Syria selling gold reserves as sanctions bite

Syria is trying to sell gold reserves to raise revenue as Western and Arab sanctions targeting its cen

tral bank and oil exports begin to bite, diplomats and traders said.

Western sanctions have halved Syria's foreign exchange reserves from about $17 billion, French Foreign Minister Alain Juppe said on Tuesday after a meeting with about 60 nations aimed at coordinating measures against President Bashar al-Assad's government.

"Syria is selling its gold at rock bottom prices," said a Western diplomatic source, declining to say where it was being sold.

A second diplomatic source confirmed the information, adding that Damascus was looking to offload everything it could to raise cash, including currency reserves.

On February 27, the European Union agreed more sanctions including prohibiting trade in gold and other precious metals with Syrian state institutions, including the central bank.

Two gold traders in the United Arab Emirates said the Syrian government had been offering gold at a discount, with one saying it was making offers at about 15 percent below the market price.

The trader said Damascus was selling small volumes of around 20-30 kilos which were easier to offload, with offers being made through private accounts set up with free email providers.

Another trader said deals as of yet had not gone through in Dubai because the Emirati authorities were blocking unauthorized trades and few potential buyers were willing to take the risk of these deals.

"We have been getting offers for gold purchases from Syria and North African countries at 15 percent discount, but there are tough restrictions in Dubai that don't allow any unauthorized trades," said the trader.

The meeting on Tuesday was aimed in part at tightening up existing sanctions and trying to pinpoint countries that were offering Damascus ways to sidestep them.

The World Gold Council estimates Syria had about 25.8 metric tones of gold as of February 2012, representing about 7.1 percent of its total reserves.

At Wednesday's spot prices, Syria's total gold reserves are worth around $1.36 billion. Around $33.8 billion worth of gold is cleared through London on a daily basis.

Syria has not published economic statistics since May 2011, making it impossible to verify gold figures or forex reserves.

Spot gold inched up 0.2 percent to $1,652.84 per ounce on Wednesday, after touching a one-week low near $1,634 in the previous session.

Diplomatic sources estimated the sanctions had cut Syria's oil output by 30 percent, costing Assad's government $400 million a month in revenue, or $2 billion since November. Prior to EU sanctions, Damascus sold 90 percent of its oil to Europe.

The Syrian pound hit a record low on the black market in March of around 100 to the dollar, compared to 47 before the protests erupted, sharply raising the cost of imports.

Diplomats said that sort of economic difficulty would over time increase the pressure on Assad's government.

"Sanctions are a particularly effective instrument to deprive the Syrian regime of the resources it uses to finance and arm militias," Juppe said on Tuesday. -Reuters

The Largest Gold Nugget In The World Sells At Auction For $400,000

Gold is always worth its weight in, well, itself. Sometimes, it’s worth even more. A gold nugget, weighing 100 troy ounces, sold at auction in Sacremento for $400,000 Wednesday night. “We valued it at around $200,000,” said Amy Baker, auction manager for Holabird-Kagin American. “There were 6 to 7 people bidding on it, most of them anonymously. It went to an anonymous (phone) bidder.” Baker said the auction house may be able to release more information on the winning bidder Thursday.

Security is important when you’re dealing with a large hunk of precious metal. “The new owner, I’m not sure when it will exactly be delivered to him,” Baker said. “That’s confidential.” On Wednesday, gold closed at $1,396.10 an ounce on the New York Mercantile Exchange, making the nearly 7-pound nugget worth about $140,000, if it were melted down. But since the nugget, found last year in Nevada County, California, is believed to be the largest one left from the state’s gold rush, it has special value. An estimated 500,000 people traveled to California between 1848 and 1864 in search of instant wealth. “It’s the last one we know left in existence,” Baker said. “There have been larger ones over the years, but they have been melted down.” The nugget will be on display this weekend at the Sacramento Convention Center, she said. The California Natural Resources Agency says the largest nugget ever mined in the state was found in 1854 and weighed 195 pounds.

It might seem to be a small chunk of precious metal, but it is very much a “founding father” of California. Without this piece of gold, California as we know it may very well have ended up on a much narrower and more desolate track in the eyes of history.

Gold rises 1pc, set to end three-week drop

NEW YORK/LONDON: Gold rose 1 percent on Friday, on track for its biggest one-day gain in almost a month, as higher crude oil prices and a sharp drop in the dollar prompted investors to cover short positions after a sell-off earlier in the week.

Bullion is set for its first weekly rise in four weeks. Fading hopes of further US monetary easing had led to weakness in the precious metal, reflected in a huge outflow from bullion exchange-traded funds and some funds exiting the gold trade.

Gold, which was oversold after falling $150 in the last four weeks, rallied after data showed US new home sales fell to a four-month low, a fund manager said.

"The jump today is somewhat sparked by the bad home sales, which increased the chance of the Fed bringing easing back to the system, and that's why gold is reacting positively," said James Rife, an assistant portfolio manager at Haber Trilix Advisors, which has $2 billion in assets.

Spot gold was up 1 percent at $1,660.79 an ounce by12:41 p.m. EDT(1641 GMT), recovering from a two-month low hit in the previous session.

US gold futures for April delivery rose $18.20 to$1,660.70 an ounce in moderate volume.

However, momentum weakened somewhat after the metal failed to breach resistance at $1,670, near the highs of its last seven sessions, said Daniel Hwang, senior technical strategist at FOREX.com.

Gold could face strong headwinds between $1,680 and $1,700, where many key moving averages converged after the metal's pullback, Hwang said.

The gold price has lost 2 percent so far this month as a shift in investors' perception of the health of theUSeconomy in particular has made so-called safe-haven assets less attractive than stocks or higher-yielding currencies.

GOLD ETFS POST OUTFLOW

The decline in the gold price earlier this week took its toll on investment in exchange-traded funds backed by physical metal, resulting in the largest one-day fall in holdings on Friday in three months.

ETF holdings hit a record of nearly 70.9 million ounces on Tuesday, but the past couple of days of outflows have wiped out all of the build-up that had taken place so far in March.

Markets are attaching lower probability to the US Federal Reserve's embarking on a fresh round of government-bond buying, or quantitative easing, to keep short-term interest rates low to stimulate growth.

That shift has been a key driver in this month's fall in the gold price.

"We think that quantitative easing and abnormally lowUSinterest rates have been a huge support for gold prices. It's no surprise that the falling gold price recently has been accompanied by quite a significant rise in US interest rates," Nic Brown, head of commodity research at Natixis, said.

Silver took its lead from gold, rising 1.8 percent to $32.12 an ounce, as did the platinum group metals.

Platinum rose 0.7 percent to $1,625.74 an ounce, while palladium gained 0.8 percent on the day to reach $653.72 an ounce. :- Reuters