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| Gold & Jewelry in the News! Gold Price Winning Streak EndsApril 13th, 2010 - 9:42 am | by GoldAlert  GOLD PRICE NEWS - The gold price slid yesterday after rising for five consecutive trading days and hitting a high print of $1,170 per ounce. The price of gold is marginally lower heading into the open in tandem with lower crude oil and pressure on S&P 500 stock futures. COMEX gold futures are trading down $7.20 to $1,155 per ounce, as the gold price slid after the mid-day close yesterday in the trading pit. The spot gold price is down $0.80 to $1,154 per ounce. Overseas, Greece tested the market’s appetite for its debt, auctioning off roughly $2 billion of securities. While the yield on the 6-month and one-year debt securities was a relatively high 4.55% and 4.85%, respectively, demand was strong. The $61 billion rescue package for Greece has calmed fears of a default for the time being, but the underlying budgetary problems remain firmly in place. The stronger euro led to a sell-off in the gold price in terms of the single European currency, which hit an all-time high above 860 euros last Friday. Over the past six months, the gold price is up 8.6% versus the U.S. dollar and 18.8% versus the euro. Gold continues to gain versus most global currencies as investors seek to prevent the depreciation of their savings in the current negative real interest rate environment. Gold mining stocks fell with the gold price yesterday, although remain up a large 8.6% in the month of April alone, as measured by the Market Vectors Gold Miners ETF (GDX). There was ratings changes on two widely-held gold stocks this morning as UBS downgraded shares of Royal Gold (RGLD) to “Neutral” from “Buy” and RBC Capital analyst Leon Esterhuizen raised its rating on Gold Fields (GFI) to “Outperform” from “Sector Perform.” UBS also downgraded shares of Aluminum producer Alcoa (AA) to “Neutral” from “Buy” following last night’s earnings release in which the company missed consensus estimates on revenues. IMF refuses to Sell Gold  As I have explained several times, the multi-year publicity over the possibility that the International Monetary Fund (IMF) might sell of part of its gold reserves was really only a tactic meant to help the US government suppress the price of gold.
Early on, the mere threat that the IMF was considering a possible release of gold reserves was successful in driving down the price of gold at least 10%, where it typically took at least three months to recover. The pretext given for such sales changed over time, but always involved unloading about 400 tons (12.9 million ounces) of gold. Until last year, the potential IMF sales never materialized. By 2009, demand for physical gold was so strong that the threat of a possible IMF gold sale no longer had much impact on prices. Gold’s price would drop only 1-2% and then recover within a few days. To try to have a larger impact, the IMF was forced to actually commit to selling gold instead of just talking about it. However, even the actual sale of gold could not overcome growing demand. China not only stated that it was willing to purchase the entire lot of gold the IMF was putting up for sale (403 tons or 13 million ounces), but it was ready to pay cash to acquire all of the IMF gold reserves of more than 100 million ounces! What ended up happening is that the central banks of India, Sri Lanka, and Mauritius purchased just over half the IMF gold in “off-market” transactions. The bulk of these sales went to India, one of four nations that is supposedly the custodian of the IMF gold reserves. There is significant suspicion that this particular sale may have been done to replace prior secret sales of gold intended to help suppress gold prices. It is possible that the gold sale to India’s central bank may have been settled by bookkeeping entries rather than the actual transfer of physical gold. Since these gold sales to central banks did not have the desired effect of knocking down prices, the IMF suspended further sales. Six weeks ago, the IMF announced that it planned to sell the remaining 191.3 tons (6.15 million ounces) of its gold to “the market.” By trying to make it appear that this amount of physical gold might actually be sold to “retail” buyers, the hope of the US government and the IMF was that the price of gold would decline. This announcement did not produce enough of an effect at knocking down gold prices. Within 24 hours, the price of gold sank as much as $24, just over 2%, and then almost completely recovered. In this announcement, the IMF did anticipate that some of the gold might be sold to central banks. At the time, I predicted that little if any of this gold would actually be sold to the general public. My prediction appears to