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Precious metal marks brght quarterly performance - Gold Bullion

Thursday, March 31, 2016

It’s been a volatile week for the gold price this week after the long Easter weekend and remarks from the US Federal Reserve chair Janet Yellen.

The precious metal hit a weekly high of £864.75 at 21.45 Tuesday (29 March) after Ms Yellen warned about “ongoing risks” in the global economy and said that the Fed should “proceed cautiously” when considering further rises in the cost of borrowing.

She said: “Although the baseline outlook has changed little on balance since December, global developments pose ongoing risks. These risks appear to have contributed to the financial market volatility witnessed both last summer and in recent months.”

Analysts interpreted the comments as meaning another hike in interest rates is not likely in the coming months as had previously been forecast, especially if there is further disappointing international economic news on the horizon.

Ms Yellen’s speech in New York led to a mini rally in the gold price but it fell back to £851.58 at 15.30 on Wednesday, and this morning, gold was £857.53 per troy ounce at 08:00.

Strong quarterly performance

Despite the unsettled performance of the gold price this week, the precious metal is on course to record its best quarterly showing for almost three decades.

So far this year, gold has increased in value by almost 17 per cent on the back of weak economic news and political unrest which sent investors scurrying to the safe haven gold traditionally offers. That means the first quarter of 2016 is now set to be the strongest for gold since the third quarter of 1986, Reuters reported.

Mitsubishi precious metals analyst Jonathan Butler said gold was “susceptible to profit-taking” in the short term, but the medium-term outlook for the precious metal was good, thanks to the Fed’s stance which would also keep the strength of the US dollar in check.

Overall, gold has been the best performing commodity on the markets so far this year.

First Indian gold coins go international

The first gold coin produced by the Indian government as part of its ongoing gold recycling and monetisation efforts is now available for overseas collectors and investors to buy.

The coins have been manufactured from bullion collected from homes and temples in the government programme to reduce the country’s reliance on imports of the precious metal. It’s estimated that around 20,000 tonnes of gold is in private hands in India, but the country is still importing around 1,000 tonnes each year making it the world’s second biggest gold importer after China.

The new 999 fine 24 carat gold Indian Gold Coins, which are being produced in five and 10 gram varieties, as well as the new 20 gram Indian bullion bars, are being made with gold deposited with banks.

The coins are part of the Make in India initiative and feature the Ashoka Chakra on one side and Father of the Nation, Mahatma Gandhi, on the other. They are the only gold coins to bear the Bureau of Indian Standards hallmark and have built in anti-counterfeiting measures.

Launch for first Indian gold coin collection - Gold Bullion

Monday, March 28, 2016

Overseas distribution has begun for the first gold coin to be produced by the Indian government for investors and collectors.

The newly-launched Indian gold coins are 999 fine 24 carat gold and come in five and ten gram options. There is also an Indian gold bar available, weighing 20 grams, as part of the initiative.

The coins are made from gold bullion collected through the Indian government’s Gold Deposit Scheme and Gold Monetisation Scheme. Both programmes are aiming to release gold held in households and temples, and reduce the country’s reliance on imports of the precious metal to meet domestic demand for bullion.

India is the world’s second largest gold importer after China, bringing around 1,000 tonnes of bullion into the country annually. However, the Indian authorities estimate that there are around 20,000 tonnes of gold held privately and by temples and it wants to mobilise these reserves to reduce the cost of importing the precious metal.

The Gold Monetisation Scheme is a key part of this. The project, launched last year, allows banks to collect gold deposits for 15 years to auction off or lend to jewellers. People who deposit their gold with participating banks will receive up to 2.5 per cent interest on the value each year.

The Indian government is also backing the creation of more gold recycling centres across the country, where people can bring their precious metal to be melted down and converted into other forms.

The new gold coins are utilising bullion collected by the banks and simultaneously meeting domestic demand for gold investments. They feature the Ashoka Chakra on one side and Father of the Nation, Mahatma Gandhi, on the other.

