Prices were higher on Friday and mixed on the week. The most-active June gold contract on the Comex division of the New York Mercantile Exchange rose Friday, settling at $1,591.90 an ounce, up 0.50% on the week. July silver rose Friday, settling at $28.715 an ounce, down 0.61% on the week.
In the Kitco gold survey out of 33 participants, 23 responded this week. Of those 23 participants, 21 see prices up, while two see prices down, and zero are neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.
Several analysts who follow technical-chart patterns said this week’s low of $1,526.70 for the June futures was important to hold and may provide a stronger base of support for the market if prices fall again. These analysts said gold could target $1,625-$1,640 next week if momentum continues up.
Gold prices rallied on hopes for another quantitative easing after the Fed meeting minutes suggested again that the Fed stands ready to act. Further support came from weaker-than-expected data on Thursday, specifically the drop in U.S. leading indicators and the Philadelphia Fed index.
Yet analysts at Barclays said those who only focus on Thursday’s news have too narrow a view as U.S. data is mixed. Thursday’s weaker data “follows strong industrial output and housing starts in April, a rebound in the Empire state manufacturing index and the strongest builder sentiment in five years. Jobless claims held steady, and point to a modest uptick in payroll growth in the May employment report on June 1.”
After two days of sharp gains, some analysts suggested gold might have turned a corner for price direction after recent weakness. They pointed out that gold’s ability to rally Thursday as risk assets fell might signal a new direction for gold, returning it to safe-haven status, but others urged caution, saying that one day does not make a trend.
Edward Meir, commodities consultant for INTL FCStone, said while Thursday’s bounce was “impressive,” he wants more evidence that gold’s recent gains have legs.
“We still are not that comfortable with the European situation, which still has the potential of going off the rails between now and June 17th, at which time the Greek situation should clarify itself,” he said.
Meir and other market watchers said given the unknowns in Greece between then and now, the U.S. dollar should stay stronger and added that time will tell whether gold has become a safe haven on its own or if this week’s action was just a short-covering rally. If gold can gain in tandem with the dollar, it may have returned to safe-haven status, as normally the gold falls versus the greenback because the metal is denominated in dollars.
“Much will depend not so much on the European debt situation, as opposed to whether the global macro environment starts to deteriorate even further. Such a scenario would help gold’s upside more, as central banks will then be expected to be more aggressive in terms of quantitative easing laying fertile ground for a more sustained advance in gold,” Meir said.
WHAT TO WATCH NEXT WEEK
Traders will look to this weekend’s G-8 meeting and any message sent from the confab on what measures might be taken by policy-makers to boost growth and deal with Greece, analysts said.
The U.S. economic data calendar is light going into next week, so market watchers may look for direction from China’s HSBC flash Purchasing Managers Index and Germany’s IFO Index. Also next week there is the EU Summit, which could provide plenty of headlines as government officials try to balance austerity and growth.
Gold is expected to rise next week, but not everyone sees it changing the recent trend. Daniel Pavilonis, senior commodities brokers with RJO Futures, said looking toward next week gold might have the chance to add a little more to its gains, but sees the market topping out around $1,630-$1,640. Much of the strength in gold comes from hopes of another round of monetary stimulus, which is something he doesn’t foresee happening. At most, he said, the Fed may try to shift around the balance sheet in an effort to keep down longer-term yields. That would not be supportive for gold.
Pavilonis also said prior to the rebound off the $1,520s area, gold had been drifting lower, while U.S. bond yields were falling and German bund yields rising. He’s not convinced gold is a safe-haven asset yet. What also concerns him is the general economic slowdown globally, which hurts demand for everything, including gold. Crude oil prices are falling, which is another side of economic weakness.
“In the near-term I see gold up a little more from here, but then I see it coming back down. If we break this week’s low, there’s nothing to stop it until $1,470 and then maybe $1,420,” he said.
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The uber-critical $1,527 line of gold’s price defense came into play overnight as we had recently pondered here, and this time around, despite all the denials of the fact and protestations to the contrary, the gold market entered the cave of the bear. Granted that with RSI levels near 20 and with bullish Daily Sentiment indicators perhaps only in the single digits an overdue counter-trend rally might yet delude the bulls, but this is where the market highway junction that really matters is to be found.
A quick round-up of the midweek opening quotes showed gold prices being bid near $1,540 the ounce. The yellow metal has lost $255 per ounce since February the 28th and $385 since last September’s peak. Spot silver was quoted at $27.55 per ounce and platinum posting a small loss of $1 at $1,426 per ounce. Palladium lost $5 to reach $586 while rhodium was unchanged at $1,325 after having shed $25 recently. In the background, the US dollar hovered near 81.33 on the index but crude oil slipped $1.40 to $92.60 a barrel (a six-month low), copper was off 1.4%, while the euro continued to struggle near $1.27 against the greenback.
While the majority of recent gold market commentaries kept reaching in vain for any possible explanation for gold’s continuing melt-away, the simplest of all reasons evidently eluded most of their authors. We have now been treated to excuses that range from the silly to the preposterous, as to why gold is not acting in the manner that we had all been promised it would, when and if serious financial conditions such as we are witnessing these days would materialize.
Thus, we are being treated to gems such as: “Gold is down because the putative ‘bankster elite’ wants it to be down” and “gold is down because some ‘paper market’ is deluding people to the ‘reality’ that, in fact, gold is up and that the demand for coins and bars has never, ever been better” and “ advanced algorithms that control commodities and stocks make real price discovery impossible“ or “gold is down because we just had a “Super Full Moon” event.” We could go on…but it is not worth your time.
If anyone cared to dig just a tad deeper, they would have found the principal agent of change in gold prices staring them in the face; the US dollar. Yep, that debt-ridden, good-only-for-fireplace fodder, no-good, sickening green piece of paper, just recorded its 12th session of gains in value. That kind of streak has not been seen since –in the words of Marketwatch- “at least 1985.” Talk of the target level of 90 on the index has suddenly materialized, and such talk could be validated by a breach above the 82 mark on that scale.
If you think that is merely heavy lipstick on a terminally ill pig, the consider the virtual flood of dollar obituaries which have been coming our way for the past six years, and how they might appear to today’s readers in light of what has not happened. You get the point. In what may have sounded like trite remark at the time, this writer told Bloomberg’s Tom Keene (in an early January interview) that “gold will go where the dollar does not.”
