UBS: India's Gold GST Of 3% 'Relatively Subdued Outcome'
UBS analysts arecalling weekend developments in India, including announcement of a 3% goods andservices tax on gold, as "a relatively subdued outcome" and "encouraging." TheGST tax was at the lower end of the range of expectations of 2% to 5%, the bankpoints out. No change was made to the gold import tax of 10%. "The GST on goldtherefore brings the total tax bill for gold slightly higher to 13% (10% importduty plus 3% GST) from 12% previously (10% import duty plus 1% excise tax plus1% VAT)," UBS says. "We think this outcome should be supportive enough for theongoing recovery of core gold demand in India to continue. The removal of thispolicy uncertainty should also allow the local gold market to now focus onadjusting to the current environment, where the government continues to pushthe industry towards the formal sector."
By Allen Sykoraof Kitco News; asykora@kitco.com
UBS: Gold BoostedBy Lower U.S. Real rates, Softer Dollar
Monday June 05, 2017 11:24
Gold is extendingits recovery, creeping closer towards UBS' target of $1,300 an ounce, supportedby recent macroeconomic developments, the bank says. "The pullback in U.S. realrates and the dollar have clearly been key positive influences for gold pricesof late," UBS says. "Gold's strength is in the face of equities hovering atall-time highs. The disappointment around the U.S. employment report for May triggered the move towards the latest highs in gold. Although our U.S.economists do not think this derails the Fed from hiking rates next week, it doesintroduce a bit more uncertainty around Fed expectations later this year." Asof 11:09 a.m. EDT, Comex August gold was up $2.70 to $1,282.90 an ounce and hita peak of $1,286 that was its loftiest price since April 21.
By Allen Sykoraof Kitco News; asykora@kitco.com
StandardChartered: Upside Price Risk' For Gold This Week
Monday June 05, 2017 09:58
StandardChartered sees potential upside for gold this week despite weekend news thatIndia's goods and services tax on gold will be 3%, more than the jewelryindustry had hoped for. "The weaker-than-expected U.S. employment report,released [Friday], boosted gold prices, but has not derailed the likelihood ofa rate hike at the June FOMC meeting," Standard Chartered says. However, marketconviction for subsequent rate hikes "is likely to waver," the bank says. "U.S.event risk is unlikely to subside" before the next FOMC meeting, especiallygiven congressional testimony by former FBI director James Comey that isscheduled for this week, Standard Chartered says. Meanwhile, U.K. electionsalso take place. "Our economists note that although some polls point to a hungparliament, a Conservative Party majority is still likely, but aless-than-50-seat majority could raise questions about Prime Minister [Theresa]May's political future, leaving Brexit talks vulnerable to no deal'hardliners," Standard Chartered says. "The weaker-than-expected U.S. data onFriday has resulted in gold garnering interest, and this week's events pointtowards upside price risk despite the higher-than-hoped for goods and servicestax in India."
By Allen Sykoraof Kitco News; asykora@kitco.com
INTL FCStone SeesMore Gains For Gold During June
Monday June 05, 2017 09:22
INTL FCStone seespotential for more gold upside during June, although the firm also cautionsabout potential volatility with Federal Reserve policymakers scheduled to meetmid-month. "We have been relatively upbeat on gold lately and suspect that itcould move slightly higher again in June, although we think that a significantpart of its advance has already been put in during May and therefore, theremight be only limited upside from here," INTL FCStone says in its monthlycommodities outlook. "We do expect gold to hit some turbulence as we approachthe June Fed rate hike, but things could open up for the precious metalpost-meeting if the central's bank language remains dovish. Silver is expectedto be steady as well, but we are fairly neutral on platinum as its supplypicture does not look as tight as it once did." Palladium baffles analysts,they say, since a longtime high of just under $840 an ounce recently took placedespite slowing car sales in the U.S. and China. "Nevertheless, consideringthat we are now in breakout territory, we suspect that prices could move higherstill, although we would not want to necessarily go long here, tempting as thecharts are," INTL FCStone says. The firm forecasts a "fairly resistant band" oftrading for gold during June of $1,235 to $1,310 an ounce, with a silver rangeof $16.60 to $18.20. Platinum is seen between $895 and $1,000, whilepalladium's range was forecast to be between $750 and $895.
By Allen Sykoraof Kitco News; asykora@kitco.com
RBC's Gero:Worriers' Maintaining Bid In Comex Gold
Monday June 05, 2017 09:22
Gold is retaininga bid due to a number of geopolitical and political factors despite theapproach of a Federal Reserve meeting in mid-June, when an interest-rate hikeis expected, says George Gero, managing director with RBC Wealth Management. Asof 9:06 a.m. EDT, Comex August gold was up $2.80 to $1,283 an ounce and hit apeak of $1,286 that was its strongest level since April 21. The marketmaintained momentum from Friday, when the monthly U.S. nonfarm payrolls reportwas softer than forecast. "There are enough reasons for worries to keep bids,"Gero says, citing events surrounding Qatar, Greece, Venezuela, North Korea andthe weekend terrorist attack in London.
By Allen SykoraFor Kitco News
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asykora@kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities,securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.  |