China overtakes India in Gold sales

India has been until now, the undisputed single-largest Gold bullion consumer, with its own final demand outweighing the next largest market – China by almost 57 percent. But it seems now, that the Chinese Gold buyers have caught up during 2008.

World Gold Council's latest data says Chinese demand is surging rapidly (up by 15 percent year-onyear) while Indian demand fell as Indian Gold sales collapsed by about 65 percent in the first six months of 2008.

Finally, China has overtaken India in Gold sales as India's Gold demand has been consistently dropping for the last few months. China has for all these years remained one step behind India, trying hard but unable to match India's voracious appetite for the yellow metal. It looks like finally the Tortoise, at its own pace has overtaken the hare. India has for so long been the undisputed single-largest consumer of Gold bullion, with its final demand outweighing the next largest market- China by almost 57 percent.

High prices have been the culprit this year as Gold imports in India for 2008 dipped by almost 47 percent to 402 tonnes. The December 2008 Gold imports at 3 tonnes versus 16 tonnes in December 2007. Despite December being the marriage season, it is not the ideal and as auspicious as is the month of April and May. Buying remained dull and prices remained high on global cues.

High prices have been the culprit this year as Gold imports in India for 2008 dipped by almost 47 percent to 402 tonnes. The December 2008 Gold imports stood at 3 tonnes versus the 16 tonnes in December 2007. Despite December being the marriage season, it is not the ideal and as auspicious as is the month of April and May. Buying remained dull and prices remained high on global cues.

How are the Indian ETF's doing?

Although redemption has been marginal, India's Gold collection under Exchange traded funds edged lower and this has not really helped the funds. The Exchange traded fund lost about 4.3 percent on the month to 5.3 tonnes in December. The Gold Benchmark Exchange Traded Scheme (GBES.NS) on National Stock Exchange closed at Rs 1,316.89 per gram, down 7.6 percent from its all-time high of Rs 1,425 per gram struck in mid October. Though Gold collections under the ETF's are growing year on year, they remain negligible when compared to India's imports of around 700 tonnes annually.

Although prices in December have been range bound between Rs 12,500 to Rs 13,500 per 10 grams and not very erratic, they have been very fluctuating. A rally has hence been absent for long as prices climb and are soon pulled down by lackluster demand. December began with high prices as the wedding season was in process and Gold is an integral part of an Indian wedding. But neither the auspicious days nor the recent shuddering Bombay blasts could catalyse a rally in Gold prices. We have been talking about the absence of a Gold rally since November and are still waiting to see one.

First week of December saw Gold prices surge ahead of the Federal Reserve's Interest rate meet. A rate cut would indeed support the euro and in turn push up Gold prices. Investors remained bullish even in India but buyers remained conspicuously absent. Traders and retailers alike strongly felt that Gold prices are too high for the Indian consumer, extremely price sensitive that he is. One puzzling fact is that despite the continual string of bad news and with the world economies worsening by the day,

Gold has not reacted and rallied. Price volatility has been at its lowest in December and prices have moved almost sideways.

Indian buying has been insignificant and Gold imports for this month have fallen drastically as mentioned earlier by a staggering 47 percent. The continuous depreciation of the rupee has not helped either, making imports more expensive and the need for capital more vital.

The only relief over the long run is the second important phase of wedding season in the Hindu calendar arriving in a few months. Let's hope Gold sales pick and India's traditional behavioral buying patterns restore the dampened imports.

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Gold rises 3% on weak dollar, investment demand

Reuters NEW YORK/LONDON

GOLD prices rose nearly 3% on Friday, breaking above $840 an ounce, on a sharply lower dollar against the euro, lingering economic worries and signs of strengthening investment demand.
    Spot gold was at $840.30 an ounce at 2:55 pm EST, up 2.8% from the last trade of $817.45 on Thursday. US gold for February delivery settled up $32.60, or 4%, at $839.90 an ounce on the COMEX division of the New York Mercantile Exchange. US metals markets will shut Monday for the Martin Luther King Jr. holiday and reopen for regular trade Tuesday. Gold ignored short-term deflation concerns. US inflation slowed to a half-century low last year, with the Consumer Price Index dropping a sharp 0.7% in December, a third straight monthly decline.
    "The fall in headline CPI was a bit less than the market had priced in, and core CPI was unchanged, so that was supportive of gold," said Dresdner Kleinwort consultant Peter Fertig. A recovery in the euro and the equity markets was supporting the precious metal, he added. The dollar extended losses versus the euro after the government report showing a continued drop in US consumer prices, helping revive appetite for other currencies.
    In addition to the weak dollar, interest in bullion as a haven from risk was also lifting gold, analysts said. "Risk aversion is high," said Commerzbank analyst Eugen Weinberg. "People are looking at gold right now as a real hedge against everything — an alternative asset." Weakness in the banking sector, with Bank of America and Citigroup reporting large fourth-quarter losses on Friday, was increasing investor jitters and further supporting gold, he added.
    Investment demand for physical gold remains strong as turmoil in the financial markets and fears over the outlook for the global economy boost bullion's appeal.The world's largest gold-backed exchange-traded fund, New York's SPDR Gold Trust, said its holdings rose on Thursday to a record 795.25 tonnes. Demand for physical gold from ETFs has been a major factor supporting prices in recent years. In December, SPDR overtook the Bank of Japan as the world's seventh largest holder of gold.
    The world's largest silver-backed ETF, the iShares Silver Trust, said its holdings climbed 1% to a record 7,143.27 tonnes on Jan. 14. Strength in demand for silver bullion from ETFs is helping to outweigh falling demand in other areas, analysts said.

Mumbai: Drastic fall in Gold demand

Mumbai Gold demand in Mumbai has witnessed a drastic fall at 100 kgs per day from one tonne in August due to higher prices and a lack of buying interest, a top industry official said.

The auspicious period, post-Sankranti, also failed to lure buyers into the market as there is no demand for gold in the commercial capital.

The demand has fallen to 50-100 kgs per day from 1-2 tonnes per day in August 2008 due to a lack of buying interest and higher prices, Bombay Bullion Association (BBA)'s President Suresh Hundia told PTI here.

Demand will pick up only when prices come down to a level of Rs 12,200 per 10 grams, Hundia said.

India is a market well known for its price sensitivity. India's gold buyers just hate increasing their holdings when the price keeps going up," bullion analyst, Amit Zaveri, said.

High prices plus high volatility cut Indian gold buying 65 per cent last year, Zaveri said.

The lower demand has cast its shadow over imports.

India imports more than two-thirds of its annual demand of about 700 tonnes a year. In December, imports fell to as low as 3.7 tonnes as high prices restrained traders from purchases even during Christmas and New Year festivals.

Export of rice to African nations permitted

STC to ship 55,000 tonnes to Nigeria, 3 other countries.

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Nigeria, Senegal and Ghana would get 15,000 tonnes of non-basmati rice each, Cameron would get 10,000 tonnes from India.

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G. Srinivasan

New Delhi, Jan. 16

Even as the plea for lifting the long ban on non-basmati rice remains strident, the Government on Friday announced release of 55,000 tonnes of non-basmati rice for export with a minimum of 25 per cent brokens for African countries on the eve of the Partnership Summit with African countries, beginning here from January 19.

In a notification issued here, the Director General of Foreign Trade (DGFT) has said the continuing ban on export of non-basmati rice would not be applicable to export of such rice to four African countries, viz., Nigeria, Senegal, Ghana and Cameron, subject to certain provisos.

While Nigeria, Senegal and Ghana would get 15,000 tonnes of non-basmati rice each, Cameron would get 10,000 tonnes of non-basmati rice from India. According to DGFT, the specified quantities would be exported through the State Trading Corporation of India (STC) till April 30.

Procurement criteria

STC would procure rice from such rice mills with surplus rice/paddy in their stock. STC would ensure that its entry into the export market does not affect the overall price situation of rice, and also source the rice to be exported from more than one State and in four different tranches.

