New Delhi, Jul 22, 2007 (Asia Pulse Data Source via COMTEX) -- India is likely to gain 7-8 billion dollars this year on surplus foreign exchange reserves invested by the Reserve Bank in central banks of other countries and International Monetary Fund (IMF), thanks to hardening global interest rates.
"During the year 2005-06 (July-June), the return on foreign currency assets and gold, after accounting for depreciation, increased to 3.9 per cent from 3.1 per cent during 2004-05, mainly because of hardening of global short- term interest rate," said a report on foreign exchange released by the Reserve Bank of India (RBI).
The return of foreign exchange invested abroad by RBI, on behalf of Union government, fetched around six billion dollars between July 2005 and June 2006 as interest.
Interest rate earnings on foreign exchange reserves was merely 2.1 per cent in 2003-04 and 3.1 per cent a year later.
Market analysts said with foreign direct investment expected to cross 20 billion dollars this fiscal and rising flow of funds through NRI remittances and Foreign Insitutional Investors, India will soon be among the top league of countries with largest foreign exchange reserves. Foreign exchange reserves is already touching 219 billion dollars.
Earlier, Finance Ministry had asked RBI to lend five billion dollars for investment in infrastructure sector for capital imports. The analysts said it would not be easy for the government to borrow funds from the RBI, as it has promised to offer higher returns than current returns.
Apart from India, China, whose forex reserves have crossed one trillion dollars, has also parked a major chunk of its surplus reserves in US securities and other countries. As on March 31 this year, out of around 200 billion dollars, the central bank had invested as much as 191.9 billion dollars in foreign currency assets, and 6.7 billion dollars in gold deposits.
RBI, which recently received about Rs 35,000 crore from the government for transferring its share in the State Bank of India last month, is expected to hand over a hefty check from its surplus to the Finance Ministry next month.
Monday, July 23, 2007
GOLD PRICES SURGE IN VIETNAM IN LINE WITH GLOBAL TRENDS
HANOI, Jul 23, 2007 (AsiaPulse via COMTEX) -- Gold prices in the local market continued to escalate on July 20 as VND20,000 (US$1.25) was tacked onto the per tael price, pushing unit prices past the VND13 million mark.
Sai Gon Jewelry Holdings Co.'s (SJC) 99.99 gold price reflected the spike as it was trading between 13-VND13.07 million per tael in Hanoi by the morning of July 20.
Domestic gold traders attributed the price hike to an increase in gold prices on the world market that was caused by the slippage of the US dollar and the growing price of crude oil.
In Hong Kong, gold rose by US$3.2 per ounce from the July 19 trading session to 675.7-676.2 USD per ounce (equivalent to 13.137-13.146 million VND per tael).
Vietnam's demand for gold has grown sharply over the past years and now surpasses 70 tonnes a year. In 2006, the country imported 86 tonnes of gold, a year-on-year increase of 41 per cent.
According to the Vietnam Gold Business Association (VGBA), although the volume of gold hoarded by locals remained high, businesses have still splurged hundreds of millions of USD to import gold from abroad.
In a recent move, the association submitted a second request to the State Bank of Vietnam (SBV) for permission to export ingot gold. Currently, local companies can only import gold and trade on the local market after receiving central bank approval.
"Exporting would help us manage short term output and input more easily," said SJC general director Nguyen Thanh Long.
Sai Gon Jewelry Holdings Co.'s (SJC) 99.99 gold price reflected the spike as it was trading between 13-VND13.07 million per tael in Hanoi by the morning of July 20.
Domestic gold traders attributed the price hike to an increase in gold prices on the world market that was caused by the slippage of the US dollar and the growing price of crude oil.
In Hong Kong, gold rose by US$3.2 per ounce from the July 19 trading session to 675.7-676.2 USD per ounce (equivalent to 13.137-13.146 million VND per tael).
Vietnam's demand for gold has grown sharply over the past years and now surpasses 70 tonnes a year. In 2006, the country imported 86 tonnes of gold, a year-on-year increase of 41 per cent.
According to the Vietnam Gold Business Association (VGBA), although the volume of gold hoarded by locals remained high, businesses have still splurged hundreds of millions of USD to import gold from abroad.
In a recent move, the association submitted a second request to the State Bank of Vietnam (SBV) for permission to export ingot gold. Currently, local companies can only import gold and trade on the local market after receiving central bank approval.
"Exporting would help us manage short term output and input more easily," said SJC general director Nguyen Thanh Long.
US gold ends down, bullion held by ETF near high
NEW YORK, July 23 (Reuters) - U.S. gold futures finishedslightly lower on Monday, as the precious metals market took abreather from last week's rally, but a weakened dollar and morebullish sentiment limited losses. Bullion's recent rise prompted investors to increase holdings
in StreetTRACKS Gold Shares the world's largest gold
exchange-traded funds (ETF) by far, to a near-record level. "There is good-sized buying out there with the current market
price. We are also seeing the buyers move up their targets a
little bit. I think the market will be supported underneath here,"
said Paul McLeod, vice president of precious metals at Commerzbank
in New York. Most-active gold for August delivery (GCQ7: on the COMEX
division of the New York Mercantile Exchange settled down $3.20 at
$681.50 an ounce, dealing between $680.50 and $685.80. On Friday, gold futures rallied to a two-month high of
$687.60, which marked their loftiest level since May 10. Last
week, August gold gained nearly $18, or 2.6 percent, as the dollar
fell to record lows against the euro on worries related to U.S.
subprime mortgage sector. Most recent data showed bullion held by StreetTRACKS
(XAUEXT-NYS-TT: increased to 497.15 tonnes, near its all-time high
of 500.72 tonnes set on April 17. It has also gained more than 20
tonnes above 473.45 tonnes reported on July 6. Changes in gold and silver ETF holdings are closely watched by
market participants because sharp inflows in gold ETFs could
be a bullish signal as they show longer-term retail investors are
entering the market.
in StreetTRACKS Gold Shares the world's largest gold
exchange-traded funds (ETF) by far, to a near-record level. "There is good-sized buying out there with the current market
price. We are also seeing the buyers move up their targets a
little bit. I think the market will be supported underneath here,"
said Paul McLeod, vice president of precious metals at Commerzbank
in New York. Most-active gold for August delivery (GCQ7: on the COMEX
division of the New York Mercantile Exchange settled down $3.20 at
$681.50 an ounce, dealing between $680.50 and $685.80. On Friday, gold futures rallied to a two-month high of
$687.60, which marked their loftiest level since May 10. Last
week, August gold gained nearly $18, or 2.6 percent, as the dollar
fell to record lows against the euro on worries related to U.S.
subprime mortgage sector. Most recent data showed bullion held by StreetTRACKS
(XAUEXT-NYS-TT: increased to 497.15 tonnes, near its all-time high
of 500.72 tonnes set on April 17. It has also gained more than 20
tonnes above 473.45 tonnes reported on July 6. Changes in gold and silver ETF holdings are closely watched by
market participants because sharp inflows in gold ETFs could
be a bullish signal as they show longer-term retail investors are
entering the market.
Crude prices ‘could be poised for rapid fall’
Crude prices fell more than $1 a barrel Monday as hedge funds took profits after their rise to near-record levels.
Frederic Lasserre, head of commodities research at Société Générale, said that some hedge funds were sitting on huge gains and that profit taking could start a rapid downward spiral for oil prices.
The latest data from the Commodity Futures Trading Commission (CFTC) showed a fall in net speculative long positions – bets on further price appreciation – for crude in New York last week after they reached a record high in the preceeding week.
ICE September Brent fell $1 to $76.64 a barrel while Nymex September West Texas Intermediate sank $1.15 to $74.64.
Pressure is mounting on the Organisation of the Petroleum Exporting Countries to raise production quotas at its next meeting, in September.
“Opec is quite simply not producing enough oil,” said analysts at the Centre for Global Energy Studies. “The world is short of crude and Opec needs to relax its output restraints immediately if it really wants to ensure a balanced market with prices around $60 a barrel.”
Mohammed al-Hamli, Opec’s president, said there was little sign of high oil prices having any impact on global economic growth and that real oil prices were no higher than three decades ago. Opec also maintains that global stocks of crude are more than adequate as they stand well above their five year averages.
