Going for gold

The arts were always meant to be part of the Olympics, as envisioned by the so-called father of the modern games, Pierre de Coubertin. For decades the events included competitions in categories such as sculpture, painting and music, all tethered to a sporty theme. These days, medals for setting records in the arts tend to be doled out by auction houses—and, awkwardly, it pays to be dead. But in London in 2012 artists and performers will be jockeying for position alongside the world’s finest athletes. Unlike Beijing, which used its games in 2008 to prove its graduation to long trousers, London wants to reaffirm its eminence as an international cultural destination.

Brits could be forgiven for not noticing, but London’s Cultural Olympiad began in 2008, with nationwide events and commissions designed to culminate in a big festival in June-September 2012. In practice this meant little before Tony Hall, head of the Royal Opera House, became involved in 2009 and then anointed Ruth Mackenzie as the Olympiad’s director in early 2010. With some £94m ($147m) to play with, largely from lottery funds, Ms Mackenzie and the festival’s organisers have curated more than 1,000 events, many of them free and aesthetically daring, for an estimated audience of 10m people. Though London will enjoy the lion’s share, the festivities will be spread throughout Britain—a crucial bit of diplomacy given the use of national taxes.

What to see? The most inescapable bit of cultural cool will be Bus-Tops, a public-art installation on the roofs of London bus shelters, designed by Alfie Dennen and Paula Le Dieu. Part of a programme called Artists Taking the Lead, funded by the UK Arts Councils, this is one of 12 commissioned projects throughout the country, one for each region.

Much of the Olympiad is designed to be enjoyed outdoors—rain or shine—to maximise participation. This includes a big, free music event on Hackney Marshes on June 23rd and 24th, courtesy of the BBC and Radio 1. There is also something called Big Dance, a festival of moving and shaking in unexpected places (parks, lidos, shopping centres). Bigger still is a summer-long celebration of performances by disabled and deaf artists called the Unlimited festival. 

All 37 plays in 37 different languages

In these grim times for arts funding, many institutions are seeing the benefits of collaboration. Sadler’s Wells and the Barbican are working together for the first time to produce a grand tribute to the career of Pina Bausch, a German choreographer who died in 2009. Then there’s Metamorphosis: Titian 2012, from the Royal Ballet and the National Gallery, based around three Titians, including one important recent acquisition. This project features three new ballets, each inspired by a Titian painting, and several new Titian-influenced works by contemporary artists, including Chris Ofili and Mark Wallinger, which will hang alongside the originals in the museum. Mr Ofili is also one of 12 visual artists commissioned to design posters for the games, along with Tracey Emin, Martin Creed, Bridget Riley and Rachel Whiteread.

To be or not to be, in Lithuanian

Other highlights include “Dr Dee”, a new opera from Damon Albarn of the band Blur, directed by Rufus Norris at the ENO; a rare show of David Hockney’s landscape work at the Royal Academy (January 21st to April 9th); and an exhibition of Lucian Freud’s portraits at the National Portrait Gallery (February 9th to May 27th). Britain’s largest-ever poetry festival, Poetry Parnassus, will take place on the South Bank and feature 205 poets, one from each of the Olympic nations. Then there will be Britain’s biggest piece of public art, Anish Kapoor’s towering, looping, £19.1m ArcelorMittal Orbit near the Olympic park, which people will climb for unparalleled views of the city. Funded mostly by Lakshmi Mittal, a steel magnate who gave £16m and donated the steel (around 1,400 tonnes of it), the tower “would have boggled Gustave Eiffel,” Boris Johnson, London’s mayor, has boasted.

