The government is likely to borrow less in the new financial year that begins on April 1 than in 2012/13 because of its surplus cash balance, two government sources told Reuters on Monday.Lower government borrowing could help bolster India's growth prospects by reducing borrowing costs for private investors and facilitating a pick-up in capital investments, which are projected to hit at least a five-year low this fiscal year.New Delhi has built up a cash surplus of about 800 billion rupees as a result of Finance Minister P. Chidambaram's deep spending cuts to keep the fiscal deficit down at 5.3 percent of gross domestic product this fiscal year."Our borrowing requirement next year will come down, but the (fiscal) deficit number will remain unchanged," said one of the two senior officials with direct knowledge of the matter.
India has set a target of cutting its fiscal deficit to 4.8 percent of GDP in the next fiscal year.The official, however, said the government is still to work out how much it needs to borrow in 2013/14. Chidambaram will reveal the borrowing plans in his budget speech on February 28.The government is on track to borrow 5.7 trillion rupees by issuing bonds in the current fiscal year that ends in March. It has thus far raised 5.48 trillion rupees and will borrow the remainder by February 22.Faced with a tough task of trimming a swollen fiscal deficit that has put India's investment-grade credit rating in peril, Chidambaram has reduced budgeted spending by about 1.1 trillion rupees in the current financial year, some 8 percent of budgeted outlay.Although those cuts have tightened market liquidity, they have helped shore up government coffers."We are intentionally piling up cash to meet redemption requirements," said another official. "You cannot repay next year's redemptions with this year's borrowing."Government bonds worth about 950 billion rupees are due for redemption in 2013/14.
India’s industrial output unexpectedly slid in December for a second month as demand falters in an economy expanding at the weakest pace in a decade.Production at factories, utilities and mines fell 0.6 percent from a year earlier, compared with a revised 0.8 percent drop in November, the Central Statistical Office said in a statement in New Delhi today. The median of 29 estimates in a Bloomberg News survey was for a gain of 1 percent.India’s elevated inflation of more than 7 percent has limited the extent its central bank can cut interest rates to boost demand, while an uneven global recovery has hurt exports. Finance Minister Palaniappan Chidambaram, who unveils the budget Feb. 28, has pledged spending curbs to ease price pressures amid wider government efforts to encourage a revival in investment.“This set of data is really bad and there is a need to aggressively address risks to growth,” said Rupa Rege Nitsure, an economist at Bank of Baroda in Mumbai. The report adds to the case for a reduction in borrowing costs, though the magnitude of cuts depends on the path of inflation, she said.Prime Minister Manmohan Singh has stepped up efforts to spur the economy since mid-September, opening industries such as retail and aviation to more foreign investment and setting up a panel to speed up infrastructure projects. India has also eased caps on capital inflows and moved to limit fuel subsidies.The rupee has risen about 2.8 percent against the dollar since then, while remaining 8.4 percent weaker in the past year. The currency was down 0.1 percent to 53.925 as of 12:49 p.m. in Mumbai, while the BSE India Sensitive Index climbed 0.3 percent. The yield on the 8.15 percent note maturing June 2022 rose two basis points, or 0.02 percentage point, to 7.88 percent.
Inflation RisksInflation, based on wholesale prices, decelerated to a three-year low of 7.18 percent in December. Consumer prices rose 10.79 percent in January from a year earlier, a report showed today. That’s the fastest in the BRIC group, which also includes Brazil, Russia and China.The climb in the cost of living and risks such as a record current-account deficit limited India’s central bank to a quarter-point reduction in interest rates last month, the first cut since April 2012.The current-account gap may widen to a record and be “significantly higher” in the 12 months through March 2013 than last year’s 4.2 percent of gross domestic product, Reserve Bank of India Governor Duvvuri Subbarao said yesterday.The “external sector is very vulnerable,” inflation remains “high” and investment has declined, he added.Budget VowChidambaram has pledged to contain the fiscal deficit at 5.3 percent of gross domestic product in 2012-2013 and pare it to 4.8 percent the following year. He is seeking to lower the odds of a credit-rating downgrade.The statistics office’s Feb. 7 forecast for 5 percent economic growth this fiscal year would be the weakest since 2002-2003.
The International Monetary Fund last week predicted an acceleration to 6 percent in 2013-2014. While India’s expansion remains one of the highest in the world, risks are on the downside, the Washington-based lender said.Manufacturing dropped 0.7 percent in December from a year earlier, while capital goods output decreased 0.9 percent, today’s data showed. Mining fell 4 percent while electricity output increased 5.2 percent.Companies such as motorcycle maker Hero MotoCorp Ltd. have reported declining profits, while higher costs led mobile-phone operator Bharti Airtel Ltd. to increase prices in January.Elsewhere in the Asia-Pacific region today, Indonesia and Sri Lanka left borrowing costs unchanged.In Europe, year-on-year U.K. inflation probably held at 2.7 percent last month, a survey of economists showed before a report today. Russia will probably refrain from easing borrowing costs after inflation surged to a 15-month high, a separate survey showed.In the U.S., job openings likely rose in December to 3.7 million, while confidence among small businesses probably advanced in January from an almost three-year low, Bloomberg surveys showed.
Gold rallied from its lowest level in more than a month as North Korea conducted its third nuclear test, spurring demand for a haven. Platinum advanced.Gold for immediate delivery was little changed at $1,646.40 an ounce at 3:12 p.m. in Singapore after losing as much as 0.3 percent to $1,642.90, the cheapest since Jan. 4. Spot silver was 0.3 percent lower after declining as much as 0.7 percent to $30.735 an ounce, the lowest since Jan. 28.North Korea detonated an atomic warhead underground, the official Korean Central News Agency said in a statement today. South Korea’s Defense Ministry estimated the yield at 6 to 7 kilotons, bigger than the previous two tests. The test comes after the United Nations last month tightened sanctions on the totalitarian state after it launched a rocket in December.“Given the rhetoric coming from South Korea and what they’ve said about if North Korea decides to detonate, it doesn’t give them a lot of room to maneuver,” said David Lennox, an analyst at Fat Prophets in Sydney. South Korean Foreign Minister Kim Sung Hwan has vowed to “firmly” deal with a nuclear weapons test and other provocations.
Bullion earlier fell to the lowest in more than a month as a top U.S. treasury official said Group of 20 nations must refrain from competitive devaluations. Global growth was “weak and vulnerable to the downside,” said Lael Brainard, the undersecretary for international affairs. Gold gained for a 12th year in 2012 on demand for a haven against currency debasement.Gold for April delivery dropped as much as 0.4 percent to $1,643 an ounce and traded at $1,645.40 on the Comex in New York. Most-active futures fell 0.2 percent to 30,595 rupees per 10 grams ($1,763.30 an ounce) on the Multi Commodity Exchange of India Ltd. Markets in Hong Kong, China, Singapore, Malaysia and Taiwan are closed for Lunar New Year holidays today.Bullion declined 1.8 percent this year as silver advanced 1.6 percent and platinum climbed 10 percent. One ounce of gold bought as many as 53.39 ounces of silver today, the most since Jan. 29, data compiled by Bloomberg show.Spot platinum gained 0.6 percent to $1,698.87 an ounce, while cash palladium was little changed at $759.50 an ounce.
