Gold Nears $1,900 – Venezuela Formally Requests Gold Holdings Held by BOE Ship by Sea

All major currencies have fallen against gold and silver again today with gold reaching new record nominal highs in most fiat currencies including U.S. dollars. Gold reached a new record of $1,894.80/oz – just shy of $1,900/oz.


Cross Currency Table

Gold is trading at 1,870.10 USD, 1,296.40 EUR, 1,132.40 GBP, 1,470.90 CHF and 143,670 JPY per ounce and has risen some 1% in all currencies. Gold is particularly strong against the yen and Swiss franc which have fallen in international markets on concerns of debasement.

The London AM fix was a fourth consecutive record nominal high in US dollars. Gold’s London AM fix this morning was USD 1,877.75, EUR 1303.17, GBP 1139.55 per ounce (from Friday’s USD 1,862, EUR 1299.28, GBP 1126.91 per ounce).

Silver is in all major currencies and has risen another 1.4% in dollars after last week’s 8% gain.

Gold’s 6.2% rise last week and silver’s 8.2% rise was barely reported in the press and media in Europe over the weekend – with all the focus continuing to be on equities and to a lesser extent bonds. The usual suspects in stockbrokerages and banks warned about gold being a bubble again. 

Silver was not reported at all and remains almost completely taboo in the non specialist financial press. Besides the very occasional article warning that it is a bubble. 

According to Bloomberg, the central bank of Venezuela has sent a statement by e-mail requesting its 99 tons of gold holdings from the Bank of England, citing the institution’s president, Nelson Merentes. 


GOLD SPOT $/OZ

“We’ve contacted the Bank of England and the corresponding protocols have been initiated to complete this operation as soon as possible,” Merentes said, according to the statement. “Once that’s done, the shipments will begin by sea.”

Chavez ordered the central bank on Aug. 17th to repatriate $11 billion of gold reserves held in developed nations’ institutions. Chavez fears ‘hostile countries’ may seize the national patrimony. 

Venezuela holds 211 tons of its 365 tons of gold reserves in U.S., European, Canadian and Swiss Banks.

40 shipments will be needed to carry the 17,000 400 ounce bars by sea. Piracy must be a real concern given the value of the bullion and Venezuala should ensure that the shipment is well protected.

While physical demand remains robust, sentiment in the trading pits remains muted. An indication that speculative sentiment remains lukewarm was seen in the U.S. Commodity Futures Trading Commission data released Friday evening.

Hedge-fund managers and other large speculators decreased their net-long position in New York gold futures in the week ended Aug. 16, according to the CFTC data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 200,086 contracts on the Comex division of the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions fell by 3,487 contracts, or 2 percent, from a week

The opposite was the case in the silver market where sentiment appears to be heating up somewhat with the risk of another short squeeze developing.

Hedge-fund managers and other large speculators increased their net-long position in New York silver futures in the week ended Aug. 16, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 21,928 contracts on the Comex division of the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 3,540 contracts, or 19 percent, from a week earlier.

The dumb money continues to warn that gold and silver are bubbles.

Their simplistic bubble thesis is based almost exclusively on the nominal US dollar price and recent price movements and on the assumption that (to paraphrase) ‘gold has gone up in price a lot – therefore it is a bubble’. 

There is a continuing failure to look at the important supply and demand fundamentals of the gold and silver markets which leads to unsound reasoning and irrational conclusions. There is also a failure to adjust for inflation.

There is little knowledge of the very small size of the physical bullion markets vis-à-vis the stock, bond, currency and other markets. 

There is also very little knowledge of financial, economic and monetary history and a continuing ignorance regarding ‘investment 101’ which is diversification.

Being prudent and having an allocation of 10% to gold will protect no matter what economic and monetary scenario develops in the coming months. If one is not leveraged and is prudently diversified and owns gold bullion (coins and bars in the safest way possible), it does not matter if gold is a bubble or not as you own a range of other quality assets.

From a purely investment point of view – an allocation of 5% to 10% makes sense.

From a financial insurance or store of wealth point of view – having a higher proportion of your overall net worth makes sense. 

Especially given the risks posed to the dollar, euro, pound and fiat currencies and to deposits “guaranteed” by insolvent states.

Not putting 10% of your wealth in gold is extraordinarily imprudent today and a recipe for further financial destruction.   

For the latest news and commentary on gold and financial markets please follow us on Twitter.

SILVER
Silver is trading at $43.22/oz, €29.98/oz and £26.19/oz.

