Gold's biggest one-day drop

Spot gold 

posting biggest one-day drop 

in more than three years

Spot gold gained more than half a percent on Thursday, pulling back from a fall of 5 percent 

in the previous session after U.S. Federal Reserve Chairman Bernanke failed to signal further 

bond buying, dashing hopes of more monetary easing. 

Spot gold rose 0.6 percent to $1,705.19 an ounce by 0020 GMT, after posting its biggest 

one-day drop in more than three years. 

read 

Digital gold currency

Digital gold currency (or DGC) is a form of electronic money based on ounces of gold. It is a kind of representative money, like a US paper gold certificate at the time (from 1873 to 1933) that these were exchangeable for gold on demand. The typical unit of account for such currency is the gold gram or the troy ounce, although other units such as the gold dinar are sometimes used. DGCs are backed by gold through unallocated or allocated gold storage.

Digital gold currencies are issued by a number of companies, each of which provides a system that enables users to pay each other in units that hold the same value as gold bullion. These competing providers issue independent currency.

 

 

Gold ETF

Gold exchange-traded product

Gold exchange-traded products are exchange-traded funds (ETFs), closed-end funds (CEFs) and exchange-traded notes (ETNs) that aim to track the price of gold. Gold exchange-traded products are traded on the major stock exchanges including Zurich, Mumbai, London, Paris and New York. 

As of 25 June 2010, physically backed funds held 2,062.6 tonnes of gold in total for private and institutional investors. Each gold ETF, ETN, and CEF has a different structure outlined in its prospectus. Some such instruments do not necessarily hold physical gold. For example, gold ETNs generally track the price of gold using derivatives.

Gold Outlook

Gold Outlook (Prediction) 
Insight for Future 

Date: November 24, 2011

Future Target is Expected To approximately $ 1310 per troy oz.



Commentary:
Short-Term: Nov. 28, 2011

In the short-term trade above $1,702 would be a sign of strengthening, while a move above $1,710 signals a bounce that could take Gold up to at least the $1,735.4 (double top neckline) price area.

Last week it was pointed out that Gold had broken down from a bearish ascending wedge, and that it had also broken the neckline of a double top reversal pattern.

Trade below $1,666.5 confirms a continuation of the two week downtrend. Bearish support is given by the short-term 21 day exponential moving average (ema) and medium-term 55ema, which have each turned down. The 21ema crossing down through the 55ema would further confirm weakness.

The next potential support area of significance is from approximately $1,635.52 to $1,634.4, the 61.8% Fibonacci retracement level and the 200ema, respectively. This support zone also includes a lower trend line. The target for the ascending wedge remains $1,603.3.

Wikileaks Discloses Reasons Behind China's Gold Buying

Wikileaks Discloses The Reason(s) Behind China's Shadow Gold Buying Spree

Wondering why gold at $1850 is cheap, or why gold at double that price will also be cheap, or frankly at any price? 


Because, as the following leaked cable explains, gold is, to China at least, nothing but the opportunity cost of destroying the dollar's reserve status. 

Putting that into dollar terms is, therefore, impractical at best, and illogical at worst. We have a suspicion that the following cable from the US embassy in China is about to go not viral but very much global, and prompt all those mutual fund managers who are on the golden sidelines to dip a toe in the 24 karat pool. The only thing that matters from China's perspective is that "suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar's role as the international reserve currency.


China's increased gold reserves will thus act as a model and lead other countries towards reserving more gold. Large gold reserves are also beneficial in promoting the internationalization of the RMB.

" Now, what would happen if mutual and pension funds finally comprehend they are massively underinvested in the one asset which China is without a trace of doubt massively accumulating behind the scenes is nothing short of a worldwide scramble, not so much for paper, but every last ounce of physical gold...
From Wikileaks:

3. CHINA'S GOLD RESERVES

"China increases its gold reserves in order to kill two birds with one stone"

"The China Radio International sponsored newspaper World News Journal (Shijie Xinwenbao)(04/28): "According to China's National Foreign Exchanges Administration China 's gold reserves have recently increased. Currently, the majority of its gold reserves have been located in the U.S. and European countries.

The U.S. and Europe have always suppressed the rising price of gold. They intend to weaken gold's function as an international reserve currency. They don't want to see other countries turning to gold reserves instead of the U.S. dollar or Euro.

Therefore, suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar's role as the international reserve currency. China's increased gold reserves will thus act as a model and lead other countries towards reserving more gold. Large gold reserves are also beneficial in promoting the internationalization of the RMB."

Perhaps now is a good time to remind readers what will happen if and when America's always behind the curve mutual and pension fund managers finally comprehend that they are massively under invested in the one best performing asset class.

From The Driver for Gold You’re Not Watching (via Casey Research)

You already know the basic reasons for owning gold – currency protection, inflation hedge, store of value, calamity insurance – many of which are becoming clichés even in mainstream articles. Throw in the supply and demand imbalance, and you’ve got the basic arguments for why one should hold gold for the foreseeable future.

All of these factors remain very bullish, in spite of gold’s 450% rise over the past 10 years. No, it’s not too late to buy, especially if you don’t own a meaningful amount; and yes, I’m convinced the price is headed much higher, regardless of the corrections we’ll inevitably see. Each of the aforementioned catalysts will force gold’s price higher and higher in the years ahead, especially the currency issues.

But there’s another driver of the price that escapes many gold watchers and certainly the mainstream media.

And I’m convinced that once this sleeping giant wakes, it could ignite the gold market like nothing we’ve ever seen.

The fund management industry handles the bulk of the world’s wealth. These institutions include insurance companies, hedge funds, mutual funds, sovereign wealth funds, etc. But the elephant in the room is pension funds. These are institutions that provide retirement income, both public and private.

Global pension assets are estimated to be – drum roll, please – $31.1 trillion. No, that is not a misprint. It is more than twice the size of last year’s GDP in the U.S. ($14.7 trillion).

We know a few hedge fund managers have invested in gold, like John Paulson, David Einhorn, Jean-Marie Eveillard. There are close to twenty mutual funds devoted to gold and precious metals. Lots of gold and silver bugs have been buying.

So, what about pension funds?

According to estimates by Shayne McGuire in his new book, Hard Money; Taking Gold to a Higher Investment Level, the typical pension fund holds about 0.15% of its assets in gold. He estimates another 0.15% is devoted to gold mining stocks, giving us a total of 0.30% – that is, less than one third of one percent of assets committed to the gold sector.

Shayne is head of global research at the Teacher Retirement System of Texas. He bases his estimate on the fact that commodities represent about 3% of the total assets in the average pension fund. And of that 3%, about 5% is devoted to gold. It is, by any account, a negligible portion of a fund’s asset allocation.
Now here’s the fun part. Let’s say fund managers as a group realize that bonds, equities, and real estate have become poor or risky investments and so decide to increase their allocation to the gold market. If they doubled their exposure to gold and gold stocks – which would still represent only 0.6% of their total assets – it would amount to $93.3 billion in new purchases.

How much is that? The assets of GLD total $55.2 billion, so this amount of money is 1.7 times bigger than the largest gold ETF. SLV, the largest silver ETF, has net assets of $9.3 billion, a mere one-tenth of that extra allocation.

The market cap of the entire sector of gold stocks (producers only) is about $234 billion. The gold industry would see a 40% increase in new money to the sector. Its market cap would double if pension institutions allocated just 1.2% of their assets to it.

But what if currency issues spiral out of control? What if bonds wither and die? What if real estate takes ten years to recover? What if inflation becomes a rabid dog like it has every other time in history when governments have diluted their currency to this degree? If these funds allocate just 5% of their assets to gold – which would amount to $1.5 trillion – it would overwhelm the system and rocket prices skyward.
And let’s not forget that this is only one class of institution. Insurance companies have about $18.7 trillion in assets. Hedge funds manage approximately $1.7 trillion. Sovereign wealth funds control $3.8 trillion. Then there are mutual funds, ETFs, private equity funds, and private wealth funds. Throw in millions of retail investors like you and me and Joe Sixpack and Jiao Sixpack, and we’re looking in the rear view mirror at $100 trillion.

I don’t know if pension funds will devote that much money to this sector or not. What I do know is that sovereign debt risks are far from over, the U.S. dollar and other currencies will lose considerably more value against gold, interest rates will most certainly rise in the years ahead, and inflation is just getting started. These forces are in place and building, and if there’s a paradigm shift in how these managers view gold, look out!
I thought of titling this piece, “Why $5,000 Gold May Be Too Low.” Because once fund managers enter the gold market in mass, this tiny sector will light on fire with blazing speed.

