Seeking Alpha

Russia sells gold for first time in a year

  • Russia's central bank - which accounted for 30% of official gold purchases since 2010 - sold 12K ounces of the metal in September, the first sale in a year, according to IMF data. "Gold really doesn't have much to offer," says commodity analyst Joe Murphy in one of those quotes you never hear at tops. "People are seeing better opportunities, whether that be in bonds or equities."
  • Central banks have a dubious track record with gold, and were regular sellers for years up until 2009, and became net buyers in 2010 - particularly the emerging market central banks. Thomson Reuters GFMS sees central banks as cutting back gold purchases by 34% this year - so while they're not buying as aggressively, they're certainly not becoming net sellers yet. Contrarian bulls need to stay patient.
  • Gold ETFs: GLD, IAU, SGOL, PHYS, AGOL, DGL, UBG, DGP, UGL, DZZ, GLL, DGZ, UGLD, DGLD, GLDI.
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Comments (28)
  • thotdoc
    , contributor
    Comments (1826) | Send Message
     
    So, Russia sold enough gold to...pay some taxes...buy some Christmas presents.. Send money to some person????
    29 Oct 2013, 10:59 AM Reply Like
  • Yorkville Trading
    , contributor
    Comments (175) | Send Message
     
    That does seem like a pretty token amount.
    29 Oct 2013, 11:04 AM Reply Like
  • filipo
    , contributor
    Comments (4018) | Send Message
     
    When I take the WGC official reserve holdings of Central Banks, I find Russia to have added from 996.4 to 1,002.8 Tonnes in September, i.e. appr. 6 Tonnes.
    I certainly find no trace of Russia having sold 12K oz on balance.
    It is possible though that Russia intermittently sold 12K ounces - I don't question the IMF's honesty - , but the end result is a gain of 6 Tonnes.
    BTW, in October so far Russia has added 13 Tonnes to it's Central Bank's stockpile, going from 1,002.8 to 1,015.5 Tonnes.
    I have the impression someone is trying desperately to find whatever argument good enough to convince people of selling their gold by saying: be careful, even the Russian bear isn't kean on gold anymore.
    Well, I can assure everyone: the Russian bear is accumulating more than ever before.
    29 Oct 2013, 11:05 AM Reply Like
  • chcc
    , contributor
    Comments (156) | Send Message
     
    Really? If that's true, then this is really misleading, and completely crap.
    29 Oct 2013, 11:23 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (3290) | Send Message
     
    Seeking Alpha, whose editors are against promoting ownership of physical gold via any articles submitted to them, unless of course the article mentions an ETF, stock or mutual fund, simply liked what the commodity analyst Joe Murphy said in that snippet (whomever Murphys is or works for is evidently irrelevant as it is left out of the snippet); Murphy said; "Gold really doesn't have much to offer,".... "People are seeing better opportunities, whether that be in bonds or equities."

     

    Doing a little research on this commodity analyst Joe Murphy, we find the following (showing he has no experience to comment on gold whatsoever):

     

    "Hermes Commodities, one of the UK’s largest institutional long-only commodity managers with over US$2.3bn assets under management*, announces the strengthening of its team with the appointment of Joseph Murphy as Senior Analyst.

     

    Reporting into David Hemming, Portfolio Manager, Joseph will focus on trade execution and cover the industrial and precious metals."

     

    Background:

     

    "Joseph’s asset management experience spans over ten years, including nearly five years at BT Pension Scheme Management where he was a multi-investment manager with particular focus on derivative fund management and dealing. This was followed by a position at Aon Hewitt, where Joseph was an asset allocation specialist providing asset allocation requirements to a range of US and UK institutional investors." Source: http://bit.ly/19PFd71
    29 Oct 2013, 11:28 AM Reply Like
  • filipo
    , contributor
    Comments (4018) | Send Message
     
    ch,
    http://bit.ly/Zw2VxK
    You need to make an account, but that's free, to get into the WGC website.
    I can assure you, it is true.
    29 Oct 2013, 11:42 AM Reply Like
  • happyguy
    , contributor
    Comments (207) | Send Message
     