The coins are being manufactured under the Make in India initiative and feature anti-counterfeiting safeguards. They are the only Indian coins to be hallmarked by the Bureau of Indian Standards. 

Gold price volatile amid Brussels attacks & hawkish Fed comments

Thursday, March 24, 2016

The price of gold dipped to a four-week low on Wednesday (23 March) following rises on Tuesday as investors sought a safe haven for their money after the Brussels terror attacks.

The price of the precious metal has been volatile so far this week, starting off on Monday at £864.48 per troy ounce at 09:00 and reaching a high of £883.37 at 13.45 on Tuesday following the atrocities in Belgium. This morning at 09:00, gold was £864.98 per troy ounce.

The strengthening US dollar on Wednesday, helped by remarks from US Federal Reserve members pointing to the possibility of further interest rate rises on the agenda were among the reasons that Tuesday’s rally didn’t last.

Analysts also said that profit takers helped to bring down the gold price ahead of the long Easter weekend.

"After the news of Brussels, markets had a strong rally, but with the long weekend approaching there is some liquidation, likely to continue for the next few hours," MKS SA head of trading Afshin Nabavi told Reuters on Wednesday.

However, the slump in what has been a remarkable performance by the precious metal so far this year is not predicted to continue.

Georgette Boele from ABN Amro said: "The Fed comments put a bit of pressure on the gold price but are unlikely to derail a more positive long-term sentiment towards the metal.

“If there was a massive rate hike and a jump in the dollar, it would be very difficult for gold to move higher, but any rate increase will be gradual."

Indian jewellers call off strike

Indian jewellers striking over a one per cent tax on the sale of gold jewellery have called off their action after 18 days.

The All India Gems and Jewellery Trade Federation ended the strike after an eight-hour meeting with government officials, in which they received assurances that small businesses would not suffer “harassment in the imposition of the excise duty”.

The tax was imposed in the February Budget as part of efforts to reduce the country’s reliance on imported gold. Figures from Indian customs show that there was a slowing in imports last month, when the country bought in 23.8 tonnes.

However, the end of the strike is likely to reverse that trend, with jewellers returning to work and increasing demand once again for the precious metal. This could, in turn, boost the gold price on the international markets.

Silver coin focus

The second release of the Royal Canadian Mint’s Wild Canada Silver Maple Leaf coins has sold out.

The mint produced 50,000 of the one troy ounce 99.99 per cent purity silver coins, which feature a roaring grizzly bear. They are part of the Wild Canada six coin collection, which is running for three years.

The first coin in the series depicted a roaring wolf and will be followed with a cougar, a moose, an antelope and wood bison. The series will be completed in 2018.

Demand for the grizzly bear edition has been so high from collectors that the coins are now changing hands for around £7 more than the spot silver price. 

Silver coin sell-out and new gold bullion coin launch

Monday, March 21, 2016

The Royal Canadian Mint has sold out of its second release of the six-coin Wild Canada Silver Maple Leaf coins.

Just 50,000 of the one troy ounce 99.99 per cent purity silver coins were made. They went on sale in February and there has been high demand from investors and collectors, with coins now selling for around £7 more than the spot silver price.

The sold-out coin replaces the usual mint mark with a roaring grizzly bear and is part of the Mint’s $5 Silver Maple Leaf collection which was first launched in 1988.

The Mint’s Wild Canada series runs for three years. The first coin was decorated with a roaring wolf, and the third, featuring a cougar, comes out in September. It will carry the 2017 date and the fourth, also dated 2017, will show a moose. The final two in the collection will feature an antelope and a wood bison, and will be dated 2018.

Meanwhile, over the border, the US Mint has announced it will be issuing Betty Ford First Spouse Gold Coins towards the end of the month. The run of the half troy ounce fine gold coins will be limited to 10,000 so they are likely to become a collectors’ item.