My advice is to not just hope you can jump in once these drivers hit the gas, but to claim your seat during the relative calm of this month's level prices.

 

How To Make Gold

South Africa 30: How To Make Gold

 http://www.youtube.com/watch?v=UsGg4kYbpJU&feature=related

Gold - How its made

 http://www.youtube.com/watch?v=MyOKNR1JCs0&feature=related

 

 

Chinese Gold Buying - why?

Chinese govt advise gold buying - why? What is their plan? 

 

Spot gold to surge into $1,762-$1,773 range

SINGAPORE: Spot gold is expected to pierce into a resistance range of $1,762-$1,773 per ounce, before starting a deep correction.

The metal is still riding on an upward wave "C", progressing towards $1,762, the 100 percent Fibonacci projection level, based on the length of the wave "A".

In the meantime, a Fibonacci retracement on the fall from $1,920.30 to $1,534.49 also reveals a likely target at $1,773, the 61.8 percent level.

Given the corrective wave nature of the rise from Sept. 26 low of $1,534.49, it is highly likely for the current wave "C" to peak in the target range.

No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.


Copyright Reuters, 2011

Gold Jewellery Consumption by Country (in Tonnes)

The consumption of gold produced in the world is about 50% in jewelry, 40% in investments, and 10% in industry.

India is the world's largest single consumer of gold, as Indians buy about 25% of the world's gold, purchasing approximately 800 tonnes of gold every year, mostly for jewelry. India is also the largest importer of gold; in 2008, India imported around 400 tonnes of gold.

India	745.70	442.37	+69
Greater China	428.00	376.96	+14
United States	128.61	150.28	-14
Turkey	74.07	75.16	-1
Saudi Arabia	72.95	77.75	-6
Russia	67.50	60.12	+12
United Arab Emirates	63.37	67.60	-6
Egypt	53.43	56.68	-6
Indonesia	32.75	41.00	-20
United Kingdom	27.35	31.75	-14
Other Gulf Countries	21.97	24.10	-10
Japan	18.50	21.85	-15
South Korea	15.87	18.83	-16
Vietnam	14.36	15.08	-5
Thailand	6.28	7.33	-14
Total	1805.60	1508.70	+20
Other Countries	254.0	251.6	+1
World Total	2059.6	1760.3	+17

The Many Uses of Gold

Of all the minerals mined from the Earth, none is more useful than gold. Its usefulness is derived from a diversity of special properties. Gold conducts electricity, does not tarnish, is very easy to work, can be drawn into wire, can be hammered into thin sheets, alloys with many other metals, can be melted and cast into highly detailed shapes, has a wonderful color and a brilliant luster. Gold is a memorable metal that occupies a special place in the human mind.

When Spanish explorers first arrived in the "New World" they met the native South Americans. These two cultures had been separated by a vast ocean, they had never touched one another, they spoke different languages and lived entirely different lives. Yet they had one thing in common - they both held gold in highest esteem and used it to make some of their most important objects.

Throughout the history of our planet almost every established culture has used gold to symbolize power, beauty, purity and accomplishment. Today we continue to use gold for our most significant objects: wedding rings, Olympic medals, Oscars, Grammys, money, crucifixes and ecclesiastical art. No other substance of the same rarity holds a more visible and prominent place in our society.

Jewelry: The Primary Use of Gold

The production of ornamental objects was probably the first use of gold over 6000 years ago. Gold is found in the pure state, is very easy to work and was probably the first metal used by humans. Today, most of the gold that is newly mined or recycled is used in the manufacture of jewelry. About 78% of the gold consumed each year is used in the manufacture of jewelry.

Special properties of gold make it perfect for manufacturing jewelry. These include: very high luster; desirable yellow color; tarnish resistance; ability to be drawn into wires, hammered into sheets or cast into shapes. These are all properties of an attractive metal that is easily worked into beautiful objects. Another extremely important factor that demands the use of gold as a jewelry metal is tradition. Important objects are expected to be made from gold.

