Top Five Factors Which are Driving Down The Rupee Against The Dollar

The rupee plunged to a fresh 13-month low in trade on Wednesday as brewing financial crisis in Russia continued to raise concerns about foreign fund outflows.

The rupee made the day's low of 63.89 against the US dollar. In the last one month-and-a-half, the rupee has tended to decline against the US dollar, with the pace accelerating in the latter part of November and December.

It has been depreciating since the beginning of November 2014. CARE Ratings expects the domestic currency to hover between Rs 64 and Rs 65 a dollar in the coming days until there is intervention from the RBI and the global situation returns to normalcy.

Overall, the rupee has recorded a 2.9 per cent depreciation against the US currency. There may also be measures imposed on gold imports in case the available data suggests a continuation of the trend of increasing imports. 

According to experts, the near-term trend looks volatile and the currency may touch levels of 64/USD. HSBC forecasts 2015 to be a better year, while Deutche Bank and Barclays foresee a slide in the currency in the next year.

The sell-off in emerging market currencies seems somewhat indiscriminate right now. But what will happen over the next month or so is that the market will become more discriminatory as the sell-off will stabilise or reverse for a number of Asian currencies, say experts. 

"The situation in Asia is totally different from that we saw in 1998. Yes, the Indian rupee cannot really challenge the broad dollar strength. But I do think that the decline in the Indian rupee is going to be very minor. We have currently traded down to close to 63-64," says Robert Parker, Senior Advisor, Credit Suisse.

"Some further slippage in the first half of next year is inevitable. But I would emphasise that it is going to be a moderate move. It is going to be nowhere of the order or magnitude that we have seen previously," he adds.

Read more at: EconomicTimes

Gold Prices Jump by Rs 650 on Strong Seasonal Demand

Gold prices on Wednesday soared by Rs 650 to Rs 27,470 per ten gram in the bullion market in the national capital on strong seasonal demand and firm trends in overseas markets.

A fall in rupee value against the US dollar and increased buying by jewellers and retailers amid ongoing wedding season lifted prices of gold, bullion traders said.

A cheaper rupee makes gold imports costlier. The rupee was trading weak at 62.05 against the US dollar at the Interbank Foreign Exchange (Forex) market.

The precious metal's prices surged over US $28 to a six-week high of US $1,238.32 an ounce in New York on Tuesday as weakening of the Greenback and retreat in global stock markets raised demand for gold as an alternative investment.

On similar lines, silver prices also rose sharply by Rs 1,600 to Rs 38,400 per kg on increased off-take by industrial units and coin makers.

Silver prices climbed up by 5.2 per cent to US $17.12 an ounce in New York on Tuesday.
In the national capital, gold of 99.9 and 99.5 per cent purity zoomed up by Rs 650 each to Rs 27,470 and Rs 27,270 per ten grams respectively. It had gained Rs 170 on Tuesday.

Sovereign traded Rs 100 higher at Rs 23,800 per piece of eight gram.
Following gold, silver ready spurted by Rs 1,600 to Rs 38,400 per kg and weekly-based delivery by Rs 1,815 to Rs 38,615 per kg. Silver coins shot up by Rs 1,000 to Rs 63,000 for buying and Rs 64,000 for selling of 100 pieces.

Read more @  BusinessToday

Gold price lifted out of danger zone

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery on Tuesday attempted a comeback of sorts, recovering from a two month low.

By the close of regular trade gold was changing hands for $1,285.20 an ounce, up over $6, after earlier hitting a day high of $1,291.90. The gains follow six weak sessions which saw the metal lose 2% in value.

Tuesday's move lifted the metal above its 200-day moving average – a bullish technical sign – after bouncing off support at $1,272 and could now attempt a move back above $1,300 an ounce.

The gains in the price of gold came amid fresh money flowing into US equities with the S&P 500 setting new records above the 2,000 point level on Tuesday.


During the last Fed tightening cycle the gold price actually increased by about 50%

Minutes of the last US Federal Reserve meeting showing the US central bank opting for a more hawkish tone as the country's job picture continues to improve sparked last week's sell-off on the gold market.

Short term bond yields have also been rising on expectations that the bank might raise rates a bit sooner than expected.

Bond yields are negatively correlated with the gold price as the metal is not income producing, but rising interest rates do not necessarily turn gold into a one-way bet.

During the last Fed tightening cycle from June 2004 to June 2006 the price of gold actually increased by about 50%.

And soaring equity markets and sky-high stock valuations may push investors back into gold. London-based ETF Securities, an institutional research firm, sees money flowing back into hard assets:

"Gold and silver have had substantial corrections offering attractive relative value propositions and remain near the cost of production. Fundamental value and relative valuations normally prevail in the long term as many prudent investors have continued to diversify into the precious metals."

More on : Mining

Gold Extends Losses to Third Day as Oil Slumps

Gold extended losses into a third session on Friday, dropping to a one-week low, on expectations that plunging oil prices could sap inflationary pressure, curbing the metal's appeal as a hedge. Oil hit four-year lows around USD 70 a barrel, as OPEC resisted the temptation to cut back production following a more than 30 percent plunge in prices since June. The drop in oil prices, along with the resulting strength in the dollar, hurt gold which is often seen as a hedge. 

"Precious metals declined as lower oil prices prompted concerns about deflation," said ANZ analyst Victor Thianpiriya. Spot gold had fallen 0.3 percent to USD 1,187.40 an ounce by 0741 GMT. It hit USD 1,181.30 earlier in the session - its lowest since Nov. 20. The metal has lost over 1 percent for the week, snapping a three-week rally. US gold futures slid 1 percent to a session low of USD 1,180.60. The dollar index held firm, having made notable gains versus oil-related currencies, the Canadian dollar and Norwegian crown in the previous session.

 "Gold sympathized with oil but I think there is a limit to the downward slide and we might hold USD 1,180 for now," said a trader in Tokyo, adding that the market was also eyeing the Swiss vote on central bank reserves on Sunday. The vote is aimed at preventing the Swiss National Bank from offloading its gold holdings and obliging it to hold at least 20 percent of its assets in gold, compared with 8 percent last month. 

