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Wednesday, December 5, 2012

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Gold World News Flash 2

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Goldman Sachs is looking out for us

Posted: 05 Dec 2012 12:58 PM PST

Golman Sachs has an opinion about Gold prices going forward.

Quote:


The price of gold slipped to a one-month low below $1,700 an ounce on Wednesday as a weaker price forecast by Goldman Sachs triggered some fund liquidation, but some professional traders think the precious metal could continue to push higher.

Refined gold is poured into molds. REUTERS/Siphiwe SibekoGoldman Sachs cut its 2013 gold outlook and said the metal's current bull cycle will likely turn next year as rising real interest rates and better growth offset monetary stimulus from the Federal Reserve.

"... Improving U.S. growth outlook will outweigh further Fed balance sheet expansion and the cycle in gold prices will likely turn in 2013," the New York-based investment bank wrote in a note to clients.

Goldman cut its 3-month price target on gold from $1,840 to $1,825 an ounce while its 6-month target dropped from $1,940 to $1,825 an ounce, and its 12-month target fell from $1,940 to $1,800 an ounce.

http://finance.yahoo.com/news/pros-s...190821876.html

Jim Rogers: There's Too Much Speculation In Gold

Posted: 05 Dec 2012 12:44 PM PST

By CommodityHQ:

By Jared Cummans

Gold has been a major talking point in the commodity world for the last few weeks. Although it seems as if the metal has been grabbing headlines for the better part of a year, the anticipation of the fiscal cliff and the future of the U.S. dollar have gold investors on the edge of their seats. Famed investor Jim Rogers recently chimed in with his views on the precious metal, as he has been an owner for quite some time, but investors may not like what he has to say.

After reiterating the shocking trend of gold turning in 12 straight winning years, Rogers pointed out that he feels the asset is the subject of too much trader speculation for the time being. "If you look at the open interest from the CFTC, the speculators have been piling into gold. The number of call


Complete Story »

Top Dividend Stocks Favored By David Einhorn

Posted: 05 Dec 2012 12:19 PM PST

By Osman Gulseven:

By Aubrey Tabuga

David Einhorn's Greenlight Capital is an American hedge fund with around $6 billion worth of assets under management. Einhorn became famous for short-selling the Lehman stock prior to the latter's collapse in 2008. He is one fund manager who had benefited from strategic shorting when the market is struggling. Einhorn is popular for successfully turning his initial investment of $900,000 to a $6 billion hedge fund in a span of 12 years.

In this article I investigate the dividend stocks that this popular hedge fund favors. These are Seagate Technology Public Limited Company (STX), Microsoft (MSFT), Computer Sciences Corporation (CSC), Ensco plc (ESV), and Einstein Noah Restaurant (BAGL). I analyze them from a fundamental perspective, focusing on the yield, stability of dividends, and growth prospects, to see whether they are worth


Complete Story »

When Prices Have No Meaning

Posted: 05 Dec 2012 12:12 PM PST

A reader recently passed along some fascinating material providing a detailed review of the Weimar Hyperinflation experienced by Germany in the 1920's, along with some astute analysis of those events in order to give readers a clear picture of this economic catastrophe.

The purpose of this piece, however, is not to review that article; so those interested in further enlightenment will have to obtain it on their own. What my own reading of that analysis provided was both some interesting surprises, along with reinforcement of several of my own economic premises.

Among the most important of these is the illusory nature of "change." The Weimer Hyperinflation provides us with a classic illustration of that concept. Viewed from nearly a century in the future, our assumption is that this "episode" was characterized by a consistent progression: either the parabolic explosion in prices (and collapse in the value of currency) which we are taught defines hyperinflation, or (at the least) some steady-but-dramatic linear progression.

In fact Germany's hyperinflation did not unfold like that at all. Rather, there were dramatic ebbs and surges, including intervals of weeks at a time where the Reichsmark actually rose in value versus other currencies. Imagine the difficulty in trying to convince the Average German that their currency was "being destroyed by hyperinflation" when they saw it rising in value for weeks at a time. Hyperinflation, what hyperinflation?

Undoubtedly, these Average Germans told themselves that if there were any hyperinflation event that they would "see it coming." They were wrong. With the modern citizens of our (collectively doomed) Western economies, their folly is two-fold.

First they suffer from the same self-delusion of the German people: that they would/will see any economic catastrophe coming; or (at worst) recognize the event as it is happening. This alone is a potentially terminal lapse of judgment. Secondly, these Sheep have been deceived by the statistical lies of our duplicitous governments.

The poster-child for this deceit is the U.S. government. For nearly four years a Cast of Liars (from government, media, and the banking community) have assured Americans that they have been enjoying an "economic recovery." Meanwhile, in the real world; the percentage of employed Americans continues to relentlessly decline, while retail sales in this "consumer economy" are collapsing.

The economy of the world's Great Energy Glutton is so anemic that the U.S. is now a "net energy exporter"; due to plummeting demand within its own (energy-intensive) economy. If those reality-checks are not enough to rouse Americans from their propaganda-induced stupor, perhaps one final question will accomplish this. How could a "four-year recovery" take the U.S. directly to an economic Cliff?

By definition, any "recovery" should be taking the U.S. economy away from any kind of economic cliff; since any honest characterization of an "economic recovery" directly and necessarily implies that the economy is healing. The Fiscal Cliff which the Corporate Media is trumpeting with as much hysteria as they can muster is proof (by itself) that there never was any U.S. economic recovery.

Weakness in Gold “Being Caused by Futures Market”, “Mounting Risk” Britain Will Lose Triple-A Rating

Posted: 05 Dec 2012 11:52 AM PST

Weakness in Gold "Being Caused by Futures Market", "Mounting Risk" Britain Will Lose Triple-A Rating

THE WHOLESALE MARKET gold price traded just above $1700 an ounce during Wednesday morning in London, having risen back above that level in the earlier Asian session, though they remained near one-month lows.

Silver hovered just above $33 an ounce this morning, down 1.3% on the week, while stocks and commodities edged higher.

US and German government bond prices gained, while longer-dated UK gilts fell ahead of the chancellor's Autumn Statement in London, at which he will unveil the latest UK economic projections.

A day earlier, gold fell through $1700 an ounce on Tuesday for the first time in nearly a month.

"Because physical demand appears relatively robust at present, the fall in the price of gold was no doubt triggered mainly by the futures market," says today's commodities note from Commerzbank.

Open interest in gold futures trading on the New York Comex fell for the seventh session running Tuesday, down around 10% from the start of last week, according to data from Comex operator CME Group – although that period does cover last Wednesday's sudden price drop.

The volume of gold held by world's largest gold ETF SPDR Gold Shares (GLD) meantime rose to a fresh all-time high yesterday at 1351.2 tonnes.

