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Tag: Gold / US Dollar Spot

  • Hong Kong seizes over $10 million worth of gold disguised as machine parts in record smuggling bust

    Hong Kong seizes over $10 million worth of gold disguised as machine parts in record smuggling bust

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    Gold was concealed as air compressor parts

    Source: Hong Kong Customs and Excise Department

    In Hong Kong’s largest gold smuggling bust, the city authorities seized an estimated $10.7 million worth of the precious metal that had been concealed as machine parts being shipped to Japan.

    According to a government statement on Monday, 146 kg of gold had been “molded and camouflaged” as part of two air compressors in the cargo of an airplane parked in the city.

    Photos provided by officials show that the gold had been shaped into screw-like and cylinder-shaped parts and with a coat of paint to conceal it. Scrapes on the surface of the parts revealed the gold underneath.

    Hong Kong customs detected the illicit gold while conducting an examination of the machines on March 27, and after a follow-up investigation, arrested a 31-year-old in connection with the case on Wednesday. 

    The arrested man has been released on bail with the investigation still ongoing. Under Hong Kong law, any person found guilty of smuggling cargo is liable to a maximum fine of $2 million and imprisonment for seven years.

    A customs official told local reporters on Monday that this was the first case in which gold had been found concealed as machine parts.

    The official added that the suspected aim of the smuggling operation was to evade import tariffs of about 10% in Japan, which would have saved more than $1 million had the operation been successful.

    Hong Kong, which is one of the world’s largest gold trading hubs, in February arrested another suspect for trying to smuggle gold bars out of the city. There’s been at least one other gold seizure by customs this year.

    Both the cases had involved Macau-bound vehicles smuggling gold worth more than $1 million.

    Prices of the precious metal have hit successive record highs in 2024 amid geopolitical uncertainty. The commodity’s spot price closed at another high in the U.S. on Monday, at above $2,340.

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  • Gold prices to hit $2,200 and a ‘dramatic’ outperformance awaits silver in 2024, says UBS

    Gold prices to hit $2,200 and a ‘dramatic’ outperformance awaits silver in 2024, says UBS

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    Gold and silver bars of various sizes lie in a safe on a table at the precious metals dealer Pro Aurum in Munich.

    Sven Hoppe | Picture Alliance | Getty Images

    Gold and silver are expected to climb further in 2024 on expectations that the U.S. Federal Reserve will start cutting interest rates, UBS forecasts.

    “We are expecting gold to be pushed higher by a Fed easing. Also this comes with a weaker dollar” said the investment bank’s precious metals strategist Joni Teves, who expects the metal to hit $2,200 per ounce by the end of the year.

    Gold prices tend to have an inverse relationship with interest rates. As interest rates dip, gold becomes more appealing compared to alternative investments like bonds, which would yield weaker returns in a low interest rate environment. 

    In turn, lower rates weaken the dollar, making gold cheaper for international buyers, driving up demand.

    While there is still much uncertainty on the timing and extent of rate cuts, UBS maintained its expectations for the Federal Reserve to ease policy. Last week, the Fed announced its decision to leave rates unchanged in January, on top of shooting down hopes of a rate cut in March. 

    In a scenario where the Fed is easing, we think silver can do really well. It tends to outperform a move in gold.

    The bullion’s appeal as a safe haven asset has risen since Israel’s war with Hamas began on Oct. 7, which contributed to gold prices notching an all-time high of $2,100 an ounce last month.

    “We do think investors will start to build allocations to gold in an environment where there is a lot of macro uncertainty [and] geopolitical risks,” said Teves.

    Prospects for gold’s “poorer cousin” are also optimistic, with silver on course to “really, really shine.”

    Silver is not as common of a geopolitical and safety haven compared to gold, which partly explains why it has underperformed gold in the last few years, the strategist said. But the tables could turn in its favor when the Fed eases.

    “In a scenario where the Fed is easing, we think silver can do really well. It tends to outperform a move in gold,” Teves said. “Silver has been underperforming gold quite a lot. So there is a lot of catching up to do and I think the move could be quite dramatic,” she added.

