“In the short term, the $1,730 support level will continue to feel a lot of pressure as investors focus on the euro zone summit,” said Chen Min, an analyst at Jinrui Futures in the southern Chinese city of Shenzhen.

The World Gold Council (WGC) on Thursday published the conflict-free gold standard, which aims to curb gold production fuelling conflict and human rights violations. The standard, which would apply to conflict-affected areas globally, was developed in collaboration with the council’s member companies, which comprise the world’s leading gold producers.

“It is essential that we combat any misuse of gold by militias and criminal networks. This has been the driving force behind the development of this standard,” Franco-Nevada chairperson and WGC board member responsible for leading the development of the standard, Pierre Lassonde, said.

Canadian miner Goldcorp and WGC chairperson Ian Telfer added that responsible gold mining was an important contributor to economic growth and social development in gold-producing countries.

An industry-led approach to combat the potential misuse of mined gold to fund armed conflict. The Standard has been developed with our member companies, comprising the world’s leading gold producers, and with extensive input from governments, civil society and supply chain participants. It is hoped that the Standard will promote responsible mining practices throughout the gold mining industry. It is an open standard that is available for use by any party involved in the extraction of gold.

Responsibly undertaken, gold mining can play an important role in contributing to sustainable development and alleviating poverty in many of the world’s developing countries. The direct and indirect economic contribution of professional gold mining creates new possibilities for these nations, their communities and individuals.

However, when there is armed conflict, even the best managed operation will need to take additional steps to ensure that both the gold it produces and its broader activities do not contribute to the conflict.

Where a company can demonstrate that it is operating in an area assessed to be ‘conflict-affected or high-risk; in a way that does not support or benefit unlawful armed conflict, it should be encouraged to continue its operations. Indeed, the closure or suspension of a major source of employment and government revenue may accentuate the crisis.

Gold produced in conformance with the Conflict-Free Gold Standard will provide confidence that it has been extracted in a manner that does not cause, support or benefit unlawful armed conflict or contribute to serious human rights abuses or breaches of international humanitarian law. The Standard is based upon internationally recognised benchmarks and conformance will be subject to external assurance. It has been widely recognized as credible and workable.

Guidance for Assurance Providers

Conformance with the Conflict-Free Gold Standard will be externally assured. TheGuidance for Assurance Providers sets out guidance to practioners who have been engaged to report in, accordance with recognised assurance standards, on whether a company’s Conflict-Free Gold Report is prepared in accordance with the Standard.

Guidance for Implementing Companies

The Guidance for Implementing Companies aims to serve as a helpful reference guide to any implementing company and includes a range of tools and reference materials which companies may draw on, according to their individual needs and circumstances.

If you would like to contact the World Gold Council regarding the Standard, please email: conflictfreestandard@gold.org

The Hang Seng RMB Gold ETF (83168.HK: Quote, Profile,Research, Stock Buzz), launched by Hang Seng Bank Ltd (0011.HK:Quote, Profile, Research, Stock Buzz), is intended to track the performance of the London gold fixing price in U.S. dollars.

It was flat at midday at 35 yuan (US$5.60), with 30,000 units exchanging hands. Each board lot of the ETF is 100 units.

Spot gold edged lower on the day, tracking a weaker euro, but has gained nearly 10 percent so far this year. It posted a similar gain in 2011.

With a limited range of yuan investment products in the Hong Kong market, Hang Seng Bank said its yuan-denominated gold ETF provided a new choice for the city’s investors to get into gold by using their yuan holdings.

“It will take time for investors to understand the product before they jump in,” said Hou Xinqiang, a gold analyst at Jinrui Futures in China.

“Besides, Hong Kong has a lot of gold investment products and the market is already very savvy, so investors will probably take some time to assess its selling point.”

China has been stepping up efforts to boost the use of its currency in cross-border trades and Hong Kong is fast becoming a major offshore yuan trading centre.

Betting on growing appetite for offshore investments in the yuan as well as the Chinese’s cultural affinity towards gold, banks and exchanges in Asia are working feverishly to launch more bullion-related investment products priced in yuan.

The Shanghai Gold Exchange is working on rolling out a gold-ETF, while the Hong Kong Mercantile Exchange has also said that it would soon roll out yuan-denominated gold and silver futures contracts.

China’s Lion Fund Management, which last year launched the country’s first gold fund, also raised $500 million to invest in gold-backed ETFs overseas.

Hong Kong has been at the forefront of the yuan’s internationalization efforts with yuan deposits in the city reaching 588.5 billion yuan ($93.46 billion) in December last year, according to data from the Hong Kong Monetary Authority data showed last month.

