Where Is Gold Going In This Market

[teletiger]

Midas.

"As well as this ongoing, or ‘current’ surplus, Japan also entered the recession with colossal reserves of money. Japan had no government debt, which allowed the government to pour unprecedented sums of money into public works, creating a government debt of 190% of GDP by 2007.

Also, because of the high level of savings in Japan, consumers were able to reduce their savings ratio from 15% before the crisis to 5% a year during the 1990s. In other words, the Japanese increased spending from 85% to 95% of incomes. In the US the savings ratio is already only 2%, meaning current expenditure is reliant on the very debts that cannot now be repaid.

The USA is going into recession with a government debt of 60% of GDP but the most dramatic story is of the USA’s external debt (government and private sector) to the rest of the world, which stands at $13 trillion compared with Japan’s external debt of $1.5 trillion AFTER the ‘lost decade’. Whereas Japan could fund its own bailouts the US will have to rely on investment from abroad that will be far less forthcoming than it was during the good times.

As if this is not enough of a challenge, there is evidence that the property price bubble in the USA is even further ‘over-inflated’ than was the case in Japan."

http://socialistworld.net/eng/2008/10/09worlda.html

The US is running up debts it will never be able to repay in the normal course of events. ( this was probably true even before 2007) So only abnormal events are on the horizon. Gold revels in abnormal events.

Regards.

[midas]

Midas.

"As well as this ongoing, or ‘current’ surplus, Japan also entered the recession with colossal reserves of money. Japan had no government debt, which allowed the government to pour unprecedented sums of money into public works, creating a government debt of 190% of GDP by 2007.

Also, because of the high level of savings in Japan, consumers were able to reduce their savings ratio from 15% before the crisis to 5% a year during the 1990s. In other words, the Japanese increased spending from 85% to 95% of incomes. In the US the savings ratio is already only 2%, meaning current expenditure is reliant on the very debts that cannot now be repaid.

The USA is going into recession with a government debt of 60% of GDP but the most dramatic story is of the USA’s external debt (government and private sector) to the rest of the world, which stands at $13 trillion compared with Japan’s external debt of $1.5 trillion AFTER the ‘lost decade’. Whereas Japan could fund its own bailouts the US will have to rely on investment from abroad that will be far less forthcoming than it was during the good times.

As if this is not enough of a challenge, there is evidence that the property price bubble in the USA is even further ‘over-inflated’ than was the case in Japan."

http://socialistworld.net/eng/2008/10/09worlda.html

The US is running up debts it will never be able to repay in the normal course of events. ( this was probably true even before 2007) So only abnormal events are on the horizon. Gold revels in abnormal events.

Regards.

Thanks tele

As you would expect there are opposing views about this from the experts . I only found this today after I posted my comment. This guy believes there are similarities………..

“the U.S. is unwittingly committing the same mistakes as the Japanese did in their decade-long stagnation, saying, “These are not zombie loans. They're just non-performing. We're speaking Japanese without knowing it.”

http://hussmanfunds.com/wmc/wmc090928.htm

I could see gold increasing in value if say for example Israel attacks Iran ( which is looking more and more likely ) but otherwise simply from an economic perspective IMO i just cant see the inertia there right now to propel it much higher.

[cloudhopper]

Another interesting analysis of gold-

http://www.nakedcapitalism.com/2009/09/guest-post.html

[Naam]

The US is running up debts it will never be able to repay in the normal course of events. ( this was probably true even before 2007) So only abnormal events are on the horizon. Gold revels in abnormal events.

that does not only apply to the Greatest Nation on Earth™ but to a large number of other countries too and it was a fact BEFORE the present crisis. anybody who thinks that "national debt" was ever meant to be paid back has never done some homework on macroeconomics.

[CaptainARK1]

Gold at $1002.2 and climbing

but in the background ....

receding waters off Patong beach - receding to beyond 500 metres.

[churchill]

That is not funny - You seem to have a knack of always being wrong in your predictions or trying to wind people up - So what are you ?

