News articles of '2019' 'February'

GOLD PRICES recovered a $5 drop in London trade Thursday as the US Dollar eased back from this week’s gains on the currency market following a surprise rise in the number of Americans filing for jobless benefit claims.

The Euro gold price in contrast held firm near the highest since April 2017 at €1155 per ounce as France recalled its ambassador to Rome over what Paris called “outrageous statements” from Italy’s deputy prime-minister Luigi Di Maio, “exploiting relations for electoral purposes.”

Leader of Italy’s self-declared ‘anti-establishment’ M5S party – now in coalition with the right-wing Lega – “The winds of change have crossed the Alps,” tweeted Di Maio after meeting self-appointed leaders of the gilets jaunes protesters, now planning to stand in May’s European elections.

Oggi con @aledibattista abbiamo fatto un salto in Francia e abbiamo incontrato il leader dei gilet gialli Cristophe Chalençon e i candidati alle elezioni europee della lista RIC di Ingrid Levavasseur.
Il vento del cambiamento ha valicato le Alpi. pic.twitter.com/G8E0ypLalX

— Luigi Di Maio (@luigidimaio) February 5, 2019

Having spiked to the highest since September 2017 in late January, new US claims for jobless income support last week came in only 7.5% lower, barely half the drop Wall Street analysts forecast.

Priced in the Dollar, gold prices had briefly dipped below $1303 per ounce for the first time in a week in Asian trade, where financial markets in China – the world’s No.1 gold consumer market – remain shut for the Lunar New Year until Monday.

The UK gold price in Pounds per ounce meantime rose to £1015 – a 16-month high when first reached at the start of January – as the Bank of England cut its UK GDP forecast to the slowest growth since the global economic slump of 2009.

As the Dollar weakened in 2016 and again in 2017, gold prices traded higher for US investors than for non-US investors, but the metal has been stronger against non-Dollar currencies since the start of 2018.

“Global slowdown concerns saw the Dollar gaining and gold moving down,” Reuters quotes one spread-betting analyst.

But while gold prices are “pressured by a stronger Dollar,” says the Wall Street Journal, they “remain near their highest levels since June” in USD terms.

The Reserve Bank of Australia yesterday held its key interest rate at a record low of 1.5% and warned that GDP growth looks “weaker than expected…due to slow growth in household consumption and income.”

Keeping UK interest rates near all-time lows and maintaining £435bn of QE bond purchases, the Bank of England today cut its 2019 UK GDP forecast from 1.7% to 1.2%, pointing to a drop in business investment, in new home-building, and in export growth.

UK Prime Minister Theresa May meantime had “robust but constructive” talks on Brexit – set to take effect on 29 March – with European Commission President Jean-Claude Juncker in Brussels today.

Further talks are now due for end-February, while UK and European Union negotiators seek “a way through” on the Irish backstop.

Disclaimer

This publication is for education purposes only and should not be considered either general of personal advice. It does not consider any particular person’s investment objectives, financial situation or needs. Accordingly, no recommendation (expressed or implied) or other information contained in this report should be acted upon without the appropriateness of that information having regard to those factors. You should assess whether or not the information contained herein is appropriate to your individual financial circumstances and goals before making an investment decision, or seek the help the of a licensed financial adviser. Performance is historical, performance may vary, past performance is not necessarily indicative of future performance. This report was produced in conjunction with ABC Bullion NSW.

GOLD PRICES held flat in US Dollar terms in London on Wednesday, keeping a $5 drop for the week so far but rising towards new all-time highs for households in world No.2 consumer market India.

Euro gold and the UK gold price in Pounds per ounce both rose, hitting 22-month highs above €1155 and 3-week highs at £1017 respectively as politicians from the European Union and the UK got no nearer to resolving the ‘Irish backstop’ part of their Brexit deal rejected by lawmakers in London last week.

I’ve been wondering what that special place in hell looks like, for those who promoted #Brexit, without even a sketch of a plan how to carry it out safely.

— Donald Tusk (@eucopresident) February 6, 2019

Gold priced in Dollars meantime held around $1313 as world stock markets slipped after US President Trump’s annual State of the Union address called for an end to what he called “the politics of revenge” but failed to highlight any progress in the key US-China trade talks.

“Relatively muted price action again for bullion during Asian trade today,” says one trading desk, noting the absence of No.1 consumer market China thanks to this week’s Lunar New Year holidays.

Over in India however – the metal’s second largest consumer market – retail gold prices today reached above 33,000 Rupees per 10 grams in Mumbai and over Rs 34,000 in Ahmedabad, nearing new all-time record highs.

Coming after wholesale gold prices in India last week rose to a slight premium to global quotes, these levels match the record-high Rupee cost for consumers of August 2013, when India’s then-Congress Party government rushed out a series of severe anti-gold import rules to try and stem the country’s huge balance of payments deficit, worsened by record-high gold demand amid the metal’s steepest Dollar-price drop in three decades.

India today continues to charge 10% import duty on gold bullion, plus extra VAT sales tax on jewelry since 2017.

Wholesale prices in the sub-continent have now traded at a discount to London on 75% of all business days over the last 3 years according to data compiled by the mining-industry backed World Gold Council, suggesting weak domestic demand against plentiful supply.

“Despite high prices, demand for gold jewelry has been good, mainly due to the ongoing wedding season,” the Times of India quotes one retailer.