But the jewel in the London 2012 crown promises to be the World Shakespeare Festival, a collaboration of more than 50 arts groups and thousands of performers in a celebration of the bard as “the world’s playwright”. The Royal Shakespeare Company has been working with international troupes to create a roster of new productions, either of or inspired by Shakespeare’s plays. And the open-air Globe theatre on the South Bank will stage a six-week, Babel-flouting programme of all 37 plays in 37 different languages, beginning on April 23rd (Shakespeare’s birthday). This means an “All’s Well That Ends Well” in Gujarati, “The Comedy of Errors” in Dari, “The Merchant of Venice” in Hebrew and a Lithuanian “Hamlet” the critics love. Who better than the bard to highlight London as a global city where more than 250 languages are spoken?

Will 2012 be another stellar year for gold investors?

NEW YORK - 

In contrast to the closing months of 2011, gold has begun the new year on a more positive note.  Whatever the metal's short-term prospects - indeed even if gold takes another dive - we believe 2012 will be another stellar year for gold investors.

Gold topped out at an all-time high just over $1,924 an ounce in early September - a whopping gain of some $600 or about 50 percent from last January's low point.  But as investors know all too well, gold prices can be quite volatile - with big upswings often followed by big downturns, albeit around a rising long-term trend.  Such has been the experience of the past four months with gold shedding roughly 30 percent from its all-time high to its recent late-year low point of $1,522.  But, let's not forget, even allowing for this deep price correction, gold still closed the past year with just about the best annual gain of any asset class!

Looking ahead, 2012 could well turn out looking much like the past year for gold - with sizable gains, possibly as much as 50 percent (or more) from the recent lows, but also with occasional big declines that may lead many observers of the gold scene to mistakenly declare an end to the yellow metal's bull market.  Just as gold bears have been wrong over and over again in the past decade, so will they continue to be wrong in 2012.

The story of gold in recent years has been a tale of institutional traders and speculators - including hedge funds, commodity funds, and the trading desks at the big banks and financial firms - producing great two-way volatility as they rushed into gold (as we saw last summer) and then, not just unwinding long positions, but shorting the metal in a big way (as we saw this past fall).

Driving these institutional players, in addition to momentum and technical trading indicators, has been the flight from the euro into U.S. dollar assets - and the appearance of dollar strength pushing gold lower, particularly at times of massive euro capital flight.

Importantly, much of this negative activity has taken place in gold derivative markets - but, all the while, long-term physical demand has remained fairly robust.

Buying from the Asian gold-market giants - China and India - for both jewelry and investment has continued to remain firm in spite of higher prices that years ago might have discouraged continued accumulation.

Having just returned from two weeks in China and meetings with many players in the country's gold market, I can tell you that gold demand remains strong despite the recent slowdown in economic activity, thanks to personal income growth albeit at a slower pass, rising wealth among those most likely to buy gold, and also inflation fears.  Moreover, higher gold prices, rather than discouraging demand, have attracted new investors to the market.

Meanwhile, global net central bank gold buying has not just continued but has accelerated as reserve managers look for opportunities to shed U.S. dollars - and euros too - in favor of something that has a longer track record as a reliable store of value.

Central bank reserve managers, ever sensitive to buying without disrupting the market, have used episodes of price weakness to step up their buying.  This behavior now reduces downside risk while it is also helping set the stage for a surprising sizable snap-back in the metal's price.

What few gold pundits realize is that the amount of physical gold available in the world gold market - the "free float" - is shrinking, thanks not only to Chinese and other Asian buyers, many of whom are unlikely to sell, but also due to renewed interest and accumulation of gold by a growing number of central banks.  For central banks, the holding period may be measured in decades if not longer.  As a consequence, future demand will have a much more high-powered affect on the price of gold - and this is one of the reasons we expect much higher prices in the years ahead.

Short-term trading in derivative markets may, at times, produce a great deal of gold-price volatility - and can trigger significant price corrections - but, in my book, it does not affect the long-term price trend.  What governs the price of gold over the long term are the market's real-world supply and demand fundamentals - and these have been decidedly bullish and are becoming even more so.  Hence, my long-standing long-term forecast of higher gold prices over the next several years.