[flying]

The US is running up debts it will never be able to repay in the normal course of events. ( this was probably true even before 2007) So only abnormal events are on the horizon. Gold revels in abnormal events.

that does not only apply to the Greatest Nation on Earth™ but to a large number of other countries too and it was a fact BEFORE the present crisis. anybody who thinks that "national debt" was ever meant to be paid back has never done some homework on macroeconomics.

Actually my klingon friend I disagree with that.

The deficit was meant to be paid back & has been twice in the past. Albeit before we started using this creative counterfeit means of money we call a dollar. But these days the govt has become accustomed to the same no need to repay thinking.

Then it went nuts to pull out of the last great depression.

But there is a big difference there too. Since from 1946-1980 was a prosperous time for the US & we actually produced. We do not have that to help reduce the deficit this time.

But all that aside. How can a country...any country ask its citizens to be

responsible & pay their bills,mortgages,taxes etc. Yet hold itself free from such tasks? ? This idea that anyone does not have to pay their bills has trickled down & will help collapse what was once as you say a great nation.

PS: Since this is the gold thread How about Gold today doing ok.

Edited September 30, 2009 by flying

[Naam]

The US is running up debts it will never be able to repay in the normal course of events. ( this was probably true even before 2007) So only abnormal events are on the horizon. Gold revels in abnormal events.

that does not only apply to the Greatest Nation on Earth™ but to a large number of other countries too and it was a fact BEFORE the present crisis. anybody who thinks that "national debt" was ever meant to be paid back has never done some homework on macroeconomics.

Actually my klingon friend I disagree with that.

The deficit was meant to be paid back & has been twice in the past. Albeit before we started using this creative counterfeit means of money we call a dollar. But these days the govt has become accustomed to the same no need to repay thinking.

are we talking about "deficit" or total "national debt" my Earthling friend?

[flying]

The US is running up debts it will never be able to repay in the normal course of events. ( this was probably true even before 2007) So only abnormal events are on the horizon. Gold revels in abnormal events.

that does not only apply to the Greatest Nation on Earth™ but to a large number of other countries too and it was a fact BEFORE the present crisis. anybody who thinks that "national debt" was ever meant to be paid back has never done some homework on macroeconomics.

Actually my klingon friend I disagree with that.

The deficit was meant to be paid back & has been twice in the past. Albeit before we started using this creative counterfeit means of money we call a dollar. But these days the govt has become accustomed to the same no need to repay thinking.

are we talking about "deficit" or total "national debt" my Earthling friend?

I dont really see how one can be thought of as separate from the other.

The Federal Deficit is the difference between what it takes in in taxes versus what it spends annually.

The National Debt is the running total of all those years of borrowing to pay off the Federal Deficit.

[Naam]

I dont really see how one can be thought of as separate from the other. The Federal Deficit is the difference between what it takes in in taxes versus what it spends annually. The National Debt is the running total of all those years of borrowing to pay off the Federal Deficit.

thanks for the clarification. i didn't know discussed was "repaying national debt" which is for many countries an impossible undertaking and therefore not even taken into consideration. by the way, deficit and national debt are two completeley different animals whether you believe it or not. the fact that deficit (if existing) is added to national debt by balancing it via IOUs (aka UST) is of no consequence

nota bene: the deficit was never paid back. what happened was "deficit was not created".

for further info read www.naams-macroecon-wisdom.org

[flying]

discussed was "repaying national debt" which is for many countries an impossible undertaking and therefore not even taken into consideration.

Yes & that is why I posted that chart of it showing it had in fact been paid back twice. (well almost the second time as it was not zeroed)

Albeit before the invention of counterfeit currency

[lannarebirth]

I dont really see how one can be thought of as separate from the other. The Federal Deficit is the difference between what it takes in in taxes versus what it spends annually. The National Debt is the running total of all those years of borrowing to pay off the Federal Deficit.

thanks for the clarification. i didn't know discussed was "repaying national debt" which is for many countries an impossible undertaking and therefore not even taken into consideration. by the way, deficit and national debt are two completeley different animals whether you believe it or not. the fact that deficit (if existing) is added to national debt by balancing it via IOUs (aka UST) is of no consequence

nota bene: the deficit was never paid back. what happened was "deficit was not created".

for further info read www.naams-macroecon-wisdom.org

Yes, when talking about deficit spending one needs to think and speak in a whole 'nother language. About the time I gave up on politics and television I seem to recall a politician telling me that he had reduced the deficit when in fact it was only growing more slowly. I think they finally brainwashed a lot of people into thinking that way too.

