Goldcore Newsletter

   Gold $1,749.28/oz Silver $33.72/oz Platinum:$1,618.00/oz

Gold Challenges Resistance at $1,750/oz – Technicals and Fundamentals Remain Very Positive Gold’s London AM fix this morning was USD 1,747.50, EUR 1,326.68, and GBP 1,102.80 per ounce. Yesterday's AM fix was USD 1,744, EUR 1,327.65, and GBP 1,106.74 per ounce. Cross Currency Table - Bloomberg Adding to the very gold supportive interest rate backdrop, Japan's finance and economic ministers are putting pressure on the Bank of Japan to consider easing monetary policy even further. Negative yields on some bonds (such as TIPS) are very gold positive as are moves to let investors buy short term bills with negative yields. Gold is also being supported by central bank buying. Russia's gold and foreign exchange reserves rose to $504 billion in the week to Jan. 27 from $499.7 billion a week earlier. Newcrest Mining, the world's third largest gold producer, expects gold to trade as high as $2,500 an ounce and retain its safe harbour status for as long as the world's financial system remains in crisis. SILVER Silver is trading at $33.72/oz, €25.66/oz and £21.30/oz. PLATINUM GROUP METALS Platinum is trading at $1,618.00/oz, palladium at $689/oz and rhodium at $1,400/oz.

Please click here to read the rest of GoldCore’s Market Update.

NEWS:

Zero Hedge:

Gold Challenges Resistance: http://www.zerohedge.com/news/gold-challenges-resistance-1750oz

NEWS
(Reuters)Gold rises to 8-week high, firm euro supports

(Reuters) 
Gold in a bubble? Not in Europe, where public can't sell fast enough

(Reuters) 
Economic woes could push gold to $2500-Australia's Newcrest‎

(CNBC) 
Fed's Low Rates Killing Credit, Slowing Recovery: Gross

(BusinessWeek) 
California Will Borrow Up to $1 Billion to Skirt Cash Crisis

COMMENTARY

(ZeroHedge) 
Bill Gross Explains Why "We Are Witnessing The Death Of Abundance" And Why Gold Is Becoming The Default "Store Of Value"

(Max Keiser) 
The Historical Case For $960 Silver

(Benzinga) 
Central Bankers Weaken Their Currencies, Boost Gold

(The Economic Collapse Blog) 
34 Shocking Facts About U.S. Debt

(RT) 
Chinese 'gold rush': Country diversifying assets

(Ludwig Von Mises Institute)
Currency Wars

Gold Gives Ground As Europe/Germany Decides Its Future

Fort Knox U.S. Gold Reserves to be Independently Audited and Assayed? Congressman Ron Paul Pressures U.S. Treasury

Gold is trading at $1,527.39/oz, €1,070.50/oz and £944.70/oz.

Gold has given up much of yesterday’s modest gains and is marginally lower in all currencies except the Swiss franc. The euro has stabilized despite continuing contagion concerns and an existential threat to the euro currency itself.


Cross Currency Rates

Gold remains close to record nominal highs in all major currencies but media coverage in the UK, Ireland and Europe remains minimal and skeptical. Focus continues to be almost exclusively on bond, equity and currency markets – with little or no coverage of gold.

The ramifications of contagion and a euro currency crisis which would lead to the price of gold in euros surging has not been covered in the media. This is of course bullish as it shows a continuing lack of understanding and appreciation of gold’s importance as a diversification and a safe haven asset.

SILVER
Silver is trading at $35.38/oz,€24.79/oz and £21.88/oz.

PLATINUM GROUP METALS
Platinum is trading at $1,747.25/oz, palladium at $752/oz and rhodium at $1,925/oz.


Please click here to read the rest of GoldCore’s Market Update.

Gold Just 2% from Record Nominal High of $1,577/oz - Targets $1,600/oz and New Highs on Deepening Economic Risks

from GoldCore newsletter@goldcore.com reply-to newsletter@goldcore.com to aucanary@gmail.com date Tue, Jun 7, 2011 at 7:30 AM subject Gold Just 2% from Record Nominal High of $1,577/oz - Targets $1,600/oz and New Highs on Deepening Economic Risks Gold is trading at $1,549.95/oz, €1,056.47/oz and £949.83/oz.

Gold and silver are higher again today with the U.S. dollar and yen in particular under pressure as concerns about the outlook for growth in Japan, the UK, the EU and the U.S. deepen. Gold reached new record nominal highs in sterling yesterday at £949.83/oz on concerns about the UK economy.