It might be noted that the empowered group of Ministers (eGoM) headed by the Union Agriculture Minister, Mr Sharad Pawar, in November 2008, decided to export up to two million tonnes (mt) of non-basmati rice and 1.2 mt of basmati rice. It was agreed that after declaration of Pusa 1121 as basmati, some of the quantity budgeted for non-basmati might shift to basmati and the remaining might be kept for export on diplomatic basis through the Ministry of External Affairs. Since that meeting in November last, Pusa 1121 was allowed to be exported as basmati, subsequently.

Industry sources told Business Line here that if it is decided to allow export of non-basmati rice through this reserve earmarked earlier, how is it that the STC is tasked with to procure this 55,000 tonnes of non-basmati from more than one State and from mills with surplus rice/paddy in their stocks. It is also not known the price at which it is to be procured by the STC.

Time to relax ban

When contacted, the South India Rice Exporters Association Secretary, Mr P. Vishnukumar, said that if the Government could relax the long ban on non-basmati rice prevalent since March 31, 2008, to help African countries savour Indian rice, the time had come to show equal concern to expatriate Indian population, particularly in West Asia, Europe and the US to give traditional non-basmati premium varieties such as ponni, sona masuri and matta rice from India.

The industry is hopeful that a decision to release at least 25,000 to 50,000 tonnes of such premium non-basmati rice variety would be taken by the eGom when it would meet here on January 20.

Officials in the Department of Commerce are of the view that there is some merit in the demand of South Indian rice producers to get a respite from the choking ban on non-basmati rice that has been in vogue since April 2008.

Artificial good cholesterol to clean arteries using Gold

Will Help Body Excrete LDL

Chicago: US researchers have developed a synthetic form of good cholesterol known as HDL they hope will be able to keep levels of bad cholesterol in check.
    The compound, which has a tiny core of gold, is manufactured using nanotechnology, and its developers think it has the potential to rid the body of excess bad cholesterol. "The idea is you take this and effectively just urinate it out," said Chad Mirkin of Northwestern University in Chicago, whose study was published on Monday in the Journal of the American Chemical Society.
    Mirkin, director of Northwestern's International Institute for Nanotechnology, said the molecule mirrors the size and structure of high-density lipoprotein, or HDL.
    It is comprised of a carefully sized gold particle swathed in fat molecules known as lipids and capped off with a protein layer. It is designed to attract and trap low-density lipoprotein, or LDL, the bad kind of cholesterol that can build up in arteries and cause heart attacks and strokes.
    Powerful drugs known as statins can help lower LDL levels, but they do little to raise levels of protective HDL cholesterol. "The hope is this will be a material that doesn't have side effects, that allows you to do what the statins don't do. That is raise the HDL level, which might be able reverse a lot of the damage and plaques that are already there," Mirkin said.
    Current drugs that raise levels of HDL, such as niacin, cause unpleasant side effects like flushing. And while many drug companies are working to develop better HDL-raising drugs, few have succeeded. "HDL is a natural nanoparticle, and we've successfully mimicked it," Mirkin said. REUTERS

Gold rush erupts over financial crisis

January 10, 2009 12:01am

THE global financial crisis has sparked a new gold rush.

Worried investors seeking a safe home for their money are ploughing billions of dollars into the precious metal in a bid to preserve their wealth.

Demand has now reached such unprecedented levels that the Perth Mint, Australia's biggest wholesaler of gold coins and bars, has been forced to ration its sales.

Perth Mint's bullion sales rose 194 per cent in the December quarter compared with the corresponding period in 2007, while silver bullion sales were up 140 per cent.

The mint has suspended sales of all gold bars and all bullion coins - except its 1oz "Kangaroo" gold bullion coin.

On Monday, after a three-month suspension, it will expand its range of bullion coins for sale but the restrictions remain in place for minted gold bullion bars so the mint can sell some gold to as many customers as possible.

"We are working three shifts a day, six days a week, and still can't keep up with demand," Perth Mint CEO Ed Harbuz said. "I've never known anything like this in the precious metals market.