[flying]

Yes, when talking about deficit spending one needs to think and speak in a whole 'nother language. About the time I gave up on politics and television I seem to recall a politician telling me that he had reduced the deficit when in fact it was only growing more slowly. I think they finally brainwashed a lot of people into thinking that way too.

That I understand & agree with. I know 100% the amount is insurmountable & in all honesty know they have no intention of ever really reducing it. But I also see it is tied to a destined to fail from the start system. The sooner this system fails the better & yes I know there will be pain yada yada yada

[flying]

Marc Faber Dollar weakening the market, Sept 25, 2009

bullish on metals...

Edited October 1, 2009 by flying

[Naam]

discussed was "repaying national debt" which is for many countries an impossible undertaking and therefore not even taken into consideration.

Yes & that is why I posted that chart of it showing it had in fact been paid back twice. (well almost the second time as it was not zeroed) Albeit before the invention of counterfeit currency

you are talking about the times when the Injuns hunted buffaloes?

[teletiger]

1836. I think the buffalo had all been skinned by this stage. Similar to the shorts of today.

How.

[CaptainARK1]

Gold at $1002.2 and climbing

but in the background ....

receding waters off Patong beach - receding to beyond 500 metres.

You could have (would have/should have yawn, yawn ) made an easy $7-9+/unit on this short trade alone - and if you were LONG before, you'd have closed the LONG = taken profit and then positioned for the inevitable short at the same-o, same-o coffeshop = 61.8% retracement + pitchfork line. In essence, you'd be up around $18+/unit easily, but by playing the market with your collective middle-legs, you lost both opportunities? Best part, you would have set the take profit order well in advance so you'd capture the whole amount right at the boundary line. Don't worry, sh*t happens.

See accompanying chart for how Andrews Pitchfork would have so easily helped you - doesn't work always, but works often enough to be a force and both Gold and Silver have an antediluvian habit of pitchforking often. Dollar doesn't, neither does GBP do it well enough to be worthwhile.

At least somebody would be making money today and it certainly is not me - I'm still flat with my thumb up my ass waiting for GBPUSD to trigger my short. I'm not trading gold, not even tempted to do so as its too volatile for me.

And if you think you're too old to read the book on Price, note that General George S. Patton was heard muttering in glee as he surveyed the tank battle in Tunisia, "Rommel, you magnificent bastard, I read your book!!!"

Pitchfork primer ..... http://www.tradecision.com/support/pitchfork.htm

my gold pitchfork chart showing the sooooo obvious boundaries that were drawn in advance - note my usage is more artistic than what's in the article, as I toggle the knob to tweak a good fit and keep adjusting till Price tells me I'm right, which when it works, is very fast, before the move has really made much progress .. so you can set your take profit point and your stoploss level very early and then work bull and bear rallies within the fork ad infinitum as some forks go on for hours, days or even months. Sometimes they break after just one or two swings, so it varies.

Ditto fork for Silver, actually even better looking than goldie's

[flying]

you are talking about the times when the Injuns hunted buffaloes?

More so the time when a meeting in Nov 1910 occurred at Jekyll Island Georgia

Edited October 1, 2009 by flying

[teletiger]

Capt'Monica, Have you got a timeline for your zero hedge, $50 ferrari scenario. Just sold my 2 f40s and am anxiously waiting to buy them back. Not that I disagree with your excellent TA....it's just that these sam-laws are hard on my portly arse.

A serious question now. Your TA has taken into account Fed, GS, et al manipulation?.....right? Elliot can overcome these problems?....right? Yes, yes...there's enough room in here. Jump in.