The risk of contagion in the Eurozone remains and could see the single European currency project unravel which would negatively impact on the global financial and monetary system.


Cross Currency Rates

SILVER
Silver is trading at $37.41/oz, €25.50/oz and £22.76/oz.

PLATINUM GROUP METALS
Platinum is trading at $1,819/oz, palladium at $804/oz and rhodium at $2,275/oz.


Please click here to read the rest of GoldCore’s Market Update.

COMEX Registered Silver Bullion Inventories Fall Sharp 38.5% in Two Weeks – Risk of COMEX Silver Default Remains

Spot gold and silver prices rose slightly again this morning after hitting a one-month high yesterday as equity markets internationally came under selling pressure. The Moody's downgrade of Greece and worryingly poor US economic data again pushed investors to seek the safe haven of bullion. Gold reached new record nominal highs in sterling yesterday (£945.62/oz) as the pound fell on concerns about the UK economy.

Silver Prices and Rates

Markets await key U.S. data on non-farm payrolls on Friday, while ongoing concerns over Greek sovereign debt and contagion in the Eurozone also affected market sentiment and supported the precious metals.

COMEX Silver Bullion Registered Inventories – January 1996 to May 31st 2011

Friday's U.S. payrolls is likely to show that the world's largest economy is weakening and may be on the verge of a double dip which will likely lead to further safe haven demand.

Seeing as the extent of the recovery was always exaggerated, this is not a surprise to us.

The supply situation in the silver market gets more interesting by the day.

Registered COMEX silver inventories have fallen to multiyear lows at 29,631,268 ounces. In the last 5 days they fell from 32,132,903 ounces to Tuesday’s holdings of 29,631,268 ounces. As can be seen in the table below registered silver inventories fell every single day last week leading to a sharp fall of 8.4% in 5 days.

Registered metals are those metals which meet the standards for delivery under the silver futures contracts and for which a receipt from an Exchange-approved depository or warehouse has been issued. Eligible metals are those which meet the delivery standards as stated in the rules for which no receipt from an Exchange-approved warehouse has been issued.

This is a long term trend that has been seen since the early 1990s when total COMEX silver stockpiles were over 101.45 million ounces.

However, the scale of the drop in inventories since early 2008 is significant and the trend has accelerated in recent weeks.

Registered silver inventories are down a sharp 38.5% in just two weeks – from 41,044,280 to 29,631,268.

COMEX Silver Bullion Registered Inventories – June 2009 to May 31st 2011

The record nominal highs near $50/oz, seen 31 years ago and again at the end of April, are likely to be seen again sooner rather than later due to the increasingly delicate supply demand balance.

The scale of current investment demand and industrial demand, especially from China and the rest of Asia, is such that it is important to keep monitoring COMEX warehouse stocks.

The Hunt Brothers were one of a few dozen billionaires in the world in the late 1970s when they attempted to corner the market. Today there are thousands of billionaires in the world, any number of whom could again attempt to corner the silver market.

Also, today unlike in the 1970s, there are sovereign wealth funds and hundreds of hedge funds with access to billions in capital.

COMEX Silver Bullion Stockpiles – 05/31/11

The possibility of an attempted cornering of the silver market through buying and taking delivery of physical bullion remains real. However it would be very difficult to corner the silver market due to the very small nature of the silver bullion market.

A COMEX default remains a risk as does a massive short squeeze which could see silver surge as it did in the 1970s and again recently leading to silver targeting the inflation adjusted record high of $140/oz.

As ever price predictions from gurus should be take with a pinch of salt and diversification remains of paramount importance.

Gold

Gold is trading at $1,543.05/oz, €1,066.53/oz and £941.40/oz.

Silver

Silver is trading at $37.33/oz, €25.80/oz and £22.77/oz.

Platinum Group Metals

Platinum is trading at $1,821.75oz, palladium at $775/oz and rhodium at $2275/oz.

