3 Months Quotes for Precious Metals

Precious Metal Prices Quotes 3 Months

   Gold                  1,202.98

   Silver                     18.83

   Platinum             1,238.20

From BNN: Precious Metals Slump

Gold hit its lowest point in almost three years on Wednesday and was on course for a record quarterly loss after U.S. data reinforced expectations for an end to ultra-loose monetary policy.

Prices could slide to levels below $1,000 US per ounce, investors and analysts said, with stock markets rising and scant potential for U.S. or European data or developments to reverse an accelerating move out of bullion.

"Equities are up again. People want risk-on and gold is therefore seen as a source of cash and not as a safe haven, because that's not needed," said Simon Weeks, head of precious metals at the Bank of Nova Scotia.

Strong gains in U.S. orders for durable goods, the largest annual rise in house prices in seven years and rising consumer confidence fuelled speculation the Fed would rein in its $85 billion monthly bond-buying programme, which had helped push gold prices to record highs in recent years.

Spot gold slumped to its lowest since August 2010 at $1,223.54 an ounce and was down 3 percent at $1,237.81 an ounce at 1431 GMT. U.S. gold futures for August delivery were also down 3 percent at $1,236.70, having hit a low of $1,223.20.

"We bought gold for two reasons - because we were worried about the inflationary impact of policy and because we thought the financial system was going to fall apart," said Sean Corrigan, chief investment strategist at Diapason Commodities Management.

"Although it may be completely the wrong judgement, the market has decided that none of those at the moment is a concern."

Spot prices have fallen more than a quarter this year and by 22.8 percent this quarter, their biggest quarterly loss since Reuters data began in 1968.

"If you look at yields, they are going higher, and people are more bullish on the dollar - all of this creates a difficult environment for gold," UBS analyst Joni Teves said.

European share markets were up Wednesday. Gains in global stock markets this year will be a signpost of

more losses in gold, analysts say.

ASIA DEMAND EYED

The world's largest gold-backed exchange-traded fund, New York's SPDR Gold Shares (GLD-N), reported the biggest one-day drop in its holdings in more than two months at 16.23 tonnes on Tuesday. That brought the fund's total outflow for the year to 381 tonnes.

"There has been 550 tonnes of gold sold out of ETFs since mid-February," Natixis analyst Bernard Dahdah said. "That's the equivalent of saying we've added to the gold market an additional 11 percent on top of 2012's gold (mine) output."

Demand in number one consumer India is likely to fall this quarter as the government has  curbed gold imports to reduce a record current account deficit.

In the latest move, India's central bank told rural regional banks on Tuesday they could no longer provide loans against gold jewellery and coins.

Worries about a liquidity crunch in China, the world's second-largest gold consumer, drove down share prices despite attempts by the Chinese central bank to soothe markets. Physical gold demand could be hurt by a slowdown in Chinese growth, analysts said.

Silver prices fell further than gold, shedding more than 5 percent to its lowest since August 2010 at $18.39 an ounce. Spot prices were later down 3.5 percent at $18.88 an ounce.

From BNN Canada. Cooling Housing Market

The risk to the Canadian financial system from consumer indebtedness and the heated housing market has abated over the past year but is still present and merits monitoring, a Bank of Canada official said on Wednesday.

"We are seeing a moderation over the last year in both the buildup of household indebtedness and also the related imbalances in the housing market," said Bank of Canada Deputy Governor Timothy Lane in response to an audience question following a speech in Toronto.

"At the same time ... that's not to say that the risk has suddenly disappeared, and it's still a risk that we're watching very closely," he said.

Honda Motor will enter the market of business jets

Honda Motor Co., preparing to enter the market for business jets, said it's won two to three years of orders for what it calls "flying sports cars" and signaled the business will turn profitable before the end of the decade.

The aviation business is on track to turn profitable five years after it begins delivering planes as soon as next year, Michimasa Fujino, president of Honda Aircraft, said in an interview in Tokyo on Wednesday.Deliveries of the Honda jets, originally planned to begin this year, have been delayed because the company is awaiting approval from the U.S. Federal Aviation Administration, Fujino said. After four to five years, Honda may begin fleet sales as the increase of chartered flights turns business jets into forms of "air taxis," he said.

China Complains of Trade Protectionism

Chinese exporters have undergone an increasingly unfavorable trade climate this year as trade protectionism and yuan appreciation pressure have been on the rise amid the global financial crisis.

The following are major relevant cases, quotes and figures:

-- On Dec. 22, the European Union (EU) made a decision to extend dumping duties on leather footwear from China for another 15 months.

-- On Dec. 21, Zhou Xiaoyan, a Chinese Ministry of Commerce official, said as of the end of November, 19 countries and regions have launched 103 trade remedy investigations against Chinese products. Both the number of the cases and the money involved hit record high.

-- On Nov. 29, Chinese Premier Wen Jiabao said in Nanjing when meeting with three Euro Group leaders that China had maintained the stability of the exchange rate of the currency yuan, making an important contribution to global financial stability and economic development.

Wen said China would continue to enhance the flexibility of the yuan exchange rate, acting on its own initiative and in a controllable and gradual manner, and keep it basically stable at reasonable, balanced levels.

-- On Nov. 24, the United States made a decision to impose duties ranging from 10.36 percent to 15.78 percent on Chinese oil well pipes for alleged unfair subsidies.

-- On Nov. 15, Nobel economics laureate and New York Times columnist Paul Krugman pushed for a stronger yuan in an article entitled "World Out of Balance". He wrote, "China's weak-currency policy siphoned much-needed demand away from the rest of the world into the pockets of artificially competitive Chinese exporters."

Shaun Rein, founder and managing director of the China Market Research Group, a strategic market intelligence firm, said revaluing the yuan right now would "jeopardize the world's fledgling economic recovery". Rein argued, "It is better for American businesses for China to maintain current yuan rates until the worldwide recovery is on a firmer footing."

He stated that if the yuan were to appreciate, billions of U.S. dollars of purchasing power would be taken from American consumers, which he said satirically would not make the upcoming holiday season "such merry time"

IMF Paper. Subsidies on Fuel Products are fiscally costly and socially regressive

A recent working paper of the IMF shows that many countries subsidize the consumption of fuels,however the study shows that fuel subsidies are fiscally costly and socially regressive.

At a global level, a major cross-country study by the IMF showed that fuel subsidies generally crowd out high priority public spending, like health, education and infrastructure. They also put pressure on current account deficits, distort productive investment toward energy-intensive sectors and technologies, and contribute to global warming. Fuel subsidies are the opposite of carbon taxes, after all. But the study also showed that fuel subsidies are regressive, meaning that they actually benefit the rich much more than the poor.

Averaged across a large number of low-and middle-income countries, the study found that the top 20% of households capture six times more in benefits from fuel subsidies than the poorest 20%. Why? Because upper income households consume a lot more fuel products than poor ones, especially gasoline, which is the most regressive fuel product to subsidize. The image of a millionaire zooming by in his big SUV comes to mind. By contrast kerosene, which poor families are more likely to consume, is the least regressive product to subsidize.

Recognizing that fuel subsidies were reaching the neighborhood of 2% of GDP, and  crowding out more productive public spending, India’s government has taken bold steps over the past nine months to reduce fuel subsidies. Diesel prices have systematically been rising, there are plans to cap the number of subsidized Liquefied Petroleum Gas cylinders per household, and state electricity boards have been encouraged to set more cost-reflective power tariffs. These measures are welcome, as they also help to take pressure off the worsening current account deficit.

But what less widely understood is that reducing fuel subsidies is a pro-poor measure. In per capita terms, the top 10% of Indian households spends more than 20 times as much on fuel as the poorest 10%.  This includes both direct and indirect consumption – the latter being when producers transport food to market, for example,   using subsidized fuel. Low-income households consume mainly kerosene, while upper income households predominantly use petrol and LPG. 

The bottom 40% of families could be fully compensated for the move to market prices for less than a fifth of what government now spends on fuel subsidies, leaving significant savings to invest in roads, schools, and hospitals.

India´s Reform on Energy

According to The WSJ , price controls and quasi monopoly of state-owned Coal India, has produced lower investment in the Energy Industry.
 As a result of that policies India´s economic growth fell to 5% in the year ended in March,nearly half the rate growth it was five years ago.
"A major blackout last summer deprived 600 million Indians of electricity for about 48 hours. Rolling outages are common. Peak-hour power demand outstripped supply by 8.7% for the 12 months that ended March. Power sector stocks have lost 18% in the past year, even as the broader market gained 10%"
 The immediate problem is inadequate supply of coal. More than half of India's electric power comes from coal, most of it supplied by state-owned Coal Company, but it hasn´t met the
growing demand in past years.

But the government's now is beginning to address these problems.

Last week, lawmakers said generators that have supply agreements with Coal India can reduce the amount of coal they buy from the state-owned miner to about 65% from 80% earlier, importing the difference. The government also said power generators can pass on the additional cost of imported coal to distributors.

Separately, power distributors owned by eight provincial governments have hiked end-consumer prices by up to 24% this year. This should help power generators sell more expensive power to distributors.

The power sector will attract more investment. In the year to March 31, investment in infrastructure like power grew at only 7.8%, half the average rate since 1991.

