'Gold can't be faked,' Mr. Zhang? Ever hear of the LBMA, JPMorganChase, and the Fed?

Section:

By Leslie Hook
Financial Times, London
Monday, January 23, 2012

http://www.ft.com/intl/cms/s/0/ba8af0a4-4354-11e1-9f28-00144feab49a.html

BEIJING -- "Gold can't be faked," says Mr Zhang with all the zeal of a first-time buyer of the precious metal. The 29 year-old advertising clerk, who prefers not to give his first name, has just spent a month's wages, Rmb8,000 ($1,266), on a bracelet, as a gift for his fiance at Chinese New Year.

He is not alone. Standing in Beijing's Caibai store, the capital's largest gold shop, he is surrounded by shoppers. These range from first time buyers picking up single items to veteran purchasers looking for an investment opportunity.

China overtook India as the world's largest consumer of gold jewellery in the third quarter of 2011. The new year holiday, which started on Sunday night, is now a powerful source of demand in global gold markets as traditional family gifts of cash or presents are being replaced by gold for the auspicious year of the dragon.

... Dispatch continues below ...


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Sona Discovers Potential High-Grade Gold Mineralization
at Blackdome in British Columbia -- 13.6g over 1.5 Meters

From a Company Press Release
November 22, 2011

VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling.

"We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company."

Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered.

For the company's complete press release, please visit:

http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf



China overtook India as the world's largest consumer of gold jewellery in the third quarter of 2011. The new year holiday, which started on Sunday night, is now a powerful source of demand in global gold markets as traditional family gifts of cash or presents are being replaced by gold for the auspicious year of the dragon.

"People who work in the city go back to their [village or town] for new year," said Albert Cheng of the World Gold Council, a lobby group for the industry.

They bring back "all kinds of gifts, including clothes and electronics and whatever is not available in the village," he added. "And increasingly this includes gold too."

Rising incomes in China have fuelled consumer spending on luxury items. Buyers look to gold as a more durable store of value at a time when other investment options in the country are extremely limited.

Gold consumption figures are inexact and estimates for the Chinese new year shopping period have yet to come out. But sales figures from Caibai help tell the story.

The value of sales in 2011 rose 61 per cent from the previous year, hitting Rmb 11.6 billion ($1.8 billion). The first weekend in January saw sales increase 50 per cent from the previous year, as customers stocked up on new year gifts.

"My grandchild will be born in March or April and I want it to have a gold dragon locket," explains Ms. Wang, a frequent gold shopper, as she waits in line at the Caibai store.

She has picked out a pendant that costs more than $600, and she says she regularly buys gold jewellery for her family when the occasion calls for it.

Chinese gold shops have been preparing for months for the new year's rush, but inevitably some are still sold out of the most popular products.

At one downtown branch of ICBC, the Chinese bank, a manager says that they have sold out of the small 50g gold bars amid the rush.

"Some customers just walk in and buy a bunch of 100-gram gold bars all at once," says the manager with an air of surprise. A bar of that size costs more than $5,500 at current prices.

"People like to give them away," she shrugs. "Companies come in too to buy gold bars for presents."

While most gold purchases are driven by individuals, anecdotal evidence suggests Chinese businesses are buying more and more bullion as well.

"Some companies are giving out gold instead of cash to their employees," said Jia Zhihong, founder of Kingold, a Wuhan-based jewellery maker.

China's gold rush has been surprising in its strength and persistence, analysts and traders say.

Gold sales went up significantly in 2010, as investors sought refuge from inflation. But the gold craze has continued even as inflation cooled to it current 4.1 per cent.

In an environment where investment options are limited and bank accounts yield negative real interest rates, Chinese savers are increasingly turning to gold as an investment.

"Think of it like investing in the stock market," says a cheerful clerk at the China Gold shop. "Gold maintains its value much better than stocks. And with the eurozone crisis the price is starting to head back up again."

As for Mr Zhang, he just hopes his fiance likes the bracelet.

* * *

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Prophecy Coal (TSX: PCY) Wins Positive Feasibility Study
for the 600-MW Chandgana Power Plant in Mongolia

Company Press Release
January 17, 2012

VANCOUVER, British Columbia, Canada -- Prophecy Coal Corp. (TSX: PCY, OTCQX: PRPCF, Frankfurt: 1P2) has received a positive feasibility study for the company's 600-megawatt Chandgana Mine-Mouth Power Project in central Mongolia. The report was independently prepared by Ralf Thomsen, project manager at Steag, a German firm specializing in the planning, financing, construction, and operation of highly efficient thermal power plants for fossil fuels.

The study covers technical specifications, deployment, and financial analysis of a 4x150-mw thermal power plant to be built adjacent to Prophecy's Chandgana Tal coal deposit, which contains 140 million tonnes of measured coal. Last year the power plant received a construction license and the coal deposit received a mining license. Engineering, procurement, and construction management selection and project financing discussion have begun and are expected to be concluded this year.

Construction is planned to start in April 2013, with the first 150-mw unit being commissioned in October 2015 and subsequent units to start in April 2016, October 2016, and April 2017. With proper maintenance the project will have 30 years of commercial operation.

For the complete statement from the company, including maps and charts, please visit:

http://www.prophecycoal.com/news_2011_jan17_prophecy_receives_power_plan...