Britain's chancellor George Osborne was this morning expected to announce a downward revision of UK growth forecasts by the Office for Budget responsibility during Wednesday afternoon's Autumn Statement. Lower economic growth would cast doubt on Osborne's commitment to reduce the UK's government debt-to-GDP ratio by 2015.

"The ratings agencies will not be impressed," says Societe Generale economist Brian Hilliard.

"The risk is mounting that one or other soon strips the UK of its hallowed AAA rating."

"You can criticize the government because we have had very little growth since the [2010 general] election because austerity has been too harsh," says George Buckley, chief UK economist at Deutsche Bank.

Activity in the UK services sector slowed last month, according to purchasing managers index data published Wednesday.

Elsewhere in Europe, Germany's services sector showed signs of improvement during November, with activity contracting at a slower rate than the previous month, PMI data show.

Similar data for the US are due at 08.30 EST, while the latest ADP Employment Report – regarded by some as a precursor to Friday's official nonfarm payrolls – is also due out today.

In Washington meantime the Republicans risk pushing the US economy over the fiscal cliff, White House communications director Dan Pfeiffer said yesterday.

"This is a choice of the Republican Party," said Pfeiffer. "If they are willing to do higher [tax] rates on the wealthy, there's a lot we can talk about."

Unless Congress passes legislation to avoid it, tax cut expiries and government spending cuts are due at the end of this month and early January.

"We suspect that it may be best to remain on the sidelines during December and let this momentous event play itself out," says December's commodities note from brokerage INTL FCStone.

"There is always a chance, albeit a small one, that the politicians will actually fail to deliver, resulting in a multi-market meltdown that could set in during the first week in January… [but] we think the odds strongly favor a modest agreement that will likely be announced over the second half of December and one which should push most markets substantially higher."

South Korea's central bank meantime announced Wednesday that it bought 14 tonnes of gold bullion in November.

"Gold is a physical, safe asset and allows [the country] to deal with changes in the international financial environment more effectively," said a Bank of Korea statement.

Ben Traynor
BullionVault

Gold value calculator   |   Buy gold online at live prices

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.

Gary Wagner’s Gold & Silver Outlook for 2013

Posted: 05 Dec 2012 11:12 AM PST

Market technician Gary Wagner joined us via video to share his 2013 forecast for Gold & Silver.

Gold Should Be Nearing A Major Bottom

Posted: 05 Dec 2012 09:59 AM PST

David A Banister- www.MarketTrendForecast.com

The recent rally in Gold took the metal from the 1620's to roughly 1800 per ounce before the ensuing corrective action began.  Back around October 20th we warned our readers about a likely " wave 2" correction in Gold and we had several reasons for that warnings.  One of the biggest concerns we had was that the sentiment surveys were  running  very hot at the time. The percentage of professional advisors polled that were bullish on GOLD was 88%, with 7% neutral and only 7% bearish.  Elliott Wave Theory is the foundation of our work, though we are sure to mix in other clues and elements to "fact check" our reads.  When you see sentiment readings that high, coupled with a $180 rally leading up to those readings, you can begin to look for clues of a top.

The other warning signal we noted was the MACD signal which had crossed south and was a topping warning signal to get out of GOLD for intermediate traders.  At the time, we surmised that a "wave 2" correction in sentiment, and therefore price was required to work off the overbought conditions.  The first level attacked the 1681 areas roughly and then a "B" wave rally to 1751 roughly ensued. Wave 2's are made up of a 3 wave pattern, A down- B up- and C down to finish.  It appears that GOLD is now in the final C wave down in sentiment to complete the correction pattern.

Clues for the "C" wave include the Goldman Sachs quasi-bearish 2013 GOLD forecast that came out today.  In addition, the media attempting to explain the drop in GOLD as being related to stronger than expected economic indicators or fiscal cliff negotiations, neither of which make any sense at all.

We expect GOLD therefore to complete the C wave correction at 1631 or 1681 specifically. There are Fibonacci fractal relationships to the first leg down (The A wave) at those levels, and they tend to repeat themselves in terms of crowd behavior.  At the 1681 level we have the C wave equal to 61.8% of the A wave amplitude.  At 1631 we have a more traditional C wave equal to the A wave.  In either event, look for a washout low in GOLD occurring at anytime near term, and for traders to start scaling in long.

Below is the GLD ETF chart showing the two most likely bottoms for the precious metal, one of which already qualifies as of today's trading:

Gold Market Forecast

Consider signing up for our free weekly report at www.MarketTrendForecast.com or take advantage of our 33% coupon by signing up today for SP 500 and GOLD forecasts updated on a daily basis.

ECB : increase of oz1901,33 in gold and gold receivables

Posted: 05 Dec 2012 09:01 AM PST

Citi Cuts 11,000 Jobs, Illustrating Rentier Capitalism in Operation

Posted: 05 Dec 2012 08:40 AM PST

Citi is a particularly blatant example of a way of operating that has become endemic in American business: when things get tough, throw as many employees as possible over the bus, and use that to maintain or even increase the pay of the top echelon. In investment banking, the number of folks who are spared from corporate austerity is larger than in other businesses, since those businesses have more profit centers (a single trader can have his own P&L) but the same general principle applies.

William Cohan of Bloomberg highlights this phenenomon:

This is the reverse of how business used to operate. When I was a kid on Wall Street, the line at Goldman was that partners lived poor and died rich. Even though everyone's pay would suffer if the firm had a bad year (that was the poing of bonuses, you knew your pay depended on firm performance), the partners took more of the variability in pay themselves and did everything necessary to preserve employment levels. The first time Goldman had actual layoffs, as in fired people because the firm was having a bad year (as opposed to for individual performance reasons) was in the early 1990s, and it was highly traumatic. And this attitude was not unusual in Corporate America. A CEO would reduce his pay if his firm was suffering; broad headcount cuts were seen as a sign that a business was in very serious trouble, and the market often did not react well to them.

Now Citi may have some fat in selected areas, and it is a famously badly run firm. But given how aggressive banks have been in wringing efficiencies out of their operations, and how much pressure Citi has been under to rationalize its businesses, these cuts look to be reactive, to reassure the Investor Gods that Action is Being Taken.

On a broader basis, Henry Blodget wrote today how destructive the "cream for the top, crumbs for everyone else" business attitude is:

The first chart shows that big American companies now have the highest profit margins in history.

The second chart shows that the companies are now paying the lowest wages in history as a percent of the economy.

If you happen to be an owner of a big American corporation, these charts could be construed as good news: You're coining it!

If you happen to be a rank-and-file employee, however–or someone hoping to be such an employee–this is bad news: You're sharing less than ever before in the success of American industry.

