Browsing all articles tagged with Commission
Apr
29

Precious Gold Rises 1 percent, Holds near One Week High

Yellow metal rose more than 1 percent on Monday and held near its highest level in more than a week as a bounce back in prices from multi-year lows failed to control investor appetite for the gold’s, leading to a shortage in physical supply.

Current bleak US growth statistics that raised expectations the Federal Reserve will keep its current pace of bond buying at $85 billion a month also supported precious metal that is typically seen as a hedge against inflation.

However investors are still roiled by the very recent event of the tumble. The question is how supportable is this physical buying as at the same time, we are still seeing funds flowing out of yellow metal. Retail investors won’t be buying bullion in hundreds of millions of dollars like the funds.

Both cash gold and futures dropped to around $1,321 on April 16, their weakest in over two years, subsequently drop below $1,500 sparked a sell-off that encouraged investors to slash their holdings on exchange traded funds. They touched an 11 day high above $1,484 on Friday.

I don’t consider gold is out of the woods yet, however there’s room for upward correction. One of the reasons why precious metal has plunged so much was the strong signs of US economic recovery.

US gold futures which often give trading cues to cash metal, hit a high of $1,472.20 per ounce. By 0226 GMT, prices stood at $1,469.60 climbed $16.00. Spot gold gain $7.51 per ounce to $1,470.01.

Premiums for gold bars have jumped to multi-year highs in Asia as of strong demand from the physical market, which has led to a shortage in gold coins, bars, nuggets and other products.

In other markets, shares in Asia crept ahead on Monday however the US dollar lost ground to the yen as markets braced for a busy week for economic statistics and central bank policy meetings in the United States and euro zone.

Holdings on the biggest gold-backed exchange-traded-fund ETF, New York’s SPDR Gold Trust continue to drop, which was a sign investors have yet to reinstate their confidence in gold. The holdings are currently at their lowest since September 2009.

The current string of underwhelming statistics will strengthen the hand of the doves at the Fed and temper any talk of tapering back the bond buying programme. The policy setting Federal Open Market Committee will announce its decision at 1815 GMT on Wednesday.

Report by the Commodity Futures Trading Commission showed on Friday that yellow metal rallied to an 11-month high in October previous year after the Fed announced its third round of aggressive economic stimulus, raising fears the central bank’s money printing to buy assets would stoke inflation, money managers and Hedge funds trimmed their net longs in gold futures and options in the week to April 23 as investors reduced optimistic bets.

 

Apr
12

Cyprus Consider Early EU structural Funds, Officials Said

EU officials said that Cyprus is considering placed EU structural funds to earlier use to assist its stricken economy however is not asking for a superior bailout from the euro zone and the International Monetary Fund than the agreed 10 billion euro’s.

Nicos Anastasiades, Cypriot President told reporters in Nicosia on Friday that he would send a letter to European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso to give it extra assistance given the bad economic situation of the island.

That fueled assumption on financial markets that the island may be pushing Brussels for additional money under a bailout package which now illustrates Cyprus contributing roughly twice as much in budget cuts and asset sales than originally debatable.

However euro zone finance ministers gave political backing to 10 billion euro’s of loans for the Mediterranean island on Friday and stated there were no plans or requests to raise that amount.

The letter from President Anastasiades has nothing to do with asking for additional money than the sum decided in the MoU.

It is about a request for more financial assistance and support from our EU partners in the middle term as of the financial and economic situation Cyprus is facing.

The two international lenders have predicted Cyprus will contract about 9 percent this year and approximately 4 percent in 2014 prior to returning to growth in 2015.

Structural funds come from the long term EU budget and are used to co-finance projects in less EU developed countries to assist them enlarged economically.

The flow of such funds is increased over the seven years of the EU budget, however can be accelerated to boost the amount of money in the earlier years at the cost of the outer ones, this method has been employed to help Greece already.

Mar
16

Italy and France See Leeway on Budget Rules At EU Conference

Italy and France won support for a somewhat further growth friendly explanation of European Union budget rules at a meeting on Thursday following French President Francois Hollande challenged German driven fiscal austerity.

The 27 EU leaders agreed following discussion how to overcome recession and mass unemployment unleashed by three years of the euro zone’s sovereign debt crisis, to allow superior scope for public investment when reducing government deficits.

The potential’s presented by the EU’s existing fiscal framework to balance productive public investment requirements with fiscal discipline objectives can be exploited in the defensive arm of the Growth and Stability.

Exceptions would have to be permitted by the euro zone states and executive European Commission, however Italy’s and Hollande Europe minister drew support from what they depicted as a concession.

The Socialist French leader said that they were summiting their deficit reduction commitments however in a way that does not challenge our objective of growth.

He further said that’s the discussion that is now going to start with the Commission and the leadership we were given today permit us to approach this discussion with confidence.

Germany, the leading stickler for fiscal regulation, is worried that any straying from the course of deficit reduction will lift debt burdens and reignite financial market turmoil.

However Chancellor Angela Merkel avoided any clash with France, they made clear in a very consensual conversation that structural reforms, budget consolidation and growth are not in contradiction however are mutually reinforcing.

Hollande recognized this week that France’s budget deficit would strike 3.7 percent of GDP this year, omitted the 3 percent it had promised EU partners because of flat economy. That illustrate criticism from Germany’s central bank chief who stated French economic restructuring seemed to have floundered.