Pure gold is too soft to stand up to the stresses applied to many jewelry items. Craftsmen learned that alloying gold with other metals such as copper, silver, and platinum would increase its durability. Since then most gold used to make jewelry is an alloy of gold with one or more other metals.

The alloys of gold have a lower value per unit of weight than pure gold. A standard of trade known as "karatage" was developed to designate the gold content of these alloys. Pure gold is known as 24 karat gold and is almost always marked with "24K". An alloy that is 50% gold by weight is known as 12 karat gold (12/24ths) and is marked with "12K". An alloy that contains 75% gold by weight is 18 karat (18/24 = 75%) and marked "18K". In general, high karat jewelry is softer and more resistant to tarnish while low karat jewelry is stronger and less resistant to tarnish - especially when in contact with perspiration.

Alloying gold with other metals changes the color of the finished products (see illustration at right). An alloy of 75% gold, 16% silver and 9% copper yields yellow gold. White gold is an alloy of 75% gold, 4% silver, 4% copper and 17% palladium. Other alloys yield pink, green, peach and even black colored metals

Financial Gold - Coinage, Bullion, Currency Backing

Because gold is highly valued and in very limited supply it has long been used as a medium of exchange or money. The first known use of gold in transactions dates back about 6000 years. Early transactions were done using pieces of gold or pieces of silver. The rarity, usefulness and desirability of gold make it a substance of long term value. Gold works well for this purpose because it has a high value, is durable, portable and easily divisible.

Some early printings of paper money were backed by gold held in safe keeping for every unit of money that was placed in circulation. The United States once used a "gold standard" and maintained a stockpile of gold to back every dollar in circulation. Under this gold standard, any person could present paper currency to the government and demand in exchange an equal value of gold. The gold standard was once used by many nations but it eventually became too cumbersome and is no longer used by any nation.

The gold used as a financial backing for currency was most often held in the form of gold bars, also known as "gold bullion". The use of gold bars kept manufacturing costs to a minimum and allowed convenient handling and storage. Today many governments, individuals and institutions hold investments of gold in the convenient form of bullion.

The first gold coins were minted under the order of King Croesus of Lydia (a region of present-day Turkey) in about 560 BC. Gold coins were commonly used in transactions up through the early 1900's when paper currency became a more common form of exchange. Gold coins were issued in two types of units. Some were denominated in units of currency, such as dollars, while others were issued in standard weights, such as ounces or grams.

Today gold coins are no longer in wide use for financial transactions. However, gold coins issued in specific weights are popular ways for people to purchase and own small volumes of gold for investment. Gold coins are also issued as "commemorative" items. Many people enjoy these commemorative coins because they have both a collectable value and a precious metal value.


Uses of Gold in Electronics




The most important industrial use of gold is in the manufacture of electronics. Solid state electronic devices use very low voltages and currents which are easily interrupted by corrosion or tarnish at the contact points. Gold is the highly efficient conductor that can carry these tiny currents and remain free of corrosion. Electronic components made with gold are highly reliable. Gold is used in connectors, switch and relay contacts, soldered joints, connecting wires and connection strips.
A small amount of gold is used in almost every sophisticated electronic device. This includes: cell phones, calculators, personal digital assistants, global positioning system units and other small electronic devices. Most large electronic appliances such as television sets also contain gold.

One challenge with the use of gold in very small quantities in very small devices is loss of the metal from society. Nearly one billion cell phones are produced each year and most of them contain about fifty cents worth of gold. Their average lifetime is under two years and very few are currently recycled. Although the amount of gold is small in each device, their enormous numbers translate into a lot of unrecycled gold.

Use of Gold in Computers

Gold is used in many places in the standard desktop or laptop computer. The rapid and accurate transmission of digital information through the computer and from one component to another requires an efficient and reliable conductor. Gold meets these requirements better than any other metal. The importance of high quality and reliable performance justifies the high cost.

Edge connectors used to mount microprocessor and memory chips onto the motherboard and the plug-and-socket connectors used to attach cables all contain gold. The gold in these components is generally electroplated onto other metals and alloyed with small amounts of nickel or cobalt to increase durability.