That point is that, gold prices, aside from all the unpleasant happenings in Europe, closed at their lowest level of 2012 after having probed even lower (around $1,540) during the trading day on Tuesday. The point is that silver (also purported to be around $80 by now, for sure) tested price zones very close to $27.00 an ounce instead of vaulting three times higher. The point is that the dollar’s aforementioned streak has now been updated and that its 13-day long advance has now been classified as the longest winning one ever since the trade-weighted index has been created.
The point also is that, as was the case in 2008, this is the perfect environment for gold to show its mettle and to attract serious amounts of worried global money, and, yet, it is failing to do so. In fact, this May has been so cruel to bullion prices that analysts can now talk about the worst semi-monthly performance in the yellow metal in seven year, and not just since 2008.
If there is any “comfort” to be found by disillusioned gold and silver investors who had loaded up on the metals in anticipation of that which never came, it would be the fact the misery loves company. Commodities as a group fell for a tenth day on Tuesday, putting in their worst losing sequence since 1998. Oil, for example, traded near $92.50 per barrel early this morning.
Copper fell to the lowest level since January. Last week, according to Standard Chartered, investors pulled another quarter billion dollars or more out of this fast-sinking niche. A huge portion of recent gains in this space was attributed to the ear of “easy money” courtesy of the Fed. Now that questions have arisen about the continuation of that kind of largesse, well, you can see the (initial) results; pain and devastation.
Peter Major, an analyst at Cadiz Corporate Solutions, a unit of Cadiz Holdings Ltd., said by phone from Cape Town: “Commodity prices were unrealistically high as a direct result of a combination of easy and cheap money from quantitative easing and the threat of inflation. The market is efficient and it looks ahead. Mining houses have been weak for four or five months now; investors definitely saw weaker prices going forward.” Does that sound somewhat familiar? It should, to the regular readers of these columns.
As well, we cannot yet take comfort in the fact that the latest reports indicate that investors such as fund maven John Paulson have not yet lightened up on their GLD holdings. The first quarter may have initially been kind to such portfolios but the tide has swiftly turned against them and new questions are not swirling around as to the fate of at least a portion of such allocations. Shareholders do not take kindly to more than one “explanatory” message from fund managers. They want results, here and now.
Some market watchers expect Mr. Paulson to join the selling herd and cut some of his holdings in gold before the second quarter draws to a close. “There’s absolutely no question in my mind that large institutions have been net sellers in gold over the past two weeks,” said Adam Sarhan at New York’s Sarhan Capital. “The fact that Paulson has been coming under a lot of pressure on his other holdings may force him to liquidate as well.” The additional price pressure coming from such liquidations is as yet not fathomable, but is certainly did show its effects on the way up in the gold market. To be continued…
Gold corrects but Fed looms
Something that we are continuing: our coverage of developments in China and how they relate to the commodities’ space. The recent shifts in that country’s economy have clearly been contributors to the decline in the price of “stuff” and that includes gold and silver. At the present time, the overriding perception is that China’s economic deceleration could increase and that its growth might reach a weak point not seen in circa 13 years. PMICO certainly feels that way, and it projects economic expansion in China to only come in at around the 7% mark this year.
Something else that underscores the deepening slowdown in the planet’s second-largest economy is the fact that foreign investment in China fell by 0.7% in April. So-called inbound investment amounted to only $84 billion after the country missed import/export estimates and recorded the slowest level of industrial output since 2009.
China’s currency reserves did however grow in the first quarter and that pattern reversed the first quarterly decline since 1998 that was witnessed earlier. However, once again starkly contradicting those who continue to see the mirage of “stealth” Chinese official sector gold buying, China bought…US Treasuries. In fact, China bought 1.6% more US government securities in Q1 while Japan bought 2.4% more of the same as well.
And now, to close things out, we go back to the US of A for more perspectives. A string of economic statistics has been making its way into the markets since the start of the week, and most of the data appears to reinforce the take that the Fed will not budge and that QE3 remains only a dream in the sleep of the commodity bulls who have become hooked on such generosity. In fact, the week’s most relevant metric- that of inflation falling (largely owing to gas prices caving in) – has not managed to bring about any higher levels of expectations for a new round of QE.
Other than that, we have seen retail sales in April bounce one-tenth of a percent higher in April, US homebuilder sentiment coming in at its best level since the Great Recession, The Empire State manufacturing Index rebounding to 17.1 this month, US industrial production climbing 1.1% and thus beyond expectations in April, housing starts rising by 2.6% in the same month, and capacity utilization – an important metric- increasing to 79.2 percent, i.e., the highest level since April of 2008. That little amalgam of positive economic numbers should be sufficient to silence those who see the “unfolding demise of America” and who only preach fear. Odds are stacked against such a silencing however, as it has become quite fashionable to scare folks into buying that which…one offers to sell; be it God, gold, or guns.
Until Friday,
By Jon Nadler
Senior Metals Analyst – Kitco Metals
By Kitco News
Editor’s note: Catch the Latest Happenings with Kitco Video News!
(Kitco News) – World gold demand fell 5% to 1,097.6 metric tons during the first quarter compared to the same period a year ago, with jewelry consumption down but investment demand higher, the World Gold Council said in its quarterly trends report released early Thursday.
“It was quite a complex quarter,” said Marcus Grubb, managing director for investment at the World Gold Council.
He pointed out that prices climbed year-on-year despite the lower global demand, including a sharp decline in buying from India, historically the world’s largest consumer. This meant there had to be “a lot of positives” elsewhere for demand to hold up as well as it did, Grubb said. Chinese buying surged, far outpacing India for both gold jewelry and investment, and central banks remained net buyers.
17 January 2010, terbang dari Kuching ke Pulau Pinang untuk mengambil stok pembelian pertama. Bersua dengan Dato' Louis Ng CEO Public Gold. Personally terkejut dengan kehadiran anak muda jauh dari seberang.. He personally gives me useful business tip..
In value terms, global gold demand rose 16% year-on-year to $59.7 billion, with an average price of $1,690.57 per ounce that was up 22% from the same period a year ago, the WGC said.
First-quarter global gold supply rose 5% year-on-year to 1,070.3 metric tons as both mine production and recycling grew.
Data for the report was compiled by the London-based consultancy Thomson Reuters GFMS.
1Q Jewelry Demand Falls 8% Year-On-Year; Investment Demand up 13%
While first-quarter demand of 1,097.6 tons was down from a year ago, the WGC described it as in line with the average of the previous eight quarters.
Global jewelry demand fell 6% year-on-year to 519.8 tons, which Grubb linked to the high price and volatility of gold in the first quarter. Still, the WGC described sales as resilient considering the price rise. In fact, the January-March total was above the average for the last five first quarters of 496.2 tons. In value terms, gold-jewelry demand grew by 14% in the first quarter to a record $28.3 billion.
First-quarter investment demand grew 13% year-on-year to 389.3 tons, the WGC said. This was driven by demand for ETFs and medals/imitation coins, with declines for physical bars and coins, the WGC said. Holdings for ETFs and similar products grew by 51.4 tons, a reversal from the year-ago quarter when there were net outflows of 62.1 tons, said the WGC. Buying of medals and imitation coins, dominated by Indian demand, grew by 7% to 26.6 tons.
Demand for gold bars and coins totaled 337.9 tons, 17% below the first quarter of 2011. Still, the Gold Council said, the percentage decline largely reflects a strong year-ago quarter. For instance, first-quarter bar demand fell 18% to 260 tons, but was above its five-year average of 171.5.
The amount of gold used by the technology and industrial sectors slid 7% year-on-year to 107.7 tons.
China’s first-quarter demand was a record 255.2 tons, up 10% year-on-year. Jewelry consumption rose 8% to 156.6 tons and accounted for 30% of global jewelry demand, making China the largest jewelry market for the third consecutive quarter. Investment demand rose 13% year-on-year to a quarterly record of 98.6 tons.
“As we previously forecast, it is likely China will become the largest source of demand for gold in 2012,” Grubb said.
India, meanwhile, had a “difficult” quarter, Grubb said. Jewelry demand fell 19% year-on-year to 152 tons and investment demand was down 46% to 55.6 tons. Grubb cited hikes in import taxes on gold, taking them from 1% to 4%, as well as an excise tax that has since been rescinded. The WGC also said the country’s demand was hurt by a weaker rupee, which makes gold more expensive for Indians.
The WGC looks for a normalization of investment demand as consumers adjust to higher import taxes and bullion dealers rebuild stocks. The trends report said high local prices and fewer auspicious days in the Hindu calendar will likely keep a lid on India’s jewelry demand. Still, Grubb said, there is anecdotal evidence of some recovery, such higher gold premiums.
The Gold Council reported that global central banks posted net purchases of 80.8 tons in the first quarter, accounting for an estimated 7% of global gold demand. Mexico was the largest purchaser with 16.8 tons, followed by Russia with 16.5 and Kazakhstan with 14.2.
The WGC anticipates that central banks will be net buyers for the foreseeable future and as a result, is now listing official-sector purchases under “demand” in the trend report. Historically, this had been listed as “supply,” (with negative numbers during periods of net purchases), since central banks were net sellers for many years prior to a turnabout in recent years.
Global Mine Output Up 3%; Recycling Increases 11%
Mine output of 673.8 tons was 3% higher than the year-ago period. This was the result of new projects coming on line and the continued ramping up of projects that were started up during the last three years.
“Despite higher prices, it’s been moderate growth,” Grubb said.
Total mine supply was 678.8 tons when adding in 5 tons of net producer hedging, although the hedging was described as minute and half of the total from the year-ago quarter. The limited hedging activity taking place is the result of one or two producers taking out project-related hedging or extending existing positions, the WGC said. The report described the global hedge book as “very modest” at roughly 160 tons as the first quarter wound down.
Meanwhile, the amount of recycled gold rose 11% year-on-year to 391.5 tons. This was in line with the first-quarter average from 2007 to 2011 of 395.2 tons, the WGC said. Industrialized nations accounted for around one-third of the global supply of recycled gold.
By Allen Sykora of Kitco News; asykora@kitco.com
Global prices of the metal had plunged to $1,547.99 per ounce, the lowest in 2012, amid concerns over the financial turmoil in Euro zone, but have inched back to $1,560 after positive data about the German economy and demand from southeast Asia and India.
Unlike gold, the stock market is up 5.6% in 2012 despite heavy losses since mid-February.
For India, the decline in gold prices was offset by the rupee’s depreciation. But many analysts and traders expect the currency to appreciate in the medium term. Analysts, economists, fund managers, bullion traders and jewellers say the yellow metal will bounce back and may give returns of 10-15% in three-six months depending on the value of the rupee.
“Like every asset class, gold is in a consolidation phase. Though it’s currently in a bearish phase due to geopolitical uncertainty, it will bounce back shortly. Gold still remains a safe haven and investors should add gold to their portfolio. At least 10-15% of their investments should be in gold,” said Lakshmi Iyer, head of products and fixed income at Kotak Mutual Fund.
Gold prices plummeted as the euro sank against the US dollar on worries that a worsening debt crisis in Greece could spill over to its neighbours and the country may exit the Euro zone. On MCX, the June gold contract on Tuesday was trading at Rs 28,057 per 10 gm, down 0.66%.
Though gold is trading at its lowest since December, Morgan Stanley said the metal’s bull run “is not over” and there were buyers at current prices. The recent selloff is “consistent with distressed selling and long liquidation”, but prices would recover in coming weeks.
A gold dealer in Singapore said Asian demand was supporting prices. “Refiners can’t deliver immediate gold because there’s a sudden surge in demand. We are seeing demand from India, Thailand and Indonesia,” he said, according to a Reuters report.
Bullion traders have resumed purchases after a gap of two months and started building inventories, traders said. “This is a good time for buying gold, and imports of the metal are expected to touch 60 tonnes this month compared to 35 tonnes last month,” said Bombay Bullion Association President Prithviraj Kothari.
]]>Tuesday May 15, 2012 4:02 PM
Gold closed weaker on further weakness in the euro as Greece edged closer to another round of elections. Nevertheless, emerging-market demand for bullion could help stem further declines, says HSBC. Gold has fallen some 7% so far in May. “In light of cheaper prices, Asian dealers have reported a pickup in physical gold purchases in countries such as India, Thailand and Indonesia,” HSBC says. Although gold demand in India has been weak early in the year due to a depreciating rupee and proposed government tariffs, demand in the black market may have picked up, the bank says. HSBC cites comments from the Indian customs commissioner saying gold smuggling into India has increased significantly in response to government tariffs.