News

(MarketWatch) -- Gold, silver futures drop as dollar rises
http://www.marketwatch.com/story/gold-silver-futures-drop-as-dollar-rises-2011-06-02?link=MW_latest_news

(Wall Street Journal) -- PRECIOUS METALS: Gold Marginally Down In Asia; Silver Up
http://online.wsj.com/article/BT-CO-20110602-701855.html

(Bloomberg) -- Gold May Advance as Economic Slowdown, Greece's Debt Turmoil Spur Demand
http://www.bloomberg.com/news/2011-06-02/gold-may-advance-as-economic-slowdown-greece-s-debt-turmoil-spur-demand.html

(Reuters) -- Gold steady on weak US data, Greek crisis
http://www.reuters.com/article/2011/06/02/markets-precious-idUSL3E7H202820110602

Commentary

(ZeroHedge) -- Why Gold Is Still a Good Long-Term Investment
http://www.zerohedge.com/article/why-gold-still-good-long-term-investment

(David McWilliams) -- There is life after default, take a look at Argentina
http://www.davidmcwilliams.ie/2011/06/01/there-is-life-after-default-take-a-look-at-argentina

(ZeroHedge) -- Scotia Mocatta Loses 60% Of Its Physical Silver In One Month To "Reclassification", Total Comex Registered Silver Now Under 30 Million Ounces
http://www.zerohedge.com/article/scotia-mocatta-loses-60-its-physical-silver-one-month-reclassification-total-comex-registere

(National Review) -- Keynesians vs. the Entrepreneurs
http://www.nationalreview.com/articles/267555/judge-jury-and-economist-kevin-d-williamson

(Reuters - John Wasik) -- Gold crash: What could trigger the inevitable (Comments are more astute than column)
http://blogs.reuters.com/reuters-wealth/2011/05/30/gold-crash-what-could-trigger-the-inevitable/#commentform

(Wall Street Journal) -- Double Fear: Gold and Dollar Rising Today
http://blogs.wsj.com/marketbeat/2011/06/01/double-fear-gold-and-dollar-rising-today/

Today's newsletter is published on the GoldCore Blog here.

Dollar and Yen Fall - Moody's Warns of Japan Downgrade & UN Warn of Risk of "Collapse" of Dollar

from	GoldCore newsletter@goldcore.com
reply-to		newsletter@goldcore.com
to		aucanary@gmail.com
date		Tue, May 31, 2011 at 8:16 AM
subject		Dollar and Yen Fall - Moody's Warns of Japan Downgrade & UN Warn of Risk of "Collapse" of Dollar

Dollar and Yen Fall - Moody’s Warns of Japan Downgrade & UN Warn of Risk of “Collapse” of Dollar

Gold has fallen against the euro and most currencies but is 0.2% higher in U.S. dollars and nearly 1% higher in yen terms as the American and Japanese currencies have come under selling pressure. Gold remains near record nominal highs in all major currencies which shows that markets are concerned about inflation and concerns about the future of major currencies.


Cross Currency Rates

The euro climbed to a three-week high versus the dollar on speculation Germany and other European nations may pledge more funds to bankrupt Greece and favourable German economic data. This is more a reflection of dollar weakness rather than any great confidence in the euro. The euro at €1,068/oz remains under pressure versus gold and is less than 2% from record nominal highs at €1,088/oz.

While the focus, has of late, been on the increasingly ‘unsingle’ single currency, news overnight shows how there are also substantial risks posed to the yen. Moody’s have warned that they may have to downgrade Japan and have warned of a “tipping point” which may lead to a government funding crisis for heavily indebted Japan.

Moody’s caveat that the risk is long term in nature is likely underestimating the risk which is at least medium term and may even be short term given the deepening economic crisis in Japan today and the sovereign debt risks seen in the Eurozone and in the U.S.



Gold in Euros – May (Tick)

The United Nations warned on Wednesday of a possible crisis of confidence in, and even a "collapse" of, the U.S. dollar if its value against other currencies continued to decline. The UN’s mid-year review of the world economy did not get covered widely.



The UN economic division said that a crisis of confidence in the dollar, stemming from the falling value of foreign dollar holdings, would imperil the global financial system. This trend, it said, had recently been driven in part by interest rate differentials between the U.S. and other major economies (see table above) and growing concern about the sustainability of the U.S. public debt, half of which is held by foreigners including the Chinese government.


Gold in US Dollars – May (Tick)

A reminder, if ever one was needed, of the importance of having a diversification into gold and silver bullion.

Cost averaging remains a sensible strategy for those concerned that there may be further short term weakness in bullion markets.

On the 100th anniversary of the launch of the Titanic, governments internationally appear to be engaged in an exercise of “rearranging the deckchairs” prior to the ship sinking.

In the same way that there was a popular perception that the Titanic was “unsinkable” so today the real risk posed to the euro, dollar, yen, pound and other fiat currencies is largely unacknowledged.


Gold in British Pounds – May (Tick)

There is a real sense of both desperation and denial about the debt crisis and indeed the global nature of the debt crisis.