Natural gas futures climbed in New York for the first time in three days. Forecasters predicted colder-than-normal weather next week that would stoke demand for the heating fuel.Gas gained after dropping to $3.207 per million British thermal units, the lowest price since Jan. 29. A midday update to the National Weather Service’s Global Forecast System model showed temperatures may be below normal in most of the contiguous U.S. from Feb. 16 through Feb. 20. A morning outlook had shown mostly normal readings.“We still have a month of winter left and sellers are going to be reluctant to jump in,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “If these indications of seasonal demand have some strength behind them, the market will continue to move higher.”Natural gas for March delivery rose 0.7 cent to settle at $3.279 per million British thermal units on the New York Mercantile Exchange. The futures are up 32 percent from a year ago. Trading volume was 9.6 percent above the 100-day average for the time of day.March $3 puts were the most active gas options in electronic trading. They were 0.4 cent lower at 0.8 cent per million Btu on volume of 587 contracts as of 3:12 p.m. Puts accounted for 48 percent of options volume.April gas traded 6.7 cents above the March contract, compared with 6.5 cents on Feb. 8.Below NormalThe low in New York on Feb. 16 may be 23 degrees Fahrenheit (minus 5 Celsius), 6 below normal, according to AccuWeather Inc. in State College, Pennsylvania. The low in Chicago may be 19 degrees, 3 less than the usual reading.About 50 percent of U.S. households use gas for heating, data from the Energy Information Administration show. The agency is part of the Energy Department.Gas inventories totaled 2.684 trillion cubic feet in the week ended Feb. 1, 15 percent above the five-year average and 7.8 percent below last year’s stockpiles for the period. The supply surplus to the five-year norm has climbed from 11 percent over the past three report periods.The EIA increased its estimate last month for 2013 natural gas prices, citing more normal winter heating demand compared with last year. Gas prices at the benchmark Henry Hub in Erath, Louisiana, will average $3.74 per million British thermal units, compared with the previous estimate of $3.68 and $2.75 in 2012, the EIA said Jan. 8 in its monthly Short-Term Energy Outlook.
Record ProductionNatural gas production in the lower-48 states rose to a record in November as more of the fuel was pumped from shale wells in the Northeast.Output increased 0.6 percent to 73.88 billion cubic feet a day from a revised 73.47 billion in October, the EIA said in the monthly EIA-914 report, released Jan. 31 in Washington.Supplies from the “other states” category rose 1.4 percent to 24.29 billion cubic feet a day from a revised 23.96 billion in October. Production advanced as “some operators reported new wells coming online in the Marcellus shale play,” the EIA said in the report.The boom in oil and natural gas production helped the U.S. cut its reliance on imported fuel. America met 84 percent of its energy needs in the first 10 months of last year, government data show. If the trend lasted through 2012, it would be the highest level of self-sufficiency since 1991.