“We expect purchase to remain good for another month, before the Holashtak or inauspicious period sets in.”

Late-2018’s rising gold price for India consumers “saw a rise in the number preferring to exchange existing gold for new pieces” said the WGC of India’s jewelry business in its global demand update last week.

“This was particularly prevalent in the south and west regions, where some retailers reported an increase of up to 45% in [this type of] exchange activity.”

India’s police and Customs officials meantime report “an extra push from smugglers to bring in more quantity of gold,” reports the New Indian Express, with gangs looking to exploit today’s near-record high retail prices for legally-imported and retailed products.

“When smugglers used to bring less than a kilo of gold before,” says Customs Commissioner Sumit Kumar, “they now take additional risk and smuggle in more quantities.”

Following last week’s pre-election giveaways in India’s national 2019 budget – widely expected to boost gold demand in the key rural states – the finance minister of Assam today promised a raft of subsidies and gifts for the northeastern state’s citizens, including free electric bicycles for each student passing this year’s senior school exams, rice priced at just 1 Rupee per kilo for 5.3 million families, and 1 tola of gold (currently worth around $500) for brides whose families earn less than $7,000 per year.

Formerly a politician for the Congress Party – dominant in Indian politics until Narendra Modi’s victory in 2015 – Himanta Biswa Sarma quit to run on the ticket of today’s ruling BJP in May 2016.

Disclaimer

This publication is for education purposes only and should not be considered either general of personal advice. It does not consider any particular person’s investment objectives, financial situation or needs. Accordingly, no recommendation (expressed or implied) or other information contained in this report should be acted upon without the appropriateness of that information having regard to those factors. You should assess whether or not the information contained herein is appropriate to your individual financial circumstances and goals before making an investment decision, or seek the help the of a licensed financial adviser. Performance is historical, performance may vary, past performance is not necessarily indicative of future performance. This report was produced in conjunction with ABC Bullion NSW.

GOLD PRICES slid Monday in London, losing more than $15 per ounce from Friday’s new 8-month high for US Dollar investors as No. 1 consumer nation China shut for the Lunar New Year holidays.

World stock markets meantime ticked lower and oil prices hit 2-month highs amid the worsening crisis in the energy resource’s No.1 reserves holder Venezuela, plus growing US-Russia tensions.

Gold bullion prices fell to $1310 per ounce as the US Dollar bounced on the currency market following 2 consecutive weeks of declines.

“[Friday’s] upbeat non-farm payroll suggests the US economy is riding a strong momentum, dampening demand for safe-haven assets like gold,” Reuters quotes one spread-betting brokerage.

Ending last week with the Federal Reserve holding its key interest rate unchanged, January however saw gold-backed ETFs increase their holding “by over 70 tonnes,” notes German bank Commerzbank.

“That is almost equivalent to the total inflows of last year.”

Due to the New Year’s partial US government shutdown, US regulator the CFTC remains behind with updates to positioning data in precious metals futures and options contracts.

But new figures released Friday confirmed that hedge funds and other speculators in the Managed Money category grew their bullish betting on gold prices as 2018 ended, capping their longest run on record of bearish bets.

US benchmark WTI-grade oil contracts meantime rose above $64 a barrel on Monday as supply cuts from the Opec cartel of nations, plus new US sanctions against Venezuela’s petroleum industry, spurred talk of a supply crunch.

The US State Department’s move to block the sale of Venezuelan crude aims to force President Nicolas Maduro to hand power to rival Juan Guaidó – now recognized as interim leader of the Latin American nation by Washington plus Australia, the UK, Spain, France and Germany.

Following mass protests against Maduro at the weekend, US President Donald Trump said Sunday that US military action is “an option”.

Venezuela’s ally Russia warned the US against “destructive meddling”.

With the Bank of England refusing to ship Venezuela’s gold bullion holdings in London back to Caracas since November, Abu Dhabi investment firm Noor Capital on Friday confirmed accusations from Florida senator Marco Rubio that it bought 3 tonnes of gold from Venezuela’s central bank on 21 January, adding that it will now hold off buying more amid the US-led sanctions.

The BBC meantime quotes “a senior Western diplomatic source” that Turkey has been “warned” against accepting any more gold from Venezuela – most especially with “growing suspicions” that it is then busting other sanctions to re-export the metal to Iran – after importing nearly $900m-worth last year.

After the United States said on Friday it will withdraw from a 1987 arms controls pact with Russia in 6 months’ time unless Moscow ends what Washington says are violations, President Vladimir Putin suspended the Intermediate-range Nuclear Forces Treaty with immediate effect on Saturday.

Silver prices today fell harder than gold, retreating 3.0% from Friday’s top above $16 before rallying 10 cents to $15.82 per ounce.

Disclaimer

This publication is for education purposes only and should not be considered either general of personal advice. It does not consider any particular person’s investment objectives, financial situation or needs. Accordingly, no recommendation (expressed or implied) or other information contained in this report should be acted upon without the appropriateness of that information having regard to those factors. You should assess whether or not the information contained herein is appropriate to your individual financial circumstances and goals before making an investment decision, or seek the help the of a licensed financial adviser. Performance is historical, performance may vary, past performance is not necessarily indicative of future performance. This report was produced in conjunction with ABC Bullion NSW.