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Swiss Yes Vote Possible – First “Gold Rush” Of 21st Century?

Swiss Yes Vote Possible – First “Gold Rush” Of 21st Century?

There are just 3 days left until the“Save Our Swiss Gold” referendum this Sunday. On November 30, voters in Switzerland will head to the polls to decide whether the Swiss National Bank (SNB) should back the Swiss franc with gold by increasing its gold holdings to 20% – up from current levels of 7%.

The conservative Swiss People’s party proposed the initiative, called “Save Our Swiss Gold“, with the intention of boosting the security and financial and monetary independence of Switzerland in these  times of financial uncertainty. They believe that a 20% gold holding will protect the Swiss people from currency debasement, currency devaluation and an international monetary crisis.

In the case of a “yes” vote, gold prices are likely to surge. Analysts do not believe a yes vote is possible. However, analysts have got the mood of the people wrong in many referendums both in Switzerland and throughout Europe in recent years.

We believe that the vote will be very close – much closer than many analysts suggest. After a massive, very well funded and highly coordinated campaign by the banking and political establishment in Switzerland, the polls show that the no side is in the lead.

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Gold “Price” Spikes to $1,467.50/oz on Computer Glitch

Gold “Price” Spikes to $1,467.50/oz on Computer Glitch
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Gold spiked higher in many price feeds overnight and was $270 higher or more than 22% higher to $1,467.50/oz at one stage in what appears to have been some form of computer glitch.

There was speculation that the price spike was due to a series of charting errors or misprints, a bad price feed or a computer glitch. Another example of how technology is a great enabler but can also be a great disabler.


www.GoldCore.com  

Despite a very bullish backdrop of the Swiss gold referendum on Sunday, gold repatriation movements in Europe, Russian central bank gold buying and very robust Indian and Chinese demand, there was no breaking news that would justify such a dramatic uptick in gold.

The “usual suspects” were a fat finger trade by a large hedge fund or bank. This was quickly discounted as the price moved higher in a series of trades over a period of minutes rather than in one or two trades.

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FT’s Tett: Gold “Tangible” and “Clear”; People “Unnerved” About “Money” in “Bottomless Cyber Space”

FT’s Tett: Gold “Tangible” and “Clear”; People “Unnerved” About “Money” in “Bottomless Cyber Space”

Gillian Tett, markets and finance commentator and an Assistant Editor and former U.S. Managing Editor of the Financial Times, looked at the increasing concerns about money today and the benefits of gold in an important article on Friday.


Gillian Tett, FT Assistant Editor

The article’s introduction pointedly states

“Ordinary people are unnerved about how money works in a bottomless cyber space. Gold seems tangible, clear and timeless”

She refers to numerous examples of how finite gold is taking a more prominent place in the public consciousness as a monetary asset and as money.

She mentions the Swiss gold referendum which will take place on Sunday and how at least a very large minority of the Swiss population prefer gold-backed currency to fiat. She also mentions Rand Paul of the U.S. Republican party who favours greater use of gold as currency.

She makes some important points regarding gold being tangible and finite in a world of trillion dollar central bank experiments and a risky “ethereal” or intangible cyberspace:

“Most ordinary people have no idea what central banks are really doing, with their trillion-dollar experiments. They are unnerved about how money works in a bottomless cyber space. But the beauty of gold is that it seems tangible, clear and finite. It also seems timeless, creating an impression of permanent, intrinsic value.

Of course, this image is – ironically – also an illusion. You cannot actually do anything practical with gold (as you can, say, with a lump of coal). Its value, like that of fiat currency, depends on social convention. But culture, as Greenspan now recognises, is a very powerful thing – especially in a world of finance that is rushing more deeply into ethereal cyberspace every day.”

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122 Tonnes of Gold Secretly Repatriated to Netherlands

122 Tonnes of Gold Secretly Repatriated to Netherlands

The Dutch central bank said Friday it is repatriating some of its gold reserves from the U.S., making it the latest central bank in Europe to address public concerns about the safety of its gold in the wake of the eurozone debt crisis.