This situation, by the way, is only temporarily good news for the company owners. Because, by pumping so little back into the economy in the form of employee wages (and capital investments–the other area where companies are scrimping), our companies are constraining the growth of the economy.

Why?

Because the rank-and-file employees of America's corporations are also mainstream American consumers–the folks who account for ~70% of the spending in the economy.

Almost every dollar these folks earn in salaries gets spent–on food, clothing, houses, education, entertainment, cars, and other goods and services that big American companies produce.

So, if, instead of hoarding their wealth by hiking their profit margins ever higher, companies invested more in employees and equipment, they would help the whole economy.

And the companies would also, of course, help their employees–the people who are dedicating their lives to helping the companies earn such vast profits.

This situation, by the way, is only temporarily good news for the company owners. Because, by pumping so little back into the economy in the form of employee wages (and capital investments–the other area where companies are scrimping), our companies are constraining the growth of the economy.

Why?

Because the rank-and-file employees of America's corporations are also mainstream American consumers–the folks who account for ~70% of the spending in the economy.

Almost every dollar these folks earn in salaries gets spent–on food, clothing, houses, education, entertainment, cars, and other goods and services that big American companies produce.

So, if, instead of hoarding their wealth by hiking their profit margins ever higher, companies invested more in employees and equipment, they would help the whole economy.

And the companies would also, of course, help their employees–the people who are dedicating their lives to helping the companies earn such vast profits…

The business-ethos pendulum in this country has now swung so far toward "profit maximization" that most American companies would never dream of voluntarily sharing more wealth with their employees.

These employees, after all, are not viewed as people. They're viewed as "costs"–cash outflows that just drain financial value away from owners…

Think about that for a minute.

Some of the richest, most revered companies in this country–companies that are currently generating record-high profits–pay their full-time employees so little that they're poor.

Even more depressing is the fact that concepts like "fairness" and "sharing" are now seen as evidence of bleeding-heart socialism–as though the only way to be a bona fide capitalist is to treat your employees like costs and pay them as little as possible.

But Citi and its ilk are perpetuating this race to the bottom. We've had a radical shift in business and cultural values in a mere 30 years. Neofeudalism seems to serve the elites just fine, and many of those who are not on at top of the food chain seem reluctant to believe that the system has been restructured to exploit them.

Gold versus yen update

Posted: 05 Dec 2012 08:15 AM PST

Gold fell against the yen over the last week, as we approached the top of a larger consolidation range. The andyen;145,000 level is acting as a barrier again, and as a result the pullback wasn't ...

PMI and Keegan to Merge as Equals to Form Asanko Gold

Posted: 05 Dec 2012 07:52 AM PST

MERGER TO CREATE LEADING WEST AFRICAN GOLD DEVELOPMENT COMPANY

Vancouver, December 5, 2012 --PMI Gold Corporation ("PMI") (TSX: PMV, ASX: PVM, Frankfurt: PN3N.F) and Keegan Resources Inc. ("Keegan") (TSX, NYSE MKT: KGN) are pleased to announce that today they have entered into a definitive arrangement agreement to combine their respective businesses (the "Merger") and to create a leading West African gold development company.  A joint conference call hosted by Peter Breese and Collin Ellison will be held at 4:30 pm (EST) and 1:30 pm (PST) today (8:30 am Thursday in Sydney) to discuss this transaction. Call-in details are provided at the end of this release. 

The combined company will continue under the name "Asanko Gold Inc." ("Asanko"), reflective of the West Ghana region in which the two companies hold their principal gold projects. Asanko will be led by Peter Breese, the current President and CEO of Keegan and Collin Ellison, the current Managing Director and CEO of PMI.  Under terms of the Merger (which will be effected by means of a statutory plan of arrangement of PMI), each PMI shareholder will receive 0.21 Asanko shares for each PMI share (the "Exchange Ratio"). As Keegan is the surviving corporate entity, existing Keegan security holders will not need to exchange their securities in the Merger. The Merger will create a combined company with an aggregate market capitalization expected to be in the $700 million range. Existing Keegan and PMI shareholders will each own approximately 50% of the combined company, inclusive of currently in-the-money dilutive securities.

HIGHLIGHTS OF THE MERGER

Asanko is set to become the leading gold development company in West Africa with near term production expected from a unitized project comprised of two nearby gold deposits -- Obotan and Esaase. Other merger highlights include:

  • Measured and Indicated Resources of combined projects = 6.94 million ounces at an average grade of 1.90 grams per tonne1,2,3;
  • Additional Inferred Resources of combined projects = 2.65 million ounces at an average grade of 1.87 grams per tonne1,2,3;
  • Strongly capitalized with over $340 million in cash on hand and no debt outstanding;
  • Obotan can proceed to construction quickly -- approximately 200,000 ounces per year with first gold pour expected in 2014;
  • Esaase development to be funded from cash flow -- additional 150,000 to 200,000 ounces per year by 2017;
  • Targeted operational and capital synergies through a 2013 optimization analysis - Obotan and Esaase located within a 15 km radius;
  • Experienced mine development and operational executive and management team to build and operate;
  • Consolidated Asankrangwa gold belt -- over 70 km of belt strike anchored by the Obotan and Esaase deposits and over 1,000 square kilometers in Ghana;
  • Planned growth through exploration of numerous high priority targets on the belt as well as Kubi and Asumura;
  • Enhanced capital markets presence -- Asanko is expected to appeal to a broader shareholder base, increase analytical following and improved share trading liquidity;
  • Merger is expected to be tax neutral or deferred for substantially all participants; and
  • Asanko shares issued to PMI shareholders under the Merger will be free of trading restrictions in Canada and United States (except for affiliated persons); Asanko shares are required to be listed on the TSX, ASX and NYSE MKT Equities Exchange upon completion of the Merger.

Peter Breese, President and CEO of Keegan, stated: "This is truly a unique and exciting opportunity to combine these two adjacent and near-term development projects and to have available some $340 million in combined cash to fund a Mid-Tier scale production growth profile starting in about two years. We expect significant synergies through the joint development of Obotan and Esaase which we expect will ultimately create one of the largest gold mining and exploration districts in Africa."

Collin Ellison, Managing Director and CEO of PMI, stated: "We think the combination of these two companies with adjacent and complementary deposits, highly prospective exploration holdings on the Asankrangwa belt, outstanding self-funding financial flexibility and a combined management strength will allow both groups of shareholders to realize maximum value through Asanko Gold's path to production and aggressive growth profile through to Mid-Tier Producer status by 2017."