Use of Gold in Dentistry

How would iron work as a dental filling? Not very well... your dentist would need blacksmithing tools, your smile would be rusty a few days after a filling and you would need to get used to the taste of iron. Even at much higher expense, gold is used in dentistry because of its superior performance and aesthetic appeal. Gold alloys are used for fillings, crowns, bridges and orthodontic appliances. Gold is used in dentistry because it is chemically inert, nonallergenic and easy for the dentist to work.

Gold is known to have been used in dentistry as early as 700 B.C. Etruscan "dentists" used gold wire to fasten replacement teeth into the mouths of their patients. Gold was probably used to fill cavities in ancient times;, however there is no documentation or archaeological evidence for this use of gold until a little over 1000 years ago.

Gold was much more generously used in dentistry up until the late 1970's. The sharp run-up of gold prices at that time motivated the development of substitute materials. However, the amount of gold used in dentistry is starting to rise again. Some motivation for this comes from concerns that less inert metals might have an adverse effect on long-term health.

Medical Uses of Gold

Gold is used as a drug to treat a small number of medical conditions. Injections of weak solutions of sodium aurothiomalate or aurothioglucose are sometimes used to treat rheumatoid arthritis. Particles of a radioactive gold isotope are implanted in tissues to serve as a radiation source in the treatment of certain cancers.

Small amounts of gold are used to remedy a condition known as Lagophthalmos, which is an inability of a person to close their eyes completely. This condition is treated by implanting small amounts of gold in the upper eyelid. The implanted gold "weights" the eyelid and the force of gravity helps the eyelid close fully.

Radioactive gold is used in diagnosis. It is injected in a colloidal solution that can be tracked as a beta emitter as it passes through the body. Many surgical instruments, electronic equipment and life-support devices are made using small amounts of gold. Gold is nonreactive in the instruments and is highly reliable in the electronic equipment and life-support devices.







If you are going to spend billions of dollars on a vehicle that when launched will travel on a voyage where the possibility of lubrication, maintenance and repair is absolutely zero, then building it with extremely dependable materials is essential. This is exactly why gold is used in hundreds of ways in every space vehicle that NASA launches.

Gold is used in circuitry because it is a dependable conductor and connector. In addition, many parts of every space vehicle are fitted with gold-coated polyester film. This film reflects infrared radiation and helps stabilize the temperature of the spacecraft. Without this coating, dark colored parts of the spacecraft would absorb significant amounts of heat

Gold is also used as a lubricant between mechanical parts. In the vacuum of space, organic lubricants would volatilize and they would be broken down by the intense radiation beyond Earth's atmosphere. Gold has a very low shear strength and thin films of gold between critical moving parts serves as a lubricant - the gold molecules slip past one another under the forces of friction and that provides a lubricant action.

Uses of Gold in Awards and Symbols of Status

What metal is used to make the crown worn by a king? Gold! This metal is selected for use because gold it is THE metal of highest esteem. It would make no sense to make a king's crown out of steel - even though steel is the strongest metal. Gold is chosen for use in a king's crown because it is the metal associated with highest esteem and status.

Gold is associated with many positive qualities. Purity is another quality associated with gold. For this reason, gold is the metal of choice for religious objects. Crosses, communion ware and other religious symbols are almost always made with gold for this reason.

Gold is also used as the first place winner's medal or trophy in almost any type of contest. First place winners at the Olympic Games are given gold medals. The Academy Awards Oscars are gold awards. Music's Grammy Awards are made of gold. All of these important achievements are honored with awards made of gold.

Uses of Gold in Glassmaking

Gold has many uses in the production of glass. The most basic use in glassmaking is that of a pigment. A small amount of gold suspended in the glass when it is annealed produces a rich ruby color.

Gold is also used when making specialty glass for climate controlled buildings and cases. A small amount of gold dispersed within the glass or coated onto the glass surface will reflect solar radiation outward, helping the buildings stay cool in the summer, and reflect internal heat inward, helping them stay warm in winter.

The visor on the helmet of an astronaut's space suit is coated with a very thin film of gold. This thin film reflects much of the very intense solar radiation of space, protecting the astronaut's eyes and skin.

Gold Gilding and Gold Leaf

Gold has the highest malleability of any metal. This enables gold to be beaten into sheets that are only a few millionths of an inch thick. These thin sheets, known as "gold leaf" can be applied over the irregular surfaces of picture frames, molding or furniture.