Regards

[trajan]

I previously bought some five baht gold biscuit-type bars (each about 2.36 troy ounces of gold) at HUA SENG HENG goldshop in Chinatown-Yaowarat (Bangkok)..

they are one of the oldest and most reputable shops....they buy back, no questions..at the then current "buy back price" which is just Baht100 lower than the "sale price" per baht weight....

I think I will occasionally buy bars, just for another form of savings for a rainy day (in addition to equities, mutual funds, bonds, CDs, real prop., prov fund etc.)...and squirrel them away in a bank safe box....

they also have 10 and 25 baht weight gold bars....(and also, traditional Chinese "boat" shaped bars).... [they also have tons of gold necklaces, bracelets, rings, amulets etc. but I have no interest in those]...

are any expats doing this? or am I alone?? (I know of several Thai co-workers doing this)....

here is a pic of a five baht weight bar (equivalent to 2.36 troy ounces of gold)

[churchill]

Where to invest ? Markets - in October ? , cash - which currency ? , gold ? short term correction possible - are people starting to panic ?

IMF beats gold-auction drum

http://www.atimes.com/atimes/Global_Economy/KJ02Dj01.html

Gold Tells You U.S. Bubble Hasn’t Popped Yet

http://www.bloomberg.com/apps/news?pid=206...id=ajPCIYcGX8t4

Recession Is Over; Depression Has Just Begun

http://seekingalpha.com/article/164452-rec...-has-just-begun

[CaptainARK1]

Gold at $1002.2 and climbing

but in the background ....

receding waters off Patong beach - receding to beyond 500 metres.

You could have (would have/should have yawn, yawn ) made an easy $7-9+/unit on this short trade alone - and if you were LONG before, you'd have closed the LONG = taken profit and then positioned for the inevitable short at the same-o, same-o coffeshop = 61.8% retracement + pitchfork line. In essence, you'd be up around $18+/unit easily, but by playing the market with your collective middle-legs, you lost both opportunities? Best part, you would have set the take profit order well in advance so you'd capture the whole amount right at the boundary line. Don't worry, sh*t happens.

See accompanying chart for how Andrews Pitchfork would have so easily helped you - doesn't work always, but works often enough to be a force and both Gold and Silver have an antediluvian habit of pitchforking often. Dollar doesn't, neither does GBP do it well enough to be worthwhile.

At least somebody would be making money today and it certainly is not me - I'm still flat with my thumb up my ass waiting for GBPUSD to trigger my short. I'm not trading gold, not even tempted to do so as its too volatile for me.

And if you think you're too old to read the book on Price, note that General George S. Patton was heard muttering in glee as he surveyed the tank battle in Tunisia, "Rommel, you magnificent bastard, I read your book!!!"

Pitchfork primer ..... http://www.tradecision.com/support/pitchfork.htm

my gold pitchfork chart showing the sooooo obvious boundaries that were drawn in advance - note my usage is more artistic than what's in the article, as I toggle the knob to tweak a good fit and keep adjusting till Price tells me I'm right, which when it works, is very fast, before the move has really made much progress .. so you can set your take profit point and your stoploss level very early and then work bull and bear rallies within the fork ad infinitum as some forks go on for hours, days or even months. Sometimes they break after just one or two swings, so it varies.

Ditto fork for Silver, actually even better looking than goldie's

-------------------------

>>>> but in the background ....

receding waters off Patong beach - receding to beyond 500 metres <<<<<

Gold @ $1,003 and climbing.

next move good odds targets ....

$973

$944

$898

Don't miss the boat.

[flying]

Don't miss the boat.

Is departure imminent?............Still?

[Abrak]

receding waters off Patong beach - receding to beyond 500 metres <<<<<

[/b]Gold @ $1,003 and climbing.

next move good odds targets ....

$973

$944

$898

Don't miss the boat.

Yeah wish the world was that easy that we could foretell the future. Hope you do better than your last one.

'The bear market is on the verge of un-hibernating = resuming = Captain calls the TOP for SET' dated 2nd September. It has risen over 10% since.

Normally the Captain should go down with the sinking ship.