MANAGEMENT TEAM AND BOARD OF DIRECTORS

The Board of Directors and management of Asanko will draw from the expertise of both companies. Peter Buck and Shawn Wallace, the respective Chairmen will become Co-Chairmen, while Peter Breese will become Chief Executive Officer and Collin Ellison will become Asanko's President.  Other senior management will be determined following completion of the Merger.

On immediate completion of the Merger, the Board will be comprised of three directors from each predecessor and a seventh director will be added post-completion.  The initial six directors of Asanko will be, from PMI: Peter Buck, Ross Ashton and John Clarke; and from Keegan: Shawn Wallace, Colin Steyn and Gord Fretwell.

DETAILS OF THE ARRANGEMENT AGREEMENT

The proposed Merger will be effected by way of court-approved plan of arrangement of PMI (the "Arrangement") under the Business Corporations Act of British Columbia. Full details of the Merger will be included in joint management information circulars for both PMI and Keegan which will be mailed to their respective shareholders in late January 2013. The Merger will be subject to approval of 50% plus one of the votes cast by Keegan shareholders and by 2/3 of the votes cast by PMI shareholders at their respective special meetings of shareholders which will both be held on the same day targeted for late February, 2013. In addition to the shareholder approvals and a court approval, the Merger is subject to applicable regulatory approvals and the satisfaction of other customary closing conditions, including Asanko obtaining an ASX listing for its shares. A copy of the arrangement Agreement will be posted at www.SEDAR.com and a summary will be included in the joint information circular.

Pro-forma the Arrangement, Asanko will have approximately 171.7 million shares outstanding, 11.4 million options outstanding and 9.8 warrants outstanding. PMI options and warrants will be cancelled and replaced by equivalent length options and warrants of Asanko which will be adjusted as to number and exercise based on the Exchange Ratio. Pro-forma ownership of Asanko is approximately 50% PMI and 50% Keegan including currently in-the-money dilutive securities.

Asanko will maintain its TSX and NYSE MKT listings, and will forthwith apply to list on the ASX subject to completion of the Merger. In the United States the issuance of securities of Asanko under the Merger will be conducted in reliance on the exemption from registration found under section 3(a)(10) of the Securities Act of 1933. Asanko will continue to be a foreign private issuer under United States securities laws.

The Arrangement Agreement includes mutual deal protection provisions, including no solicitation obligations, right to match, a mutual $13 million break fee and customary fiduciary-out provisions in the event of a superior proposal being received by either company.

Both companies' Boards of Directors have determined that the proposed business combination is in the best interests of their respective shareholders based on a number of factors, including verbal fairness opinions received from each of their respective financial advisors.  These opinions are subject to certain assumptions and limitations and opine on the fairness, from a financial point of view, of the consideration to be received by their respective shareholders pursuant to the Merger. These factors will be further discussed in the joint information circular. Each company's Board of Directors has unanimously approved the terms of the proposed Merger and will recommend that their respective shareholders vote in favour of the Merger at their respective shareholder meetings. In addition, directors and officers of both companies have entered into voting lock-up agreement to vote in favour of the Merger.

ADVISORS AND COUNSEL

PMI has retained Macquarie Capital Markets Canada Ltd. to act as financial advisor and Stikeman Elliott LLP to act as legal advisor.

Keegan has retained Canaccord Genuity to act as financial advisor and McMillan LLP to act as legal advisor.

NOTES:

1.  Mineral Resources for Esaase stated using a 0.8 g/t Au cut-off, NI 43-101 Technical Report filed on SEDAR November 23, 2012 and Mineral Resources for Obotan stated using a 0.5 g/t cut-off, NI 43-101 Technical Report filed on SEDAR on May 25, 2012.

2. NI43-101/JORC Code compliant Mineral Resource inventory for Obotan consist of Measured Resources of 15.57Mt grading 2.47g/t Au for 1.23Moz; Indicated Resources of 29.21Mt grading 2.00g/t Au for 1.88Moz; and Inferred Resources of 21.91Mt grading 1.99g/t Au for 1.40Moz, as reported in the NI43-101 Technical Report filed on SEDAR on May 25, 2012.

3. Figures shown exclude PMI's Kubi Gold Project consisting of NI 43-101/JORC Mineral Resources estimate of  Measured 0.66 Mt grading 5.30 g/t for 112k oz, Indicated 0.66Mt grading 5.65 g/t for 121 k oz, Inferred 0.67Mt grading 5.31 g/t for 115k oz. The preceding information relates to Mineral Resources at the Kubi Main Deposit, Ghana, is based on a resource estimate that has been audited by Simon Meadows Smith, who is a full time employee of SEMS Exploration Services Ltd, Ghana. Simon Meadows Smith is a Member of the Institute of Materials, Minerals and Mining (IMO3), London and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, and under NI43-101. Simon Meadows Smith consents to the inclusion in press release of the matters based on information in the form and context in which it appears.

CONFERENCE CALL AND WEBCAST INFORMATION

A joint conference call hosted by Peter Breese and Collin Ellison will be held today (Wednesday) at 4:30 pm (ET), 1:30 pm (PT), 9:30 pm (London), Thursday 5:30 am (Perth) and 8:30 am (Sydney) to discuss this merger.  Details are as follows:

Live Webcast Information:

Event Title:  PMI and Keegan Resources Merger Announcement
To view the live webcast: http://www.investorcalendar.com/IC/CEPage.asp?ID=170293
Webcast replay available until:  December 11, 2013 at www.InvestorCalendar.com

Teleconference Information (all numbers are Toll-Free):

Live Participant Dial In (North America):  877-407-8033
Live Participant Dial In (International):  201-689-8033
Conference ID #: 405440
-----------------------------------------
Teleconference Replay available until:  December 19, 2012 at 11:59pm
Replay Number (North America):  877-660-6853
Replay Number (International):  201-612-7415
Conference ID #: 405440

Webcasts will also be available at Keegan's website at www.keeganresources.com and PMI's website at www.pmigoldcorp.com.

About PMI Gold Corporation

PMI is an international gold company which is focused on developing a substantial West African gold business spanning three emerging mining centres in south-west Ghana, one of the world's most prolific gold producing regions. PMI has a strong portfolio of assets in Ghana, with a dominant 70km contiguous landholding in the Asankrangwa Gold Belt with interests in 9 concessions which comprises the 100% owned Obotan Gold Project and the 100% owned Asanko Regional Exploration Project. PMI also holds 2 mining leases and 2 concessions within the Ashanti Gold Belt which comprises the advanced exploration Kubi Gold Project.  The Obotan Gold Project (Measured Resources of 15.57Mt grading 2.47g/t Au for 1.23Moz; Indicated Resources of 29.21Mt grading 2.00g/t Au for 1.88Moz; and Inferred Resources of 21.91Mt grading 1.99g/t Au for 1.40Moz, based on a 0.5g/t Au cut-off) is scheduled to start gold production in 2014 and expected to produce an average of 221,500 oz Au per year over the first five years.  Mineral Resources is based on a resource estimate audited by Mr Peter Gleeson, who is a full time employee of SRK Consulting. Mr Gleeson is a Member of the Australian Institute of Geoscientists (MAIG) with sufficient experience relevant to the style of mineralization and type of deposit under consideration and to the activity undertaken to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' and as defined in terms of NI43-101 standards for resource estimation of gold.  Mr Gleeson has more than 5 years' experience in the field of Exploration Results and of resource estimation in general and consents to the inclusion of matters based on information in the form and context in which it appears.