Mrs Ford was US First Lady from 1974-1977 and is known for her work to combat addiction, raising awareness of breast cancer and promoting the role of women. The coin represents this on the tails side with an inscription of a young woman climbing a staircase. The heads side shows a portrait of the former First Lady and the inscriptions Betty Ford, Liberty, In God We Trust, 38th, the dates of her tenure and 2016.

It’s the latest in the Presidential and First Ladies coin series produced by the mint, which has already released coins celebrating Ronald Reagan and wife Nancy, and Richard Nixon and his wife Pat in 2016. 

Gold rebounds after US Fed leaves the cost of borrowing unchanged

Thursday, March 17, 2016

The gold price jumped higher again on Wednesday (16 March) after the US Federal Reserve announced its decision to leave interest rates unchanged.

The gold price increased by more than two per cent in the wake of the announcement at 18:00, and by 19.45, it stood at £884.39 per troy ounce, £12 more than it was 24 hours earlier. This morning (Thursday 17), the gold price was £885.78 per troy ounce.

The Fed had been widely forecast to leave interest rates unchanged at the end of its meeting, but gold slipped in price earlier in the week while the market waited to see which way the US central bank would go. The price of the precious metal climbed steadily after the announcement, following a pattern that has seen the gold price increase by around 17 per cent so far this year.

Economic indicators and the price of gold

While the price of gold rose after the Fed’s decision to leave rates on hold, the US dollar fell in value by around 0.6 per cent. Generally, when gold is strong, the dollar is weaker and vice-versa.

So far this year, an unsettled economic picture with continued worries about the strength of the international economy, notably the slowdown in China, has helped add value to gold as a safe haven for investors.

However, figures from the US this week showed that housing data was better than expected and inflation rose more than the market had forecast.

Projections from the Fed after its rates announcement suggest that there may be one or two small increases in the cost of borrowing this year, Reuters reported. That is likely to benefit the strength of the US dollar to the detriment of the gold price.

However, it is difficult to predict what will happen accurately; gold has performed well this year on the back of unexpected volatility in the world markets.

Analyst Brien Lundin told MarketWatch: “Any indications that the Fed is showing less enthusiasm for rate hikes is bullish for gold.

“Any indication that they’ll have to forestall hikes altogether, or even revert to easing, would send gold catapulting higher.”

US Mint probes coin ‘anomaly’

An investigation has started in the US after buyers of 2016 American Eagle gold bullion coins complained of a fault that stops the coins from stacking correctly.

The Mint believes that up to 63,000 of the one troy ounce coins could be affected by the issue, where the image on the ‘heads’ side of the coin is higher than the rim. But rather than calling it a fault, the Mint says it is an anomaly.

The 2016 coins have been available since January and the US Mint will release four different weights of the 22 carat gold 2016 American Eagle proof coins today (17 March).

They will come in one troy ounce, half ounce, quarter ounce and one-tenth of an ounce varieties. The new proof coins, which do not have a maximum mintage, feature Liberty on one side and an eagle soaring above its nest containing its mate and chicks on the other.

Gold price softens as US Fed begins two-day rate-setting meeting

Wednesday, March 16, 2016

Gold’s recent rally hit the skids on Tuesday as the US Federal Reserve began its two-day rate setting meeting, with its decision set to be announced around 18:00 tonight (Wednesday 16 March).

After enjoying 13-month highs, the gold price fell to £869.00 per troy ounce at 18:00 on Tuesday and stood at £873.09 at 09:20 this morning.

Tuesday’s fall meant gold hit its lowest price in almost two weeks as the market waited to see whether the Fed would increase the cost of borrowing. There had been concerns that a poor run of economic data would mean that interest rates would remain unchanged, but more positive recent news in the US means that analysts now believe that a rate rise could be on the cards.

Macquarie analyst Matthew Turner told Reuters: "One difference from a few weeks ago is that the surprise (from the Fed) would be a rate hike, whereas perhaps a few weeks ago people thought a surprise would be a rate cut.

"There has been a shift towards hawkishness again, which is probably pressuring gold a little bit."

