Eldorado Gold slashes capital spending by 35%, shelves projects as gold price falls

Eldorado Gold Corp says it will bump back the start dates for three of its European development projects — Skouries and Perama in Greece and Certej in Romania — by at least a year, into 2016 or 2017.<br />

TORONTOEldorado Gold Corp said on Tuesday that it will cut capital spending in 2013 by more than 35%, deferring a full expansion at its Kisladag project in Turkey, in light of the recent drop in the gold price.

The Vancouver-based company also said it will bump back the start dates for three of its European development projects — Skouries and Perama in Greece and Certej in Romania — by at least a year, into 2016 or 2017.

Eldorado now plans to spend US$430 million on capital projects in 2013, down from a previous estimate of US$670 million. The company also revised down its exploration spending to US$51 million from US$98.5 million.

  • Dow Jones 30,000 Trigger Leaked by 27-Year-Old Stock Research Firm CLICK HERE
  • The Inevitable: Dow Jones 30,000 CLICK HERE

Source: http://business.financialpost.com/2013/07/16/eldorado-gold-slashes-capital-spending-by-35-shelves-projects-as-gold-price-falls/

$300 Trillion In Derivatives Losses To Lead Gold’s Rebound

Today Egon von Greyerz warned King World News that the global derivatives market has already suffered a staggering $300 trillion of losses.  These massive derivatives losses, which are being hidden from the public, will help lead the rebound in gold as it begins the next leg of its bull market.  Below is what Greyerz, who is founder of Matterhorn Asset Management out of Switzerland, had to say in this powerful interview.

Greyerz:  “A few years ago when the problems in Greece started, it was found that the Goldman Sachs had helped them to hide the real truth of their economy by a major derivatives positions.

  • Dow Jones 30,000 Trigger Leaked by 27-Year-Old Stock Research Firm CLICK HERE
  • The Inevitable: Dow Jones 30,000 CLICK HERE

 

Now we’ve found out that Italy has done exactly the same thing.  They took out derivatives in order to meet euro criteria back in the late 1990s.  They had a total of $31 billion of derivatives and now they are finding that at least $8 billion of that is worthless.  That’s about 30% of the entire position….

 

“This just illustrates what I’ve been saying time and time again, that a major part of the over one quadrillion dollars of derivatives currently held in the financial world is worthless.  Here you have a typical position that a government is taking, $31 billion of derivatives, and 30% is worthless.

 

If you then overlay that loss into the total amount of global derivatives, the loss would be a staggering $300 trillion.  It would not surprise me if $300 trillion is in fact very close to the total losses on global derivatives.  If that is the case it means that no counterparty can cover those type of losses, so in reality the entire financial system is bankrupt.

 

This is why the world will witness money printing on an unprecedented scale going forward, despite misinformation and propaganda about “tapering of QE.”  So central planners are just hiding the truth and lying to the public.

 

If we continue to look at Italy, 160 corporations are in “special crisis administration.”  That’s 160 major companies in Italy alone are in serious financial trouble.  But Italy has a stunning debt to GDP ratio of 238%.  In reality it’s probably a lot higher than 238% because of the derivatives losses which have been used to conceal the truth about what is really taking place.

 

But what this means is we can’t trust any government figures.  This is why Draghi recently said, “There is still downside risk.”  Of course there is downside risk, and that risk is massive.  If we look at the European banking system, it’s terminal.  People can never repay their debts to those banks, and of course the banks have continued to borrow money from the ECB since 2008.  Of all of the bad debts these banks have, remember that nothing has been written off or even written down so far.

 

And of course the central banks have bought worthless debts directly from the banks in Europe.  The ECB over the last 11 years has grown its balance sheet over 200%.  The Fed’s balance sheet has grown 400%.  The Chinese central bank has grown its balance sheet 660%, and the Bank of England 800%.  England’s balance sheet has gone from $2 trillion to $9 trillion, and of course that debt can never be repaid.

 

Not only are the central banks highly leveraged, but so are the commercial banks.  France is also in a mess.  French bank Credit Agricole has a remarkable 46 times leverage!  So if there is 2% bad debt, the capital of that bank is wiped out.  Another French bank is using 40 times leverage.  Credit Suisse, if you use Basel III rules, also has 40 times leverage.  Deutsche Bank has 30 times leverage.

