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Gold101.com - Gold climbs above $1,360 as demand may rise

Gold rose above $1,360 an ounce in New York, approaching last week's record, on speculation more investors will buy metals as an alternative to currencies.

Increased investor demand in Europe helped push holdings in ETF Securities Ltd.'s gold funds to nearly 8.9 million ounces on Tuesday, the most since July 20, according to data compiled by Bloomberg. Investors kept buying gold with prices near an all- time high as Goldman Sachs Group Inc., UniCredit SpA and Citigroup Inc. raised forecasts for the metal.

"All is set for a new record price in gold," said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland. "This momentum higher will attract investors to participate in the next move up."

Gold futures for December delivery climbed $13.90, or 1%, to $1,360.60 an ounce at 8:35 am on the Comex in New York. Prices touched $1,362, the highest level since the record $1,366 reached on October 7. Immediate-delivery bullion gained 0.7% to $1,359.52 in London.

In Shanghai, futures for December delivery traded at an all-time high of 293.2 yuan a gram ($1,367 an ounce).

The dollar fell 0.3% against the euro, after dropping 7% last month.

Bullion will benefit from so-called quantitative easing as the U.S. Federal Reserve tries to boost growth, Goldman Sachs said. It forecast a price of $1,650 an ounce in 12 months. UniCredit analyst Jochen Hitzfeld in Munich raised his 2011 target to $1,500. Citigroup's "short and medium term" forecast is $1,450.

A Fed purchase of $500 billion of government securities would lead to lower interest rates, weighing on the dollar and aiding gold, LGT's Dincer said. The central bank in March finished $1.7 trillion in purchases of Treasuries, mortgage- backed securities and housing agency bonds.
Gold, which pays no interest, becomes a more competitive investment when borrowing costs decline.

Silver for December delivery jumped 40.3 cents, or 1.7%, to $23.55 an ounce on the Comex. Platinum for January delivery gained $19.80, or 1.2%, to $1,703.10 an ounce on the New York Mercantile Exchange and palladium for December delivery added $11.60, or 2%, to $592.25 an ounce.

Gold101.com - Fiscal Limits Can Help Put U.S. on Sustainable Budget Path

Federal Reserve Chairman Ben S. Bernanke said adopting rules that limit federal spending or debt can help put the U.S. on a more sustainable fiscal path, urging lawmakers to consider their enactment.

“Well-designed rules can help promote improved fiscal performance,” Bernanke said yesterday in a speech in Providence, Rhode Island. A rule “could provide an important signal to the public that the Congress is serious about achieving long-term fiscal sustainability, which itself would be good for confidence,” he said.

Bernanke provided one of his most detailed prescriptions yet for reducing the record federal budget deficit. He said in congressional testimony in June that unless the U.S. makes a “strong commitment to fiscal responsibility,” the country in the long run will have neither economic growth nor fiscal stability.

“It is crucially important that we put U.S. fiscal policy on a sustainable path,” Bernanke said at the Rhode Island Public Expenditure Council’s annual dinner, where he was invited to speak by Senator Jack Reed, a Democrat from Rhode Island and member of the banking committee.
“The only real question” is whether adjustments to taxes and spending will come from a “careful and deliberative process” or from a “rapid and painful response to a looming or actual fiscal crisis,” Bernanke said.

Bernanke cited Switzerland, Sweden, Finland, the Netherlands, Canada and Chile as countries that improved their budgetary performance by using fiscal rules. He didn’t elaborate on what kinds of spending, deficit or debt limits would be best.

Presenting Plan

The White House Office of Management and Budget in July projected the deficit for fiscal 2010, which ended Sept. 30, at $1.47 trillion and the gap for fiscal 2011 at $1.42 trillion. President Barack Obama formed a commission in February charged with presenting a plan by Dec. 1 on how to reduce deficits over the next decade.

The U.S. budget gap has “stabilized” and should narrow relative to national income in the next few years, Bernanke said.

“Economic conditions provide little scope for reducing deficits significantly further over the next year or two; indeed, premature fiscal tightening could put the recovery at risk.” The situation is “quite different” in the longer term, he said.

The Fed chief didn’t elaborate on the near-term outlook for the economy and monetary policy, and he didn’t take audience questions.