($1 = 6.2971 Chinese yuan)

Source: http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=145350&sn=Detail&pid=102055

Source: goldinspirations.com

‘It’s a healthy move for the country to bring that gold … actually I think we’ve waited a long time; the economies of Europe and the United States are sinking and now it’s evident how solid the Chinese, the Russian and other countries’ (economies) are … Brazil,’ the socialist president, who has long been at loggerheads with the US, said Wednesday.

Chavez participated by phone in a press conference given by Finance Minister Jorge Giordani and Venezuelan Central Bank chief Nelson Merentes to explain the reasons for moving the Venezuelan gold reserves held abroad.

‘I agree Nelson. We’re going to bring that gold to our Central Bank,’ Chavez said.

Venezuela holds a total of $11 billion in gold reserves abroad and most was sent in the 1980s, Chavez said, adding that ‘some was placed’ in a bank in Britain during his time in office, which dates back to 1999.

The gold held abroad will be brought to Venezuela ‘gradually’ because it involves repatriating physical bars of the mineral ‘that are the same that were taken away back then’ and it is necessary to ‘verify that they’re the same’, Merentes said.

Venezuela holds a total of more than $18.34 billion in gold and that amount will rise to $20 billion because the metal will continue to be extracted from the southeastern Guayana region and deposited in the national vaults, the president said.

Chavez announced earlier that he will nationalise Venezuela’s gold deposits by decree and use the mineral to bolster the country’s international reserves.

Source:

Kitco Metals Inc. said it was negotiating with Revenu Quebec about its opposition to the tax assessment when agents raided its premises Tuesday.

“We were co-operating with them fully, so this definitely came as a surprise to us,” Kitco spokeswoman Sharlene Dozois said in an interview Friday.

Revenu Quebec is probing sales of $1.8 billion by the network, with alleged provincial sales-tax evasion in excess of $150 million. The agency is also investigating evasion of the federal goods and services tax on the same sales.

Kitco asked Thursday for a court-appointed receiver that can supervise the 200-employee business while it addresses the allegations brought by Quebec’s revenue department. RSM Richter has been appointed interim receiver.

The Montreal-based company, founded in 1977, says it is one of the largest retailers of precious metals in the world. It also provides specialized refining services.

More than 175 agents conducted raids on homes, offices, accountants and bankruptcy trustees in the Montreal area. The agency said the scam allegedly involved a system of repetitive and false billing in transactions involving more than 125 companies.

Most of the companies are jewelry stores, which have closed.

The department also said false tax returns were prepared for certain companies that provided the fake invoices.

Kitco said it “has never participated in any tax fraud, nor has it ever carried out any fictitious transactions.”

“Kitco buys precious metals scrap and pays the suppliers sales taxes on these purchases for which Kitco receives a tax credit. It is the responsibility of these suppliers to pay back the sales taxes to Revenue Quebec.”

Revenu Quebec alleges that Kitco and a company called Carmen Industries ran parallel operations.

Carmen Industries couldn’t be reached for comment.

Published reports say Revenu Quebec placed liens worth $33.8 million each on two properties owned by company executives Steven and Joseph Chesir.

Nick Macri, vice-president of Carmen Jewelry, which shares the same phone number and operates in adjacent spaces in Montreal, said he hasn’t seen the owners of the company in several months.

Although the two companies share similar names, Macri said they are unrelated although he did the accounting for Carmen International and remitted its taxes to government.

“We charged them a fee every month to give them a service and that’s how we somehow got implied in this mess,” Macri said.

It alleged that several people, including Viken Gebenlian, Haroutioun Dakessian, Oskan Hazarabedian, Benjamin Bensimon and Shadia Khatib created artificial tax declarations for certain companies involved by furnishing them with false invoices.

Those found guilty must pay the evaded funds plus interest, fines and a maximum of five years in prison.

Source: canadianbusiness

As that pile shrinks, so too does the chance of funding and sustaining a revolution to oust one of the world’s longest-serving dictators.

If the cash-flow problem “isn’t solved in the next few days, there’s going to be a problem here,” Albagrmi said, speaking from his office in Benghazi, the northeast Mediterranean port that has become the rebels’ de facto capital.

On Tuesday, Italy pledged hundreds of millions of euros in funds and fuel to the rebels – the latest aid to be promised by a foreign government.

But three months into the fight against Libyan leader Moammar Gadhafi, the rebels complain they have yet to see a penny of the hundreds of millions of dollars on offer.

