Thailand increases gold holdings by 20%


Gold Hits New Record on Jitters over Data, Fed

By Frank Tang
Friday, September 17, 2010

NEW YORK -- Gold hit a record high on Friday for the third time this week as poor U.S. consumer confidence and market talk of more quantitative easing helped the alternative asset score its biggest weekly gain since May.

The metal received a boost from data showing Thailand raised its gold holdings by a fifth in July through open-market purchases, joining a growing list of Asian nations diversifying into gold amid volatility in other markets.

Thailand increased its gold holdings to 3.2 million ounces in July from 2.7 million ounces in June, according to financial data published by the International Monetary Fund.

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Sona Resources Expects Positive Cash Flow from Blackdome,
Plans Aggressive Exploration of Elizabeth Gold Property

On May 18, 2010, Sona Resources Corp. (TSXV: SYS, Frankfurt: QS7) announced the release of a preliminary economic assessment for gold production at its flagship Blackdome and Elizabeth properties in British Columbia.

Sona Executive Chairman Nick Ferris says: "We view this as a baseline scenario for gold production. The project is highly sensitive to the price of gold. A conservative valuation of gold at $1,093 per ounce would result in a pre-tax cash flow of $54 million. The assessment indicates that underground mining at the two sites would recover 183,600 ounces of gold and 62,500 ounces of silver. Permitting and infrastructure are already in place for processing ore at the Blackdome mill, with a 200-tonne per day throughput over an eight-year mine life. Our near-term goal is to continue aggressive exploration at Elizabeth and develop a million-plus-ounce gold resource, commencing production in 2013."

For complete information on Sona Resources Corp. please visit:

A Canadian gold opportunity ready for growth

Silver rose to just below $21 an ounce, approaching levels not seen since 1980 as gold's rally triggered further investor speculation that the white metal would continue a winning streak that began in August.

"Gold continues to reflect the overall level of concern. The weak consumer confidence data was certainly supportive to the rally in gold," said Frank McGhee, head of precious metals trading at Integrated Brokerage Services in Chicago.

Gold surged to an all-time peak of $1,282.75 an ounce in the European session on expectations that the U.S. Federal Reserve, hoping to stave off double-dip recession, could announce more quantitative easing -- usually a boon for gold.

After some profit-taking, the yellow metal turned higher again after data showed consumer sentiment worsened in early September to its weakest in more than a year. Another report indicated little underlying U.S. inflationary pressure.

Spot gold fetched $1,275.50 an ounce at 3:11 p.m. EDT, compared with $1,272.20 late in New York on Thursday. It has gained more than $100, nearly 9 percent, since the start of August.

U.S. December futures settled up $3.70 at $1,277.50 an ounce.

On charts, gold remained well within a long-term rising channel dating to late 2008, and technical buying could propel the metal further above record highs, analysts said.

Gold's safe-haven status increased on renewed sovereign debt worries in Ireland, after a report said Irish banks might need a bailout, but Ireland's finance ministry said there was no truth to the claim.

Foreign-exchange volatility also boosted gold's appeal as an alternative currency. Japan intervened this week to weaken the yen for the first time in six years and the United States sharpened its tone on China's currency policy.

"It's partly a currency move. There's certainly investor nervousness about monetary policy around the world since the yen intervention," precious metals strategist Matthew Turner of Mitsubishi Corp. said.

The euro fell as European debt worries and the weak U.S. consumer data enhanced the dollar's safe-haven appeal, while fear of more Japanese intervention kept the yen near a one-month low against the U.S. currency.

Dollar sentiment overall has been damaged by speculation that the Fed could announce more quantitative easing when it meets on Tuesday.

September and October are typically strong periods for jewelry demand, with a number of major gold-buying festivals near the year-end in top consumer India, while Western manufacturers stock up ahead of Christmas.

Eclipsing gold's rally, silver has gained 5 percent this week, double the yellow metal's 2.5 percent increase. Spot silver was up 0.1 percent at $20.74 an ounce from $20.72 in New York on Thursday.

"The last few months silver has been benefiting as a monetary metal like gold, when things are looking bad, and as an industrial metal when things are looking good," Mitsubishi's Turner added.

However, technical analysis suggests silver is overbought and could be due a correction.

"Silver is renowned for overshooting and undershooting. In my opinion that kind of rate of increase can't be sustained. I would not be recommending anyone to get long or longer silver at $21," Credit Suisse analyst Tom Kendall said.

Spot platinum hit $1,630 an ounce, its highest since May 19. It rose to $1,611.50 from $1,603.65 on Thursday and palladium fell to $540.50 an ounce from $544.65.

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Prophecy to Become Coal Producer This Year
with 1.5 Billion Tonnes of Resource

Prophecy Resource Corp. (TSX.V: PCY) announced on May 11 that it has entered into a mine services agreement with Leighton Asia Ltd. to begin coal production this year. Production will begin with a 250,000-tonne starter pit as planned in August, with production advancing to 2 million tonnes per year in 2011. Prophecy is fully funded to production and its management team includes John Morganti, Arnold Armstrong, and Rob McEwen.

For Prophecy's complete press release about its production plans, please visit: