I received an email regarding gold officially being accepted as a tier 1 banking asset as of January 1st 2013.

Information indicates that the global banking regulatory group that meets in the small mountain town of Basel, Switzerland is responsible for setting global banking standards. They decide things like which assets qualify as Tier 1 assets, how much loan loss reserves banks need to hold, and how much leverage banks can take on.

Basel Committee on Banking Supervision

Officially known as the Basel Committee on Banking Supervision, it’s only met three times in the last 20 years. The first meeting was in 1988. The second meeting, Basel II, in 2004, was a disaster. The Basel banking geniuses allowed mortgage-backed securities to be considered a Tier 1 asset. (A Tier 1 rating means that the asset is considered a cash equivalent.) Of course, after the housing crash and ensuing Great Recession, we know that mortgage-backed securities are nowhere near as good as cash.

So in 2010, the committee met again to fix their past mistakes. It was at this meeting — known as Basel III — that the biggest news for gold in 40 years emerged.

Basel III will fundamentally change the way gold is valued by the financial markets.

The Basel Committee on Banking Supervision ruled that gold could be included as a Tier 1 asset. In other words, Basel III rules make gold just as good as cash or Treasury bonds.

Before Basel III, banks had to hold around 6% of the value of outstanding loans as collateral for those loans. Most of that 6% was comprised of what’s called Tier 1 assets: cash and company stock. (Treasury bonds count as cash.) After Basel III, banks are required to hold approximately 12% of Tier 1 capital. But the big news is that gold will now be considered a Tier 1 asset.

Prior to Basel III, a bank could only count 50% of gold’s market value as collateral. As of January 1, 2013, gold’s value will double as a banking asset.

Rumors have the European Union will adopt Basel III rules in January 2013. So will Russia and Japan. China, India, and even Pakistan are on board. Australia, New Zealand, Brazil, and South Africa, too.

ONE POINT is that gold that banks hold will double in qualifying asset value automatically. The banks will need to do nothing and gain 100% increase in their qualifying banking gold assets. This seems to be great for foreign banks, who many have been accumulating gold over the last several years and bad for most USA banks who mostly have not been accumulating gold.

SECOND POINT Will banks need or want to start buying more gold now or have they already made their major purchases of gold in anticipation of the effective date of January 1st 2013. Most likely, yes, (I would guess most if not all) major gold buying banks have long ago heard of this new Basel III gold reclassification asset upgrade rule to a tier 1 asset.

THIRD POINT The big question is, has the new Basel III banking rules requirement of 2010 named above been figured in to the price of gold? In my opinion most of the gold buying by banks has been completed in anticipation of the 2013 effective date.

The above information is opinion based except where noted. Always contact a licensed professional for information on the above subject or BEFORE applying or practicing the above information.

Anthony DiChi at TradeCurrencyNow,
America’s Forex News and currency information source.

For much of the past few years, the world’s largest economies have experienced a fair amount of uncertainty and turmoil. Many of the world’s most used currencies have dropped in value, entire economic systems have demonstrated considerable instability, and as a result people have begun to look for alternative ways of maintaining and increasing wealth through various investment opportunities. This is where practices such as forex trading – essentially, purchasing other world currencies with your own in the hope of eventually selling back for greater value – often come in. However, it is also a reason that many people look to invest in precious metals such as gold.

Gold investment is something of a foreign concept to many people – even experienced investors – but in reality it is actually quite simple. While gold is not like a typical stock or investment opportunity, in that it is not tied to a particular company or industry, investing in the metal is quite simple. You only need to find a reliable gold investment website such as Bullionvault, where you can purchase essentially any amount of physical gold bullion you like. You can then store your gold safely at a secure location, to be kept, withdrawn, or sold whenever you choose. The whole process is incredibly easy and makes gold investment one of the most accessible financial dealings you can make.

The main reasons for gold investment, as mentioned, are somewhat similar to most forex trades. Essentially, the idea is that gold has a universal price, and does not change in value as a result of any one economic system or currency. Because of this, gold is generally not prone to sudden drops or rises in value, meaning that many people see it as a somewhat stable financial resource. For this reason, a common reason to invest in gold is that one’s currency value is depreciating. For example, if you typically use the U.S. dollar, and the value of the dollar is projected to drop, you may want to purchase gold to protect the value of your wealth, rather than leaving that value in currency. Not only can you avoid the drop in dollar value this way, but you may see your wealth increase as other investors buying gold drive up the price of the resource slightly.

Looking ahead to the remainder of 2012, however, there are some doubts as to whether gold investment is particularly strategic. The U.S. economy is showing significant signs of strengthening in the near future, and the outlook for the dollar is considerably stronger than in recent months or years. Meanwhile, with the euro struggling, many European forex traders are turning to the dollar, rather than gold, which means the gold outlook is not as strong as many predicted a few months ago. All of these factors are important to consider when investing.

The above information is opinion based except where noted. Always contact a licensed professional for information on the above subject or BEFORE applying or practicing the above information.