Traditionally, when the Fed is following a rate increasing arc, it suggests the US economy is also on the up and investors are more likely to put their money into more risky assets. Conversely, when rates are falling or staying static, it tends to benefit the gold price as investors seek a safe haven for their cash.

This slightly lower price seen this week offers a good opportunity to buy gold, as many analysts believe the price of the precious metal will continue to rise this year. If you’re seeking an opportune moment to buy or sell, it’s always worthwhile watching the markets and learning when the best times are to increase or decrease your holding. But like everything in life, there can be no guarantee of whether the gold price will increase or decrease.

American Eagle bullion coins may be affected by ‘anomaly’

Monday, March 14, 2016

The US Mint has ordered an investigation into a manufacturing anomaly that has affected what is thought to be tens of thousands of its 2016 edition of the American Eagle gold bullion coin.

The issue with some of the one troy ounce coins is that the relief image on the ‘heads’ side of the coin is higher than the rim. That stops the coins stacking correctly and the affected coins and those around them can be damaged if they are forced into a stack, Coin World reported.

The US Mint, which was informed of the problem by a customer, believes that up to 63,000 coins could have been manufactured this way but said that it was a variant, rather than an error. However, the Mint has not published pictures showing the variant.

The 2016 American Eagles have been on sale since 11 January and the US Mint at West Point has now announced the release of its 22 carat 2016 American Eagle Gold Proof Coins. They will go on sale from 17 March.

There are four different coins – a one troy ounce gold coin, a half ounce coin, a quarter ounce coin and tenth of an ounce coin. The coins will also be available to buy as a set of four. There is no maximum mintage of the new proof coins, which are all sold with a certificate of authenticity.

The heads side of the coins features an image of Liberty with flowing hair and a torch in her right hand and an olive branch in her left, designed by Augustus Saint-Gaudens. The tails side, designed by Miley Busiek, shows an eagle carrying an olive branch above a nest with a female eagle and chicks inside.

The current demand for gold from both institutional and private investors suggests that sales of the new proof coins could well be strong.

Gold prices dip but are expected to rise again - Gold Bullion

Thursday, March 10, 2016

Gold prices fell on Wednesday as the dollar strengthened against the euro, but analysts expect volatility on the markets over the next few days to lead to a further hike in the cost of the precious metal.

The European Central Bank (ECB) is widely expected to reduce the cost of borrowing across the eurozone when it meets today (Thursday). This could lead to further increases in the gold price as investors head for the safe haven of the precious metal.

Gold has been enjoying a sustained rally for much of 2016. On Friday, it broke through the £900 per troy ounce mark to reach 13-month highs. Yesterday’s (9 March) prices were off that peak, standing at £883.15 at 18:30 as some profit-takers sold off investments to make the most of the strong prices. This morning, the gold price was £879.17 per troy ounce at 09:00.

One of the world’s best known gold investors, Pierre Lassonde believes the price of the precious metal will head much higher this year.

He told BNN: “The five-year bear market for gold is over and we are at the beginning of a new bull market.

“I’ve been saying for the past six months now is a good time to buy gold. You have to buy (gold stocks) when you hate them and sell them when you love them.”

Canadian government’s gold stocks ‘virtually zero’

Figures published by the Canadian government’s Finance Department show that it jettisoned almost all of its remaining gold bullion stocks in February.

Canada has been selling off its gold reserves for a number of years and the sale of 21,851 troy ounces of coins last month brings its remaining supplies down to virtually zero.

Finance Department spokesman David Barnabe told CBC News: "The decision to sell the gold was not tied to a specific gold price, and sales are being conducted over a long period and in a controlled manner.

"The government has a long-standing policy of diversifying its portfolio by selling physical commodities (such as gold) and instead investing in financial assets that are easily tradable and that have deep markets of buyers and sellers.”

However, other countries are continuing to build up their gold stocks, led by China, India and Russia. Figures from the World Gold Council show that central bank bullion buying increased by a quarter in the last six months of 2015, compared to the same period the year before.