 The latest measures may signal New Delhi is willing to move further on power pricing reform,and the end of India´s power shortages.

China's Foreign Minister Wang Yi,countries seeking help from third parties, for their territorial claims in the South China Sea are doomed

Countries with territorial claims in the South China Sea that look for help from third parties will find their efforts "futile", China's Foreign Minister Wang Yi warned on Thursday, adding that the path of confrontation would be "doomed".

Beijing's assertion of sovereignty over a vast stretch of the South ChinaSea has set it directly against Vietnam and the Philippines, while Brunei, Taiwan and Malaysia also lay claim to other parts of the sea, making it Asia's biggest potential military troublespot.

At stake are potentially massive offshore oil reserves. The seas also lie on shipping lanes and fishing grounds.

Wang didn't name any third countries, but the United States is a close ally of Taiwan and the Philippines, and has good or improving relations with the other nations laying claim to all or part of the South China Sea.

"If certain claimant countries choose confrontation, that path will be doomed," Wang said after a speech at the annual Tsinghua World Peace Forum.

"If such countries try to reinforce their poorly grounded claims through the help of external forces, that will be futile and will eventually prove to be a strategic miscalculation not worth the effort."

Source: Reuters

China fights corruption

The National Audit Office (NAO) on Thursday said it has found that some state-owned financial institutions have violated lending regulations.

NAO said 27 branches of state-owned financial institutions provided loans worth a combined total of 28.44 billion yuan (4.6 billion U.S. dollars) for projects without proper procedures or necessary guarantee.

Nine branches charged extra fees totaling 421 million yuan for small business loans and export credit services, auditor general of NAO, Liu Jiayi, said in an auditing report presented to the country's top legislature.

Meanwhile, 18.39 billion yuan was embezzled by clients and 2.2 billion yuan was transferred to private financial markets for usurious loans, NAO said.

NAO said 22.03 billion yuan in illegal or embezzled loans has been retrieved and authorities have prosecuted 693 people in relation.

Source Xinhua

Transition from Easy Money to less Easy,is a matter of Communication to Calm Markets

The comments by Fed Chairman, that they will start to taper the accomodative monetary policy, has send bond markets in to a shock,and has affected negatively the bond of Governments,Corporate, and emerging market debt.
The key question for investors is to assess whether central banks have changed the way they react to incoming data, or whether the incoming data have changed. This is particularly difficult in an environment where unorthodox policies like quantitative easing have become prevalent.
The Bank of England's Financial Stability Report this week warned in two consecutive sentences of the risks arising both from sharply higher interest rates and an intensification of the search for yield that has driven rates down.
Fed Chairman Ben Bernanke has been at pains to argue that the shift in Fed thinking is down to a better economic outlook, but that monetary policy will remain extremely loose.
Economic data will be the determining factor. If the data suggest a sustainable, accelerating U.S. recovery, then it could be painful for fixed-income investors. The degree to which the Fed can secure the short end of the curve will be vital. But weaker data might not be a panacea either: It will test the Fed's ability to communicate how the longer-term outlook, and hence the policy reaction, is changing. Either way, volatility is likely to stay high.


Excerpts from the WSJ

Price of Bonds Stabilizing after GDP growth Data. And Fed Officials Speeches to Calm Markets.

U.S. Treasuries prices gained
on Thursday as bond markets showed signs of stabilizing after a
dramatic selloff and before the Treasury's auction of $29
billion of seven-year notes, the final sale of $99 billion in
new coupon-bearing supply this week.

Downward revisions to first quarter gross domestic product
data on Wednesday led some investors to speculate that a
pullback of stimulus may still be far away. Speeches from
Federal Reserve officials in recent days have also sought to
soothe the markets with statements that the removal of stimulus
is likely to be slow and depend on the strength or weakness of
data.

Source. Reuters

From WSJ. Bonds Quotes

  Goverment Bonds                                                         Change%    Yield

U.S. 3 Month			0/32	0.058
U.S. 2 Year			1/32	0.363
U.S. 5 Year			1 29/32	1.398
U.S. 10 Year			15/32	2.484
U.S. 30 Year			27/32	3.532
Germany 2 Year			1/32	0.194
Germany 10 Year			17/32	1.710
Italy 2 Year			15/32	2.271
Italy 10 Year			1 9/32	4.537
Japan 2 Year			0/32	0.141
Japan 10 Year			9/32	0.841
Spain 2 Year			6/32	2.214
Spain 10 Year			27/32	4.705
U.K. 2 Year			1/32	0.403
U.K. 10 Year			12/32	2.411

European Union. Investors and Wealthy Savers will share de cost of Future Bank failures.

The European Union agreed on Thursday to force investors and wealthy savers to share the costs of future bank failures, moving closer to drawing a line under years of taxpayer-funded bailouts that have prompted public outrage.