The most-recent opinion poll showed support among Swiss voters for the initiative had slipped to 38 percent. A surprise 'yes' vote, however, could prompt the Swiss central bank to buy about 1,500 tonnes of gold over the next few years, boosting bullion prices, analysts say. "Most people in the market are already expecting a 'no' in the Swiss vote but it might still cause some sell-off. A 'yes' vote is unlikely but if it happens, we can see a jump in prices," the Tokyo-based trader said.

 Among other precious metals, silver futures slid 3 percent. Platinum is down 1 percent for the week on outflows from the metal-backed exchange-traded funds. Palladium was headed for a second weekly gain.

More information at @ MoneyControl

Gold Prices Recover on Wedding Season Demand

NEW DELHI: Gold prices recovered by Rs 20 to Rs 26,900 per ten grams at the bullion market in the national capital today on the back of wedding season demand from jewellers and retailers even as the metal weakened overseas.

Silver rose by Rs 100 to reclaim the Rs 37,000-mark on increased offtake by industrial units.

Traders said scattered demand from jewellers and retailers in view of wedding season helped gold prices to recover but a weak trend in global markets limited the gains.

Globally, gold declined by 0.40 per cent to USD 1,204.69 an ounce in Singapore.


In Delhi, gold of 99.9 and 99.5 per cent purity went up by Rs 20 each to Rs 26,900 and Rs 26,700 per ten grams, respectively, while sovereign held steady at Rs 23,700 per piece of eight grams.

Silver ready also moved up by Rs 100 to close at Rs 37,000 per kg and weekly-based delivery by Rs 580 to Rs 36,650 per kg on speculative buying.

Meanwhile, silver coins ruled steady at Rs 62,000 for buying and Rs 63,000 for selling of 100 pieces in restricted activity at existing higher levels.

Read more at:
EconmoicTimes

India's position in Corruption Perception Index improves

In a good news for India, the country has improved on its ranking in the Corruption Perception Index. In the data for the year 2014, India stands at 85th position out of 175 countries as compared to its ranking of 94 in 2013 out of 177 countries. There has been an improvement in the CPI score also for the year 2014. The score which is 38 in 2014, was 36 in the year 2013. Poorly equipped schools, counterfeit medicine and elections decided by money have been stated as some of the consequences of public sector corruption.

 "Bribes and backroom deals don't just steal resources from the most vulnerable - they undermine justice and economic development, and destroy public trust in government and leaders," the report states. Based on expert opinion from around the world, the Corruption Perceptions Index measures the perceived levels of public sector corruption worldwide. In an alarming picture painted by the CPI, not even a single country has got a perfect score and more than two-thirds score below 50, on a scale from 0 (highly corrupt) to 100 (very clean).
More on : MoneyControl

Gold Prices and the U.S. Economy

Gold prices are a good indicator of how healthy the U.S. economy is. When the price of gold is high, that's when the economy is not healthy. Why? Investors flock to gold when they are protecting their investments from either a crisis or inflation. When gold prices drop, that usually means the economy is healthy. That's because investors have left gold for other, more lucrative, investments like stocks, bonds or real estate.

To understand the economy, it's helpful to understand gold. In this article, you can track recent trends in gold prices. You'll also learn about how gold should be used by investors, the history of gold, and more about the gold standard.

More on useconomy.about.com

Japan Stock Futures Gain as S&P 500 Advances on Economy

Japanese stock futures rose, after U.S. equities advanced for the first time in three days amid an unexpected increase inconsumer confidence. The yen was little changed against the dollar.

Futures on the Nikkei 225 Index added 0.5 percent in Chicago. The yen fell less than 0.1 percent to 102.28 per dollar as of 6:53 a.m. in Tokyo. The Standard & Poor’s 500 Index (SPX) added 0.4 percent to 1,865.62. The Stoxx Europe 600 Index climbed 1.3 percent after falling 1.1 percent the previous day, the most in two weeks. Ten-year Treasury yields increased 2 basis points to 2.75 percent. Copper jumped 2 percent on speculation demand will improve as China takes steps to bolster economic growth.

An index of U.S. consumer confidence rose in March to the highest level in six years, overshadowing a separate report showing a drop in February home sales. German business confidence fell for the first time in five months. The world’s top industrial powers threatened further sanctions to deter Russian President Vladimir Putin from taking over other parts of Ukraine and suspended Russia from participating in the Group of Eight.

“The U.S. economy seemed to have cooled off from the pace it’s on toward the end of last year,” Curtis Holden, a senior investment officer at Tanglewood Wealth Management in Houston, said in a phone interview. His firm oversees about $800 million. “There may be a little relief recently that things may be stable here. Things don’t look spectacular here, but they look OK. The market is trying to piece together about how concerned should we be about things going on overseas.”

Source : - Blomberg.com

Gold Up on Safe-Haven Demand, Bullish Technicals

P.M. Kitco Metals Roundup: Gold Up on Safe-Haven Demand, Bullish Technicals

(Kitco News) - Gold prices ended the U.S. day session moderately higher Tuesday, on some more safe-haven demand that surfaced amid the simmering geopolitical situation in Ukraine. Chart-based buying was also seen as the near-term technical posture for gold remains bullish.

Gold prices are hovering not far below their recent four-month highs. April gold was last up $6.20 at $1,347.70 an ounce. Spot gold was last quoted up $7.80 at $1,348.00. May Comex silver last traded down $0.07 at $20.84 an ounce.

The Ukraine matter is still a worry among traders and investors and has moved closer to the front burner of the market place. Russian president Putin has spurned a U.S. proposal to defuse the crisis, reports said. Last weekend Putin said he would back the Crimean region seceding from Ukraine. U.S. and German officials have rebuked Putin, and reports said the European Union is set to discuss this week sanctions against Russia. A vote on the Crimean secession is scheduled for March 16, and that could be the next flashpoint in the region. The Russian occupation of Crimea is a bullish factor for the safe-haven gold market.

U.S. economic data released Tuesday was on the light side and failed to move the markets. Traders are looking ahead to next week’s meeting of the U.S. Federal Reserve’s Open Market Committee (FOMC).

The London P.M. gold fix is $1,346.25 versus the previous P.M. fixing of $1,344.00.

Technically, April gold futures closed near mid-range Tuesday. A 2.5-month-old uptrend is in place on the daily bar chart. Bulls have the overall near-term technical advantage. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the March high of $1,355.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,318.70. First resistance is seen at $1,355.00 and then at $1,360.00. First support is seen at Tuesday’s low of $1,337.80 and then at $1,330.00. Wyckoff’s Market Rating: 6.5

May silver futures prices closed nearer the session low Tuesday and closed at a fresh four-week low close. The bears have the slight near-term technical advantage. Prices are in a three-week-old downtrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the March high of $21.74 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $20.00. First resistance is seen at $21.00 and then at Tuesday’s high of $21.325. Next support is seen at this week’s low of $20.61 and then at $20.25. Wyckoff's Market Rating: 4.5.

May N.Y. copper closed down 760 points at 295.55 cents Tuesday. Prices closed nearer the session low and slumped to a fresh contract and nearly four-year low. Weak economic data coming from China over the weekend has helped to sink the copper market. Prices are in an accelerating 10-week-old downtrend on the daily bar chart. Bears have the solid near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at this week’s high of 307.75 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 290.00 cents. First resistance is seen at 297.50 cents and then at 300.00 cents. First support is seen at Tuesday’s contract low of 294.20 cents and then at 292.50 cents. Wyckoff's Market Rating: 1.0.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff

Source :  Kitco.com

Getting Started In Stocks

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So you've decided to invest in the stock market. Congratulations! In his 2005 book "The Future for Investors," Jeremy Siegel showed that, in the long run, investing in stocks has handily outperformed investing in bonds, Treasury bills, gold or cash. In the short term, one or another asset may outperform stocks, but overall stocks have historically been the winning path.

But there are so many ways to invest in stocks. Individual stocks, mutual funds, index funds, ETFs, domestic, foreign - how can you decide what is right for you? This article will address several issues that you, as a new (or not-so-new) investor, might want to consider so that you can rest more easily while letting your money grow.

Risk Taker, Risk Averse or in the Middle?
You may be eager to get started so that you, too, can make those fabulous returns you hear so much about, but slow down and take a moment to contemplate some simple questions. The time spent now to consider the following will save you money down the road.

What kind of person are you? Are you a risk taker, willing to throw money at a chance to make a lot of money or would you prefer a more "sure" thing? What would be your likely response to a 10% drop in a single stock in one day or a 35% drop over the course of a few weeks? Would you sell it all in a panic?

The answers to these and similar questions will lead you to consider different types of equity investments, such as mutual or index funds versus individual stocks. If you are naturally not someone to take risks, and feel uncomfortable doing so but still want to invest in stocks, the best bet for you might be mutual funds or index funds. This is because they are well diversified and contain many different stocks. This reduces risk - and doesn't require individual stock research.

Have much time and interest do you have for investing?
Should you invest in funds, stocks or both? The answer depends on how much time you wish to devote to this endeavor. Careful selection of mutual or index funds would let you invest your money, leaving the hard work of picking stocks to the fund manager. Index funds are even simpler in that they move up or down according to the type of company, industry or market they are designed to track.

Individual stock investing is the most time consuming as it requires you to make judgments about management, earnings and future prospects. As an investor, you are attempting to distinguish between a money-making stock and financial disaster. You need to know what they do, how they make their money, the risks, the future prospects and much more.

Therefore, ask yourself how much time you have to devote to this enterprise. Are you willing to spend a couple of hours a week, or more, reading about different companies, or is your life just too busy to carve out that time? Investing in individual stocks is a skill, which, like any other, takes time to develop.

Eggs In One Basket
It is best that you not be exposed to only one type of asset. For instance, don't put all of your money in small biotech companies. Yes, the potential gain can be quite high, but what will happen to your investment if the Food and Drug Administration starts rejecting a higher percentage of new drugs? Your entire portfolio would be negatively impacted.

It is better to be diversified across several different sectors such as real estate (a real estate investment trust is one possibility), consumer goods, commodities, insurance, etc., rather than focusing on one or two or three, as above. Consider diversifying across asset classes, as well, by keeping some money in bonds and cash, rather than being 100% invested in stocks. How much to have in these different sectors and classes is up to you, but being invested more broadly lessens the risk of losing it all at any one time.

A Portfolio for Beginners
If you are just starting out, think seriously about investing most of your money in a couple of index funds, such as one tracking the broad market (e.g. the S&P 500) and one that gives some international exposure. Maybe adding one that tracks small companies (e.g. the Russell 2000) would give your portfolio a boost.

A portfolio consisting of those three would give plenty of diversification, provide the steadier performance of large companies and be spiced up a bit with both international companies and small caps.

A Portfolio with Individual Stocks
If you are investing in individual stocks, a portfolio of 12-20 well-chosen ones will give you plenty of diversification and probably will not be too many to follow regularly. However, you will need to ensure that you fully understand each company, from their businesses to their risks. If you plan on investing in only stocks, make sure to spread the funds across different sectors such as healthcare, technology, small cap and big cap.

If you don't have the time or desire to pick as well as follow that many stocks, consider investing in a mixture of index funds and individual stocks. Another consideration, especially if starting out with limited funds, is that investing in 12-20 stocks may not be feasible, so having the majority of your money in some funds would provide the stabler returns those tend to generate while maybe half a dozen individual stocks would give your portfolio an extra kick.

Time to Invest
Once you've determined the shape of your portfolio, it is time to invest. Find a broker you are comfortable with, either an online broker or one with a local office or both. Call and talk with this person, if necessary. Then, fill out the paperwork, deposit some money and open an account.

After deciding what to buy, don't buy all at once, but enter slowly. What if you invested all your money just before a market downturn? Being in the red that quickly wouldn't do much for your confidence. Plan to take several months to invest all of your money to minimize any market timing risk. Finally, remember to set aside time each week to review or catch up on the news for your investments.

Keep AddingAs your experience grows, your asset allocation decisions will probably change. You could adjust your portfolio on a regular basis, say every year or so, by selling some of one type of investment and buying more of another. You could also adjust your portfolio by adding additional funds to those areas in which you want to increase exposure.

