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FX COLUMN-Tax issues, election uncertainty leave sterling at risk

October 24, 2014 - reuters.com

-- Neal Kimberley is an FX market analyst for Reuters. The opinions expressed are his own -- By Neal Kimberley LONDON, Oct. 24 (Reuters) - Sunny September days that cut into British retail sales ID:nL9N0CA01R have ushered in taxing problems for the UK government's finances and could weigh the pound down versus the dollar. GBP= The budget position is worsening and that may unnerve investors, particularly before the May 2015 parliamentary election, the outcome of which remains impossible to call. The expected timing of any Bank of England interest rate increase has been pushed further and further into 2015, which may also make investors think twice before buying sterling. ID:nL6N0SH2A3 In fact, speculators' bets against sterling are at their most negative since the week of the Scottish referendum last month, which saw a late surge in support for the pro-independence camp. They had been well into positive territory for much of the year. IMM/FX Both this positioning data and options prices GBP1MRR= show investors less negative on the pound than they were just before the vote, but the bias to sell has been maintained. Retail sales volumes fell 0.3 percent on the month in September, their weakest performance since January, and grew 2.7 percent year-on-year. Economists had expected 0.1 percent monthly and 2.8 percent annual growth. The Office for National Statistics said mild weather had put shoppers off buying winter clothes. Whatever the reason, the lower the retail sales, the less sales tax is paid to the British authorities. That is not great news for British Finance Minister George Osborne, who is already struggling to cut Britain's budget deficit against a backdrop of lacklustre growth in government revenues. ID:nL6N0SG1SK September's government borrowing was 15.3 percent higher than a year earlier at 11.8 billion pounds, the ONS said. For the first six months of the financial year that began in April, public-sector net borrowing, excluding state-controlled banks, was 58.0 billion pounds, 10.3 percent up on 2013. While Britain's economic recovery since mid-2013 has been stronger than expected, it has not yet translated into burgeoning tax revenues. Slow wage growth has kept a lid on income tax. So has government policy to relieve the lower paid of income tax by raising the level at which it becomes payable. A decline by mortgage approvals in September to their lowest since July last year could mean fewer houses change hands, lowering the amount of stamp duty paid to the government. ID:nS8N0PK03K And the tax take from costly-to-extract North Sea oil may be reduced by falling crude prices CLc1 LCOc1 ID:nL5N0R91DE . MAY POLL Whoever takes power in Britain in May 2015 will, like the current coalition, have to address the budget deficit. The problem for investors is that there is absolutely no clarity about the make up of the next British government. The centre-right Conservative Party, the biggest party in the governing coalition, is worried it will lose support to the increasingly popular UK Independence Party, which wants to see Britain leave the European Union. That might seem to benefit the centre-left opposition Labour Party. But its vote could be hurt in Scotland by a swing toward the Scottish Nationalist Party. All in all, it is hard to predict who will take office in May 2015, let alone how the new government will address the challenge of getting British government finances into a better balance. From that perspective, the outlook for the pound against the dollar is not too rosy. (Editing by Nigel Stephenson; Reuters Messaging: neal.kimberley.thomsonreuters.com@reuters.net, Larry King) ((neal.kimberley@thomsonreuters.com)) Keywords: MARKETS FOREX/GBP