वित्त वर्ष 2013 की तीसरी तिमाही में एचपीसीएल का मुनाफा 94.5 फीसदी गिरकर 147 करोड़ रुपये रहा। पिछले साल अक्टूबर-दिसंबर में कंपनी का मुनाफा 2725 करोड़ रुपये रहा था।वित्त वर्ष 2013 की अक्टूबर-दिसंबर तिमाही में एचपीसीएल की आय 11.3 फीसदी बढ़कर 53413 करोड़ रुपये रही। पिछले साल की तीसरी तिमाही में कंपनी की आय 47975 करोड़ रुपये रही थी।अक्टूबर-दिसंबर तिमाही में एचपीसीएल तेल उत्पाद बिक्री 77.3 लाख टन और रिफाइनरी थ्रूपुट 42.2 लाख टन रहा।
ऑटो सेक्टर मुश्किल भरे दिन से गुजर रहा है। टाटा मोटर्स, मारुति सुजुकी, एमएंडएम, हीरो मोटोकॉर्प के डीलर्स के पास काफी स्टॉक बाकी है।हीरो मोटो के डीलरों के पास 4 हफ्तों का स्टॉक पड़ा है। वहीं, मारुति सुजुकी के डीलर्स के पास 5 हफ्तों का स्टॉक जमा है। मारुति सुजुकी के मुताबिक किसी भी गाड़ी के लिए वेटिंग पीरियड नहीं है।टाटा मोटर्स के डीलर्स के पास 5 हफ्तों का स्टॉक मौजूद है। एमएंडएम के एसयूवी और एमयूवी का 2 हफ्तों का स्टॉक मौजूद है। सियाम पहले ही कह चुका है कि इस साल ऑटो इंडस्ट्री के किसी भी सेगमेंट में ग्रोथ देखने को नहीं मिलेगी।
महंगाई से राहत मिलती नजर नहीं आ रही है। सरकार अर्थव्यवस्था में जान डालने के लिए हर मुमकिन कदम उठा रही है लेकिन महंगाई एक बड़ा रोड़ा बन गई है।जनवरी में रिटेल महंगाई दर 10.56 फीसदी से बढ़कर 10.79 फीसदी हो गई है। शहरी महंगाई की रफ्तार गांवों के मुकाबले ज्यादा है।शहरों की रिटेल महंगाई दर 10.42 फीसदी से बढ़कर 10.73 फीसदी हुई है। वहीं, ग्रामीण इलाकों में रिटेल महंगाई दर मामूली बढ़ोतरी के साथ 10.88 फीसदी के स्तर पर आ गई है।बैंक ऑफ महाराष्ट्र के ईडी सी वी आर राजेन्द्रन का मानना है कि रबी की फसल अच्छी रहने पर महंगाई दर में कमी आ सकती है। महंगाई दर में कमी आने पर आरबीआई दरों में 0.25 फीसदी तक की कटौती कर सकता है।
खराब आईआईपी आंकड़े और रिटेल महंगाई में बढ़ोतरी के बावजूद बाजार ने दम दिखाया। सेंसेक्स 100 अंक चढ़कर 19561 और निफ्टी 25 अंक चढ़कर 5922 पर बंद हुए।लेकिन, छोटे और मझौले शेयरों पर दबाव बना रहा। निफ्टी मिडकैप 1 फीसदी और बीएसई स्मॉलकैप 0.5 फीसदी टूटे।ऑयल एंड गैस, हेल्थकेयर, ऑटो और सरकारी कंपनियों के शेयर 1.5-1 फीसदी चढ़े। बैंक, कंज्यूमर ड्यूरेबल्स और एफएमसीजी शेयरों में 0.6-0.25 फीसदी की तेजी आई। कैपिटल गुड्स शेयरों में मामूली बढ़त आई।रियल्टी शेयर 4 फीसदी टूटे। आईटी, मेटल, तकनीकी और पावर शेयरों में 0.6-0.3 फीसदी की कमजोरी आई।बाजार की चालअंतर्राष्ट्रीय बाजारों से ठोस संकेत न मिलने से घरेलू बाजारों ने मिली-जुली शुरुआत की। खुलते ही निफ्टी 5900 के ऊपर पहुंचा। लेकिन, रियल्टी शेयरों में आई भारी गिरावट ने बाजार पर दबाव बनाया।2जी स्पेक्ट्रम घोटाले में सीबीआई वकील और आरोपियों के बीच सांठगांठ होने के खुलासे से डीबी रियल्टी और यूनिटेक शेयरों की जमकर पिटाई हुई। इसकी वजह से रियल्टी इंडेक्स 5 फीसदी से ज्यादा टूटा।कारोबार के पहले 1.5 घंटे में बाजार में उतार-चढ़ाव नजर आया। निफ्टी 5900 के करीब घूमता नजर आया। मिडकैप और स्मॉलकैप शेयरों में बिकवाली हावी नजर आई।उम्मीद से बेहद खराब आईआईपी आंकड़ों से बाजार निराश नजर आए और लाल निशान में फिसले। दिसंबर में औद्योगिक उत्पादन की विकास दर -0.6 फीसदी रही है, जबकि अनुमान 1.1 फीसदी का था।आईआईपी के साथ रिटेल महंगाई के आंकड़ों ने भी बाजार को निराश किया। जनवरी में रिटेल महंगाई दर बढ़कर 10.79 फीसदी रही है। पिछले साल दिसंबर में रिटेल महंगाई 10.56 फीसदी के स्तर पर रही थी।लेकिन, बाजार आईआईपी और रिटेल महंगाई के दोहरे झटके जल्द उबरे। निफ्टी फिर से 5900 के ऊपर पहुंचा। सेंसेक्स ने करीब 90 अंक की तेजी दिखाई। लेकिन, छोटे-मझौले शेयरों में 1-1.5 फीसदी की गिरावट रही।यूरोपीय बाजारों में कमजोर शुरुआत के बावजूद घरेलू बाजारों में मजबूती कायम रही। कारोबार के आखिरी घंटे में बाजार ने रफ्तार पकड़ी। सेंसेक्स 125 अंक चढ़ा और निफ्टी 5925 के ऊपर पहुंचा।
सोने में गिरावट आई है। अंतर्राष्ट्रीय बाजार में सोने का भाव 1,645 डॉलर के नीचे आ गया है। कॉमैक्स पर सोना करीब 1 महीने के निचले स्तर के आसपास कारोबार कर रहा है। दरअसल एशिया के ज्यादातर बाजार बंद होने से वॉल्यूम बेहद कम है। हालांकि घरेलू बाजार में डॉलर के मुकाबले रुपया कमजोर हुआ है, इसके बावजूद एमसीएक्स पर सोने की कीमतों पर दबाव बना हुआ है।वहीं कॉमैक्स पर चांदी 0.5 फीसदी से ज्यादा टूटकर 30.70 डॉलर प्रति औंस के स्तर पर कारोबार कर रही है। अंतर्राष्ट्रीय बाजार की कमजोर घरेलू बाजार में चांदी में भी साफ झलक रही है। एमसीएक्स पर चांदी 0.7 फीसदी की कमजोरी के साथ 57,270 रुपये पर आ गई है।एमसीएक्स पर कच्चा तेल सपाट होकर 5,230 रुपये पर कारोबार कर रहा है। नैचुरल गैस 0.5 फीसदी की उछाल के साथ 178 रुपये पर पहुंच गया है। एमसीएक्स पर बेस मेटल्स में निकेल को छोड़कर सभी लुढ़क गए हैं। निकेल 0.15 फीसदी की बढ़त के साथ 982.80 रुपये पर कारोबार कर रहा है। कॉपर में 0.2 फीसदी, एल्यूमिनियम में 0.15 फीसदी, लेड में 0.35 फीसदी और जिंक में 0.4 फीसदी की गिरावट दर्ज की गई है।आज सरसों में बढ़त पर कारोबार हो रहा है। एनसीडीईएक्स पर सरसों का भाव करीब 1 फीसदी तक बढ़कर 3,400 रुपये के पार पहुंच गया है। हालांकि अगले महीने से मंडियों में सरसों की नई फसल की आवक भी शुरु हो जाएगी। लिहाजा सरसों की तेजी को लेकर असमंजस बना हुआ है।धनिया में जोरदार तेजी आई है। एनसीडीईएक्स पर धनिया का भाव करीब 3 फीसदी तक बढ़कर 6,550 रुपये के करीब पहुंच गया है। हालांकि अगले महीने से मंडियों में नई फसल की आवक और बढ़ने की उम्मीद है।
ली मिर्च का जून वायदा आज लॉन्च नहीं होगा। एफएमसी के निर्देश पर एनसीडीईएक्स ने काली मिर्च के जून वायदा की लॉन्चिंग अगले आदेश तक के लिए टाल दी है। आज काली मिर्च के जून वायदा की लॉन्चिंग होनी थी।हालांकि सूत्रों का कहना है कि वायदा बाजार आयोग और एक्सचेंज काली मिर्च से जुड़ी कुछ शिकायतों की जांच करा रहे हैं। इस वजह से अगले वायदा में कारोबार की इजाजत नहीं दी जा सकती है।कोच्चि और एर्नाकुलम के कुछ गोदामों में खराब क्वालिटी के काली मिर्च की शिकायत मिली थी। इसके बाद एनसीडीईएक्स ने वहां के करीब 6 गोदामों के ऑपरेशन पर रोक लगा दी थी, फिलहाल एक्सचेंज का दावा है कि अभी भी जांच चल रही है।
India's software services exports are expected to grow 12-14 percent in 2013-14 (April-March), Nasscom (National Association of Software and Services Companies) said on Tuesday.
The industry body expects the sector to clock 13-15 percent growth in the domestic market, while the IT industry revenue is seen at USD 12-15 billion in FY14.
Nasscom had forecast the IT sector exports to grow 11-14 percent in FY2013. However, it has since revised the guidance and said that the sector will only grow at the lower end of that guidance following a slowdown in decision making and cut in discretionary spends by corporations in US and Europe, key markets for Indian IT companies, amid the global economic downturn.
Most IT companies, including Infosys , which had been underperformer for several quarters, and Tata Consultancy Services reported better-than-expected earnings in the Oct-Dec quarter and have said that growth in 2013-14 will be better than in 2012-13.
US-based Cognizant Technology Solutions this month reported 3 percent quarter-on-quarter revenue growth in Oct-Dec, its fourth quarter, and has guided for at least 17 percent growth in 2013.
