Gold Price Movement (Jan, 2013) - Al Etihad Gold through the savings plan to Dr. Bharat Butaney,...
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Gold Price Movement (Jan, 2013) Dear Colleagues, The year 2013 has kicked off with a lot of enthusiasm and tight rigor to strengthen the trade. DMCC has further strengthened its position with the official launch of the review protocol and the list of DMCC approved global auditors. Issue 2.1, January 2013 (US$ per Oz) International Market News Increase in custom duty in India by 2% India increased taxes on gold imports from 4% to 6% to reduce the current-account deficit. In addition to balance payments, the government has proposed to provide a link between gold exchange-traded-funds (ETFs) and the gold deposit scheme. The government highlight the objective is to unfreeze or release a part of the physical holdings of gold by mutual funds under gold ETFs and enable them to deposit the gold with banks under the gold deposit scheme. “The advantage will be that a part of the gold lying in stock will be brought into circulation and will partially meet The average gold price for January 2013 was US$ 1,671 which is similar to the same period last year. The price fluctuated between 1,682 and 1,640. Michael Shaoul, the chairman of New York based Marketfield Asset Management said “If you are long on gold you better hope for bad economic news, we have had a good six months of economic data in the U.S. and Europe is surprising people with how quickly it is healing itself. The long-term rally is under more pressure.” DMCC GOLD BULLETIN meet the requirements of the gems and jewelry trade." said Arvind Mayaram, India's secretary of the Ministry of Finance. "It is hoped that, consequently, there will be a moderation in the quantity of gold that is imported into the country." Source: Times of India "Market participants from India are hopeful that the demand for gold for the wedding season will not get impacted by the increased tax rate," says Gerhard Schubert, Head of Precious Metals, Emirates NBD. The Indian culture is heavily driven by gold, the increase in import duty is expected to only have a short term effect on the economy. In the medium to long term demand is expected to adjust to the increase in the cost of imports. Source: LBMA
Transcript of Gold Price Movement (Jan, 2013) - Al Etihad Gold through the savings plan to Dr. Bharat Butaney,...
Gold Price Movement (Jan, 2013)
Dear Colleagues,
The year 2013 has kicked off with a lot of enthusiasm and tight rigor to strengthen the trade. DMCC has further strengthened its position with the official launch of the review protocol and the list of DMCC approved global auditors.
Issue 2.1, January 2013
(US$ per Oz)
Average price of gold for H1 2012 was US$1,651 which represents a 14% increase from H1 2011. The average price for H1 2011 was US$ 1,445
International Market News
Increase in custom duty in India by 2%
India increased taxes on gold imports from 4% to 6% to
reduce the current-account deficit. In addition to balance
payments, the government has proposed to provide a
link between gold exchange-traded-funds (ETFs) and
the gold deposit scheme. The government highlight the
objective is to unfreeze or release a part of the physical
holdings of gold by mutual funds under gold ETFs and
enable them to deposit the gold with banks under the
gold deposit scheme.
“The advantage will be that a part of the gold lying in
stock will be brought into circulation and will partially
meet
The average gold price for January 2013 was US$
1,671 which is similar to the same period last year.
The price fluctuated between 1,682 and 1,640.
Michael Shaoul, the chairman of New York based
Marketfield Asset Management said “If you are long on
gold you better hope for bad economic news, we have
had a good six months of economic data in the U.S.
and Europe is surprising people with how quickly it is
healing itself. The long-term rally is under more
pressure.”
DMCC GOLD BULLETIN
meet the requirements of the gems and jewelry trade." said Arvind Mayaram, India's secretary of the Ministry of Finance. "It is hoped that, consequently, there will be a moderation in the quantity of gold that is imported into the country." Source: Times of India
"Market participants from India are hopeful that the
demand for gold for the wedding season will not get
impacted by the increased tax rate," says Gerhard
Schubert, Head of Precious Metals, Emirates NBD.
The Indian culture is heavily driven by gold, the increase
in import duty is expected to only have a short term effect
on the economy. In the medium to long term demand is
expected to adjust to the increase in the cost of imports.
Source: LBMA
DMCC Gold Bulletin
Issue 2.1, January 2013
Gold forecast for 2013
"I think we could see investment in a number of arenas, and at a higher set of prices," GFMS' head of research Philip Klapwijk said. "Commentary on the dollar/euro has shifted in recent months from being very bearish on the euro. We don't see much scope for dollar appreciation this year."
