PROJECTS HISTORY - SAUDI BIN LADEN GROUP PROJECTS

Morning Gold Fix June 21, 2010 - ZeroHedge.com

http://www.zerohedge.com/article/morning-gold-fix-june-21-2010Courtesy of www.fmxconnect.com

Gold closed Friday at 1258.3 and has continued its advance in early Asian & European trading. Over the weekend, China announced that it would remove the Yuan’s peg to the Dollar and allow it to appreciate gradually. The Yuan rose to record strength against the dollar on the news and will continue to increase under China’s central bank measured management. Gold has gained from the subsequent losses to the Dollar and treasuries, with the August contract trading as high as 1266.5 this morning. A stronger Yuan has also led some speculators to believe China may use its increased purchasing power for gold, a contention we remain skeptical of given the quantity of domestic producers.

Someone likes gold: Gold spikes to a new record on heavy buying Friday.

BRIC SQUEEZE

There was plenty to be happy about if you are a Gold bull this weekend.

The stalking horse behind last week’s strength showed its hand in the gold markets. China made the announcement they'd be ending their peg to the dollar.

The Saudis revised their gold holdings up from 143 to 322 tons, a small (+125%) rounding error perhaps.

What's more, among the most read stories on Bloomberg was something from July 10 last year titled: Medvedev Shows Off Sample Coin of New ‘World Currency’ at G-8. The dollar barbarians are closing on the gates it would seem.

Last week, the IMF released a whitepaper of sorts discussing a new global currency. Most likely a red herring to get the conversation going at the upcoming G-20 meeting, but a sign of gathering momentum nonetheless.

Which brings us to the point. We think there is a greater chance than many that gold will be a factor in currency backing in the not too distant future.

Why a gold backed currency is more likely than you think:

1- Russia and Germany are working towards forming an alternative to the dollar as medium for exchange between their two economies. Most likely this will have some weighting of commodities in it. Natural Gas would be an obvious choice, since Russia exports to western Europe through the region.

2- China is decoupling, their buying power will soar

3- One thing the West still has more of than BRICS is gold. As a percentage of GDP and reserve holdings the U.S. Germany, France and England dwarf the BRICS.

4- throughout history, powerful people do what they have to preserve their incumbent status.

If it were me, and I wanted to stay in economic power, I’d buy all the Gold I could and then devalue the cash I used to buy it. Then I’d create a new currency backed by Gold. If I were stressing about budget deficits and weak partners in the ECB and I had a decent Gold hoard to begin with, I’d be thinking about that.

If I were all ready long gold and knew there was pent up demand out there coming from the BRIC countries and I had the ability to print money to buy more gold forcing the other buyers to pay up I might consider doing that.. Just saying….

August gold was up 3.8 to $1262.1 per 100 troy ounces as of 8:20 AM EDT, this morning. The September U.S. dollar index was down .076 to 85.9. July platinum was up 18.7 to $1597.8 per 50 troy ounces. Silver was up 18.6 cents to 19.37.

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-Elizabeth Thawne

Open Interest In Comex Gold Futures Hits All Time High At 603,094

http://www.zerohedge.com/article/open-interest-comex-gold-futures-hit-all-time-high-603094
Open Interest In COMEX Gold Futures Hit All Time High At 603,094
Submitted by Tyler Durden on 06/21/2010 13:27 -0500

Comex is reporting that as of June 18, the open interest in gold futures surpassed 600,000 only for the second time since May 17, hitting 603,094 lots. COMEX gold open interest climbed 5,712 to 603,094 lots on Friday, surpassing its previous record of 601,014 contracts set on May 17, Reuters notes. On Friday gold closed at an all time high price just shy of $1,260. Reuters reports that according to analysts, a "record open interest, an indicator of overall market trading activity, could lead to increased volatility in gold futures." Little did analysts realize just how prescient they would be with this simplistic summary, on a day when a commodities fund is rumored to be in its death throes, leading to a major drop in spot gold. Also don't mind opex: that's completely irrelevant.

