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Emerging market central banks boost gold holdings in July

Section: Daily Dispatches

By Amanda Cooper
Wednesday, August 31, 2011

LONDON -- Colombia joined the ranks of official-sector gold buyers in July for the first time in 13 years, along with Russia, mirroring the trend among emerging central banks to diversify their currency portfolios.

International Monetary Fund data released on Wednesday showed that Russia, which is already the world's eighth largest official holder of bullion, raised its reserves by 4.42 tonnes in July to 841.131 tonnes, while Colombia added 2.3 tonnes to bring its reserves to 9.14 tonnes, its first increase since March 1998.

The gold price, which on Wednesday was last down 0.6 percent at $1,826.49 an ounce at 1145 GMT, has risen by nearly 30 percent this year, fuelled by a sagging dollar, waning confidence in the resilience of the global economy, and purchases by central banks, particularly in emerging market countries, over the past few years.

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Prophecy Platinum Drills 49.5 Meters Grading 1.27 g/t PGM+Au at Yukon Wellgreen Project

Company Press Release
August 22, 2011

Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) announces results from its 2011 drilling program for its first completed hole on the Wellgreen Project in the Yukon Territory, Canada.

Borehole WS11-184 encountered 472.6 meters of mineralization grading 0.43% nickel equivalent from surface to the footwall contact. Within this larger swath of mineralization the hole encountered 49.5 meters of 1.27 grams per ton platinum group metals plus gold, 0.71% nickel, and 0.45% copper (or 1.11% nickel equivalent).

The geology transitioned from blebby disseminated to net-textured to massive sulphide approaching the footwall contact grading 6.3% nickel, 1.7% copper, 2.7 grams per ton platinum, 1.6 grams per ton palladium, 0.17 grams per ton gold, and 3.4 grams per ton silver. The drilling zones and results are tabulated here, with more information:

"Not all of this is new net buying ... but it is a powerful source of demand for gold coming through from the central bank community and sends a number of messages, one of them is dollar holdings of EM countries are too high and they need to rebalance those and gold is the big beneficiary of that," said Deutsche Bank analyst Michael Lewis. "This is still a very weak dollar environment where people do want to diversify."

While the dollar has fallen by over 6 percent this year against a basket of currencies, global equities have lost nearly 7 percent, while hedge funds have fallen by a similar amount in 2011, according to the HFRX Global Fund Index.

Russia alone has added more than 51 tonnes to its reserves this year and has doubled the size of its holdings in the last four years. Other major buyers this year include Mexico with more than 100 tonnes, Thailand with 28 tonnes, and South Korea with around 25 tonnes.

The data showed Kazakhstan cut its holdings by 3.11 tonnes to 67.323 tonnes, while Tajikistan reduced by 1.19 tonnes to 1.841 tonnes and Mexico by 0.19 tonnes to 105.690 tonnes, meaning that net purchases by central banks amounted 2.24 tonnes in July, worth about $132 million at current prices.

The largest official buyers of gold since 2007 have been China, which boosted its holdings by over 450 tonnes, Russia, with some 400 tonnes, and India with 200 tonnes.

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Golden Phoenix Q2 2011 Conference Call Posted at Company Internet Site

The second quarter 2011 conference call of Golden Phoenix Minerals Inc. (GPXM) has been posted at the company Internet site for immediate playback. The call includes updates on the start of gold production at the company's Mineral Ridge gold project in Nevada, the letter of intent to acquire the Santa Rosa gold mine in Panama, and the company's due-diligence efforts to secure a senior stock exchange listing.

The conference call is 18 minutes long and you download an mp3 of it here:

Or play back the call here:

Golden Phoenix is a U.S. mining company with international exposure to gold, silver, and strategic metals. The company's business model combines project generation and royalty mining that offers the potential for exploration upside, coupled with the backing of production and future royalty streams. View company videos here: