By Adrian Ash, GoldSeek

London Gold Market Report

THE PRICE OF GOLD dropped to a near-two week low early Thursday in London, dipping below $1090 an ounce as the US Dollar rose vs. the Euro, crude oil held flat, and world stock markets slipped.

“Yesterday saw a new divergence in the Gold/Euro correlation,” says one Londondealer in a note after the Euro rose in Wednesday’s trade but gold priced in Dollars fell.

Also continuing to display a strong one-month correlation of +0.91 with the US stock market, the gold price still ended Wednesday below the nominal price of the S&P 500, dropping to a new two-week low of $1090 as the index rose to 1,105.

“The Euro is now, for the first time since its introduction, in a difficult situation, but it will come through,” German chancellor Angela Merkel tells the Frankfurter Allgemeine Zeitung newspaper today.

“There is financial speculation against countries which had an unfavorable starting position and unsolved structural problems. That is dangerous.”

Second-only to the South African Rand in losing value against the US Dollar so far in 2010, the Euro’s effective exchange rate index – a weighted average of its different trading partners’ currencies – “has fallen the most year-to-date,” says analysis from French bank Natixis, “down more than 4%.”

Both the Euro and Sterling fell on Thursday’s currency market to new 9-month lows versus the Dollar, putting a floor under the gold price at €805 and £706 an ounce respectively.

Gold stood 3% below last week’s record Euro high of €26,716 per kilo.

“Two figures to compare,” says Wolfgang Wrzesniok-Rossbach, head of sales at German refining group Heraeus in Hanau.

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GDP: Great Day to Play

Good Day,

Friday’s market sessions in precious metals started off on a tamer note, following the best gains in gold in three weeks. Explanations follow. The recapture of the $1045 area is noteworthy, although analysts we polled during the wee hours overseas are trying to define the move as everything from a ‘one-hit wonder’ to the ‘re-ignition of what we saw during most of October.’

The Bloomberg weekly survey foresees weaker gold prices come next week - not by a large margin (57% bearish)- but still focusing on a potential comeback by the US currency, the early signs of which became visible this past Monday. Demand for the yellow metal once again slipped away in India, following signs of life during the earlier part of the week when values came close to $1025 per ounce. The country recorded its sixth straight month of declining gold imports, despite a decent gain during September – in anticipation of festival-related sales.

New York spot dealings opened with a $2.60 loss in gold bullion, which was quoted at $1043.20 bid, as against a euro-dollar seen at $1.4798 and the USD index steady-to-higher, at 76.05, with little in the way of fresh news thus far this morning. Oil prices gave back about 50 cents of their whopper-sized Thursday gains, slipping to $79.32 per barrel. Risk traders took a latte break this morning, and this gave the dollar a moment to try to re-group.

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Read the rest of Gold, Silver, Metal Prices: Commentary – 10/30/2009 (2,324 words)

Today at noon ET the United States Mint began selling the 2009 American Buffalo Gold Proof Coin for $1,360.00, as it announced on Oct. 22.

The one-ounce .9999 fine (24 karat) gold coin is expected to draw significant attention. The US Mint handled early demand in improved fashion compared to the collector blitz and resulting problems that brought its web site down just a few weeks ago with the release of another product, the Lincoln Coin and Chronicles Set.

While there were initial reports of several minute online order delays, that appeared to be the extent of any issue. Phone lines were busy. Some collectors indicated that it took dozens of minutes to get through to a Mint customer service representative, but again, it was unlike their experience of weeks back where there were reports of over an hour of delay and repeated "call back" messages. The Mint added an extra menu option that routed customers to a different queue and standby waiting list, which may have helped.

The Mint’s handling of the Buffalo Gold proof orders on opening day indicates they made improvements, but demand may also have been less intense. The $1,360.00 price point certainly held some customers at bay — especially when considering that gold prices have been dropping for several days and the coins missed out on a $50 price cut by a mere 28.8 cents. (See 28.8 Cents Prevents US Mint Gold Coin Price Reductions.) Many may try and wait for such a cut next week, despite the possibility that the coins could sell out — the Mint has not indicated how many are available, and there are no order limits in place.

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Read the rest of 2009 American Buffalo Gold Proof Coin Launches with Little Issues (253 words)

By Kim Kyoungwha

Oct. 28 (Bloomberg) — Gold may rise to a record $2,000 an
ounce in the next three years as investors hedge against
“massive” inflation sparked by governments printing money,
according to Superfund Financial Singapore Pte’s Aaron Smith.

“In the next few years, after the deflation cycle, we’ll
see massive inflation,” Managing Director Smith, 30, said in an
interview. “Soon, when you go to buy a cup of coffee, you’ll
pay $20 or $30 because the dollar won’t be worth anything.”