have been accurate. Last week, Sprott Asset Management of Toronto announced that they had contacted the IMF to try to purchase the entire remaining amount of IMF gold supposedly for sale. Sprott received $400 million from investors from its initial public offering on February 26 for Sprott Physical Gold Trust (symbol PHYS), the beginning of what is expected to be a much larger fund. This closed-end mutual fund used the proceeds of the stock sale to purchase a large quantity of 400-ounce London Good Delivery gold bars for storage at the Royal Canadian Mint. This Sprott fund will own specific gold bars, not paper gold. Owners of sufficient shares have the option of turning in their shares and taking delivery of the physical gold bars, with current delivery costs running about 6% of the value of the gold content. As Sprott prepares to sell its next round of shares, it obviously needs to acquire large quantities of physical gold from somewhere. The IMF gold for sale would be a perfect fit as some of it could be allocated to the Sprott Physical Gold Trust and the balance to other Sprott funds. However, such a sale of IMF gold would not offer the US government or the IMF the opportunity to push down the price of gold. In fact, such a sale would almost certainly emphasize just how strong physical demand really is—with the result that the price of gold could rise! So, it is no surprise to me that the IMF flatly turned down the prospect of selling gold to Sprott. Another reason why the IMF may be so reluctant to sell physical gold to the public is that its “holdings” appear to have been double counted (required by former IMF regulations) as part of the respective nation’s gold reserves. Should the IMF actually sell gold to the public, that may expose this double counting of gold reserves. The IMF’s refusal to actually sell gold that it claims it has for sale, when coupled with the evidence of gold and silver price manipulation entered in the official record as part of last week’s hearings by the Commodity Futures Trading Commission, could end up providing a boost for precious metals prices. I had earlier predicted that the price of gold would surpass its early December 2009 record by the end of March 2010. It doesn’t look like that will happen by tomorrow’s close. However, market signals point to a new record high in the very near future. I think my forecast will soon prove right on the direction, though slightly off on the timing. NYTimes.com
In a Modern Gold Rush, Can Memories Beat $913 an Ounce?
Sunday April 6, 12:38 am ET
By MICHAEL BARBARO
Gold rushes should be simple money-making schemes.
And on the surface, this one is. With prices hitting record levels, people are melting down rare coins. They are digging through drawers for family heirlooms to pawn. And they are giving gold parties, inviting friends to walk in with gold and walk out with cash.
“Gold is coming out of the walls,” said Joseph Grunberg, a pawnbroker and jewelry shop owner in the Diamond District of Manhattan.
He said his clientele is the rich and not-so — a stockbroker came into his store recently to sell his $30,000 gold watch, but he’s also seen people hoping that their old class ring might help pay the rent. “It’s a mega-mega business right now,” he added.
But there are hidden costs to cashing in. As thousands of Americans rush to sell off pieces of their past — an ounce of gold now commands about $913, as of Friday afternoon, up about $240 from a year ago — they are confronting treacherous emotional terrain.
Behind every 18-karat gold herringbone necklace and 12-karat toggle bracelet is the story of a bad breakup or a late great-aunt.
That has turned the seemingly uncomplicated process of cashing in on gold’s surging value into an emotionally fraught experience, bringing new meaning to the notion of a precious metal.
“People tear up as they tell us about the jewelry,” said Michael Mouret, president of Louisiana Gold & Coins in Baton Rouge, who, like many storekeepers, has become a therapist for conflicted gold sellers.
A tough economy across much of the country is pitting memories against much-needed money. Rita Wallace, 50, has collected coins for 30 years, a hobby she inherited from her grandfather. Selling the coins as scrap gold, destined for melting, was never her intention.
But after watching the price of gold soar this winter, Ms. Wallace, who is unemployed, decided to send off for melting her United States Mint coins commemorating the Statue of Liberty, the Constitution and the founding of the Jamestown colony in Virginia.
In the end, she was paid $5,000, far more than the coins’ value as collectibles, she said. “Is it really what I wanted to do?” said Ms. Wallace, who lives outside Columbus, Ohio. “No, not really. But it made the most sense financially.”
