Standard Chartered Sees Gold Rising After FOMC Meeting
U.S. rate hikeof 25 basis points. “Alongside the move in U.S. Treasuries, gold prices tend tocome under pressure ahead of a rate hike, and rebound after,” Standard says.“But perhaps more importantly, the market has entered a seasonally strongperiod for demand. Buying in India has picked up amid lower prices and jewelershave restocked; festival-related purchasing should add to this.” Still, thebank says, there are some headwinds for gold, including some interest inestablishing short, or bearish trades, in the SPDR Gold Shares exchange-tradedfund, which hints at bearish sentiment. The bank also cites potential importduty hikes in India that could dampen demand during a strong period forconsumption.
By Allen Sykoraof Kitco News; asykora@kitco.com
StandardChartered: India Gold Market Worried That Import Duty Will Rise
Friday September 21, 2018 09:45
There isnervousness in the Indian gold market that import duties will be hiked again,says Standard Chartered. According to news reports, government officials andthe finance minister are considering measures to halt weakness in the Indianrupee. When the government enacted measures to reduce the current-accountdeficit in 2013, gold was one of the imports to be targeted, with the metalviewed at the time as one of the largest contributors to the deficit, behindoil. The gold import duty was increased to 10% in an attempt to slow goldimports. “The import duty remains at 10%, and although imports initially fell,they subsequently bounced back,” Standard says. “While gold demand has slowedannually since 2013, local-market participants worry that the government mayincrease the duty 2-3 [percentage points] to 12-13% to curb imports; othersbelieve the import duty on gold dor?(C) could be raised to 10% from 9.35%currently. If implemented before year-end, any changes would materialize duringa seasonally strong period for demand.”
By Allen Sykoraof Kitco News; asykora@kitco.com
RJO'sHaberkorn: Gold Tends To Rally After Fed Announcements
Friday September 21, 2018 09:03
Gold tends torally after Federal Reserve announcements on interest-rate hikes, so look forthe same next week, says Bob Haberkorn, senior commodities broker with RJO Futures. Atwo-day meeting of Fed officials ends Wednesday, followed by a press conferenceby Fed Chair Jerome Powell. Markets have factored in another 25-basis-pointrate hike. “At the beginning of the week, it [gold] will be quiet,” Haberkornsays. “After the Fed, there will be upside in gold....Typically, you can buy goldgoing into any Fed announcement and it rallies afterward.” Longer term, hecontinues, the key will be whether the Fed makes any changes to past languagein its communiqu?(C) that steered markets toward expecting further monetarytightening. “What do they say about inflation and rates moving forward?”Haberkorn asks rhetorically.
By Allen Sykoraof Kitco News; asykora@kitco.com
Commerzbank: Russian Central Bank Still BuyingGold
Friday September 21, 2018 09:03
Russia’s central bank remains a noted gold buyer while China remains conspicuous by its absence, says Commerzbank. “By itsown account, the Russian central bank topped up its gold reserves by a further1 million ounces in August,” Commerzbank says. “This equates to purchases of31.1 tonnes. As per 1 September, its holdings totaled 64.3 million ounces(approximately 2,000 tonnes). A few days ago, the IMF had reported a similarlyhigh rise in Russian gold reserves. Russia’s central bank thus remains theleading official buyer. By contrast, China has purchased no gold for almost twoyears now.”
By Allen SykoraFor Kitco News
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