Tax Cuts

In July, Bernanke told lawmakers that extending at least some of the tax cuts set to expire this year would help strengthen a U.S. economy still in need of stimulus and urged offsetting the move with increased revenue or lower spending. He didn’t discuss the tax cuts in yesterday’s speech.

“It would be difficult to identify a specific threshold at which federal debt begins to pose more substantial costs and risks to the nation’s economy,” Bernanke said. “What we do know, however, is that the threat to our economy is real and growing, which should be sufficient reason for fiscal policy makers to put in place a credible plan for bringing deficits down to sustainable levels over the medium term.”

Separately, in a forum with college students yesterday in Providence, Bernanke said the central bank’s first round of large-scale asset purchases that ended in March improved the economy and that further buying is likely to help more.

More Purchases

“I do think that the additional purchases -- although we don’t have precise numbers for how big the effects are -- I do think they have the ability to ease financial conditions,” Bernanke told the students.

The Fed chief and other officials have signaled over the past two weeks that the central bank may purchase more Treasuries at its next policy meeting Nov. 2-3 in an effort to boost economic growth and reduce an unemployment rate persisting at 9.5 percent or higher for the past year.
While he hasn’t given a detailed economic outlook since Aug. 27, Bernanke said Sept. 24 that the Fed’s actions haven’t “produced an economic recovery of sufficient vigor to significantly reduce the high level of unemployment.” He said Sept. 30 that “we need to do our part to help the economy recover” and ensure job growth in the U.S.

Brian Sack, the New York Fed official in charge of carrying out FOMC decisions, said yesterday that a further expansion of the central bank’s balance sheet would help stimulate an economic recovery that is forecast to be “relatively tepid.” Smaller steps of purchases may be warranted in contrast to the last round, Sack said in Newport Beach, California. 

Source: Bloomberg

Gold101.com - European Economic Confidence Improves

European confidence in the economic outlook unexpectedly improved this month as executives and consumers weathered tougher government budget cuts by countries struggling to convince investors that they won’t need external aid.

An index of executive and consumer sentiment in the 16 euro nations rose to 103.2, the highest since January 2008, from a revised 102.3 in August, the European Commission in Brussels said in an e-mailed statement today. That compares with economists’ forecast for a decline to 101.3, based on the median of 28 estimates in a Bloomberg News survey.

Europe’s recovery may lose some momentum after surging exports and a rebound in investment helped fuel the fastest growth in four years in the second quarter. While business sentiment in Germany also unexpectedly rose this month, the European Commission on Sept. 13 forecast a more “moderate” expansion in the second half of the year as governments from Ireland to Portugal step up spending cuts to push down deficits.

“We expect sentiment to top out in the period ahead and then trend down into 2011,” said Ken Wattret, an economist at BNP Paribas in London. “Industrial sentiment in particular is vulnerable to a correction.”

The euro rose as much as 0.2 percent against the dollar after the report was published and traded at $1.3600 as of 11:19 a.m. in London. Bonds were little changed, with the yield on the 10-year German bund at 2.25 percent.

Debt Worries

 A gauge of sentiment among manufacturers rose to minus 2 in September from minus 3, while services confidence gained to 8 from 7. The index of consumers’ confidence remained at minus 11, while retailers’ grew more optimistic, with that measure rising to minus 1 from minus 3.
The increase in confidence comes as fiscal concerns continue to weigh on Irish and Portuguese bonds. The decline has increased the extra yield investors charge to hold the 10-year debt of those nations rather than German bunds. The Irish yield premium was at 452 basis points today, compared with 353 a month ago, while for Portugal, it was at 431 basis points, up from 332.

Former European Central Bank Vice President Lucas Papademos said in an interview in Brussels on Sept. 27 that he’s “confident” governments will take the “appropriate actions” to push down budget deficits and help restore investor confidence. Uncertainty “is always a factor that tends to lead to excessive reactions on markets,” he said.

‘Alarmist’

“Market tensions will stiffen resolve and the adjustment process will continue,” Paul Mortimer-Lee, head of market economics at BNP Paribas in London, said in a Sept. 27 report. “In respect of spreads, the chronic problems and the risk of external shocks are likely to lead to periodic tensions, though we warn against becoming alarmist.”

Some data indicate the euro-area recovery is already cooling. Growth in services and manufacturing industries slowed this month, while in Germany, Europe’s largest economy, investor confidence dropped to a 19-month low. Pernod Ricard SA, the maker of Chivas Regal whiskey and Absolut vodka based in Paris, on Sept. 2 said it is seeing “persistent difficulties” in Western Europe.

