Gold - The Weekly Global Perspective

By: Julian D. W. Phillips | Wed, Dec 31, 2003
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That was the year that was!

This report was written on the last day of 2003, when Gold continued to remain at Euros 330 +.

The $ continued its fall, against both Gold and the Euro, falling below the $1.26 to the Euro level today and falling to $417.25 at the morning fix in London, for one ounce of gold.

Sounds strange doesn't it? But that is what is happening and how we should see the gold / Euro / $ in the light of the realities of the day.

The markets, whilst quiet, continued to see funds bidding for stocks of gold steadily. No drama, no fuss, just steady buying, when it was offered. Of course, the full market activity will not resume until Monday January 5th 2004, but the trend of being long of gold and out of the $, continues. The Japanese continue as steady buyers, fully aware of the crisis state of the economy there and the "Weak Yen" policy, which will continue ad infinitum.

Silver:

- is featuring well, having risen Euro 0.19 per ounce to Euros 4.76, whilst it stands at $6.00. So it is the star of the day, letting us know it has the hormones to perform well in 2004.

Platinum:

- is showing a far greater volatility at Euros 646.47, having fallen from Euros 668.21 or down to $812 from its high. Platinum appear to be looking somewhat tired at the moment too.

Gold - The Monetary Factor.

The pattern of fund buying of gold through the last quarter of 2003 and before, has perplexed many. So many times the funds have shown a capricious nature, rushing in, then out of a commodity, turning a buck where they could. No better was this demonstrated than before the Iraqi war, when they drove the gold price up $70, nearly 22% in one charge. Then they drove it back to where it came from. Suddenly, a change occurred, the funds began to buy steadily, increasing their holdings in line with the drop in the $, but accumulating greater amounts as time went on. Yes, some funds continued the capricious behaviour, but in the main, their nature changed to a responsible, price level driven pattern, holding and accumulating. Why?

They continue to do this at a time when the market is quiet. Yes, for sure they are dressing the books for their year end valuation, which must look stunning for them now, with precious metals at, or near, recent highs. But is this all?

In the past we have suggested that these purchases were made as a means to acquire large quantities, without driving the price up. In other words, they appeared to be intent on to taking delivery at some point, even though they may well 'roll-over' their futures positions for a number of times. If they have followed this policy of 'rolling-over', they will have seen some excellent returns, to date, on the margins they put down. It is also clear that those who would wish to take delivery of the physical gold contracted for, would only be the larger institutions and maybe a Central Bank or two 'in disguise'? For sure, their London market Banks are used for this purpose primarily, still. But the pattern of steady growing acquisitions by Institutions, continues. Why?

There are some solid and excellent reasons why this is so, that have not been disclosed to the public and for very good reasons.

In our next issue of "Gold - Authentic Money" we will outline just why this policy is being followed and why it will continue for the foreseeable future. It will, we believe prove one of the foundations of the gold market in 2004, closely behind the "Monetary" role of gold on the "Official" level, which we will continue to write about in 2004. - subscribe!

Gold Corp.

The sight of the head of Gold Corp selling both the company's gold and 40% of his own personal shares is startling, to say the least. We wonder if the Shareholders of Gold Corp, have been told what the gold being held in the company was sold for - $ or Euros? To say the reason for selling to satisfy personal Financial and Estate planning requirements sounds like a hormone free statement. The fact that the company sold its gold bullion held in place of cash, was such a clear and strong position that to sell it implies that Mr McEwen, has changed his view of both the $ and gold. If this is not the case then it would be appropriate for him to make a public statement, so as to retain his credibility. Some pretty disturbed shareholders were fairly shaken by the moves.

U.S. Myopia.

For the bulk of 2004 the U.S. will introvert and relegate external U.S. matters to "of minor importance" on their list of priorities. With them completely focussed on the elections, external matters will not be of great concern, except the blight of Terrorism. But the U.S. you might say, has always had a propensity to ignore matters outside of itself, to a large degree. Quite right, and this attitude is now reinforced by the Election's demands. Hence the external value of the $ is not of such importance at the moment. As to the continually falling $, there is a comfortable way of looking at it, from the leading world power's point of view, [a repeat of past mistakes unfortunately]:

• With the $ having risen to the dominant world currency over the last three decades any fall in the currency should be seen as only temporary.