[flying]

Not sure if this was posted?

[Abrak]

Not sure if this was posted?

You know I really do have a problem with that video. You see essentially gold isnt really money or a 'real store of value' because it is inherently too volatile. Some people know this and argue that it is not gold that is volatile but the US$ in which it is priced. But this is a nonsense because then you would have to assume velocity of money is highly volatile based on gold.

To see what I mean by volatility and store of value consider that it went from US$800 to US$250 over 20 odd years with no dividends or interest. If you had put your money on deposit it would have doubled. I do not believe there is any point over the last 150 years that the US stockmarket or bond market would have given half as bad returns over 20 odd years when interest and dividends are taken into account. (I am just guessing). I mean even the Japanese stockmarket from its peak is a store of value on that basis.

Now I inherently like volatility in assets even though it prices the asset at a discount

So if gold was money you would lose control of prices as in 1800s

http://www.bankofengland.co.uk/education/i...eline/chart.htm

BTW on this website there is game where you control inflation at 2% by either blowing hot air into the balloon (lower rates) or let air out (raise interest rates). Rather cleverly they have got around the problem of what you do when you have lowered interest rates to zero because you are still allowed to pump infinite amounts of 'hot air' into the economy.

[churchill]

CAUTION: Crash/Collapse Dead Ahead Say Faber, Rogers, Dent and Celente

After a massive upswing in US stocks over the last six months, the recent rally may finally be coming to an end. It seems that the trend of rising stocks on bad or better than expected news may be in a reversal, as evidenced by market participants’ caution over the last couple of weeks. For those that follow contrarian investors like Marc Faber, Jim Rogers, Gerald Celente and Harry Dent, this should come as no surprise.

Marc Faber, publisher of the Gloom Boom & Doom Report, advised his subscribers and followers to take positions in US tech stocks, the banking sector and hard assets at the bottom of the markets in early March of 2006. However, he did provide a word of caution on March 16, 2009, making it known that while he was a short-term bull on stocks, that eventually, the economic fundamentals would catch up:

“probably a total collapse in the second half of the year when it becomes clear that the economy is a total disaster.”

As recently as September 3rd, on Delhi TV, he made another call, essentially telling investors to get out:

“I believe in the next 10 days to two weeks we’ll get big moves in markets. And I wouldn’t be surprised if the Dollar would for a change strengthen and equity markets would correct and possibly quite meaningfully so.”

Gerald Celente, Trends Research forecaster and contrarian thinker, advised listeners of the Jeff Rense show on September 23rd to look out below, calling it the Christmas Crash. He believes that the next collapse will come quickly, sometime this Fall, but as late as January or February of 2010:

“It’s going to really be an ugly scene. We are really encouraging people now to take pro-active measures and prepare for the worst. Don’t spend an extra dime.”

Jim Rogers, who is well known for making millions during the recession and commodities boom of the 1970’s, is also hesitant about acquiring more equities. He is an avid US Dollar bear, but in an interview on September 30th, he turned bullish on the dollar in the short term. His advice?

“I am not buying shares anywhere in the world as we speak.”

Finally, we have economist and cyclical analyst Harry Dent Jr., who some may know for having called the real estate Bubble-Boom, and subsequent crash, years before it happened in his book The Next Great Bubble Boom. Dent was also bullish on the Dow, calling for it to reach between 9450 and 10,500 after the March lows of 2009. Like Faber, Dent also cautioned investors to stay vigilant once the 9000 mark was breached. In a recent Economic Forecast Alert to subscribers, Dent indicated that the tide was changing:

“The markets are very overstretched here and we think it is very likely that we are seeing a top just above 9,800 on the Dow today.

This is the best intermediate term play we have seen in a long time. Shorting the stock market (for example, ETF symbol SH) could yield 50% to 60%+ gains over the next year with a 5% to 15% downside if the markets keep edging up for awhile, even to extremes.”

