Gold prices opened lower this morning below $935 an ounce as the US dollar found strength ahead of the July 4th holiday in America. Markets are thin today, as many had already abandoned their desks early to headed for the nearest cookout.
Gold for August delivery was last seen at $933.30 an ounce, down $8 from this morning's open. Silver prices were also down $0.31 to $13.44 an ounce while oil fell to $67.68 a barrel and the US Dollar Index rose to 80.505
Traders may be a bit reluctant to be long commodities ahead of tomorrow's market closure, but this mornings jobs figure may force an adjustment in thinking.
— Luke Burgess
The Royal Canadian Mint, which has been touted as one of the most secure facilities in Canada, may have been the victim of a $13.2 million (CDN$15.3 million) gold heist, an audit concluded Monday.
The mint called in external auditors last month to investigate a significant discrepancy between the mint's 2008 financial accounting of its precious metal holdings and its actual stockpile.
Auditors concluded that approximately 17,500 troy ounces of gold, or about 0.32% of the mint's fiscal 2008 throughput, is indeed missing.
A report published by the auditors concluded that, “the unaccounted-for difference in gold does not appear to relate to an accounting error in the reconciliation process, an accounting error in the physical stock count schedules, or an accounting error in the record-keeping of transactions during the year.”
It is still unclear whether any gold is physically missing from the inventory. The gold may have been lost through the refining process. The auditor suggested a review of the technical processes used in the various aspects of refining.
Errors in reconciling the financial records and the physical stockpile of precious metal in previous years may also be the source of the missing gold. However, the auditors concedes “it would be difficult to complete such a review due to the passage of time, the availability of supporting documentation and the turnover of mint staff.”
Of course foul play has not been ruled out. On June 9th, the Canadian government asked the Royal Canadian Mounted Police to probe a possible heist, after mint officials signaled that the audit was not likely to reconcile the discrepancy.
The mystery surrounding the 17,500 ounces of missing gold is still being investigated.
After hitting a six-week low of $913.20 an ounce overnight, gold for August delivery is up slightly to $923.80 an ounce this morning as the US dollar fell against the euro and Japanese yen.
Concerns about reserve diversification away from US assets caused a drop in the dollar against the euro ahead of the Federal Reserve's monthly meeting, after Moody's said that America's AAA rating could be at risk if the dollar was challenged as the world's main reserve currency.
In other precious metals, silver at $13.80 an ounce, platinum was down slightly to $1,167.00 an ounce, while palladium strengthened to $233.50 an ounce.
The Onion, a satirical news organization, posted a funny video over the weekend that reported on an emergency White House economic plan to sell the US national gold reserves for cash through precious metal buyers Cash4Gold.com. And even though the news brief is fake, there are some hard truths in it on how the US government and Federal Reserve would like the American public to view gold.
To watch the news brief from The Onion's website, just click on the image above or cut and paste the following link into your internet browser's address bar: http://www.theonion.com/content/video/us_to_trade_gold_reserves_for
If you've never seen any of The Onion's fake news videos, I highly recommend taking the time to watch a few of them. They're all pretty funny. Some of my favorites include:
In today's market, gold bullion can be bought from dealers, jewelers, auctions, private investors, and now from gold vending machines.
German gold bullion dealer TG-Gold-Super-Market says it plans to install as many as 500 gold vending machines throughout Germany, Austria, and Switzerland this year.
The Stuttgart-based company aims to introduce the gold vending machines in train stations, airports, shopping malls, and anywhere else retail interest for gold bullion is likely.
The new gold vending machines will sell small 1, 5, and 10-gram gold bars as well as South African Gold Kuggarand Coins. TG-Gold-Super-Market says each vending machine will hold up to 1,500 pieces of gold bullion.
Prices for bullion from the vending machines will be about 30% higher than market prices and will be updated every 10 minutes to keep pace with gold spot prices.
Interest in gold has risen during the financial crisis, particularly in Germany.
Thomas Geissler, owner of TG-Gold-Super-Market, said, "German investors have always preferred to hold a lot of personal wealth in gold, for historical reasons. They have twice lost everything. Gold is a good thing to have in your pocket in uncertain times."
Retail demand for gold worldwide reached an estimated 108 tonnes in 2008, up 200% from 36 tonnes in 2007 and up 286% from 28 tonnes in 2006.
India imported 17.8 tonnes of gold in May, representing an 11% decline compared to April and a 39% drop from May 2008.
Gold imports to India have been relatively down for the first half of 2009. Between January and May, India has imported only 39.6 tonnes of gold, compared to 115 tonnes of the precious yellow metal in the same period last year.
India did not import any gold during February or March due to lack of demand in the domestic market following higher gold prices. High prices continue to stifle demand in India.
Crude oil for July delivery surged to $71.65 per barrel this morning as an unexpectedly large decline in U.S. oil inventories confirmed that supplies are beginning to tighten.
Light, sweet crude traded nearly $1 higher this morning on the New York Mercantile Exchange at set a year-to-date high. Oil prices have increased 70% since hitting a low of $42.19 in February.
China’s State Administration of Foreign Exchange reported this week that the country’s gold reserves increased to 960.77 tonnes (33.89 million ounces) by the end of April, making it now the fifth largest holder in the world. At the same time, monetary gold in China has grown from 33.724 billion to 66.984 billion yuan ($9.8 billion).
Gold is considered to be one of the main foreign assets held by countries, along with foreign exchange reserves and IMF balances, but its value in China's reserves is less than 2%. Over the past six years, China has been buying gold through its State Administration of Foreign Exchange in an attempt to diversify the nations foreign exchange reserves.
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