This is G o o g l e's cache of http://www.btimes.co.za/99/0620/comp/comp12.htm. G o o g l e's cache is the snapshot that we took of the page as we crawled the web. The page may have changed since that time. Click here for the current page without highlighting. To link to or bookmark this page, use the following url: http://www.google.com/search?q=cache:89UxzgYuRsoJ:www.btimes.co.za/99/0620/comp/comp12.htm+goldman+sachs+gold+holdings&hl=en&ie=UTF-8 Google is not affiliated with the authors of this page nor responsible for its content. These search terms have been highlighted: goldman sachs gold holdings Sunday, April 11, 2004, 08:51:30 AM -------------------------------------------------------------------------------- Kelvin calls for marketing drive AT A workshop, "How does the gold industry move more product to consumers?", Anglogold's Williams implored the gold producers to support the marketing efforts of the World Gold Council. Outlining a number of ways in which gold is losing out to other causes such as diamonds ("pieces of carbon produced by a distant cousin"), platinum (also from a distant cousin) and even plaster of Paris models of British houses, Williams had this message: "The fact that more platinum jewellery than gold was sold in Japan last year should serve as a wake-up call to the gold industry, yet only 30% of them are members of the WGC. The other 70% clearly do not care what happens to the future of their only product." The gold mining industry spends fewer dollars on marketing gold than when the WGC was set up in 1987, and far, far less than do its competitors. Advertising agency TBWA has been engaged to try to improve matters, and its message matched Da Vanzo's that the gold pattern needs to be disrupted. There was some positive news from American home-shopping channel QVC - the single-largest importer and retailer of gold jewellery in the world. QVC is the 16th largest cable TV channel in the US. It grosses $1-billion of shipped gold jewellery and without a single showroom, gold is 30% of its business. Now or never for SAA's foreign suitor... Engen in talks to buy out Zenex, Afric ... Stan Katz gets his hand in at Kaya F... Swiss MPs shun gold sales pla... Brait, Sonns ponder SourceCom trouble... Rembrandt Group comes out smoking ... Growth pains for evolving Nasper... AME looks offshore to find more money in... Del Monte firm to list in eas... NRB's buyer set to be announce... Counting down for SA's third cellular li... Delegates plan to gild tarnished gold v... THE WEEK AHEA... BUSINESS ROUNDU... COMPANY ROUNDU... Anglo American Gold Investment Company Limited SA Reserve Bank Back To Home Page Delegates plan to gild tarnished gold vessel The world's gold buffs met in London this week at the 22nd annual FT World Gold Conference against the backdrop of a falling gold price. JULIE WALKER reports Gold is heavily exposed to currency movements and will evolve towards commodity status WHILE gold may have been a tradable currency for five millennia, it is no longer a commodity that sells itself. It will have to be marketed effectively right now, or the entire gold industry faces the prospect of losing yet more ground to the gains made by other investment media and jewellery materials. This was the clearest message to emerge from the Financial Times World Gold Conference, held in London over two days last week. Rumour suggested the conference was not presented on the mezzanine floor of the Intercontinental Hotel just because the space was large enough, but to protect from damage anyone jumping off the window-ledges. It was the 22nd annual gold conference, so since gold is at its lowest level for 20 years it must have been the worst ever scenario for the producers and investors among the delegates. It doesn't take a rocket scientist to see that gold needs new champions. The number of delegates older than 30 swamped those younger, and one or two who had been in gold for 30 or 40 years seemed glad to be getting out. Encapsulating that sentiment was the only comment the J Aron/Goldman Sachs consultant and session chairman Neil Hewitt could muster after an impassioned speech from Consolidated Bullion's Sarah Da Vanzo: "We are now a little bit behind the time schedule after that, er, ...." Enough said. Speeches by central bankers from England, Switzerland and South Africa opened the conference, the keynote speaker being Bank of England deputy governor David Clementi, who joked about his speechwriter's humour - "it gives me great pleasure to address you today". Truth was, he represented the gold producers' public enemy number one. Clementi maintained that the Bank's announced decision to sell 60% of its gold (and keep 300t) over the next five years was made "entirely on portfolio management