By Allen Sykora of Kitco News; asykora@kitco.com
Market Nuggets: MKS Finance: Gold Eases With Euro On Greek Political Impasse
Tuesday May 15, 2012 3:33 PM
Gold finished the day lower on worries about Greece and pressure on the euro, says MKS Finance. The metal weakened overnight but bounced after stronger-than-forecast report on German gross domestic product. Later, “as Greece announced that there was no deal on government and that the country was heading again to elections, the EUR immediately lost about a figure down to $1.2770,” MKS says. “The initial drop took gold down back to the low but the metal eventually decorrelated from the currency going towards the fix.” MKS says physical buyers are still “not big players, as they are probably waiting for a base to build.” As of 3:06 p.m. EDT, Comex June gold was $9.40, or 0.6%, lower at $1,551.60 an ounce. July silver was down 50.3 cents, or 1.8%, to $27.85.
By Allen Sykora of Kitco News; asykora@kitco.com
Market Nuggets: BNP Paribas: Tin Most Supply-Constrained Base Metal; Price Rise Forecast
Tuesday May 15, 2012 11:47 AM
BNP Paribas looks for tin to return to $25,000 a metric ton in the second half of the year and reach $27,000 in the first half of 2013. A report from senior metals strategist Stephen Briggs says demand has been soft, rising just 30% since 2001 compared to 60% for the other five base metals combined. “However, we still believe that the underlying fundamentals are strong, not because demand prospects are enthralling but because tin is the most supply-constrained of the base metals,” he says. Global output last year was about 10% lower than its peak in 2005 despite a price rise of 250% over the period, he says. Mine output rose just 1% last year. “The industry remains on track for faster growth in 2012-13, but we have trimmed our forecast from 8% to just 6.5-7.0% over the two years,” he says. BNP looks for a supply deficit of 10,000 metric tons this year and 5,000 in 2013. As of 11:33 a.m. EDT, tin was trading at $19,989 a ton.
By Allen Sykora of Kitco News; asykora@kitco.com
Market Nuggets: Barclays: Low Natural Gas Prices Unlikely To Slash U.S. Aluminum-Smelting Costs
Tuesday May 15, 2012 9:12 AM
Weak natural-gas prices are unlikely to significantly lower cost pressures for North American aluminum smelters, says Barclays Capital. The sector is generally perceived to be in the midst of a structural change in which low prices and rising costs will ultimately drive the closure uneconomic producers, eroding spare capacity in the market. Barclays says weak natural-gas prices are doing little to ease those cost pressures in the U.S. In fact, even though U.S. natural-gas prices fell nearly 60% since 2008, average regional smelter electricity costs rose by 32%. Natural gas was used as a power source by just 2% of North American smelters last year, Barclays says. Further, smelter power tariffs are often fixed for the long term and in many cases are linked to aluminum prices, which rose by 30% from 2009-11. For smelters to benefit from lower natural-gas prices, they would either have to build new gas-fired capacity or close their current self-generation capacity. “If the cost-benefit of such strategies makes sense and parties can agree to new terms, then this obviously cannot be ruled out,” Barclays says. “However, the fact we have yet to see any announcements to this end in 2012 so far indicates the aforementioned challenges make it an unlikely near-term substantive influence on aluminum-production costs trends.”
By Allen Sykora of Kitco News; asykora@kitco.com
Market Nuggets: Gartman Looks For Greece To Eventually Exit From The Euro
Tuesday May 15, 2012 8:54 AM
Investor and newsletter writer Dennis Gartman is among those who look for Greece to eventually leave the eurozone. He says “it is not a matter of if but only a matter of when.” Germany is likely to tire of being the eurozone’s source of liquidity, Gartman says in The Gartman Letter. Polls show that Germans, after paying for the inclusion of East Germany back into Germany, are not prepared to keep sacrificing on behalf of Greece, Spain, Portugal and Italy, Gartman says. “Largesse can only be extended so far before the bonds of sympathy and pan-European good are torn asunder,” Gartman says, adding that the “breaking point is hard upon us.”
By Allen Sykora of Kitco News; asykora@kitco.com
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Apabila meletusnya perang di Cambodia, ramai rakyatnya lari meninggalkan tanah air bagi menyelamatkan diri dan keluarga. Sebahagian besar daripada mangsa peperangan ini memilih Malaysia sebagai tempat melarikan diri bagi memulakan hidup yang baru. Kebanyakan dari mereka mendarat di selatan tanah air terutama daerah Kota Tinggi dan Mersing.
Melarikan diri tanpa hala tuju.. Tiada kompas atau GPS.. Ke mana angin membawa haluan ke situlah tujuan mereka
Semenjak dari itu, bermula lah kehidupan baru mereka di bumi asing tanpa sebarang keistimewaan. Daripada sehelai sepinggang, mereka kini menguasai deretan bazar tekstil di tengah-tengah bandar Kota Tinggi dan memiliki banglo di Ulu Tiram.
Memang dah menjadi adat, orang yang berusaha dengan tekun lambat laun pasti berjaya! Dalam hal perniagaan, sekecil mana sekalipun tetap memerlukan modal bagi memulakannya. Daripada manakah orang-orang Cambodia ini mendapat modal mereka?
Rupa-rupanya rahisa mereka ada pada ‘benda’ yang mereka bawa bersama ketika melarikan diri. Semua harta benda yang lain ditinggalkan dan dirampas oleh rejim Khmer Rouge. Namun dalam keadaan tergesa-gesa mereka masih sempat membawa bersama beberapa keping ataupun ketul emas.
Vietnamese Kim Thanh gold bullion "bars" or leaves Fineness: .9999 Actual Gold Content: 1.205 troy ounce (37.5 grams) (Typically, three leaves wrapped in oil-paper: two leaves at 15gr apiece and a third at 7.5 gram)
Bukannya Cambodia tidak ada matawang ketika itu, malah matawang Dolar Amerika cukup banyak! Namun mereka sedar bahawa dalam situasi perang, duit tidak akan ada nilai lagi. Emas pula dalam bentuk apa sekalipun tetap diterima walau ke mana sahaja mereka pergi di muka bumi ini. Tidak ada satu negara pun di dunia ini mengatakan emas tidak bernilai!
