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Gold in its biggest weekly drop since November

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SINGAPORE – Gold started its week by falling half a percent on the prospect of U.S. interest rate hike in early 2015 that has boosted the dollar and dented the mental’s appeal as a hedge against inflation.

This has been Gold’s biggest weekly drop since November.

A lack of activity in the physical sector also raised some concerns, with demand from top consumer China likely to be subdued because of a weak yuan and the discounted prices on the Shanghai Gold Exchange, which discourage imports.

Gold eased $7.14 an ounce to $1,326.80 by 0320 GMT, down from a six-month high of $1,391.76 hit early last week. The precious metal touched a record high above $1,900 in 2011, when a worsening debt crisis in Europe sparked a buying rush.

Gold is under pressure from the U.S. dollar as the U.S. Federal Reserve scales back its quantitative easing programme and has suggested a rise in interest rates quicker than expected, said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

“We can say the initial support will be $1,325 to $1,320. The downside may be $1,300, and let’s see if it can break that or not. On the upside, I think $1,350 could be capped,” Leung said.

U.S. gold was at $1,327.70 an ounce, down $8.30.

The dollar index was steady at 80.149, not far off a three-week peak of 80.354 set on Thursday. A stronger dollar weighs on gold and other commodities as it makes purchases in other currencies pricier.

The 99.99 percent purity gold on the Shanghai Gold Exchange traded below cash and U.S. gold futures.

Premiums for gold bars in Hong Kong were unchanged from last week at $1 to the spot London prices.

In Tokyo, gold bars were offered at premiums of up to 25 cents to the spot London prices, higher than zero last week as supply tightened.

“Japan’s fiscal year ends this month and some trading houses are closing their positions. They have exported their gold stocks to London, so there’s a bit of shortage in physical supply,” said a dealer in Tokyo.

“But at the same time, gold prices in Japan are still high, so there’s selling from the general public. So the market is a bit balanced,” said the dealer, referring to gold futures on the Tokyo Commodity Exchange

Gold investors may be shifting their attention away from Ukraine, but palladium held near its highest since August 2011 on a miners’ strike in South Africa and concerns the standoff between major producer Russia and the West over Crimea could escalate.

NATO’s top military commander said on Sunday that Russia had built up a “very sizeable” force on its border with Ukraine and Moscow may have Moldova, another ex-Soviet republic, in its sights after annexing Crimea.

Asian shares gave up earlier gains on Monday after the China HSBC flash manufacturing purchasing managers index (PMI) fell to an eight-month low in March.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.52 percent to 816.97 tonnes on Friday from 812.78 tonnes on Thursday.

Hedge funds and money managers raised their bullish bets in gold futures and options to the highest level since December 2012, as worries about tensions in Ukraine and China’s economy boosted speculative interest for a sixth straight week, according to data from the Commodity Futures Trading Commission on Friday.

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Business

Nigeria set to boost Naira value and foreign reserve with local gold production, as Tinubu receives gold bar

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IN  a significant move to strengthen Nigeria’s economy, President Bola Tinubu received a symbolic gold bar on Sunday from the Minister of Solid Minerals Development, Dele Alake.

This gesture marks the commencement of the National Gold Purchase Program (NGPP), aimed at boosting the naira’s value and enhancing the country’s foreign reserves.

Minister Alake expressed gratitude to President Tinubu for his support of reforms in the solid minerals sector.

He highlighted that the NGPP, which involves sourcing gold from artisanal and small-scale miners and refining it to meet the London Bullion Market Association’s Good Delivery Standard, will substantially contribute to Nigeria’s economic stability.

Alake stated “This initiative will significantly increase our foreign reserves and strengthen the naira. The refined gold will be supplied to the Central Bank of Nigeria, marking a crucial step in our economic strategy.”

The presentation also underscored the first commercial transaction under the NGPP, establishing a centralized gold purchasing system that integrates small-scale miners, cooperatives, and production units across the nation.

This program is expected to provide a structured market for gold, fostering economic growth and stability.

He said, The successful completion of the first commercial transaction clearly demonstrates the National Gold Purchase Program’s effectiveness. It has increased the nation’s foreign reserves assets and shown that using the Nigerian Naira to purchase a liquid asset traded in United States Dollars, such as gold, is a viable strategy. This transaction has also underscored the potential of the National Gold Purchase Program to enhance fiscal and monetary stability.”

Alake added that the initial commercial transaction under the program resulted in a +US$5 million boost in Nigeria’s foreign reserve assets.

The transaction involved refining over 70 kilograms of gold to meet the London Bullion Market quality standard and aggregating locally mined gold, thereby infusing approximately NGN6 billion into the rural economy.

President Tinubu expressed appreciation for the Ministry’s accomplishment in advancing the government’s goal of economic diversification by acknowledging and displaying the symbolic gold bar

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Solid Minerals

FG Fingers Foreigners Sponsoring Banditry For Illegal Mining

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The Nigerian Government has threatened to come down heavily on foreigners sponsoring bandictory as a way of sustaining illegal mining activities in parts of the country.

The warning was handed down in Abuja by Minister, Solid Minerals Development, Dr Oladele Alake, while receiving a delegation of the Nigeria-China Chamber of Mines led by its National President, Dr. Olugbenga Ajala.

Details of these were contained in a statement released by Head, Press & PR, Ministry of Solid Minerals Development, Alaba Balogun over the weekend.

The statement cited, Dr Alake, thus, “The government will come down firmly on these unscrupulous foreign operators sponsoring banditry to perpetrate illegal mining: let me use this medium to appeal through you to tell those sponsors to desist or face the full wrath of the law.”

According to Dr Alake, the Ministry is committed to establishing a multi-agency task force that will end the activities of illegal miners and their collaborators.

The Minster made it clear that the FG had given illegal miners a 30-day-ultimatum to legitimise their businesses, quit Nigeria or incur the wrath of the law.

According to him, this will help “to streamline and structure the Small-Scale Artisanal Miners for maximum yield to the Federal Government.”

The delegation paid a courtesy call on the Minsiter at the Ministry’s headquarters in Abuja.

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Energy

Fuel Scarcity: Govt Yet to Increase Pump Prices – NMDPRA

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A long queue at an NNPC fuel station

By Edozie Obasi-Eze

 

Amidst heightening uncertainties in the domestic petroleum products market characterised by scarcity and irregular pricing, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has declared that there’s no intention to review pump prices upwards.

This was contained in an advisory issued by General Manager, Corporate Communications, NMDPRA, Kimchi Apollo.

He stated that the Nigerian National Petroleum Corporation Limited (NNPCL) had imported PMS with current stock levels sufficient for 34 days.

In an attempt to address panic buying and speculations which have seen price of Premium Motor Spirit (PMS) oscillate between N180-N250 in the Lagos area, Apollo assured that there was enough quantity of the product in the country already.

He said, “Consequently, marketers and the general public are advised to avoid panic buying, diversion of products and hoarding.

“In keeping with the Authority’s responsibilities as outlined in the Petroleum Industry Act (PIA), the Authority assures the public that it would continue to monitor the supply and distribution of petroleum products nationwide, especially during this holiday season.”

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