Gold’s steady climb in price has been driven by a swooning stock market, a weak dollar and fear of inflation, which have prodded people to turn to safer bets, like ever-reliable gold. Its value jumped from around $660 an ounce a year ago to more than $1,000 in March.
Prices have slipped back to about $900, but the numbers are still attractive enough to drive thousands of Americans to raid their jewelry boxes.
To mitigate the emotional toll, a handful of pawnshops and jewelers are playing host to gold parties, where a combination of alcohol, food and banter has transformed a cold financial transaction into something resembling happy hour.
At one such party a few nights ago, with a 28-year-old teacher in Shelby, Mich., as host, a group of women drank wine and snacked on vegetables as a jewelry expert calculated the weight and karat value of their gold, writing them checks based on that day’s gold price ($880 an ounce).
Raegen Findlay, a 29-year-old homemaker, arrived with several dozen pieces of jewelry, some hers, some belonging to her mother. As it was examined, Ms. Findlay panicked, picked up her cellphone and called her mother. Did she want to salvage the gems from a gold ring before it was sold off and melted down?
“Nah, she said to go ahead and sell it all,” Ms. Findlay said, relaying the conversation with her mother, who wanted the extra money for a coming vacation. The gold from Ms. Findlay’s mother was worth $365 — a figure that drew applause from the women in the room.
While wrenching for some, selling gold is cathartic for others. Over the last few months, a woman named Diane, who lives in Tennessee and asked that her last name not be used, has sold more than $1,000 worth of gold jewelry given to her by her former husband, including a 14-karat herringbone necklace (sold for $500).
“If I had not gotten a divorce, I probably would not have parted with it,” she said. “But I did not need that kind of karma lying around the house.”
Stanley Crane, a 66-year-old coin and jewelry collector, said the high price of gold was the equivalent of a get-out-of-jail-free card for those who are stuck with, say, an 18-karat wedding band saddled with emotional baggage from a breakup, or a chunky gold charm bracelet that has fallen out of fashion.
“It forgives a lot of bad stuff and makes up for a lot of mistakes,” he said.
Mistakes like damaged coins. For years, Mr. Crane, a retired trucking company employee in White Lake, Mich., has tried to unload dented and scratched coins that have languished in his collection for lack of a buyer.
When gold prices began to surge this winter, the weight of the flawed coins overshadowed any aesthetic flaws. He just traded an imperfect gold coin worth $936, at the time, for two smaller gold coins, potentially worth much more because they are in mint condition.
Not everyone’s story ends that happily, or profitably. Many are discovering, much to their embarrassment, that all that glitters in the back corner of their jewelry box is not gold — or at least not the valuable kind.
Several weeks ago, a 30-something woman walked into Lombard Mutual, the pawnbroker and jewelry shop in Manhattan, to find out how much a pair of gold drop earrings might fetch.
Behind the counter, the shop’s owner, Joseph Grunberg, performed a routine test and delivered his verdict: “Gold plated,” he said.
“I’m shocked,” responded the woman, who would identify herself only as Jessica because of what she said next. “It figures. My boss gave me those earrings right before she fired me.”
“She claimed,” Jessica added, with disgust, “that they were real gold.”
Gold futures close lower after hitting a 27-year high
December gold scores weekly gain of almost 3% on weak dollar, strong oil
By Myra P. Saefong & Polya Lesova, MarketWatch
SAN FRANCISCO (MarketWatch) -- Gold futures closed lower Friday, retreating from a 27-year high in electronic trading, but scoring a weekly gain of almost 3% an ounce as a weak dollar and high oil prices continued to feed demand.
"Although the market is significantly overbought and throwing off a bunch of bearish signals, the momentum is still calling the market higher," said Zachary Oxman, a senior trader at Wisdom Financial. "Gold is focusing on easier monetary policy, which will attract gold demand."
But prices will likely see a correction into the $710-$720 level, he said in emailed remarks, "which should be a great buying opportunity for a continued leg up as gold approaches $800 by year end.
