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from Breakingviews:

Gold’s geopolitical ledge won’t hold up

By Ian Campbell

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The Ukrainian crisis and Middle Eastern conflict have provided a respite for the price of gold. After going over a cliff and dropping from heights of $1,700 an ounce during 2013, it has found a ledge at around $1,300. The ledge is eroding.

The 25 percent plunge was precipitated by investors fleeing exchange-traded funds. In 2013 they sold 880 tonnes of gold, equivalent to about one-third of the annual demand for use in jewellery. Holders of gold bars and coins dismissed the ETF crowd as lemmings without conviction, but the true believers themselves now look less confident. Their second-quarter purchases of 275 tonnes were 56 percent below the level of a year earlier. Total investment demand in the year to June was 893 tonnes - the least since 2007.

The reality is the ETF lemmings were prescient. The outlook for gold remains bad. Its appeal is hurt by a rising dollar, the imminent end to Federal Reserve money-printing and the eventual approach of higher U.S. interest rates. More investors are likely to leap.

from Expert Zone:

National agenda to bring $100 billion of domestic household savings in capital markets in next five years

(Rajiv Deep Bajaj is the Vice Chairman and Managing Director of Bajaj Capital Ltd. The views expressed in this column are his own and do not represent those of Thomson Reuters)

Currency of different denominations are seen in this picture illustration taken in Mumbai April 30, 2012. REUTERS/Vivek Prakash/FilesIndia is an attractive investment destination for foreign institutional investors, due to its vibrant economy, favourable demographics, high growth potential and well diversified capital markets. In fact, the benchmark Nifty has representation from 10 broad sectors, four with weightage in double digits.

from Counterparties:

MORNING BID – Crypto-sale of the Century

Details on the sale of about 30,000 bitcoin have been spare, but what can be inferred by reading through the lines is that the sale of about $18 million went a lot better than many expected - particularly those who expected to get the coins on the cheap somehow. The prevailing market rate at the end of Monday was about $639, according to Coindesk, currently the leader in the pricing world, and the chatter trickling out was that the unsuccessful bidders - including hedge fund Pantera and SecondMarket's Barry Silber, who put together a consortium of more than 40 bidders - aimed too low in one of those "Price is Right" moves but without the warmth of Bob Barker to confront you when you lose on these things.

With that in mind the speculation on just where the auction ended up can run wild - did it go for $650? $700 for the lot? Perhaps; those commenting on twitter and to Reuters in a story from Gertrude Chavez and Nate Raymond on Monday were suggesting that there were plenty of newer bidders in the process, firms that have been just getting going in the bitcoin world and probably wouldn't mind to get their hands on a large stake even at a somewhat elevated price.

from Full Focus:

Nevada’s gold rush

It took almost two years to finally get the green light, but Reuters photographer Rick Wilking was given near-total access to Newmont Mining's massive series of open pit and underground gold mines in northeast Nevada – one of the largest open-pit gold mine complexes in the United States. It's an industry few see in-person – and the results are in your jewelry and in almost any electronic device you own.

A lot has changed in the 150 years since miners dug shafts into mountains chasing veins of ore.  Today’s gold mines are recovering gold that is sub-microscopic, totally invisible to the naked eye, comparable to smoke particles.  The methods they use to mine it involve moving millions of tons of earth and highly complex chemical processes to get it out of that rock.

from Counterparties:

MORNING BID – The “Everything Is Awesome” Rally

Sometimes the biggest pain trade is not being in the market at all, and that's certainly the case in 2014. We're in something of a Goldilocks environment when it comes to major markets: Bank of America-Merrill Lynch laid this out pretty well in a note yesterday, noting that global equities, US stocks, emerging markets, government bonds, gold, high yield bonds and investment grade corporate are all up between 3.9 and 5.2 percent so far this year.

One way or another now, there are a lot of people waiting for something to go wrong in the market and as a result it’s more or less caused people to freeze in place. Recent investor surveys in the stock market have more people neutral than has been seen in a long time, because while they don’t see equities falling dramatically any time soon, they also are confounded as to how the equity market can keep rallying.

from Breakingviews:

Market adjustment is not over yet

By Ian Campbell

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The golden fear gauge is rising. Gold is up to a six-month high of $1,383 an ounce. A more serious equity and commodity meltdown threatens as markets grow more uneasy about Ukraine, China, emerging economies and global growth. Gold may go a bit higher still - but its rally too may soon prove vulnerable.

from Counterparties:

MORNING BID – Losses continue, and other concerns

The ructions in China have had an interesting effect on commodities prices – good for gold, crappy for copper. And more developments in this area should be expected as the market deals with growing weakness and the threat of a deflating credit bubble coming from the massive lending to various sectors in the world's second-largest economy. Copper has been rather weak of late, but the broader CRB commodities index is actually much higher on the year. This is the biggest divergence since the eurozone debt crisis in 2011, points out Ashraf Laidi, the chief global strategist at City Index in London.

Again, the recent selling has had to do with the Chinese companies using the metal (and iron ore, too) as collateral for cheap dollar financing. So we've hit a weird storm here – weak yuan that makes those loans more expensive, and copper falling too, and again, that also messes with those loans. Put that together and you have a few markets moving in directions that are not beneficial to a major counterparty in several of them, for one, and resulting in the kind of activity that tends to turn into a vicious cycle.

from Expert Zone:

Is gold a good investment once again?

(Any opinions expressed here are those of the author and not of Thomson Reuters)

The increase in gold prices in the last two months has rekindled interest in the yellow metal as a vehicle for investment. It was after the 2008 global financial crisis that gold became the most preferred asset, with prices doubling in four years.

Why was gold preferred? It was not so much as a hedge against inflation but as an insurance against uncertainty. When the economy is faltering and the future looks bleak, gold becomes a preferred asset.

from Global Markets Forum Dashboard:

Better year for commodities?

We quizzed Gavin Wendt, Founding Director & Senior Resource Analyst at MineLife, on the impact of Fed-taper on commodities, base metals, precious metals, nat-gas, Indonesia's ban on mineral exports and China.

Gavin is positive on soft commodities as hard commodities in the medium to longer-term. "The world's population is 7 billion and growing - and demand for energy, hard and soft commodities will only grow," he said.

from Global Markets Forum Dashboard:

Better year for commodities?

We quizzed Gavin Wendt, Founding Director & Senior Resource Analyst at MineLife, on the impact of Fed-taper on commodities, base metals, precious metals, nat-gas, Indonesia's ban on mineral exports and China.

Gavin is positive on soft commodities as hard commodities in the medium to longer-term. "The world's population is 7 billion and growing - and demand for energy, hard and soft commodities will only grow," he said.

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