Jeffrey Nichols, Managing Director of American Precious Metals Advisors, has been a leading gold and precious metals economist for over 25 years. He is also Senior economic Advisor to Rosland Capital.  See www.nicholsongold.com

LBMA Forecasters See Gold Reaching $2,055 This Year

The London Bullion Market Association published the results of its Forecast on Monday, the firm’s annual survey on the direction of precious metals prices for the coming year.  The large majority of respondents – comprised of analysts and strategists from investment banks and other financial firms across the globe – predicted that gold will rise for a 12th consecutive year on its way to further new all-time highs.

The average maximum gold price estimate among the 26 respondents came in at $2,055 per ounce, a 6.9% increase over the yellow metal’s $1,923 record high in 2011.  In addition, the highest individual estimate came from UBS’s Edel Tully – last year’s most accurate gold price forecaster – who predicted that gold will reach a high of $2,500 per ounce in 2012.

The average of the mean gold estimates was $1,766 per ounce, 12.3% above the $1,572 average price in 2011.

While the analysts were quite bullish on gold in the year ahead, they were considerably less constructive on other precious metals.  The average estimate for silver in 2012 came in at $33.98 per ounce, 3.2% below 2011′s average of $35.11 per ounce.  Platinum’s 2012 average estimate was $1,624, 5.6% below 2011′s average of $1,720 per ounce. Lastly, palladium’s 2012 average estimate of $735.52 per ounce was just 0.3% above 2011′s average of $733.63 per ounce.

The numerical results of the LBMA Forecast are available at the web address below:

http://www.lbma.org.uk/assets/LBMA%20Press%20Release%202012%20Forecast%2020120106.pdf

The LBMA also noted that “The full survey, including specially written commentaries together with analysis of the historical performance of the Forecast, will be published later this month and posted on the LBMA website in mid-January.”

Hildebrand says he 'acted correctly' on deals

Swiss central bank chief Philipp Hildebrand on Thursday defended himself against criticism of foreign currency transactions made by his family last year and suggested "political motives" were at work.
Speaking publicly for the first time about the scandal, Hildebrand told media in Zurich that he had complied with all the regulations of the central bank.
"I acted correctly on every count," he said, following days of media speculation over allegations of insider trading.
It emerged last month that his wife Kashya Hildebrand profited after buying $504,000 in August, just weeks before an intervention by the SNB to halt the rise of the franc -- a move that saw the dollar rise significantly against the Swiss currency.
The purchase, which investigators said appeared to have been carried out without her husband's knowledge, was deemed "sensitive" by auditors who nevertheless cleared the couple of any wrongdoing.
"I immediately allowed an investigation and allowed the investigators to look at all my records," Hildebrand said.
Bank Sarasin in Basel this week dismissed an employee who allegedly transmitted transaction details to a lawyer close to the far-right Swiss People's Party whose chief Christoph Blocher is a Hildebrand critic.
Zurich prosecutors have launched a criminal case against a 39-year-old former bank worker.

The history of gold trading

Throughout history, gold has been highly valued for coinage, jewellery and the arts. Gold is considered a unique store of value and the symbol of power, strength and wealth. Since April 2001 it has more than quintupled in value, writes Nicolas Shamtanis, Dealing Room Manager at easy-forex.com.
The poet Virgil describes man's underlying lust for gold when he wrote “Auri Sacra Fames” (the accursed thirst for gold). In the 19th century, gold mining expanded around the world with the 1848 California gold rush which helped the settlement of the American West. In 1869, South Africa became a major source of the world’s gold after the discovery of the Witwatersrand basin and the Canadian Yukon gold rush followed in 1896. 

Approximately 65% of all the gold in the world has been mined since 1950 and the finite supply of gold adds to its rarity and attraction.  But how did it all begin?

Various forms of livestock, in particular cattle, and grains were the earliest forms used to settle trades and payment for good goods and services. Cattle are hard to carry in your pocket and grains spoil so an alternative currency was needed. 

