Gold Starts the Week Up, Franklin Mint Buys Dead Mans Gold

The spot price of gold in Sydney ended USD$2.90 higher at USD$647.60 per fine ounce on Friday. Gold miners were mixed, with Lihir (ASX: LHG) losing one cent to AUD$3.09 and Newcrest (ASX: NCM) gaining 64 cents to AUD$21.94.

Resource Investor reports that China’s gold production is up 25.74 percent for January this year, reaching 19.856 tonnes, and that China is forecast to produce in the region of 260 tonnes of gold in 2007. Even at this growth rate, China may still see a shortfall of close to 100 tonnes, and this estimate may prove conservative given additional demand as a result of the Year of the Golden Pig.

Royal Bank of Canada (RBC) Dominion Securities has sent out a “buy” signal on gold stocks, using an indicator it follows and claims has the best track record for making money in the sector: the ratio of the gold spot price to the Philadelphia Gold & Silver Index (XAU).

The Franklin Mint has purchased 360,000 coins recovered from the wreck of El Cazador, a Spanish brig-of-war that sank in early 1784 during a storm in the Gulf of Mexico, reports. While most of the coins are silver “reals”, the company also has obtained “dead man’s gold” – gold coins carried by the captain and crew members – that will be put up for auction.

Philippine gold output is expected to increase by 16 percent due to the opening of new mines funded by foreign investors, The Emirates Evening Post reports. Angelo Reyes, the Philippines’ Environment Secretary has said that gold output from the Philippines is forecast to jump to 1.38 million ounces this year from 1.16 million in 2006. Next year, gold production could increase to 1.57 million ounces.

Canada’s Financial Post reports that Barrick Gold (NYSE: ABX) is dismissing claims that it may launch a takeover bid for Newmont Mining (NYSE: NEM) as nothing but “unsubstantiated rumour mongering.” However, the speculation was enough to push Newmont shares up as much as 3.4 percent on the New York Stock Exchange last week. The company eventually closed at USD$42.93, up almost 2 percent. About 14 million shares changed hands, more than double the usual volume.

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