could be a combination of several options, such as lowering the interest rates on the first two Greek packages and front-loading parts of the funding of the second package. This could again kick the Greek can further down the road."

Elsewhere in Europe, German retail sales rose 1.5% month-on-month in September, significantly more than many analysts forecast, although year-on-year sales were down 3.1%, official figures published Wednesday show.

The Euro rallied against the Dollar following the release.

Here in the UK, prime minister David Cameron said Wednesday he is prepared to veto a rise in the European Union's budget if he does not secure "a deal that is good for Britain."

Conservative MP Mark Reckless has put forward a motion calling for a real-terms (inflation-adjusted) cut in UK contributions to the EU, and says around 40 other Conservatives support it.

"What I hope will happen," said Reckless today, "is that the government will accept this motion and will put itself and David Cameron at the head of a united Parliament, going to Brussels to call for a cut in the budget, representing Britain, representing our constituents."

The opposition Labour party has said it will also back the amendment.

Ben Traynor

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics. Ben writes and presents BullionVault's weekly gold market summary on YouTube and can be found on Google+

(c) BullionVault 2012

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

If Obama Gets Re-elected Gold Is Going To Go Through The Roof

“If Obama Gets Re-elected Gold Is Going To Go Through The Roof”

-- Posted Wednesday, 31 October 2012 | Share this article | Source: GoldSeek.com

Today’s AM fix was USD 1,718.00, EUR 1,321.54, and GBP 1,065.89 per ounce. 
Yesterday’s AM fix was USD 1,713.50, EUR 1,322.66, and GBP 1,067.07 per ounce.

Gold edged up $0.50 or 0.06% yesterday and closed at $1,709.50. Silver hit a high of $32.118 and pulled back but still finished with a gain of 0.05%.

Cross Currency Table – (Bloomberg)

Gold inched up on Wednesday but traders remain cautious ahead of the nonfarm payrolls report and the imminent US presidential election.

The devastation of Hurricane Sandy will be a further blow to the already fragile U.S. economy.  The destruction of property and vital infrastructure - two of the vital components in the wealth of a nation is negative for the economy. The last thing the over indebted families and close to default U.S. government needs are more very expensive reconstruction works. Reconstruction and 'stimulus' has to be paid for either by the tax payer in the form of taxes or a further increase in the money supply and inflation.

Event risk is high with the aforementioned issues including a change of power in China and multiple policy meetings at various central banks.

Today, the September eurozone unemployment figures released were 11.6% up from 11.5% in August.

The US fiscal cliff involving steep government spending cuts and tax hikes looms in January and is likely to support gold at these levels and lead to higher gold prices in the coming weeks.

Violence in South Africa’s mining industry continues.  The police fired tear gas and rubber bullets on strikers and protesters at top platinum producer Amplats today.

The Financial Times had an interesting article that suggested that Mitt Romney is a "threat to the gold price" (see news) and quoted an executive in a jewellery group who said that “if Obama gets re-elected gold is going to go through the roof.”

The truth is that, gold is likely to go much higher in the course of the 45th President's 4 year term - whether there is a President Obama or a President Romney.

The article suggested that gold investors would vote for Mitt Romney due to concerns about "potential" currency debasement and the US government’s indebtedness and that the Republican Party’s rhetoric of deficit reduction appeals to them:

Gold Spot $/oz, 20 Days – 30 Minutes – (Bloomberg)

“It is therefore ironic that the single greatest risk to gold at the moment is probably a Romney victory in next Tuesday’s presidential elections.

“A win by Romney is generally seen by investors as a downside risk for gold,” says Joni Teves of UBS. “Nobody wants to do anything until the elections are out of the way.”

A surprise win by Romney could lead to very short term gold weakness but the scale of the fiscal and monetary challenges facing the White House and Federal Reserve mean that the down side risk is short term and limited and investors should continue to fade the noise and focus on the long term diversification benefits of gold.

The FT continues

“History supports the case. As James Steel of HSBC notes, gold’s most dramatic rallies – in 1980 and 2011 – have occurred with Democrats in the White House (Jimmy Carter and Barack Obama). And if Mr Romney can succeed in bringing down the deficit, that could lead to a stronger dollar and therefore weaker gold.”