As the debate regarding whether or not Switzerland should keep the bulk of its gold reserves at home on Swiss soil reaches it’s climax – the referendum takes place on Sunday – it is telling that the Dutch announced on Friday that they have just secretly repatriated 122 tonnes of their sovereign gold reserves from New York back to Amsterdam.

The gold, worth $5 billion at today’s prices, represents 20% of the Netherlands total reserves. It now keeps 31% of its reserves in Amsterdam. Another 31% is believed to be in New York, with the remainder spread between Ottawa and London – the same locations where the bulk of Swiss gold is purported to be stored.

The trend towards gold repatriation began with Hugo Chavez bringing Venezuelan gold back to Caracas in 2011.  It has been followed by similar moves  by other large gold owning nations and central banks, most notably, Germany.

The repatriation movement has been driven by suspicion that the Federal Reserve and other central banks may have leased or sold gold it was holding on behalf of other countries to bullion banks and that this gold may have been used in order to suppress the price of gold in recent years…

 

 

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Swiss Gold Poll Likely Tighter Than Polls Suggest

Swiss Gold Poll Likely Tighter Than Polls Suggest
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By Ronan Manly, GoldCore Consultant

There is just over one week to go before the Swiss gold initiative referendum on Sunday 30 November. The release of the latest opinion poll earlier this week shows a strengthening of opposition to the initiative at the expense of the yes camp, with the level of undecided voters still a significant component of the equation. Taking the ‘maybes’ into account, there are still, according to the latest poll, 37% of voters who are not definitely yes or definitely no at this stage.


GoldCore founder and Research Director, Mark O’Byrne on CNBC today

The official pollsters believe that the initiative will likely fail, and perhaps, at this stage they are correct. The intervention of the Swiss National Bank (SNB) into the campaign at every turn seems to have dissuaded some previously ‘yes’ leaning voters. However, the SNB is still not taking any chances and continues to make statements on what it see as the dangers to Swiss monetary policy from increased gold reserves in the form of a 20% gold minimum in the reserves, and a ban on gold sales if the initiative does go through.

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Ebola Remains a Risk – Deaths in Nebraska and New York

Ebola Remains a Risk – Deaths in Nebraska and New York
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The Ebola crisis has faded from headlines but remains a risk after the death of another Ebola patient in Nebraska and the death of a suspected victim in New York yesterday. This brings the number of confirmed deaths to two in the U.S. and possibly three if the New York victim is confirmed as having had Ebola.

The toll in the Ebola epidemic has risen to 5,420 deaths out of 15,145 cases in eight countries, the World Health Organization (WHO) said today. Transmission of the deadly virus still “intense and widespread” in Sierra Leone.

The figures, through November 16, represent a jump of 243 deaths and 732 cases since those issued last Friday. Cases continue to be under-reported, the WHO said in its latest update.

Tragic scenes unfolded in Brooklyn yesterday afternoon when a woman collapsed, dead, in a salon with reports of bleeding from her mouth and nose. This is frequently how Ebola victims die as Ebola disables the body’s coagulation system, leading to uncontrolled bleeding. By the time the body can rally its second line of defense, the adaptive immune system, is frequently too late.

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Gold Rises After Unusual Russian Central Bank Gold Buying Announcement

Gold Rises After Unusual Russian Central Bank Gold Buying Announcement

Russia’s central bank bought about 150 metric tons of the metal this year, announced Governor Elvira Nabiullina yesterday. The pronouncement immediately created buying in the market, prompting gold to rise to a two week high at $1,200 an ounce.

Head of Russian Central Bank Elvira Nabiullina -Jr/Bloomberg

Russia’s central bank Governor Elvira Nabiullina told the lower house of parliament about the significant Russian gold purchases. She is an economist, head of the Central Bank of Russia and was Vladimir Putin’s economic adviser between May 2012 to June 2013.

This announcement is unusual and to our knowledge has not happened before. The announcement by the Russian central bank governor was likely coordinated with Putin and the Kremlin and designed to signal how Russia views their gold reserves as a potential geopolitical and indeed financial and currency war weapon.