    Silver’s performance is tied closely to the health of the overall economy due to its wide industrial applications. The precious metal is commonly incorporated in the manufacturing of automobiles, solar panels, jewelry and electronics.

    Gold last traded at $2,052 per ounce, while silver was priced at $22.69 per ounce.

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  • Gold soars past $2,100 to new record — and analysts don't expect it to stop there

    Gold soars past $2,100 to new record — and analysts don't expect it to stop there

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    Traffic_analyzer | Istock | Getty Images

    Gold prices notched a new record on Monday for a second day in a row — with spot prices touching $2,100 as the global rush for bullion appears set to continue.

    Gold prices are on course to hit fresh highs next year and could remain above $2,000 levels, analysts said, citing geopolitical uncertainty, a likely weaker U.S. dollar and possible interest rate cuts.

    Prices of the yellow metal have risen for two consecutive months with the Israel-Palestinian conflict boosting demand for the safe-haven asset, while expectations of interest rate cuts have provided further support. Gold tends to perform well during periods of economic and geopolitical uncertainty due to its status as a reliable store of value.

    “The anticipated retreat in both the USD and interest rates across 2024 are key positive drivers for gold,” UOB’s Head of Markets Strategy, Global Economics and Markets Research, Heng Koon How, told CNBC via email. He estimated that gold prices could reach up to $2,200 by the end of 2024.

    Similarly, another analyst is bullish on bullion’s outlook.

    “There is simply less leverage this time around vs 2011 in gold … taking prices through $2,100 and putting $2,200/oz in view,” said Nicky Shiels, head of metals strategy at precious metals firm MKS PAMP.

    All that glitters is gold

    Spot gold prices rose to a new record high of $2,110.8 per ounce Monday before giving up some gains. It is currently trading at $2,084.59.

    On Friday, gold touched $2,075.09 to surpass a precious intraday record high of $2,072.5 on Aug. 7, 2020, according to LSEG data.

    Bart Melek, head of commodity strategies at TD Securities, expects gold prices to average $2,100 in the second quarter of 2024, with strong central bank purchases acting as a key catalyst in boosting prices.

    According to a recent survey by the World Gold Council, 24% of all central banks intend to increase their gold reserves in the next 12 months, as they increasingly grow pessimistic about the U.S. dollar as a reserve asset.

    “This means potentially higher demand from the official sector in the years to come,” Melek said.

    A possible policy pivot by the Fed in 2024 could also be on the cards, he added. Lower interest rates tend to weaken the dollar and a softer dollar makes gold cheaper for international buyers thus driving up demand.

    Stock Chart IconStock chart icon

    Gold prices in the past six months

    On Friday, while Fed Chairman Jerome Powell pushed back on expectations for aggressive interest rate cuts ahead, his remarks indicated the Fed may at least be done hiking for now.

    “We believe the main factors buoying gold in 2024 will be interest rate cuts by the U.S. Fed, a weaker U.S. dollar and high levels of geopolitical tension,” BMI, a Fitch Solutions research unit, said in a recent note.

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  • Goldman says ‘shine is returning’ for gold as investors ramp up bets on rate cuts

    Goldman says ‘shine is returning’ for gold as investors ramp up bets on rate cuts

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    Ingots of 99.99 percent pure gold are placed in a workroom at Novosibirsk Refining Plant, Russia on September 15, 2023.

    Alexander Manzyuk | Anadolu Agency | Getty Images

    Gold prices on Monday rose to a more than six-month high as the U.S. dollar weakened and investors firmed up bets that the Federal Reserve is done with interest rate hikes.

    Spot gold was up 0.52% at $2,012.39 per ounce at 1:47 p.m. London time, but reached a May 16 high of $2,017.82 earlier in the day, Reuters reported. Gold futures for December hit $2,018.9, the highest level since Oct. 27, according to CNBC calculations.

    The dollar index, a measurement of the greenback against major currencies, was 0.13% lower as markets price in a more than 90% chance the Fed will hold rates at its next two meetings.

    CME’s FedWatch Tool shows a 25% probability of a cut as soon as March.