"We are also expecting the Fed will continue with its asset purchase programmes, and that we won't see these cease in 2013," he added. "We think the U.S. economic performance will disappoint this year."
The LBMA recently conducted a survey on 23
participants in the precious metals industry to forecast
the price of gold in 2013. Based on the survey the
average gold price for the year is $1,753, which is 5.1%
higher than the average gold price in 2012 ($1,669).
The 2013 average price forecast is 8% less than the
highest price forecast for the year as predicted by UBS.
It is also 10% more than what is predicted by Sumitomo
Corporation who have the most conservative estimate
for 2013.
GFMS is forecasting a surge in implied net
investment, which covers activity in exchange-traded
funds, futures and over-the-counter trading, in the
next six months to 152 tonnes, against 59 tonnes in
the first half of last year.
That is likely to balance a projected 4.2%, or 40 tonne,
drop in jewellery offtake – which is expected to
weaken especially in the major Indian market – a 20
tonne rise in mine output and a 57 tonne increase in
scrap supply.
Bullion demand from central banks is forecast to
remain relatively steady in the first six months of the
year at 280 tonnes, against 277 tonnes in the same
period of 2012.
As per GFMS estimates, implied net investment more
than tripled last year to 354 tons from 104 tons in
2011, picking up the slack after physical bar
investment fell by a fifth to 961 tons. Jewellery buying,
the largest demand segment, fell 4.4% to 1,885 tons.
Global coin minting is forecast to have dropped to a
four-year low of 199 tons, down 19% from the
previous year. High prices weighed on demand from
jewellers last year, particularly in price-sensitive Asian
markets such as India, historically the world's largest
consumer of the precious metal. Jewellery fabrication
demand in the Indian subcontinent fell 11% last year
to 624 tons, and was down in almost every individual
region. In contrast it rose 5% in the Middle East.
Market news and forecasts from GFMS
Source: LBMA
DMCC Gold Bulletin
Issue 2.1, January 2013
Dialogue with
Frederic Panizzuti, CEO, MKS Precious Metals DMCC
How do you see the Dubai Good Delivery standard accreditation impacting your business?
Dubai Good Delivery is an important
standard as it fills in the gap in the
market for accrediting refineries with
smaller bars. It is tailored to the
Middle East and South Asian markets
and takes care of important synergies
as with the Dubai Gold and
Commodities Exchange. It therefore
helps enhance our reputation and our
market value. Clients also tend to
trust us more as this product ticks all
the boxes and back us more.
We wanted the DGD accreditation
from the start and therefore we
ensured our procedures and policies
were based on the DGD
requirements so once we complete
three years of operations we could
immediately qualify. This included
hiring of a very competent
Compliance team, training them up in
the AML, CFT, etc and putting in
place required standards to be
competent with the DMCC Practical
Guidance for responsible sourcing of
precious metals.
Sometimes we lost business
because of our strong compliance
but in order to achieve the goal of
keeping the market clean and
strengthening the reputation of
Dubai, we must continue to do the
right thing.
Tell us a little bit about Al Etihad’s operations… Al Etihad started in 2009 and in
today‟s market we are sometimes
considered as a new refinery but it
is important to note that the
management and operations staff
has a combined experience of
more than 70 years in this field. Al
Etihad Gold Group is a part of Al
Bahrain Jewellery Group owned by
the Khalaf family, with entirely
independent operations. The
Khalaf Family has been in the gold
and silver manufacturing and
trading since 1945.
We are a leading refinery with a
good reputation amongst our
clients and a strong service
culture. Our cutting edge
technology and procedures are as
per international standards which
enable us to provide superior
quality, precision and most
accurate results. Our operations
run 24 hours in the interest of
satisfying our customers and
meeting deadlines.
Where does your gold come in from and go out to?
Based on our clients‟ approved
sources (Al Etihad Gold deals with
only registered company in U.A.E):
Asia mainly India / Pakistan – 60%
Middle East – 30%
Africa – 5% (Due to restrictions
that are placed in Africa)
Other - 5%
25% of the gold we receive is in
jewellery, semi finished products
and the rest are scrap bars.
Any new developments in the pipeline?
In the next 3 years we will be
introducing different value added
products to cater further to our
clients in the Jewellery Industry and
some related to general industries.