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/6/28_$300_Trillion_In_Derivatives_Losses_To_Lead_Golds_Rebound.html

World Central Banks Buying Gold

Today is a national holiday in the United Kingdom and the USA.
Friday’s AM fix was USD 1,385.25, EUR 1,068.95 and GBP 917.81 per ounce.

Gold climbed $5 on Friday and closed at $1,390.25/oz in London and silver closed at 22.482 in NY.

Gold rose 0.45% this morning in quiet European trading with UK and U.S. markets closed for holidays. Silver, platinum and palladium also advanced this morning.

  • Dow Jones 30,000 Trigger Leaked by 27-Year-Old Stock Research Firm CLICK HERE
  • The Inevitable: Dow Jones 30,000 CLICK HERE

Gold’s gains come on the back of the best week in a month last week when gold rose 2%.

Gold is being supported by continued diversification from central banks and signs of increased physical demand which is countering continued outflows in ETF holdings.

Gold Price (Nominal) and Central Bank Net Buying/ Selling (1971-2013)

Russia,Turkey, Kazakhstan and Azerbaijan expanded their gold reserves for a seventh straight month in April, buying bullion to diversify foreign exchange reserves due to concerns about the dollar and the euro.

Russia’s steady increase in its gold reserves saw its holdings, the seventh-largest by country, climb another 8.4 metric tons to 990 tons, taking gains this year to 3.4% after expanding by 8.5% in 2012, International Monetary Fund data show.

Kazakhstan’s reserves grew 2.6 tons to 125.5 tons, taking the increase to 8.9% this year after a 41% expansion in 2012, data on the website showed.

Turkey’s holdings rose 18.2 tons to 427.1 tons in April, increasing for a 10th month as it accepted gold in its reserve requirements from commercial banks.

Belarus’s holdings expanded for a seventh month as did Azerbaijan’s.

Interestingly, Greece’s gold holdings climbed for a fourth month, according to the IMF data.

This could be a sign of rising economic nationalism in Greece or that the Greek central bank realises that if Greece leaves the euro and is forced back onto the drachma that gold reserves will offer a modicum of protection. Only a modicum, because Greece’s gold reserves remain miniscule especially considering the scale of their debts.

IMF Greece Gold Reserves, in Mill Fin Troy Oz, (Quarterly 01Jan1956-27May2013)

Central banks are buying gold as an overall strategy of forex portfolio diversification and the recent price drop will not deter them from a long term policy of diversification into gold.

Central bank reserve managers are conservative rather than speculative and will ignore the day to day noise and price predictions emanating from certain banks in favour of passive allocations to gold as part of their foreign exchange diversification strategy.

IMF World Gold Reserves, in Mill Fin Troy Oz, (Monthly 31Mar2007-31Mar2013)

While not driven by price, some central banks may have made the most of the lower prices by increasing their holdings by more than they would have if prices had risen in value.

The long term trend for central banks to increase gold reserves remains intact and will support gold.

Central banks bought 534.6 tons of gold last year, the most since 1964, and may add as much as 550 tons in 2013, the World Gold Council estimates. While central-bank purchases fell 5.2 percent in the three months through March, they totaled more than 100 tons for the seventh straight quarter, according to council data.

IMF China Gold Reserves, in Mill Fin Troy Oz (Quarterly 01Jan1977-27May2013)

China’s foreign currency reserves have surged more than 700% since 2004 and are now enough to buy every central bank’s official gold supply – twice.

China’s foreign reserves surpassed the value of all official bullion holdings in January 2004 and rose to $3.3 trillion at the end of 2012 and are at $3.4 trillion today.

The price of gold has failed to keep pace with the surge in the value of Chinese and global foreign exchange holdings. Gold has increased just 54% in the last 5 years and 250% since 2004, with the registered volume little changed, according to data based on International Monetary Fund and World Gold Council figures.

China’s Foreign Exchange Reserves vs Gold Monthly (2004-2013)

By comparison, China’s reserves rose 721% from 2004 through 2012, while the combined total among Brazil, Russia and India rose about 400% to $1.1 trillion.

Continuing diversification into gold from the huge foreign exchange reserves by the People’s Bank of China and other central banks is a primary pillar which will support gold and should contribute to higher prices in the coming years.

We are confident that the PBOC is quietly accumulating gold and we expect another announcement from the PBOC, possibly this year, when they again disclose to the market that they drastically increased their gold reserves – possibly from 1,054 tonnes to between 2,000 and 3,000 tonnes.

Source: http://www.marketoracle.co.uk/Article40627.html