World Gold Report Newsletter
‘What, me worry?’ East Indians happy to pay top $ for gold
India is the world’s biggest consumer of gold bullion. And they’re not going to slow down anytime soon. (“India’s Gold Imports Will Top 2009 as Buyers Accept Paying Record Prices,” by Madelene Pearson in Mumbai, Bloomberg.com, Aug. 28, 2010).
The purchase of gold in India this year may total between 600 to 625 tons, compared with about 480 tons bought in 2009. This is according to Anjani Sinha, who is the CEO of the massive sub-continent’s biggest bourse for the trade of physical gold. The demand for bullion almost doubled in the first half of the year. Why? Because investors sought a haven and higher salaries in India pushed up jewelry sales.
“This level of prices is already accepted, so during this period compared with last year, the demand will be higher,” said Sinha. “Indians are not selling, they are buying.”
But aren’t East Indians concerned about buying gold at the highest prices ever? No. Goldman Sachs Group Inc. predicted earlier in August that gold may hit $1,300 by February 2011. Deutsche Bank AG said on June 3 that the price my blossom to $1,700 as world currencies falter. The Euro slumped to a four-year low vs. the dollar in June.
India is gearing up for its festival season which begins next month. Bullion sales usually reach a peak during the Hindu festival of Diwali, which falls on Nov. 5. Plus the second wedding season of the year runs from November to December. Ca-Ching!
Australian gold output jumps to 227 tons
Gold miners Down Under are producing at their best rate in over six years thanks to strong gold prices and new financing opportunities. (“Six-year peak for gold output,” by Matt Chambers, The Australian, Aug. 30, 2010).
Full-year gold production jumped 11 percent over the previous year to 227 tons, which is worth about $11.2 billion AUS at current prices. The data was provided by Sandra Close, director of industry consultant Surbiton Associates. The Kalgoorlie Super Pit, owned by Newmont and Barrick, kept its rank as Australia’s biggest miner of gold.
According to Close, gold prices averaging $1,200 an ounce in the past year, up from $550 earlier in the decade, have led to the re-evaluation and redevelopment of older known deposits.
“Some producers are still in the ramp-up phase and there are several other operations that are due to pour their first gold in the September quarter.”
Suriname rainforest gutted by gold miners
“It looks like a meteor strike…a huge clearing appears in the jungle -- a deep rust-colored pit surrounded by mounds of dirt and thick stands of trees pushed to the side in dense piles of overturned soil.”
Thus begins Ben Fox’s account (“Gold rush is growing threat to Suriname rainforest,” AP wire service, August 29, 2010) written in Paramaribo, Suriname. The miners at the edge of Suriname’s rainforest planned to spend a week tearing through the soil and filtering through it with toxic mercury.
Juergen Plein, a 29-year-old miner, needs work and doesn’t know another way to get at the gold. He thinks about the environmental damage he is causing, but "survival comes first."
The record gold prices have resulted in hundreds of small freelance mining operations along the northwestern coast of South America. According to the Suriname government, small-scale miners ripped a record 16.5 metric tons of gold from the ground in 2009. Around 14,000 people are working in Suriname to get at the yellow stuff. This illegal activity -- which is rampant and unrestricted -- is generally tolerated by the government because it gives people work. The metal is one of the major exports in this mostly poor nation of 500,000.
How much damage has the gold mining done in Suriname? Satellite analysis show the deforestation of at least 30,000 hectares (74,000 acres) and damage of over 2,200 kilometers (1,370 miles) of river during the past decade. Additionally, the small-scale mining is responsible for 20 tons of mercury poisoning the environment, which poses a risk to the population through the consumption of fish.
Lucky Chinese Gold Coins go for mega-bucks in Boston
A trio of Chinese gold coins fetched over $460,000 at the Boston ANA World’s Fair of Money during the recent Heritage Auctions (Aug. 11-16).
An “extremely rare” Lucky Number 8 Year of the Dog 2006 Lunar Kilo 10,000 Yuan, Gem Ultra Cameo Proof realized a final price of $162,627. Following the Dog was a Lucky Number 8 Year of the Horse Lunar Kilo 10,000 Yuan 2002 and a Lucky Number 8 Year of the Rooster Lunar Kilo 10,000 Yuan 2005; both fetched $161,000 each. These prices include the 15 percent Buyer’s Premium.
“The number 8 is widely regarded as a universally lucky number in Chinese culture,” explained Christiano Bierrenbach, VP of International Numismatics at Heritage, “and it proved very fortunate for Heritage in this auction, as well.”
Russian rarities did well in the auction. A “spectacular” Nicholas II Proof gold 25 Roubles (2-½ Imperials) 1896, Proof 61 NGC, realized $149,500. It is believed that this coin was a special commemorative issue for the Coronation of Nicholas II. Of a small mintage of 301, very few examples are known to have survived.
Another gold coin, a Chilean Carlos III 8 Escudos 1775 DA,Santiago Mint, EB in oval for Ephraim Brasher, KM27, VF -- an historically important and collectible Brasher doubloon -- realized $80,500.