• International trade advantages are being gained with every cent fall of the $, so mounting an attack on the competitiveness of the Euro and any other strong currency.

• The moment the recovery has sufficient momentum, interest rates will rise to reassert the $ attractiveness as an investment currency.

• With the sheer power of the U.S. economy internationally, the $ will regain any losses in value and dominance that it may be losing now.

In a forthcoming issue of "Gold-Authentic Money" we will show why this attitude is a completely inappropriate and inadequate policy to counter the developments in the world's foreign exchanges. This article is an important one for anybody in either the currency or the precious metal markets, to read, as it will explain some of the surprises waiting to appear in the next year and more in the global economy.

Gold in 2004.

As we sit on the brink of 2004, what can we expect from the year ahead. We think that overall 2004 will represent a major year in the history of gold, as the dark clouds of instability build up, spawned by the self interest of individual nations, as they come together in the next phase of the evolution of the Global economy.

As 2003 saw the return of the large scale investor in gold, so 2004 will see his presence in the market grow to a dominant force.

The Central Bank Gold Agreement will appear as the single most important event in the life of gold this year, with the new agreement surprising the markets.

Volatility will increase in most markets, but particularly forex markets and will be a feature creating many trading opportunities.

The external value of the $ will be ignored by the U.S. Administration, until at the earliest after the Elections. U.S. $ policy will continue to be made in Brussels and Beijing.

The Euro will grow in its percentage of world reserves.

Competitive devaluations will precede the return of the growth of inflation.

Gold and Silver will remain attractive investments in the above climate.

Our own specific forecasts and projections can be found in our services below, to which we invite you to subscribe.

Gold Analysts in 2004

When the reviewed forecasts are issued by the world's top Analysts, in 2004, we hope to see if they give their forecasts in Euros, which appears to be the way to show the precious metals true behaviour, without the complications of the $'s fall. With the Euro leading the way among currencies, it would appear that this currency is a better basis for valuing metals than the $.

• Gold, at the time of writing was trading at Euros 330.888 down Euros 2.50 since last week, and in $, $416.

• The Euro was trading at $1.2615 at the time of writing.

The London Gold Fix

Gold Fix 31st December a.m. $417.25   E 330.888

Track Record of Gold-Authentic Money - Changing Tack - Gold & Precious Metal Shares

We Received this from one of our Subscribers and wanted to meet his request as follows: -

"Thank you for the latest gold bullion buy signal at $393. So far, coupled with my own charting analysis, your precise call has helped me realize an 1000% profit trading high - leveraged futures contracts and the money is still rolling in. I just wonder if you can send me a detailed record of your trades, say, like, over the last 1 or 2 years. I think subscribers would gain a lot more confidence in you and your services if you can fully disclose your past performance."

So in reply here is our Track record:

In 2003 we managed to make overall, over $160 net from the gold market this year, which started with gold at $350 and is finishing at $414. And we always keep our eyes on minimising losses and getting the best runs available from these markets. Tony Henfrey and well known Technical Analyst going back over 35 years in experience, keeps his fingers on the pulse in our other services which cover the broad spectrum of markets from Bonds to Currencies, etc. His "One-on-One" daily service is there to help each of you to make the moves in specific trades, while our original "Comparative Performance Model" puts you into the shares which will outperform the rest of the best of gold and precious shares, in our top-of-the-range, technical service called "Changing Tack - Gold and Precious Metal Shares"

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Julian  D. W. Phillips

Author: Julian D. W. Phillips

Julian D. W. Phillips
Gold Forecaster

Julian D. W. Phillips

"Global Watch: The Gold Forecaster" covers the global gold market. It specializes in Central Bank Sales and details, the Indian Bullion market [supported by a leading Indian Bullion professional], the South African markets [+ Gold shares shares] plus the currencies of gold producers [ Euro, U.S. $, Yen, C$, A$, and the South African Rand]. Its aim is to synthesise all the influential gold price factors across the globe, so as to truly understand the global reasons behind the gold price.
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