Matawang yang diguna sebelum perang meletus
Pengalaman orang-orang Cambodia ini memang banyak memberikan pengajaran. Betapa peranan emas dapat menyelamatkan kelangsungan hidup mereka dan generasi seterusnya.
Dalam dunia yang moden ini, kaedah melarikan diri dengan emas juga telah berlaku.. Iaitu isteri bekas presiden Tunisia bernama LAILA!
Laila, melarikan diri menggunakan kapal terbang ke Eropah dengan emas yang begitu banyak!
Official Banner/Bunting yang eksklusif bagi dealer-dealer rangkaian Public Gold Sarawak. Selain dari design ini bukanlah dealer kami
Original Article;
Hafizul Hakim Bin Mohamad Kerta (A350)
Master Dealer Borneo
h/p: 019-8884452
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But lower bullion prices triggered a flurry of activity in the physical market, with purchases from jewellers in top consumer India and also Southeast Asia keeping premiums for gold bars steady at $1.20 to London prices in Singapore.
Although euro zone finance ministers have dismissed talk of Greece leaving the euro zone as “propaganda and nonsense”, they urged the debt-ridden country to respect the terms of the bailout programme agreed with the EU and the International Monetary Fund.
Gold hit an intraday low at $1,552.49 an ounce before rebounding to $1,553.66 by 0318 GMT, still down $2.99. Early bargain hunting, however, sent prices to a high of $ 1,559.33 a n ounce.
“Jewellers have been buying a lot. At the moment supply is a bit tight for immediate delivery, although it’s not that the market is short of physical gold bars right now,” said a physical dealer in Singapore.
“Refiners can’t deliver immediate gold because there’s a sudden surge in demand. We’re seeing demand from India, Thailand and Indonesia. I think the gold price could fall further because of the global economic situation, and China is also slowing.”
Gold raced to a record of around $1,920 an ounce in 2011, when investors turned to the metal as a safe haven during the debt crisis in Europe. But bullion is moving in tandem with riskier assets this year, as investors turn to the safety of the dollar and the euro hits multi-month lows.
Beijing’s move to slash banks’ reserves to boost lending is seen as an affirmation the world’s No. 2 economy is weakening further. A Reuters poll showed China was likely to cut the amount of cash lenders must hold as reserves by another 100 basis points this year.
US gold for June delivery fell $7.40 to $1,553.60 an ounce.
Overnight, the selloff in commodities deepened, with the Thomson Reuters-Jefferies CRB index, a closely followed indicator for commodities, falling 1.2 per cent to settle below 290 points – its lowest since October 2010.
Greece’s president will ask politicians on Tuesday to stand aside and let a government of technocrats steer the nation away from bankruptcy, but leftists have already rejected the proposal and look set to force a new election they reckon they can win.
The euro slipped to a four-month low against the dollar as political impasse in Greece raised fears the country may renege on bailout pledges and exit the currency bloc.
Equities also dropped as investors liquidated riskier assets, with the MSCI’s broadest index of Asia-Pacific shares outside Japan falling 0.3 per cent to a four-month low.
“Sentiment is of course a bit bearish,” said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong, adding that markets were waiting for Greece to form a new government or call an election.
Silver hardly changed, while platinum and palladium rebounded from lows.
Platinum and palladium prices are expected to end the year higher, a Reuters poll conducted for Platinum Week showed, as constraints on supply and improving demand tighten the market.
The global palladium market may swing into deficit this year, potentially pushing prices of the autocatalyst metal to nine-month highs, as top producer Russia sells its state stockpile, refiner Johnson Matthey said on Monday.
Australian Prime Minister Julia Gillard.
The underlying cash surplus will be A$1.54 billion ($1.56 billion) in the 12 months to June 30, 2013, Treasurer Wayne Swan said in Canberra yesterday. Expenditures are forecast to fall to A$364.2 billion next year, the first drop in figures dating back to 1971. The A$44.4 billion deficit this year is the third-largest on record and 3 percent of gross domestic product.
“The surplus years are here,” Swan said in a speech to parliament after he scrapped a planned corporate tax cut. A balanced budget will “provide a buffer against global uncertainty, and continue to give the Reserve Bank room to cut interest rates for families,” he said.
Gillard’s bid for a A$46 billion fiscal reversal risks slower growth heading into an election year with polls showing the opposition Liberal-National coalition would win in a landslide. She’s betting tighter budgets will put the onus on the central bank to further reduce the highest benchmark rate among major developed nations and win a political dividend in an economy where 90 percent of mortgages have floating rates.
‘Very Large’
“The fiscal turnaround is very large,” said Su-Lin Ong, head of Australian economic and fixed-income strategy at RBC Capital Markets in Sydney. “It does keep pressure on theReserve Bank of Australia to continue to lower rates.”
The 2013 surplus, if achieved, will amount to 0.1 percent of GDP, the budget showed. That compares with a U.S. deficit equivalent to 8.1 percent of the economy, Japan’s shortfall of 9.5 percent and the euro area’s gap of 4.1 percent of GDP, according to data compiled by Bloomberg.
Australian bonds rallied after the budget, spurred by concern Greece’s political deadlock will exacerbate Europe’s debt crisis. The benchmark 10-year yield fell as much as five basis points to a record 3.37 percent. The local currency traded as low as $1.0093, near the weakest level this year.
Gillard and Swan have struggled to protect the ruling Labor Party’s electorate from the two-speed economy — a phrase the RBA uses to distinguish resource-rich regions in the north and west that are powering growth and hiring workers, from struggling tourism, manufacturing and retail industries of the south and east.
Two-Speed Economy
“The great bulk of Labor supporters are in the slow lane,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd.
Moody’s Investors Service Vice President Steven Hess saidAustralia’s Aaa rating with a stable outlook remains intact. Kyran Curry, an analyst at Standard & Poor’s, said that while there’s no immediate impact Australia’s AAA rating, the strategy relies on “an accommodative economic outlook that remains highly uncertain.”
Projected surpluses through 2016 are driven by A$33.6 billion in savings.
The budget papers show spending reductions include A$5.4 billion from defense over four years and A$2.9 billion from the deferral of an increase in overseas aid by a year. It will also reduce tax breaks on pensions for higher income earners and tighten the pharmaceutical benefits scheme to lower costs.
Europe’s Austerity
As Europe faces years of fiscal austerity, Australia’s budget surplus would make it one of the first developed nations to emerge from an era of red ink caused by the worldwide financial crisis that started in 2008.
“In a global economy marked by anxiety and uncertainty, our nation is a beacon of resilience,” Swan told parliament.
The Treasury forecasts the economy will accelerate to 3.25 percent in the 12 months beginning July 1 before slowing to 3 percent growth the following year. The unemployment rate is predicted to rise to 5.5 percent in the next two years.
Consumer prices will increase to 3.25 percent in the 12 months to June 30, 2013, with the introduction of the government’s carbon pollution reduction scheme adding 0.7 percentage point, and core inflation will be 2.75 percent, the budget papers show.
The outlook is similar to the RBA’s growth and inflation forecasts released last week in its monetary policy statement.
Mining Boom
The Treasury predicts resource industries will expand at an annual pace of 9 percent, compared with 2 percent for the rest of the economy over the next two years. Energy and mining companies will invest a record A$120 billion in the fiscal year starting July 1, a 150 percent increase from two years earlier, as part of a A$450 billion resource investment pipeline, the budget showed.
Swan told parliament yesterday that for much of the country“this feels like someone else’s mining boom.” In response, he announced that A$1.8 billion in revenue from the government’s mining tax will be diverted to increases in family payments.
RBA Governor Glenn Stevens last week cut the overnight cash-rate target by half a percentage point to 3.75 percent, the deepest reduction in three years. Traders are forecasting a 54 percent chance the RBA rate will drop to a record 2.75 percent by October, according to swaps data compiled by Bloomberg.
Australia still has the highest benchmark rate among major developed nations. Central banks from Europe to New Zealand toCanada have policy rates ranging from 1 percent to 2.5 percent. Rates in Japan and the U.S. are near zero.
Chinese Demand
Stevens is trying to manage an economy powered by demand from emerging nations including China and India for iron ore, coal and natural gas. Chevron Corp., Royal Dutch Shell Plc,Woodside Petroleum Ltd. (WPL) and ConocoPhillips are among energy companies spending $180 billion to explore and develop gas fields in Australia.
Australia is undergoing what the central bank calls“historically unusual” structural change as the surge in resource investment and opportunity to bet on China’s growth drives an appreciation in the exchange rate.
The Australian dollar has been the best-performing group of 10 currency against the U.S. dollar during the past three years, rising about 31 percent, according to data compiled by Bloomberg.
While that strength helps contain inflation by making imports cheaper, it hurts exporters by making their products more expensive relative to overseas competitors. BlueScope Steel Ltd., the country’s largest steel producer, in August shuttered its export division, and Australian wine exports fell to a 10-year low in 2011.
Slumping Popularity
Labor-market weakness is taking a political toll on Gillard, who withstood a leadership challenge from predecessor Kevin Rudd in February. Her Labor Party trails opposition leader Tony Abbott’s coalition by 18 percentage points, according to a Newspoll published in the Australian on May 1.
To help non-resource industries adjust, the government will allow companies to carry back as much as A$1 million of losses against tax paid two years earlier. Swan said the measure will encourage businesses to invest and adapt as they struggle with the competitive pressure caused by the dollar.
The currency’s extended stretch above parity with the U.S. dollar is among reasons the government reduced its forecast collection from the mining tax over the next two years to A$6.5 billion, from A$7.7 billion 12 months earlier.
The government had planned to use the proceeds to cut company taxes by 1 percent. Swan said he abandoned that proposal due to a lack of support in parliament and would instead spend it on increased family benefits and support for businesses.
‘Dripping With Politics’
The budget “is ambitious for Commonwealth finances but lacks vision for the broader economy,” Peter Anderson, chief executive officer of the Australian Chamber of Commerce and Industry, said in a statement. “The decision to abandon the company tax cut is dripping with politics and a low blow to the business sector given that the quid pro quo mining tax has already been legislated.”
Australian employers probably cut 5,000 jobs last month, a Bloomberg News survey of economists showed before a government report on May 10. The unemployment rate likely rose to 5.3 percent in April, the highest level since September.
Australia’s jobless rate has held at about 5.2 percent for the past six months, less than half the level in Europe, where governments and households are reducing spending in response to the debt crisis.
“We make a forceful statement ours is one of the world’s strongest economies and fairest communities,” Swan said in his speech to parliament.
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Seluruh saham dunia merudum malam semalam
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,616.75 a troy ounce during early U.S. trade, tumbling 1.4%.
Produk Public Gold terus menjadi pilihan utama pembeli emas di Seluruh Malaysia kerana harga sentiasa update ikut harga semasa dunia & spread margin yang terendah!
It earlier fell by as much as 1.5% to trade at USD1,613.55 a troy ounce, the lowest since April 4, when prices fell to the lowest since January.
Gold futures were likely to find support at USD1,606.05 a troy ounce, the low from January 9 and resistance at USD1,672.15, the high from May 1.
Gold’s losses accelerated after prices broke below a key technical support level close to USD1,625 an ounce, triggering fresh sell orders amid bearish chart signals.
Markets were watching developments in Greece as political leaders continued to hold cross party talks after the country’ largest party, New Democracy, was unable to reach an agreement to form a government on Monday.
The task now falls on Alexis Tsipras, the head of Syriza, the country’s second-biggest party. But he indicated late Monday that a coalition could not be formed, as the differences between the various parties who won seats in the weekend elections are too wide.
The uncertainty fuelled fears that Greece will not have a government in place in time to secure its next tranche of international aid next month, as new elections look increasingly likely.
The Financial Times reported earlier that New Greek elections could come as early as June 17, if a coalition cannot be agreed in the next few days.
Investors were also jittery amid concerns over new French president-elect, Socialist Francois Hollande who has said he wants to renegotiate the euro zone’s fiscal pact in order to stimulate growth in the region.
Although gold’s appeal as a safe haven is boosted during times of economic uncertainty, the euro zone’s debt crisis has done little to bolster appetite for the precious metal.
A weakening euro and stronger dollar have weighed on gold instead. The euro traded close to Monday’s three-month low against the U.S. dollar, while the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.37% to trade at 80.00.
Elsewhere on the Comex, silver for July delivery tumbled 2.15% to trade at a four-month low of USD29.48 a troy ounce, while copper for July delivery plunged 2.3% to trade at USD3.687 a pound.
