Gold at its highest price in a Month

Gold hit its highest in a month on Monday as a retreat in the dollar pushed prices through tough resistance at $1,300 US an ounce and as fears abated that the U.S. Federal Reserve will soon curb monetary easing.

Fed chairman Ben Bernanke’s assurances last week that any withdrawal of U.S. quantitative easing, a major driver of gold prices in recent years, would depend on economic conditions had already prompted a second week of gains in gold and continued to underpin the market on Monday.

Analysts said, however, that with an end to QE still in sight, its rally is likely to be muted.

There are not many reasons to a rally in the price of gold,it is too soon to say that the price of gold has changed its trend, a weak dollar index today and some short covering rally should have underpinned the price of gold today.

Source:  Reuters

China reports first decline of FX purchases in 7 months

China reported the first decline of foreign exchange purchases in seven months amid signs the United States will "taper off" its quantitative easing policy.

Foreign exchange purchases by financial institutions, a major indictor of capital inflows or outflows, fell 41 billion yuan ($6.6 billion) to 27.39 trillion yuan last month, according to datareleased by the People's Bank of China, the central bank, on Monday.

The decline came against the backdrop of a hightrade surplus of $27 billion and strong foreigndirect investment inflows of $14 billion during thesame month.

The data show that China experienced strong capital outflows in June, a sharp reversal from early  2013, said Zhang Zhiwei, chief China economist at Nomura Holdings Inc

It said tightened regulation in recent months of cross-border trade settlements and capital flowshave "caged" arbitrage money flows disguised as trade deals, which also led to the moderation of capital inflows.

"There is no sign of a collective withdrawal of foreign investment."

Zhang said: "The capital outflows in June reinforce our view that the central bank will cut the reserve  requirement rratio by 50 basis points in each quarter from the third quarter of 2013 to the second quarter of 2014."

He said China will experience a prolonged period of capital outflows in the second half of thisyear and the first half of 2014 as growth slows and investors worry about a potential hardlanding in China.

"The PBOC will need to cut the reserve ratio to offset the negative effects from capital outflows on   domestic liquidity conditions."

In a recent statement, the PBOC said it will keep the money market stable with a combination of tools, iincluding open market operations, re-lending, rediscounting, short-term liquidity operations and standing lending facilities.

OECD : Change in international taxation. Action Plan on Base Erosion and Profit Sharing

The OECD Secretary-General Angel Gurría presented the action Plan on base Erosion and Profit Sharing  within the framework of the G20 Finance Ministers and Central Bank Governors' Meeting.

National tax laws have not kept pace with the globalization of corporations and the digital economy, leaving gaps that can be exploited by multi-national corporations to artificially reduce their taxes.

This Action Plan, which we will roll out over the coming two years, marks a turning point in the history of international tax cooperation. It will allow countries to draw up the coordinated, comprehensive and transparent standards they need to prevent BEPS," said  Secretary-General Angel Gurría. "International tax rules, many of them dating from the 1920s, ensure that businesses don't pay taxes in two countries - double taxation. This is laudable, but unfortunately these rules are now being abused to permit double non-taxation. The Action Plan aims to remedy this, so multinationals also pay their fair share of taxes."

 Recognizes the importance of addressing the digital economy, which offers a borderless world of products and services that too often do not fall within the tax regime of any specific country, leaving loopholes that allow profits to go untaxed.

Will develop a new set of standards to prevent double non-taxation. Closer international cooperation will close gaps that, on paper, allow income to ‘disappear' for tax purposes by using multiple deductions for the same expense and "treaty-shopping". Stronger rules on controlled foreign companies would allow countries to tax profits stashed in offshore subsidiaries.

Government Bonds Rates

Government Bonds

                                                                                          Price          Yield
                                                                                        Change            %

U.S. 5 Year			0/32	1.298
U.S. 10 Year			1/32	2.483
U.S. 30 Year			6/32	3.551
Germany 2 Year			-2/32	0.116
Germany 10 Year			0/32	1.520
Italy 2 Year			6/32	1.943
Italy 10 Year			21/32	4.330
Japan 2 Year			0/32	0.131
Japan 10 Year			5/32	0.791
Spain 2 Year			4/32	1.897
Spain 10 Year			12/32	4.618
U.K. 2 Year			-1/32	0.326
U.K. 10 Year			6/32	2.262

  Source: WSJ

U.S. Mortgage rates & Car loan rates

Consumer Money Rates
U.S. Mortgage Rates and Car loan Rates
                                                                                                   Change in
                                                  Rate   week         52  week       PCT PTS
                                                   %        ago         Hi      Low   52-wk

30-year mortgage, fixed	4.51	4.63	4.78	3.54	0.79	-0.20
15-year mortgage, fixed	3.63	3.65	3.84	2.80	0.51	-0.57
Jumbo mortgages, $417,000-plus	4.74	4.84	5.11	3.97	0.45	-0.90
Five-year adj mortgage (ARM)	3.71	3.87	4.06	2.80	0.76	-0.22
New-car loan, 48-month	2.65	2.61	3.72	2.42	-0.42	-3.59

Source: WSJ

Yuan has appreciated 34% against US dollar since July 21, 2005

The Chinese currency Renminbi, or the yuan, has appreciated 34 percent against the U.S. dollar since the exchange rate reform began eight years ago.

