Gold Continues To Lanquish Amid Volatility

Gold futures declined 7.1% last week and are down 16.6% in October. The Dow Jones Industrial Average, meanwhile, fell 5.3% for the week and 22.8% in October.

Gold was volatile throughout the third quarter ranging from $741.30 to $977.70 an ounce.

Hedge fund and instituational selling, as well as strength in the US Dollar have contributed to the recent declines in gold prices.

"The fact that gold did not head higher during the current leg of the crisis seems to reflect a combination of the rise in the dollar, deleveraging of commodity positions, sales to meet margin calls, and the unwinding of the long gold, short dollar trade," ... Natalie Dempster, an analyst at the World Gold Council.

According to the World Gold Council investors spent $2.8 billion on gold investments in the third quarter.

The World Gold Council reports that 145 tons of gold were bought on stock exchanges in the three months to September. Gold held by investors on the exchanges hit 1,000 tons for the first time since the metal was introduced on the US bourse in 2004.

OPEC devising gold backed currency?

The recent dramatic drop in oil prices has prompted OPEC to move up the date of its meeting from November 18 to October 24. The meeting is set to focus on "the global financial crisis, the world economic situation and the impacts on the oil market".

OPEC has been feeling the impact and ramifications of fluctuations in the US Dollar. Oil prices are quoted and traded in US Dollars and therefore the inflation/deflation cycles have created discontent among many OPEC members.

Could this be the correct time for OPEC nations to pursue oil being priced in a gold backed currency?

Dollar Correction Leading To Stronger Gold Prices

In European trading on Monday the US Dollar is trading down and boosting gold prices.

Spot gold was at $862.25/865.25 an ounce at 0911 GMT, up from $847.40 in late New York trade on Friday.

Money continues to flow into gold ETFs...

The SPDR Gold Trust, the world's largest gold-backed ETF, announced on Friday that its holdings rose to a record 770.64 tonnes last week.

The SPDR Gold Trust (NYSE GLD) has expanded its holdings by 26% since the bankruptcy announcement by Lehman Brothers.

Gold prices retreated from early gains to post a loss on Friday. Gold for December delivery fell $27.50 (3.1 percent) to settle at $859 an ounce on the New York Mercantile Exchange. Gold hit an intra day low of $829.

Shares of StreetTracks Gold ETF (NYSE GLD) once again failed to close above the 200 day moving average of $88.30 after hitting an intra day high of $90.72.

Gold rallies amid global stock market meltdown.

Gold is currently up $41.90 at $928.40

A close above $925 would be a bullish signal for gold prices.

The AMEX gold bug index has been trending lower after bumping up against the 50 day moving average last week.

Analysts Predict Gold To Surge Toward $1000

"I would be surprised given the scale of the economic crisis if gold doesn't scale above $1,000," he said ahead of the London Bullion Market Association annual conference in the ancient Japanese capital of Kyoto.

"In terms of core trading range for us, I have to say that gold going up towards the $1,000-level is not an impossibility at all," Paul Walker, CEO of GFMS.

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Barrick Gold Corp. Chairman Peter Munk forecasts "Large Scale Buying Of Gold".......

``That impact on holders of U.S. dollars in China or Russia or Abu Dhabi or Kuwait is that they're going to say, `What is that going to mean for the U.S. dollar, and what alternative are we going to have?''' Munk said in an interview in New York. ``So gold is going to have very powerful support.'' Munk, 80, founded Toronto-based Barrick in 1983 and made it the world's largest gold producer.

Spot gold was at trading $889.75/892.75 an ounce (1905 GMT), down 1.2 percent from gold's Monday close of $900.20.

U.S. gold futures for December delivery settled down $17.80, or 2 percent, at $891.20 an ounce on the COMEX division of the New York Mercantile Exchange.

Investors flock to Gold ETFs

Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, jumped 11% last week to 679.6 metric tons as volatility surged in financial markets.

Mark O'Byrne, managing director of brokerage Gold and Silver Investments Ltd. in Dublin.....``By the end of the year, I think we'll be looking at $1,000 an ounce, because of the extent of the physical demand,'' ........``We can't keep up with the funds ringing. We've never had demand like it.''