FOREX-Euro dips ahead of banks' stress test results, sterling firm

October 24, 2014 - reuters.com

(Updates, adds fresh details) * European bank stress test results awaited * Sterling rises after Q3 UK GDP data * Yen firm on safety bids after NY doctor tests positive for virus By Anirban Nag LONDON, Oct 24 (Reuters) - The euro slipped against the yen on Friday, with investors cautious ahead of the results on Sunday of stress tests on euro zone banks, with the single currency also lagging the pound after robust third-quarter UK growth data. Sterling GBP=D4 gained after figures showed the British economy growing in line with forecasts and at a healthy pace, providing relief for those worried that weakness overseas, especially in the euro zone, could drag more on activity. The euro was down 0.1 percent at 78.85 pence EURGBP=D4 and shed 0.1 percent against the yen to trade at 136.84 EURJPY=R . Against the dollar, the euro was steady at $1.2650 EUR= , having hit a two-week low of $1.2614 on Thursday. The euro zone's 130 biggest banks received the European Central Bank's final verdict on their finances on Thursday after a review aimed at drawing a line under persistent doubts about the health of the region's banking sector. They will not be made public until 1100 GMT on Sunday. Generally investors are expecting few failures and surprises, especially amongst household names, but going into the weekend, most preferred to be cautious about the euro. ID:nL6N0SI47Y "Evidence that a significant number of banks -- say more than 15 percent of total, among them large European lenders -- failed, and the capital shortfall is substantially above consensus of 25 billion euros, could fuel concerns about future credit growth and the economic outlook, weighing on the euro," said Valentin Marinov, currency strategist at Citi. "If only a handful of smaller banks fail and the capital shortfall does not exceed market estimates, this may help euro stabilise. The longer-term risks for euro could remain on the downside, however." YEN FIRM The yen was helped by safe-haven bids after news that a doctor had tested positive for the Ebola virus in New York City after returning from West Africa. ID:nL2N0SI2LX The first confirmed case in the city worried investors because of the possible repercussions in the global financial centre, although some said the market focus could soon shift. "The volatile move was a good chance for some to buy the dollar on dips," said Kaneo Ogino, director at Global-info Co in Tokyo, a foreign exchange research firm. "I think, next week the market will be more event-driven, with the FOMC and the Bank of Japan, so the downside should be limited," he said, adding that dollar support at 107 yen was likely to hold for now. The greenback was about 0.1 percent lower at 108.15 yen JPY= after earlier dropping as low as 107.86 yen. The U.S. Federal Reserve will meet next Tuesday and Wednesday, and the consensus view is that it will wrap up asset purchases under its third round of quantitative easing. The Bank of Japan appears set to resist pressure for more stimulus measures, or to accept its inflation target is unrealistically high, at its next policy meeting on Oct. 31, people familiar with its deliberations have told Reuters. ID:nL3N0SB47X The yen had faced overnight pressure after a Wall Street Journal report sparked talk of more easing. The article, citing people familiar with the Japanese central bank's thinking, said the BOJ saw "a much bigger possibility of inflation slipping below 1 percent" due to falling oil prices. Sterling rose against the dollar GBP=D4 to $1.6040, after the GDP data showed Britain's economy grew by 0.7 percent in the third quarter, down from 0.9 percent the quarter before, but in line with economists' expectations. Money markets continue to price in a first interest rate rise by the Bank of England around the middle of next year, potentially the first post-crisis hike by any big central bank. (Additional reporting by Lisa Twaronite; Editing by Catherine Evans) ((anirban.nag@thomsonreuters.com)(+44 20 7542 8399; Reuters Messaging: anirban.nag.thomsonreuters.com@reuters.net)) Keywords: MARKETS FOREX/

UPDATE 1-Russian assets slide ahead of S&P rating review

October 24, 2014 - reuters.com

(Adds comments, details throughout) MOSCOW, Oct 24 (Reuters) - Russian assets slid on Friday before a ratings review by Standard and Poor's, which might downgrade Russia's debt to 'junk' status, and a weekend parliamentary election in Ukraine that could enflame East-West tensions. The rouble was badly hit. It has already been bruised by strong demand for dollars from Russian companies shut out of international capital markets by Western sanctions over Ukraine, and is down 22 percent since the start of the year, its worst since 1998. By 1015 GMT, it was 0.64 percent weaker against the dollar at 41.97 RUBUTSTN=MCX . It also had lost 0.53 percent to trade at 53.08 versus the euro EURRUBTN=MCX after earlier hitting new lows against both currencies. The central bank intervened once more to defend the currency, with traders saying the bank has now spent close to $17 billion so far this month in market interventions. "A continuation of the negative mood on foreign markets, as well as the risk of a downgrade of Russia's sovereign rating, are forcing market participants to hurry to get rid of their roubles," analysts at Bank Zenit said in a note. The rouble was 0.6 percent weaker at 46.98 against the dollar-euro basket RUS=MCX the central bank uses to gauge the rouble's nominal exchange rate. The central bank said early on Friday it had shifted the rouble's trading band by 40 kopecks a day before, to 37.70 to 46.70 against the basket - the largest daily shift in the rouble's trading band so far this year. Once the rouble reaches the band's limits, the bank automatically conducts market interventions. ID:nL6N0SJ0HS Analysts said they do not think Russia's macroeconomic fundamentals warrant a downgrade and S&P is unlikely to impose one. But lingering political tensions around Ukraine and a dramatic collapse in prices for oil, one of Russia's chief exports, have fuelled market fears. S&P is expected to announce its verdict after the market closes. Its rating is already BBB-, just a step away from non-investment status, and carries a 'negative outlook', meaning there is at least a one-in-three chance of a downgrade at some point over the next two years. Russian shares also fell on Friday, hurt by the same broad-based risk aversion linked to the S&P decision and the decline in oil prices. Brent crude fell to $86 a barrel after a confirmed case of Ebola in New York raised fears of travel restrictions that could weaken jet fuel demand, and poor economic growth outlooks weighed on projected oil consumption. ID:nL3N0SJ258 The dollar-denominated RTS index .IRTS was down 0.9 percent at 1,026 points, 10 points away from its low for the year. The rouble-based MICEX .MCX was 0.3 percent lower at 1,368 points. Top bank Sberbank SBER.MM was 0.5 percent lower, while oil producer Rosneft ROSN.MM was down 0.3 percent. For rouble poll data see FXRUB FXEURRUB FXRUS For Russian equities guide see RU/EQUITY For Russian treasury bonds see 0#RUTSY=MM Russia in graphics: http://link.reuters.com/dun63s (Reporting by Alexander Winning and Lidia Kelly in Moscow and Marc Jones in London; Editing by Jason Bush, Larry King) ((alexander.winning@thomsonreuters.com; +7 495 775 1242; Reuters Messaging: alexander.winning.thomsonreuters.com@reuters.net)) Keywords: RUSSIA MARKETS/