Anthony DiChi at TradeCurrencyNow,
America’s Forex News and currency information source.

I’ve just checked the weekly charts for gold and silver. Both metals seem to be contained within a downtrend chart line when viewed on the weekly basis chart.

The daily chart downtrend was broken for gold when 1690- 1700 area was breached to the upside.

The daily chart downtrend for silver was breached to the upside when silver surpassed 30 dollars per ounce.

Here are links to the daily and weekly charts for gold and silver.

I hope the above currency trading information was of help to you.

Anthony DiChi at TradeCurrencyNow,
America’s Forex News and currency information source.

Received from the YoloHub.com and written in part by Jeff Clark

Precious metals bulls are getting all worked up over the price action in silver. Why shouldn’t they? The price of the metal is up 18% in just the past three weeks. It’s showing a 10% gain on the year. And analysts are predicting more gains to come.

All of a sudden, everyone loves silver.

I love silver, too. But I’m not buying it here. Not after what happened last week.

Last week, silver’s 50-day moving average (DMA) crossed below its 200-DMA. Technical analysts refer to this action as a “death cross,” and it is considered a bearish development. This is textbook technical analysis 101. Everybody who pays attention to charts knows this is a bad sign.

But ever since the death cross occurred, I haven’t heard anyone talk about it. Not a single soul.

To be completely honest, I’m not a big fan of following the 50- and 200-DMAs. They’re just too popular. Everyone else pays attention to them, so their use as a technical tool is diluted. I prefer to look for signals no one else is following.

But the death cross on silver’s chart is a clear bearish sign… And no one noticed it. That makes me want to pay attention.

It has been three years since the last silver death cross. In September 2008, the 50-DMA crossed below the 200-DMA… And the price of silver dropped 30% in the next two months.

If we get the same sort of action this time around, the price of silver could fall as low as $25 per ounce by the end of the year.

Please understand that I’m not predicting that severe of a decline. I just won’t be surprised if it happens. But I am suggesting that if you’re looking to buy silver, you may get a better opportunity to do so a few weeks from now.

I hope the above currency trading information was of help to you.

Anthony DiChi at TradeCurrencyNow,
America’s Forex News and currency information source.

The below info was sent to me from InsideInvestingDaily.com

When it comes to the bull market in gold, occasional volatility is part of the deal. You can’t reach a long-term destination without price declines… sometimes big ones.

But on the morning of Monday, Sept. 26, something fishy happened. The price of gold dropped a stunning $130 per ounce during Asian trading hours, before the U.S markets opened.

The yellow metal recovered from that blow, leaving a nasty spike on the overnight charts. But many wondered what such a huge move was all about.

“The break has provoked a great deal of suspicion,” says Peter Brimelow of MarketWatch. In other words: Could gold have been the victim of a hit and run?

Via Brimelow, U.K. gold dealer Ross Norman adds:

Placing such a huge order into the market when the least number of market participants were active tells you that they were out for dramatic effect. Anyone looking to offload significant amounts of metal at the best possible price would have done so when both London and New York were both [open]. … Clearly finessing gold into the market was not their motive — they wanted a statement.

Nomura, a Japanese investment bank, put out a research note explaining the connection between Asian trading hours and the price of gold. In recent weeks, Nomura says, “price action during Asian hours has become very bearish, which had not been the case in previous unwinds earlier in the year.”

This naturally leads to questions. Who has been selling? And has the outlook for gold changed?

To some extent, gold had become a victim of its own popularity. As the metal kept rising, sentiment matched that of a popular stock. GLD, the best-known gold vehicle, at one point became the largest ETF in the world. Hedge funds and other leveraged speculators were patting themselves on the back for holding it.

Then, in the aftermath of the Fed’s “Operation Twist” in late September — which might as well have been called “Operation Useless” — stocks fell hard, and gold fell alongside.

There were macro-level reasons why gold fell out of bed. The U.S. dollar displayed newfound strength, deflation fears were back, and inflation expectations had hit their lowest levels in a year.

But more than likely, the selling was just overaggressive buyers facing margin calls (with margin requirements hiked repeatedly) and shell-shocked fund managers cleaning house. Profitable gold holdings became a prime source for cash.

Says Michael Gayed, chief investment strategist of Pension Partners: “The tendency for individual hedge funds or anybody is to sell winners before they sell losers. What’s been one of the few winners this year? It’s been gold.”

Being popular isn’t always what it’s cracked up to be. The important thing moving forward, though, is where gold goes from here. Have the core reasons for holding gold been invalidated?

That’s doubtful:

*

Central banks around the world are still woefully exposed to paper currency, holding far too many dollars as a portion of reserves. (And now they are forced to wonder about their euros.)
*

The root problems of the financial crisis have not been solved. If anything they have been made worse.
*

The ultimate “solutions” to Europe boil down to post-breakup catastrophe (the destruction of the euro), a Hail Mary implementation of the printing press (via eurobonds), a mass bailout of Europe’s banks… or some combination of all three.
*

The Keynesian table-pounders — those who argue we need more stimulus, more leverage, more government debt — are as insistent as ever, and will grow even more insistent as economic conditions deteriorate.