]]>In the five years that John Silvetz made about $700 million for Deutsche Bank AG (DBK) by trading corporate bonds and credit derivatives, the amount of his annual bonus paid in cash dropped to 20 percent from almost 70 percent.
The rest, earned by betting on companies from American International Group Inc. to MBIA Inc., was locked up in deferred stock and euros, according to people familiar with the matter, who declined to be identified because they’re not authorized to discuss compensation. In September, Silvetz, 37, jumped to hedge fund BlueCrest Capital Management LLP. He was the last of a trio of New York debt traders who departed after making $1 billion for the German lender in two years, the people said.
Wall Street’s biggest banks have lost almost two dozen of their most-profitable credit traders in the past 13 months.
Wall Street’s biggest banks have lost almost two dozen of their most-profitable credit traders in the past 13 months as regulators limit the kind of risk-taking that amplified the housing crisis four years ago. As banks slash or defer pay and reduce the amount they’re willing to wager, the traders are seeing better opportunities at hedge funds and investment firms that seek to profit in markets lenders are retreating from.
“People who were contributing quite a bit to the overall profitability of the firms are forced to move on,” said Doug Shaener, managing partner at Quest Group, a New York-based executive search consulting firm that specializes in financial services. “You’re seeing individuals looking to go to places where they obviously aren’t as regulated, where they don’t have as many restrictions in terms of their trading.”
Responding to Pressure
More than three years after bad bets on housing led to the collapse of Lehman Brothers Holdings Inc. and emergency sales of Bear Stearns Cos. and Merrill Lynch & Co., lenders are responding to toughened capital rules that damp risk-taking and make trades costlier.
In the U.S., the so-called Volcker rule, the provision in the 2010 Dodd-Frank Act named for former Federal Reserve Chairman Paul Volcker, will set limits on risk-taking by depositories with government backing.
Traders are fleeing cash bonuses that were capped last year at 65,000 pounds ($105,000) at U.K. lender Barclays Plc (BARC), 100,000 euros ($131,000) at Frankfurt-based Deutsche Bank and $125,000 at Morgan Stanley (MS) in New York, according to data compiled by Bloomberg. For some at Charlotte, North Carolina-based Bank of America Corp. (BAC), cash bonuses were limited to $150,000.
‘Buyer’s Market’
Hedge funds are offering managing director-level traders salaries of about $200,000 to $250,000, said Michael Karp, managing partner at New York executive recruiter Options Group. Some of the largest hedge funds may pay bonuses of as much as 12 percent of traders’ profits, or an even bigger percentage of their earnings after the firm takes a 2 percent cut, according to Options Group.
Unlike the banks, the funds typically pay 50 percent or more of bonuses to their highest earners in cash, according to New York-based compensation consulting firm Johnson Associates Inc. The rest may be locked up in funds the firms manage.
“It’s a buyer’s market” for the hedge funds, Karp said. “People are figuring out how to trade in this new world.”
Silvetz’s departure from Deutsche Bank followed those of Prakash Narayanan and Thomas Curran, who together made more than $1 billion for Germany’s biggest bank in 2009 and 2010, the people with direct knowledge of the situation said. Silvetz, Narayanan and Curran declined to comment.
Barclays Departures
Brian Maggio left Barclays’s credit-trading team in New York in March for Millennium Management LLC, a hedge fund with $15.6 billion invested. In the five years ended in December, the trader made an estimated $375 million for Barclays and Lehman, where he worked until the firm filed for bankruptcy in September 2008, according to two people familiar with the matter. Maggio’s exit followed those of Barclays colleagues Jason Quinn and Peter Agnes, both of whom went to Caxton Associates LP in New York.
Maggio and Quinn declined to comment. Agnes, who didn’t respond to messages left on his mobile phone, was part of a proprietary-trading group dealing in credit markets that wouldn’t be allowed under the Volcker rule and has been shut down, according to a person familiar with the matter.
Barclays is among banks including JPMorgan Chase & Co., Goldman Sachs (GS) Group Inc. and Morgan Stanley that have shut proprietary-trading groups.
Goldman Sachs credit traders Matthew Knopman and Philip Ha left the New York firm earlier this year, with Knopman starting at Anchorage Capital Group LLC this month and Ha going to MKP Capital Management LLC, people familiar with the moves said in March. Rob Jackson joined Cyrus Capital Partners LP from Goldman Sachs in February.
TCW Hire
High-yield bond trader Jerry Cudzil departed Morgan Stanley to head U.S. credit trading at TCW Group Inc., which was managing $73.3 billion in fixed-income assets as of March 31. Peter Viles, a spokesman for Los Angeles-based TCW, confirmed the hire.
BlueCrest this month added Deutsche Bank credit trader Stefano Galiani, according to three people familiar with the matter. It brought on Morgan Stanley’s Eugene Gokhvat in April, according to BlueCrest spokesman Ed Orlebar, who said he couldn’t comment about Galiani.
Representatives of Deutsche Bank, Barclays, Goldman Sachs, Morgan Stanley and Bank of America declined to comment.
“Many of the major investment banks just don’t have the capital they used to, and a lot of that is because of the Volcker rule,” Marc Lasry, co-founder of Avenue Capital Group LLC, said May 2 in an interview with Bloomberg TV’s Stephanie Ruhle at the Milken Institute Global Conference.
‘Very Different Business’
Regulations limiting banks’ proprietary trading “has been great” for his New York-based hedge fund, he said. “Nobody’s really competing with you as much as they used to.”
Unlike equities, fixed-income trades typically are privately negotiated outside exchanges, increasing the fees traders collect by making bids and offers because they’re more difficult to execute.
To make markets in debt securities, banks typically risk their own capital to buy assets from clients before lining up someone else to sell them to, sometimes making bets on the direction of markets. The new rules are curbing that, turning traders more into middlemen.
“It’s turning into a very different business than it once was,” John Reed, head of credit trading at Kohlberg, Kravis Roberts and Co. in San Francisco, said in a telephone interview.
Reed joined the private-equity firm in 2008 from Bear Stearns, the investment bank that sold itself to JPMorgan that year to avoid collapse.
Implementing Volcker
“The banks have reduced capital allocation to trading desks and cut back traders’ ability to take risk,” he said.
The 21 primary dealers that trade directly with the Fed have cut holdings of corporate debt due in more than a year to the lowest level in almost a decade. Inventories soared to as high as $235 billion in October 2007, before dropping to as low as $40.4 billion on Feb. 22, Bloomberg data show.