Many insolvent western governments continue to simply “kick the can down the road”. This may buy time but ultimately the misguided solution of creating more public debt to cure a private debt crisis will be seen as a blunder and will likely lead to even greater financial and economic challenges.

Geopolitical Risk in the Middle East

Geopolitical risk in the Middle East and North Africa remain high and will support gold.

Risks include sectarian tensions between oil rich Saudi Arabia and Iran and instability in strategically important Yemen where a combination of pro democracy protesters and Islamic militants clash with an unpopular, corrupt and undemocratic government.

SILVER

Sell in May?

It was a brutal month for silver investors with silver down by 19.5% in dollar terms. Gold fared much better and is only down 1.6% in dollar terms and 0.36% in sterling terms. Gold was actually higher in euro terms rising by 1.07% and this and the charts above are hardly indicative of a bubble rather of a further period of correction and consolidation.

We have long warned regarding the short term volatility of silver and hence danger of attempting to trade or time the silver market.

If ever there was a market to “buy and hold” it is the silver bullion market. Those who continue to buy silver bullion coins and bars and store in safe depositories will be rewarded in the coming years.

Absolutely nothing has changed regarding the fundamentals of the silver market and this sell off was due to the massive concentrated shorts being involved in a short squeeze, unprecedented margin increases and increasing investment and industrial demand for silver.

This demand is particularly strong in China and Asia and among a minority but increasingly vocal and influential band of silver advocates who believe that silver is money and will help protect people from developing problems in the western and global financial and monetary system.

Gold

Gold is trading at $1,538.57/oz, €1,068.01/oz and £932.525oz.

Silver

Silver is trading at $38.64/oz, €26.82/oz and £23.42 /oz.

Platinum Group Metals

Platinum is trading at $1,828.50oz, palladium at $774/oz and rhodium at $2275/oz.

News

(Reuters) -- PRECIOUS-Gold near 4-week high; Greek crisis on focus
http://www.reuters.com/article/2011/05/31/markets-precious-idUSL3E7GV02A20110531

(MarketWatch) -- Gold futures gain as dollar weakens
http://www.marketwatch.com/story/gold-futures-gain-as-dollar-weakens-2011-05-31?link=MW_latest_news

(WallStreetJournal) -- Normal Rains Could Drive India Gold Demand
http://online.wsj.com/article/SB10001424052702303657404576355033451931652.html

(Reuters) -- U.N. sees risk of crisis of confidence in dollar
http://www.reuters.com/article/2011/05/25/us-economy-un-idUSTRE74O6EI20110525

(RTE) -- Mark O'Byrne on RTE's One O'Clock News (16 minute; 31 seconds)
http://www.rte.ie/player/#v=109954

Commentary

(ZeroHedge) -- Despite Preemptive Gold Margin Hike In Shanghai, Gold Is Poised To Close May Near Record On Sovereign Risk Worries
http://www.zerohedge.com/article/despite-preemptive-gold-margin-hike-shanghai-gold-poised-close-may-near-record-sovereign-ris

(KingWorldNews) -- Richard Russell - Subscribers Should Buy Silver Once Again
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/5/30_Richard_Russell_-_Subscribers_Should_Buy_Silver_Once_Again.html

(ZeroHedge) -- Chinese USD Diversification Continues: First Euro Bonds, Now JGBs
http://www.zerohedge.com/article/chinese-usd-diversification-continues-first-euro-bonds-now-jgbs

(MaxKeiser) -- Argentina’s Economic Collapse
http://maxkeiser.com/2011/05/30/argentinas-economic-collapse/

(Goldseek) -- How gold could reach $13,644 an ounce and silver $853
http://news.goldseek.com/PeterCooper/1306764000.php

(MarketOracle) -- Economic Green Shoots, Exit Strategy, No QE3 Money Printing
http://www.marketoracle.co.uk/Article28324.html

Today's newsletter is published on the GoldCore Blog here.

