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January Gold News 2014


Gold falls on upbeat economic data

Gold falls on upbeat economic data

Gold dropped 2% yesterday, it's largest one day decline for over a month following the Federal Reserve’s decision to taper its monthly asset program by a further $10bn per month and the release of positive economic data from the U.S.

The S&P closed 1% higher after better than expected U.S. household spending and export data resulted in the U.S. economy expanding by 3.2% in the fourth quarter of 2013.

Silver, Platinum and Palladium all traded lower yesterday.
Jeffrey Christian predicts $1,900 gold

Jeffrey Christian predicts $1,900 gold

Well respected Jeffrey Christian, Managing Partner of New York based research organisation CPM, has predicted that gold could rise to $1,320 per ounce in quarter one before catapulting to $1,900 per ounce over the longer term.

Christian has forecasted that gold will trade between $1,240 and $1,500 over the next few years, which is extremely bullish when compared to recent forecasts from most mainstream bank analysts.

Gold looks vulnerable as Chinese celebrate New Year

Gold looks vulnerable as Chinese celebrate New Year

Chinese demand for physical gold is expected to diminish over the next two weeks as the Chinese celebrate the Lunar New Year Holiday which starts today.

According to ANZ analyst, "Near-term, gold fundamentals look bearish, as Chinese demand is sidelined for the next few weeks with the New Year holiday. Absent a further escalation in emerging-market jitters, we expect prices to retest recent lows, potentially falling below $1,230 an ounce."

Credit Suisse: Gold could plummet to $1,000 by the end of 2014

Credit Suisse: Gold could plummet to $1,000 by the end of 2014

After gold’s positive start to the year, Credit Suisse is warning that gold will face considerable headwinds in 2014, with bank analysts forecasting gold could fall to $1,000 per ounce.

The bank believes economic recovery in North America and Europe has reduced investor appetite for gold’s status as the “the ultimate safe haven.” The bank also suggests rising interest rates will make gold less attractive when compared to interest bearing assets.

Russian Central Bank effectively bans Bitcoin

Russian Central Bank effectively bans Bitcoin

The Russian Central Bank was warned both banks and non-banking financial companies to avoid using crytocurrencies. The bank added that any financial institutions using such “money surrogates” will be considered “suspicious”.

The Central Bank also cited money laundering and terrorist activity as further reasons for individuals to avoid the use of such currencies. In effect by making these announcements the Russian Central Bank has placed a ban on crytocurrencies.

Gold hedging at 11 year low

Gold hedging at 11 year low

The amount of gold sold forward by mining companies fell to an 11 year low in the third quarter of 2013. According to Societe Generale and Thomson Reuters the total amount of hedged gold fell by 6 tonnes to 92 tonnes.

By selling their production forward, miners have certainly over future revenues and can protect themselves from future price declines. Generally investors view hedging negatively as they lose exposure to future price increases.

27kg of Gold smuggled on commercial airline

27kg of Gold smuggled on commercial airline

27kg of gold worth $1.5 Million has been found concealed inside mobile phones on a cargo plane at Chennai airport reports say. The plane arrived from Hong Kong and it is unclear who the sender and attended recipient are.

Gold smuggling into India has significantly increased since the Indian government introduced the gold import tax in an attempt to reduce the country’s current account deficit. According to India’s central bank, gold imports declined to $3.9bn from $16.4bn in the last quarter of 2013.

Could no taper catapult gold higher?

Could no taper catapult gold higher?

The latest Federal Open Market Committee (FOMC) meeting concludes today, with most analysts expecting the Federal Reserve to continue to taper its monthly asset program known as quantitative easing.

Continued tapering is not expected to impact the gold price as most analysts believe this has already been factored into the price. On the flip side if the Fed chooses to halt tapering the news may catapult the gold price higher.

Deutsche Bank to sell gold fixing seat

Deutsche Bank to sell gold fixing seat

Deutsche bank is in negotiations to sell its seat on the global gold and silver price setting process, commonly known as the fix. The news comes weeks after Deutsche Bank announced they are withdrawing from the fix after German regulator Bafin’s investigation into the bank over potential manipulation in the precious metals markets. Earlier this week Deutsche bank also announced its decision to scale back its commodity business.
Outflows from Gold ETF’s slow

Outflows from Gold ETF’s slow

Outflows from Gold Exchange Traded Funds (ETFs) have slowed following a dismal year for the yellow metal. Since the peak in quarter two when $19.6 billion was withdrawn, the outflows have slowed. According to Nick Brookes, head of global research and investment strategy at ETF Securities “The bulk of shorter-term tactical money that went into gold over 2011 and 2012 has now been cleared and gold ETP holdings are back to 2010 levels.”
Japan may fund welfare and education with dormant bank accounts