Gold leaf is also used on the external and internal surfaces of buildings. This provides a durable and corrosion-resistant covering. One of the most eye-catching uses of gold leaf is on the domes of religious buildings and other important structures. The cost of this "roofing material" is very high per square foot; however, the cost of the gold is only a few percent of the total project cost. Most of the cost goes to the labor of highly skilled artisans who apply the gold leaf.

Future Uses of Gold

Gold is too expensive to use by chance. Instead it is used deliberately and only when less expensive substitutes can not be identified. As a result, once a use is found for gold it is rarely abandoned for another metal. This means that the number of uses for gold have been increasing over time.

Most of the ways that gold is used today have been developed only during the last two or three decades. This trend will likely continue. As our society requires more sophisticated and reliable materials our uses for gold will increase. This combination of growing demand, few substitutes and limited supply will cause the value and importance of gold to increase steadily over time. It is truly a metal of the future.

Prague: Old and New in Harmony » Buildings look like they are made of gold

This is the Capitol building in Atlanta, complete with the gold dome.

Gold, Stocks and the Dollar: The Rise and Fall of a Correlation

Since President Obama was sworn into office, a strong relationship between the dollar, stocks and gold has developed. When the dollar dropped, stocks and gold rose. The mathematics of that relationship were nearly perfect.

The simple explanation for this inverse correlation -- I'm not sure whether it was valid -- was that investors bought gold as a hedge against a declining dollar and stocks because a weaker dollar would boost American exports and corporate profits. But now, that correlation is approaching zero, and as gold ATMs are starting to dot the American landscape, the implications for gold bugs are ominous.

"Close to Zero"
Between January 2009 and the end of 2010, stocks and gold rose when the dollar dropped. According to The Wall Street Journal, the correlation coefficient between stocks and the dollar was nearly -1 during that time. However, since the beginning of 2011, that connection has evaporated. "For much of the past month, that correlation has been close to zero, meaning the relationship between stocks and the dollar has been, practically speaking, almost nonexistent," explains the newspaper's Mark Gongloff.

Not only has the negative correlation between stocks and the dollar vanished, but so too has the positive correlation between gold and stocks, held for most of 2010's second half. Since New Year's Day, the relationship between gold and stocks has turned negative: Now, when stocks rise, gold falls, and vice versa, and gold's price is down 5% to $1,347 an ounce from its year-end 2010 price of $1,421 an ounce.

Is Gold an Illusory Hedge for the Dollar?

When an apparent correlation relationship dissipates, it's good to remember that there's a more subtle problem with the whole idea of analyzing correlation: the distinction between correlation and causation. Does a rising price for A cause the price of B to rise (or fall), or it just a coincidence? That's important in this case because gold bugs claim that gold is a hedge against so-called fiat currency -- meaning that people buy the precious metal because they think the dollar is essentially worthless (a view shared by U.S. Rep. Ron Paul (R-Texas).

gold ATM machines are popping up in places like Boca Raton, Fla., and Las Vegas. This feels reminiscent of how TV shows about rehabbing and flipping real estate became really popular just before the housing bubble burst. And it could mean that anyone buying gold from these machines is getting in at the top of a market about to tumble.

The Wall Street Journal article concludes that the changing relationship between the dollar, stocks and gold means investors are beginning to focus more on fundamentals. I think that conclusion is wrong. The reality is that unless big buyers and sellers have to tell regulators -- under penalty of perjury -- the real reasons for their trading decisions in real time, all other "explanations" are really just idle speculation.

That Popping Sound

It could be that gold and stocks are parting ways because investors are sensing a turn in the public mood against gold, ironically, just as Rep. Paul -- the new GOP chairman of the House committee that oversees the Federal Reserve -- is moving to push the Fed toward a gold standard.

Once investors stampede for the exits, the sound of that gold bubble popping will be loud and clear. But now that the correlation between the values of gold and the dollar has gone from near -1 to near 0, that argument goes out the window. After all, if gold's price movements have nothing to do with the rise or fall of the dollar, gold becomes a terrible hedge against a weakening dollar.