Soros Sells Gold ETF While Paulson Buys - PIMCO Favour Gold as a "Protection Against What Can Go Wrong"

Gold and silver are higher today while sterling is stronger and the Japanese yen has again come under pressure. The yen has weakened on deepening concerns about the Japanese economy and the BOJ Governor said that the Japanese economy is in a “very severe state”. Gold is trading at $1,491/oz, £919/oz, €1,055/oz and 121,850 yen per ounce. Cross Currency Rates Sterling is firmer today despite UK inflation accelerating again more than economist forecast in April with consumer prices rising 4.5%. Inflation remains a real threat to developed and emerging markets which will lead to continued buying of gold and silver. Gold’s correction has been slow and gradual (unlike silver) and it is down 4.5% in US dollar terms so far in May. However in euro terms gold is flat on the month with gold consolidating in euro terms and looking like it may soon challenge the record high of €1,072/oz. This is especially the case as the risk posed by Eurozone debt markets is not going away anytime soon and indeed contagion remains a real risk. Euro Gold – 1 Year (Daily) The confirmation of George Soros ETF gold sale has again garnered much media comment. Soros’ $28 billion fund decreased its holdings of the SPDR Gold Trust, the exchange traded fund. Soros had bought gold to protect against possible deflation, though his fund now believes there is a reduced chance of such a condition, the Wall Street Journal recently said, “citing people close to the matter”. Should Soros and his fund think that inflation is now a greater risk than deflation then it is curious that they would sell all their ETF holdings. It is also curious as Soros is on record regarding having serious concerns regarding the outlook for the euro and the dollar and the dollar as reserve currency of the world. There is of course the precedent of other hedge fund managers , such as David Einhorn, who have also sold their gold ETF holdings but bought physical bullion in allocated accounts due to a concern about counter party and systemic risk. It is quite possible that Soros’ fund has adopted a similar strategy. This would allow Soros to discreetly accumulate bullion away from the public and media spotlight that result from SEC filings. Paulson & Co., the $36 billion hedge fund founded by John Paulson kept its largest holding - $4.41 billion in the SPDR Gold Trust. Paulson’s belief in gold is seen in the fact that those who buy his fund can have their stakes denominated in gold rather than in dollars, meaning the value of their investment rises and falls with the price of bullion – lessening exposure to the dollar. Paulson, unlike Soros, is on record as having purchased gold to protect against inflation. PIMCO, the largest bond fund in the world, are also increasingly allocating funds to gold in their global equities portfolio. “The largest position in [our] fund is gold, which we think is a very good form of protection against what can go wrong,” said Anne Gudefin, PIMCO’s global equities portfolio manager, told Fortune magazine May 12. The Soros sale may lead to selling at the margin today by guru driven sellers reading simplistic articles. However, Soros ETF sale is of far less importance than the much less reported upon and analysed investment demand, pension demand and central bank demand from Asia and internationally. This demand is coming from a very low base and is sustainable. It is prudent diversification, store of value, safe haven buying and not the rampant speculation involving over allocation and leverage one would associate with a bubble. Gold Gold is trading at $1,494.47/oz, €1,053.04/oz and £918.88oz. Silver Silver is trading at $34.16/oz, €24.07/oz and £21/oz. Platinum Group Metals Platinum is trading at $1,769.70oz, palladium at $716/oz and rhodium at $2,025/oz. News (Bloomberg) -- Gold Halts Two-Day Drop as Growth Concerns Eclipse Soros Sales Gold gained, halting a two-day drop, as declines in Asian stocks and commodities helped ignite demand for safer assets even after billionaire investor George Soros sold most of his exchange-traded bullion holdings. Immediate-delivery gold rose 0.4 percent to $1,495.22 an ounce at 11:54 a.m. in Mumbai. Silver futures were little changed at $34.085 an ounce, while cash silver advanced 2 percent to $34.2750, rebounding from a 5.1 percent decline yesterday. Asian stocks fell for a fourth day on concern that the global economic recovery is slowing. Data today may show U.S. housing starts hovered in April around the lows reached during the recession, while growth in industrial production slowed. Soros Fund Management LLC held 49,400 shares of SPDR Gold Trust as of March 31, compared with 4.721 million at end-December, according to the U.S. Securities and Exchange Commission. It also sold all 5 million shares in iShares Gold Trust. “Soros was sitting on a huge profit and like a lot of investors of late, he was happy to take those profits off the table,” said Gavin Wendt, founding director at MineLife Pty in Sydney. “That shouldn’t surprise people. Gold has been rising for a decade for fundamental reasons, which haven’t gone away.” Accelerating inflation, Europe’s debt crisis, a weakening dollar and fighting in Libya boosted the spot price of the metal to an all-time high of $1,577.57 an ounce on May 2. The metal increased 5 percent this year after a 30 percent rally in 2010, keeping it on course for an 11th straight annual advance. Portugal Bailout European finance ministers endorsed a 78 billion-euro ($111 billion) bailout for Portugal, while stepping up pressure on Greece to sell assets and deepen spending cuts in exchange for an increase in its rescue. India’s inflation index accelerated 8.66 percent in April from a year ago, topping an 8.5 percent rise forecast in a Bloomberg Survey, data showed yesterday. The dollar gained as much as 0.4 percent against six major currencies following a drop of 0.2 percent yesterday. The index weakened 4.3 percent this year. The