'Gold is focusing on easier monetary policy, which will attract gold demand.'
— Zachary Oxman, Wisdom Financial
Gold for December delivery closed $1 lower at $738.90 an ounce on the New York Mercantile Exchange. The contract finished 2.9%, or $21.10, above the $717.80 level it closed at a week ago.
In electronic trading Friday, gold prices rose to a high of $747.10, a level that hasn't been seen by a lead-month contract on the exchange since 1980.
Analysts warned about the risk of a temporary retreat in prices, but also said there are few factors that would halt the metal's climb in the long term. See Commodities Corner.
"Gold may succumb to profit-taking in the coming days as we are slightly overbought in the short term," said Mark O'Byrne, director at Gold and Silver Investments Ltd., in a research note. "While consolidation is likely we believe gold will again reach $800-plus prices by year-end."
Gold prices will continue to draw support from the recent decline in the dollar to record lows, high oil prices and increasing concern about the health of the world's largest economy, O'Byrne said.
Indeed, "given the dollar's continued losses and the strength in the energy sector, it looks as if gold will find further upside momentum in the coming sessions, potentially targeting $765 before more significant profit-taking is seen," said James Moore, analyst at TheBullionDesk.com, in a research note.
On the currency markets, the euro hit a record high of $1.4119 and the Canadian dollar was again hovering around parity to the greenback. The Dollar Index, which tracks the performance of the dollar against other major currencies, was almost unchanged at 78.56.
Moore said gold may benefit from a period of consolidation, "however, the absence of any significant resistance levels means that gold is in uncharted territory and making its own history," he said.
On Thursday, gold closed up $10.40 at $739.90 an ounce. It touched a high of $746.30, an intraday level a lead-month contract on the exchange hasn't reached in at least 27 years. See Metals Stocks.
Other metals prices finished on a mixed note Friday, with silver making big weekly gain. December silver closed up 15 cents at $13.62 an ounce, ending 7.2% higher for the week.
December copper fell by 0.2 cent to close at $3.5925 a pound. It was up 6% from a week ago.
October platinum climbed $3 to close at $1,331.60 an ounce but December palladium closed down $1.55 at $342.55 an ounce.
"Fundamentals are still supportive for gold through year-end and should boost other metals as well," said Oxman.
"Continued reports of strong physical demand in price-sensitive markets in the Middle East and India will keep prices firm," he said. And "expectations of strong gold sales have been forecast by jewelry executives in Dubai and Italy this week as well."
Gold warehouse inventories were unchanged at 7.07 million troy ounces, according to Nymex data as of late Wednesday. Silver supplies were unchanged at 133.4 million troy ounces as of late Thursday, and copper supplies fell by 82 short tons to stand at 20,193 short tons.
Soft Dollar Buoying Gold
By Simon Constable
TheStreet.com Staff Reporter
9/21/2007 2:30 PM EDT
Gold prices were trading slightly to the upside Friday as investors bet on continuing declines in the value of the U.S. dollar.
December-dated gold contracts were adding $1 at $739.90 an ounce in recent New York futures market action. Silver was up 3 cents at $13.65.
"With the dollar under pressure and with decent buying seen in nonfutures markets, there is the possibility for further gains in gold in the short term," writes John Reade, a precious metals strategist at UBS in London, in a research report.
The streetTracks Gold Shares (GLD - Cramer's Take - Stockpickr - Rating), the largest exchange-traded fund that holds inventories of bullion, serves as a prime example of the physical market demand for the metal. It has increased its metals holdings by about 10 tons, or $240 million, to 577 tons over the past week alone.
Historically, sustained rallies in the gold price have been strongly correlated with heavy demand for the metal by investors.
From the technical analysis perspective, the chart watchers remain resolutely bullish, believing that new all-time records are likely in the cards for the coming months. Still, most analysts are reluctant to pin down a definitive time frame due to the lack of historical chart formations at this level.
"The trend is up, fabulous and strong," says Aldolfo Rueda, a technical analyst at Natixis Bleichroeder in New York. "I think the next solid number is $900, but the short-term target is $830."
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