We will report on the latest holding of the GLD, which as disclosed on Friday when we first reported about Saudi Arabia's doubling in gold holdings, is now the 6th largest holder of gold (some would disagree) in the world, bigger than all of China, later today, and everyday, when the updated NAV comes out.

In other news, post today's "murder", gold is back to Thursday levels. After all, hedge funds can't always liquidate their holdings in the desired direction.

Saudis hoard twice as much gold as thought - Financial Times

Did they recover reserves they had lent to the LBMA? And what good are official statistics that can change so much overnight?

By Javier Blas
Financial Times, London
Sunday, June 20, 2010

http://www.ft.com/cms/s/0/e97c15bc-7ca1-11df-8b74-00144feabdc0.html

Saudi Arabia, the world's fourth-largest holder of foreign exchange reserves, is sitting on more than twice as much gold as previously thought, according to new estimates that point to the revival of bullion as part of emerging economies' official reserves.

The changes in Riyadh's reserves were revealed by the World Gold Council, the industry-backed body that regularly tracks official bullion holdings. According to the WGC, the Saudi Arabian Monetary Agency, the central bank, has gold reserves of 322.9 tonnes, more than double the 143 tonnes it had previously reported.

The central bank said in a footnote of its latest quarterly report that "gold data have been modified from first quarter 2008 as a result of the adjustment of the SAMA's gold accounts."

IMF Sells 38.5 Tonnes Of Gold In Q2, As Saudi Holdings Higher By 180 Tonnes - ZeroHedge.com

http://www.zerohedge.com/article/imf-sells-385-tonnes-gold-q2-saudi-holdings-higher-180-tonnes

IMF Sells 38.5 Tonnes Of Gold In Q2, As Saudi Holdings Higher By 180 Tonnes
Submitted by Tyler Durden on 06/18/2010 10:43 -0500

The WGC has released its latest report of official gold holdings. The key buyers and sellers, well, seller, were Russia, +27.6 tonnes, Venezuela, +3.1 tonnes, and Philippines, +10.3 tonnes, while the IMF sold 38.5 tonnes. Yet most interesting was the surge in Saudi Arabia holdings which increased its official holdings from 143 to 323 tonnes. It appears, at least on the surface, that this was not incremental purchasing, or at least that is how the Saudi Arabian Monetary Authority is trying to spin it: “gold data have been modified from First Quarter 2008 as a result of the adjustment of the SAMA’s gold accounts.” We wonder just how a country can "reclassify" 180 tonnes, or more than double existing holdings, in gold. Of course, if would not be good to see the country which lies on a sea of the world's biggest non-gold, yet $-denominated commodity to be in the market, diversifying its dollar holdings into hold. If SA had in fact purchased the gold, it would be equivalent to roughly $7.5 billion worth of purchases in the open market.

Official sector gold reserves as at June 2010

European central banks sold virtually no gold over the past quarter, save a small amount for minting gold coins. Total sales by European central banks have amounted to just 1.8 tonnes since the third central bank gold agreement began in September of last year. The only sales of note made via CGBA3 have been by the IMF, which has sold 38.7 tonnes since mid-February. We expect the IMF to sell at a similar pace this quarter.

Outside of the agreement, the main purchases reported over the last quarter have been by Russia and the Philippines, both of which have long-standing gold buying programmes. The Central Bank of Russia bought another 26.6 tonnes of gold over the past quarter, taking its total gold holdings to 668.6 tonnes or 5.5% of its total reserves, and remains the 9th largest official sector gold holder. The Philippines central bank bought 9.5 tonnes of gold in March, taking its gold holdings to 164.7 tonnes or 13.7% of total reserves.

The Saudi Arabian Monetary Authority reported last quarter that “gold data have been modified from First Quarter 2008 as a result of the adjustment of the SAMA’s gold accounts”, meaning SAMA’s gold reserves are now reported to be 322.9 tonnes or 2.8% of reserves, from 143 tonnes or 1.2% previously.

Reserve asset statistics...

Full chart: