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Indian Government May Restrict Gold Imports – Commerzbank

Tuesday November 18, 2014 8:45 AM

India’s Ministry of Finance may announce measures to restrict gold imports, possibly as early as Tuesday, says Commerzbank. Citing industry sources, the bank says the Reserve Bank of India is strongly supportive of new import restrictions following news that the value of gold imports in October soared by 280% year-on-year to $4.2 billion. “That said, this is partly due to a base effect. Any further limitation of gold imports would probably also lead to increased smuggling, which cannot be the Indian government’s intention. In addition, Indian jewelry retailers could increasingly resort to silver,” Commerzbank says.

By Debbie Carlson of Kitco News; dcarlson@kitco.com

 

Gartman Continues To Add To Gold/Yen Position

Tuesday November 18, 2014 8:45 AM

For the second straight day, newsletter editor Dennis Gartman says he is adding to his gold/yen position, where he simultaneously sells the Japanese yen and buys gold. Gartman says gold prices denominated in yen are up nearly 5% since August versus falling 6.8% when valued in dollars. Year-to-date gold in yen terms is up 6.5% while dollar-denominated gold is down approximately 2.2%, he adds. Overnight Japanese Prime Minister Shinzo Abe called for snap elections following news Monday of a retraction in Japan’s gross domestic product data. “We see no reason to believe that Japan’s political and monetary authorities can do anything other than monetize, monetize and monetize some more. We can imagine over the course of the next year seeing gold hold steady in U.S. dollar terms while the yen/dollar travels to 150 or beyond, taking gold/yen from its present 139,600/oz. level to 179,500… or higher. The wind is at or backs; we see every reason to sail with it,” Gartman says.

By Debbie Carlson of Kitco News; dcarlson@kitco.com

 

Gold ETF Holdings See Slight Rise

Tuesday November 18, 2014 8:03 AM

Gold prices touched $1,200 an ounce in overnight trade, and MKS (Switzerland) says the yellow metal’s correction off the $1,130 lows for the past few weeks was mostly on the back of over-extended short positioning. They note holdings in physically backed gold exchange-traded funds rose Monday, with the SPDR Gold Trust seeing a 0.3% rise, to 723.01 metric tons. This was the first increase since Nov. 3, though just off six-year lows, they say. The rise in ETF holdings is supporting prices, says Commerzbank. They note all the gold ETFs tracked by Bloomberg show a net rise of 1.6 tons. Commerzbank says in the third quarter, nearly half of the 20.8 tons of outflows from the SPDR Gold Trust were attributable to reportable institutional investors, as the mandatory filings to the Securities and Exchange Commission in the U.S. show.

By Debbie Carlson of Kitco News; dcarlson@kitco.com

 

Potential ECB Gold Purchases Would Be Shift In Stance – HSBC

Tuesday November 18, 2014 8:03 AM

Citing a news story in The Telegraph, HSBC says the European Central Bank may consider buying gold and other assets in order to boost eurozone inflation, according to ECB executive board member Yves Mersch. Speaking at Euro Finance Week, Mersch said if the ECB needed to create more stimulus, it could purchase government bonds or other assets such as gold or shares of exchange-traded funds. “The possibility that the ECB may purchase gold would be a shift in stance towards the yellow metal since the signing of the first Central Bank Gold Agreement in 1999 (where) … the ECB along with the individual central bank members of the ECB agree to coordinate and limit the sale of gold,” HSBC says. “A push for the ECB to buy gold would be price supportive, in our view. While the central banks in the eurozone have done very little selling in recent years, the possibility the ECB may turn into gold buyers would give gold a significant morale boost and reaffirm its utility in the global financial system. We will wait for further comments from ECB policymakers before making further judgment, however.”

By Debbie Carlson of Kitco News; dcarlson@kitco.com

 

 

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