PMI trades on the TSX, ASX and Frankfurt under the symbols PMV, PVM and PN3N.F, respectively.

Collin Ellison, Bsc Mining, MIMMM, C.Eng is the Qualified Person within the definition of that term under NI 43-101, who has assumed responsibility for the technical disclosure relating to PMI in this release.

The NI43-101 technical report outlining the Obotan  Project Mineral Resources and Reserve Estimate and the results of the Feasibility Study on September 17, 2012 was prepared by GR Engineering Services Limited, and co-authored by P. Gleeson, B.Sc. (Hons), M.Sc, MAIGS, MGSA, J. Price, FAusIMM(CP), FGS, MIE(Aust.), R Cheyne, BEng. (Mining), FAusIMM, CEng (IEI), and G. Neeling, BAppSc. (Multidisciplinary) FAusIMM, each of whom is independent for the purposes of NI 43-101.

About Keegan Resources Inc.

Keegan is a gold development company which has been focussing on near term gold production at its high grade multi-million ounce Esaase gold project in Ghana. The Company offers investors the opportunity to share ownership in the rapid exploration and development of high quality pure gold assets. Keegan is focused on its wholly owned flagship Esaase gold project (3.83 million ounces of gold in the Measured and Indicated category with an average grade of 1.73 g/t Au and 1.25 million ounces of gold in the Inferred category with an average grade of 1.75 g/t Au, based on a 0.8 g/t Au cut-off) located in Ghana, West Africa; a highly favourable and prospective jurisdiction. Managed by highly skilled and successful technical and financial professionals, Keegan is well financed with no debt. The Company is also strongly committed to the highest standards for environmental management, social responsibility, and health and safety for its employees and neighbouring communities.

Keegan trades on the TSX and the NYSE MKT under the symbol KGN.

Greg McCunn, P.Eng. of Keegan Resources is the Qualified Person under NI 43-101 who has assumed responsibility for the technical disclosure relating to Keegan in this release.

Charles J. Muller, B.Sc. Geology (Hons), Pr.Sci.Nat., MGSSA, a Director of Minxcon Pty Ltd. of Johannesburg, South Africa and an independent Qualified Person under NI 43-101 is responsible for any disclosure related to Keegan's Mineral Resources in this release.

Cautionary Note Regarding Forward-Looking Statements and Information:

This PMI and Keegan joint press release contains "forward-looking information", as such term is defined in applicable Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. Such statements concern PMI's and Keegan's future financial or operating performance and other statements that express management's expectations or estimates of future developments, circumstances or results.  Generally, forward-looking information can be identified by the use of forward-looking terminology such as "expects", "believes", "anticipates", "budget", "scheduled", "estimates", "forecasts", "intends", "plans" and variations of such words and phrases, or by statements that certain actions, events or results "may", "will", "could", "would" or "might", "be taken", "occur" or "be achieved". Such forward-looking information may include, without limitation, statements regarding the completion and expected benefits of the proposed Merger and other statements that are not historical facts.  Forward-looking information is based on a number of assumptions and estimates that, while considered reasonable by management based on the business and markets in which PMI and Keegan operate, are inherently subject to significant operational, economic and competitive uncertainties and contingencies. Assumptions upon which forward looking statements relating to the plan of arrangement have been made include that PMI and Keegan will be able to satisfy the conditions in the Arrangement Agreement, that ongoing due diligence investigations of each party will not identify any materially adverse facts or circumstances, that the required approvals will be obtained from the shareholders of each of PMI and Keegan, that all required third party, and that regulatory and government approvals will be obtained.  PMI and Keegan caution that forward-looking information involves known and unknown risks, uncertainties and other factors that may cause PMI's and Keegan's actual results, performance or achievements to be materially different from those expressed or implied by such information, including, but not limited to: gold price volatility; fluctuations in foreign exchange rates and interest rates; between actual and estimated reserves and resources or between actual and estimated metallurgical recoveries; costs of production; capital expenditure requirements; the costs and timing of construction and development of new deposits and expansion of existing operations; the success of exploration and permitting activities; parts, equipment, labor or power shortages or other increases in costs; mining accidents, labour disputes or other adverse events; and changes in applicable laws or regulations. In addition, the factors described or referred to in the section entitled "Risk Factors" in PMI's Annual Information Form for the year ended June 30, 2012 or under the heading "Business Description -- Risk Factors" in Keegan's Annual Information Form for the financial year ended March 31, 2012, both of which are available on the SEDAR website at www.sedar.com, should be reviewed in conjunction with the information found in this press release.  Although PMI and Keegan have attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in forward-looking information, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended.  There can be no assurance that such information will prove to be accurate or that management's expectations or estimates of future developments, circumstances or results will materialize. As a result of these risks and uncertainties, the proposed Merger could be modified, restricted or not completed, and the results or events predicted in these forward looking statements may differ materially from actual results or events.  Accordingly, readers should not place undue reliance on forward-looking information.  The forward-looking information in this press release is made as of the date of this press release, and PMI and Keegan disclaim any intention or obligation to update or revise such information, except as required by applicable law and neither Keegan not PMI assume any liability for disclosure relating to the other company herein.

Cautionary Note to US Investors Regarding Mineral Reporting Standards:

PMI and Keegan prepare their disclosure in accordance with the requirements of securities laws in effect in Canada, which differ from the requirements of US securities laws. Terms relating to mineral resources in this press release are defined in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects under the guidelines set out in the Canadian Institute of Mining, Metallurgy, and Petroleum Standards on Mineral Resources and Mineral Reserves.  The Securities and Exchange Commission (the "SEC") permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce.  PMI and Keegan use certain terms, such as, "measured mineral resources", "indicated mineral resources", "inferred mineral resources" and "probable mineral reserves", that the SEC does not recognize (these terms may be used in this press release and are included in the public filings of each of PMI and Keegan which have been filed with securities commissions or similar authorities in Canada).

