Gold - The Weekly Global Perspective

By: Julian D. W. Phillips | Thu, Mar 3, 2005
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HIGHLIGHTS from Global Watch - The Gold Forecaster
Short-term forecasts of the all-important global markets!
China moves to hold the Yuan down - new steps taken!
O.P.E.C. loves high oil prices
Is France going to sell any more gold?
The wisdom of Freeport!
The bleeding grows to a haemorrhage in South Africa.
Technical Analysis of the Gold Price: Long/Short term.
International gold markets - India - Canada - Australia - South Africa
Silver / Platinum

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That was the week that was!

Is France going to sell any more gold than the 31.3 tonnes sold so far?
After waiting and watching as governmental Ministers supported by the media, have tried to convince us that Members of the I.M.F. really do want to sell gold from that stockpile, the reality is seeping through to confirm just how unlikely such sales are. But critical to this reality is the level of sales amongst the signatories of the Central Bank Gold Agreement themselves.

In the last quarter of 2004 the level of their sales rose, as Switzerland. Sweden, Austria and France sold gold. Many thought that this flow would continue, but seemingly not. Switzerland has / is completing the sale of its long-term program of 1300 tonnes. But most surprisingly France, who announced possible sales of as much as 500 tonnes, has ceased selling!

France sold gold last year, as follows:  

- September - 0.6 of a tonne.


- October - 7.5 tonnes.


- November - 23.2 tonnes


- Nothing since then!

When we last wrote about France, we speculated that the President of the Banque de France, M.Noyer, was a very unwilling seller of the nation's gold. We were led to believe that Finance Minister Sarkosky was putting very heavy pressure on Noyer to sell "the family jewels". The remarks preceding the announcement of France's sales, by Noyer during the period leading up to and past September 2004, confirmed these impressions. The figures above would appear to confirm our speculation. Indeed, the question now comes to the fore, will France sell any more of its gold under this agreement? Please bear in mind the agreement is not an agreement to sell, but a fixing of a ceiling on the total amount that the signatories may sell.

Right now there is silence, on the matter of buying gold for reserves. There is silence on the matter of selling gold before the event. There is silence on the actual proposed dates of the sales of gold. There is a lack of clarity on the intentions of the Central Banks on why they are selling gold and if they really will continue to sell gold. France's behavior on the matter of its gold sales and the pattern set above appears to contradict previous policies. The fog now swirling around this subject leads us to one main conclusion.

The signatory Central Banks to the 2004 C.B.G.A. will not meet their ceiling of 500 tonnes of gold sales per annum. Indeed these numbers are from now on going to fall substantially.

This agreement now appears to be suffering from a hormone deficiency.

O.P.E.C. is happy!
Happy O.P.E.C. Members have announced they are not going to cut oil production with the oil price over $50 a barrel. The implication is that this figure will be increased if the oil price rises still further. This source of oil will flow well for another half century or so they tell us. This news is far better for O.P.E.C. than for us, though! Considering they were making $35 a barrel last year, a roughly 50% increase in the average price since then, does wonders for the coffers.

If our forecasts are right, they will be increasing production from the second half of this year, or certainly by the end of the year as oil prices as prices rise further.

So of course they are going to say this! But woe betide the rest of us, as the 2.5 million barrels a day spare capacity is gone and they are going full pelt at the pumps and there is a growing shortage!

Right now oil has moved back over $50 a barrel, again. Even the price of Brent Crude has risen above that level. And why? The news is not dramatic there is no drama in either the supply, or demand facets of the market, at least no more than usual. We have no doubt that the long term is reaching back to become the short term.

As to O.P.E.C. the price rise is particularly delicious, because they cannot be blamed by anyone. Perhaps the present price rise is simply stockpiling by a broad range of oil market players. If prices are going to explode by the end of this year or in 2006, why not stockpile? Why not buy at present prices it's an excellent investment?

We published an article on "Capital Controls for the U.S.A. - A glance at South Africa's Trail", which we will happily send you [free] if you send us your e-mail address [to]. It is the second article on a series on the prospects for Capital Controls in the future.
The first, called "Capital Controls for the U.S.A.", the prime article and important to those who want to understand what a collapsing $ could lead to, will be sent free to new Subscribers to "Gold - Authentic Money" in which it is published.

Please visit the end of the report to read the legal notice and disclaimer. All work
is copyrighted and may not be distributed without written permission. © 2005

The London Gold Fix
2nd March a.m. $429.15   € 327.221
1st March p.m. $433.45   € 328.496

Latest: At the time of writing, gold stood at $429.50 and in Euros 327.86. The Euro is worth $1.3100. Gold is fighting resistance still!

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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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