A look at the Trump effect on gold

The race for the White House has certainly generated plenty of headlines but a side-effect of the 2016 US Presidential election could be a further increase in the price of gold, according to analysts.

The good showing of Donald Trump, who is competing for the Republican nomination, could well spook investors and increase gold’s attraction as a safe haven.

David Govett from London commodities broker Marex Spectron told the Wall Street Journal: “The mere thought [of President Trump] would suggest a good opportunity to buy gold. Who knows what could happen should he be handed the keys to the White House.”

Canada virtually sells its entire gold holdings - Gold Bullion

Wednesday, March 9, 2016

The Canadian government has sold off almost its entire reserves of gold, according to the latest official figures from its department of finance.

At the end of February, it held just 77 troy ounces of gold coins. The data showed that 41,106 ounces of gold coins were sold in December; 32,860 ounces in January and 21,851 in February.

Finance Department spokesman David Barnabe told CBC News: "The decision to sell the gold was not tied to a specific gold price, and sales are being conducted over a long period and in a controlled manner.

"The government has a long-standing policy of diversifying its portfolio by selling physical commodities (such as gold) and instead investing in financial assets that are easily tradable and that have deep markets of buyers and sellers.”

Canada’s peak bullion holding was in the 1960s, when had built up stocks of more than 1,000 tonnes. The figure was reduced to just 2.4 tonnes by 2003.

Although the official report does not specify which gold coins the Canadian government has sold off, the Royal Canadian Mint is a major producer of collectable bullion coins. It has sold more than 25 million troy ounces of its Maple Leaf coins internationally since 1979.

It’s likely that Canada has profited from its latest sales, as gold is continuing to enjoy a sustained rally this year due to its safe haven qualities in volatile financial and political conditions.

Indeed, while Canada has been selling, other national governments have been snapping up bullion.

The amount of gold bought by central banks in the second half of last year increased by 25 per cent compared to the same period in 2014. The data from the World Gold Council showed governments bought 336 tonnes of the precious metal in the final six months of 2015. China, India and Russia were the biggest national buyers. 

Concerns about the Trump effect expected to boost gold price

Monday, March 7, 2016

One unexpected effect of the 2016 US Presidential race is its impact on the gold price.

Analysts believe the good showing so far by businessman Donald Trump as he vies for the Republican nomination is likely to worry investors, and send them scuttling for gold as a safe haven investment.

There are also concerns that a Trump victory could lead to a reduction in the value of the US dollar. Traditionally, the gold price increases as the dollar weakens.

David Govett from London commodities broker Marex Spectron told the Wall Street Journal: “The mere thought [of President Trump] would suggest a good opportunity to buy gold. Who knows what could happen should he be handed the keys to the White House.”

It isn’t just the political uncertainty in the US that has helped the gold rally this year. The precious metal’s value has been helped by a number of factors according to Mining.com.

It noted the volatile geopolitical situation around the globe, including Europe the Middle East. Part of this is the upcoming poll on European Union membership in the UK, and what Brexit could potentially mean for the EU as a whole.

In addition, financial factors are also boosting gold’s popularity with investors. There are ongoing concerns about the economic outlook and the longer-term effects of a slump in oil prices. Plus, the fall in the value of stock markets amid concerns about Chinese growth have also played a part in reviving the precious metal’s attraction.

The dollar has recently been enjoying high values, but some analysts believe this period is coming to an end. Of course, the race for the White House will play a part in the currency’s value too.

Market Oracle said: “Uncertainty regarding the US Presidential election will likely aid gold. But gold’s outlook is bright whether Donald Trump, Hillary Clinton or the Messiah himself or herself becomes President.”

Unstable week for gold prices but rally continues - Gold Bullion

Thursday, March 3, 2016

It’s been a rollercoaster week so far for the price of gold as investors reacted to continued concerns about the slowdown of the global economy.

