Indian gold imports may fall 70 percent in the final quarter of 2013 from 255 tonnes in the year-ago period and are expected to be half usual levels at 500-550 tonnes next year if new import rules are maintained, a top trade body official said on Friday.
To curb a record trade deficit, India imposed an import duty of 10 percent on gold, and tied imports for domestic consumption to exports, creating scarce supply of the yellow metal and boosting premiums to a record.
As a result, Indians have depended heavily on old heirlooms and smuggled yellow metal to meet wedding demand.
“Year 2014 seems to be a difficult one for the Indian gem and jewellery industry so far as gold imports are concerned,” Bachhraj Bamalwa, director at the All India Gems and Jewellery Trade Federation (GJF), said in an interview at the Reuters Global Gold Forum.
India, which may import a lower-than-usual 700-750 tonnes in 2013, is unlikely to ease its import policy or the customs duty until the trade deficit is under control, Bamalwa added.
“Demand (for) jewellery has not yet picked up, so the industry is not yet in panic, but I am not (very) sure about the future – say, after 30 days,” said Bamalwa.
The World Gold Council (WGC) cut its forecast for Indian gold demand earlier this month, predicting the country could also lose its crown as the world’s biggest consumer of bullion to China.
The WGC said Indian demand could be 900 tonnes in 2013, from its previous forecast of 1,000 tonnes.
Fourth-quarter demand is expected to be low because consumers brought forward wedding purchases to April and May, when gold prices fell drastically, Bamalwa said.
Premiums for gold in India climbed to a record $160 an ounce above spot prices this week. By the end of the quarter, they may have risen as high as $200 an ounce, Bamalwa said.
Global equity markets surged and the dollar rose against the yen on Friday after stronger-than-expected U.S. jobs data gave investors confidence the economy is strong enough to withstand an expected reduction in Federal Reserve stimulus.
The Labor Department’s monthly report on the main U.S. employment indicator — nonfarm payrolls — bolstered the view that the jobs market in the world’s biggest economy is on the mend and that the Fed will soon begin reducing its stimulus.
The debate over when the Fed will start to reduce the flow of cheap money has dominated markets worldwide for months.
A total of 203,000 jobs were added in November, beating expectations for 180,000, while the unemployment rate dropped three-tenths of a percentage point to a five-year low of 7 percent.
The dollar jumped to session highs against the yen and stocks on Wall Street surged, with the Nasdaq setting a record intraday high for the year and the Dow and S&P rising more than 1 percent.
“I don’t think the Fed is in a big rush to do anything drastic in the absence of inflation. A few strong jobs numbers do not mean we are out of the woods,” said Michael Marrale, head of research, sales and trading at ITG in New York.
“That said, we are in a very good spot and we can offset growth with tapering and we come out of this in one piece.”
Tom Porcelli, chief U.S. economist at RBC Capital Markets in New York, said that rising incomes stand out as even more important than the job gains.
“Wages are strongly driving consumption in this cycle more than any other time. Overall wage gains were the most compelling news in this data,” Porcelli said.
The dollar index .DXY, which tracks the greenback versus a basket of six currencies, rose 0.05 percent to 80.277.
Today’s Hot Calls Performance…..
Below format we have recommend to our clients
” BUY ORIENTBANK ABOVE 208 TARGET 212 SL 206 CMP 207 “
Result : Orientbank Achieved Target 212
“BUY MOIL ABOVE 240 TARGET 245 SL 237.50 CMP 238″
Result : MOIL achieved Target 245
“BUY INFRATEL ABOVE 171.50 TARGET 175 SL 170 CMP 170.50″
Result : Infratel achieved Target 175
“BUY IRB ABOVE 100 TARGET 104 SL 98 CMP 99″
Result : IRB hit 102…. Exited cost 100
Today’s Hot Call ( Cash segment ) accuracy 100%……..
Today’s Stock Fut & Nifty Pack Performance
Below format we have Recommend alerts
“SELL NIFTY FUT CMP 6296 TARGET 6270 SL 6310″
Result : Booked Profit at 6275
“BUY ORIENTBANK FUT ABOVE 208 TARGET 213 SL 205 CMP 207″
Result : Orientbank Achieved Target 213
” BUY AXISBANK FUT ABOVE 1270 TARGET 1285 SL 1264 CMP 1267″
Result : Axisbank Achieved Target 1285
Minted Money only………
All pack clients Enjoyed every minutes !!!
We have given follow up messages…… If any doubt call us or chat us (clients only)
Flyingcalls Team / TN / 07.00pm / 06th Dec
Foreign institutional investor (FII) flows have earlier crossed the 1 trillion-rupee mark in 2012 and 2010.
They have made net purchases of around $18 billion so far this year, making India the number one recipient of overseas stock investment in emerging Asia, Deutsche Bank figures show.
Nov’13 was the third consecutive month of net FII inflows, as FIIs invested $1.3 billion then. FIIs were sellers of 230.36 billion rupees in June to August period, regulatory data shows.
Analysts say the continuance of foreign flows depends on the prospects of U.S. Federal Reserve tapering its bond-buying programme and fate of India’s main opposition party in the upcoming general elections, due by May.
The dollar rose against a basket of currencies on Friday, with its short-term fortunes riding on whether key U.S. jobs data can bolster the case for the Federal Reserve to start scaling back monetary stimulus.
Analysts polled by Reuters expect the U.S. economy to have created 180,000 jobs in November, following 204,000 in the previous month. Any upside surprise will keep alive lingering expectations the Federal Reserve may start to scale back its bond-buying stimulus program at its December 17-18 meeting. Such an outcome would help the dollar against most major currencies.