    I agree with you filipo. I think gold bears are running out of steam. How long they will rely on uncle SAM pushing the pedal to push the gold price lower
    29 Oct 2013, 09:53 PM Reply Like
  • Yorkville Trading
    , contributor
    Comments (175) | Send Message
     
    Uncle Sam has been helping gold prices. When Uncle Same steps away, that could be when gold really breaks down.
    30 Oct 2013, 06:04 PM Reply Like
  • CoinsK
    , contributor
    Comments (3681) | Send Message
     
    Can you show us how that occurred? QE ? I thought that was for stocks and paper traders benefit.
    30 Oct 2013, 06:19 PM Reply Like
  • happyguy
    , contributor
    Comments (207) | Send Message
     
    Ok, so gold went down, so are gold stocks significantly and you're saying that Uncle Sam has been helping gold prices? Are you sleeping?
    30 Oct 2013, 11:37 PM Reply Like
  • Yorkville Trading
    , contributor
    Comments (175) | Send Message
     
    QE has helped gold by way of keeping rates low. From an economic perspective, risng rates makes gold less attractive becuase it offers no income. Its only an expense. Sorry, I dont buy into the financial armageddon theory that at some point you will need gold to buy a six pack at the bodega.
    31 Oct 2013, 08:53 AM Reply Like
  • happyguy
    , contributor
    Comments (207) | Send Message
     
    You need to look at facts and reality. And the reality is that gold price went down and no QE nonsense helped to it. there's no armageddon theory here
    31 Oct 2013, 10:32 AM Reply Like
  • CoinsK
    , contributor
    Comments (3681) | Send Message
     
    YT ,interesting theory ,even though it's a faulty premise .
    31 Oct 2013, 04:19 PM Reply Like
  • th3decider
    , contributor
    Comments (394) | Send Message
     
    So the Russian Central Bank basically bought 6 and 1/3 tons of gold in September (12k ounces is a little under a 1/3 metric ton) and then probably for some accounting reason only wanted to keep 6 tons of it, and this shedding of this chump change of 1/3 a ton is dramatic news?

     

    What's next? Will SA update us when Putin flushes or when Kim K has a bad hair day?
    29 Oct 2013, 11:32 AM Reply Like
  • Jason Burack
    , contributor
    Comments (1814) | Send Message
     
    LOL. FT, WSJ and others are running large anti-gold stories again now that the price is moving higher and starting to challenge key overhead resistance levels. The amount of propaganda from the mainstream media and mainstream financial media would make Orwell, Goebbels, Lenin, Stalin, Hitler and Chairman Mao proud.
    29 Oct 2013, 12:31 PM Reply Like
  • Brian58
    , contributor
    Comments (178) | Send Message
     
    imagine that: negative press on gold right before the FED announcement tomorrow. QE infinity. Inventory is drying up and demand is stronger than ever.
    29 Oct 2013, 01:09 PM Reply Like
  • The Prof
    , contributor
    Comments (85) | Send Message
     
    The Russian central bank bought 6-1/3 metric tons of gold and sold 12K ounces to buy office supplies. Some important details were left out of this "story."
    29 Oct 2013, 11:41 AM Reply Like
  • Jason Burack
    , contributor
    Comments (1814) | Send Message
     
    China would buy anything Russia wants to sell. China has more paper to hedge and diversify out of.
    29 Oct 2013, 12:29 PM Reply Like
  • Yorkville Trading
    , contributor
    Comments (175) | Send Message
     
    As a fairly new member of SA, I would say that the gold bugs are much more aggressive towards any anti gold writings then gold bears are towards pro gold articles.I for one am bearish, but I can also admit that there is no correct valuation tool for gold and it could rip up $100 just as easily as it could fall $100.
    29 Oct 2013, 01:56 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (3290) | Send Message
     
    Yorkville, the reason for possible gold bulls being more aggressive towards anti gold writers is either the anti gold writer is a trader and the gold bulls don't realize the difference, or the anti gold writer doesn't understand that gold bulls have the brains to invest anywhere but gold.