One important development in the
pipeline will serve our clients mainly
in India and Pakistan is small biscuit
moulded bars (mainly TT bar, 100
gram, 50 gram) with serial numbers.
We have developed our internal
control system to produce biscuit
bars with serial numbers which
refers to the batches that it is
produced from. This is in line with
new specifications from relevant
Indian authorities and helps clients
in being able to report any potential
defect in the small bars in the same
manner as they can for large bars.
In February we will be launching
Minted Bars which will cover the
requirement of the smallest
investment bars (1 gram to 100
gram in rectangular or oval form)
which is difficult to make in ingots or
molded bars. Our minted bars are
manufactured by minting or
stamping from appropriately rolled
gold or silver sheets and provide an
option customization. Both molded
and minted bar meets standard
conditions of manufacturing,
labeling and record keeping.
Dialogue with
Sami Abu-Ahmed, General Manager, Al Etihad Gold Refinery DMCC
DMCC Gold Bulletin
Issue 2.1, January 2013
JRG International Brokerage DMCC, an international
commodity derivatives brokerage institution, introduced
the UAE‟s first Gold Bullion Coin to its Emirates
Systematic Investment Plan (“ESIP”), making the UAE
bullion coin more easily accessible to the public and
investment community.
ESIP is a savings plan that invests in gold coins through
an affordable payment model aimed at all income
groups. First launched in 2011, using the „Visions of
Dubai‟ gold coin, ESIP has now added UAE‟s Gold
Bullion Coin. The plan offers gold enthusiasts different
affordable investment options through a trusted
investment platform, whereby the total price of the gold
coin is fixed and paid in 12 equal monthly instalments.
Once the payment is complete, the physical gold coin
will be delivered to the investor. Since 2011, ESIP has
helped large number of public investors make
systematic and valuable savings in gold.
Officially launched to celebrate the 41st UAE National
Day earlier this year, H.E. Hazza Mohammed Al
Dhaheri, Chairman and Managing Director, JRG
International and IBMC Group, presented the first coin
available through the savings plan to Dr. Bharat
Butaney, President Indian Business and Professional
Council (IBPC), at World Trade Centre Dubai. Present
at the ceremony was Mr. Sajith Kumar PK, CEO and
Director JRG International, international delegates,
office bearers of IBPC and media officials.
For further details visit www.jrgintl.com or www.esip.ae
Approved reviewers of the DMCC „Responsible Sourcing of Precious Metals Review Protocol
In June 2012, DMCC made it a mandatory requirement
for Dubai Good Delivery („DGD‟) refineries to implement
all of the provisions of the DMCC Practical Guidance for
Responsible Sourcing of Precious Metals in order for
DGD members to continue their membership from June
2013. The Guidance also enables other global industry
participants to perform the necessary risk assessments
to ensure conflict free gold supply chains.
DMCC has now announced that the final and official
version of the DMCC Review Protocol based on the
DMCC Practical Guidance for Responsible Sourcing of
Precious Metals has been launched and is available
here. The DMCC Review Protocol will provide guidance
to international audit firms and DMCC approved
reviewers for conducting assessments on Dubai Good
Delivery member refineries‟ due diligence processes, as
well as ensure a level of conformity when implementing
DMCC‟s Guidance.
Please note below the DMCC approved Reviewers for
conducting audits on DGD member refineries:
DELOITTE
Fadi Sidani – Partner in Charge, Middle East
Tel: +971 4376 8705, +971 5055 22613
Hossam Samy – Principal
Tel: +971 4376 8705, +971 5055 33527
ERNST & YOUNG
Amjad Rihan – Partner-Sustainability Services
Tel: +971 4701 0962, +971 5665 65171
Sharif Sikander – Senior Director-Assurance
Tel: +971 4312 9200, +971 5668 67255
KPMG
Esther Rodriguez – Global lead specialist
Tel: +44 (0) 2073113328
PRICEWATERHOUSE COOPERS (PwC)
Andrew Garrett – Partner & Risk Assurance Leader
Tel: +9714 3043 100 (ext. 3111)
The first Gold Bullion Coin from UAE now available to the public through Emirates Systematic Investment Plan
Almas Tower Level 2 PO Box: 48800 Dubai U.A.E T. +971 4 433 67 11 F. +971 4 375 18 96 [email protected]
DMCC Gold Bulletin
Issue 2.1, January 2013
DMCC Gold Bulletin
Issue 2.1, January 2013