European wheat prices rose amid continued concerns that recent heavy rains and flooding will affect yields for this summer’s harvest. The November French milling wheat contract rose 3.1 per cent to €197.75 a tonne while in London, feed wheat gained 3.2 per cent to £128.00 a tonne.
Frederic Lasserre, head of commodities research at Société Générale, said that some hedge funds were sitting on huge gains and that profit taking could start a rapid downward spiral for oil prices.
The latest data from the Commodity Futures Trading Commission (CFTC) showed a fall in net speculative long positions – bets on further price appreciation – for crude in New York last week after they reached a record high in the preceeding week.
ICE September Brent fell $1 to $76.64 a barrel while Nymex September West Texas Intermediate sank $1.15 to $74.64.
Pressure is mounting on the Organisation of the Petroleum Exporting Countries to raise production quotas at its next meeting, in September.
“Opec is quite simply not producing enough oil,” said analysts at the Centre for Global Energy Studies. “The world is short of crude and Opec needs to relax its output restraints immediately if it really wants to ensure a balanced market with prices around $60 a barrel.”
Mohammed al-Hamli, Opec’s president, said there was little sign of high oil prices having any impact on global economic growth and that real oil prices were no higher than three decades ago. Opec also maintains that global stocks of crude are more than adequate as they stand well above their five year averages.
European wheat prices rose amid continued concerns that recent heavy rains and flooding will affect yields for this summer’s harvest. The November French milling wheat contract rose 3.1 per cent to €197.75 a tonne while in London, feed wheat gained 3.2 per cent to £128.00 a tonne.
Gold to test $720?
NEW YORK (MarketWatch) -- Gold's on a roll (again). And the gold bugs are gloating.
Gold closed at $683.50 an ounce Friday, after a strong close to the week. And it is not just the gold price chart that is cheering gold's friends. The major gold stocks have suddenly started out performing gold--for the first time in well over a year. Gold itself is up just over 5%.
Which shows what a difference a month makes. When I last wrote a general roundup, it was a white-knuckle moment for the gold bugs. Gold was struggling to recover from a chilling drop below $640. Gold shares were at a three-month low. Now, the situation has been transformed.
How important this bullion blip has been is well illustrated by the Australian gold Webzine The Privateer's long-term point and figure chart, which it kindly makes available for free.
This is designed to register only very important moves. It shows that, last week, gold regained the crucial 2002-7 uptrend channel from which it was evicted in early June.
Gold share action has a big impact on sentiment. Some influential services place great faith in the equities' predictive power.
Martin Pring, for instance, has become distinctly friendlier to gold because of this: "The Amex Gold miners Gold Share ETF, has tentatively broken out from a large consolidation pattern. If it can build on this strength in the coming days, such action would suggest that gold will also be able to manage a rally above the all important $700-720 area."
Above $720 implies exceeding the multi-year high of last May, beyond the hopes of many gold bugs less than a month ago.
Another group of gold bugs focus on the arcane question of trader's positions in the U.S. futures markets, as reflected by the daily "open interest" reports and the weekly Commitment of Traders reports from the Commodity Futures Traders Commission. They are, if anything, even more excited, seeing unusual positive events. The Privateer observes: "Ominously, for those who are desperate to keep the U.S. gold price under ... the open interest on the U.S. Gold futures markets has actually been declining as the gold price rises. This points towards a shrinking of short positions, and the holders of the big gold short positions are the big New York money center banks, AKA 'the funds'."
This point is amplified by Dan Norcini, whose "Trader Dan" technical commentary is posted at Jim Sinclair's Web site: "The large funds could add a considerable number of new long positions in this market before reaching the level associated with any sort of extreme. From my perspective, gold could easily test the $700 level given the current internal structure."
Gold closed at $683.50 an ounce Friday, after a strong close to the week. And it is not just the gold price chart that is cheering gold's friends. The major gold stocks have suddenly started out performing gold--for the first time in well over a year. Gold itself is up just over 5%.
Which shows what a difference a month makes. When I last wrote a general roundup, it was a white-knuckle moment for the gold bugs. Gold was struggling to recover from a chilling drop below $640. Gold shares were at a three-month low. Now, the situation has been transformed.