These additional funds can be used to expand the number of securities you hold or can be added to existing holdings. Do this on a regular basis and before you realize it, you'll have a substantial portfolio that will help fund your retirement, pay for a second home, or meet whatever goals you set when you started you investing journey.

Conclusion
Before you jump into the stock market, spend some time thinking about what you want to accomplish and how to do that while staying within your risk tolerance levels. Also consider how much time you have to devote to investing. Doing this before committing those first dollars will go a long way toward protecting you from the emotional rollercoaster of investing first one way, then another, never really knowing why you are changing your mind. Careful thought before and during your investing career will do more to help your results than trying to chase the latest hot stock. After all, it's your money - you should know what you are doing with it and why.

by Jim Mueller
Jim Mueller started his career as a scientist, earning his advanced degree in biochemistry and molecular biology from Washington State University. He has since become a self-taught investor and financial writer. He is also a regular contributor to The Motley Fool.

Read more (Source): Nasdaq.com

Income Investing and Dividend Stocks

Quick Links: » Dividend Stocks » Dividend Funds » Preferred Stock Funds » REITs


Long-term investors may wish to consider dividend paying stocks as an alternative (or supplement) to fixed income investments. Dividend stocks can generate untold wealth for patient investors, and when reinvested, dividends offer investors a chance to exploit the miracle of compound interest. Unfortunately, the dividend yield of the S&P 500 is scraping along 120 year lows. More than ever, income investors must comb for opportunities in individual stocks, mutual funds, ETFs other investments with a margin of safety. We hope these articles and tools help you build a portfolio that provides sustainable income now, and into the future.

Source : TheStreet.com

Gold Corrects As Dollar Rebounds, Chinese Demand on Pause

Gold corrected sharply on Thursday, falling to a new low for the week at 1237.70, but support defined by last week's low 1230.85 remains well protected. The retreat is being attributed to the Fed's decision yesterday to taper further, and slackening demand for gold in China.

Despite the recent spate of weaker U.S. economic data, and the heightened volatility in emerging markets, the Fed opted to continue scaling back on asset purchases. The FOMC announced on Wednesday that they would taper by an additional $10 bln per month. That was in line with expectations, but $65 bln a month moving forward is still a pretty hefty addition to the Fed's balance sheet.

Gold initially held up well in the wake of that news, but then started to retreat in Asia. Reuters reported that volume on the Shanghai Gold Exchange was "just 1.5 tonnes on Thursday, compared with Wednesday's 8.4 tonnes and Tuesday's 14 tonnes."

This should come as no surprise as pretty much the whole of China goes into motion in the days before the Lunar New Year, which is Saturday, February 1. People travel to spend the two-week long holiday with family. It's sort of like equivalent of our Thanksgiving, Christmas and New Year's combined.

I would say this is more likely a pause in Chinese demand, rather than waning demand. This may make this pullback a pretty good buying opportunity.

A firmer dollar and a rebound in stocks is adding further weight to the yellow metal. The Dow registered it's lowest close in 13-week yesterday, and was more than 5% off the record high of 16,588 from late December. Despite today's modest bounce, stocks are still looking a little shaky.

We saw some mixed economic data this morning: Q4 advanced GDP came in at +3.2%, pretty much in line with expectations, showing a marked slow-down from the 4.1% pace in Q3. Initial jobless claims rose 19k last week to 348k. Hardly good news.

The NAR pending home sales index plunged 8.7% in Dec to 92.4, way below expectations of -0.3%. That's the lowest print since October 2011, when the home buyer's tax credit expired. Realtors blame weather this time around. However, the preponderance of recent housing market data is suggestive of renewed weakness in the sector, more likely attributable to higher mortgage rates triggered by the taper.

Emerging currency markets seem to be getting a bit of a reprieve today as well, following crazy volatility yesterday in the Turkish Lira and South African Rand specifically. It is very unlikely that rate hikes in both of those countries are panacea, so rather than declaring the storm has passed, I think this is just the eye of the storm.

Source : UsaGold.com/DailyQuotes

Gold Mines' Hedge Book Shrinks To A Decade Low

Gold hedging activity by gold mines has reached to a decade low level in quarter ended September 2013, according to latest quarterly Global Hedge Book Analysis by Societe Generale Thomson Reuters GFMS.

World over gold mining companies hedge their future production in derivatives market generally in options to lock their earnings and when prices fall the hedging activities also take a knock. “At end-September, the outstanding global hedge book stood at 2.94 Moz (92 t), the lowest volume since our quarterly series began in 2002,” said the analysis report released by the Thomson Reuters GFMS.

Mines have either allowed hedges to mature as scheduled or proactively to close out contracts for a profit and use the proceeds to pay down debt. “To date, fresh hedging in this lower price environment has remained comparatively modest,” said Cameron Alexander, Manager, Precious Metals Demand, Asia, GFMS Thomson Reuters in an email response to business standard query on hedge positions of mines.

Generally gold producers/mines refrain from hedging when they feel prices will fall further and in the rising [rice scenario they lock upper value by doing hedging. In the last phase of bull run many mnes who had sold or hedged future production had cut their position which is known as dehedging which further pushed prices. However a sudden crash in gold prices in april, 2013 tempted miners not to hedge when in September quarter prices averaged $1326 per ounce. However in subsequent months prices corrected further putting pressure on many mines as prices started trading below many of their cost of mining. GFMS global average gold mining cost including all corporate expenses is $1350 an ounce and even after considering write downs global average cost comes to $1200.

As reflected in the hedge book analysis, state of gold mining is not good. According to the hedge book analysis report, an industry wide cost containment effort has begun. Producers have cut back on non-essential capital expenditure, instituted wage freezes, cut corporate overheads and where possible, optimized mine plans for higher throughput and higher grade ore processing, leading to reduced mine lives. Furthermore, some of the larger multi-asset producers have already divested some of their higher cost mines and begun mine closures, which will afford these producers a certain degree of flexibility in this price environment. For non-cash generative juniors, it is likely that project finance will remain difficult to arrange.

While mines absence in hedging market would have given rise a belief that gold prices have bottomed out but that could be temporary as many of them may soon start looking at fresh hedging to lock current prices.