History supports the case somewhat. It is important to point out that gold rose for the 8 years of George Bush’s Republican Presidency. Many gold buyers would be concerned that Republican rhetoric regarding deficits is just that - rhetoric.

“But the real “Romney risk” for the yellow metal has nothing to do with fiscal policy. Instead, traders and investors are focusing on the likelihood that if Mr Romney wins the November 6 election, he would replace Ben Bernanke with a more hawkish chairman of the Federal Reserve when the latter’s term expires in January 2014.

If that means a change in direction from the Fed’s current experimental and super-accommodative monetary policy, gold could suffer. Recall the sharp sell-offs earlier this year when expectations of quantitative easing were deferred.”

Gold Spot $/oz, 01 November 2010-31 October 2012 – (Bloomberg)

Gold will not suffer when there is a change and a move away from ultra, ultra loose monetary policies. As was seen in 1980, gold’s secular bull market is likely to end if the Federal Reserve again achieves positive real interest rates.

As was seen in 1980, gold will only fall towards the end of the interest rate tightening cycle - this could take many years.

“Likewise, an Obama victory may be the green flag gold bulls have been waiting for.”

The 45th U.S. President is less relevant to the gold price than the wider global monetary, macroeconomic, systemic and geopolitical fundamentals - all of which remain extremely positive for gold. 

Asian Metals Market Update

Asian Metals Market Update

By: Chintan Karnani, Insignia Consultants

-- Posted Wednesday, 31 October 2012 | Share this article | Source: GoldSeek.com

General market conditions

Gold and silver are consolidating at the moment due to lack of trading volumes from the USA. This consolidation phase will be broken and a new range will be formed soon. The real fight between bulls and bears now starts. At lower prices physical demand will prevent prices from a crash while technical traders will be cautious going long at current prices. All the calculations of the US economy will now change due to hurricane sandy. Huge amounts of steel, copper and other base metals will be needed for reconstruction of cities affected and on infrastructure. Temporary laborers will be needed for the same and November’s job non farm payrolls will see a huge increase in employment. I suspect that the federal reserve could resort to more monetary easing to meet reconstruction needs. Insurance company’s liabilities will be high.

There is speculation some of the areas affected by hurricane “Sandy” may not be ready for the US presidential voting next week. Focus will now shift to Greece and Spain and the response from the European central bank. Intra day volatility will rise.

TECHNICAL VIEW

NYMEX CRUDE OIL (1^ST CONTRACT)  - current price $85.65

Bullish over $86.40 with $87.60 and $89.50 as price target

Bearish below $85.20 with $82.55 and $81.90 as price target

Break point: $87.00

• $81.92 is the key support and crude oil needs to trade over $81.92 to target $88.27 and $90.64
• A daily close below $86.00 on Friday will be bearish for crude oil in the short term.

MCX Nickel November – prices in Indian rupees below

Nickel can rise to 987-1030 in short term as long as it trades over 820. There will be a technical break down only if Nickel trades below 820 for three consecutive days at any time of the year.

Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views of the individual analyst, In no event shall Insignia Consultants or its employees have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this material; or in any delays, inaccuracies, errors in, or omissions of Information. Nothing in this article is, or should be construed as, investment advice. Prepared by Chintan Karnani

Disclosure: Insignia consultants or it employees do not have any trading positions on the trading strategies mentioned above. Our clients do have positions on the trading strategies mentioned in the above report.

Trade without emotions

"Print this report only if absolutely necessary. Save Paper. Save Trees."

NOTES TO THE ABOVE REPORT

PLEASE NOTE: HOLDS MEANS HOLDS ON DAILY CLOSING BASIS

PLEASE USE APPROPRIATE STOP LOSSES ON INTRA DAY TRADES TO LIMIT LOSSES.

APPROPRIATE STOP LOSSES PER LOT IN US DOLLARS ON THE TRADING CALLS GIVEN IN THIS REPORT

COMEX GOLD – $15-$17

COMEX SILVER: $25-$30

COMEX COPPER: $3

NYMEX CRUDE OIL: $0.60

SPOT SILVER: $0.25

SPOT GOLD: $15-$17

THE TIME GIVEN IN THE REPORT IS THE TIME OF COMPLETION OF REPORT

-- Posted Wednesday, 31 October 2012 | Digg This Article | Source: GoldSeek.com