In 560 BC, the Greek state of Lydia in Asia Minor introduced the first gold coins. The use of gold coins as currency spread quickly throughout the Mediterranean and Middle East regions. The Romans mined gold extensively and Venice introduced the gold “Ducat” which became the most popular coin in the world for the next 500 years. In 19th century America, a movement to use silver coins and adopt a bimetallic monetary system emerged.  The US Congress did not authorise the printing of paper money until 1861.

For most of the early 20th century, Americans were forbidden to buy or trade gold. In 1946, the Bretton Woods agreement fixed the price of gold at $35 an ounce, creating a gold standard and the US dollar (USD) became backed by gold.  A gold standard is defined as a monetary system in which the standard economic unit of account is a fixed mass of gold. 

The Bretton Woods agreement of fixed exchange rates was implemented to combat deflationary pressures, economic dislocations and currency instability which emerged after World War I and II. Soon after the agreement was signed, the USD became the world’s reserve currency. 

In the following years, there were significant strains on the system of fixed exchange rates as the US balance of payments with the rest of the world grew dramatically. Foreign central banks exercised their gold convertibility rights causing a sharp decline in US gold reserves. 

In 1971, the Bretton Woods system was abandoned when there was no longer enough gold to cover all the paper money in circulation. The USD became a “fiat” currency backed by nothing more than the health of the US economy and the promise of the US government. A fiat currency’s value is based on the issuing authority's promise to pay; not an intrinsic value or extrinsic backing. In 1974, the ban on US ownership of gold bars was lifted and US citizens were allowed to trade gold.

The end of the gold standard ushered in the current system of floating exchange rates. In 1972, the Chicago Mercantile Exchange (CME) launched futures trading in seven currencies and in 1974 the first gold futures contract was traded on the COMEX exchange in New York. The 1980’s experienced a sharp expansion of over-the-counter trading in currencies and gold and the beginning of online trading.

Recently, we have seen gold prices surging to an all-time high as nations, institutions and investors seek safe haven and are using gold as a hedge against inflation and protection against losses in other assets like stocks and bonds and commodities. Investors buying gold are sometimes called “gold bugs.” Gold bugs are also described as a person opposed to the use of fiat currency and are supportive of a return to the gold standard. 

Unlike a fiat currency, money backed by gold cannot be created arbitrarily by government action. The supply of gold is finite and printing of paper limitless. The term gold bug is thought to have been derived from an Edgar Allen Poe poem the “Gold -bug.” In the poem, two adventurers decipher a secret message that leads to a buried treasure.

Since April 2001, the price of gold has more quintupled in value and hit all-time high of $1913.50 in August 2011. The price movement in gold has been quite volatile with prices rising and falling quickly. Investors have shown high levels of interest in trading gold. 

Like foreign currency (forex), trading with gold rates does not require the "physical" purchase or sale of the real material. If you buy forex gold for the price of 1850.97USD, you do not have an ounce of gold that you can hold in your pocket, but you rather have the obligation to buy gold (XAU) at $1850.97. When you close your forex deal, you sell the gold and close your obligation. If you sell it for the price of $1853.00, you have made a profit of $2.03 for every ounce (unit) of gold in your contract.

Rising gold prices can also affect other currencies. Higher gold prices can be especially important to the currencies of major gold-producing countries. Australia, Canada and South Africa are all large producers of gold, so if you believe the price of gold will continue to rise, you can establish trades in the Australian dollar (AUD), the Canadian dollar (CAD) or the South African Rand (ZAR) because those currencies may become stronger. 

It may be wise to keep an eye on gold prices when the international political or economic situation is changing, such as during times when global inflation is rising. If the gold price starts to increase, you might expect it to go higher in the next periods of trading. 