Japan may fund welfare and education with dormant bank accounts

Japans ruling Liberal Democratic Party is planning to submit a new bill which will allow the government to raid bank accounts which have been dormant for over 10 years. The money will be transferred to government run Deposit Insurance Corporation of Japan and the funds will be used for both welfare and education projects. Although the government will be utilising the funds customers can request their money back at any time.
Former Assistant Treasury Secretary claims the West has no gold

Former Assistant Treasury Secretary claims the West has no gold

Dr Paul Craig Roberts former Assistant Treasury to Ronald Regan has made some extraordinary claims on US Watchdog regarding the US gold holdings. They don’t have any more gold. That’s why they can only give Germany 5 tons of the 1,500 tons it’s holding. In fact, when Germany asked for this delivery last year, the Fed said no. But it said we will give you back 300 tons . . . . So, they said we will give you back 20% of what you trusted us to keep for you over the next seven years, but they are not even ...
Morgan Stanley remains bearish on gold

Morgan Stanley remains bearish on gold

Morgan Stanley has reduced its 2014 gold forecast by 12% to $1,160 per ounce. Bank analyst Peter Richardson believes gold will remain in a downward trend as the global economy continues to recover increasing the probability of interest rates rising. The forecast follows yesterday’s release of the London Bullion Market Survey of traders who are collectively forecasting an average price off $1,219 per ounce in 2014.
Deutsche bank quits gold and silver price setting as regulators investigate

Deutsche bank quits gold and silver price setting as regulators investigate

Deutsche Bank has announced that they will withdraw from gold and silver fixing amid an investigation by German regulators into suspected manipulation of precious metal prices by banks. Bafin the German regulator added “accusations of manipulation are very serious.” The probe comes days after Deutsche bank suspended traders for potential rigging of the world’s currency benchmarks.
India’s demand for gold jewellery declines

India’s demand for gold jewellery declines

According to Haresh Soni Chairman of the All India Gem & Jewellery Trade Federation, India’s demand for gold jewellery has declined despite a drop in the gold price and the upcoming wedding season. “Compared to last January the market is down. Volatility in gold is also affecting the market. Consumers are very cautious on purchasing gold. Inflationary pressure is also keeping consumers away from purchasing gold.”
Indian women’s group seeks limit on wedding gold

Indian women’s group seeks limit on wedding gold

A women’s group in the Indian state of Kerala is calling for a limit to be placed on the amount of gold which can be gifted at wedding to 80 grams. The group believes the limit will reduce the financial burden placed on families and help reduce India’s trade deficit. Currently the average amount of gold gifted per wedding in the state is 400 grams or 80 tonnes per year, which equates to 10% of India’s total annual demand.
China grants gold import licenses to foreign banks

China grants gold import licenses to foreign banks

In an aim to open China’s physical gold market, the Chinese government has grant gold import licences to two foreign banks ANZ and HSBC. By issuing two further licenses the supply of gold could increase and reduce local prices, which are higher than other Asian countries. China is currently the world’s largest buyer of gold and in the first 11 months of 2013 imported over a 1,000 tonnes via Hong Kong.
Chinese demand to underpin gold price

Chinese demand to underpin gold price

Toby Lewis, investment strategist at Citibank is predicting that continued strong demand by Chinese buyers will support the gold price in 2013 as investment demand declines. “We expect support for the gold price to be driven by Chinese physical demand increasing later in the year,” Mr Lewis said. “Investor demand is likely to remain subdued throughout the year as demand for a safe haven from financial crises and demands for inflation protection are likely to be much lower.”
World’s largest gold coin goes on display in Hong Kong

World’s largest gold coin goes on display in Hong Kong

The Perth Mints record breaking 1,012 Kilogram gold coin is currently on display in the Hang Seng Bank headquarters. The 2012 coin has a kangaroo on one side and an image of Queen Elizabeth II on the other. The coin is 4.7 inches thick with a 31 inch diameter and took the Perth Mint 18 months to manufacturer. The purpose of the display was to further develop the relationship between the bank, the Mint and Chinese consumers.
Fund manager urges clients to look at gold

Fund manager urges clients to look at gold

City Financial Mark Harris, is urging investors to once again look at gold miners and gold bullion as a potential hedge against an equity sell off. Mark is anticipating a correction in the equity markets and increased volatility. Mark is buying gold for hedging purposes rather than believing the price of gold will dramatically increase in 2014. Last year gold bullion and gold equities where two of the worst performing asset classes.
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