Showing posts with label buffet gold. Show all posts
Showing posts with label buffet gold. Show all posts

Tuesday, March 6, 2012

PRECIOUS-Gold falls below $1,690/oz as euro slides


* Greek jitters hurt euro, stocks; German bunds rise
* Hong Kong gold imports to China ease from highs
* Gold/silver ratio edges up as silver underperforms (Updates throughout, changes dateline, previous SINGAPORE)
By Jan Harvey
LONDON, March 6 (Reuters) - Gold prices fell more than 1 percent in Europe on Tuesday, pushing through support at $1,690 an ounce, as jitters over whether private creditors will agree to a Greek bond swap deal and wider euro zone growth pressured the euro versus the dollar.
Platinum, palladium and silver were all caught up in the selling, falling more than 2 percent in gold's wake.
Spot gold was down 1.1 percent at $1,687.86 an ounce at 1141 GMT, while U.S. gold futures for April delivery were down $15.20 an ounce at $1,688.70.
The metal slipped to session lows as the dollar rose to a 2-1/2 week high against the euro, with the single currency pressured by concerns about a Greek debt swap deal. Traders cited steady selling by macro funds.
Stock markets fell and the cost of insuring Greek, Spanish and Italian government debt against default rose on uncertainty over Greece's debt restructuring and a worsening economic outlook, while safe-haven German Bunds rose.
Gold has recently failed to benefit from the safe-haven flows that helped push it to record highs last year as investors seek the safety of the dollar instead.
"Gold this year has been driven by exchange-rate mechanisms. Any dollar strength has not been positive for gold," said Citigroup analyst David Wilson.
"At some point, if confidence over Europe evaporates, you would think that should be postive for gold, but you still have to keep an eye on the dollar-gold trade-off."
The precious metal is extending losses after falling nearly 4 percent last week, the most since mid-December, after Federal Reserve chair Ben Bernanke disappointed financial markets when he failed to signal another imminent round of monetary easing.
If gold fails to push back above support at $1,690 an ounce, it is likely to decline towards the $1,649-$1,656 area, technical analysts said.
"In the near term... we sense that the market might need a period of consolidation and possibly another decline before it can trade significantly higher," said HSBC in a note.
CHINESE GOLD IMPORTS FROM HONG KONG DIP
Data showed gold imports into China from Hong Kong dipped 15 percent in January from the previous month, reflecting slower sales during the Lunar New Year holiday. Hong Kong's gold exports to China in 2011 tripled from a year earlier, showing China's strong appetite for bullion investment.
Physical demand from number one gold consumer India firmed as prices dropped and as the rupee weakened, making dollar-priced gold cheaper for local buyers.
Silver also sold off in gold's wake, down 2 percent at $33.30 an ounce.
The gold/silver ratio, or the number of silver ounces needed to buy an ounce of gold, rose back to 50.7 on Tuesday, after dropping to a five-month low at 48.4 last week, as silver underperformed gold in a falling market.
Platinum group metals were the biggest losers, however, coming under pressure from both the stronger dollar and concerns about global growth, which has a greater effect on industrial platinum and palladium than on gold.
Spot platinum was down 1.9 percent at $1,628.74 an ounce, while spot palladium was down 3.6 percent at $677.48 an ounce.
"Besides the general decrease in prices of precious metals, the restart of production at the world's largest platinum mine - Rustenburg in South Africa - is weighing on the price," said Commerzbank in a note.
"The strike meant that 120,000 ounces less platinum group metals were produced in recent weeks, which has caused the price of platinum to soar more than 25 percent since the beginning of the year.. allowing it to almost catch up with gold for a time." (Reporting by Jan Harvey, editing by William Hardy)

Monday, March 5, 2012

How much is Buffet priced in Gold?


NEW YORK (Commodity news world): Warren Buffet's distaste for gold is well known and even after a 10 year bull market, most investors are amazed when Buffet not only refuses to buy gold but goes on to thrash it.

And with gold being increasingly considered as a currency, what exactly is Buffet's worth in terms of gold? The below graphic shows Buffet's Berkshire Hathaway priced in gold (chart courtesy: www.azizonomics.com):


In a recent letter to the shareholders of Berkshire Buffet states this long-standing view of gold- the fact that it has no intrinsic value and "being neither of much use nor procreative”. And with the current gold stock valued at $9.6 trillion, Buffet argues that one could buy all of US crop farmland and 16 Exxon mobils, assets that will easily outperform gold over the next 100 years.

Though, it remains to be seen if Buffet is eventually proved right on his view of gold, it cannot be contested that in the current economic environment, gold is believed as a safe haven. And the value of an asset is directly linked to the strength of investor belief.

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