Saturday, October 18, 2008

The City of Gold

This radio interview is an absolute necessity if you are following this blog. I give it my highest recommendation:

Audio Link

Transcript Link

Listen to Part 1:
*London Gold Pool - Revisited - with Jim Puplava
*Eric King with special guest: Ian MacDonald, Executive Director, Gold & Precious Metals Dubai Multi Commodities Centre
(Total Running Time: 1 hr. 4 min.)

This audio is from September 6th, but it couldn't be more appropriate if it was recorded today! It hasn't aged at all. It is a great supplement to my last two posts about "oil", gold and Dubai ("The City of Gold").

The first half hour of the show covers manipulations in all the markets as well as the reason for the physical gold shortage and the separation in pricing between physical and paper. The second part (starting 38 minutes in) is a wonderful interview with a government official in the Dubai metals market. Positively fascinating. It continues the same theme as the first half with Jim Pulava.

I found some of the statements by Ian MacDonald to be truly surprising. It confirms in my mind that the Thoughts of Another really are blowing in the wind right now.


Anonymous said...

"gold flows " east or west look at gold today in every other currency than the USD $$.??

FOFOA said...

Yes. That would seem to show a flow of gold away from the dollar. However, currencies are complex machines. And gold is still traded in dollar terms. So if a foreign government suppresses it's own currency in support of the dollar, that would tend to show a stronger performance in gold in that currency, because everything is relative to everything else.

I would be interested if you could explain it in a way that shows an outflow of gold away from the dollar. I don't doubt it, I'm just not sure that shows it.

One thing that is interesting is if you look at the Kitco page...

On Friday all currencies listed on the left side of the page EXCEPT the Euro went up in relation to the dollar.

The dollar went up in relation to the USDX because it is heavily weighted in the Euro.

Gold went down and stocks went down.

It seems to me that the rush to cash is spilling out all over the world. So why is the Euro dropping? Is Euroland cashing out into the dollar? Or is Euroland showing the greatest support for the dollar? If so, why?

You've got Trichet talking about going back to Bretton Woods. So why was the Euro falling faster than anything else on Friday?

Bear in mind this is based on a Kitco "snapshot" so it's definitely not the whole picture.

FOFOA said...

You know, a good way to track the actual flow of gold would be to check the amount of contracts taking physical delivery at each of the gold exchanges around the world.

And to track the expected flow, check the amount of gold available for physical delivery in the warehouse of each exchange.

And lastly, it would be interesting to find out if there are statutory limits to the amount of physical delivery at each gold exchange. That would identify the intended flow.

That would give you the immediate, short term and long term flows of gold. I have a good idea what the results would show, but it would be very interesting to confirm the hunch.

Anonymous said...

Interesting similar ti Goldmoney but in Dirhams

FOFOA said...


Very interesting.

"All gold and silver is held free of lien or encumbrance. e-dinar does not engage in future contracts or any form of leveraged derivatives."

Anonymous said...

More here they are also selling gold and silver coins.

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