grounds", and that the Bank had as much interest as anyone in gold as an investment, except for those short of the metal, of course. He said the announcement of details of the disposals was in the interests of transparency. Clementi had mixed success during question time. Someone from Goldman Sachs asked why the Bank would continue to hold any gold at all when 300t was such a token amount: "I'm surprised anyone from Goldman Sachs would see 20% of any asset class as a token amount: perhaps you work in much bigger numbers." Clementi was beaming after this riposte, but Anglogold's marketing director Kelvin Williams soon took the wind out of his sails: "If the Bank of England ever decides to lighten its load in Japanese yen or Swiss francs, will it announce its intentions to the market in the same material, open and transparent way?" Clementi found that "I can't really comment," but was really grateful to give way to the next speaker. The Bank of England is one of three institutions which intend to sell gold, along with the Swiss National Bank and the International Monetary Fund. The SNB has lots and intends to halve its holding to 1 300 tons, the proceeds to be used for "purposes other than monetary policy", according to vice-chairman Jean-Pierre Roth. The IMF wants to sell gold to help offset the debts of highly indebted poor countries (hips) - perhaps a noble motive but more likely to harm many other hips trying to make an honest living out of gold-mining. James Cross, deputy governor of the SA Reserve Bank, drew attention to this, as well as suggesting how the three bodies might go about maintaining stability in the gold market by acting through the BIS (Bank for International Settlement, or the commercial banker to the world's central banks). Cross said the BIS could conduct regular auctions of official gold among member central banks, conveying anonymity on both buyer and seller until each bank declared the change. Cross pointed out that 16 central banks, which hold 88% of all official gold holdings, are voting members of the BIS. According to Cross, some 4 000t of central-bank gold has been placed on deposit, lent against forward sales of gold. One year and nine months of future gold production has been sold forward, double the amount of three years ago. JP Morgan's precious metals strategist Kevin Crisp concluded that gold is heavily exposed to currency movements in both developed and developing countries, and gold will continue to evolve towards commodity status. Crisp forecasts much greater volatility in the dollar gold price: 'It is not inconceivable to think that in the next five years, gold may from time to time trade in much wider ranges than those seen of late, repeating patterns seen in the 1970s and early 1980s … I believe the next five years may see fluctuations in the dollar price of gold of $100 to $150 over months." The message from Barrick Gold Corporation's Jamie Sokalsky, was blunt: Barrick is well hedged, tough on the rest of you cretins who aren't. "We have 12.5-million ounces sold forward, including our next three years' production, at $385/oz," said Sokalsky, praising the position's "no-lose" characteristics. However: "For other producers, the risk/reward trade-off may not be attractive in this environment … certainly some companies would find it difficult to justify building a hedge position now with gold at 20-year lows as opposed to when the price was a lot higher." Mr Arrogance ducked a question about counter-party risk; more than a handful of producers found themselves hoping the counter-parties might default. Next day, Da Vanzo reintroduced the art of conference-speaking: not for her the dreary intonation of a written speech read out, but a strong message about the whole gold chain: Did anyone know jewellery producers were having a similar conference in Italy discussing their problems and concerns about gold? Da Vanzo joined the gold industry two years ago and at present is batting for African gold. She founded Consolidated Bullion, the world's only gold-marketing company: "We must ensure that we have a future selling gold … all of our jobs depend on it." She names horizon-shifters, such as thinking of gold as both commodity and ingredient, branding it, getting women involved: "The gold jewellery industry is basically comprised of men guessing what women want. The industry is based on cookie-cutter repetition, designs are limited, the range is very narrow. "Gold needs an image makeover. We need to revamp gold, contemporise it and make it more relevant to consumers." Top of page | Home Page | News | BT Money | Survey | Companies | People | Appointments | World | Markets | Trends | Columns | News Maker | Money Guides | Labour Guides | Calculators | Search | Archive | E-Mail us |