Sources: 

FOR FURTHER INFORMATION, PLEASE CONTACT:

Keegan

Peter Breese, President and CEO
John Eren, VP Investor Relations
Tel: 1-604-683-8193 or 1-800-863-8655
Email:

info@keeganresources.com
Website: www.keeganresources.com 

PMI

Collin Ellison, Managing Director and CEO
Rebecca Greco, Fig House Communications
Tel: 1-416-822-6483 or 1-888-682-8089
Nicholas Read, Read Corporate
Tel: 61-8- 9388 1471
Email:

info@pmigoldcorp.com
Website: www.pmigoldcorp.com 

 

James Turk: Above-ground gold stock likely smaller than commonly thought

Posted: 05 Dec 2012 07:48 AM PST

“Gold Is A Physical Safe Asset” Says Central Bank of Korea

Posted: 05 Dec 2012 07:20 AM PST

gold.ie

Dollar Cliff?

Posted: 05 Dec 2012 07:11 AM PST

Merk Fund

Alasdair Macleod: GLD and SLV are UnSafe

Posted: 05 Dec 2012 06:56 AM PST

Andy Duncan interviews Alasdair Macleod, Head of Research at GoldMoney. They talk about possible security issues with the big gold and silver ETFs GLD and SLV due to insufficient regulation, and also discuss western central banks' gold leasing activities.

from goldmoneynews:

In his recent article (gata.org/node/11965) published on the GATA website, Alasdair Macleod writes about how custody arrangements for the GLD and SLV exchange traded funds may be compromising shareholder security because they exist outside the regulatory regime of the UK's Financial Services Authority, and instead solely rely upon the "good practices" of the LBMA.

As part of their discussion, they touch upon the merits and risks of gold investors using ETFs as investment vehicles, as opposed to holding physical gold outside of the banking system. They further discuss the general flow of gold from the West to Asia, and the leasing practices of western central banks. The leased out gold is fabricated and mainly sold to Asian customers — who still regard gold as money — perhaps never to return to the leasing originators. As well as working for GoldMoney, Alasdair Macleod also publishes articles at his own website FinanceAndEconomics.org. This podcast was recorded on 3 December 2012.

~TVR

Vision Victory: Hyperinflation 2013

Posted: 05 Dec 2012 06:48 AM PST

AIH talks with VV:
(1) We discuss how we may have gold + silver trading lower (because of the fiscal cliff)
(2) Daniel and I discuss whether there will be hyperinflation in Japan
(3) Daniel says that hyperinflation in the U.S. could occur as early as 2013

from altinvestorshangout:

~TVR

IT'S OVER: Goldman Calls The End Of The Great Gold Bull Market

Posted: 05 Dec 2012 06:40 AM PST

The mighty Squid has spoken.

Goldman commodity analyst Damien Courvalin is out with a big call: The top in gold is in.

The firm says that the primary driver of gold prices are real interest rates (which have been super-low in the United States, in part thanks to aggressive Fed easing) and that with the economy coming back, this era is coming to an end.

Before you get the details of this specific call, you have to understand the firm's overall view of the economy.

Last Week, Goldman economist Jan Hatzius made a big economic call... that the era of sub-par, post-Financial Crisis growth would come to an end sometime in the second half of 2013. And Courvalin, in lowering his gold outlook, is keying off of this call.

Here are the two key paragraphs from the report:

Improving US growth outlook offsets further Fed easing
Our economists forecast that the US economic recovery will slow early in 2013 before reaccelerating in the second half. They also expect additional expansion of the Fed's balance sheet. Near term, the combination of more easing and weaker growth should prove supportive to gold prices. Medium term however, the gold outlook is caught between the opposing forces of more Fed easing and a gradual increase in US real rates on better US economic growth. Our expanded modeling suggests that the improving US growth outlook will outweigh further Fed balance sheet expansion and that the cycle in gold prices will likely turn in 2013. Risks to our growth outlook remain elevated however, especially given the uncertainty around the fiscal cliff, making calling the peak in gold prices a difficult exercise.

Gold cycle likely to turn in 2013; lowering gold price forecasts
We lower our 3-, 6- and 12-mo gold price forecasts to $1,825/toz, $1,805/toz and $1,800/toz and introduce a $1,750/toz 2014 forecast. While we see potential for higher gold prices in early 2013, we see growing downside risks.

The essence of the call is boiled down to this chart, which compares gold prices to real interest rates (inverted). Given their expectation that real interest rates will rise, gold will follow the dotted line, and will decline the same way there was a decline in the 1980s






Goldman Sachs


The key thing to realize is that this call is really the only natural corrolary to Hatzius' call that growth will accelerate to above-trend levels in the second half of next year.

The firm's overall stance is that the deleveraging/balance sheet economic crisis is coming to an end. THat will end this rates era, and this huge run for gold.


Read more: http://www.businessinsider.com/goldm...#ixzz2EBkOzePJ

Precarious Spot for the Majors

Posted: 05 Dec 2012 06:34 AM PST

Gold and silver are breaking down again, and treasuries are showing signs of life.

Precious metals gapped lower on Tuesday, showing a continuation of the weakness first displayed last week.

click to enlarge

Long bonds, meanwhile, managed to reverse higher, increasing the odds of an upside breakout from a bullish weekly consolidation pattern.

The major indices look vulnerable here, especially from a weekly perspective. The Dow, for example, is showing a bearish wedge pattern in the context of a broadly intact downtrend.

This also fits the pattern in multiple sectors and industries, where near term momentum has either gradually stalled or run into resistance.

Another example of price action at resistance is the euro (EURUSD), which is now challenging the $1.31 level for the third time since September. Third time the charm? Perhaps not.

click to enlarge

Fiscal cliff negotiations remain a black box. Bulls hold out hope that a positive resolution could send equities surging higher, along with favorable seasonal patterns (stocks traditionally do well in December).

But as of now, negatives appear to outweigh positives. Overextended and prone to mean reversion is a dangerous combo.

We now have a handful of shorts on, including gold stocks (GDX), and a newly established long treasuries position. We'll be steadily adding more equity shorts to the roster if the market sees downside followthrough.

For a detailed look at all our positions, including new setup parameters and position sizing in real time, check out the Mercenary Live Feed.

Get Global Macro Notes via email 

p.s. Like this article? For more, visit our Knowledge Center!

p.p.s. Sign up for our Hedge Fund Regulatory Alerts!

“Gold is Useless!” + 6 Other Reasons To Hate Gold As An Investment

Posted: 05 Dec 2012 06:24 AM PST

"Gold is Useless!" and 6 Other Reasons To Hate Gold As An Investment


Over the past few years [most] investors have become familiar with gold. The shiny precious metal has surged in price and has managed to hold strong while broad indexes have slipped, highlighting its appeal as a diversification agent and safe haven investment. This has prompted many investors to ramp up their allocations to the space in order to take advantage of these favorable trends and lead their portfolios to broad gains…[but] there are a number of other issues that investors need to be aware of when considering allocating capital to the space, as there are several reasons to avoid the precious metal from an investment perspective. Below, we highlight seven reasons for why investors may want to temper their expectations for the metal and consider a more diversified approach that doesn't include such a large allocation to the 'barbaric relic'.