"Cognizant has a history of comfortably beating its guidance, suggesting that Indian companies should comfortably deliver our 12-14 percent expectation and there may be upsides if pace of decision making and discretionary spend pick up," Citigroup analysts Surendra Goyal and Rishi Iyer said in a recent report.
The software services exporters have highest exposure to the banking and financial services vertical, and the analysts say that trend from Cognizant and other companies suggests that weakness in the sector is abating.
"The first signs of a pickup in the (IT) sector driven by pent up demand are visible with deal pipelines building up,"said Goyal and Iyer. Infosys and HCL Technologies are Citi's top picks in the sector.
Stocks are little changed in the early going as weak earnings from Goodyear and other U.S. companies kept buyers at bay.The Dow Jones industrial average inched down a point to 13,970 shortly after the opening bell Tuesday.The Standard & Poor's 500 index was down half a point at 1,516. The Nasdaq composite was also down about half a point at 3,191.Goodyear Tire & Rubber sank 6 percent to $13.11 after the company cut its forecast for full-year earnings, blaming weakness in the European economy. Coca-Cola fell 2 percent following its earnings report.Trading was relatively light as investors waited to hear President Barack Obama's comments on the economy later Tuesday night in his State of the Union address.
Goldman Sachs Group Inc (GS.N) Chief Financial Officer Harvey Schwartz said on Tuesday that Wall Street banks will have to produce higher returns for shareholders, and may need to cut staff further in order to do so."The industry will migrate to higher returns because it will have to," Schwartz said at a Credit Suisse conference in Miami, adding that investment banks may do so by taking "excess capacity" out of the industry.
Schwartz, who took over the CFO role at the end of last month, declined to provide a specific return-on-equity target for Goldman Sachs or a time frame for getting returns up to an adequate level.Last year, Goldman delivered a return-on-equity of 10.8 percent. Schwartz said that was good on a relative basis, but not "aspirational for the long term." The measure is important to shareholders because it measures how much profit a bank can wring from its balance sheet."Shareholders are demanding more accountability," he said.
Stocks edged higher in early trading Tuesday following mixed earnings reports from companies including Avon, Goodyear and Coca-Cola.The Dow Jones industrial average rose 30 points to 13,981 in the first hour of trading. The Standard & Poor's 500 was up two points at 1,519. The Nasdaq was up three at 3,194.Avon, a direct seller of beauty products, jumped $2.68, or 16 percent, to $19.97 after the company posted a fourth-quarter loss that wasn't as bad as analysts had expected. Avon hopes to save $400 million by slashing costs. Michael Kors, a luxury clothing and accessories seller, rose $6.30, or 11 percent, to $63.23 after reporting earnings that beat analysts' predictions.Coca-Cola, the world's largest beverage company, fell 61 cents to $38.03 after reporting fourth-quarter revenue that fell short of analysts' forecasts. Goodyear Tire & Rubber sank 6 percent to $13.11 after the company cut its forecast for full-year earnings, blaming weakness in the European economy.About 70 percent of companies in the S&P 500 have reported earnings for the fourth quarter. Analysts are projecting that earnings will rise 6.4 percent for the period, an improvement from the 2.4 percent growth reported in the third quarter, according to S&P Capital IQ.
A start-of-the-year rally that pushed indexes close to record highs has slowed down. The S&P 500 is up 1.3 percent this month, following a 5 percent gain in January. The Dow has advanced 0.8 percent in February, after surging 5.8 percent a month earlier, logging its best January in almost two decades.Stock advanced at the start of the year after lawmakers reached a last-minute deal to avoid the "fiscal cliff" of sweeping tax increases and spending cuts. Investors are also becoming more optimistic that the housing market is recovering and that hiring is picking up.Investors will be watching closely Tuesday night when President Barack Obama delivers his annual State of the Union speech. Obama is expected to focus on the economy, including job creation.A decline in bond prices since the beginning of the year has also slowed. The yield on the 10-year Treasury note, which moves inversely to its price, rose 3 basis points to 1.99 percent. The yield was 1.71 percent at the beginning of the year.Among other stocks making big moves:— Masco jumped $2.23, or 13 percent, to $20.02 after the home improvement and building products company reported earnings that beat analysts' expectations thanks to strong demand in North America.— Dun & Bradstreet, a provider of credit and business data, fell $7.44, or 9 percent, to $77.92 after the company reported that a fourth-quarter profit that came in below market expectations.
