Jim Sinclair’s Commentary
The US paper gold market will not defeat the international physical market.
Gold is going to $1650 and higher.
Gold ‘biscuits’ selling like hotcakes in Mumbai
With jewellers offering gold accumulation schemes Indian consumers are tuning into gold bars as an investment opportunity and prefer to take delivery of physical gold
Shivom Seth
Monday, July 12, 2010
Mumbai – They are selling like hotcakes. Gold bars have been moving off the shelves in India’s financial capital, Mumbai, more than the trusty, old gold coins or jewellery. Commonly referred to as gold biscuits in the Mumbai market, gold bar buying in main consumer India appears to have resurfaced after a gap of nearly two month. As gold continues to break through the upside, Indian investors are investing in gold bars, for security reasons.
"Customer preferences are changing," notes Hareelalbhai Zaveri, a Mumbai-based bullion dealer. "Earlier, customers would buy gold jewellery since they were considered the best investment option. Nowadays, customers are keen to buy gold biscuits, since they are easy to hoard. The customer is also assured of best value for money. Gold jewellery is no longer an investment option."
Dealers are also stocking up for a second round of religious festivals starting in August, when demand for bullion picks up. Though jewellery is the most common gift during religious events and weddings in India, gold bars appear to be having a field day, for now.
The rush to buy gold is also ensuring that precious metal prices continue to trade firm on the Asian bourses. Reports indicate that steady physical demand has led to supply tightness, pushing up premiums for gold bars in the bullion trading centres of Singapore and Hong Kong. Dealers maintain that there are good purchases from consumers in China, Thailand and Indonesia.
"We expect some bounce back in the prices of precious metals on the back of some bargain hunting, after a sharp fall in last week’s trading session," adds Zaveri. Analysts believe that fresh money has been pumped into gold-based instruments by large institutional investors who have increased their portfolio allocation towards gold, as a means to lower risk in their portfolios.
Jim Sinclair’s Commentary
This is dollar positive.
U.S. May inventories rise marginally as sales fall
USA-ECONOMY/INVENTORIES (URGENT)
WASHINGTON, July 14 (Reuters) – U.S. business inventories rose less than expected in May as sales fell for the first time since March 2009, a government report showed on Wednesday, implying businesses may be getting wary of building stocks faced with slowing demand.
The Commerce Department said inventories nudged up 0.1 percent to $1.36 trillion, still the highest since June last year, following a 0.4 percent increase in April.
Markets had expected May inventories to rise 0.3 percent.
Inventories are a key component of gross domestic product changes over the business cycle and the rebuilding of merchandise stock from record low levels has been one of the key drivers of the economy’s recovery from the worst recession since the 1930s.
Analysts are monitoring inventories for signs of scaling back by businesses in response to ebbing demand. The boost to growth from inventories is seen wearing off in the second half of this year.
In May, businesses sales fell 0.9 percent, the largest drop since March 2009, to $1.09 trillion, following an unrevised 0.6 percent increase in April.
Jim Sinclair’s Commentary
Neither month is dollar positive.
U.S. retail sales fall a bigger-than-forecast 0.5% in June; May sales revised to 1.1% drop
By Rex Nutting
WASHINGTON (MarketWatch) – Sales at U.S. retailers declined 0.5% in June to a seasonally adjusted $360.2 billion, the Commerce Department estimated Wednesday, further evidence that the economy has slowed. Sales fell for the second straight month after seven consecutive increases. Sales fell an upwardly revised 1.1% in May. Details of the June report were mixed. The declines were heaviest in sales of durable goods and gasoline. Sales of soft goods were generally healthy. Ahead of the report, economists surveyed by MarketWatch expected total sales to fall 0.4% in June. Excluding the 2.3% drop in motor vehicle sales, retail sales fell 0.1% to $299.2 billion, in line with the 0.2% decline expected.
Jim Sinclair’s Commentary
As long as “Smoke and Mirrors” is Wall Street’s mantra to sovereign entities the hole we dig only gets deeper.
Debt shuffling will be a self-defeating exercise
By Satyajit Das
Published: July 12 2010 16:10 | Last updated: July 12 2010 16:10
George Bernard Shaw observed that “Hegel was right when he said that we learn from history that man can never learn anything from history”. Emerging details of the European Financial Stability Facility (EFSF) bear testament to this.
The structure echoes the ill-fated collateralised debt obligations (CDOs) and structured investment vehicles (SIVs). The head of the EFSF also had a brief stint at Moore Capital, a macro-hedge fund, entirely consistent with the fact the new body will be placing a historical macro-economic bet.
In order to raise money to lend to finance member countries as needed, the EFSF will seek the highest possible credit rating – triple A. But the EFSF’s structure raises significant doubts about its creditworthiness and funding arrangements. In turn, this creates uncertainty about its support for financially challenged eurozone members with significant implications for markets.
Jim Sinclair’s Commentary
Not exactly dollar positive.
Trade balance unexpectedly widens.
May’s trade balance came in at -$42.3B, wider than both the -$38.9B expected and the -$40.3B recorded in April. It’s the widest trade deficit in a year and a half, and prompted some economists to downgrade their estimates for Q2 economic growth. Others, including Morgan Stanley economists, took a more positive view, pointing to the hefty gain in imports as a sign that business and consumer spending is picking up and that the economy in Q2 was the healthiest in four years: “With much of the upside surprise in imports in a surge in capital goods, the outlook for domestic investment looks even stronger."