The commission’s gauges measuring manufacturers’ confidence in their export orders and total order books both rose to minus 16 in September from minus 18 in August, today’s report showed. An index of employment expectations increased to minus 4 from minus 6. Among services executives, a gauge of demand expectations for the next three months gained to 10 from 8.
Policy Measures

ECB President Jean-Claude Trichet said on Sept. 27 that there is “continuing uncertainty” about the outlook. ECB officials will hold their next policy meeting on Oct. 9 after last month extending emergency measures for banks into 2011. Signs that the global recovery is flagging has also prompted reaction from the Federal Reserve, which said on Sept. 21 it’s prepared to ease policy further if needed. In the U.K., Bank of England official Adam Posen said yesterday that “further easing should be undertaken.”

“We know the second half of the year is going to be worse than the first half of the year because of the tailwinds to growth from the fiscal stimulus” turning into austerity, New York University Professor Nouriel Roubini said on Sept. 27. “The main scenario is an anemic recovery.” 

 

Source: Bloomberg

Superior Gold Group - US stocks little changed on mixed data

The Dow and the S&P 500 indexes were flat on Thursday on a mixed reading on the economy from weaker jobs and improving home sales. Weekly claims for jobless insurance jumped unexpectedly, highlighting continued weakness in the labor market. Data later showed existing home sales rose in August, bouncing from severely depressed levels.

"The market is going to grasp whatever it can for a tidbit of good news," said Tom Schrader, managing director of U.S. equity trading at Stifel Nicolaus Capital Markets in Baltimore. The Nasdaq rose as pharmaceuticals and technology stocks listed on the index led gains. The Dow Jones industrial average was down 11.05 points, or 0.10 percent, at 10,728.26. The Standard & Poor's 500 Index was down 1.70 points, or 0.15 percent, at 1,132.58. The Nasdaq Composite Index was up 7.62 points, or 0.33 percent, at 2,342.17.

Bionovo Inc shares soared 67 percent to $2.04 after the U.S. health regulators accepted the chemistry, manufacturing and controls plan for its lead drug candidate, Menerba, an experimental treatment for hot flashes related to menopause. Stocks have traded above major technical lines this week, but with persistently low trading volume at levels about 20 percent less compared to last year's average, investors have been doubtful of the sustainability of the recent rally. "Equities have been behaving as if the economy was moving stronger, which is not happening. I think we are in a trading range, but short term, the markets are going to shed this belief of a stronger recovery," said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto.

"Equities probably will pull back a little bit here. The S&P 500 is well above 1,100, and a few weeks ago it was close to 1,050, and I think there's room for that kind of pullback." Red Hat Inc rose after it reported a second-quarter profit above Wall Street forecasts as sales of its software rose sharply. The stock climbed 11.7 percent to $41.04. Bed Bath & Beyond Inc also reported results that beat quarterly profit and sales estimates. It boosted its full-year forecast, sending the stock up 4.1 percent at $43.75. Video rental chain Blockbuster Inc filed for bankruptcy protection on Thursday after years of struggling to compete with online and mail-order movie services. It said a majority of senior noteholders agreed to support its recapitalization, cutting debt to about $100 million from nearly $1 billion. U.S. stocks slipped on Wednesday, ending the Dow's five-day winning streak after the Federal Reserve spoke cautiously about the economy and hinted at the possibility of further quantitative easing to spur economic activity.

 

Gold101.com - Moderate world recovery underway, says IMF

The world economy is recovering moderately but still faces challenges such as the need for medium-term fiscal consolidation, the IMF's First Managing Director, John Lipsky, said on Sunday.

"They are mainly confident that there is a moderate recovery underway globally," he told reporters, referring to delegates at the G20 meeting of deputy finance and central bank chiefs in South Korea.

"Obviously there are risks and challenges, but things seem to be moving more or less in line with our forecast," he said, listing well-designed exit strategies and medium-term fiscal consolidation as challenges. He said some good progress has been made in discusing changes to the IMFs executive board, but did not elaborate.

G20 members have pledged to reach an agreement on the issue by the time leaders meet in Seoul in November. The United States, frustrated at Europe's refusal to share more IMF power with emerging economies, took unprecedented action last month to block plans that would have kept Europe's long-running dominance over the 24-member board.