decade-long surge in gold attracted investors seeking better returns than equities or bonds and an alternative to currencies, helping boost holdings in exchange-traded products backed by bullion to a record in December. ETP holdings have slipped 3.6 percent from the peak. Touradji Capital, founded by billionaire Paul Touradji, sold all of its shares in the SPDR Gold Trust during the first quarter, according to a filing to the U.S. Securities and Exchange Commission. The fund held 173,000 shares at the end of the fourth quarter, the filing showed on May 13. ‘Another Run Higher’ “To the extent that Soros is respected by investors, I guess it implies that it will sew doubt in their minds and might see some investors leave the space,” David Thurtell, Singapore-based head of metals research with Citigroup Inc. Still, “we think gold can have another run higher.” Paulson & Co., the U.S. hedge fund run by John Paulson, maintained 31.55 million shares in the SPDR Gold Trust, according to a government filing. Eric Mindich’s Eton Park Capital Management LP reduced its stake in the SPDR Gold Trust by 48 percent during the first quarter, according to a government filing. Eton Park sold 2.165 million shares, cutting its holdings to 2.328 million as of March 31, the filing shows. Palladium demand outpaced supply by the most in a decade last year and the shortage will continue in 2011 on higher usage by carmakers and falling shipments from Russian stockpiles, Johnson Matthey Plc said. Immediate-delivery palladium increased 1.1 percent to $721.75 an ounce, while platinum rose 1.1 percent to $1,777.25 an ounce. (Bloomberg) -- Paulson Takes $1 Billion Hewlett-Packard Stake, Adds to Gold Bet Paulson & Co., the $36 billion hedge fund founded by John Paulson, took a stake in Hewlett-Packard Co. and increased its holding of Transocean Ltd., adding companies undergoing transformations to its bets on gold. Paulson bought 25 million shares in Hewlett-Packard, valued at about $1 billion, according to a regulatory filing yesterday. The New York-based fund added 17.3 million shares of Transocean, lifting its stake to 7.7 percent and making Paulson the largest holder of the Vernier, Switzerland-based offshore driller. The hedge fund has said it expects to make money in the next two years with the stocks of companies going through bankruptcy, restructuring or reorganization. Transocean, the owner and operator of the Deepwater Horizon drilling rig that exploded a year ago, was sued by BP Plc last month for billions of dollars in damages related to the oil spill. Hewlett-Packard is pushing deeper into software to try to reverse a 16 percent drop in its shares over the past year. Armel Leslie, a spokesman for Paulson, declined to comment on the stock purchases. Leo Apotheker, who took over as Hewlett-Packard’s chief executive officer Nov. 1, outlined his strategy for the first time on March 14. The company is starting a cloud-computing service that will let developers create applications for consumers and businesses that run on HP servers, Apotheker said at the time. Apotheker told top executives earlier this month that he’s bracing for “another tough quarter” in the Palo Alto, California-based company’s fiscal third quarter and urged deputies to “watch every penny and minimize all hiring.” HP said in February that sales for its second quarter, which ended in April, would miss analysts’ sales and profit estimates. Betting on Takeovers Hewlett-Packard declined 61 cents, or 1.5 percent, to $39.80 yesterday, and fell as much as 5.1 percent in extended trading. Transocean has dropped 26 percent since the April 20, 2010, explosion of the Deepwater Horizon in the Gulf of Mexico. It rose 7 cents to $68.49 in New York yesterday. Paulson’s largest fund, Advantage Plus, which bets on corporate events such as takeovers and bankruptcies, lost 1.7 percent this year through April with its dollar-denominated shares. Transocean, the world’s largest offshore driller, this month reported its biggest first-quarter profit decline in nine years amid a worldwide surfeit of rigs used to find oil and natural gas. New U.S. drilling rules enacted after last year’s disaster increased costs and forced the company to spend more time carrying out shipyard work during the quarter, Transocean has said. Gold Stakes Paulson also bought 6 million shares in Lubrizol Corp., the engine-additives maker that Warren Buffett’s Berkshire Hathaway Inc. agreed in March to buy for about $9 billion. Wickliffe, Ohio-based Lubrizol said this month its plan to sell itself is unaffected by disclosures of David Sokol’s investments in the firm as he pushed for Buffett, his then-boss at Berkshire Hathaway, to buy the firm. Paulson’s stake in Lubrizol was valued at about $804 million. Paulson kept his $4.41 billion holding of shares in the SPDR Gold Trust unchanged and added to stakes in mining companies including Johannesburg-based AngloGold Ashanti Ltd. His fund bought 97,540 American depositary receipts in South Africa’s biggest gold producer last quarter, as well as 2 million ADRs in Gold Fields Ltd., its second-largest producer. Paulson has been betting on a global economic recovery, and has purchased gold to protect against inflation. Paulson’s investors can choose to have their stakes denominated in gold rather than dollars, meaning the value of their investment rises and falls with the price of the bullion. Soros Sells George Soros, the billionaire founder of Soros Fund Management LLC, sold most of his holdings in the bullion-backed SPDR Gold Trust and iShares Gold Trust funds in the first quarter, while buying shares of mining companies Goldcorp Inc. and Freeport-McMoRan Copper & Gold Inc. Soros’s fund held 49,400 shares of SPDR Gold Trust as of March 31, compared with 4.721 million at the end of the fourth quarter. The New York-based fund sold all 5 million shares it held in iShares Gold Trust. Soros bought 301,300 shares of Freeport-McMoRan and 7,600 of Goldcorp. Today's newsletter is published on the GoldCore Blog here.