So says Eric Dutram (http://commodityhq.com) in edited excerpts from an article* which Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has further edited ([ ]), abridged (…) and reformatted below for the sake of clarity and brevity to ensure a fast and easy read. The author's views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.

Dutram goes on to identify, and explain, the 7 reasons why one should hate gold as an investment, as follows:

Despite the many positives for gold, [however, it]… has run into some significant headwinds as of late…slumping…from its recent highs…thanks to broad concerns over the global economy and a push back into dollars… Since gold around the world is priced in U.S. dollars, an uptick in the value of the greenback tends to limit the demand for precious metals, making them less attractive in comparison, especially by those who view gold as an alternative currency. Thanks to this slumping price and the apparent topping out of gold in the short term, many are starting to reconsider the wisdom of investing in this precious metal. Fears over a bubble bursting in gold are starting to grow and a lack of demand from emerging markets, coupled with a stronger dollar, could force gold prices sharply lower to close out the year…

Below, we highlight seven reasons for why investors may want to temper their expectations for the metal and consider a more diversified approach that doesn't include such a large allocation to the 'barbaric relic':

1. Gold Is Useless

The biggest knock against the yellow metal is its relative lack of uses in the industrial world. Close to two thirds of the current supply is used up in jewelry while investment accounts for another 20%. The remaining uses of gold go to dentistry, electronics, and a smattering of other applications that make up less than 5% of total demand. This is in sharp contrast to pretty much every other product in the commodity world. While copper and soft commodities are almost exclusively used for industrial purposes, the rest of the precious metal group sees a great deal of their production scooped up by industrial uses as well. Silver, platinum, and palladium, all find their way into several key applications including catalytic converters and electronics, not to mention more 'new age' technologies such as alternative energy. Although this may not necessarily be a bad thing given that it ensures that gold is entirely tied to 'fear' and dollar confidence, it does suggest that when industrial demand is surging, gold could be left out in favor of its more 'useful' cousins.

2. High Premiums For Physical Exposure to Gold

While bid/ask spreads are generally pretty tight for gold futures, stocks, and ETFs, investors are likely to encounter a different trend in the physical gold space. Premiums on one ounce gold coins can be as much as $90 over spot price, a level that, at current prices, represents a nearly 5% cost to investors. While premiums go down when investors buy larger quantities, they are still a significant cost, with 10 oz. bars currently possessing a roughly 2.7% premium per ounce. One has to expect a similar, if not greater, situation to arise when selling a bar of gold suggesting that one has to obtain a nearly 10% gain just to break-even on a gold investment. Add in extra costs to ship the products, develop secure storage locations or to get a safe deposit box at a bank, and investors who seek to purchase gold and sell it within a short period of time seem almost destined to lose money.

3. Inflation Is Low

Inflation, as represented by CPI, has been extraordinarily low for quite some time now in this country. In fact, inflation has only topped 5% once in the past 25 years while double digit inflation has not been in the marketplace since 1980. Furthermore, rates on bonds are also plumbing fresh lows on a seemingly monthly basis, suggesting to many that inflationary risks are still pretty slim, at least for the time being. This trend is further confirmed by a number of aspects in the American economy which appear to be deflating rather than inflating. For example, home prices are still flat and are no longer in 'bubble territory'; instead it is quite the opposite as many analysts are calling for further losses in the housing sector.

A similar situation is happening in the consumer credit arena as well, as many citizens look to deleverage their balance sheets and clamp down on spending. As a result, many economists are worried about deflation and not inflation, much like Japan after its credit bubble popped in the late 80′s. Granted, this low inflation rate might change in the near future given the rapid increases in money supply and the possible loss of faith in the dollar, but at least for the time being, a slow steady rate of price increases looks to be here to stay, limiting gold's appeal in this environment.

4. Gold Still Ends Up Being Tied To Fiat [only because of stupid laws forcing it]

One of the top reasons for gold bugs' love of the metal is that the product isn't subject to the whims of central banks around the world. Gold cannot be printed while dollars can be in an apparently unlimited supply driving down the value of dollars relative to gold. This is a great point for the most part as the Federal Reserve has done a terrible job of managing the money supply and the value of the dollar over its history, leading further credence to this idea. However, the main problem is that gold often ends up being tied to fiat decisions no matter what. For much of American history, the price of gold has enjoyed a fixed relationship to dollars. This rate was set by the government and has been adjusted several times in order to respond to market forces and crises such as the Civil War in which the dollar could not– at least for a short time– be converted into gold. Fast forward to the Depression and a similar situation arose when FDR confiscated all of the gold in the country and immediately devalued it by close to 60%.

The point is, even at times when gold was the money of the land, governments had a substantial influence over its price either revaluing it outright or decreasing the metalic content of coins by fiat. Furthermore, gold only really has value because people believe it does. How this is any different than fiat currencies seems questionable at best and remains a very real problem for those who are advocating its return as a monetary instrument. While gold would arguably be a better monetary base given the current situation and the never-ending dollar printing, to think that it will not be influenced by fiat decisions seems pretty unlikely to say the least.

5. Gold Has Had Terrible Long Term Performance [forgets to mention that it's been artificially held low]

Over the past few years, gold has been an all-star of the investing world, putting up gains that few investments could match. For example, over the past decade, gold has risen from about $250/oz. to its current level above $1,700/oz. an impressive gain at a time when broad markets were flat. While this is a pretty good track record, over longer time periods the metal hasn't done so well, failing to produce similar returns for investors. In fact, during the decade from 1991-2001, gold prices were pretty much flat while the S&P 500 nearly quadrupled. Furthermore, for any investors unfortunate enough to buy into gold at the end of 1979, right before the metal's all time peak, another flat performance was pretty much guaranteed over the 80′s, if not significant losses. Meanwhile, the S&P 500 nearly tripled in the same time frame, once again crushing gold's performance. While some might argue that these are 'cherry picked' results– and to an extent they are– it is difficult to find a decade that gold outperformed the S&P 500 besides the most recent one, suggesting that unless recent trends continue, investors with huge positions in gold may be very disappointed.

