Daily Dispatches

Many Americans suspect gas price decline is political market rigging


Americans Skeptical of Gas Price Drop

By Brad Foss
Associated Press
Monday, September 25, 2006


WASHINGTON -- There is no mystery or manipulation behind the recent fall in gasoline prices, analysts say. Try telling that to many U.S. motorists.

Almost half of all Americans believe the November elections have more influence than market forces. For them, the plunge at the pump is about politics, not economics.

China has enough dollars but maybe not enough oil and gold


The Trillion-Dollar Question:
China is Grappling With
How to Deploy
Its Foreign-Exchange Riches

By Richard McGregor
Financial Times, London
Monday, September 25, 2006


It operates out of a nondescript office tower in Finance Street and, shortened to its English acronym, "SAFE," sounds like one of those fictitious shadowy organisations from a Sixties spoof spy show. But the Beijing-based State Administration of Foreign Exchange has a serious, real-world job -- to manage China's towering stack of foreign currency holdings.

Ted Butler: Hedge fund's collapse proves concentration in commodity markets


11:37p ET Tuesday, September 26, 2006

Dear Friend of GATA and Gold:

Silver market analyst Ted Butler argues persuasively in his latest essay, "Concentration," that the collapse of the Amaranth Advisers hedge fund is proof of excessive concentration in the commodities markets. Amaranth's position in natural gas, Butler writes, "was so large and made up such a big chunk of the market that when it was liquidated it wasn’t even truly liquidated. It had to be assumed by other entities in arranged transactions." But the market regulators missed this concentration, just as they have studiously missed the concentration of the short positions in the silver market.

Commodities undervalued by 30%, Morgan resources fund manager says


By Jennifer Hill
Monday, September 25, 2006


LONDON -- The oil price might have fallen almost 25 percent from its peak, but the commodities sector as a whole is undervalued by around 30 percent -- giving further opportunity for growth -- according to one fund manager.

Goldcorp CEO claims most institutional shareholders back bid for Glamis


By Rachelle Younglai
Monday, September 25, 2006


DENVER -- Goldcorp Inc.'s chief executive said on Monday that the majority of the company's institutional shareholders are in favor of its plan to take over Glamis Gold Ltd. in an all-stock deal.

"We have certainly talked to the majority of our institutional shareholders," Ian Telfer told Reuters on the sidelines of the Denver Gold Forum, an industry conference.

Buzz is about silver at Denver Gold Forum


Silver Bulls Seize Day at Major Gold Industry Parley

By Steve James and Rachelle Younglai
Monday, September 25, 2006


DENVER -- At North America's major annual gold industry conference, the talk on Monday was about silver -- and how the price of bullion's less attractive rival could climb even higher.

Price dip causes gold rush and shortage in India


Banks Expand Retail Gold Offerings

By Joel Rebello
Daily News & Analysis, Mumbai
Monday, September 25, 2006


MUMBAI -- Demand for gold is expected to rise by at least 25 percent in the festival season and banks are offering gold in various denominations ranging from 5 grams to100 grams.

The festival season, considered auspicious to buy bullion, has coincided with a softening in prices of the yellow metal. Gold prices dropped to Rs 8,885 per 10 grams from an all-time high of Rs 10,665 in May. Analysts tracking the metal attribute the decline to falling crude prices, as gold is considered to be a hedge against high oil prices.

Bank of Tokyo sees faster advance of China's yuan


By Min Zeng
Bloomberg News Service
Monday, September 25, 2006


China will allow the yuan to rise more than 5 percent against the dollar over the next 12 months to help cool its economy, according to Bank of Tokyo-Mitsubishi UFJ Ltd.

The yuan, which last week reached the strongest since China ended a peg to the dollar in July 2005, will appreciate to at least 7.50 per dollar within a year, said Paul Chertkow, London- based head of global currency research at Bank of Tokyo- Mitsubishi, in a research note on Sept. 22.

Another bullion fund, Central Gold-Trust, launches on Amex


By Jon A. Nones
Resource Investor
Friday, September 22, 2006

ST. LOUIS -- After three years of trading on the Toronto Stock Exchange, Central Gold-Trust joined its sister the Central Fund of Canada on AMEX today under the symbol GTU. With gold up 2% for the week, the fund’s manager hopes to ride the positive sentiment in a new market.

"The Trust has achieved this significant milestone to broaden its market ability and will continue to soundly steward the assets entrusted to it by investors," said Stefan Spicer, president and CEO of Central Gold-Trust, in a press release.

Goldman's revision of commodity index caused plunge in gasoline prices


From The King Report
By William J. King
Friday, September 22, 2006


In yesterday's Wall Street Journal, Section C, there is a very interesting item in the article headlined "Some Investors Lose Their Zest For Commodities." The article notes that over that past few months, commodity funds have been liquidating commodity holdings. But here's the stunner: "Consider the Goldman Sachs commodity index, one of the most popular vehicles for betting on raw materials. In July, Goldman Sachs tweaked the index's content by cutting its exposure to gasoline. Investors tracking the index had to adjust their portfolios accordingly -- which sent gasoline futures prices tumbling."

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