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Sat, 27th May 2017

Anirudh Sethi Report

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Archives of “GOLD” Tag

Overnight US Market :Dow closed +232 points.Nasdaq Composite closed above 6000

The Nasdaq Composite closed at a new all-time high on Tuesday, with the S&P 500 not far behind with sentiment brightening sentiment across trading desks.

The tech-heavy Nasdaq climbed 0.7 per cent to 6,025.5 — its first ever close above the 6,000 mark. The small-cap Russell 2000 was up 1 per cent to 1,411.3, having hit an intra-day record earlier in the day. Meanwhile, the S&P 500 gained 0.6 per cent to 2,388.6.

Lower taxes would increase corporate America’s profits and spark higher levels of economic growth, according to analysis from numerous investment banks following the November election. However, the failure of the White House to repeal and replace Obamacare has cast a shadow on the administration’s ability to enact fiscal measures.

Meanwhile, investors continued to unwind positions in havens that were built up ahead of the French vote. The 10-year Treasury yield, which moves in the opposite direction of the price, was up 0.0646 percentage points to 2.338 per cent. Gold slid 1 per cent to $1,263 a troy ounce.

Forex reserves increase by $889.4 mn to $369.887 bn

India’s foreign exchange reserves rose by USD 889.4 million to USD 369.887 billion during the week ended April 14, helped by increase in foreign currency assets, the Reserve Bank said.

They had declined by USD 956.4 million to USD 368.998 billion in the previous reporting week.

The reserves had touched a life-time high of USD 371.99 billion in the week to September 30, 2016.

Foreign currency assets (FCAs), a major component of the overall reserves, surged by USD 881 million to USD 346.248 billion in the reporting week, RBI said.

Expressed in US dollar terms, FCAs include the effects of appreciation/depreciation of non-US currencies, such as the euro, pound and the yen, held in the reserves.

Gold reserves remained unchanged at USD 19.869 billion, the apex bank said.

The special drawing rights with the International Monetary Fund was up by USD 3.1 million to USD 1.446 billion.

India’s reserve position with the Fund, too, rose by USD 5.3 million to USD 2.323 billion, RBI said.

India : GOLD IMPORT SHRINKS 24 % TO $23 BN IN APRIL-FEB FY17

India’s gold import witnessed a fall of about 24 per cent to $23.22 billion in April- February period of the last fiscal, which is expected to keep a lid on the current account deficit.

Total import of the precious metal in the corresponding period of 2015-16 stood at $30.71 billion.

According to industry experts, softening prices of gold in the domestic and world markets could be the reason for the same.

The contraction in import helped in narrowing the trade deficit to $95.2 billion during the 11-month period of 2016-17 as against $114.3 billion in the same period of the previous fiscal.   

Gold Bugs: Why Russia is Stacking Bullion Bricks Like There’s No Tomorrow

Standard 24 karat gold bars being cast in the foundry of the Novosibirsk gold refineryRussia’s Central Bank purchased record amounts of gold in 2016, and plans to accelerate its purchases, retaining its spot as global leader in the growth of gold reserves. That’s according to a recent survey by the GFMS analysts at Thomson Reuters. Russian economists explain the thought process behind the Bank’s purchases.

According to GFMS analysts, Russia’s Central Bank purchased 201 tons of gold in 2016, more than the central bank of any other country. The Bank made its purchases over 11 consecutive months, with purchases accelerating to an average of 36 tons per month between October and November as gold prices fell.

The analysts expect Russia to continue buying large volumes of gold in 2017, predicting about 200 tons in purchases, regardless of fluctuations in gold prices, oil prices and even exchange rates. For comparison, the report estimates the total purchases of gold by other Central Banks to amount to roughly 250 tons for the year.

As of March 1 2017, Russia’s sitting on 1,654.7 tons in gold reserves, making its reserves the sixth-largest in the world, behind the United States, Germany, Italy, France and China.

Commenting on the Central Bank’s moves, economist Valentin Katasonov, professor of the faculty of international finance at the Moscow State Institute of International Relations, told Russia’s Svobodnaya Pressa online newspaper that the Bank is making the right move.

“The Bank is doing the right thing. Specialists know that the today the price of the precious metal is undervalued, and significantly so. Therefore, investors looking for long-term results are investing in gold,” Katasonov said.

“Of course, from the perspective of the short-term investor, such an investment means possible losses. The gold market includes very large speculators, who periodically reduce prices artificially for some period of time, making it possible for interested investors to buy gold at a lower price. But this market also has its own written and unwritten rules.”

Katasonov reiterated that as far as Russia is concerned, the Central Bank’s decision to stock up on gold is almost exclusively beneficial. “Among other things, it allows us to support the domestic gold mining industry, which in the 1990s and the early 2000s faced a very difficult situation. And what is especially insulting is that most of its output at the time went abroad.”

‘Most Secure Coin In World’ ?

– New pound coin ‘most secure coin in world’ ? 
– New British £1 coins much harder to counterfeit
– Pound coin uses “secret” cutting edge technology
– Coins uses ‘iSIS’ technology which may involve RFID tags
– Central banks, governments may be able to track coins
– Libertarians and privacy advocates will have concerns
–  “Secure coin” yes but real risk is that savings not secure due to currency debasement
– Now new risk to bank deposits as all digital wealth exposed to hacking and cyber fraud
– Sound as a pound? Safer to stick with true “coin of the realm”
– Gold and silver Sovereigns and Britannias  (VAT and CGT free) are only truly secure coins

Emerging Markets: An Update

  • Former Korean President Park was arrested.
  • Hungary’s central bank was more dovish than expected.
  • South African President Zuma finally fired Finance Minister Gordhan.
  • Brazil’s meat industry may have seen the worst of the scandal.
  • Banco de Mexico slowed the pace of tightening.
In the EM equity space as measured by MSCI, Colombia (+2.0%), Brazil (+2.0%), and Singapore (+1.2%) have outperformed this week, while Egypt (-1.5%), Turkey (-1.3%), and Poland (-1.2%) have underperformed.  To put this in better context, MSCI EM fell -0.6% this week while MSCI DM rose 0.6%.
 
