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High commodity prices risk to India's growth, inflation: PC	04:36 The New Indian Express - Business
High commodity prices pose major risk to India’s growth, inflation: Chidambaram	04:35 The Hindu Business Line - Industry & Economy
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SNB's Jordan: Franc's value driven by global uncertainty	04:30 Reuters - Economy
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SNB Jordan: CenBanks Only Growth Driver For Global Economy	04:27 ForexLive.com
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Gold And Gold Stocks Readying For Upturn Against Equities	04:20 SeekingAlpha - Macro View
Dollar Store Seeks to Rub Elbows on Rodeo Drive	04:10 ABCNews.com - Business
30 minutes to 1 hour old www.usagold.com --LIVE NEWS--
Gold ends flat; silver falls on weak global cues	04:06 The Times of India
Economic indaba blasts violent strikes	04:05 IOL - Business
1 to 2 hours old www.usagold.com --LIVE NEWS--
BOJ's Shirakawa: yen strength hurting Japan sentiment, exporters	03:29 Reuters - Economy
Economic Workshop: 'Put us out of our misery over property tax proposals'	03:19 The Irish Independent - Business
Reno firm to help state economic development marketing efforts	02:41 Reno Gazette-Journal, Nevada - Local Business
Loonie strong due to economy: Jim Flaherty	02:40 Toronto Sun - Money
2 to 4 hours old www.usagold.com --LIVE NEWS--
Inflation key as RBI review looms	02:26 The Times of India
Worst may be over for India economy: poll	02:20 The Business Standard
Economic indaba condemns violent strikes	02:14 IOL - Business
Wholesale prices climb 1.1% in September; inflation stable	01:41 Arkansas Democrat-Gazette - Business
ECB’s Draghi Stresses Signs Of Prudent Optimism In Eurozone	01:36 ForexLive.com
EU banking reforms to take 'yr or so': ECB's chief	01:25 The Economic Times
Airlines expect to post solid profits, but soft economy could bring turbulence	01:21 The Philadelphia Inquirer, Pennsylvania - Business
EU banking reforms to take 'year or so': ECB chief	01:15 EUbusiness.com
Ireland, Portugal, don't qualify for ECB's bond buying yet - ECB's Asmussen	01:11 Yahoo! UK & Ireland
Ireland, Portugal, don't qualify for ECB's bond buying yet-ECB's Asmussen	01:09 Reuters - Economy
Pound Declines for Third Week Versus Dollar; 10-Year Gilts Rise	01:06 Bloomberg - UK
Ireland, Portugal, don't qualify for ECB's bond buying yet: ECB's Asmussen	01:05 Chicago Tribune - Business
US Treasury: World economy needs action from China and EU	01:05 Mail & Guardian Online - Economy
National economic challenges loom	01:05 Columbia Daily Tribune, Missouri - Business
EU banking reforms to take 'year or so': ECB's Mario Draghi	01:05 The Economic Times
Canada dollar strong due to economy: Flaherty	00:51 Yahoo! US - Canada
IMF, World Bank chiefs urge focus on fair economic growth	00:45 Arab Times - Business
Earlier Today www.usagold.com --LIVE NEWS--
The most astonishing economic change going on around us	00:28 Adam Smith Institute (Weblog)
World economy needs action from China, EU: Timothy Geithner	00:14 The Economic Times
4 to 6 hours old www.usagold.com --LIVE NEWS--
US gold falls, data feeds worry as Fed could curb stimulus	23:20 The Business Standard
Worst may be over for India economy: polll	23:10 The Business Standard
Holiday shopping off to early start amid economic uncertainty	23:10 St. Louis Post-Dispatch, Missouri - Brian Burwell
World economy needs action from China, EU: Geithner	23:05 Business Times Online - World
Singapore’s economy shrinks, avoids recession	23:05 The News International - Business
ICCI for developing economic integration in D-8 countries	23:05 The News International - Business
Euro higher despite Spain downgrade	23:04 Zawya
Worst may be over for India economy: Reuters Poll	23:01 Yahoo! India
MARKET EYE WEEKAHEAD - Inflation, earnings key for Indian stocks	23:00 The Business Standard - Markets & Investing
Market Weekahead: Inflation key as RBI review looms	23:00 The Business Standard - Markets & Investing
RBI to introduce inflation-indexed bonds soon	22:59 Business Today - Banking
Swedish minister advises Greece: quit euro	22:51 EUbusiness.com
Santander calls off 2 bn euro deal to buy RBS branches	22:51 EUbusiness.com
6 to 8 hours old www.usagold.com --LIVE NEWS--
Sluggish economy will ease crude prices: IEA	22:33 Times of Oman
Silver Lining in Spain's Ratings Cut	22:30 The Wall Street Journal - Market News
ECB's Kranjec says Slovenia can still avoid bailout - paper	22:20 Yahoo! UK & Ireland
Euro Falls Versus Peers as Growth Concern Overshadows Central-Bank Efforts	22:18 Bloomberg - Regions
Yogyakarta’s Economic Development a Model, Bank Indonesia Says	22:16 Jakarta Globe
ECB's Kranjec says Slovenia can still avoid bailout	22:16 Reuters.co.uk - Business & Finance

Supply Issues Offer Additional Underpinnings to Gold

by Peter A. Grant

Oct 12, AM
(from USAGOLD.com) --

Gold is back on the defensive, unwinding much of yesterday's gains ahead of the weekend. However, downside potential is thought to be limited by continued robust demand for the precious metal as a hedge against the global debasement of fiat currencies, as well as ongoing central bank demand for the purposes of reserve diversification.

Everyone is probably pretty well aware of these macro drivers on the demand side, but it's also worth noting some significant supply side considerations. Fist of all, and this is a topic we've discussed on numerous occasions, none of the mining supply from China is making it to the open market. Essentially, every ounce of gold mined in the world's largest producer is going right to their insatiable reserve building effort.

Secondly, the fourth largest producer in the world is also in full-on accumulation mode. According to the World Gold Council Russia has more than doubled its gold reserves in the last five years and now holds the fifth largest stockpile. It is likely that much of their mining output is going right to reserves as well.

More recently, labor unrest in South Africa has negatively impacted production in the fifth largest producing nation. In a Reuters article yesterday, it was reported that strikes were costing AngloGold 32,000 ounces of gold each week, while Gold Fields is losing 2,300 ounces a day at the two mines affected.

So while supply issues often get short-shrift in the financial press, it's important to realize that they too provide significant underpinnings to this market. Simple supply and demand economics, strong demand relative to available supply, suggest that the long-term secular bull market remains dominant and that short-term corrective activity should continue to be limited and short-lived.

Peter Grant is USAGOLD's resident economist and a well-known analyst globally in the forex and precious metals markets.

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Opinions expressed in commentary on the USAGOLD.com website do not constitute an offer to buy or sell, or the solicitation of an offer to buy or sell any precious metals product, nor should they be viewed in any way as investment advice or advice to buy, sell or hold. USAGOLD, Inc. recommends the purchase of physical precious metals for asset preservation purposes, not speculation. Utilization of these opinions for speculative purposes is neither suggested nor advised. Commentary is strictly for educational purposes, and as such USAGOLD does not warrant or guarantee the accuracy, timeliness or completeness of the information found here.

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Supply Issues Offer Additional Underpinnings to Gold