How important this bullion blip has been is well illustrated by the Australian gold Webzine The Privateer's long-term point and figure chart, which it kindly makes available for free.
This is designed to register only very important moves. It shows that, last week, gold regained the crucial 2002-7 uptrend channel from which it was evicted in early June.
Gold share action has a big impact on sentiment. Some influential services place great faith in the equities' predictive power.
Martin Pring, for instance, has become distinctly friendlier to gold because of this: "The Amex Gold miners Gold Share ETF, has tentatively broken out from a large consolidation pattern. If it can build on this strength in the coming days, such action would suggest that gold will also be able to manage a rally above the all important $700-720 area."
Above $720 implies exceeding the multi-year high of last May, beyond the hopes of many gold bugs less than a month ago.
Another group of gold bugs focus on the arcane question of trader's positions in the U.S. futures markets, as reflected by the daily "open interest" reports and the weekly Commitment of Traders reports from the Commodity Futures Traders Commission. They are, if anything, even more excited, seeing unusual positive events. The Privateer observes: "Ominously, for those who are desperate to keep the U.S. gold price under ... the open interest on the U.S. Gold futures markets has actually been declining as the gold price rises. This points towards a shrinking of short positions, and the holders of the big gold short positions are the big New York money center banks, AKA 'the funds'."
This point is amplified by Dan Norcini, whose "Trader Dan" technical commentary is posted at Jim Sinclair's Web site: "The large funds could add a considerable number of new long positions in this market before reaching the level associated with any sort of extreme. From my perspective, gold could easily test the $700 level given the current internal structure."
Gold closes lower as oil retreats, dollar steadies
SAN FRANCISCO (MarketWatch) -- Gold futures closed lower Monday as traders locked in recent gains, pressured by a retreat in oil prices to below $75 a barrel and fractional strength in the U.S. dollar against most other major currencies.
Gold for August delivery fell $3.20 to close at $681.50 an ounce on the New York Mercantile Exchange.
There was a "pullback in oil and the dollar was mixed -- thus gold held back from further advances," said Jon Nadler, an analyst at Kitco Bullion Dealers.
"Gold traders are as yet unsure whether profit-taking may be in order first, or whether further tests over $685 could have sufficient fuel from the dollar to allow them to be triggered," he said in e-mailed comments.
On Friday, gold futures gained $6.60 to close at $684.70 and finished $17.40, or 2.6%, higher for the week.
"Gold was up 3% last week primarily on concerns regarding the U.S. dollar, the subprime fallout in the United States and elevated oil prices," said Mark O'Byrne, director at Gold & Silver Investments Ltd., in a research note. He said that the trend from last week is likely to continue in the coming days.
On the currency markets, the dollar traded fractionally higher against most other major currencies Monday. The greenback had hit a fresh record low against the euro and a six-week low against the yen reached during the Asian trading session.
Meanwhile, oil prices dropped back below $75 a barrel as concerns over global supplies eased for now. The decline helped relieve economic worries related to high energy prices.
Gold for August delivery fell $3.20 to close at $681.50 an ounce on the New York Mercantile Exchange.
There was a "pullback in oil and the dollar was mixed -- thus gold held back from further advances," said Jon Nadler, an analyst at Kitco Bullion Dealers.
"Gold traders are as yet unsure whether profit-taking may be in order first, or whether further tests over $685 could have sufficient fuel from the dollar to allow them to be triggered," he said in e-mailed comments.
On Friday, gold futures gained $6.60 to close at $684.70 and finished $17.40, or 2.6%, higher for the week.
"Gold was up 3% last week primarily on concerns regarding the U.S. dollar, the subprime fallout in the United States and elevated oil prices," said Mark O'Byrne, director at Gold & Silver Investments Ltd., in a research note. He said that the trend from last week is likely to continue in the coming days.
On the currency markets, the dollar traded fractionally higher against most other major currencies Monday. The greenback had hit a fresh record low against the euro and a six-week low against the yen reached during the Asian trading session.
Meanwhile, oil prices dropped back below $75 a barrel as concerns over global supplies eased for now. The decline helped relieve economic worries related to high energy prices.
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