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Posts Tagged ‘Gold Sale’

Gold, Nonferrous Metal, Nonferrous Metals Prices

January 13, 2010

Gold Import Declined to 343 tonne in 2009

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It was said from the Bombay Bullion Association in Mumbai on Wednesday that gold imports declined by nearly 24 per cent in 2009 at 343 tonne, against 449 tonne in 2008.

“The country has imported 343 tonne gold in 2009, compared to 449 tonne in 2008,” Bombay Bullion Association President Suresh Hundia said.

India has remained the largest gold importer in the past few years, but took a hit in 2009 due to soaring prices, he said.

Commenting on price trend, Hundia said gold may see some correction and may touch Rs 16,400-16,500 per 10-gram in the near future.

The precious metal plunged Rs 245 to Rs 16,785 per ten grams at the Mumbai bullion market today on emergence of hectic offloading by stockists and speculators.

The sudden bout of selling was attributed to heavy profit-taking fearing a price correction in the overseas markets following China’s tightening of its monetary policy yesterday, a trader said.

Pure gold (99.9 purity) fell by a similar margin to end at Rs 16,870 per ten gram from Rs 17,115 previously.

Gold, Nonferrous Metal, Nonferrous Metals Prices

November 26, 2009

Gold Demand Fallen in UAE

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It is reported that gold demand has fallen dramatically in the UAE and jeweller closures are “inevit-able” the World Gold Council said in a report.

The UAE saw demand fall by 39 per cent in the third quarter of this year compared to the third quarter of last year, the council said.

“A combination of high gold prices, declining tourist numbers and a sharp downturn in the property sector were responsible for the drop off in demand,” according to the report, released yesterday.

In the Middle East as a whole, jewellery demand fell by 34 per cent, while investment demand dropped by 11 per cent.

However, in the UAE, jewellery demand was down 38 per cent and investment dem-and 52 per cent, compared to the third quarter of 2008.

However, the third quarter of 2008 was an exceptionally strong quarter.

When compared to a five year average of third quarters, total demand in the UAE was down six per cent, the report said.

Despite this, the council said that jewellers in the UAE were at risk of closure.

“The jewellery trade, most particularly in Dubai, is under pressure. As with many residents in the UAE, many jewellers had invested their profits in the property sector.

“Left with cashflow problems jewellery retailers have been forced to liquidate inventories to meet margin calls and make repayments on gold loans. As yet, there have not been any notable closures of jewellers, but this is probably inevitable if demand conditions do not improve,” the council’s report said.

Gold, Nonferrous Metal

October 22, 2009

U.S. Dollar Devaluation is Good or Bad for Gold?

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It is becoming clearer that higher gold prices are tracking prospects for further devaluation of the U.S. Dollar. This is a result of the falling relevance and global stature of the U.S. economy, military and political cohesiveness. The stability of gold as a currency provides one of the best and most immediate polls on the direction of a nation’s future.

Gold has broken away from the seasonal pattern of flat to declining prices over the summer in each of the last seven years. This may have been a good indication that monetary easing in 2008 was beginning to circulate through the economy, increasing liquidity and the money supply. This presumed increase in liquidity could have been a reason for increases in the price of gold and the Dow. Not surprisingly, the rate of money circulation is anemic, as evidenced by low demand and supply of credit. It appears that liquidity may not be finding its way into either reported inflation indices or growth in gross domestic product (GDP). Without signs of reported inflation or credible signs of a return to a robust economy, the Federal Reserve has little impetus to increase interest rates, making the U.S. dollar less attractive. The gold price and the level for the Dow have achieved higher valuations even as the U.S. dollar depreciates relative to those assets.

The perspective that higher gold prices are not due to either inflation or lack of economic growth in the U.S. does not mean that inflation is not in our future. Simply from a U.S. perspective, gold did not become more valuable, but rather, the U.S. dollar lost value. Considering the United States lack of manufacturing and dependence on imports, higher inflation in the U.S. appears certain. Internationally, very real concerns exist over the U.S. deficit and its level of debt to GDP. While interesting today for traders and speculators, these trends may have very real implications for the economy and future of the U.S. On the present course, even at historic highs, hedging against inflation or further devaluations of the U.S. dollar with gold and gold equities appears to be a reasonable strategy.

So long-term U.S. dollar devaluation is Good for Gold.

Gold, Nonferrous Metal

October 21, 2009

Gold Plants Seeking Overseas Market

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It is reported that state-controlled China National Gold Group Corporation is planning to step up presence in Central Asia, Russia and Africa as part of its plan to scout for new investment destinations.