Though we continue to see most mainstream analysts talk the bull market talk, it looks as if the bull may be in trouble, especially if individual investors realize what all of the big boys talking their books already know - that the economic fundamentals are simply horrific and the markets are already pricing in GDP growth of over 5% for the next 4 quarters. Considering that GDP grew at 0.7% in the 2nd quarter, that seems highly unlikely. Some estimates also suggest the the P/E of the S&P 500 right now is at unprecedented levels of over 100!

As of today, it looks as if investor focus is shifting from stocks and commodities into what some consider to be short-term safehaven assets, such as US Treasury Bills/Notes/Bonds. The yield on the 10 yr is at 3.15% as of October 2nd, significantly down since August 7th’s 3.85%, suggesting that safety, not risk, is now the name of the game. Interestingly, and unlike November of 2008, gold seems to be holding strong at around $1000, though this may change if the US Dollar rises, as Jim Rogers, Faber and Dent have suggested it may.

For those still in equities, we believe Tyler Durdern at Zero Hedge said it best, “Go long here at your peril.”

http://www.shtfplan.com/marc-faber/caution...elente_10022009

[lannarebirth]

CAUTION: Crash/Collapse Dead Ahead Say Faber, Rogers, Dent and Celente

After a massive upswing in US stocks over the last six months, the recent rally may finally be coming to an end. It seems that the trend of rising stocks on bad or better than expected news may be in a reversal, as evidenced by market participants' caution over the last couple of weeks. For those that follow contrarian investors like Marc Faber, Jim Rogers, Gerald Celente and Harry Dent, this should come as no surprise.

Marc Faber, publisher of the Gloom Boom & Doom Report, advised his subscribers and followers to take positions in US tech stocks, the banking sector and hard assets at the bottom of the markets in early March of 2006. However, he did provide a word of caution on March 16, 2009, making it known that while he was a short-term bull on stocks, that eventually, the economic fundamentals would catch up:

"probably a total collapse in the second half of the year when it becomes clear that the economy is a total disaster."

As recently as September 3rd, on Delhi TV, he made another call, essentially telling investors to get out:

"I believe in the next 10 days to two weeks we'll get big moves in markets. And I wouldn't be surprised if the Dollar would for a change strengthen and equity markets would correct and possibly quite meaningfully so."

Gerald Celente, Trends Research forecaster and contrarian thinker, advised listeners of the Jeff Rense show on September 23rd to look out below, calling it the Christmas Crash. He believes that the next collapse will come quickly, sometime this Fall, but as late as January or February of 2010:

"It's going to really be an ugly scene. We are really encouraging people now to take pro-active measures and prepare for the worst. Don't spend an extra dime."

Jim Rogers, who is well known for making millions during the recession and commodities boom of the 1970's, is also hesitant about acquiring more equities. He is an avid US Dollar bear, but in an interview on September 30th, he turned bullish on the dollar in the short term. His advice?

"I am not buying shares anywhere in the world as we speak."

Finally, we have economist and cyclical analyst Harry Dent Jr., who some may know for having called the real estate Bubble-Boom, and subsequent crash, years before it happened in his book The Next Great Bubble Boom. Dent was also bullish on the Dow, calling for it to reach between 9450 and 10,500 after the March lows of 2009. Like Faber, Dent also cautioned investors to stay vigilant once the 9000 mark was breached. In a recent Economic Forecast Alert to subscribers, Dent indicated that the tide was changing:

"The markets are very overstretched here and we think it is very likely that we are seeing a top just above 9,800 on the Dow today.

This is the best intermediate term play we have seen in a long time. Shorting the stock market (for example, ETF symbol SH) could yield 50% to 60%+ gains over the next year with a 5% to 15% downside if the markets keep edging up for awhile, even to extremes."

Though we continue to see most mainstream analysts talk the bull market talk, it looks as if the bull may be in trouble, especially if individual investors realize what all of the big boys talking their books already know - that the economic fundamentals are simply horrific and the markets are already pricing in GDP growth of over 5% for the next 4 quarters. Considering that GDP grew at 0.7% in the 2nd quarter, that seems highly unlikely. Some estimates also suggest the the P/E of the S&P 500 right now is at unprecedented levels of over 100!