The company’s Superfund Green Gold A Fund, which has more
than doubled since its inception in 2005, has lost 15.6 percent
this year because of higher volatility, said Smith, who joined
in 2002. Gold rose to an all-time high this month as governments
including the U.S. boosted debt to combat the global recession.

“When the U.S. dollar crashes, all the paper currencies
have to crash, otherwise if their currencies are too strong,
their economies will be weak,” said Smith, who issued similar
gold forecasts in May and earlier this month. “Another
excellent buying opportunity for investors is silver.”

Gold for immediate delivery, which touched a high of
$1,070.80 an ounce on Oct. 14, traded at $1,039.32 at midday in
Singapore. The metal has strengthened 18 percent this year,
while the Dollar Index, a six-currency gauge of the dollar’s
strength, fell 6.4 percent.

Gold Forecasts

Smith joins investors including Shayne McGuire, director of
global research at the Teacher Retirement System of Texas, and
Jim Rogers in forecasting higher gold prices. Pension funds will
increase gold holdings as currencies decline, McGuire said on
Oct. 22. Gold will probably top $2,000 in the next decade as the
dollar weakens, Rogers said Oct. 7.

Superfund, founded in 1995 and backed by $1.6 billion in
assets, specializes in so-called managed futures, using its own
trading system to generate buy and sell calls on stock, bond,
currency and commodity futures. Still, the company’s flagship Superfund A, which gained 35.4 percent last year, has lost 24
percent this year, Smith said.

The ratio of silver to gold, currently at 62.35, will be
“cut in half” in the next three to five years as millions of
people in South Asia and China buy the metal as an alternative
because they can no longer afford gold, Smith said. Silver has
soared 46 percent this year to $16.65 an ounce.

Read more….

Denver-based Newmont Mining earned $388-million in the third quarter, compared with net income of $191-million a year earlier, helped by surging gold prices, lower production costs and increased volumes.

Revenue in the quarter rose to a best-ever $2,05-billion, compared with $1,37-billion in the same period of 2008.

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Gold prices steadied around $1 040 an ounce on Wednesday, recovering from three-week lows hit the day before when the dollar strengthened against the euro.

The dollar held gains against a basket of currencies on Wednesday while the yen rose, as investors trimmed positions in higher-yielding currencies as stocks fell on weaker-than-expected US consumer confidence figures.

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But, group says spending power has been diminished by the global crisis

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Marriage-related buying picks up in India

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Gold inched up towards $1 060 on Monday as the dollar fell to a 14-month low against the euro, but weak physical demand capped the upside for bullion.

After hitting record highs above $1 070 per ounce on October 14, gold prices have traded in a narrow range, centering around $1 060, with support near $1 040.

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One of the great benefits of investing in gold is that it typically functions as a safe haven for investors in times of economic turmoil. During the current economic instability, gold has risen to record high prices as one would expect. Some people will keep hold of their gold stocks until the peak of the instability then try to sell it off when gold prices reach their highest. But other people who struggle during tough times have another option: selling gold jewelry or other gold items to get cash to get through the hardships. You can easily sell gold bullion coins and bars to a bullion dealer, but how do you go about selling gold jewelry?

Selling your gold jewelry is not a difficult task. You can find various companies either online or around your area that will offer you cash for your gold items and make the process quite simple for you. The gold buyers are looking to get their hands on as much gold as possible, so they can profit from prices that will likely rise even higher over the longterm, and profit from some price spreads or transaction fees. But their businesses are usually legitimite and you will get a fair amount of cash for your gold.

A well-known example of such a company is Cash4Gold. They are a mail-in gold refinery, meaning that they will buy your gold items and melt them down. Cash4Gold is a good option for people who own old or broken gold jewelry or other items that are no longer attractive or desirable to wear. If you wish to sell newer and more attractive-looking gold jewerly, you will likely receive more money by selling your items to a local jeweler in your area, or to a pawn shop. That is because gold jewelry is sold at a premium price that can be much higher than the value of the item’s metal alone. The premium price covers things like quality of design and craftsmanship. But a refinery like Cash4Gold will simply melt down your items, so they don’t care if your items are resaleable or not. They will simply pay you a price based on the official spot price of your jewelry’s constituent metal (plus they will charge a transaction fee of some sort).

The things you should know about your gold before selling it are its karatage (which should be printed somewhere on the item, its weight in gold, and if possible also its resale value, so you can know whether to sell to a refinery or to a pawn shop or jeweler instead. Getting your item appraised by a reputable dealer might be a good idea. You should also be aware of the terms of your agreement with the buyer of your gold. If you have intentions to buy your item back, you should be sure to check how much time you have to do so, and the specific terms surrounding the buyback. When you are dealing with valuable items that might have special meaning to you, the last thing you want is any kind of disappointing surprise that deprives you of your cherished item.

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