Emerging economies have called for a bigger say in international institutions such as the IMF in line with their increasing contribution to the global economy and the resultant importance in global economic policy coordination. A senior Indonesian official told Reuters separately that emerging economies want more voting powers as well as a readjustment in the way the global economic policy is made.

"For emerging markets, the important thing is not only the size of the increase of the quota, but the general idea of the relationship between the quota and governance of the IMF -- and that needs to come in one package," Hartadi Sarwono, deputy governor of the Indonesian central bank, said in an interview.

One senior official from a member country, who attended the whole of the meetings, told Reuters there was no discussion about specific currencies or currency issues, although issues related to reducing the global imbalances were a key topic.

"Delegates did not talk about any specific currencies or about a specific level of a currency, but of course they discussed global rebalancing," said the official, who did not want to be identified.

Japan is grappling with the yen's soaring to 15-year highs against the dollar and policymakers have repeatedly said they could take decisive action on the yen -- normally a code phrase for currency intervention.

South Korea will host the Nov. 11-12 summit of G20 leaders in Seoul, with key issues also including reforming the global financial regulatory framework and drawing up plans to put the world economy on a balanced and sustainable growth path.

REUTERS

Gold101.com - BP to sell Malaysian assets

BP Plc, seeking cash to help pay for the worst US oil spill, agreed to sell its Malaysian chemical assets to Petroliam Nasional Bhd to focus on projects in China and India.

BP will sell its 15% stake in Ethylene Malaysia Sdn and 60% interest in Polyethylene Malaysia Sdn for $363 million, the London-based company said on Wednesday. It will also be eligible for a possible $48 million dividend from the ethylene unit. "BP will pursue opportunities in China and India," Sue Rataj, president of BP's global petrochemical business, said.

Superior Gold Group - HP to pay USD 55 million

Hewlett-Packard Co (HP) has agreed to pay the USD 55 million to settle claims which it defrauded federal government, the US justice department said.

This settlement resolves allegations under the False Claims Act that HP knowingly paid kickbacks, or "influencer fees," to systems integrator companies in return for recommendations that federal agencies purchase HP's products.

The settlement also resolves claims that HP's 2002 contract with General Service Administration (GSA) was defectively priced because it provided incomplete information to GSA contracting officers during contract negotiations, the Justice Department said.

"Contractors must deal fairly with the government when doing business with federal agencies," said Tony West, assistant attorney general for the civil division of the department of justice.

The allegations that HP improperly paid kickbacks were first made in a lawsuit that whistleblowers Norman Rille and Neal Roberts filed in the US district court for the Eastern District of Arkansas in 2004.

HP disclosed the defective pricing allegations resolved by today's settlement to GSA contracting officials.

In 2002, HP entered into a contract with GSA to sell computer equipment and software to federal agencies.

Under applicable regulations and contract provisions, HP was required to tell GSA how it conducted business in the commercial marketplace so that GSA could use that information to negotiate a fair price for government customers using the GSA contract to purchase HP products.

HP informed GSA contracting officials in 2007 that it might not have complied with all applicable provisions of the GSA contract.

The disclosure led to an audit by the GSA Office of Inspector General (GSA-OIG), which concluded that the contract had been defectively priced.

The United States has settled kickback allegations similar to those made in this case in matters involving IBM for USD2.9 million, Computer Sciences Corporation for USD 1.37 million, and PWC for USD2.3 million.

In addition, these same allegations were a part of a settlement with EMC Corporation which totalled USD 87.5 million.

The EMC settlement also settled defective pricing claims found through an audit by the GSA OIG.

PTI

Gold101.com - Wall Street futures edge up ahead of GDP

Futures for the Dow Jones industrial average, the S&P 500 and the Nasdaq 100 are flat to 0.1 percent firmer, pointing to a slightly higher start on Wall Street ahead of U.S. GDP data and a major speech by Federal Reserve Chairman Ben Bernanke.

The second estimate of U.S. second-quarter GDP will be of importance at 8.30 a.m. Economists in a Reuters survey forecast a 1.4 percent annualized rate of growth compared with a 2.4 percent rate in the advance estimate.

At 10 a.m., investors will eye a speech by Bernanke at Jackson Hole, Wyoming. He is likely to signal his views about the uncertain prospects for the world's biggest economy but probably won't offer many clues on whether the U.S. central bank will pump in more cash to keep the recovery going.