Cameron says, “If however, we start to gold prices wane further we believe this will lead to a growing willingness to hedge, and we therefore expect a return to net hedging this year, with larger-scale hedging activity in 2015 and 2016. Pressure may come from share holders to protect revenue streams in a declining price environment.”

The crisis began in mining industry doesn’t seem to be ending soon. Mines cutting down production (to cut losses when prices are lower and not covering costs) could support prices but that will depend upon whether demand contraction is lower than cut in production.

Cameron said, “mine supply is expected to edge lower this year before decreasing more rapidly in 2015 and 2016. Over 2014, a number of new operations will largely compensate for scheduled decreases in output from ageing mines elsewhere, as well as the supply lost due to the small number of operations closed so far on account of unsustainably high costs. However, from 2015 onwards, we expect to see more widespread closures or suspensions, as the declining gold price cuts more deeply into the cost curve for a sustained period.”

Source : Business-Standard.com

The Direct Economic Impact Of Gold

A new independent research report, The direct economic impact of gold, from PwC commissioned by the World Gold Council, reveals striking insights into the direct economic contribution of gold in the world’s major gold producing and consuming countries. This research is ground-breaking in the breadth of its perspective, covering the entire value chain of the gold industry, from mining and refining to end-user consumption.

The research reveals that supply and demand for gold makes a consistently positive contribution to global economic growth. Overall, in 2012, at least US$210 billion of value was created by the gold industry and added to global GDP.

Consumer demand for physical gold products – jewellery and small bars and coins – is estimated to have directly contributed around US$110 billion in 2012 to the world economy.

Another key finding of the research is the significance of gold mining to the economies of developing nations. PwC estimate that gold mining made an economic contribution of over US$78.4 billion to the economies of the top 15 mining countries in 2012. Proportionally, however, gold mining has the most substantial impact on growth and wealth creation in developing countries; greatest in Papua New Guinea (15% of GDP), followed by Ghana (8% of GDP) and Tanzania (6% of GDP). For these nations, gold is also a major source of exports and, therefore, foreign exchange earnings. In 2012, gold provided 36% of all Tanzanian exports and 26% of the exports of Ghana and Papua New Guinea.

The scope of the research only extends to examining direct economic impacts; it excludes consideration of indirect contributions to national economies from additional taxes, secondary employment and social and infrastructural development. Furthermore, it does not attempt to measure the economic impact of less formal and artisanal gold production.

Also, when looking at gold investment products, PwC did not attempt to measure the economic impact of holding gold in investment portfolios, although the World Gold Council has produced a sizeable body of research addressing this subject (see, for example, our Investment Research publications).

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Show More on  :- Gold Stock Analyst

Gold Edges Slightly Higher

GOLD futures have settled near unchanged, edging slightly higher after data showing US inflation remains below the Federal Reserve's target.

The most actively traded gold contract, for February delivery, on Thursday rose $US1.90, or 0.2 per cent, to settle at $US1,240.20 a troy ounce on the Comex division of the New York Mercantile Exchange.

The consumer-price index, a measure of how much Americans pay for goods and services, rose by 1.5 per cent in December from a year earlier, the Labor Department said. Excluding volatile food and energy costs, prices were up 1.7 per cent.

Analysts say that while tame inflation could sap interest in gold as a hedge against rising costs, it may also push the Federal Reserve to reassess the pace of the rollback of its bond-buying program. The US central bank has set an inflation target of two per cent. More muted price rises, along with a potentially slowing labour market, could suggest to Fed officials that the economic recovery isn't strong enough to further reduce its stimulus.

Slowing price rises "may add upward pressure to gold," Standard Bank analyst Walter de Wet said in a note.

Still, many market watchers expect gold to remain under pressure should economic growth remain on track. A separate report on Thursday showed new US claims for unemployment benefits fell by more than economists had expected last week.

The Fed's bond buying programs in recent years have drawn investors, looking for a hedge, to gold. Worries that a recovery in the US economy would spur a reduction in the central bank's bond buying helped send gold prices to a 28 per cent loss in 2013.

"If you see a better economy, the bet is the Fed is going to continue with the reduction in its asset purchases," said Ralph Preston, a market analyst with Heritage West Financial.

Settlements (ranges include open-outcry and electronic trading):

London PM Gold Fix: $1,241.50; previous PM $1,236.00

Feb gold $1,240.20, up $1.90; Range $1,235.80-$1,244.90

Mar silver $20.054, down 8.0 cents; Range $19.970-$20.250

Apr platinum $1,431.50, up $2.90; Range $1,418.20-$1,437.30

Mar palladium $743.90, down 10 cents; Range $738.00-$746.55

Source : News.com

My gold fund has fallen by half. Should I sell?

Ask the experts: Investors lost thousands last year backing gold funds. Should they sell or hang on?




Some gold funds lost 50pc in 2013, will their fortunes change this year? Photo: Alamy


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It is the ultimate investment conundrum. Last year you backed an investment fund that has tanked and as a result have racked up huge paper losses. What should you do?

Those savers who backed gold funds last year suffered more than most. Some funds, such as Way Charteris Gold Portfolio Elite and BlackRock Gold & General, lost half of savers’ money.

But even worse was the Junior Gold fund, which declined by 65pc. This was the worst performing fund in 2013 out of the 1,500 available to UK savers, turning a £10,000 investment into £3,500.

The reason behind the heavy losses was the gold price plummeting by 30pc. The precious metal was trading at around $1,700 an ounce last January but by the end of the year had slumped to just over $1,200.

As a result, gold and natural resources funds suffered. These funds invest in both gold itself and the shares of gold mining companies.

Investors who have money in gold funds face a difficult decision. Selling now will effectively lock in losses, and you could miss out on bumper returns if the gold price reverses. On the other hand, the gold price could fall even further, meaning you will lose even more money.

We asked Nik Stanojevic, who buys fund and shares for wealth manager Brewin Dolphin, whether investors should hold their nerve and stay invested or sell out of gold funds. Here is his answer.

"We expect the investment case for gold funds to be driven mainly by the direction of gold prices. On this point, we believe that the starting point for any rational investor must be negative.

"The outlook for inflation is low, and there are good reasons why this is likely to remain the case over the medium term as there is still plenty of spare capacity in the global economy.

