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Impact of globalization on the gold market Marino G. Pieterse publisher Gold letter International

Impact of globalization on the gold market Marino G. Pieterse publisher Gold letter International MENA MINING Congress Manama, Bahrain October 26 - 29, 2009 Measuring the New Gold Bull Market Gold does not run its own course as a safe haven Demonetization of gold

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Impact of globalization on the gold market Marino G. Pieterse publisher Gold letter International

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  1. Impact of globalization on the gold market Marino G. Pieterse publisher Goldletter International MENA MINING Congress Manama, Bahrain October 26 - 29, 2009

  2. Measuring the New Gold Bull Market

  3. Gold does not run its own course as a safe haven

  4. Demonetization of gold ■ Story of modern gold market begins with free float of gold in March 1968 central banks give up trying to defend a fixed gold price at $ 35 per ounce■ US Treasury closes “gold window” in April 1971 gold holdings of Europe central banks frozen■ IMF alters articles in 1978 to suspend gold as an ultimate means of settlement■ Central Bank Gold Agreements:first agreement (September 1999 – 2004) : sale quota of 400 tonnes per year, with anabsolute limit of 2,000 tonnes over the whole 5-year periodsecond agreement (September 2004 – 2009) - sale quota of 500 tonnes per year with an overall total of 2,500 tonnes over the whole 5-year periodthird agreement (September 2009 – 2014) – sale of 400 tonnes per year with an overall totalof 2,000 tonnes over the whole 5-year period (including IMF sale of 403 tonnes)■AsianCentral Banks don’t consider gold as a monetary instrument(as per July 2009)Gold holdings : 15 signatories + US: 19,983 tonnes 76%Major Asian countries 2,742 tonnes 10%Others 3,572 tonnes14% 26,297 tonnes 100%

  5. Related to currency basket of the US dollar index (57.6% in euro’s, 13.6% in Japanese yen, 11.9% in British pounds, 9.1% in Canadian dollars, 4.2% in Swedish crones and 3.6% in Swiss francs). Since the index went up in 1995 from a long term resistance level of 80 to a high of 120 in 2001, at the time the euro was introduced, it dropped to a low of 72 in March 2008, but has been followed by a strong upward correction to $ 87 well above the historic resistance level, before showing a new correction to a current level of 77.

  6. World official gold holdings and total monetary reserves

  7. Gold Supply and Demand

  8. Gold Supply and Demand

  9. World Gold Mine Production (10-year comparison – in tonnes) Source: GFMS

  10. P.O.Box 76988 1070 KG Amsterdam the Netherlands Telephone 0031 20 470 0249 Fax number 0031 20 675 1354 www.goldletterint.com info@goldletterint.com

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