Year of Dragon lifts China gold demand

January 23, 2012 at 17:01


"Gold can't be faked," says Mr Zhang with all the zeal of a first-time buyer of the precious metal. The 29 year-old advertising clerk, who prefers not to give his first name, has just spent a month's wages, Rmb8,000 ($1,266), on a bracelet, as a gift for his fiance at Chinese New Year. He is not alone. Standing in Beijing's Caibai store, the capital's largest gold shop, he is surrounded by shoppers. These range from first time buyers picking up single items to veteran purchasers looking for an investment opportunity. China overtook India as the world's largest consumer of gold jewellery in the third quarter of 2011. The new year holiday, which started on Sunday nigh...

Bernanke near inflation target prize, but jobs a concern

January 23, 2012 at 12:59


The Federal Reserve could take the historic step this week of announcing an explicit target for inflation, a move that would fulfill a multi-year quest of the central bank's chairman, Ben Bernanke. An inflation target would be the capstone of Bernanke's crusade to improve the Fed's communications, an initiative aimed at making the central bank more effective at controlling growth and inflation. It would, at long last, bring the Fed into line with a policy framework used by most other major central banks. Bernanke has made clearer communications a hallmark of his leadership, and bit by bit, he has worked to cast light on what for years had been purposefully opaque an...

Kinross Gold Could Be a Takeover Target

January 20, 2012 at 17:29


By paying too much for acquisitions in western Africa, Kinross Gold Corp. (KGC) is now turning itself into the cheapest gold-mining target in the world. Kinross, Canada's third-largest gold producer, fell the most in almost two decades after saying this week it will write down the value of its Tasiast mine in Mauritania. The company sold for 76 cents per dollar of net assets yesterday, versus the industry median of 2.5 times, according to data compiled by Bloomberg. Writing off the excess $4.6 billion it spent on Tasiast would still leave Kinross at a 50 percent discount to its competitors, the data show. While Kinross bought the Mauritanian mine for almost three ti...

Investors Seek Safety of U.S. Treasuries

January 20, 2012 at 08:43


Investors bought inflation-protected Treasury securities at a negative interest rate for the first time on Thursday, demonstrating the depth of concerns that Federal Reserve efforts to stimulate the economy could lead to higher inflation in the future. The $15 billion in Treasury inflation protected securities, or Tips, were sold at a negative yield of about 0.046 per cent. Investors could still make money on their holdings because the principal of such securities increases if inflation rises. Bill O'Donnell, strategist at RBS Securities, said that investors were accepting "a short-term cost for a potential long-term gain." Treasury securities of all kinds are findi...

Sprott bearish on base metals, positive on gold and oil

January 20, 2012 at 08:40


Prominent Canadian fund manager Eric Sprott said on Wednesday he was bearish on cyclical commodities such as industrial metals because of the economic slowdown, though he remained positive on gold and crude oil. Sprott, a long-time gold bull who last week filed to launch a platinum and palladium product allowing investors to redeem the physical metals, said he expects that business to grow in the wake of MF Global's collapse. "I am not bullish on cyclical commodities such as iron ore, coal, steel, lead, and zinc because I am worried about this economic contraction that everybody is talking about," Sprott told Reuters in a phone interview from his Toronto office. ...

Central Banks Increase Gold Lending

January 18, 2012 at 03:27


Central banks increased the amount of gold they lent for the first time in a decade in 2011, as they used their bullion reserves to help commercial banks raise US dollars. Although central banks hold one sixth of all the gold ever mined in their reserves, their activities in the bullion market are opaque, with not a single institution revealing its day-to-day operations. In addition to holding gold for their reserves, some central banks also trade the metal, lending it on the open market in order to obtain a yield. Thomson Reuters GFMS, the precious metal consultancy that publishes benchmark statistics on the gold market, on Tuesday said that the quantity of gold le...

Iran Cracks Down on Dollar Trades

January 17, 2012 at 03:50


Iranian authorities sent police into the streets of the capital Monday to crack down on informal currency trading and support the rial, signaling Iranians' heightened insecurity over their dwindling buying power and Tehran's increasingly hard-handed efforts to stave off economic panic. The move follows last week's steep Iranian Central Bank interest-rate increase, a bid to try to stem the growing demand for U.S. dollars in the country as the economy lurches amid fears over a new round of sanctions promised by the U.S. and Europe. Iran's rial currency has declined 40% to 55% against the dollar on the black market since December. Iranian inflation, meanwhile, now exce...