Gold could decline further in the coming weeks as money managers liquidate. In trading desk terms, this reflects the possibility of “weak hands” being washed out. It’s hard to say how long the washing out process will take, and it could end as quickly as it began.

Ultimately, those with a keen interest in accumulating large amounts of gold at a favorable average price — such as the world’s central banks — will not be able to resist the temptation. The long-term motives are intact, and shady motives for manipulating gold lower are no match for the fundamentals.

Last but not least, as for the Asian selling, Nomura closes on a bullish note:

We think that a reversal of this trend back to gold appreciation in Asian hours is the key to a short term reversal and we have begun to see this in recent days[…] We continue to view long-term fundamentals, such as low real rates and the relative cheapness of gold when viewed from an Asian perspective, as bullish for gold.

Click here to read more from the above author…..

Anthony DiChi,
Your friend in Forex Currency Trading, FX Information and Forex News at TradeCurrencyNow

Even though gold is no longer used to back currencies like the dollar, it is still stockpiled by countries around the world. Since the price of gold has fluctuated dramatically, the holdings are expressed in metric tons (or tonne = 1000 kg) as documented by the World Gold Council in August 2011. One U.S. ton is approximately 0.9 tonnes. Here’s a look at who holds the largest gold reserves and the amount of holdings.

United States – 8,133.5
While the U.S. permanently abandoned the gold standard in 1971, it has the largest holdings of any country by a wide margin. While most of the gold is held at Fort Knox in Kentucky, gold is also held by the U.S. Mints in Philadelphia and Denver and several other locations.

Germany – 3,401.0
Germany’s central bank, the Deutsche Bundesbank in Frankfurt, is the manager of the country’s reserves. However, reports have surfaced that the bulk of Germany’s gold is in the physical custody of the New York Federal Reserve.

International Monetary Fund (IMF) – 2,846.7
The IMF overseas the economic activity of its 187 member countries around the globe.

Italy – 2,451.8
Italy’s reserves are held and managed by the Banca D’Italia. Italy is one of the PIIGS nations (along with Portugal, Ireland, Greece and Spain), all of which are suffering financial woes.

France – 2,435.4
The Banque de France is the central depository for France’s gold reserves.

China – 1,054.1
The world’s most populous country is the world’s largest producer of gold and can buy gold from its own mines without reporting those transactions publicly.

Switzerland – 1,040.1
Switzerland’s seventh place rank on this list is notable considering its economy is the 38th largest and its population is the 95th largest in the world.

Russia – 775.2
Russia’s gold reserves are in the custody of the Central Bank of the Russian Federation.

Japan – 765.2
Gold accounts for only 3.3% of Japan’s total foreign reserves which are managed by the Bank of Japan.

Netherlands – 615.5
The gold reserves and national finances are managed by the Netherland Bank.
Click here to go to the Financial Edge to view more of this story….

Anthony DiChi,
Your friend in Forex Currency Trading, FX Information and Forex News at TradeCurrencyNow

The pressure that 20th century governments experienced to sacrifice currency stability for other objectives, such as full employment, did not exist in the 19th century.

Back then, workers susceptible to unemployment when the central bank raised the discount rate had little opportunity to voice their objections, much less kick out those responsible.

Wages and prices were relatively flexible. Therefore, a shock to the balance of payments that required a reduction in domestic spending could be accommodated by a fall in prices rather than a rise in unemployment. This further diminished the pressure on the authorities to respond to employment conditions. Consequently, the central bank’s priority to maintain currency convertibility was rarely challenged.

Now we live in a world where the voters can vote themselves the goodies, and politicians maintain power by promising to dole out those goodies. Indeed, a far cry from the world during the gold standard era.

The above article is written in part by author, Jack Crooks who writes for Money and Markets.com.

Anthony DiChi,
Your friend in Forex Currency Trading, FX Information and Forex News at TradeCurrencyNow

Here we are possibly just a short time away from Libya’s “people” ousting Gaddafi and installing a new government in war torn Libya.

What happens to a nation’s assets when a takeover happens in a third world country. Well, my research indicates pretty much everything is up for grabs. Therefore; whoever can grab and hold or sell and hide the assets wins the asset grab race.

Let’s look at Libya. Strong rumors in past years were afloat that Ghaddafi had been buying as much gold as possible and as of late has a sizable sum of gold in storage. Some think that Ghaddafi was planning on starting a Muslim currency which he hoped some day would be used to trade (buy) oil.

Now we look at the price of gold. Gold is at an all time high $1,875.

Now we look at who would and could get to Ghaddafi’s gold. The same organization(s) that could help drive gold to new all time highs.

After the Gold is seized in Libya and put up for sale and sold be very careful to watch out for a price drop in the price of gold. Spot traders trading to the upside use stops.

Then again maybe all this is a coincidence.

Anthony DiChi at TradeCurrencyNow,
America’s Forex News and currency information source.