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New York (HedgeCo.net) – As the price of gold hits record highs, the $2.7 billion energy focused Hedge Fund Touradji drops holdings in the worlds largest gold-backed EFT the SPDR Gold Trust and brings its stake in Barrick Gold Corp up to $84.7 million.
This news comes along side the announcement from president of Barrick Gold Corp that the planet’s gold supply is running out and we are at ‘peak gold’.
“Production peaked around 2000 and it has been in decline ever since, and we forecast that decline to continue. It is increasingly difficult to find ore,” said Aaron Regent in an interview with the Telegraph. This crunch has driven gold up to a record high of $1,126 on the 13th of November, although many have attributed this climb to India and China who are quietly beefing up their national gold reserves. Suki Cooper, commodities analyst for Barclays Capital accredits much of the gains to “a change in attitude from investors towards gold”.
Despite the rush towards gold, some remain doubtful as to how high the price of gold can climb. Metal Miner states that Nouriel Roubini, Professor of Economics at New York University’s Stern School of Business is less enthusiastic saying he could see the price going a little higher “But those people who delude themselves that gold can go to $1,500 or $2,000 are just talking nonsense. The fundamentals are not justified, and those people are just talking their books.”
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Bloomberg – Gold climbed in Asian trading as equity gains and an improving economic outlook boosted demand for the metal as a hedge against accelerating prices.
The MSCI Asia Pacific Index of equities gained for a sixth day after an index of leading economic indicators in the U.S. topped projections, indicating the country may be emerging from recession. Federal Reserve Chairman Ben S. Bernanke wrote in the Wall Street Journal that the central bank “will need to tighten monetary policy” to prevent inflation.
Globe and Mail – Paris, so far, has emerged as the most serious challenger. But Mr. Sarkozy may be his own worst enemy on this file. The reason: He and his German allies are wholesale supporters of the European Union effort to rein in the hedge funds even though the funds can take little blame for the financial disaster.
If Mr. Sarkozy gets his way, the funds, which are a huge business in London, won’t jump on the Eurostar and re-emerge in Paris. They will leave the EU entirely for Switzerland (not an EU member; some funds have already moved there) or any of the financially ambitious Middle East and Asian cities – Abu Dhabi, Singapore, Shanghai – which are dangling gold and pearls before the big-name fund managers.
istockAnalyst.com – I’ve always been a fan of what are now called "alternative investments" and never really cared as much for "generic index style equities", although I have owned them of course. Property, commodities, gold and higher yield instruments were always more interesting to me once I began to understand how imbedded inflation really was in the modern world.
Now that I am retired and living on my money, my "business" is to generate income as a goal more important than capital gains. Increasingly I am working on the great divide between tax-deferred and taxable accounts in the US, now and for the future. Perhaps we should call them "totally taxable" and "partly taxable" accounts since every penny one takes out of the IRA or 401K is taxable while only gains and dividends and interest are taxable from the taxable accounts.
Bloomberg – Gold, little changed in London, may drop on lower demand for an inflation hedge after U.S. consumer prices posted their first annual decline since 1955.
The consumer price index fell 0.4 percent in March from a year earlier, the Labor Department said yesterday. That helped to ease concern that Federal Reserve actions to stimulate the economy will cause inflation to soar. Investors often buy gold as a hedge against accelerating prices. Rhodium climbed to the highest in more than four months on improved car sales.
Bloomberg – Global Tactical Trust, a hedge fund run out of Australia by Boston-based Grantham Mayo Van Otterloo & Co., is betting the recent rally in stocks will end, and is avoiding high-risk investments.
The hedge fund that invests based on global economic trends returned 13 percent last year, when the industry posted average declines of 19 percent, by wagering against equities and backing bonds. Managed by Jason Halliwell, the fund is long the U.S. dollar, yen, U.S. Treasuries and gold, expecting them to rise, while remaining neutral on equities.
Economic Times - Gold, the traditional safe haven in times of economic turmoil, proved to be more a commodity that everyone loved to hate last year even amid the turbulence that engulfed world markets.
But as 2009 gets under way the yellow metal has found huge traction with money managers. In the last eight sessions, gold has rallied as much as $100 an ounce to hit a near four-month high of $915.30 on Monday — in spite of a rising dollar.