On the other hand, a weaker-than-expected number will see investors expect the Fed to maintain its stimulus for longer, a possible negative for the dollar but positive for riskier assets like stocks.
“A generic dollar long (investor) will hope that the payrolls number is strong enough to boost bond yields, but not strong enough to boost or scare equities in equal measure,” said Geoffrey Yu, currency strategist at UBS.
If stock markets fall on expectations that the Fed will start withdrawing stimulus sooner than most expect, the dollar could see short-term losses against the safe-haven, low-yielding yen. The correlation between moves in dollar/yen, and swings in U.S. and Japanese shares, has tightened over the past few weeks.
The dollar rose 0.3 percent to 102.15 yen, having set a six-month high of 103.38 yen earlier in the week. The gains helped the dollar index add 0.1 percent on the day to trade at 80.321 .DXY, off a five-week low of 80.231 set on Thursday.
The euro hit a five-week high against the dollar, drawing support from rising short-term interest rates in the euro zone. They edged up after the European Central Bank gave no fresh indication on Thursday that it would ease policy anytime soon. <MMT/>
The common currency last fetched $1.3670, having climbed to $1.3678, a level not seen since October 31, with hedge funds cited as buyers.
Against the yen, it rose to 139.615, sidestepping German data that showed industrial orders posting their biggest fall in nearly a year in October.
Rather, investors were more focused on central bank policy. ECB chief Mario Draghi, after a policy meeting on Thursday, said the bank was ready to take fresh policy action to support a fragile recovery, but he was light on details, including whether the bank would use a negative deposit rate.
Ministers from nearly 160 member countries of the World Trade Organisation entered a final day of negotiations on Friday with officials sounding optimistic over chances of salvaging a deal that would save the trade body from sliding into irrelevance.
“We are very close,” WTO spokesman Keith Rockwell told reporters at the meeting on the Indonesian resort island of Bali. “As things stand now, the prospects are promising.”
Just a day earlier, a deal that would add hundreds of billions of dollars to the world economy by some estimates teetered on the brink of collapse.
In an organization based on consensus among all of its members, attention focused squarely on India as the main stumbling block to the WTO’s first global trade deal in two decades.
India has insisted it would not compromise on a policy of subsidising food for hundreds of millions of poor, putting it at odds with the United States and other developed countries.
WTO Director-General Roberto Azevedo, a former Brazilian trade negotiator, told delegates at the start of the last day of talks that there was more work to be done, but sounded upbeat on prospects for success.
“He told members they were now very close to something that has eluded us for many years and that the decisions over the next few hours would have great significance beyond this day,” the spokesman said.
It is 12 years since the WTO launched the Doha Round, but the negotiations have yet to yield any concrete results. Diplomats have warned that failure in Bali would wreck the WTO’s credibility as developed nations turn towards regional and bilateral trade arrangements.
A Bali trade deal, which is far less ambitious than the Doha Round had aimed for up until two years ago, would open the way to much wider trade reforms and enable the body to modernize its rules for the internet era.
The world’s most valuable jewellery retailer Chow Tai Fook(1929.HK), which counts Cartier(CFR.VX) and Tiffany & Co(TIF.N) as competitors, is on a quest to conquer the hearts of China’s future big spenders. Its weapons of choice: Hello Kitty and Winnie the Pooh.
Superman and the Angry Birds team also feature in Chow Tai Fook Jewellery Group’s range of fashionable, and affordable, pieces which the company hopes will win over the millions of Chinese who live outside major cities but who are reaping the benefits of a rapidly growing economy and who remain enamoured by the gleam of gold.
“We are quite similar to the fast fashion way of business in that our products are only available for a limited period of time,” Kent Wong, managing director of Chow Tai Fook, told Reuters.
“The stock-keeping units will have to respond promptly to the fast-changing tastes of customers, especially young customers, who can share information about trends very quickly on their smartphones,” he added.
China, the world’s second-largest economy, is on track to overtake India as the world’s biggest consumer of gold this year as falling prices encourage purchases for both personal use and investment.
Combine that penchant for gold with a population that is rapidly urbanising, and becoming more affluent and trend-conscious in the process, and building customer loyalty as well as keeping up with fashion becomes key to the prospects of jewellery retailers.
About 100 million people are likely to move into cities over the next 17 years, according to ratings agency Moody’s. China is already the second-largest market for Zara-brand owner Inditex (ITX.MC), the world’s biggest fashion retailer.
The U.S. economy grew faster than initially estimated in the third quarter but weak demand and a pile-up in business inventories buoyed the case for the Federal Reserve to keep up its bond-buying stimulus for now.
Gross domestic product grew at a 3.6 percent annual rate instead of the 2.8 percent pace reported a month ago, the Commerce Department said on Thursday.
It was the biggest gain since the first quarter of 2012, but inventories accounted for almost half of the increase in growth.
“The strong third-quarter growth pace masks the more subdued tone in domestic activity, and as the bloated level of inventory is worked off, we are likely to see a much softer performance in growth in the fourth quarter,” said Millan Mulraine, senior economist at TD Securities in New York.
Businesses accumulated $116.5 billion worth of inventories during the quarter, the most since the first quarter of 1998.
The big build-up suggested firms were surprised by a lack of demand. Domestic demand rose at just a 1.8 percent rate, instead of the 2.1 percent the government reported last month.
Against this backdrop, economists said the Fed would likely remain cautious about trimming its asset purchases, even though recent signs on the labor market, including data on Thursday that showed a big drop in new claims for jobless benefits, suggest the economy is strengthening.
“I am not prepared to interpret the revised third quarter number as an indication that the economy is on a much stronger track,” Atlanta Federal Reserve Bank President Dennis Lockhart, a policy centrist at the central bank, told reporters.
“I think we’re still on that relatively moderate growth track.