“We are considering two new precious metals projects in these regions and expect to finalize the deals early next year,” said Tong Junhu, overseas business manager of China Gold.

The nation’s largest gold producer also said it has achieved breakthroughs in Russia and Mongolia but declined to divulge any details.

Traditionally Chinese mining companies prefer investing in Australia and Canada.

According to figures from Ernst & Young (China) Advisory Ltd, nearly 60 percent of China’s outbound transactions this has been in Australia, while Canada accounted for 32 percent.

Though resource-rich developed economies like Australia and Canada enjoy sophisticated infrastructure and legal systems, the volatile prices and rising protectionism have made it difficult for Chinese investors to clinch deals in these regions.

“There is still a valuation gap between buyers and sellers, and good deposits are impossible to find,” said Mike Elliott, global mining & metals sector leader of Ernst & Young.

In October, Baosteel Group Co, China’s largest steelmaker, was asked by the Australian government to resubmit its application to invest $240 million for a 15-percent stake in iron ore explorer Aquila Resources Ltd.

In September, the Australian Foreign Investment Review Board (FIRB) asked Yanzhou Coal Mining Co Ltd to resubmit its takeover application for Felix Resources. In the same month, China Nonferrous Metal Mining Group was blocked from investing $222 million in rare earth miner Lynas Corp.

Australian media cited a senior FIRB official as saying that the board preferred not to see foreign majority stakes in new mining projects.

About half of the 30 mergers in Australia’s mining and metals sector failed in 2009. Elliott said: “Foreign regulatory restrictions on Chinese buyers of assets require greater flexibility.”

He suggested that Chinese companies should shorten the decision-making procedure and opt for minority stakes instead of looking to control the target company to clinch the deals in a timely manner.

Outbound investment often accompanies higher risks and only full control of the project will help minimize risks, said a domestic mining executive who declined to be named.

In June, China Gold and Renova Group, a large Russian conglomerate with interests in metals and energy assets, signed a memorandum for jointly exploiting precious metals.

In 2008, China Gold acquired 41 percent of Toronto-listed Jinshan Gold Mines Inc. Jinshan owns an operating gold mine in Inner Mongolia autonomous region and has become China Gold’s offshore platform.

China Gold is the controlling shareholder of Zhongjin Gold Co Ltd, which interim report said it would acquire five gold mines in the second half of this year, adding some 100 tons of new gold reserves, the first gold stock in China.

Gold, Metal News, Nonferrous Metal

September 22, 2009

Gold Sale Aim at China Rural

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It is reported that the World Gold Council is planning what it calls an unprecedented campaign to encourage gold sales in rural China, where higher farm incomes and government stimulus programs are feeding demand.

“Rural areas showed better-than-expected demand for gold in the first half in China,” said Gerry Chen, business development manager for China with the World Gold Council.

China is the only country in the world where the demand for gold jewelry has risen in the aftermath of the world financial crisis, the council said. Sales on the mainland rose 9 percent in the first half, while global demand contracted 8 percent.

But demand in China is unevenly spread.

“Gold demand was flat in Beijing, Shanghai and other first-tier cities, while consumption in rural areas showed surprisingly strong growth,” Chen said.

He declined to break down figures and said details of the rural marketing campaign had yet to be finalized.

Throughout China, gold is considered a symbol of good fortune. In rural areas in particular, gold is used to celebrate weddings.

Prosperity is returning to many hinterland areas, where household spending and consumer sentiment are rising faster than in large urban centers.

About 59 percent of rural households said they planned to increase spending in the next 12 months, compared with 41 percent in big cities, according to a MasterCard survey released this week.

China has increased spending in rural areas as part of a comprehensive stimulus program to boost domestic consumption and counter a slump in exports, the nation’s traditional engine of growth.

“The second half will maintain the momentum,” said Chen. “It was hustle-bustle at the Shenzhen International Jewelry Fair last week. Retailers stood in long lines to do business.”The annual fair is deemed to be a benchmark for China’s jewelry market. The busier the show, the bigger the sales going into the Chinese New Year. The fourth quarter is traditionally the high season for gold sales in China.

The council wants to increase that proportion to 15 percent by 2012. While it maps plans to stimulate sales in the nascent rural gold market, the council is expanding its urban campaign to promote high-end, designer 24-carat jewelry, which now accounts for 5 percent of China’s total gold jewelry consumption.

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