There are over 3 billion ounces of gold in the world’s deposits. The Top 50 of these mines alone contain over one-third of the total gold. North America is the ‘cheapest’ place to produce gold and Africa the most expensive. Gold producer profits are getting squeezed from both directions: lower gold prices and rapidly inflating costs… >> Read More

The slump in gold prices in mid-April sparked hopes that the country would be able to narrow its current account deficit (CAD) as less would be spent on buying gold. But a surge in imports driven by massive gold purchases widened the trade deficit sharply, overshadowing the further improvement in exports performance.

“Government is serious about growing trade deficit and would take corrective measures once we have evidence that import of gold in the month of april is outlier or consistent,”  

“We will have to wait and watch it for couple of months” he added. “Gold is one of the contributors but there are invisibles like FII, which have also contributed to high CAD,” he replied when asked what is the major factor behind high CAD).

“Going forward in 2013-14, we don’t expect (CAD) to cross 4.6 per cent of the GDP”, he said. >> Read More

Overseas investors have poured in nearly Rs 12,000 crore (about $2.2 billion) into the Indian equity market so far this month.

With this, the total foreign investment in the country’s equity market has reached Rs 73,029 crore ($13.5 billion) since January.

As on May 10, the number of registered FIIs in India were 1,770 and total number of sub-accounts were at 6,407.

During May 2-17, foreign institutional investors (FIIs) were gross buyers of shares worth Rs 37,997 crore, while they sold equities amounting to Rs 26,005 crore — a net inflow of Rs 11,993 crore ($2.2 billion), according to the data available with market regulator SEBI.

FII net investments had plunged to the lowest level in 16 months during April, attracting net inflow of Rs 5,414 crore. >> Read More

On 21st Feb’2013 -We had Written this :

http://www.anirudhsethireport.com/gold-spot-major-support-1525-1510-big-decline-upto-1300-1224-1123-on-card-in-coming-months/

Gold, down 17 percent since January, is poised to lose 20 percent in a year as inflation fails to accelerate and with the worst risks to the global economy waning, Credit Suisse Group AG said.

Gold will trade at $1,100 an ounce in a year and below $1,000 in five years, according to Ric Deverell, head of commodities research at the bank. Lower prices are unlikely to lure more central-bank buying, said Deverell, who worked at the Reserve Bank of Australia for 10 years before joining Credit Suisse in 2010.

Gold prices are down about 12.5% since the start of April. But global central banks have been increasing their reserves of the yellow metal.

A new report from the World Gold Council shows that central banks bout 109 tonnes of gold in the first quarter.

This was the seventh straight quarter in which they purchased over 100 tonnes of gold.

Central banks held 31,735.4 tonnes of gold as of May 2013. This was up from 31,694.8 tonnes as of April 2013.

Gold entered a bear market during that quarter.  In the current quarter, gold has gone from $1,603 on April 1 to below $1,400 today.

According to the WGC, Russia and South Korea were among the biggest buyers of gold. >> Read More

Merchandise exports in the first month of the present fiscal rose a tad by 1.68% to $24.16 billion over $23.76 billion same month last year.

However, imports surged during the month surged by a massive 10.96% to $41.95 billion over $37.80 billion last year on account of a 138% jump in import of gold and silver.

Trade deficit in April ballooned to $17.8 billion over $14.04 billion, according to the latest data released by the ministry of commerce and industry here today.

“Imports has seen an undue growth of 10.9% largely contributed by significant increase in gold imports … in exports the problem is with engineering and petroleum that showed negative growth,” commerce secretary S R Rao said while releasing the data.

Import of gold in April alone reached $7.5 billion over $3.1 billion in the same month last year. According to Rao the government is closely watching the situation and reason for such huge surge in gold imports, which he also attributed with the onset of the current festive season with ‘Akshaya Tritiya’ which is regarded as an occasion to buy gold for religious reasons. >> Read More

India’s macroeconomic situation is looking up

One would have to be a diehard pessimist not to acknowledge the fact that the flow of economic data over the past fortnight points to a possible improvement in India’s macroeconomic situation for the coming year. The inflation print for March, for one thing, came as a pleasant surprise at a little less than six per cent. This was underpinned by an extremely low core inflation rate, of 3.4 per cent, which corroborated much of the anecdotal evidence strewn all over that tight monetary policy had completely reined in the pricing power of Indian companies. Even if there is an upward revision in the headline number for the month, core inflation is unlikely to budge much.

The second important development was the crack in gold prices driven partly by the news that Cyprus would sell its gold reserves as part of its crisis resolution package. Though this amount, euro 400 million, is indeed paltry, it has sparked fears that gold sales by central banks would emerge as part of the fiscal/banking stress mitigation strategies of other, bigger European economies such as Italy. These economies are saddled with much larger fiscal gaps and hold bigger gold reserves. Therefore, the supply of gold from their coffers could be much bigger. >> Read More

Billionaire investor John Paulson told investors on Wednesday he is staying the course on gold even though there may be more short-term volatility in the price of the metal.

The New York-based hedge fund manager has long stuck by his thesis that gold will someday be a powerful hedge against inflation, and it was no different on the investor call he held, two people who listened to the call said.

John Reade, a partner at Paulson & Co, said that the firm, which oversees about $18 billion, is not veering off its course even as he cautioned that there could be more price fluctuations in the short term.

A spokesman for Paulson did not immediately return a call seeking comment. >> Read More

Some of the banks that have opened LCs are Punjab National bank, Union Bank of India, Central Bank of India, Vijaya Bank, IDBI Bank, among others. Standard Chartered Bank was the lead bank of the consortium.

The consortium of lenders which had opened letters of credit to jewellery firm Winsome, formerly Su-Raj Diamonds, for the purchase of gold are set to take a hit as a significant part of their Rs 4,000 crore exposure will turn bad.

According to bankers, they have some collateral attached with the LC, but the amount is not significant. Banks also have charge over the stock of Winsome and in the consortium meeting of lenders last week, it was decided to send inspectors to verify the stock. However, bankers said since gold prices have fallen in the last few days, the value of the stock, if any, will be depleted. >> Read More