Regrettably for investors in gold, this revelation is arriving on the scene at a time when

An Historic Look At the Gold/Dollar Ratio

With Gold making 52-week highs on a daily basis and the US Dollar making 52-week lows, below we highlight a chart of the two going back to 1975. As the chart shows, the two move in the opposite direction of each other most of the time. Gold made its all time high of just under $850 back in January 1980 only to quickly reverse and move sharply lower.
While Gold currently remains about $100 below its all-time highs, the ratio of Gold versus the US Dollar index is much closer to all time highs (2nd chart below). Most people seem to believe Gold will continue higher and the Dollar will go lower, but contrarians have a pretty compelling case based on these charts as well.

GOLD - bubble trouble or ready to double

Gold Price At $15000 Per Ounce

Gold Vs Dollar

Gold price will reach $5,000 predicts Rob McEwen

Gold Price Forecast

Gold Pics

GOLD CHART Live

Gold reserve

A gold reserve is the gold held by a central bank or nation intended as a store of value and as a guarantee to redeem promises to pay depositors, note holders (e.g., paper money), or trading peers, or to secure a currency.
At the end of 2004, central banks and investment funds held 19% of all above-ground gold as bank reserve assets. It has been estimated that all the gold mined by the end of 2009 totaled 165,000 tonnes.

IMF gold holdings

As of June 2009, the International Monetary Fund held 3,217 tonnes (103.4 million oz.) of gold, which had been constant for several years. In Fall 2009, the IMF announced that it will sell one eighth of its holdings, a maximum of 12,965,649 fine troy ounces (403.3 t) based on a new income model agreed upon in April 2008, and subsequently announced the sale of 200 tonnes to India, 10 tonnes to Sri Lanka, a further 10 Metric tonnes of Gold was also sold to Bangladesh Bank in September 2010 and 2 tonnes to the Bank of Mauritius. These gold sales were conducted in stages at prevailing market prices.
The IMF maintains an internal book value of its gold that is far below market value. In 2000, this book value was SDR 35, or about US$47 per troy ounce. An attempt to revalue the gold reserve to today's value has met resistance for different reasons. For example, Canada is against the idea of revaluing the reserve, as it may be a prelude to selling the gold on the open market and therefore depressing gold prices

Officially reported gold holdings

Foreign currency reserves and gold minus external debt based on 2010 data from CIA Fact book

Gold reserves per capita

The International Monetary Fund regularly maintains statistics of national assets as reported by various countries. These data are used by the World Gold Council to periodically rank and report the gold holding of countries and official organizations.
The gold listed for each of the countries in the table may not be physically stored in the country listed, as central banks generally have not allowed independent audits of their reserves.

