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Old 03-04-2008, 12:55 PM
StarnetGypsy StarnetGypsy is offline
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Default G7 approves IMF gold sales

(this should be good news for the dollar, and i'd hope to see it rebound now as a long position? also, gold could wither back down now so a good time to short expecting maybe $750oz once the IMF begins to unload?)

TOKYO (Reuters) - The Group of Seven rich nations on Saturday approved the sale of gold by the International Monetary Fund from April as part of a broad reform of its budget, Italian Economy Minister Tommaso Padoa-Schioppa said.

"There was an acceptance among the G7 that resources should be raised by selling gold," Padoa-Schioppa, who is also the head of the IMF's steering committee (IMFC), told reporters after a meeting of G7 finance ministers in Tokyo.

He said the agreement would be finalised in April and would complement spending cuts being drawn up by the IMF under its new managing director, Dominique Strauss-Kahn.

"The current gold price means a flow of income can be ensured," Padoa-Schioppa said.

Morgan Stanley analyst Stephen Jen said the Fund held 103.4 million ounces of gold worth some $92 billion at current market prices. That was up from $23 billion just five years ago.

"The IMF is rich, if it wants to be," he wrote in a recent note to clients, issued before the G7's approval of the gold sales. "This is arguably a good time to consider selling some of these gold holdings and investing the proceeds in financial securities with positive yields."

A surge in oil prices has boosted gold's appeal as a hedge against inflation.

The precious metal gained more than 30 percent in 2007 as safe-haven buying increased due to the credit market turmoil and worries about the health of the dollar as it fell to record lows against the euro.

Gold continued its upward march this year. Cash gold hit a record high of $936.50 an ounce on Feb. 1, up about 12 percent since the start of the year, and was quoted at $918.00/918.70 an ounce in late New York on Friday.

Padoa-Schioppa noted that in the case of the United States, approval for gold sales would be required by Congress, meaning "the administration must present a proposal and support it".

Padoa-Schioppa said he would step down as president of the IMFC because of the recent fall of the Italian government which meant he would soon lose his job as economy minister.

Asked if he would continue as IMFC head, he said: "I don't believe so, it has to be a minister in office, and soon I will no longer be a minister in office."
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Old 03-04-2008, 09:20 PM
Bostongambler Bostongambler is offline
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Cramer predicts it goes to 1,600.
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Old 03-07-2008, 09:07 PM
StarnetGypsy StarnetGypsy is offline
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Originally Posted by Bostongambler View Post
Cramer predicts it goes to 1,600.
ayep. I saw where he said that, and also this one other guy who's saying $1500 by eoy.

as long as oil & US economy is unstable, which could be a long time, it's going to continue to be a hedge against these troubles ... today it inched down to $972 because the dollar's been gaining a wee bit of ground lately.

Gold edges down after bleak U.S. payroll data

Platinum falls sharply on power boost for South African mines

By Polya Lesova, MarketWatch

NEW YORK (MarketWatch) -- Gold futures finished a volatile trading session with a modest loss Friday after the government reported the biggest drop in nonfarm payrolls in five years.

Gold for April delivery fell $2.90 to $974.20 an ounce on the New York Mercantile Exchange. The contract extended Thursday's decline.
Gold posted a weekly decline of 80 cents from last Friday's closing level of $975 an ounce.

"The jobs numbers point to more of a recession scenario than the commodities complex would like in order to enjoy a continuation of their recent run," said Jon Nadler, senior analyst at Kitco Bullion Dealers.

In the clearest suggestion yet of a recession, the Labor Department reported that U.S. nonfarm payrolls fell by 63,000 in February, the second straight decline in employment. It was the largest drop in payrolls since March 2003 and dashed surveyed economists' expectations for a gain of about 20,000.

"This is bad, but not as bad as it will get in the coming months," said Kathy Lien, chief strategist at Forex Capital Markets LLC, in a research note.

"This seals the fate for the Fed rate decision in less than two weeks -- they will have no choice but to cut interest rates by 75 basis points," she said. "We expect the labor market to continue to worsen."

Kitco's Nadler also said that a rise in the U.S. dollar has also "put a damper on today's ascent towards $1,000 gold."

The dollar dropped to three-year lows against the yen as a sell-off on Wall Street sapped investor appetite for risk, but the greenback was relatively steady against other major counterparts. See Currencies.

Earlier Friday, before the release of the payroll data, the Federal Reserve announced two new steps to add cash to the banking system. The Fed said the measures were needed to address "heightened liquidity pressures in term funding markets."

The Fed said it was in close contact with foreign central banks concerning liquidity conditions in markets. In the first measure, the Fed said it would increase the size of the two Term Auction Facility auctions to $50 billion each or a total of $100 billion.

Secondly, the Fed said it will initiate a series of term repurchase transactions that are expected to cumulate to $100 billion. Read more.

Platinum drops sharply

Platinum for April delivery tumbled $159.10, or 7%, to $2,041.70 an ounce on Nymex following reports that South African mining companies will get an additional allocation of power.

Platinum prices had rallied in recent weeks on concerns that power shortages in South Africa would lead to decreased output from the world's biggest producer of platinum.

Gold Fields Limited (GFI), one of the world's largest unhedged producers of gold, said Friday that it has been notified by the Department of Minerals and Energy that the mining industry had been allocated an additional 260 megawatts of power, effectively allowing mines to increase their power consumption from the current level of 90% of average historical consumption.

This new allocation will be phased in over the next two weeks and is aimed at minimizing the disruptive impact of power rationing on the mining industry, job losses and mine safety, Gold Fields said in a statement.

Also on the Nymex, June palladium fell $34.20 to end at $495 an ounce. May silver edged down 2 cents to $20.25 an ounce.

May copper gained 2 cents to end at $3.92 a pound.
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