6. Gold Is Hard To Value

Gold, like many commodities, is notoriously difficult to value. The product has no cash flows, dividends, or earnings, so values must be calculated based off of market sentiment and supply/demand imbalances and nothing more. While this may be fine in markets such as cocoa or wheat, gold, thanks to its historic role as money and its lack of industrial uses, can have sort of an odd relationship with markets due to this reality. Gold will often trade off of fear levels which is obviously hard to judge and can swing wildly in a short matter of time. Thanks to this, gold's price is pretty much determined by investor sentiment, making valuation models useless for this asset class…

7. Euro Turmoil

One geopolitical situation that looks to be impacting gold over the next few months is certainly the crisis in Europe. The continent has failed to get its debt situation under control and an expanded European Financial Stability Facility seems to be a necessity in order to boost confidence in the struggling bloc. Even then, an expanded program could sink the French economy and push investors to consider the trillion dollar market as only slightly better than the PIIGS nations. If this happens, it could still make investors reconsider a huge allocation to euros and bring up a fresh crop of issues in its stead. After all, what is bad for Europe has proven to be great news for the dollar over the past few months as the greenback has gained against its main currency counterpart in the past few weeks.

Given this, many should not be surprised to note that gold has had a very rough stretch as the metal tends to move inversely compared to the U.S. dollar's value on the world stage. Assuming that these trends continue into the near future, and thanks to continued uncertainty in nations such as Spain and Italy, not to mention growing worries over France, they probably could. This would force many investors to buy up dollars as protection, pushing gold investments sharply lower in the process once again.

Moral Of The Story

Gold bugs are likely to be experiencing a mild heart attack by this point in the article but the above reasoning is hard to deny for most investors. With that being said, it doesn't necessarily make gold a bad investment overall– especially in the short-term– just that investors need to consider these issues before plunking down a huge chunk of their portfolio's dollars into the precious metal. While gold seems poised to keep its current price thanks to continued expansion of the monetary base around the world, it is always important to keep things in perspective…

In other words, a small allocation to the metal seems warranted given the broad concerns in the global marketplace and as an insurance policy against a collapse. With that being said, an allocation to gold exceeding even 10% of a portfolio seems like a terrible idea given the reasons outlined above, especially over the long-term, as history certainly isn't on the shiny metal's side.

http://www.munknee.com/2011/10/gold-...an-investment/

South Korea central bank bought 14 tonnes of gold in Nov

Posted: 05 Dec 2012 06:14 AM PST

14 tons here, 20 tons there, it adds up.



South Korea central bank bought 14 tonnes of gold in Nov

* Bank of Korea increases gold reserves to 84.4 tonnes
* Gold holdings at 1.2 pct of total foreign reserves, up
from 0.9 pct

By Christine Kim

SEOUL, Dec 5 (Reuters) - South Korea's central bank said on
Wednesday it bought 14 tonnes of gold in November using its
foreign reserves in order to spread its portfolio risks, while
releasing data showing total reserves rose after talk of market
intervention.

The Bank of Korea bought the gold for $780 million, the
fourth purchase in about one-and-a-half years and lifting the
proportion of gold in its total foreign reserves to 1.2 percent
from the previous 0.9 percent, it said in a statement.

"Gold is a physical, safe asset and allows (the country) to
deal with changes in the international financial environment
more effectively," it said in a statement, without providing
more details on the purchase.

The Bank of Korea now holds 84.4 tonnes of gold, valued at
$3.76 billion in terms of purchase prices, up nearly six-fold
from 14.4 tonnes before June last year.

The Bank of Korea made its first gold purchase in more than
a decade between June and July last year, joining some central
banks in diversifying their increasing foreign reserves away
from the U.S. dollar and low-yielding government bonds.
Official sector buying has become a key factor supporting
gold demand and prices in recent years.

"It (South Korea's gold buying) points to stronger support
for gold prices from central banks," said Philip Klapwijk,
global head of metals analytics at Thomson Reuters GFMS, a
metals consultancy.

"If private sector investment falters and prices dip,
central banks' buying supports prices at higher levels than if
this demand were not present. It is a substantial additional
source of demand for gold bullion."

Central banks around the world bought a total of 351.8
tonnes of gold in the first nine months of 2013, up 2 percent
from a year earlier, data from the World Gold Council showed.
In comparison, private sector gold investment demand during
the period dropped nearly 8 percent on the year to 1,139.3
tonnes, the data also showed.

Spot gold traded just below $1,700 an ounce on
Wednesday, up more than 8 percent so far this year.
The Bank of Korea said it now expected its ranking among
central banks around the world in terms of gold holdings to rise
to 36th from 40th.

Meanwhile, the central bank said foreign reserves rose by
$2.6 billion last month to a record $326.09 billion, extending
its record-breaking streak to a fourth consecutive month.
It attributed the increase to investment gains but the data
came after reports by traders of dollar-buying intervention by
South Korean authorities during the month to curb the won's
rapid appreciation.

On Nov. 22 alone, currency traders estimated authorities
bought up to $1 billion in the local currency market to temper a
stronger won, which hurts the competitiveness of South Korean
exporters.

Central bank officials declined to comment on the talk of
intervention.

South Korea, which had the world's seventh-largest foreign
exchange reserves as of the end of October, held 91.7 percent of
its reserves in the form of securities.

South Korean foreign reserves (in $ bln, at end-month):
Nov Oct Sept Aug July June May
326.09 323.46 322.01 316.88 314.35 312.38 310.87

http://www.reuters.com/article/2012/...09F03Z20121205

Weakness in Gold 'Being Caused by Futures Market'

Posted: 05 Dec 2012 05:49 AM PST

The wholesale market gold price traded just above $1,700 an ounce during Wednesday morning in London, having risen back above that level in the earlier Asian session, though they remained near one-month lows.

Surge in gold coin sales

Posted: 05 Dec 2012 05:44 AM PST

Goldmoney

Silver demand surging in Japan ?

Posted: 05 Dec 2012 05:40 AM PST

Goldmoney

Bullion 'a Physical Safe Asset,' says Bank of Korea

Posted: 05 Dec 2012 05:34 AM PST

Gold has recovered from the fall yesterday and overnight and is tentatively above $1,700/oz. There was no fundamental driver of the price falls yesterday or today. It may have been momentum traders selling as the short term trend is now down.

What Caused Gold & the US Dollar to Fall Together?

Posted: 05 Dec 2012 05:15 AM PST

The recent surge in daily volatility in gold is probably related to large funds liquidating positions or algorithmic-selling in addition to market's lack of confidence of gold to break $1,800. The US fiscal cliff bickering further eroded market confidence.

Alasdair Macleod on safety issues with GLD and SLV

Posted: 05 Dec 2012 05:00 AM PST

Episode 79: Andy Duncan interviews Alasdair Macleod, Head of Research at GoldMoney. They talk about possible security issues with the big gold and silver ETFs GLD and SLV due to insufficient ...

This posting includes an audio/video/photo media file: Download Now

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