After seven hours of late-night talks, finance ministers from the bloc's 27 countries emerged with a blueprint to close or salvage banks in trouble. The plan stipulates that shareholders, bondholders and depositors with more than 100,000 euros (84,998 pounds) should share the burden of saving a bank.

The deal is a boost for EU leaders, who meet later on Thursday in Brussels, and can show that they are finally getting to grips with the financial crisis that began in mid-2007 with the near collapse of Germany's IKB.

"For the first time, we agreed on a significant bail-in to shield taxpayers," said Dutch Finance Minister Jeroen Dijsselbloem, referring to the process in which shareholders and bondholders must bear the costs of restructuring first.

The rules break a taboo in Europe that savers should never lose their deposits, although countries will have some flexibility to decide when and how to impose losses on a failing bank's creditors.

"They can affect German savers just as well as they can affect any other investor in the world," German Finance Minister Wolfgang Schaeuble said after the meeting.

Taxpayers across much of Europe have had to pay for a series of deeply unpopular bank rescues since the financial crisis that spread across the bloc to threaten the future of the euro.

The European Union spent the equivalent of a third of its economic output on saving its banksbetween 2008 and 2011, using taxpayer cash but struggling to contain the crisis and - in the case of Ireland - almost bankrupting the country.

But a bailout of Cyprus in March that forced losses on depositors marked a harsher approach that can now, following Thursday's agreement, be replicated elsewhere.

From Xinhua. Short Term Pain vs Long Term Gain

An interbank liquidity crunch has made China's overextended commercial banks the first sector in the country to feel the pressure of the reform package initiated by the new leadership.

Despite the unusually-high interbank lending rates over the past two weeks, China's central bank, surprisingly, did not pump hefty amounts of money into the cash-thirsty market as expected in a bold but essential move to discipline unchecked lenders.

Such financial brinkmanship spooks investor confidence, sending the benchmark stock index into a tailspin to a four-year low this week. The panic, if unsoothed, may worsen the already slowing world's second largest economy.

It takes pains to get through the liquidity crunch, but it also paves way for future gains. For the blessing of a more sustainable economy, banks are the first, but certainly not the last to suffer the hardship.

The central bank has an arsenal of policy options at its disposal to ease the cash strains. It also pledges liquidity support to stem systemic risks if necessary. But its cautious attitude toward fueling another round of easy money is necessary to squeeze the bubbles and send the economic vessel onto a safer route.

While the stimulus helped lift China out of the shadow of recession, commercial banks, real estate developers and local governments used the package as a chance to start a credit binge over the past years. Sadly, a substantial amount of the money flowed into financial derivatives rather than the real economy.

According to Zhang Monan, a researcher with the State Information Center, the debt of enterprises was 122 percent of the country's GDP in 2012, hitting a 15-year high.

A great portion of the money was lent to state-backed large-scale projects with a long return cycle and short maturity date.

As a result, local government debts are spiralling up. Property prices have not been tamed. These unstable elements heighten the dangers of asset price bubbles and potentially defaults if loans turn sour.

It is time to deflate bubbles and restore normal practice.

The road-map is clear.

Analysts have lowered their forecasts of China's GDP growth for 2013. But the central authority has shown rare tolerance for slower growth rate in exchange for more sustainable and balanced development. It has the courage, as well as the ammunition to keep the situation within control.

If long-term gains can be secured, short-term pains will be worth it.

FTSE in positive territory at midday

UK markets were able to hang on to gains on Thursday morning on a busy day for economic data, as stocks continue to rebound after some heavy losses over the last month.

After hitting a fresh five-month low of 6,029 on Monday, the FTSE 100 has risen strongly over the past two sessions with bargain hunters stepping in, given that many have seen the index's recent sell-off - after coming within touching distance of its record closing high of 6,930 last month - as overdone.

Benchmarks in the States finished higher last night as markets reacted positively towards a downwards revision to US economic growth to 1.8% in the first quarter, down from the initial estimate of 2.4%. This sparked hopes that the Federal Reserve could potentially delay its decision to taper stimulus until growth shows more signs of improvement.

Supporting stocks this morning was the news that the initial estimate for UK economic growth in the first three months of 2013 was maintained at 0.3%. Meanwhile, revisions to historic estimates mean that the economy did not actually suffer a double-dip recession in the first quarter of 2012. 

It is a relatively busy day for economic data today, with markets this morning digesting a higher-than-expected drop in unemployment and a falling jobless rate in Germany, as well as mixed Eurozone consumer and business confidence figures.

Meanwhile, jobless claims, personal income/spending and pending home sales are all due out in the States later on.

Source: LiveCharts