Comex raised margin payments on gold and silver futures by as much as 47 percent after price swings accelerated.

The margin rate for Comex members advances to $5,500 a gold contract today from $3,750, the exchange said in an e-mailed statement late yesterday. The new rate for non-members is $7,425, compared with $5,063. One contract represents 100 ounces.

For silver futures, members will pay a margin rate of $6,000, compared with $5,000 previously. Non-members will pay $8,100, up from $6,750. One silver contract represents 5,000 ounces.

LONDON (AFP) — Gold prices rebounded Monday as the precious metal won support amid ongoing uncertainty stemming from the collapse of US investment bank Lehman Brothers, dealers said.

On the London Bullion Market, the price of gold rose to 785.70 dollars per ounce, from 750.25 late on Friday.

In contrast, crude oil prices slumped Monday as investors feared that slower economic growth would dampen future energy demand.

Gold, which is used in jewellery, dentistry and electronics, is widely regarded as a safe store of value amid economic gloom.

Note the breakout point for gold during October 2007.

Gold prices moved higher after testing the $750 level last week, indicating strong technical support at this level.

Gold moved higher on Friday as the US Dollar declined on weak retail sales data.



U.S. gold futures for December delivery settled up $19.00, or 2.6 percent, at $764.50 an ounce on the COMEX division of the New York Mercantile Exchange.

Gold bounces off support at $750 amid a weaker US Dollar and rising oil prices.

U.S. Mint Suspends Gold Coin Sales

The U.S. Mint is temporarily suspending sales of American Eagle bullion coins citing increased demand and lack of supply.

"Due to the unprecedented demand for American Eagle gold one-ounce bullion coins, our inventories have been depleted. We are therefore temporarily suspending all sales of these coins," the U.S. Mint announced in a memorandum to authorized dealers.

Details......

In Singapore trading gold for immediate delivery dropped $11.83, or 1.5 percent, to $788.24 an ounce before trading at $789.54. The metal dropped to as low as $772.98 Aug. 15, the lowest since October. Silver for immediate delivery tumbled 2.9 percent to $12.685 an ounce.

Kitco anticipates delays in bullion products.

Kitco has posted this notice on their website:

IMPORTANT NEW NOTICE: Due to market volatility and higher demand in the entire industry, we are anticipating delays in supply of all bullion products. Please note that you can continue to place orders and prices will be guaranteed; however, cancellation fees will still be applicable regardless of the length of the delay. Consequently once inventory is received there may also be delays in processing and shipping by our vaults.

Zachary Oxman, senior trader of Wisdom Financial in Newport, California believes gold "could drop below $900 before bouncing back to above the $960 to 970 an ounce area in the second half of the year."

(CEP News) London – In an extraordinary development, the International Monetary Fund (IMF) announced late on Monday that it was musing over proposals to sell some of its gold reserves as part of radical plans to bolster its troubled finances.

IMF reportedly hopes to sell 12.97 million ounces of gold, nearly 12% of its total reserves to raise approximately $6 billion. However, the sale is dependent on approval by the U.S. Congress.

The IMF currently holds 103.4 million ounces of gold thought to be worth $95.2 billion at current market rates according to published sources. Overnight, gold futures for June delivery rose $13.64 to $926.79 an ounce in New York trading prior to the IMF announcement.

Gold prices continued to rally on Wednesday.

Gold remains on the borderline of being technically oversold with a Williams%R reading of -61.66

Gold is trading higher in Tokyo on Friday........
Gold for immediate delivery gained $9.71, or 1.1 percent, to $920.24 an ounce as of 4:26 p.m. in Tokyo.

NYMEX trading is closed for the Good Friday holiday.

Gold continues to be pressured by margin related selling and profit booking prior to the end of the quarter. Gold is down more than 8% over the past 4 trading sessions. A bounce off the support level of $900 could provide a strong buy signal.

``Gold's assault on $1,000 is happening for a good reason,'' ....``Gold is not only an inflation hedge, it's a catastrophe hedge. Gold is becoming increasingly important as the credit crunch continues to spiral out of control.''........Gold Analyst James Turk

Shares of Newmont Mining have broken above the 50 day moving average of $51.84

Continued weakness in the US Dollar is driving gold prices to record levels.