Revenue from trading among the nine-largest U.S. and European investment banks, excluding accounting gains, dropped 16 percent to $120 billion in 2011 amid the escalating European sovereign-debt crisis, Bloomberg data show.
“Trading had a very poor year on Wall Street, so bonuses were down and so many people were cheaper than they would have been a year or two ago,” Johnson said. “We probably have not reached equilibrium yet because I don’t think anybody knows quite how the Dodd-Frank and the Volcker rules and all that, how that’s really going to shake out.”
Lenders will have two years to implement the Volcker rule as long as they make a “good faith” effort to comply with the ban on proprietary trading, U.S. regulators said April 19.
Dimon Lobbies
The Volcker rule “matters more” in credit markets “because transactions are typically over-the-counter,” said Roger Joseph, co-chair of financial services at law firm Bingham McCutchen LLP.
Chief executives from JPMorgan, Goldman Sachs and Bank of America — three of the five biggest U.S. banks by assets — lobbied the Fed on May 2 to soften proposed reforms that might crimp their profits, saying that new rules would harm financial markets.
JPMorgan Chief Executive Officer Jamie Dimon sent a 38-page letter to shareholders last month, saying that while he agrees with the Volcker rule’s intent to eliminate “pure” proprietary trading and ensure market-making won’t jeopardize banks, the rule must be written so that it doesn’t put U.S. banks at a global disadvantage.
“We cannot and should not be in a position where the rule affects U.S. banks outside the United States but not our foreign competition,” Dimon, 56, wrote.
London Whale
Along with its competitors, JPMorgan has shut groups in its investment bank that specialized in speculative bets with the company’s own money. At the same time, the bank has kept some of its biggest risk-takers in its chief investment office, with a team that has amassed as much as $200 billion in investments, booking a profit of $5 billion in 2010 alone, a former senior executive, who asked not to be identified because he wasn’t authorized to discuss the matter, said last month.
Bruno Iksil, a London-based trader for the group dubbed by some in the market as the London Whale, gained attention this year after moving credit derivatives with trades so large they distorted price relationships, market participants who asked not to be identified said last month.
Financial institutions also are adapting to higher capital requirements set by the Bank for International Settlements in Basel, Switzerland, and a slowdown in the global economy being fueled by Europe’s sovereign-debt crisis. Banks reduced employment by more than 120,000 worldwide last year, Bloomberg data show.
Eroded Volumes
While traders have historically headed for hedge funds with the hope of bigger paydays, Wall Street banks previously offered greater job security and a higher volume of business. That’s changed, said Gregory Cresci, an executive recruiter at Odyssey Search Partners in New York.
“A lot of these guys were sitting atop a mountain of trading volume and revenue, much of which has eroded beneath them,” he said. “So it’s logical that they decide to leave or are no longer needed.”
Silvetz, who joined Deutsche Bank in 2001, generated about $225 million in profit for the firm in 2009 with trades that included wagers American International Group (AIG), the insurer rescued by the U.S. government in 2008, was in better financial condition than its bonds suggested, according to people familiar with the situation who declined to comment because they weren’t authorized to discuss the trades.
MBIA Trades
Silvetz also accurately predicted credit-default swaps protecting against a default by bond insurer MBIA would plunge.
Before Silvetz’s departure last year, Narayanan and Curran left Deutsche Bank for hedge funds Saba Capital Management LP and Rose Grove Capital Management LLC. Narayanan had been with Deutsche Bank since 2002, and Curran was an employee since 2004, Financial Industry Regulatory Authority records show.
Deutsche Bank, which during the credit crisis reported $22.6 billion in losses and writedowns that were less than rivals including Bank of America and Morgan Stanley, saw the departures this year of Scott Martin and C.J. Lanktree, who traded distressed debt. They started working at Solus Alternative Asset Management.
Neil Yaris, who headed high-yield sales and trading at Bank of America, left in February for Luxor Capital Group LP, the New York-based hedge fund run by Christian Leone.
Jefferies Hires
Bank of America, which recorded $115.5 billion of writedowns and losses in the credit crisis, cut pay by 25 percent on average last year, Bloomberg data show.
Smaller investment banks not touched by the Volcker rule are also adding credit traders from the biggest institutions.
Jefferies Group Inc., the New York-based securities firm led by Chairman and Chief Executive Office Richard Handler, hired at least seven corporate debt traders, including Tim Sullivan fromUBS AG (UBSN), Richard Roche and David Murphy from Morgan Stanley, and Sean George from Deutsche Bank. In April, it hired credit trader Ji Pak from JPMorgan, Finra records show.
The best-performing traders are landing hedge-fund jobs even as the industry is in its fourth year of underperforming stocks. Funds returned an average 3.4 percent this year through April, Bloomberg data show, compared with a 12 percent return from the Standard & Poor’s 500 Index.
No ‘Buffalo’ Migration
Investors still poured $16 billion in new capital into hedge funds during the first quarter, boosting assets to a record high of $2.13 trillion, according to Hedge Fund Research Inc., a Chicago-based research firm. Relative-value hedge funds that focus on fixed-income markets received a net $12.4 billion, the most of any strategy.
“Hedge funds don’t employ that many people. So I think the migration is not the wild buffalo across the prairie or something,” Johnson said.
Financial firms boosted base salaries starting in 2009 as they de-emphasized bonuses, which lawmakers said encouraged bigger-than-average risks that fueled the financial crisis and still make up the bulk of pay packages.
Employees at the largest investment banks got an average salary increase of 3 percent last year, compared with 14 percent at smaller investment banks and 13 percent at fund managers, according to an online survey of 2,860 financial professionals by eFinancialCareers.com.
‘Talented Traders’
When year-end bonuses were included, average pay in 2012 fell for workers at companies including Goldman Sachs and JPMorgan’s (JPM) investment bank. As bonuses dropped, some banks raised base salaries that in past years contributed a small portion of pay for senior employees.
“They’re talented traders, they contributed a lot to the overall performance of the firms, but it’s a changing world,” Quest Group’s Shaener said, referring generally to traders being hired by asset managers.
“In some cases they want to move on, and in some cases it’s not necessarily an option because their roles and the businesses they were part of are no longer what the firm is looking to invest in,” Shaener said.
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