The fall of HKMEx and what it means for Hong Kong’s commodities dreams
The sudden blow-up of the Hong Kong Mercantile Exchange (HKMEx) not only represents the collapse of a commercial proposition. It is also a warning call to Hong Kong’s ambition to develop itself as a commodities trading centre. Continue reading »
South Africa: rand under pressure
Battered by falling metal prices and labour unrest, the South African rand touched a four-year low on Thursday of 9.3836 to the US dollar.
And with the mining industry suffering strikes, the economy sluggish and credit rating agencies nervously eyeing the country’s finances, the currency could have further to fall. Continue reading »
India’s Akshaya Tritiya spurs gold buying on religious, not financial, grounds
Monday marked the Hindu festival of Akshaya Tritiya, considered as an auspicious day to buy precious metals. And with last month’s sharp drop in the price of gold, demand in India is higher than ever.
But what does this mean for an economy where the current account deficit is weighed down by mammoth gold imports? And what does it mean for Indian households, quick to act on a price drop, buying the commodity on religious rather than financial grounds? Continue reading »
China’s love of gold: not going anywhere
Pure 24 carat gold has a special place in the hearts and minds of the Chinese, who love its beauty and its practicality. So while investors around the world were dumping gold last month, shoppers in China (and elsewhere in Asia) have been lining up in droves outside jewellery stores and banks.
For Chinese people, no other material item on earth so epitomises wealth, prosperity and family tradition. And (rightly or wrongly) it is also regarded as an insurance policy, currency hedge, inflation hedge and international currency all rolled into one. Why? Continue reading »
Harmony: loss sparks sell-off
South African mining stocks have had a tough time of it in the last 12 months what with strikes, outages and falling commodity prices. So you’d expect much of the bad news to be priced in.
However, Harmony Gold pulled off a surprise on Friday. The company announced a headline loss for the latest quarter of $23m, mainly due to the prolonged closure of a key mine. Its shares fell over 8 per cent to a low not seen since 2005. Continue reading »
Guest post: put India’s gold to work
By Nupur Pavan Bang and Saumya Rastogi of the Indian School of Business
When gold prices fell below $1400 in mid-April, investors across the globe panicked and tried to exit their gold-based investments. Yet the scene was quite different driving through the Somajiguda area of Hyderabad, in India.
Both sides of the road, which is lined with jewellery shops, were overflowing with customers. As a valet at one of the largest shops put it: “People have been buying like gold is being distributed for free.” Continue reading »
India’s love affair with gold: breaking up is hard to do
Yes, it's made of gold
Indians are easily the world’s most voracious buyers of gold so as prices fall, demand should rise, right? Right. Conversely, as prices rise, demand should fall, right? Wrong. Experience of the past few years suggests that Indians buy gold with an apparent disregard for price.
That’s a headache for policy makers because gold imports have a big impact on India’s current account deficit. But Leif Eskesen, chief economist for India and Asean at HSBC, says there is scope for policy to take some of the passion out of Indians’ love affair with gold. Continue reading »
Hong Kong gold jewellers’ shares tumble despite rush of customers
With the largest tumble in gold in three decades, the shares of Hong Kong’s three biggest jewellery retailers fell sharply this week, despite a rush of customers wanting to take advantage of lower bullion prices.
Investors were clearly more interested in the impact of lower gold prices on the stores’ margins than in the potential benefits of the surge in sales. Continue reading »
Gold’s fall: how will it affect S Africa?
Gold’s dramatic fall over in the past week has sent analysts scurrying to work out who is feeling the pinch, and how hard.
As beyondbrics reported on Tuesday, there may be some positive effects for India, one of the biggest gold buying countries in the world. But what about South Africa, one of the bigger gold producers? Continue reading »
What does the big drop in the gold price mean for India?
For a poor country, India has expensive taste.
It is the world’s biggest importer of gold – a pricey habit that has taken its toll on the country’s current account deficit. So is the recent tumble in the gold price just what India’s economy needs? Continue reading »
Chile suspends Barrick Gold mine
By Jude Webber and Naomi Mapstone
Another mining project in a minerals-rich Andean country has been hit by another environmental/indigenous complaint. Digging up precious metals as a way of achieving economic prosperity, especially in areas of outstanding natural beauty, has never been so fraught.
The latest casualty is the Chilean side of Barrick Gold’s Pascua-Lama project, which promises to be one of the world’s biggest gold mines. Continue reading »
China: gold before swine
Should gold traders be paying attention to Chinese pork prices? It may sound outlandish, but new research has uncovered an interesting link between global gold prices and Chinese inflation (which in turn is often driven by pork prices). Continue reading »
Kyrgyzstan takes on mining group
Another resource-rich country. Another push to renegotiate a deal between the government and a foreign mining company.
This time it’s Kyrgyzstan, a small country that rarely excites the international investor. But the disputed deal concerns an operation that’s big enough to interest the global mining industry – the Kumtor gold mine, the country’s largest single asset, which has generated annual revenues of up to $1bn. Continue reading »
Colombia’s Mineros bets on Nicaraguan gold
The move by Mineros, Colombia’s leading gold producer to acquire a majority stake in Nicaragua’s Hemco, highlights two trends — one is the arrival of billions of dollars of Colombian capital in Central America, the other Nicaragua’s efforts to boost its growing mining industry. Continue reading »
Prokhorov sells out of gold
Mikhail Prokhorov is slimming down his business empire in a move that has Moscow gossips wondering if the Russian billionaire has finally decided to focus on politics.
After selling his $3.6bn stake in Polyus Gold, Russia’s biggest gold miner, this week, Prokhorov is in talks to divest his electricity assets. Continue reading »
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