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ECB Buy Gold Bullion? Japan’s Monetary Policy Dubbed “Ponzi Scheme”

ECB Buy Gold Bullion?  Japan’s Monetary Policy Dubbed “Ponzi Scheme”

Concerns about deflation, recession and a return to the Eurozone debt crisis, may see the ECB follow Japan and print money to buy assets including shares, exchange traded funds and physical gold.

Counter intuitively, gold prices fell on the quite bullish news. In marked contrast to the sharp falls gold saw on the mere rumour of small Cyprus selling their miniscule gold reserves. Such odd trading leads to continuing concerns that the precious metals markets are still being manipulated. Over the last couple of months, the ECB has launched several measures to revive the lacklustre euro zone economy. Mersch said the bank should let these steps take effect first before considering more action.

If more action was needed, the ECB’s hands wouldn’t be tied as it could theoretically purchase government bonds or other assets such as gold, shares, or exchange traded funds (ETFs).

 

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Cameron Says Second Global Crash Looming – Russian Relations Worsen at G20, Japan in Recession

Cameron Says Second Global Crash Looming – Russian Relations Worsen at G20, Japan in Recession


David Cameron warned last night that the global economy risked another crash and said in an article that ‘red warning lights’ were ‘flashing on the dashboard of the global economy’ and the eurozone was ‘teetering on the brink’ of another recession.

The warning came at the same time that the world’s largest economy, Japan, fell into another recession. Japan shrank by an annualised 1.6% in the third quarter. This followed a huge 7.3% contraction in the previous quarter caused by a rise in the national sales tax and ran counter to economists forecasts for a 2.1 percent rebound.

Mr Cameron’s warning follows a claim by Bank of England governor Mark Carney that a ‘spectre’ of economic stagnation was haunting Europe. Christine Lagarde, managing director of the International Monetary Fund, has also expressed fears that a diet of high debt, low growth and unemployment may yet become ‘the new normal in Europe’.

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‘Gold Wars’ – Swiss Gold Shenanigans Intensify Prior To November 30 Vote

‘Gold Wars’ – Swiss Gold Shenanigans Intensify Prior To November 30 Vote – By Ronan Manly

‘Gold wars’ are intensifying with just 16 days left to polling day in the Swiss Gold Initiative.


‘The Gold Wars’ by Ferdinand Lips

The Swiss National Bank (SNB) and establishment parties went “all in” during the week and intensified their campaign. They suggested that passing the Gold Initiative would be a ‘fatal’ for Switzerland and would be positive only for speculators. The ‘yes’ side countered by saying the SNB’s assertions were alarmist and over the top. They say that it is not an invitation to speculators as there would be a five year transition to gold being 20% of Swiss reserves. They warned that there is a real risk of another debt crisis and a global currency crisis and that gold reserves would protect the Swiss franc and the Swiss economy.

If the Swiss vote to revert to having 20% of currency reserves in gold, the Swiss National Bank will be forced to make huge purchases of gold bullion. Switzerland  and its ‘Gold Initiative’ would contribute to driving the price of gold higher – likely in the short term and contributing to higher prices in the long term. Understanding the important recent past and what has led to the forthcoming Swiss Gold Initiative is important and why we look at it today. This context is all important and is essential reading for all who wish to understand the key issues in the debate, for all who invest in and own gold internationally and for all Swiss people.

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New Currency Wars Cometh – Gold To Be “Last Man Standing”

New Currency Wars Cometh – Gold To Be “Last Man Standing”

Currency wars are set to warm up again, after Japan’s radical decision to further debase its currency through an intensification of already significant monetary easing. There was a palpable coldness from China’s Premier Xi Jinping as he greeted Japan’s President Abe at the APEC summit in Beijing.

Volatility in the currency markets is likely to increase greatly. If the competitive devaluation of currencies accelerate, fiat currencies risk losing value versus gold. Indeed, in worst case scenarios some may revert to their intrinsic value – zero. When the dust settles gold will be the last man standing as it cannot be created or destroyed by governments. It remains the best form of financial insurance.

 

 


h/t Brian via Zero Hedge

Tensions are normally high between the two countries but are even more so in recent months.

War grievances run deep and are never far below the surface. Along with South Korea, these are the big industrial powers of Asia who are competing for a share of the shrinking export market.