Gold prices are trading near steady levels in the early going Tuesday, but did hit another fresh five-week low overnight. Gold has seen some intensified technical selling pressure early this week. The U.S. dollar index moving to a four-week high Tuesday is also a bearish underlying factor for the gold and silver markets. April gold last traded up $0.20 at $1,649.30 an ounce. Spot gold was last quoted up $0.30 at $1,649.00. March Comex silver last traded steady at $30.91 an ounce.News that North Korea has detonated another nuclear bomb underground, in defiance of United Nations sanctions, had little impact on the market place overnight. However, North Korea’s rogue status on the world stage could quickly flare up into an international incident, which would prompt investor demand for perceived safe-haven assets like gold.The Group of 20 nations meets in Moscow on Friday and Saturday. A main topic will likely be currency values as many industrialized nations have in recent months, or longer, worked to devalue their currencies to revive their economic growth. The Group of Seven nations on Tuesday issued a statement that said their central banks were not attempting to devalue their currencies, but instead trying to boost their economic growth rates. The G-7 nations also said they will not target specific currency exchange rates. The statement was meant to head off growing concerns that “currency wars” could break out if there is not some form of agreement reached soon by the major nations, regarding currency exchange rates. The G-7 statement was mildly supportive to the precious metals and it implies that the major world economies are not going to do much to stop the devaluation of their currencies. At present, Japan is seen as the major instigator as the yen continues to plummet in value. The fact that the G-7 is attempting to “jawbone” the matter before the G-20 meeting even begins is an indicator the situation is considered serious by the G-7 countries. If the major countries cannot come to meaningful agreement on the matter and continue to work to devalue their currencies, that could become a major bullish force for the gold market.
Moody’s ratings agency on Tuesday lowered its economic growth expectations for the eight major economies of the world. Moody’s said the growth rate of the group would be a collective 1.4% in 2013. That’s down 0.2% from Moody’s forecast for the same group in November. That news helped put some downside price pressure on the European stock markets overnight.The Lunar New Year celebration is occurring this week in Asia. China is on holiday all week for the celebration. That is slightly bearish for the gold market as it is limiting physical buying interest from the Chinese this week.The U.S. dollar index is slightly lower early Tuesday but did hit another fresh four-week high overnight. The greenback bulls have gained some fresh upside near-term technical momentum recently, but the bears still have the overall near-term technical advantage. Meantime, Nymex crude oil futures prices are slightly higher early Tuesday. The crude oil bulls have the overall near-term technical advantage. The bullish near-term technical posture in crude oil is a supportive underlying element for the precious metals.U.S. economic data due for release Tuesday includes the NFIB small business index, and the weekly Goldman Sachs and Johnson Redbook retail sales reports. President Obama delivers his State of the Union speech Tuesday evening.The London A.M. gold fixing is $1,641.75 versus the previous London P.M. fixing of $1,652.00.Technically, April gold futures prices hit a fresh five-week low overnight. Prices have dropped well below the key 200-day moving average, which comes in at $1,670.00 level. Fresh near-term chart damage has been inflicted early this week as a bearish downside “breakout” from a choppy and sideways trading range on the daily chart has occurred. Bears have the near-term technical advantage. The gold bulls’ next upside price breakout objective is to produce a close above solid technical resistance at the February high of $1,687.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at the January low of $1,627.90. First resistance is seen at $1,660.00 and then at Monday’s high of $1,670.30. First support is seen at the overnight low of $1,639.50 and then at $1,627.90.March silver futures prices hit a fresh four-week low overnight. Prices also dipped below the key 200-day moving average, which comes in at $30.75 on Tuesday. Bears have gained the slight near-term technical advantage in silver. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $31.935 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $30.00. First resistance is seen at $31.25 and then at Monday’s high of $31.535. Next support is seen at the overnight low of $30.58 and then at $30.25.
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