Gold Breaks $1200/oz Barrier

Gold just capped off its best month in a year — up 14% in November and 34% so far in 2009.

Helping drive the latest gains was the news out of the China Gold Association that the country’s gold demand is on pace this year to exceed 450 metric tonnes, a 14% increase over the 395.6 tonnes in 2008. (In contrast to India, jewelry sales are up double-digits in China so far this year.)

Gold $1180/oz India/IMF At It Again

 November 25, 2009 will be counted as another flying colors day for gold, the hottest commodity traded in global markets these days. Gold prices hit a historic record of $1180 per ounce, again on news reports that India is buying more gold from the International Monetary Fund (IMF).

Early this month, India’s central bank—the Reserve Bank of India (RBI)—bought 200 tonnes out of IMF’s saleable 403 tonnes of gold for a price of $1045 per ounce. Since then, gold prices have jumped more than $135 per ounce, may be the biggest rise for gold in the history of bullion trading.

Why is it that the mere news of India or for that any country in the world buying some gold from IMF driving up gold prices to unimaginable levels? Is a gold market hysteria on?

IMF Gold Sale Spikes Price

The price of gold leapt to a record peak of $1,095.40 an ounce in trading here on Wednesday in the wake of the International Monetary Fund’s massive sale of the precious metal to India.

Gold had already reached a record high of $1,087.80 on Tuesday as the IMF said it had sold 200 tons of gold to India’s central bank over a two-week period last month for $6.7 billion to bolster its finances.

After spiking to a new high Wednesday, gold pulled back to $1,091.75 in London.

Fake Gold In Ethiopia’s National Bank

The price of real gold is currently soaring Ethiopia’s national bank has been told to inspect all the gold in its vaults to determine its authenticity. It followed the discovery that some of the’ gold’ it bought for millions was gold plated steel. The first hint that something was wrong reportedly came when the Ethiopian central bank exported a consignment of gold bars to South Africa. The South Africans sent them back, complaining that they had been sold gilded steel. An investigation revealed that the bank had bought a consignment of fake gold from a supplier, who is now under arrest. Other arrests followed, including business associates of the main accused; national bank officials; and chemists from the Geological Survey of Ethiopia, whose job it is to assay the bank’s purchases of gold and certify that they are real. But what has clearly now got the government even more worried is that another different batch of gold in the bank’s vaults has also been found to be fake, and this time it was gold which had been there for several years, after being seized from smugglers trying to take it to Djibouti. The Ethiopian parliament’s budget and finance committee ordered the inspection of all gold in the national bank’s vaults. A report from the auditor-general on the affair is expected to be presented to parliament during its current session. Gold is mined in Ethiopia in considerable quantities, and a trader selling gold to the central bank has to have it tested and certified by the Geological Survey. Whether the bank bought fake gold in the first place, or whether real gold from the vaults has been swapped for gilded steel, the fraud has cost the bank many millions of dollars, and it must have involved collusion on a considerable scale. [Taken from the BBC News].

Gold On The Rise – Breaks $1000 Barrier

    Concern about a possible US recession fueled by a weak US dollar have seen the price of gold reached a record, trading at $1,000 an ounce for the first time.

The price of gold has been rising in recent months due to the weakening US dollar, the slow down in production in gold mines, particularly in South Africa and the increase in inflation.

The metal have been increasing by 20% since the beginning of the year having rose 32% in 2007.

Gold is traditionally denominated in US dollars althought the currency stopped being backed by gold in 1971. The ongoing wakening of the dollar against other currencies of the world, paricularly the yen and euro in recent days has driven investors to flock to the metal as a means to protecting themselves.

Gold futures for April delivery gained $4.60 or 0.5% to $998.40 an ounce on the Comex division of the New York Mercantile Exchange.

The price reached $1001.45 an ounce yesterday.

Historically gold has failed to keep pace with inflation. After hitting the $847 mark in January 1980, gold fitures fell 70% to $253 in Aug 1999.

Even so gold may continue to soar. The shiny commodity has long been a saft haven for investors worried about the economy.

And 1980 is proof that gold prices could go up. Though gold has never been traded at a higher price, the $847 level in 1980 would be worth $2170.00 in today’s money.More than double the current price of gold.

{Adapted from International Press Reports}