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$14.3 Trillion U.S. Debt Ceiling Threatened; Silver Bullion Buying Spree in India After Price Falls

   Gold $1,491.30/oz   Silver $34.09/oz   Platinum:$1,755.50/oz

	$14.3 Trillion U.S. Debt Ceiling Threatened; Silver Bullion Buying Spree in India After Price Falls Gold and silver are lower this morning as the recent bout of weakness continues. Equities in Asia were lower on economic growth and inflation concerns and European indices are also lower as Greek debt talks are in disarray after the weekend arrest IMF’s Dominique Strauss-Kahn. Cross Currency Rates There are concerns that the IMF’s chiefs’ arrest may delay resolution of Europe’s deepening debt crisis and Greek bonds have fallen again seeing the 10 year yield rise to 15.58% - close to the record highs seen last week. Greek Government Bond – 10 year (Daily) Oil prices are lower again on growth concerns despite a significant increase in tensions in the Middle East with clashes on Israel’s borders with Syria, the Lebanon and Egypt. Gold is likely to find support from geopolitical risk emanating from the tinderbox that is the Middle East. NYMEX Crude Oil – 5 Year (Daily) Gold and silver’s fundamentals remain very sound and yet the majority of the western public remain unaware of the fundamentals and unaware of the significant macroeconomic, monetary and geopolitical risk facing them today. Tensions in the Middle East and North Africa, concerns that Japan is on the verge of a severe recession (due to its earthquake, tsunami and its worsening nuclear catastrophe), risk of sovereign debt contagion in Europe and the U.S. (the U.S. is set to reach its $14.3 trillion 'debt ceiling' this week) and ultra loose monetary policies, currency debasement and inflation are contributing to continuing safe haven demand. This is especially the case in China and India where strong demand has continued after the recent sell off and where demand continues to surprise analysts and market participants. The Financial Times reported on Saturday that “the sharp drop in gold and silver prices has stimulated a surge in buying from India in a sign that consumers in the world’s largest gold-buying country retain faith in the decade-long bull story for precious metals.” Chhabil Jain, a Mumbai silver trader told the Financial Times that “demand for silver bars was going through the roof” and that “many vendors were starting to run low on stocks”. “People are booking incredible amounts of silver as they see the current drop in prices as a great opportunity to buy more ... most are buying for pure investment,” he added. Bloomberg reports this morning that silver was the most traded commodity in April. Incredibly, the value of trading in silver futures in India was four-times greater than gold. Trading of silver futures on the Multi Commodity Exchange gained more than sevenfold to 4.1 trillion rupees in the April 16-30 period from a year earlier, regulator’s data showed. Indians unlike their western counterparts still silver as an important store of value to protect against the declining purchasing power of paper currencies. U.S. Debt Ceiling of $14.3 Trillion To Be Reached  While the media focuses on the weekend arrest IMF’s Dominique Strauss-Kahn, a more fundamental and important story is that of America’s debt ceiling of $14.3 trillion which is likely to be reached, possibly today or tomorrow. America’s budget deficit this year alone is set to be a record breaking $1.5 trillion. These figures and America’s appalling fiscal state means that gold and silver remain important diversifications. Should the US Congress fail to vote to increase the debt limit today or this week, the White House has warned that the country would default on its debt and spark a new financial crisis. The US Treasury has threatened to implement "extraordinary measures" so America can keep paying its bills until August. Federal Reserve Chairman Ben Bernanke told Congress last week that any delay in increasing the debt limit would result in higher interest rates and could have "extremely dire consequences for the US economy". The reality is that the continuing imprudent and profligate fiscal and monetary policies in the U.S. are likely to lead to higher interest rates and have "extremely dire consequences for the US economy". Recent and continuing unsustainable fiscal and monetary policy have led to safe haven demand for gold and silver and the continuation of the bull markets in the precious metals. Until fiscal and monetary discipline and sanity returns to America and the world, gold and silver will continue to be bought in order to hedge the continuing debasement of fiat currencies.