Meanwhile, Libya’s more than $70 billion in assets are unreachable – frozen by United Nations sanctions.

Their only export revenue source – oil sales – is at a standstill because of the fighting and, rounding off the problems, Albagrmi says businessmen are hoarding cash instead of depositing it into banks.

“Two weeks, if things continue as they are … and there could be a liquidity crisis,” he said.

The prediction is a troubling one for the rebels, who are locked in a battle against a better-equipped Libyan military, as a shortage of cash has the potential to translate into a crisis of confidence in the civilian National Transitional Council.

The rebel government, from the start, pledged a measure of transparency in its dealings that contrasts sharply with the Gadhafi regime’s opaque policies over the past four decades.

Albagrmi was careful from the start of the uprising against Gadhafi on Feb. 15 to make sure that he and others at the Benghazi branch of the Central Bank stayed true to that promise.

“After the revolution, everybody on the street had weapons and I was afraid there could be looting. We prevented that,” he said.

To ensure that life went on normally for Libyans, the central and commercial banks reopened within four days of the start of the uprising and organizers of the revolt, acting on the advice of bank managers, deposited 200 dinars ($160) into every bank account held in the rebel-controlled region.

The cash came from one of two underground vaults encased in double walls and sealed off by a steel door that required three keys to open. Two of the keys were in Benghazi while the third was in Tripoli, the Libyan capital still under Gadhafi’s control.

It took three days to get into the vault, with officials finally forming an eight-man committee to oversee the operation.

In one room, they found Libyan dinars and foreign currency. Albagrmi said he is not authorized to give a precise figure, but said it was between 500 million and 1 billion dinars.

He did not have a precise figure for the foreign currency holdings, but said it “wasn’t much.”

In the second vault was a huge pile of gold bars that some reports have valued at about $1 billion. The bullion is part of what the World Gold Council estimates is Libya’s trove of 143 tons of gold in reserve.

Albagrmi said he hasn’t counted the bullion in the Benghazi branch and refused a request by The Associated Press to photograph the cache, saying the eight-member committee would have to be re-formed to accompany reporters into the underground vault.

The deputy Central Bank head said that every effort was made to ensure the money was properly accounted for.

“The rebels didn’t break in and take money – not a single dinar,” he said.” “Any auditor can come in here and they will find everything is in order,” he said.

The gold sits as a tantalizing treasure for a de facto government that says it needs a $3 billion infusion to keep afloat, with the money to go toward paying salaries, buying medicine and supplies and powering the country’s eastern half.

Tempting as it might be, however, the gold will go untouched, said Albagrmi. “It is what has been preventing the dinar from depreciating even more against the dollar, who’ll give us a loan against it anyway?” he asked.

The Libyan currency now stands at about 1.60 dinars to the dollar, compared to 1.25 dinars to the dollar before the uprising in the east.

The emerging liquidity crunch has helped stoke inflation, with the cost of some goods doubling over the past few months and businessmen forced to pay premiums on foreign currency to complete import deals.

But with the Central Bank in Benghazi dealing with a diminishing supply of dinars, businessmen have been reluctant to deposit money.

“The problem is if I deposit 100,000 (dinars) today, if I go to the bank tomorrow they’ll tell me they can’t give me any money because of the … problem of liquidity,” said Mustafa Mahmoud, an importer and exporter who runs a hardware store.

“The next day maybe they’ll give me 2,000 or 5,000 (dinars). That doesn’t work for me.”

To help ease the burden on the fledgling government, Albagrmi says the Central Bank has limited withdrawals by individuals to 750 dinars per month, a level he said was “more then enough given the current circumstances.”

But the cash crunch weighs heavily on his mind, especially as “not one dollar has reached us” of the money promised by other countries.

Qatar has pledged $400 million. Kuwait promised $180 million. Other friendly nations, led by France and Italy, promised a fund of at least $250 million last month.

The rebels are asking for loans secured by billions of dollars in assets that were frozen under sanctions imposed on Gadhafi and the Tripoli government.

At first, legal hurdles were blamed for delays in unfreezing the Libyan funds. Weeks later, the question on the rebels’ minds is if the hesitation stems from fears the money would be used to buy arms desperately needed to take on the better-equipped forces loyal to Gadhafi.

Another concern may be that the rebels, despite their best efforts, remain a largely untested quotient.

The rebels have offered no accounting of how they spent the money the provisional government borrowed from the Central Bank. Also unclear is how they spent the roughly $129 million they got from the one tanker of oil they were able to sell with the help of Qatar.