China’s economy is slowing. Official figures suggest that growth has slowed to around 7%. Some analysts say it is as low as 5%. While Western countries would rejoice at such figures it must be remembered that in 2012 China’s growth in GDP was over 10%.

The decline has affected employment in China which is causing social tensions. The U.S. has put diplomatic pressure on China to not devalue its currency in recent years. So the Chinese resent Japan’s unsignaled and unilateral debasement of their currency, especially if it comes with the blessing of the U.S.

It would appear as though Japan’s actions were not taken at the behest of Japan’s financial elites, even though they stand to gain the most from QE in the short term – especially if the U.S. experience is anything to go by.

How China will respond remains to be seen. Recent renminbi currency swap deals with Canada and Qatar show the increasing risk posed to the dollar’s status as sole global reserve currency.

If and when the dollar falls out of favour as the preeminent reserve currency it’s ability to run large deficits for months on end will be greatly compromised.

The symbolism of the official photograph of the APEC summit could not be more clear. Symbolism is important to the Chinese.

In the photograph (see above) are Xi Jinping along with the leaders of Brunei, the Philippines, and Russian President Putin on the left hand side. Far to the right is Barack Obama. President Putin is at President Xi Jinping right hand.

China is emphasising it’s influence in East Asia and it’s good relations with Russia. The U.S. is presented as insignificant and ineffectual, at least in the affairs of East Asia.

Currency wars are set to intensify again. Indeed, Saxobank has warned of a new “full scale” currency war. We are in a full-blown currency war and the ECB will feel under pressure to take part in that,” said Nick Beecroft, non-executive chairman and senior markets consultant at Saxo Capital last week.

Chief Economist and CIO of Saxobank, Steen Jakobsen warned yesterday that there’s an increasing risk we will soon see a “significant paradigm shift” from China in its attitude to the strength of its currency. He says we’re about to see a full-scale currency war, notably between China and Japan, two of the world’s greatest exporting countries.

Whatever action China chooses with regard to positioning the yuan as reserve currency and using its gold reserves, it seems sure that the U.S. will not be consulted. It is likely that China has enough gold bullion to dethrone the dollar in the event of a dollar crisis or a wider international monetary crisis.

Volatility in the currency markets is likely to increase greatly. If the competitive devaluation of currencies accelerate, fiat currencies risk losing value versus gold. Indeed, in worst case scenarios some may revert to their intrinsic value – zero.

When the dust settles gold will be the last man standing as it cannot be created or destroyed by governments. It remains the best form of financial insurance.

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MARKET UPDATE

Today’s AM fix was USD 1,151.25, EUR 927.90 and GBP 726.43 per ounce.
Yesterday’s AM fix was USD 1,172.00, EUR 938.20 and GBP 737.25 per ounce.

Gold fell $25.90 or 1.14% to $1,149.40 per ounce yesterday and silver slipped $0.18 or 2.2% at $15.56 per ounce.


Silver in U.S. Dollars – 10 Years (Thomson Reuters)

Gold remained firm near $1,150 an ounce as physical demand for gold bullion coins and bars especially from Chinese store of value buyers increased after yesterday’s weakness.

Spot gold was flat at $1,150.45 an ounce at 1021 GMT, while Comex U.S. gold futures for December delivery fell $9.90 an ounce to $1,149.90.

Silver slipped 0.3% at $15.51 an ounce. Spot platinum was down 0.2% at $1,190.24 an ounce, while spot palladium was down 0.2 percent at $757.35 an ounce. Spot palladium was down 0.2% at $757.35 an ounce.
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(more…)

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Gold Rigging Settlement With UBS – Other Banks To Follow

Gold Rigging Settlement With UBS – Other Banks To Follow

 

Suspicions that the price of precious metals are frequently manipulated by a few international banks were further confirmed over the weekend. UBS agreed to settle with various international regulatory bodies investigating rigging in foreign exchange and precious metals markets.

Manipulation of markets can work effectively in the short term. However, in the long term prices will be dictated by the global supply and the global demand of 7 billion people, many in Asia who believe in gold as a store of wealth. Not to mention, sovereign central banks such as the People’s Bank of China and the Russian central bank – who also believe in gold as an important monetary asset.   (more…)

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