As of today, it looks as if investor focus is shifting from stocks and commodities into what some consider to be short-term safehaven assets, such as US Treasury Bills/Notes/Bonds. The yield on the 10 yr is at 3.15% as of October 2nd, significantly down since August 7th's 3.85%, suggesting that safety, not risk, is now the name of the game. Interestingly, and unlike November of 2008, gold seems to be holding strong at around $1000, though this may change if the US Dollar rises, as Jim Rogers, Faber and Dent have suggested it may.

For those still in equities, we believe Tyler Durdern at Zero Hedge said it best, "Go long here at your peril."

http://www.shtfplan.com/marc-faber/caution...elente_10022009

Looks like someone's been reading my posts. That said I take these things one rally/correction at a time. If you're a bear there are few things more worrying than a bunch of gurus telling the general investing public to "get short".

[zorro1]

About the 403 (!) tonnes of GOLD the IMF is selling:

Reuters

China weighs purchase of IMF gold -report

09.21.09, 5:07 AM ET

* China could consider IMF's sale of 403 tonnes of gold

* China looking to diversify, has 1,054 tonnes already

* Market value of IMF sale around $13 billion

BEIJING, Sept 21 (Reuters) - China is considering buying gold being offered for sale by the International Monetary Fund, Market News International said on Monday, citing two unnamed government sources, but the report could not immediately be confirmed.

"China will consider buying if the price is right and the return is relatively high," MNI quoted one of the government sources as saying.

Gold, which had dipped just below $1,000 an ounce, rebounded to $1,003.45 after the report. That would put the market value of the 403.3 tonnes on offer from the IMF at close to $13 billion.

"There was a small reaction to the news that China may discuss its gold plans at the G20, it recovered a little, but overall the market isn't overly concerned, not yet anyway," a Europe-based trader said.

China, the world's biggest producer and buyer of gold, revealed earlier this year that it had lifted its own stocks of gold to 1,054 tonnes from 400 tonnes when it last reported its holdings in 2003.

The IMF formally endorsed a plan on Friday to sell 403.3 tonnes of gold, one eighth of its holdings, to central banks or in the gold market.

Two Chinese central bank officials not directly involved in the issue told Reuters China should consider buying the gold being put up for sale by the IMF, but only at a big discount.

The officials, neither of whom had direct knowledge of the gold strategy, said they were expressing personal opinions.

"China only has about 1,000 tonnes of gold reserves and the investments in other assets are performing not very well," said one official, who declined to be named.

"I think we should build up more gold with foreign reserves, but when to buy is the key. It's a good idea if China can buy the gold from IMF at prices well below market level."

The official said he had no idea if the sale would be on the agenda for the G20 summit.

"I personally think China should buy the IMF gold. It will help China to diversify its reserve assets," the second official said. "For the purpose of reserve safety, it is also good to increase the proportion of gold by a suitable amount."

The estimated $13 billion cost of the is small beer for the Chinese exchequer, with foreign exchange reserves of more than $2 trillion. If it decided to buy the gold, China would be likely to seek a discount for the bulk purchase, since a market sale would put heavy pressure on the price.

The IMF has said it will try to sell the gold, one-eighth of its holdings, to central banks. If there are no takers, it could sell to the market, which saw world gold demand of 3,880 tonnes last year, according to World Gold Council figures.

The huge increase in reserves that China announced earlier this year had had little impact on the market because the gold was accumulated over a long period and mainly through direct purchases from Chinese producers.

(Reporting by Eadie Chen and Tom Miles; Editing by Clarence Fernandez)

-- Reuters Sept. 21, 2009

Reuters article on Forbes:

http://www.forbes.com/feeds/reuters/2009/0...rtner=dailycrux

LaoPo

sorry for butting in and off topic but your wife's lap top stand is simply brilliant, got the lazy boy and can trade flat on my back . Thanks again

[Abrak]

By the way I was reading a report written in 2004 in which it said 'meanwhile China is slowly accumulating gold'. 5 years later it just seems to be slowly accumulating gold..... very slowly.