Oil sales have since stopped because of damage to the fields from the fighting.
They have also not disclosed what they have done with the millions of dollars donated by Libyans living abroad.

One businessman, who declined to be identified because it was “un-Libyan” to boast about donations, said he came back from England and gave 200,000 pounds sterling ($331,000) to the rebel cause. Rebel officials have confirmed they received the cash.

Despite the challenges – or perhaps because of them – Albagrmi said the rebels have done well, so far.

Benghazi is “an economic paradise” compared to Tripoli, he says. Gasoline shortages in the capital have people lining up for days, with the gasoline costing more than three times the 15 dinars (10 U.S. cents) a liter the easterners still pay.

“It’s a huge achievement, what we’ve accomplished,” Albagrmi said, referring to the financial balancing act they undertake daily.

Source: miamiherald.com

The 1872 Mining Law, signed by President Ulysses S. Grant, allows mining companies — including foreign-owned ones — to take about $1 billion a year in gold and other metals from public lands without paying a royalty, according to a report by the nonprofit Pew Environment Group.

“The law was enacted … to encourage the development of the West and … rewarded those people who trekked across the frontier and gave them the right to mine gold, silver, whatever other valuable metals they could find on public land in unlimited amounts for free,” said Pew’s Jane Danowitz.

While the law has remained largely unchanged, the mining industry has expanded so that now multinational corporations still enjoy “basically free access to a majority of public lands,” Danowitz said in a telephone interview.

She said the government estimates these companies legally take at least $1 billion a year worth of gold, uranium and other metals from public lands without compensating U.S. taxpayers.

This contrasts with the oil, gas and coal industries, which have paid royalties to the U.S. Treasury for decades.

As prices for uranium and other metals have risen steeply in the last decade, mining claims near the Grand Canyon and other natural landmarks have soared, according to the report, available online here.

Federal data show that more than 8,000 mining claims have been staked in national forest and other public land around the Grand Canyon since 2004, an increase of 2,000 percent, while more than two-thirds of the claims on public lands near Yosemite National Park and 99 percent of claims surrounding Arches and Canyonlands in Utah have been staked since 2005.

The report found mining claims have also been staked around Joshua Tree National Park in California, Mount Rushmore National Memorial in South Dakota, Mount St. Helens National Volcanic Monument in Washington state, Siskiyou Wild Rivers in Oregon, Gila Wilderness in New Mexico and Dinosaur National Monument in Colorado and Utah.

Congressional efforts to overhaul the 1872 Mining Law stalled in 2009, prompting Interior Secretary Ken Salazar to start a process to protect approximately 1 million acres around the Grand Canyon that were threatened by uranium mining operations.

The Obama administration called for comment on four versions of this protection plan, and a decision is expected this summer.

Source: Reuters

China was the number-one gold producer in 2010, followed by Australia ,the US and then Russia, which just edged past South Africa, the group said in its Gold Survey 2011 report, launched on Wednesday.

Overall, gold mine production rose 3,8% in 2010, to 2 689 t in 2010, and GFMS expects a similar gain of around 4% this year, research director Neil Meader said in a presentation in Toronto.

He said later that he expects “modest increases for the mid-term” as miners ramp up exploration, build new projects and expand existing mines in response to higher prices.

“But I think once you get beyond that rush of new projects coming through, there is the threat of a decline.”

There haven’t been any major new discoveries and the established gold producing regions, including but not only South Africa, are maturing.

And while producers are benefitting from rising prices, margins are also reflecting higher costs, with average industry cash costs having increased 17%, or $79, to $557/oz in 2010, according to GFMS calculations.

Mines in Latin America remain the lowest cost operations, while South Africa has the highest cash costs in the sector.

Overall, GFMS expects cost pressure will continue to increase, despite miners’ efforts to control cost inflation.

The broader move upward will be partly offset by larger, low-cost mines being developed, especially by the majors, that will pull the global average down.

RETURN TO HEDGING

Despite record gold prices, any significant new gold hedging is unlikely, because of pressure by equity investors to maintain exposure to gold prices, Meader said.

Hedging allows companies to sell their gold forward, at predetermined prices. It ensures that a certain return for production, but can limit the benefits they see from higher prices.

With prices at record levels, gold miners have been steadily reducing their forward sales for the most of the last decade, often in response in pressure from shareholders.

“The attitude towards hedging is still very hostile at the moment,” Meader told reporters after the Toronto launch.

“But clearly from the mining companies’ side, you’ve got to start thinking about longer term locking in some prices at these levels.”