In the EM local currency bond space, the Philippines (10-year yield -23 bp), India (-16 bp), and Hungary (-11 bp) have outperformed this week, while Turkey (10-year yield +21 bp), the South Africa (+14 bp), and Malaysia (+7 bp) have underperformed.  To put this in better context, the 10-year UST yield was flat at 2.41%.
 
In the EM FX space, RUB (+1.5% vs. USD), PLN (+1.2% vs. EUR), and INR (+0.9% vs. USD) have outperformed this week, while ZAR (-7.9% vs. USD), BRL (-1.4% vs. USD), and TRY (-1.1% vs. USD) have underperformed.

Bitcoin price tops gold for the first time ever

The price of a bitcoin has climbed above that of a troy ounce of gold for the first time on record after the cryptocurrency enjoyed a dramatic upswing in interest since last year.

Bitcoin has jumped by nearly 33 per cent this year to trade at $1,265 on Thursday amid a surge in interest in China, where the authorities fret the digital currency is being used to facilitate capital flight from the country. Bitcoin has risen nearly 200 per cent over the past 12 months, despite efforts to curb its use in China.

Of course, comparing gold to bitcoin is arbitrary, given that the precious metal is measured in weight – a troy ounce of gold (about 31 grams) cost $1,233 on Thursday – while the virtual currency beloved of technologists is entirely ephemeral and abstract. But the cross is nonetheless symbolic of its unexpected staying power and influence in certain circles.

SEC officials on February 14 met with Tyler and Cameron Winklevoss – the bitcoin ETF’s champions – to discuss the proposal and a decision is due by March 11, according to Bloomberg.

The digital currency came close to the headline gold price in late 2013, when it spiked above $1,000 per dollar for the first time, but then quickly halved in value in 2014, traded sideways for much of 2015 before embarking on a sharp rally in the middle of last year.

Putin “Buys The Dip” – Russia’s Gold Buying In October Largest This Millenium

Russia gold buying accelerated in October with the Russian central bank buying a very large 48 metric tonnes or 1.3 million ounces of gold bullion.

 

This is the largest addition of gold to the Russian monetary reserves since 1998 and could be seen as a parting ‘gift’ by Putin to his rival ex-President Obama.

The Russian central bank gold purchase is the biggest monthly gold purchase of this millennium.

Concerns about systemic risk, currency wars and the devaluation of the dollar, euro and other major currencies has led to ongoing diversification into gold bullion purchases by large creditor nation central banks such as Russia and China.

Commerzbank went with the simple explanation: 

“Clearly the central bank was taking advantage of the stronger ruble – which has made gold cheaper in local currency – to buy more gold.”

“By contrast, the Chinese central bank bought only around four tons of gold last month – the second-lowest gold purchases since China began publishing monthly figures back in June 2015. The currency is likely to have played a role here, too – the yuan has been depreciating noticeably since the end of September.”

However, the Russian Central Bank has quietly been buying huge volumes of gold over the last 10 years. This diversification into gold accelerated since the financial crisis and since relations with the U.S. deteriorated in recent years. Russia bought gold systematically both when the ruble was strong and when it was weak.

In 2015, Russia added a record 208 tons of gold to her reserves compared with 172 tons for 2014.

According to the World Gold Council, only the central banks of the U.S., Germany, Italy, France and China currently hold larger gold reserves than Russia.

SNB forex reserves end-Oct CHF 630.343bln vs 628.091bln prev

Latest SNB forex reserves report 7 Nov

Increase in FX reserves, decline in gold reserves all supporting the SNB intervention plays

USDCHF 0.9781 near session highs as USD demand and risk-on returns. EURCHF found support at 1.0780 but has run into sellers around 1.0830

 

Russia’s Most Potent Weapon: Rapidly “Hoarding Gold” As Global Currency War Is Upon Us

“He who holds the gold makes the rules?” notes SHTFPlan.com’s Mac Slavo… 

Fresh attempts at containing Russia and continuing the empire have been met with countermoves. Russia appears to be building strength in every way. Putin and his country have no intention of being under the American thumb, and are developing rapid resistance as the U.S. petrodollar loses its grip and China, Russia and the East shift into new currencies and shifting world order.

What lies ahead? It will be a strong hand for the countries that have the most significant backing in gold and hard assets; and China and Russia have positioned themselves very well. Prepare for a changing economic landscape, and one in which self-reliance might be all we have.

As The Free Thought Project’s Jay Syrmopoulos warns, Russia is Hoarding Gold at an Alarming Rate — The Next World War Will Be Fought with Currencies

With all eyes on Russia’s unveiling their latest nuclear intercontinental ballistic missile (ICBM), which NATO has dubbed the “SATAN” missile, as tensions with the U.S. increase, Moscow’s most potent “weapon” may be something drastically different.

The rapidly evolving geopolitical “weapon” brandished by Russia is an ever increasing stockpile of gold, as well as Russia’s native currency, the ruble.

Take a look at the symbol below, as it could soon come to change the entire hierarchy of the international order – potentially ushering in a complete international paradigm shift – and much sooner than you might think.

The symbol is the new designation of the Russian ruble, Russia’s national currency.