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'Everything the gold bulls predicted is coming true'

Section: Daily Dispatches

But the Financial Times still won't ask why gold alone has not kept up with inflation.

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Search for Shelter Drives Gold and Swiss Franc

By Jack Farchy
Financial Times, London
Tuesday, August 9, 2011

Gold and the Swiss franc jumped to new records after the US debt downgrade drove investors to seek haven in an ever-narrowing range of "safe" assets.

The precious metal soared more than 3 per cent to surpass $1,700 an ounce for the first time, while the Swiss franc hit a record SFr0.7497 against the dollar.

Traders said investors ranging from sophisticated hedge funds to European savers were turning to bullion as they pulled money out of tumbling equity markets. Investors in gold through exchange traded funds hold a record 2,276 tonnes of gold, more than most central banks. Dealers said sales of coins and small bars to European investors were on Monday the highest so far this year.

... Dispatch continues below ...


Golden Phoenix Q2 2011 Conference Call Posted at Company Internet Site

The second quarter 2011 conference call of Golden Phoenix Minerals Inc. (GPXM) has been posted at the company Internet site for immediate playback. The call includes updates on the start of gold production at the company's Mineral Ridge gold project in Nevada, the letter of intent to acquire the Santa Rosa gold mine in Panama, and the company's due-diligence efforts to secure a senior stock exchange listing.

The conference call is 18 minutes long and you download an mp3 of it here:

Or play back the call here:

Golden Phoenix is a U.S. mining company with international exposure to gold, silver, and strategic metals. The company's business model combines project generation and royalty mining that offers the potential for exploration upside, coupled with the backing of production and future royalty streams. View company videos here:

"Everything the gold bulls predicted is coming true," said Matthew Turner, precious metals strategist at Mitsubishi. "The eurozone is under severe stress, government debt from Greece to the US is being called into question, and most central banks see the solution as expanding the money supply."

Adjusted for inflation, gold's record of $1,719 on Monday remains well below its 1980 peak, which translates to nearly $2,500 in today's money. Analysts have revised up their forecasts in the wake of the US downgrade. Goldman Sachs said gold would rise to $1,860 in 12 months, while JPMorgan predicted it could reach $2,500 by the end of this year.

The gains for the traditional haven currencies, the Swiss franc and Japanese yen, were limited by concerns about the possibility of intervention by the central banks of Switzerland and Japan. The Swiss government met on Monday to discuss measures to curb the currency's appreciation after the G7 group of industrialised nations said it was ready to intervene in foreign exchange markets.

Edel Tully, precious metals strategist at UBS, said the threat had further burnished gold's appeal: "It's likely you could see flows that had been destined for the Swiss franc and yen going to gold."

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Prophecy Platinum Reports 10.97 Million Ounces Inferred
and 1.04 Million Ounces Indicated PGM+Gold in Yukon

An independent resource report on the Wellgreen project in the Yukon Territory in Canada has just confirmed that it as one of the largest platinum group metals projects in Canada and one of the few outside South Africa, Prophecy Platinum Corp. Chairman John Lee says.

The report, compliant with Canadian National Instrument 43-101, was written by geologist Todd McCracken of Wardrop Engineering Inc., a Tetra Tech company. It incorporated drill data from 701 diamond drill holes (182 surface and 519 underground) totaling more than 53,222 metres. Using a 0.4 percent nickel equivalent cutoff grade, the Wellgreen deposit now contains a total inferred resource of 289.2 million tonnes at an average grade of 0.53 g/t platinum, 0.42 g/t palladium, 0.23 g/t gold (1.18 g/t PGM and gold), 0.38 percent nickel, and 0.35 percent copper. Separately, the deposit also contains an indicated resource of 14.3 million tonnes at an average grade of 0.99 g/t platinum, 0.74 g/t palladium, 0.52 g/t gold (2.25 g/t PGM and gold), 0.69 percent nickel, and 0.69 percent copper.

Prophecy Platinum Corp. trades on the Toronto Venture Exchange under the symbol NKL, on the pink sheets in the United States as PNIKD, and in Frankfurt as P94P.

For the complete press release on the Wellgreen report, please visit: