And here’s an interesting note …
Greenlight Capital Inc. switched all its SPDR holdings into bullion during the second quarter because costs to store physical gold are lower than the SPDR fees, it told investors yesterday. David Einhorn, who runs the $5 billion hedge fund, told clients in January he was buying gold for the first time amid the threat of inflation from higher government spending.
“Clearly some of the declines in the SPDR last quarter were associated with switching gold exposure rather than selling,” John Reade, UBS AG’s head metals strategist in London, said today in a note. “We suspect that more of this activity will take place.”
Here’s another interesting note. Moody’s drops California’s credit grade below A, may cut more
Sean’s comment: Approximately $72B of debt will be impacted. Moody’s believes that as the days and weeks go by without solutions to the current cash crisis and the $26 billion budget gap, the risk to priority payments, and eventually debt service payments, is skyrocketing. You’ll remember that I wrote two weeks ago that California is just the tip of the iceberg.
I’ve written about China’s foreign reserves more times than I can count. You’re probably sick of it, but here’s an update …
China Currency Reserves Top $2 Trillion for First Time on Overseas Buying
China’s foreign-exchange reserves, the world’s biggest, topped $2 trillion for the first time as the nation’s economic recovery prompted overseas investors to pump money into stocks and property.
All that money has to go somewhere; I’m guessing gold is one answer. Remember, if history is a guide, we won’t find out about China’s gold purchases until years after the fact. Speaking of which …
China’s Gold Reserves Unchanged at 1,054 Tons in June, Central Bank Says China said its gold reserves were unchanged in June compared with April, according to a statement from the central bank.
And here is a bullish surge of news for commodities …
Rio Tinto Says Second Quarter Iron Ore Output Rose 8% to 45 Million Tons Rio Tinto Group, the world’s third- largest mining company, reported second-quarter iron ore output rose 8 percent to a record and it expects further recovery in Chinese steel demand for the rest of the year.
Corn Extends Gain as Drought Reduces Russian Harvest, Strains Ukraine Crop Corn futures declined in Chicago on speculation rains in the U.S., the world’s biggest grower and exporter, and China will help increase production.
Gold Rises to Two-Week High in London on Weaker Dollar and Oil’s Advance Gold rose to the highest in almost two weeks in London as a weaker dollar and higher oil prices boosted the metal’s appeal as an alternative investment and hedge against rising consumer prices.
Copper Rises to Two-Week High as Retail Sales, Production Signal Recovery Copper rose to a two-week high in London as U.S. retail sales beat forecasts and European industrial production climbed, signaling a recovery in the global economy.
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- Notes for Tonight’s Neil Cavuto Appearance — Oil Surge! (06/04/09)
- The Big Picture in the S&P 500 — Bullish or Bearish? (02/04/10)
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