Considered a safe haven in volatile times, the dash for gold has seen the precious metal increase in value by as much as 20 per cent so far in 2016.

This week, gold hit a high of £895.44 per troy ounce at 02:15 on Tuesday (1 March), but fell to £877.58 at 12:45 on Wednesday. This morning (Thursday 3), it stood at £884.40 at 09:00.

There are differing views in the market whether the strong gold price will be maintained. Societe Generale believes the rally cannot be sustained because it reckons fears of a recession in the US are being over-stated. However, Deutsche Bank expects gold prices to remain stable for the rest of the year.

Now may be a good time to sell to extract value from your investment, but equally, it may be worth waiting to see whether the gold value trajectory will continue to rise. It’s impossible to predict with any accuracy what the market will do, and the strong showing by gold so far this year has taken a number of analysts by surprise.

Indian jewellers strike over gold tax

The India Bullion and Jewellers Association has called a strike after the Indian government introduced a one per cent excise duty on gold jewellery in this week’s budget.

The last time the government tried to impose a gold jewellery tax in 2012, it was forced to back down as a result of industrial action taken by jewellers. It remains to be seen whether the jewellers will be as influential on government policy this time.

The Indian budget also failed to reduce the unpopular pure gold import tax, which stands at 10 per cent. In addition, the import duty on semi-pure gold doré bars was raised from 8.0 per cent to 8.75 per cent.

Importers have found it cheaper to bring doré into India and then extract and refine the gold. However, this may now cost almost as much as importing pure bullion due to the duty increase.

India is aiming to reduce its gold imports, which are estimated to account for around 25 per cent of the country’s annual trade deficit.

Superhero coins minted

The Royal Canadian Mint has introduced a limited edition run of gold and silver coins to mark the release of the Batman v Superman: Dawn of Justice action movie.

There is one gold coin, two silver coins and a cupronickel coin in the collection. Just 3,000 of the 12 gram, 14 carat $100 gold coins are being made. It features an image of the two superheroes standing back to back on the reverse.

Both the silver coins, which are 99.99 pure, are $30 editions. There will be 7,000 of Batman v Superman silver coins produced and 12,500 made of the Batman v Superman Trinity silver coins. The former weighs in at two ounces and the latter is just over one troy ounce in weight.

The Royal Canadian Mint has already issued a number of new gold and silver coins this year, celebrating everything from the country’s wildlife to a four leaf clover silver coin adorned with green enamel.

Anger as gold jewellery tax introduced in Indian budget

Wednesday, March 2, 2016

Indian jewellers are going on strike after the government imposed a one per cent excise duty on gold jewellery as part of its ongoing efforts to reduce imports of the precious metal.

The budget, unveiled on Tuesday (29 February), also left the controversial 10 per cent import duty for gold in place – something the market had been hoping would be reduced. The unpopular tax was originally levied in 2013 and there had been a lull in the domestic gold buying market leading up to the budget, as consumers waited to see whether taxes would be reduced.

But Indian Finance Minister Arun Jaitley did not cut the tax and now his imposition of the gold jewellery duty has set him against the country’s jewellers.

The India Bullion and Jewellers Association reacted to the announcement by calling an indefinite strike. The last time the Indian government moved to impose an excise duty on gold jewellery in 2012, it was forced to backtrack when jewellers took industrial action.

Indian gold imports are second only to China’s internationally, and according to Reuters, the amount of bullion brought into the country accounts for around a quarter of India’s annual trade deficit.

Mr Jaitley’s decision not to reduce the import duty and the imposition of the gold jewellery tax were accompanied by an increase in the import duty on semi-pure gold doré bars, to 8.75 per cent from 8.0 per cent.

Importing doré and then refining the gold contained in it had been a cheaper option than bringing pure gold into India, but the increase in duty means that once the costs of refining are taken into account, that may no longer be the case.

Association of Gold Refineries and Mints secretary, James Jose, told the Economic Times: "This budget is detrimental to the refining industry in the country. We will approach the finance ministry on this issue immediately."