Still, it’s unlikely that there will be any pressure to enter into hedges until prices decline meaningfully, and there are indications that the bull market may be reversing.

Meader commented that the higher-cost producers, particularly in South Africa, could probably be the first to look at locking in higher prices.

“There’s clearly an incentive for them to start putting hedging in first because their mines will be underwater sooner.”

Source: miningweekly.com

“We recently carried out a strategic review of our operations and whilst there are significant opportunities in the UAE, we do not currently have the appropriate critical mass there to maximise them, nor can we deploy the necessary resource,” said the statement.

“As such, we have decided to reallocate our resource in the UAE,” it added. The office will close on 31 March.
The WGC took part in promoting the retail sector through the Dubai Shopping Festival and said it would continue to honour such initiatives, the statement said.

Some analysts believed that the UAE government and retailers were not cooperative in giving the WGC enough data for their reports; others site a slowdown in Dubai’s gold business.

“I think they decided to shutdown because they are having problems collecting date from traders and the government,” said Pradeep Unni, senior analyst and trader at Richcomm Global Services in Dubai.

Labelled the city of gold, Dubai’s retail business in recent months has taken a hit as gold prices rose above consumers’ reach, due to unrest in the region.

“Business has been hit so badly here I think the WGC is looking for somewhere a bit more active,” said a Dubai-based gold trader who declined to be named.

On Wednesday, Spot gold hit a session high of $1,440.90, its highest since March 7 when it scored a record peak of $1,444.40 an ounce.

China’s official gold reserve holdings are believed to be around 1150 tons. Last year, China had made an announcement that the country would increase its gold reserves to a massive 10,000 tons in the next 10 years. The idea is to replace the Chinese foreign exchange reserve, now held in US dollar, with gold.

According to a report in GoldCore, China has imported a massive 200 metric tonnes of gold in just the first two months of 2011. This gold is being bought by China’s 1.3 billion people in order to protect against surging inflation (see news).

The FT last week quoted a senior executive of the world’s largest bank by market capitalisation Industrial and Commercial Bank of China Ltd. (ICBC) about the “voracious” appetite for gold in China. ICBC bank has in some two months opened gold savings accounts for more than 1 million savers with more than 12 tons of gold stored on their behalf.

Shopping malls in China are experiencing massive buying of gold jewellery and ingots as shoppers buy gold as a store of wealth in order to protect against surging food and energy inflation. Statistics from Beijing Caibai, Beijing’s largest jewellry store, show sales of gold bars and jewellry have totaled an incredible 4 billion yuan or about $600 million US dollars so far this year, a 70-percent increase year-on-year (see news).

This demand is only the demand from Chinese investors and savers. It does not include purchases by the less than transparent People’s Bank of China who are almost certainly continuing to diversify their massive nearing $3 trillion currency reserves into gold bullion in order to protect themselves from their massive dollar ($1.6 trillion dollars of US debt alone, according to the Treasury Department) and other currency exposure.

Chinese Yuan Gold Standard
China is clearly trying to position the yuan or renminbi as the alternative global reserve currency. The Chinese likely realise that they will need to surpass the Federal Reserve’s official, but unaudited, gold holding of 8,133.5 tonnes. China is the sixth largest holder of gold reserves in the world today and officially has reserves of 1054.1 tonnes which is less than half those of even Euro debtor nations France and Italy who are believed to have 2,435.4 and 2,451.8 tonnes respectively.

China’s ambitions to rival and even supplant the dollar were seen overnight with news that China is to allow all exporters and importers to settle their cross-border trades in the yuan this year. The People’s Bank of China said that it was “part of plans to grow the currency’s international role” and “would respond to overseas demand for the yuan to be used as a reserve currency.”

Russia is also attempting to position the Russian ruble as a global reserve currency (see news).

World Bank President Robert Zoellick recently mooted the possibility of a return to some form of gold standard. It seems extremely likely that senior and influential Chinese policy makers, bankers and government officials may be having similar thoughts.

Gold Bubble?
The lack of knowledge of the vast majority of people about gold and the very important developments in the gold markets with significant macroeconomic, monetary and geopolitical ramifications is hardly indicative of a bubble.

Nor is the instinctual aversion and bias against gold by some today. Indeed, the negativity displayed against gold by a minority (normally vested interests offering other investment or saving products) in recent years and continuing today may be partly due to some feeling unwise due to their failure to predict gold’s rise and return as a global currency.

The significant and continuing price appreciation of something they don’t own, they don’t understand and did not advise people to diversify into has some looking somewhat imprudent.

Source: (Scrap Monster)