The central parity rate of the yuan stood at 6.17 yuan per U.S. dollar on Monday, according to the China Foreign Exchange Trading System.

The yuan advanced some 20 percent against the euro during this period.

Experts said after eight years of appreciation, the yuan's exchange rate is close to the equilibrium level, and a general trend of two-way exchange rate fluctuation is coming into being.

Since the beginning of the year until now, the yuan's value went up in 65 trading days and down in 63 trading days.

China discontinued the yuan peg to the greenback on July 21, 2005, and moved into a managed floating exchange rate mechanism based on market demand and supply, with reference to a basket of currencies.

Source: Xinhua

G-20 countries ask for careful future changes in accomodative monetary policy

Finance ministers and central bank chiefs from the Group of 20 nations agreed Friday to make future changes to unconventional monetary policy carefully at a two-day meeting in Moscow, as possible tapering of the U.S. central bank's ultraeasy monetary is expected to rattle financial markets and hurt emerging economies, sources close to the matter said.

China is apprehensive of Japan becoming nationalistic after P.M. Shinzo Abe landslide victory in the upper house election

China is growing apprehensive of Japan becoming nationalistic after Prime Minister Shinzo Abe's ruling coalition scored a comfortable win in Sunday's upper house election, giving his party and its ally control of both chambers of parliament for the first time in six years.

"We hope Japan will be sincere in dealing with and settling relevant problems," Chinese Foreign Ministry spokesman Hong Lei told Kyodo News in a statement, adding that Beijing's stance remains unchanged and that it wants to develop bilateral ties "by learning from history and facing the future."

Chinese media and some experts expressed concerns over a potential negative impact on already strained bilateral relations that may arise from the election outcome and said that they will be closely watching Abe's remarks in the days ahead to gauge whether he would moderate or toughen his already firm stance toward Beijing.

Precious Metals Quotes

Gold prices climbed Monday, on track for a third consecutive gain, as reduced expectations that the U.S. Federal Reserve will soon taper its bullion-friendly stimulus program boosted the metal at the expense of the U.S. dollar.

As of 03:16 ET, gold for immediate delivery climbed 1.81 percent or 23.47 points to trade at $ 1,317.23 after opening at $1,296.19, having earlier hit a high of $1,322.86, and a low of $1,296.00.

Dollar-denominated gold prices advanced after dollar fell against key rivals as Federal Reserve chairman Ben Bernanke’s comments on stimulus lacked any confirmation on when the Fed’s will start scaling back its stimulus.

Bullion's have been pressured by expectations the Fed’s will pare back its $85 billion-per-month bond purchase program. The Fed's quantitative easing schemes have boosted gold’s appeal as a hedge against inflation

Dollar index, which measures the strength of the green Benjamin in front of a basket of major currencies after the recent sell-off that started with Ben Bernanke’s dovish comments last week. The USDIX fell on Monday to trade around 82.57 after opening at 82.69, hitting a high of 82.72 and a low of 82.48.

Other precious metals tracked gold higher where:

• Silver gained 2.44% to trade around $ 19.98
• Platinum went up 0.59% to $ 1,438.55
• Palladium inched 0.09% up to $ 750.70

Source  Oilngold

China's Wuhan East Lake Hi-Tech Industrial Development Zone

Optical-electronics, telecommunications, and equipment manufacturing are the core industries of Wuhan East Lake High-Tech Development Zone (ELHTZ) while software outsourcing and electronics are also encouraged.

ELHTZ is China's largest production centre for optical-electronic products with key players like Changfei Fiber-optical Cables (the largest fiber-optical cable maker in China), Fenghuo Telecommunications and Wuhan Research Institute of Post and Telecommunications (the largest research institute in optical telecommunications in China). Wuhan ELHTZ also represents the development centre for China's laser industry with key players such as HUST Technologies and Chutian Laser being based in the zone.

In 2007, 465 new projects were approved in ELHTZ, and by the end of 2007, more than 2,000 high-tech enterprises had set up business in the zone. More than 20 enterprises based at ELHTZ, such as Wuhan East Lake High-tech Group, HUST Technology and Yangtze Telecommunication, have been listed on stock exchanges in China.

Source: RightSite.Asia