	Gold Gold is trading at $1,491.30/oz, €1,056.98/oz and £921.69oz.
	Silver Silver is trading at $34.09/oz, €24.16/oz and £21.07/oz.
	Platinum Group Metals Platinum is trading at $1,755.50oz, palladium at $703/oz and rhodium at $2,025/oz.
	News (Bloomberg)-- Commodity Futures Turnover in India Jumps on Silver Trade Turnover on commodity futures exchanges in India, the biggest consumer of gold, surged 73 percent in April as silver’s rally to a record and price volatility spurred trading in the metal. Turnover on the Multi Commodity Exchange of India Ltd., the nation’s biggest bourse and rivals, jumped to 12.9 trillion rupees ($286 billion) last month from 7.5 trillion a year ago, the Forward Markets Commission said today on its website. Turnover gained to 7.02 trillion rupees in the fortnight ended April 30, from 4.4 trillion rupees, the regulator said. Bullion trade, comprising silver and gold, almost tripled in April, the commission said. Silver futures rallied to a record 73,600 rupees per kilogram in India on April 25, before slumping 28 percent through today. The value of trading in silver futures in India, the most traded commodity in April, was four-times greater than gold, data from the regulator showed. “The large swings have resulted in large trading volumes,” Kishore Narne, head of research at Anand Rathi Commodities Ltd., said from Mumbai. “Speculators, especially the intra-day traders, have shifted from gold to silver because it appeared to them it’s a good way to make a quick buck.” Trading of silver futures on the Multi Commodity Exchange gained more than sevenfold to 4.1 trillion rupees in the April 16-30 period from a year earlier, regulator’s data showed. Silver futures for July-delivery on the exchange fell 1.6 percent to 52,860 rupees per kilogram at 12:21 p.m. in Mumbai. The metal has added 80 percent in the past year. Trade in metals other than bullion dropped 38 percent in April, the regulator said. Trade in agricultural commodities rose 23 percent in the period and energy gained 14 percent. (Bloomberg) -- Shanghai Gold Exchange May Cut Silver Daily Trading Limit to 10% The Shanghai Gold Exchange may cut the trading band for silver contracts to 10 percent from 13 percent, the bourse said on its website. The band will be reduced if the metal doesn’t rise or fall by the current 13 percent limit today, according to the statement. If reduced, the new 10 percent limit will be effective from tomorrow, it said. The exchange will also reduce the margin requirement for silver contracts by 3 percentage points to 15 percent if the metal doesn’t rise or fall by the daily limit today, it said. The change in margin requirements would be effective from today, according to the statement. (US Mint) -- 2011 American Buffalo Gold Proof Coin Available May 19 The United States Mint will begin accepting orders for the 2011 American Buffalo Gold Proof Coin on May 19 at noon Eastern Time (ET). There is no mintage or household order limit for this product. The designs on the obverse (heads side) and reverse (tails side) of the 24-karat one-ounce gold coin are based on the original 1913 Type I Buffalo nickel by James Earle Fraser. The obverse features the profile of a Native American and the inscriptions LIBERTY, 2011, the initial F for Fraser and the W mint mark for the United States Mint at West Point. The coin's reverse features the revered American Buffalo-also known as the bison-along with the inscriptions UNITED STATES OF AMERICA, E PLURIBUS UNUM, IN GOD WE TRUST, $50, 1OZ. and .9999 FINE GOLD. Each American Buffalo Gold Proof Coin is presented in an elegant hardwood box with a matte finish and a faux leather inset. The coin is exhibited on a platform which can stand at an angle for display when the box is open. A Certificate of Authenticity is also included. Today's newsletter is published on the GoldCore Blog here. This email was sent to aucanary@gmail.com by newsletter@goldcore.com |