Barrick's Impairment Charge for 2013

Impairment Charges

In its first quarter 2013 report, Barrick indicated that it may need to reassess the long-term gold and silver price assumptions used in its most recent annual impairment test should metal prices remain at lower levels for an extended period of time.

As a result of recent and continued significant declines in gold and silver prices, and the delay in first gold production, Barrick is conducting impairment testing. Preliminary analysis indicates an after-tax asset impairment charge in the range of approximately US$4.5-US$5.5 billion in the second quarter for the Pascua-Lama project. This is a preliminary estimate range and the impairment testing work is ongoing, including with respect to various underlying assumptions related to items such as long-term metal prices, capital costs, and the construction schedule re-sequencing work for the project. The company will complete a final impairment assessment by its second quarter 2013 results release.

In light of the lower metal price environment, Barrick is also reviewing its other assets, including goodwill, for possible impairment charges in the second quarter, which, although dependent on various analyses and assumptions which have not been finalized, are likely to be significant.

Source: Form 6-K 5fth of day July 2013

Dollar Index at 3 Year High

A widely used measure of the dollar’s value rose to a three-year high Friday after stronger-than-expected June U.S. jobs data reinforced expectations the Federal Reserve will move sooner rather than later to begin slowing the flow of monetary stimulus to the economy.

The ICE dollar index DXY, which measures the U.S. unit against six other major currencies, rose to 84.434, up from 83.291 late Thursday in North America. On a closing basis, that’s its highest in three years, according to FactSet.

Sugar Prices Crush Impact in India

This is a good time for buyers of refined sugar, but for refiners in India, the world’s biggest consumer of the sweetener and the second largest producer, not so much.

Global sugar prices have fallen to their lowest levels in nearly three years, and surplus production of cane in India isn’t helping the situation, with share prices of listed sugar companies in the country getting crushed.

Benchmark ICE sugar traded in New York has fallen from a high above 35 cents a pound in February 2011 to around 16 cents a pound recently. In the year to date, it has fallen a relatively subdued 16%, but stock prices for Indian refiners have fared much worse.Shree Renuka Sugars Ltd.India’s biggest sugar refiner, is the worst performer, having lost around 48% of its stock value in 2013  Bajaj Hindhustan Ltd. India’s top sugar producer by volume, has lost 40%, while other significant players Balrampur Chini Mill Ltd. and Simbhaoli Sugars Ltd.  have shed 19% and 36%, respectively. All of the companies’ share prices are around three-year-low levels.

Analysts say they expect sugar share prices to stay at depressed levels at least for the next several months, potentially hitting four-year lows given the limited scope refiners have to eke out profits.

From WSJ

Gold Majors' Shares Steep Drop

Canada's main stock index stumbled on Friday after a robust U.S. jobs report showed growing strength in the world's largest economy but lessened the appeal of safe-haven assets such as bullion, causing gold-mining stocks to dive.

Shares of gold producers dropped almost 5 percent, with Barrick Gold Corp  the world's largest gold miner, losing more than 5 percent of its market value to hit its lowest level in about 21 years.

Increasing signs that U.S. economic recovery is gathering speed raised fears that the Federal Reserve might dial down its massive stimulus program later this year.

Data showed U.S. job growth was stronger than expected in June and that the employment count for the previous two months was higher than initially reported.he materials sector, which includes mining stocks, declined the most among the major groups, giving back 2.1 percent. Gold miners tumbled in a volatile session after the price of the precious metal fell, with the U.S. dollar rising on the jobs news.

Barrick fell to $13.52, hitting its lowest level since May 1992.