"We would be working Sundays too but we are having difficulty getting enough staff."

Non-minted gold in the form of cast bars produced by Perth Mint's local refinery can still be bought, although customers who want the bigger bars often have to wait several weeks.

One customer recently bought $500,000 worth of bullion and wanted it delivered so he could hold it personally.

"For very big orders we normally keep the gold in our depository for security reasons," Mr Harbuz said.

"Orders of $10 million or more are not unusual. Often the orders are much larger if we are dealing with pension funds or institutional investors."

Gold's 2009 Outlook

By Luke Burgess | Monday, January 5th, 2009

The investment markets are yielding to the fact that the global economy will remain weak for the better part of 2009.

As a result, investors will continue to seek safe havens.

Under normal conditions, these safe haven investments would include land and real estate. These assets have intrinsic value; or in other words, their value will never fall to zero. But with falling prices, investing in real estate is out of the question for most people right now. And there's little doubt that investors will look elsewhere for safety against financial crisis.

The best safe haven asset in the world right now is still gold because it is never considered to be a liability.

And we believe that safe haven investment demand will drive gold prices during 2009. With this in mind, we would like to present a broad overview of Gold World's 2009 gold outlook. But before we get into that, let's review what happened to gold prices in 2008.

Gold Was One of the Best Investments of 2008

In March 2008, gold prices hit a record high of $1,033 an ounce as the gold bull market entered its seventh year of life. This was followed by a normal 18% correction, which drove gold prices back down to $850 an ounce.

Gold prices subsequently rebounded and were once again closing in on the $1,000 level in mid-July. At the same time, however, the fundamental and psychological effects of the slowing housing and credit markets were just beginning to devalue significantly the investment markets across the board.

As a result, many long gold positions had to be sold in order to cover losses from investments in other markets. Over the next several months, this forced selling pressure pushed gold prices down.

Gold prices were also held down during the second half of 2008 as the U.S. dollar enjoyed a +20% rally. Foreign governments, institutions, and banks began buying the U.S. dollar, which despite a legion of problems continues to be the world's most important reserve currency, as a hedge against domestic economic turmoil.

These factors contributed to a significant drop in the price of gold, which officially bottomed out for the year at an intraday low of $683 an ounce in October 2008.

Gold prices have subsequently bounced off of the $700 level as major selling has dried up, and fresh buying has come into the market.

Despite three 20% corrections and serious deflation in the market, gold exited 2008 with a positive 5.4% gain for the year. Although subtle, this gain outperformed every major equity index and commodity in the world. Here are just a few examples...

Index/Commodity	Percent Change During 2008
Dow Jones	-34%
NASDAQ	-41%
S&P 500	-39%
TSX	-35%
TSX Venture	-74%
Oil	-55%
Silver	-23%
Copper	-54%
Gold	+5%

This made gold one of the best investments of 2008.

And the 2009 gold outlook looks just as strong.

Abu Dhabi gold jewellery sales fall 40 pc in Dec

DUBAI: The volume of gold jewellery sales in Abu Dhabi fell about 40 per cent in December from November as higher prices and the uncertain global financial outlook crimped buying, the emirate's industry group said on Sunday.
Sales in January could pick up if prices retreat enough to make the precious metal more attractive to buyers looking for an alternative to investing in equities

, said Tushar Patni, the chairman of Abu Dhabi Gold and Jewellery Group.

Prices in December averaged about 99 dirhams ($26.95) a gram, up around 11 percent from November, Patni said. "If prices fall below 90 dirhams, then we could see buying activity pick-up, but at the moment prices are still too high," he said.

"Gold is a luxury item. People are less inclined to spend on such items when the economy is not doing well." Re-selling of gold jewellery is beginning to rise, Patni said. "People view current prices as an appropriate time to cash in," he added.

Spot gold ended December at around $878 an ounce on Friday, up over $60 from the end of November.

Prices for the bullion remain well supported compared to other commodities as investors continue to seek the metal as a haven from risk as global financial turmoil hammers other asset classes.