World official gold holding (December 2010)
Rank	Country/Organization	Gold (tonnes)	Gold's share of nationalforex reserves (%)
-	Euro Area	10,792.6	60.7%
1	USA	8,133.5	73.9%
2	Germany	3,401.8	70.3%
3	IMF	2,846.7	-
4	Italy	2,451.8	68.6%
5	France	2,435.4	67.2%
6	China	1,054.1	1.7%
7	Switzerland	1,040.1	16.4%
8	Russia	775.2	6.7%
9	Japan	765.2	3.0%
10	Netherlands	675	57.5%
11	India	614.8	8.1%
12	ECB	522.7	27.9%
13	Republic of China (Taiwan)	466.9	4.6%
14	Portugal	421.6	81.1%
15	Venezuela	401.1	52.4%
16	Saudi Arabia	322.9	3.0%
17	United Kingdom	310.3	16.8%
18	Islamic Republic of Iran	300.0	-
19	Lebanon	286.8	27.6%
20	Spain	281.6	38.6%
21	Austria	280.0	56.2%
22	Belgium	227.5	36.8%
23	Pakistan	184.4	19.2%
24	Philippines	175.9	14.0%
25	Algeria	173.6	4.5%
26	Libya	143.8	5.6%
27	Singapore	127.4	2.5%
28	Sweden	125.7	11.1%
29	South Africa	124.9	12.2%
30	BIS	120.0	-
31	Turkey	116.1	6.0%
32	Greece	111.7	78.7%
33	Romania	103.7	9.1%
34	Poland	102.9	4.5%
35	Mexico	100.1[12]	3.8%[12]
36	Thailand	99.5	2.5%
37	Australia	79.9	8.1%
38	Kuwait	79.0	13.5%
39	Egypt	75.6	8.7%
40	Indonesia	73.1	3.6%
41	Kazakhstan	67.3	10.0%
42	Denmark	66.5	3.3%
43	Argentina	54.7	4.5%
44	Finland	49.1	20.6%
45	Bulgaria	39.9	9.9%
46	WAEMU	36.5	12.2%
47	Malaysia	36.4	1.5%
48	Belarus	32	24.5%
49	Peru	34.7	3.6%
50	Brazil	33.6	0.5%
51	Slovakia	31.8	65.4%
53	Bolivia	28.3	13.4%
53	Ukraine	27.2	3.5%
54	Ecuador	26.3	31.0%
55	Syria	25.8	-
56	Morocco	22.0	4.2%
57	Nigeria	21.4	-
58	Sri Lanka	17.5	11.9%
59	South Korea	14.4	0.2%
60	Cyprus	13.9	50.8%
61	Bangladesh	13.5	5.2%
62	Serbia	13.1	4.2%
63	Netherlands Antilles	13.1	36.3%
64	Jordan	12.8	4.3%
65	Czech Republic	12.7	1.2%
66	Cambodia	12.4	14.4%
67	Qatar	12.4	2.1%
68	Laos	8.8	36.5%
69	Latvia	7.7	4.0%
70	El Salvador	7.3	10.6%
71	CEMAC	7.1	2.3%
72	Guatemala	6.9	5.3%
73	Colombia	6.9	1.1%
74	Macedonia	6.8	12.7%
75	Tunisia	6.8	-
76	Ireland	6.0	11.8%
77	Lithuania	5.8	3.8%
78	Bahrain	4.7	-
79	Mauritius	3.9	6.8%
80	Canada	3.4	0.2%
81	Tajikistan	3.3	-
82	Slovenia	3.2	13.4%
83	Aruba	3.1	17.7%
84	Hungary	3.1	0.3%
85	Kyrgyzstan	2.6	6.5%
86	Luxembourg	2.2	11.7%
87	Hong Kong	2.1	0.0%
88	Suriname	2.0	11.4%
89	Iceland	2.0	1.6%
90	Papua New Guinea	2.0	2.9%
91	Trinidad and Tobago	1.9	0.8%
92	Albania	1.6	2.8%
93	Yemen	1.6	1.1%
94	Cameroon	0.9	1.2%
95	Mongolia	0.9	2.4%
96	Honduras	0.7	-
97	Paraguay	0.7	0.7%
98	Dominican Republic	0.6	1.0%
99	Gabon	0.4	0.8%
100	Malawi	0.4	6.2%
101	Central African Republic	0.3	8.4%
102	Chad	0.3	2.4%
103	Republic of the Congo	0.3	0.4%
104	Uruguay	0.3	0.1%
105	Fiji	0.2	-
106	Estonia	0.2	0.3%
107	Chile	0.2	0.0%
108	Malta	0.2	1.6%
109	Costa Rica	0.1	0.1%
110	Haiti	0.0	0.1%
111	Burundi	0.0	0.5%
112	Oman	0.0	0.0%
113	Comoros	0.0	-
114	Kenya	0.0	0.0%
-	World	30,562.5	-

Privately held gold

As of October 2009, gold exchange-traded funds held 1,750 tonnes of gold for private and institutional investors.
Gold Holdings Corp. a publicly listed gold company estimates that the amount of in-ground verified gold resources currently controlled by publicly traded gold mining companies is roughly 50,000 tonnes.

Privately held gold (May 2011)
Rank	Name	Type	Gold (Tonnes)
1	SPDR Gold Shares	ETF	1.210,75
2	ETF Securities Gold Funds	ETF	259,79
3	ZKB Physical Gold	ETF	195,53
4	COMEX Gold Trust	ETF	137,61
5	Julius Baer Physical Gold Fund	ETF	93,50
6	NewGold ETF	ETF	47,75
7	Sprott Physical Gold Trust	ETF	32,27
8	ETFS Physical Swiss Gold Shares	ETF	27,97
9	Bullionvault	Allocated storage	21,36
10	GoldMoney	Allocated storage	17,99

World gold holdings

World gold holdings (2008) (Source: World Gold Council)
Holding	Percentage
Jewelry	52%
Central banks	18%
Investment (bars, coins)	16%
Industrial	12%
Unaccounted	2%