GFMS chief belatedly acknowledges that official gold data is no good

Section:

9:34p ET Sunday, March 20, 2011

Dear Friend of GATA and Gold:

From the Financial Times today, appended here, is confirmation from a gold establishment source of what GATA, the organization of supposedly radical loonies, has been saying for a long time: The official data about central bank gold reserves is bogus and often simply disinformation. (See http://www.gata.org/node/9545.)

The Financial Times reviewed diplomatic cables obtained by Wikileaks and discovered that quite a few central banks lately have been interested in getting gold quietly. The newspaper quotes a leading respectable, the executive chairman of the precious metals consultancy GFMS, Philip Klapwijk, as acknowledging: "The totality of central bank reserves is not what is reported to the International Monetary Fund. There's probably another 10 per cent on top of that."

Klapwijk must hope that the totality is only 10 percent. Why didn't he tell his clients and the world before now that the official gold data wasn't any good?

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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Iran Bought Gold to Cut Dollar Exposure

By Jack Farchy
Financial Times, London
Sunday, March 20, 2011

http://www.ft.com/cms/s/0/cc350008-5325-11e0-86e6-00144feab49a.html

Iran has bought large amounts of gold in the international market, according to a senior Bank of England official, in a sign of how growing political pressure has driven Tehran to reduce its exposure to the US dollar.

Andrew Bailey, head of banking at the Bank of England, told an American official that the central bank had observed "significant moves by Iran to purchase gold," according to a US diplomatic cable obtained by WikiLeaks and seen by the Financial Times.

Mr. Bailey said the gold buying "was an attempt by Iran to protect its reserves from risk of seizure."

Market observers believe Tehran has been one of the biggest buyers of bullion over the past decade after China, Russia, and India, and is among the 20 largest holders of gold reserves.

... Dispatch continues below ...



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They estimate that it holds more than 300 tonnes of gold, up from 168.4 tonnes in 1996, the date of the most recent International Monetary Fund data.

The cable, dated June 2006, is the first official confirmation of Tehran's buying.

Last year central banks became net buyers of bullion after 22 years of large sales, helping drive gold prices to all-time nominal highs. Trades by central banks are often kept secret.

Bankers said other Middle Eastern countries had also been quietly adding to gold holdings to diversify away from the dollar amid political tensions and volatility in currency markets.

"The totality of central bank reserves is not what is reported to the IMF," said Philip Klapwijk, executive chairman of GFMS, a precious metals consultancy. "There's probably another 10 per cent on top of that."

Cables obtained by WikiLeaks cite Jordan's prime minister as saying the central bank was "instructed to increase its holdings" of gold, and a Qatar Investment Authority official as saying the QIA was interested in buying gold and silver.

"There is no question some Middle Eastern countries are very interested in buying gold," said George Milling-Stanley, head of government affairs at the mining industry-backed World Gold Council.

In the past two months, the political unrest in the Middle East has helped propel gold to a record price of $1,444.40 a troy ounce.

The Bank of England declined to comment on the cables but did not dispute their contents. The central banks of Iran and Jordan and the QIA did not respond to requests for comment.

-----

Additional reporting by Najmeh Bozorgmehr in Tehran.

* * *

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Prophecy Resource Spins Off Platinum/Palladium Venture:
World-Class PGM Deposit in Yukon

Company Press Release, January 18, 2011

VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy.

PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding.

Following the transaction:

-- Prophecy will own approximately 90 percent of PCNC.

-- PCNC will consolidate its share capital on a 10 old for one new basis.

-- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp.

-- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings.

Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000.

For the complete announcement, please visit:

http://prophecyresource.com/news_2011_jan18.php