"Given that central bank money printing, or 'quantitative easing', is starting to slow down in the US, interest rates are likely to rise. Meanwhile, with inflation down and interest rates up, 'real' returns on cash should benefit.

"Gold prices tend to do poorly in an environment of rising real interest rates because the cost of avoiding other assets in favour of gold rises. As gold prices are driven by investment (as opposed to industrial) demand, there is no theoretical floor to the gold price.

"Funds exposed to small mining companies such as the Junior Gold fund are particularly vulnerable. In a falling gold price environment, shares in these companies typically under perform, for technical reasons to do with the way new mines are financed.

"Therefore we would advise cutting losses and selling these funds, unless investors have a strong conviction in rising inflation expectations."

Source :-  Telegraph.co.uk

2014 Australian Silver and Gold Coin Releases for January

The Perth Mint of Australia expands its numismatic offerings for 2014 with the January release of several collector products that are now available for ordering.

Some of the coins released by the Perth Mint of Australia in January

New products include options that will excite many collectors. Among them, gold and silver high relief coins with a reverse design by American sculptor and engraver, John Mercanti, the 12th Chief Engraver of the US Mint.

Also making debut appearances are two new koala silver coins. One is enhanced with gilding and the other is featured in an affordable 1/10 ounce size. Additional offerings include 2014 Year of the Horse products and special occasion coins.

Below is information on Perth Mint January 2014 product releases.

2014 Australian Koala 1 oz Gilded Silver Coin

In limited quantities, the Perth Mint made available its one ounce 2014 Australian Koala Gilded Silver Coin. As indicated by the name, its reverse has a gilded koala design which shows the head of a single koala along with a spray of gum leaves.

2014 Australian Koala 1 oz Gilded Silver Coin

An issue limit of 5,000 is in place for individual sales with a maximum mintage of 10,000 allotted. Each ships in a Perth Mint display case along with a numbered Certificate of Authenticity.

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2014 Australian Koala 1/10 oz Silver Coin

The one-tenth ounce 2014 Australian Koala Silver Coin is available as a less pricey koala silver coin option. The same basic reverse image of the head of a single adult koala is shown.

2014 Australian Koala 1-10 oz Silver Coin

This one is struck from 99.9% pure silver and features a diameter of 20.60 mm. These koala coins are attached to an illustrated presentation card.

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2014 Year of the Horse 1/10 oz Gold Square Ten-Coin Collection

The 2014 Year of the Horse 1/10 oz Gold Square Ten-Coin Collection includes ten 1/10 ounce 99.99% pure gold coins each showcasing a different colored image of a horse. The Chinese character for horse also appears on the design.

2014 Year of the Horse 1-10 oz Gold Square Ten-Coin Collection

A stylish case accompanies each ten-coin set. The product limit of the collection is listed as 1,500 with a mintage of up to 7,500 for each individual coin.

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2014 Year of the Horse 1 oz Silver Square Ten-Coin Collection

Similar to the gold coin set, the 2014 Year of the Horse 1 oz Silver Square Ten-Coin Collection depicts a different colored image of a horse on each coin’s reverse. Each is struck from one ounce of 99.9%pure silver.

2014 Year of the Horse 1-10 oz Silver Square Ten-Coin Collection

The issue limit is capped at 5,000. Up to 10,000 of the individual coins will be struck.

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2014 Newborn Baby 1/2 oz Silver Proof Coin

Presented in an Australian-themed gift card, the one-half ounce 2014 Newborn Baby Silver Proof Coin is minted as a gift option for newborns of the year. Found on the coin’s reverse is a colored image of a kookaburra carrying a sleeping newborn baby — an Australian take on the traditional stork folklore.

2014 Newborn Baby 1-2 oz Silver Proof Coin

Each is composed of 99.9% pure silver to proof quality. The coins are produced on a mint-to-order basis with the final mintage declared after twelve months.

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2014 Forever Love 1/2 oz Silver Proof Coin

Available with a mintage of up to 7,500, the one-half ounce 2014 Forever Love Silver Proof Coin showcases the theme of love with two colored Major Mitchell Cockatoos perched on a heart-shaped branch.

2014 Forever Love 1-2 oz Silver Proof Coin

Each coin is struck as legal tender of the island nation of Tuvalu. A Perth Mint display case is included along with an illustrated shipper.

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2014 Australian Megafauna – Diprotodon 1 oz Silver Proof Coin

Issued as the second release in the Australian Megafauna series is the one ounce 2014 Diprotodon Silver Proof Coin. A colored image of the giant Diprotodon from the Pleistocene period is shown on the reverse.

2014 Australian Megafauna – Diprotodon 1 oz Silver Proof Coin

The Perth Mint strikes them in 99.9% pure silver to proof quality. A maximum mintage of 6,500 applies.

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2014 Year of the Horse Stamp and Coin Cover

Horse lovers may want to consider the 2014 Year of the Horse Stamp and Coin Cover. Included is one 2014 Year of the Horse Coin with two official Australia Post stamps on the outside.

2014 Year of the Horse Stamp and Coin Cover

The stamps have been postmarked for the first day of issue with the Australian Post’s Seal of Authenticity and official number. Mintage is unlimited.

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2014 Australian Wedge-Tailed Eagle Gold and Silver High Relief Coins

2014 Australian Wedge-Tailed Eagle Gold and Silver High Relief Coins are each struck to proof quality from either one ounce of 99.99% pure gold or 99.9% pure silver. These high relief coins feature a reverse design of a single Wedge-Tailed Eagle in flight.

2014 Australian Wedge-Tailed Eagle High Relief Coins

This common reverse was commissioned by the Perth Mint from John Mercanti, the 12th Chief Engraver of the United States Mint. Of his many works, the heraldic eagle with shield currently found on the American Silver Eagle is perhaps his best known.

Maximum mintage for the gold proof coin is listed as 1,000 with up to 10,000 of the silver coin issued.

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Moody’s Lowers Downside Targets to $900 on Gold and $15 on Silver

If a prediction from Moody’s Investors Service turns out to be true, gold and silver are going to have a bad year. Moody’s reduced its forward views for the average prices of gold and silver in 2014 and beyond. This could have another negative impact on the SPDR Gold Shares (NYSEMKT: GLD), but it could be a boon for the DB Gold Short ETN (NYSEMKT: DGZ).