PLATINUM GROUP METALS
Platinum is trading at $1,882.50/oz, palladium at $755/oz and rhodium at $1,800/oz.

NEWS
(Bloomberg)
Gold Seen Heading for Biggest Gain in 32 Years on Investment

(Financial Times)
Bulls pounce on European stocks as gold hits record

(Reuters)
Gold soars to record high on economic woes

(Financial Times)
Summer malaise helps gold to fresh record

(Businessweek)
Hedge Funds Buying Corn to Silver to Soy as Commodities Tumble

BLOOMBERG WIRE
– Thai Exchange Temporarily Halts Silver Futures After Price Jump (20%)
– China’s July Silver Imports Were 284 Tons, Customs Says
– Venezuela Gold Repatriation Won’t Mean Metal Scramble, UBS Says
– Gold is strong in all currencies and is entering a stage when prices go “parabolic,” Dennis Gartman says

COMMENTARY
(ZeroHedge)
Things That Make You Go Hmmm…. Such As A Venezuelan Dictator Bringing Down The Global Gold Cartel

(King World News)
Interview with Sponsor of Utah Legal Tender Act” Recognizing Gold & Silver as Legal Tender

(GoldSeek)
Gold, Silver SOAR, Gold Cartel In Shambles

(ZeroHedge)
The Battle For Libya Is Almost Over… As Is The Battle For Its 144 Tons Of Gold

(The Sunday Business Post)
David McWilliams: The Future – Tax the Rich

(Moneyweek)
Should You Sell Your Gold Now? – Dominic Frisby

(Financial Times)
Gold Standards: FT’s Lex Column 

Mark O'Byrne

Also on news-goldcore-com

Videos

Jim Rickards – Don’t Trust the Fed’s Narrative

[Video] It’s here! Jim Rickards on The M3 Report – Episode 1 is Live Now

How Long Will Inflation Last 2022 – Charles Nenner

Blog posts

Gold cheers when the Fed tries to fight the inevitable

Yesterday the Fed released the minutes from the FOMC’s July meeting. There were few surprises, but two things really stood out; members are anxious about inflation and they’re anxious about a recession. As you will read below, this is good news for the gold price and anyone who has already decided to invest in gold. […]

READ MORE

Jim Rickards – Don’t Trust the Fed’s Narrative

“Don’t underestimate the power of a narrative” says our guest on GoldCore TV this week. Jim Rickards joins Dave Russell to talk about perception, the Putin Price Hike and why he believes Ukraine cannot win the war. If you enjoyed the interview, look out for our new look GoldCore TV show, The M3 Report, when […]

READ MORE

Inflation is now out of the control of central banks

When “whatever it takes” means confiscation of wealth One of the reasons people decide to buy gold bullion or add silver coins to their portfolio is because they cannot be devalued. No one can suddenly decide to print more gold or silver! Sadly, this is exactly what happens with currencies around the world. And the […]

READ MORE

Featured

Rick Rule- Should You Invest In Gold 2022

READ MORE

Jim Rogers- The Worst Bear Market is Coming

READ MORE
Newsletter
Category
Archives
Popular

No posts available

Videos

Jim Rickards – Don’t Trust the Fed’s Narrative

[Video] It’s here! Jim Rickards on The M3 Report – Episode 1 is Live Now

How Long Will Inflation Last 2022 – Charles Nenner

Blog posts

Gold cheers when the Fed tries to fight the inevitable

Yesterday the Fed released the minutes from the FOMC’s July meeting. There were few surprises, but two things really stood out; members are anxious about inflation and they’re anxious about a recession. As you will read below, this is good news for the gold price and anyone who has already decided to invest in gold. […]

READ MORE

Jim Rickards – Don’t Trust the Fed’s Narrative

“Don’t underestimate the power of a narrative” says our guest on GoldCore TV this week. Jim Rickards joins Dave Russell to talk about perception, the Putin Price Hike and why he believes Ukraine cannot win the war. If you enjoyed the interview, look out for our new look GoldCore TV show, The M3 Report, when […]

READ MORE

Inflation is now out of the control of central banks

When “whatever it takes” means confiscation of wealth One of the reasons people decide to buy gold bullion or add silver coins to their portfolio is because they cannot be devalued. No one can suddenly decide to print more gold or silver! Sadly, this is exactly what happens with currencies around the world. And the […]

READ MORE

Featured

Rick Rule- Should You Invest In Gold 2022

READ MORE

Jim Rogers- The Worst Bear Market is Coming

READ MORE