    A weaker dollar and lower interest rates are often flagged by market-watchers as boosting gold prices.

    Analysts at Goldman Sachs said in a note Sunday on the metals outlook for 2024 that gold’s “shine is returning.”

    “The potential upside in gold prices will be closely tied to U.S. real rates and dollar moves, but we also expect persistent strong consumer demand from China and India, alongside central bank buying to offset downward pressures from upside growth surprises and rate cut repricing,” they said.

    Bank of America analysts, meanwhile, said in a Sunday note that the commodities team’s base case was for gold to appreciate from the second quarter of 2024 as “real rates are pushed lower by the Fed cutting.”

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  • Want to invest in gold? Skip mining stocks, strategist says, and trade this instead

    Want to invest in gold? Skip mining stocks, strategist says, and trade this instead

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  • Gold surges to 6-month high, and analysts expect new records in 2023

    Gold surges to 6-month high, and analysts expect new records in 2023

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    One kilo gold bars are pictured at the plant of gold and silver refiner and bar manufacturer Argor-Heraeus in Mendrisio, Switzerland, July 13, 2022.

    Denis Balibouse | Reuters

    LONDON — The price of gold notched a six-month high early on Tuesday, and analysts believe the rally has further to go in 2023.

    Spot gold peaked just below $1,850 per troy ounce in the early hours, before easing off to trade around $1,834 per ounce by late-morning in Europe. U.S. gold futures were up 0.8% at $1,840.50.

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    Gold prices have been on a general incline since the beginning of November as market turbulence, rising recession expectations, and more gold purchases from central banks underpinned demand.

    “In general, we are looking for a price friendly 2023 supported by recession and stock market valuation risks — an eventual peak in central bank rates combined with the prospect of a weaker dollar and inflation not returning to the expected sub-3% level by year-end — all adding support,” said Ole Hansen, head of commodity strategy at Saxo Bank.

    “In addition, the de-dollarization seen by several central banks last year when a record amount of gold was bought look set to continue, thereby providing a soft floor under the market.”

    Looking ahead, Hansen suggested the key events for gold prices would be Wednesday’s minutes from the latest U.S. Federal Reserve meeting and Friday’s U.S. jobs report.

    “Above $1842, the 50% [mark] of the 2022 correction, gold will be looking for resistance at $1850 and $1878 next,” Hansen added.

    New all-time high in 2023?

    Much of the 2023 outlook for global markets hinges on the trajectory of monetary policy as central banks ease off the aggressive interest rate hikes of the past year amid slowing economic growth and possible recessions.

    Economists are divided as to whether this will culminate in rate cuts by the end of the year, however, as inflation is expected to remain well above the target range in most major economies.

    A full dovish pivot by central banks this year would likely have major implications for gold prices, according to strategists.

    Gold could see 'Goldilocks conditions' in 2023, strategist says

    Eric Strand, manager of the AuAg ESG Gold Mining ETF, said last month that 2023 would yield a new all-time high for gold and the start of a “new secular bull market,” with the price exceeding $2,100 per ounce.

    “Central banks as a group have continued, since the great financial crisis, to add more and more gold to their reserves, with a new record set for [the third quarter of] 2022,” Strand said.

    “It is our opinion that central banks will pivot on their rate hikes and become dovish during 2023, which will ignite an explosive move for gold for years to come. We therefore believe gold will end 2023 at least 20% higher, and we also see miners outperforming gold with a factor of two.”

    There's been a rebound in demand for gold from India and China, says Standard Chartered

    The bullion bullishness was echoed toward the end of last year by Juerg Kiener, managing director and chief investment officer at Swiss Asia Capital, who told CNBC last month that the current market conditions mirror those of 2001 and 2008.

    “In 2001, the market didn’t just move 20 or 30%, it moved a lot, the same in 2008 when we had actually a smaller sell-off in the market and the stimulus coming back in, and gold went from $600 to $1,800 in no time, so I think we have a very good chance that we see a major move,” Kiener told CNBC’s “Street Signs Asia” in late December.

    “It is not going to be just 10 or 20%, I think I’m looking at a move which will really make new highs.”

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