Moody’s sent its average per-ounce price of gold down to $1,100 from $1,200, and the average per-ounce price of silver was reduced to $18 from $20 previously. The ratings agency’s price target previously offered were deemed over a time period of “over the next couple of years.”

What is more important than the average price here is the downside price targets. This was lowered to $900 per ounce from $1,000 for gold. Silver’s downside price target was lowered to $15 per ounce from $17 previously. Again, these are the downside price targets rather than the average price targets.

We would warn readers that the iShares Silver Trust (NYSEMKT: SLV) is now less than $1 above the 52-week low. After a drop of $0.11 to $18.72 on Thursday, the 52-week range is $17.75 to $31.41.

The lower price expectations are based on significant deterioration in the spot price of gold and silver and on fundamentals that seem unfavorable over the next couple of years. Some headwinds include forward momentum in the global economy, the unwinding of various government stimulus programs and the subdued threat of inflation in most major economies.

Moody’s had previously indicated that it could lower its forward view if the price of gold was to persist below $1,300 per ounce. This is really bad news for gold and silver companies involved in mining and production. Moody’s said that the key credit metrics of certain producers are stretched for current ratings in the absence of mitigation through cost reductions or other actions.

Moody’s also said that it plans to evaluate the impact of lower gold and silver prices for each company over the coming months. A key issue was that operating costs for gold producers increased significantly over the past several years with companies chasing new production because of higher prices. Mining lower-grade ore came at the same time as wage hikes, higher power costs, higher exploration costs, higher environmental spending and other factors.

Here is the real rub for gold miners and producers. It said, “Moody’s believes the rated-industry’s all-in average cost of gold production is currently at least $1,100/oz comprised of about $850/oz of cash operating costs and a minimum of $250/oz of sustaining capital costs.”

Moody’s showed that this review was regarding gold and silver companies such as AngloGold Ashanti Ltd. (NYSE: AU), Barrick Gold Corp. (NYSE: ABX), Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX), Goldcorp Inc. (NYSE: GG), Hecla Mining Co. (NYSE: HL) and others in the sector.

Almost all investors know the SPDR Gold Shares (NYSEMKT: GLD) as the largest gold exchange-traded product out there, but the DB Gold Short ETN (NYSEMKT: DGZ) is the short bet as it aims for the inverse of the daily performance of the Deutsche Bank Liquid Commodity Index — Optimum Yield Gold Excess Return, but investors know by now that short ETFs have erosion, particularly when they use futures contracts.

By :-  Jon C. Ogg

Source : - 247Wallstcom

Two Lessons for 2014 Gold Investors

2014 finds gold investment shunned by trend-following money managers in the West...

 

GOLD has had worse years than 2013, but not many, writes Adrian Ash atBullionVault, in this article first published at ThisIsMoney.

 

Dropping more than 27% this year against the US dollar, gold suffered its worst year since 1981 (down 32%) and worse yet than 1975 (down 25%). But perverse as it sounds, 2013 proved gold's role as financial insurance.

 

For UK investors over the last 40 years, as this annual asset performance comparison shows, gold priced in Sterling has lagged the returns from the stockmarket (including dividends), gilts, cash savings and UK house prices 16 times. It has beaten those assets only eight times. In those years however, the gains on gold far outweighed its losses under better economic conditions, beating those other assets' average 3.8% return by 46 percentage points. Overall, gold has delivered 11% annual gains since 1973, second-only to the total return from the FTSE (15.4%) and comfortably beating the pace of inflation as the Pound has steadily lost purchasing power. But with stock markets surging this year, it was only natural that the price of financial insurance would fall.

 

2013 also proved that China's surging gold demand does not, as yet, set gold prices worldwide. Western money managers still hold the whip hand, and it was their about-turn in sentiment which sparked the crash in gold prices this spring. This change in sentiment had various roots. Boredom with six years of financial crisis. The sharp rise in equities. Growing expectation that the US central bank, the Federal Reserve, would start to reduce its QE money printing. Trend-following money managers ran for the exits from gold, shown clearly by the sharp fall in gold ETF holdings. From the record-high holdings of December last year these giant trust-fund vehicles shed one-third of their gold in 2013. That turned what had been around 250 tonnes of annual demand since the gold ETFs were launched a decade ago into 800 tonnes of supply. Turning over some 4,500 tonnes per year, the gold market buckled.

 

Yes, Chinese households and investors proved eager buyers, snapping up all that gold and more besides. Like a growing number of private investors in the West, they took the price crash to be an opportunity, adding to their gold holdings as a long-term investment. But their demand leapt as a result of the price drop, and it was the positioning of speculative traders in US gold futures and options which weighed heaviest of all. From a strongly bullish stance, hedge funds and other leveraged players as a group raised their betting against gold prices to the highest level since 1999, the very low of gold's two-decade bear market.

 

2013's deafening chorus of bearish forecasts from bank analysts also matches that historic turning point. All a bloody-minded contrarian would need now is for a Western government to start selling gold. But Gordon Brown is long gone. The idea of selling Cyprus' small gold reserves was merely discussed, not actioned in spring. Western central banks continue to hold gold close, and emerging-market governments continue to buy. When asked, they all name gold's insurance function as the No.1 reason. 

 

Looking to 2014, events in India could be important. Formerly the No.1 consumer nation, it is now locked out of the global gold market by import restrictions aimed at cutting India's trade deficit, in the hope of supporting the Rupee without stronger interest rates. Any relaxation of the government's rules could support prices if Western selling continues. But metal is still flowing into the former No.1 market regardless, but without any duty being paid and with criminals enjoying a 10% margin over legal suppliers.

 

The strategic question for gold bulls, and longer-term allocations, is whether the drop of 2013 will prove to have been 1981, when gold sank from then record-highs to begin a 20-year drop. Or was it more like 1975, when central banks talked tough in inflation but then failed to follow through with strong-enough interest rates? That reloaded gold's long bull market on the 1970s, clearing hot money out of the trend and then sending prices eight times higher as resurgent inflation saw stock markets and the returns to cash savers collapse in real terms.

