Top 3 News Stories from the Past Week about Gold, Precious Metals and the Overall Economy
Every week, we give you the latest news about gold, precious metals and the overall economy. This week’s stories include: Russia and South Africa meet to discuss how they can boost the prices of platinum and palladium, gold smuggling in India is still on the rise and gold buyers are back thanks to the sell-off in U.S. stocks.
Russia and South Africa to Support Platinum and Palladium Prices
Among those attending the meeting, Bloomberg reports, are Russian central bankers and officials from OAO GMK Norilsk Nickel (GMKN), the world’s biggest producer of palladium, according to Russia’s Natural Resources Minister Sergei Donskoi.
“The main aim of this cooperation is to put together the interests of the two countries in this field,” said Donskoi.
One alternative for the two countries is to increase their central banks’ purchases of platinum and palladium, Donskoi said; another was suggested by Norilsk – reserve agreements between the five BRICS nations of Russia, India, China, South Africa, and Brazil that would involve purchasing stockpiles of the two metals.
Most of the world’s platinum (70 percent) is mined in South Africa, and 40 percent of the world’s palladium comes from Russia.
Gold Smuggling in India Is Still a Problem
Indian Customs officials seized 120 gold bars weighing about 14kg at Hazrat Shahjalal International Airport Wednesday, as gold seizures at Chennai International Airport have reached record highs.
Customs at Chennai Airport has seized 617 pounds of gold worth about $11.5 million. According to officials, gold comes mostly from Sri Lanka and Dubai, with Malaysia, Bahrain and Singapore as secondary sources. To fight the rise in gold smuggling, Indian Customs is doubling its manpower at the airport and has started training their staff to identify suspicious behavior.
Gold smuggling in India has been on the rise since mid-2013 when the government raised import tariffs to 10% in an attempt to lower India’s giant account deficit.
The yellow metal has always had special significance for Indians. For them, gold is a status symbol with religious significance – the safest, inflation-proof investment.
Gold Buyers Are Back
Gold saw gains for a third straight session early on Wednesday. The buying spree was largely spurred by the sell-off in U.S. stocks, says George Gero of RBC Wealth Management, a long time gold investor.
“We have seen interest rates back off largely as we have seen the stock market backing off. We finally had six out of seven sessions lower in stocks and people have started to look,” said Gero.
“Gold is an important currency… it’s liquid, it’s portable, and convertible to any currency no matter where you go,” and that’s why it is important for you portfolio, he said.
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Image by Aleksey Nikolskyi