     

    Remember, the entire financial services industry I was a part of for over 20 years was never taught anything about gold as an asset class, except in the most risky of plays. Even the CFP books I bought on investing didn't understand gold. Most from the anti gold side would more than likely want gold to disappear (same with the Fed). But traders love it (presently overall down) but eventually higher.

     

    I also noticed on the replies the many who were anti-gold disappeared and the bullish crown have indeed stepped it up a notch. Good observations!

     

    29 Oct 2013, 02:32 PM Reply Like
  • filipo
    , contributor
    Comments (4018) | Send Message
     
    York,
    "but I can also admit that there is no correct valuation tool for gold and it could rip up $100 just as easily as it could fall $100. "
    What's the valuation tool for equities ?
    Today they go up, tomorrow they go down.......
    Does that induce you to say there is no correct valuation tool for equities ?
    29 Oct 2013, 04:02 PM Reply Like
  • th3decider
    , contributor
    Comments (394) | Send Message
     
    The commenters here are anti-purposeful manipulation of a story and selective cherry picking of facts, which is what the above article is.

     

    It's like some guy on a diet losing 10 pounds in one month, blogging about it and having his expert friend on weight loss praise him, but failing to mention that overall he has gained a couple hundred pounds in the last month or two.
    29 Oct 2013, 04:13 PM Reply Like
  • Yorkville Trading
    , contributor
    Comments (175) | Send Message
     
    No because for equities I could use any type of DDM model (assuming they pay a dividend) or multiples. You dont have the same metrics for gold. Unless you want to use something like an oil / gold ratio but that brings in a whole new set of assumptions.
    29 Oct 2013, 04:23 PM Reply Like
  • filipo
    , contributor
    Comments (4018) | Send Message
     
    York,
    I remember my friends calculating the dividend discount model of Enron.
    It didn't do them any good.
    You are simply extrapolating past earnings and hence dividends into the future. In a growing economic environment that makes sense, although there are exceptions (look at Enron, Lehman), but what to say of a stagnant economic growth situation ?
    When economic growth erodes to almost 0%, the odds are that dividends will stagnate or even near to zero.
    Have you ever taken that into account ?
    I guess not, because a 0-growth environment is something most people simply can't imagine.
    And yet, it might be the new normal, hence the DDM model becoming obsolete.
    30 Oct 2013, 05:20 AM Reply Like
  • CoinsK
    , contributor
    Comments (3681) | Send Message
     
    Not true at all. YT That's like saying conservatives were the one's pretending to offer "Hope & Change" in their campaign slogans. BTW,Doug is NOT a "GoldBug" .He's not a "Paperbug" either. I have been a PM dealer for 10 years and do not have the "GoldBug" credentials required.However I do own Gold that i have had as insurance for currency and stock drops. It has served me well because Gold is money and cash at the crash is king.
    30 Oct 2013, 05:54 PM Reply Like
  • CoinsK
    , contributor
    Comments (3681) | Send Message
     
    Paper is an asset that is another 's liability. And Gold of course, isn't. That's why you need all the charts and graphs for paper and equities ,you don't actually own but place bets on them.
    30 Oct 2013, 05:57 PM Reply Like
  • EuricoIFConsultant
    , contributor
    Comments (38) | Send Message
     
    Based on recent history, central bankers buy gold at highs and sell at lows, that might be a signal to buy.
    29 Oct 2013, 03:57 PM Reply Like
  • 6151621
    , contributor
    Comments (1180) | Send Message
     
    Great comments. When I saw this I thought what BS WSJ story: 12k is a fraction of a tonne (about 3/8 MT).
    31 Oct 2013, 08:39 AM Reply Like
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