Dubai: Shortage of coins hits gold market
 

<TABLE class=RedTableBorder style="HEIGHT: 483px" cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR style="PADDING-LEFT: 10px" vAlign=top><TD class=articalTitle align=middle>Shortage of coins hits gold market <TABLE cellSpacing=0 cellPadding=0 width=430 border=0><TBODY><TR><TD class=dates id=hDate height=27>Published: Monday, 15 January, 2007, 11:54 AM Doha Time
Gulf Times Newspaper, 2007 ©
http://www.gulf-times.com/site/topic...6&parent_id=16


</TD></TR></TBODY></TABLE></TD></TR><TR style="PADDING-RIGHT: 12px; PADDING-LEFT: 10px"><TD class=articalBody id=artical1 vAlign=top height=345>By Pratap John
DISCERNING gold buyers have to make do without coins these days due to shortage in the local market, as the price of yellow metal again started increasing after a few days' stability.

Industry sources yesterday said there was a short supply of gold coins primarily due to their heavy demand in Dubai, the main regional source for gold.

The spurt in the demand of gold in Dubai is due to the ongoing Dubai Shopping Festival (DSF) during which jewellers offer special incentives and prizes to customers.

The manager of a leading Doha jewellery shop told the Gulf Times yesterday that gold coins were not available in most city outlets now.

"We have been facing a shortage in gold coins in the last few days. Normally, we get gold coins and other jewellery items from Dubai. But due to the DSF, there is no adequate supply from there," he said.

Sources said the greatest demand is for gold coins weighing 8gms or a sovereign. Gold coins of 2gm and 4gm are also available, mostly on demand.

They said another reason for the current shortage of gold coins was the long holidays due to Eid al-Adha.

"Imported gold needs to be certified by the municipal authorities before they can be sold in Qatar. The department did not function during Eid al-Adha. Hence whatever imports made could not be certified," an industry source pointed out.

Meanwhile, gold prices have again started climbing after a few days' stability.

Gold closed at QR70.50 for 22-carat and QR76.50 for 24-carat in the local market yesterday.

And for 10 tolas (116gm), the price was QR8580 yesterday. A few days ago, it was stuck at QR8,380.

Despite the rising prices the gold sales have been brisk as before, a jeweller said.

"Many see gold as a safe investment. And many customers think the gold prices are unlikely to fall, though they may not shoot up in the short to medium-term. Hence it is being considered a reasonably good investment," he said.

Industry sources said the business seen since mid-November was sort of "unprecedented".

Sales had gone up because of 15th Asian Games in Doha. Both visitors and residents seem to have contributed to this.

Jewellers said many visitors to the Games and athletes purchased gold during their shopping.

Expatriates who flew out on holidays taking advantage of schools closure during the Games had also purchased gold.

And towards the year-end, the gold sales have surged primarily because of Christmas, Eid al-Adha and the New Year, said A V Joju, an executive with Joy Alukkas Jewellery.

Joju said though there was no marked difference in gold price worldwide, many expatriates, particularly non-resident Indians, buy the yellow metal from the Gulf due to the "guarantee on quality".
Also, a wide range of designs was available in jewelleries across the Gulf.

A jeweller said the prices might not remain stable in the coming weeks due to the current fluctuation in crude oil price.

"The price of oil has a bearing on the gold price in the international market. So, the price of yellow metal will depend on how the crude price moves," he said.

In the last two years, prices in the international market have more than doubled, causing a sharp decline in the metal's retail business.

This was due to a combination of factors including skirmishes in many regions, declining bank interest rates and bearish run in capital markets worldwide.


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Re: Dubai: Shortage of coins hits gold market
 

Note that Dubai highly regulates gold purity and content of coin and jewelry, making it a very good place for the consumer to buy. But the coin shortage is due to a bottleneck in inspections and regulatory approvals due to religious holidays rather than any long term fundamentals.

Re: Dubai: Shortage of coins hits gold market
 

I am not so sure on this GJ,

Iran was locked out of buying Gold about a year ago, shipments from Switzerland were frozen, bank accounts frozen, etc

now if I were the Iranian Govt (or an Iranian) I would want to convert as many dollars to gold as possible.

notice the proximity of Iran to Dubai, the northern tip of the peninsula is part of Iran, it is in fact the southern portion of the straits of hormuz.

Iranian agents visiting Dubai to buy up all the gold it can prior to an attack? or just wealthy Iranians making a trip to get more gold since they cannot get it in Iran?

http://z.about.com/d/geography/1/0/t/6/tc-150.gif

Re: Dubai: Shortage of coins hits gold market
 

here is the original story on Iran buying Tonnes of Gold (and stopped)

Iran Hoarding Gold

Kenneth R. Timmerman
Wednesday, June 7, 2006

WASHINGTON -- Iranians are going for the gold - at least until someone else cuts them off.

To forestall an effort by the West to seize Iranian assets in Europe, the Iranian leadership decided last fall to begin a massive, secret repatriation of its international currency reserves, according to Central Bank of Iran documents.

The documents were obtained by an Iranian opposition group and shared with Newsmax.

The documents detail eight shipments in chartered jumbo jets from Zurich's Kloten airport. The shipments, from October through late November, brought 250 tons of gold bullion from the vaults of Swiss banks to Tehran.

The gold was purchased by Bank Markazi (the Central Bank of Iran) from Credit Suisse in Zurich, the documents showed.

Three of the eight flights attracted the attention of amateur aircraft spotters, because the planes were painted in the distinctive livery of Iran Air, which rarely flies into Zurich.

The spotters noted a 747-200 at the airport on Oct. 24, 2005, and an Airbus A-300 that made two rotations, on Nov. 14 and Nov. 23. They provided that information to Jetstream, a glossy, German-language monthly published in Zurich.

Other chartered aircraft handled five additional rotations, before word of the shipments leaked out. Each plane transported between 28-35 tons of gold, although the 747-200, initially designed as a freighter, could have taken as much as 100 tons of cargo, according to Boeing.

Iran's leadership wanted to purchase 700 tons of gold, according to the Organization of the People's Fedaii Guerillas of Iran (OPFGI), a communist opposition group that obtained the Central Bank documents.

However, their secret effort to convert Iran's foreign currency holdings into gold appears to have stopped when word leaked out earlier this year.

The gold is now being held in the vaults of the Bank Markazi in Tehran, the group said.

A Credit Suisse spokesman, Andres Luther, told Newsmax by phone from Zurich that it was bank policy not to comment on its clients. However, if the bank had shipped gold to Iran last autumn, "I can assure you that we fulfilled all the reporting requirements the state demands of us."

Credit Suisse, Switzerland's second largest bank, announced on Jan. 23 that it would no longer accept new business in Iran or Syria. Mr. Luther said the bank's decision was not in response to U.S. pressure, as previously reported.

"We made this decision on our own after looking at developments in the region and assessing the increased economic risks for our bank and for our clients of doing business in Iran," he said.

The asset repatriation plan was set into motion just weeks after former Revolutionary Guards officer Mahmoud Ahmadinejad took over as president of the Islamic Republic of Iran last August.

The decision was made during a strategic planning session of top regime leaders in Tehran, who were examining Iran's options in the nuclear face-off with the West.

The meeting was chaired by Supreme Leader ayatollah Ali Khamenei, and included top intelligence officials, strategists and former president Ali-Akbar Hashemi-Rafsanjani, the so-called "moderate" that Ahmadinejad beat in the presidential run-off election in the summer.

According to minutes of the meeting, obtained by the OPFGI, the regime leaders concluded that the Bush administration had been weakened by the war in Iraq, and needed Iran's help if it wanted to withdraw from Iraq.

They also concluded that the decision of Prime Minister Ariel Sharon to leave the Likud party and create a new center-left coalition had weakened Israel.

Iran's leaders surveyed their own allies around the world � in particular, terrorist groups � and felt confident in their ability to inflict severe pain on the United States and Israel, if necessary.

"The minutes mentioned, by name, Lebanon's Hezbollah, Hamas, Palestinian Islamic Jihad, as well as Ansar al Islam, Jeish Mohammad, Jeish al Mehdi, and the Sepah al-Badr as Islamic Republic allies," an OPFGI spokesman told Newsmax.

U.S. news accounts refer to "Jeish al Mehdi" as the "Mehdi Army," the milita controlled by renegade Shiite cleric Muqtada al-Sadr. The Badr Army (or Badr Brigade) is controlled by the Iraqi Dawa party.

Both militias receive extensive support from Iran.

The minutes also mentioned as Iranian allies Saudi Shiite organizations, and Muslim radicals in Afghanistan and Thailand, the OPFGI said.

After making this world tour, the Iranian leadership determined that it had little to gain from continuing a dialog with the European Union over its disputed nuclear programs.

"They felt that Europe was less important than before, and that the Europeans would be unable to impose any real pain" on Iran should the regime break off dialog, an OPFGI spokesman told Newsmax by phone from Europe.

Shortly afterwards, in early September, the International Atomic Energy Agency found new evidence that Iran had received uranium enrichment equipment from the black market of Pakistani scientist A.Q. Khan, and the confrontation between Iran and the international community over its nuclear program began in earnest.

As a backstop, the leaders decided they should begin to disperse and repatriate the liquid assets they held overseas, in the unlikely event the international community decided to impose economic sanctions on Iran for its nuclear intransigence.

In addition to giving the orders to convert foreign currency holdings to gold and to repatriate them from Switzerland, the leaders also gave orders to Iran's central bankers to move cash accounts from Europe into Arab and Russian banks, which they felt would be less immune to Western pressure, according to the minutes.

The asset relocation plan became public on Jan. 20, just one day after French President Jacques Chirac threatened to use French nuclear weapons against Iran should Tehran launch a major terrorist attack.

Central Bank governor Ebrahim Sheibani announced on Jan. 21 that his government had started to shift Iran's overseas holdings from Europe to countries in southeast Asia.

Commenting on Sheibani's announcement, a State Department spokesman said the Iranian move was "a sign of Tehran's growing isolation" over its nuclear program, and was an attempt to protect its assets should the United Nations impose sanctions on Iran.

Jeffrey Christian, managing director of CPM Group, which tracks the flow and pricing of gold, told Newsmax that the reports of 250 tons of gold repatriated to Iran late last year "makes sense."

"There has been a tremendous amount of gold going into Iran over the past eight months," he said. "Some of it belongs to the Central Bank, but part is to satisfy private investment demand."

Since the first quarter of 2003, he added, "we've seen a broad range of Middle Easterners buying gold for storage outside the Middle East, the United States, Europe, or Japan. More people have bought gold over the past five years than in the entire history of mankind."

The main repositories of these new gold findings, Christian said, were Australian, Singapore, Malaysia, and Thailand.

The Fedaii organization also alleged that in a separate scheme, pro-Iranian Shiites in Iraq looted the Iraqi Central Bank and one of Saddam Hussein's palaces in the immediate aftermath of the 2003 war, and made off with 200 tons of Swiss-stamped gold bullion.

The Iraqi gold was re-melted in Iran, cast into automobile bumpers, and covered with chrome. Iranian agents drove the cars with the gold bumpers into Pakistan and Azerbaijan, where they sold the gold to brokers at a 15 percent discount, the group said.

"Sales of this gold are ongoing," sources at the OPFGI said.

http://www.newsmax.com/archives/arti...138.shtml?s=lh