Article sponsored by www.easy-forex.com.

gold rebounds for second straight day on eurozone cues

The price of gold rebounded on Monday after it suffered losses last Friday. Gold traded higher Monday on the hope that the leadership of the European countries are striving to find solution to the protracted debt crisis the continent of Europe has been struggling with and as at today, Tuesday, the price of gold remains steady as it continues to gain momentum amidst it rising demand globally.
On Monday, gold got a boost as it gained about 2% upon the recognition that many European policymakers are putting more efforts into solving the debt crisis which had plagued the Eurozone nations for more than twenty four months now.
Though the price of gold inched up higher last week to reach $1,718.48 it fell on Friday to $1,679.15. As at today, the price of gold has inched up by 0.16% to attain $1,714.60 per ounce.
It could be surprising to see many investors snapping up gold after it had almost lost its safe-haven status by displaying the features similar to risky assets in the past couple of months. Jeremy Friesen, one of the Hong Kong commodities strategists said they were having their focus on gold to have a bullish run knowing that the solutions to the perennial economic challenges would require very intense monetary policy applications which will guarantee upward price gain for gold.
Friesen was optimistic that the price of gold will go up higher in 2012 when the effects of the application of monetary policies will favor increases in its price though ‘’much may not be seen now that the year is fast running out’’ according to him.

Read more: http://www.thegoldeconomy.com/2011/11/gold-trades-higher-on-eurozone-cues/#ixzz1iuX3Cavq

The Fukushima black box

The government was almost as clueless. Naoto Kan, then prime minister, had a crisis headquarters on the fifth floor of the Kantei, his office building. But emergency staff from various ministries were relegated to the basement, and there was often miscommunication, not least because mobile phones did not work underground. Crucial data estimating the dispersion of radioactive matter were not given to the prime minister’s office, so that evacuees like those from Namie were not given any advice on where to go. That is why they drove straight into the radioactive cloud. The report faults the government for providing information that was often bogus, ambiguous or slow. Perhaps the biggest failure was that nobody in a position of responsibility—neither TEPCO nor its regulators—had sought to look beyond the end of their noses in disaster planning. No one seems ever to have tried to “think the unthinkable”.
In America official reports such as those on the September 11th attacks or the Deepwater Horizon oil spill have become acclaimed books. This one is hardly a page-turner. A privately funded foundation, headed by Yoichi Funabashi, a former editor of the Asahi Shimbun newspaper, is doing a separate investigation, based partly on the testimony of TEPCO whistle-blowers. (One, according to Mr Funabashi, says the earthquake damaged the reactors before the tsunami, a claim that officials have always rejected.) It at least promises to have literary merit. Mr Funabashi, a prominent author, draws parallels between the roots of the disaster and Japan’s failures in the second world war. They include the use of heroic front-line troops with out-of-touch superiors; rotating decision-makers too often; narrow “stovepipe” thinking; and the failure to imagine that everything could go wrong at once.
Complex systems, jerry-rigged
For now, the risk is that the interim report does not get the attention it deserves. So far it seems to have aroused more interest on a techie website called Physics Forums, beloved of nuclear engineers, than in the Japanese press. The government, led by Yoshihiko Noda, has not yet used it as a rallying call for reform. One of its recommendations, an independent new regulatory body, will soon be set up. Others, such as new safety standards and broader evacuation plans, would take months to implement.
Such reports are, after all, confidence-building exercises. They are meant to reassure the public that, by exposing failures, they will help to prevent them from being repeated. In the case of Fukushima Dai-ichi there is still plenty to be nervous about. Although the government declared on December 16th that the plant had reached a state of “cold shutdown”, much of the cooling system is jerry-rigged and probably still not earthquake-proof. On January 1st a quake temporarily caused water levels to plunge in a pool containing highly radioactive spent-fuel rods.
Meanwhile, across Japan, 48 out of 54 nuclear reactors remain out of service, almost all because of safety fears. Until somebody in power seizes on the report as a call to action, its findings, especially those that reveal sheer ineptitude, suggest that the public has every reason to remain as scared as hell.