Metals News
Stress Tests Reveal Hundreds of U.S. Banks at Risk Due to Loans and Rate Hikes
Hundreds of small and regional banks in the U.S. are under financial stress, with 282 facing significant risks from commercial real estate loans and the effects of higher interest rates, according to a study by Klaros Group. While these banks, predominantly holding less than $10 billion in assets, are not nearing insolvency, their strained financial conditions could lead to a reduction in investments like new branches and technology, potentially impacting communities and limiting direct services to customers. Fitch Ratings' Christopher Wolfe and Klaros Group's Brian Graham emphasize that the risk is more about financial pressure than outright failures.
Rising Gold Prices Could Push India's Demand to Lowest in Four Years, Says WGC
Despite an 8% increase in India's gold demand in the March quarter, the World Gold Council (WGC) warns that soaring gold prices may reduce the country's total 2024 gold consumption to a four-year low. Sachin Jain, CEO of WGC's Indian operations, indicated that if prices keep rising, demand might drop to the lower end of the projected 700 to 800 metric tons range.
India's Gold Demand Climbs 8% in Q4 Despite High Prices, WGC Reports
Despite record-high prices, India's gold demand rose by 8% to 136.6 tonnes in the March quarter, according to the World Gold Council's "Gold Demand Trends Q1 2024" report. This increase was driven by both a rise in the quarterly average prices by 11% and a volume growth that led to a 20% surge in value terms to Rs 75,470 crore. Jewelry demand grew by 4% to 95.5 tonnes, and investment in gold bars and coins jumped by 19% to 41.1 tonnes, compared to last year.
Market Data Hints at Massive Yen Intervention by Japan
Japan is actively prepared to address foreign exchange issues, emphasized Masato Kanda, a top currency official, in light of recent market data indicating a possible $35 billion intervention by the finance ministry to support the depreciating yen. Although Kanda did not confirm Monday's sudden yen rise as an intervention, traders and a former official suggested it was. Additionally, central bank projections expect increased yen receipts, hinting at substantial yen purchases, which usually settle in two days.
China's $170 Billion Gold Accumulation Stirs Taiwan Conflict Fears
China's recent accumulation of a $170 billion gold reserve, following a record 27-tonne purchase that raised its total to 2,262 tonnes, has sparked concerns over its preparations for potential conflict regarding Taiwan. The People’s Bank of China's strategic buying, which began in October 2022 and marks the longest gold stockpiling period since 2000, appears to be a precaution against Western sanctions in case of escalating tensions with Taiwan.