Source Reuters

A closer look to the U.S. June's Jobs Report

According to June labor Statistics, total nonfarm payroll employment increased by 195,000 in June, and the unemployment rate was unchanged at 7.6 percent, the U.S. Bureau of Labor Statistics reported today. Employment rose in leisure and hospitality, professional and business services retail trade, health care, and financial activities.
The number of unemployed persons, at 11.8 million, and the unemployment rate, at 7.6 percent, were
unchanged in June.
Among the major worker groups, the unemployment rate for adult women (6.8 percent) edged up in
June, while the rates for adult men (7.0 percent), teenagers (24.0 percent), whites (6.6 percent), blacks
(13.7 percent), and Hispanics (9.1 percent) showed little or no change. The jobless rate for Asians was
5.0 percent (not seasonally adjusted), down from 6.3 percent a year earlier.
In June, the number of long-term unemployed (those jobless for 27 weeks or more) was essentially
unchanged at 4.3 million. These individuals accounted for 36.7 percent of the unemployed. Over the
past 12 months, the number of long-term unemployed has declined by 1.0 million.
The number of persons employed part time for economic reasons (sometimes referred to as
involuntary part-time workers) increased by 322,000 to 8.2 million in June. These individuals were
working part time because their hours had been cut back or because they were unable to find a full-time
job.
In June, 2.6 million persons were marginally attached to the labor force, essentially unchanged from a
year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted
and were available for work, and had looked for a job sometime in the prior 12 months. They were not
counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.
Among the marginally attached, there were 1.0 million discouraged workers in June, an increase of
206,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not
currently looking for work because they believe no jobs are available for them. The remaining 1.6
million persons marginally attached to the labor force in June had not searched for work for reasons
such as school attendance or family responsibilities.

Source   Bureau of Labor Statistics

Basel Committee New Standards for Risk

Global regulators proposed on Friday that banks set aside more capital to cover investments in "shadow banks" such as private equity or hedge funds to improve cover for underlying risks.

Policymakers worry that as mainstream banks become more tightly regulated, risks will shift to other financial businesses that handle credit but have been less regulated than the banks.

The Basel Committee of banking supervisors from the world's top financial centers said on Friday that more clarity and consistency is needed on its existing rule for how banks set aside capital to cover exposure to equity funds.

Basel will make it a requirement for banks to adopt a "look-through" approach, meaning that banks will have to calculate risks from their exposure to a fund as if they owned the fund. A public consultation on the proposed change will close on October 4.

"The committee believes the revised standard will more appropriately reflect the risk of a fund's underlying investments and its leverage," the committee said in a statement.

"The revised standard will also help address risks associated with banks' interactions with shadow banking entities."

Source  Reuters

Precious Metals Quotes

Gold Price    3 Months Futures     US$      1,211.47

Silver Prices 3 Months Futures     US$          18.79

Government Bonds Quotes

Government Bonds			Price change	YIELD
U.S. 2 Year			-2/32	0.391
U.S. 5 Year			-24/32	1.575
U.S. 10 Year			-1 18/32	2.697
U.S. 30 Year			-2 25/32	3.662
Germany 2 Year			-3/32	0.137
Germany 10 Year			-30/32	1.728
Italy 2 Year			6/32	1.963
Italy 10 Year			3/32	4.395
Japan 2 Year			0/32	0.139
Japan 10 Year			3/32	0.859
Spain 2 Year			9/32	1.914
Spain 10 Year			20/32	4.592
U.K. 2 Year			-3/32	0.411
U.K. 10 Year			-29/32	2.501

A bright spot on U.S. job growth.

U.S. job growth increased more than expected in June, which could draw the Federal Reserve closer to implementing a plan to start scaling back its massive monetary stimulus later this year.

Employers added 195,000 new jobs to their payrolls last month, the Labor Department said on Friday, while the unemployment rate held steady at 7.6 percent as more people entered the workforce.

The government revised payrolls for April and May to show 70,000 more jobs created than previously reported.

Economists polled by Reuters had expected employment to increase 165,000 last month and the jobless rate to fall a tenth of a percentage point to 7.5 percent.

The closely watched employment report was released two weeks after Fed Chairman Ben Bernanke offered an upbeat assessment of the economy's outlook and said the U.S. central bank expected to start trimming its bond purchases later this year.

The employment report also showed weekly hourly earnings rose by the most since November. That, combined with other relatively upbeat data on housing, auto sales and manufacturing, makes it more likely the Fed will proceed with its tapering plan in September.

wenty-eight of 60 economists polled by Reuters in late June said they expect the Fed to begin dialing back its purchases in September, with most expecting the program to end by June 2014.