 

Here sentiment amongst Western money managers and hedge funds will again prove decisive. Further tapering by the US Fed may already be priced into gold, but the mere idea of less QE helped spark the spring 2013 crash. Less money printing, however, won't change the zero interest rates or record peace-time debts being worn by savers and investors across the West as 2014 begins.

Buy gold at the lowest prices in the safest vaults today...

Adrian Ash runs the research desk at BullionVault, the physical gold and silver market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and is now a regular contributor to many leading analysis sites including Forbes and a regular guest on BBC national and international radio and television news. Adrian's views on the gold market have been sought by the Financial Times and Economist magazine in London; CNBC, Bloomberg and TheStreet.com in New York; Germany's Der Stern and FT Deutschland; Italy's Il Sole 24 Ore, and many other respected finance publications.

See the full archive of Adrian Ash articles on GoldNews, or get more from Adrian Ash on Google+

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News, RSS links are shown there.

Source : BullionVault.com

Gold Is No Longer A Safe Investment

The crash in gold prices was one of the biggest shockers of 2013. A correction had already begun at the fag end of 2012, but prices really crashed in 2013, triggered by fears that the US Federal Reserve would scale down and do away with the economic stimulus.

However, Indian investors in gold were cusioned against the crash due to the fall in the rupee. As the dollar became costlier, gold continued to fetch a higher price in India. Besides, the government introduced certain measures that pushed up the domestic price of the metal. Import duty on gold was hiked from 2% to 10%, increasing the landed cost of gold. Quantitative restrictions were also imposed on gold imports, such as the RBI's 20:80 scheme, which mandates that 20% of imports need to be re-exported .

As a result of these measures, domestic prices of gold have receded by only 4.3%, compared to the 28% drop in global gold prices during 2013.

This gap in the price of gold has created an opportunity for 'legal smuggling' of the metal. NRIs returning to India after spending more than six months abroad are allowed to carry up to 1 kg of gold. Jewellers are using NRIs as carriers , even offering to pay for their air fare if they bring in gold for them. Even if they pay the import duty of 10% on bars and coins or 15% on jewellery, the arrangement works out to be profitable (see table).

The wide difference in the domestic and international prices of gold have led to another anamoly in the capital market. The market price of gold ETFs, which is based on the domestic price of the metal, is far higher than their NAVs, which is based on the landed cost of gold. The difference is as high as 10%.

Since gold has rallied for more than a decade now, most investors had begun to believe that gold prices can only go up. However, the crash in gold prices has shattered this myth, at least for the global investors. This explains why they are now dumping gold. The gold holdings in SPDR Gold Shares, the largest gold ETF in the world, have came down from 1,351 tonne at the end of 2012 to just 814 tonne now, a fall of around 40%.

Lessons from 2013

1) Gold is no longer the safe haven it used to be. Its price can also come down, shattering a long held belief.

2) The currency dynamics and policy measures can lead to a significant variance in domestic and global prices.

3) Paper gold is not always the best way to invest in the metal. Gold ETFs are trading 10% above their NAVs.

Strategy for 2014

International gold prices may continue to correct in 2014. "We remain bearish on gold because it will underperform during tighter liquidity and rising interest rates scenario. It may go down further to the $1,050-1 ,080 range before March 2014," says Kishore Narne, associate director, Motilal Oswal Commodities Broker. Domestic gold prices have been cushioned from the global crash but this could change in the new year as the government rolls back some of the harsh measures introduced in 2013. A reduction in the import duty and other restrictions can bring down the domestic gold prices. "Domestic gold also looks bearish; the only risk is the currency," says Narne. Investors will have to monitor global developments and government policy measures more closely in 2014. Financial advisers have long advocated the benefits of buying paper gold. This conventional wisdom has been turned on its head by the differential in the market price of gold ETFs and their NAVs. It's better to stay away than get caught on the wrong foot. Getting gold from abroad for a jeweller may seem a great way to earn easy money, but there are several glitches in this arrangement. The tax department may want to know where you got the money to buy the gold. Since this involves profit, you would also have to pay tax on the gains. However, it makes sense for NRIs to bring in small quantities of gold.

Source : Times of India

Closing Update: Stocks Enjoy Bernanke-Bump Late In the Day

Stocks started losing steam midday and gave back most of their earlier gains but picked up momentum into the close as Wall Street grew more optimistic before Ben Bernanke's speech in Philadelphia. After yesterday's deep sell-off, investors returned to pick up bargains this morning, especially among airline stocks where Delta ( DAL ) led the entire sector higher thanks to strong December passenger traffic.

But without the benefit of economic data, the equity market took direction from Fed officials who generally warned of higher rates and more moderate economic growth, the implications of which caused stocks to slump. However, the mood improved later in the day when market players started positioning themselves in the event that Bernanke gave the financial markets one last reassurance. And Bernanke didn't disappoint stating that the Fed remains committed to an accommodative monetary policy that will continue to encourage economic growth without inflationary pressures. The resulting late price action helped the Dow Industrials close higher for the third consecutive week with yet another record high
Here's where the markets stood at the close:

US MARKETS
Dow Jones Industrial Index was up 28.64 (+0.17%) to 16,469.99
S&P 500 was down 0.61 (-0.03%) to 1,831.37
Nasdaq Composite Index was down 11.16 (-0.27%) to 4,131.91
GLOBAL SENTIMENT
FTSE 100 was up 0.19%
Nikkei 225 was up 0.69%
Hang Seng Index was down 2.24%
Shanghai China Composite Index was down 1.24%
UPSIDE MOVERS
FEYE, FireEye acquired Mandiant for $106.5 million and raised its guidance.
BIOD, Seeking Alpha report calls the stock "extremely undervalued" with a stock price that should be 2-3 times higher than the current price
PLUG, Announced on Thursday that it had met its projected order targets for 2013 with around $32 million in Q4 bookings.
DOWNSIDE MOVERS

DM, Appointed a chief restructuring officer and received a warning from the New York Stock Exchange that its stock fell below the exchange's minimum share price.
GM, Despite upbeat 2013 sales, December sales were down 6% from year ago levels.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2013 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.


This article appears in: Investing , Commodities

Referenced Stocks: DAL
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