The Thomson Reuters/University of Michigan Surveys of Consumers releases it final August consumer sentiment index at 1355 GMT. Economists in a Reuters survey expect a reading of 69.6, a repeat of the preliminary August number.

There is little in the way of earnings news on Friday, but Tiffany & Co. is reporting second-quarter figures.

In corporate news, Hewlett-Packard Co (HPQ.N) raised its bid for data storage company 3PAR Inc (PAR.N) to $1.8 billion, dealing a blow to Dell Inc's (DELL.O) $1.6 billion effort to win a rapidly escalating bidding war.

Cybersecurity firm ArcSight Inc (ARST.O) has put itself up for sale and could be bought by a technology giant such as Oracle Corp (ORCL.O), Hewlett-Packard Co (HPQ.N) or IBM (IBM.N), The Wall Street Journal reported on Thursday.

Boeing Co (BA.N) said on Friday it now expects delivery of the first 787 Dreamliner in the middle of the first quarter 2011, owing to a delay in engine availability.

Canadian insurer Manulife Financial Corp (MFC.TO) and Switzerland's Ace Ltd (ACE.N) are among bidders for New York Life Insurance Co's Hong Kong, Taiwan and South Korean assets that are up for sale, sources said, in a deal valued between $800 million and $1 billion.

Swiss drugmaker Roche Holding (ROG.VX) said on Friday the U.S. Food and Drug Administration (FDA) has rejected its request to fast-track a license application for a drug aimed at combating breast cancer.

The Obama administration's so-called Public-Private Investment Program, which was devised to purge troubled real estate assets from the financial system, has generated an estimated return of 15.5 percent for taxpayers so far, according to the New York Times.

Oil snapped a two-day rally on Friday and was heading for a third straight week of losses as a forecast downgrade in U.S. economic growth fed disquiet over record oil inventories and weak housing and manufacturing data.

European shares fell 0.5 percent on Friday and were on track for a third straight week of losses as investors remained concerned about the pace of economic recovery after recent grim macroeconomic data.

The Dow closed below 10,000 points on Thursday, the first time the Dow has finished below that psychologically important level since July 6.

The Dow Jones industrial average .DJI fell 0.7 percent, the Standard & Poor's 500 Index .SPX shed 0.8 percent and the Nasdaq Composite Index .IXIC lost 1.1 percent.

Reuters

Superior Gold Group - Japanese yen hits 15-year dollar high

The yen has hit a new 15-year high against the dollar amid continued uncertainty about whether the government will intervene.

The impact of a strong yen was discussed by the Prime Minister and Bank of Japan governor on Monday, but no action has so far been taken.

The strength of the Japanese currency is a major concern as it puts a strain on exporters.

The dollar slid to 84.17 yen, the lowest since 1995.

It later recovered slightly to 84.47 yen. The yen is also at a nine-year high against the euro.

The strength of the currency led to heavy losses for Japanese shares on Tuesday. The Nikkei index closed down 121.55 points, or 1.3%, to close below 9,000 points for the first time since May 2009.

Under pressure

Japanese authorities last intervened in the currency in March 2004 and the pressure is on for them to do so again.

However, Japanese Finance Minister, Yoshihiko Noda, declined to comment on any potential currency intervention but said that he is monitoring the situation "extremely closely, with grave concern". He added that recent currency moves had been one-sided.

The US dollar has been falling because investors are concerned about the health of the global economy and they see the yen as a safe haven at such times.

Japan is among the world's biggest exporters - so each time the value of the currency rises, their goods become more expensive to overseas buyers.

BBC News

Superior Gold Group - H1B visas yet to reach 50% of quota

Applications for H-1B work visas, once most sought-after among Indian IT professionals, have not even reached the 50% mark of the Congressional-mandated quota of 65,000, US officials have said, amid India's concerns over the fee hike for the scheme. 

According to the latest figures released by the US Citizenship and Immigration Services (USCIS), just 29,700 people had applied for H-1B visas till August 13. In the separate higher-education category, the USCIS had received only 12,300 petitions so far. 

Till two years ago, the cap for both the categories of H-1B visas was reached within the first few days and USCIS had to resort to computerised draw of lots to decide the successful applicants. The low-key response this year comes amid India's concerns over the hike in H1-B and L1 visa fee, which would adversely affect Indian IT companies.