View Full Version : Gold shines as China dumps greenback

6th September 2009, 23:41
Gold shines as China dumps greenback

Article from: The Australian

NOT before time -- and great timing, at that. After problems in recent years with declining gold output -- production fell by 4 per cent in the 2009 fiscal year -- Australia is back on the growth path.

Melbourne-based Surbiton Associates, which produces quarterly statistics on the local gold sector, tells us production of the yellow metal not only turned around and rose in the June quarter (by two tonnes) after three quarters of decline but we're on track to become the world's second-largest producer within a year (behind China but ahead of present No.2, the US).

Surbiton's Sandra Close says gold production should get a further boost in the present quarter from the startup of the Boddington mine in Western Australia and several other companies joining the list of producers over the next nine months.

Between now and Christmas these include A1 Minerals (AAM) with its Brightstar mine and Range River Gold (RNG) at its Mt Morgan project near Laverton. The latter has upgraded the resource at Mt Morgans to 517,700oz, at an average grade of 3.08 grams per tonne.

The other companies joining producer ranks in early 2010 are Focus Minerals (FML), Saracen Mineral Holdings (SAR), Catalpa Resources (CAH) and Integra Mining (IGR).

What a time to be churning out gold, with the metal so close to $US1000/oz.

Ask yourself this: if, as some politicians would like the world to believe, everything is on the brink of being hunky-dory, how come investment demand for gold is growing?

You should ignore the hand-wringing of some commentators about demand for gold in jewellery being down. It's irrelevant. You only have to look at China to see why.

We've been reading reports during the week that indicate the Chinese government is about to starting encouraging its 1.3 billion people to invest in gold and silver.

If you're Chinese, you'll soon be able to walk into any bank and buy, over the counter, those metals in four bars of various sizes (in the case of silver, the largest will be 5kg). The explanation -- and it sounds plausible -- is that China wants to convert more of its US currency holdings into gold and silver. It is working day and night to buy hard assets with its billions of US dollars before the greenback tanks.

Here's another piece of the puzzle. On Friday the Hong Kong Monetary Authority was reportedly removing all its physical gold holdings from depositaries in London and transferring them to a new high-security facility close to Chek Lap Kok airport.

The plan, according to investment sources, is to turn Hong Kong into a global hub for bullion trading.

Nothing important happens in Hong Kong -- and gold is very, very important -- without the instigation by, or approval from, Beijing.

South of the border

MEXICO'S role as a leading producer of gold and silver was all but destroyed by the revolution that paralysed the country from 1910 to 1920. Gold output fell by 80 per cent and silver by 65 per cent.

For more than 80 years, relatively little of the country's still substantial resource of precious metals was pulled out of the ground.

Since the mid-1990s, however, exploration and mining have blossomed again.

Many local investors did very well from the sharp price gains made by Bolnisi Gold, and then from its takeover by Coeur d'Alene Mines (CXC).

We continue to keep an eye on Azure Minerals (AZS) and await further news after a mining study showed its copper-gold-silver deposit in Mexico looked to be an economic proposition.

Now Kings Minerals (KMN) says a study of its Cerro del Gallo project has identified 120 million tonnes of gold-silver material, much of it treatable by heap leaching, and test work has resulted in good metals recovery.

Familiar story

7th September 2009, 09:27
"as some politicians would like the world to believe, everything is on the brink of being hunky-dory, how come investment demand for gold is growing?"

Since the majority of the world only know what they see in the mass media, the sheeple do believe we're on the brink of hunky-dory. Gold demand is growing because there are enough educated people accumulating bullion to make a difference.

It has been commented on in many places that if every adult in North America were to buy only one ounce of gold or silver, the price would skyrocket. Our duty is to beat them to the punch and grab their ounces cheap before they realize what's going on.