RPT-Turkish markets steady after central bank keeps rates on hold

October 24, 2014 - reuters.com

(Repeats to additional subscribers) ISTANBUL, Oct 24 (Reuters) - Turkish markets were steady on Friday, a day after the central bank kept rates on hold and repeated its commitment to tight monetary policy until the inflation outlook improves. Significant dovish signals from the central bank over possible rate cuts could hurt the lira, but markets welcomed the central bank's decision. After a massive rate increase in January to halt a slide in the lira, the central bank reduced rates in May, June, July and August before leaving them unchanged in September. "The central bank's decision to keep rates unchanged impacted the lira positively and strengthened the bank's credibility," HSBC strategist Fatih Keresteci said in a note, adding that the currency could strengthen towards 2.20 against the dollar next week. The lira TRYTOM=D3 was trading at 2.2420 against the dollar by 1011 GMT from 2.2393 late on Thursday. The main share index .XU100 rose 0.09 percent to 79,565.28, slightly outperforming the broader emerging markets index .MSCIEF , which was down 0.21 percent. The 10-year benchmark bond yield tTR240724T0=IS fell to 8.84 percent from Thursday's 8.83 percent. (Reporting by Seda Sezer; Editing by Daren Butler and David Goodman) ((seda.sezer@thomsonreuters.com; +90 212 350 7062;)) Keywords: MARKETS TURKEY/

Turkish markets steady after central bank keeps rates on hold

October 24, 2014 - reuters.com

ISTANBUL, Oct 24 (Reuters) - Turkish markets were steady on Friday, a day after the central bank kept rates on hold and repeated its commitment to tight monetary policy until the inflation outlook improves. Significant dovish signals from the central bank over possible rate cuts could hurt the lira, but markets welcomed the central bank's decision. After a massive rate increase in January to halt a slide in the lira, the central bank reduced rates in May, June, July and August before leaving them unchanged in September. "The central bank's decision to keep rates unchanged impacted the lira positively and strengthened the bank's credibility," HSBC strategist Fatih Keresteci said in a note, adding that the currency could strengthen towards 2.20 against the dollar next week. The lira TRYTOM=D3 was trading at 2.2420 against the dollar by 1011 GMT from 2.2393 late on Thursday. The main share index .XU100 rose 0.09 percent to 79,565.28, slightly outperforming the broader emerging markets index .MSCIEF , which was down 0.21 percent. The 10-year benchmark bond yield tTR240724T0=IS fell to 8.84 percent from Thursday's 8.83 percent. (Reporting by Seda Sezer; Editing by Daren Butler and David Goodman) ((seda.sezer@thomsonreuters.com; +90 212 350 7062;)) Keywords: MARKETS TURKEY/

Ugandan shilling flat, seen weaker on end-month dollar demand

October 24, 2014 - reuters.com

KAMPALA, Oct 24 (Reuters) - The Ugandan shilling UGX= was steady on Friday in quiet trading, but was expected to weaken in the coming days due to dollar demand from importers, traders said. At 0923 GMT commercial banks quoted the shilling at 2,700/2,710, unchanged from Thursday's close. "I think the outlook points to further weakening... a lot of demand is still anticipated from importers," said Faisal Bukenya, head of market making at Barclays Bank. The shilling had lost ground to the dollar earlier this week, pressured by a strong appetite for hard currency from manufacturing and energy firms weighing against scarce inflows. Lack of any Treasury bill auctions this week had also weakened the local currency, traders said. The debt auctions attract inflows because offshore investors who participate have to convert their hard currency holdings to pay for their bids. In the year to date, the local currency is so far 6.7 percent weaker against the greenback. In a market note, Stephen Kaboyo of Alpha Capital Partners said the shilling was poised to touch further lows next week. "Going forward, the reality is that currency headwinds are unlikely to turn into currency tailwinds soon," he said. UGX Spot Rate..... UGX= Ugandan Shilling Money Guide.... UGX/1 Calculated Cross Rates.......... UGXX= Deposits..................... UGXDEPO= Deposits & Forwards............. UGXF= Uganda Equities Guide....... UG/EQUITY Uganda All Share Index........ .ALSIUG Shilling background ..... UGX/BKGDINFO Ugandan Debt Guide............ UG/DEBT All Uganda Bonds............. 0#UGTSY= Uganda T-Bills.............. 0#UGTSYS= Uganda Benchmark............. 0#UGBMK= Central Bank ................ BOUGINDEX Ugandan Contributor Index.... UG/CONT1 Uganda Coffee Prices....... COFFEE/UG01 (Reporting by Elias Biryabarema; Editing by James Macharia) ((elias.biryabarema@thomsonreuters.com; Tel. +256772887571; Reuters Messaging: elias.biryabarema.thomsonreuters.com@reuters.net)) Keywords: UGANDA CURRENCY/

EMERGING MARKETS-Emerging stocks heading for first gain in 7 weeks

October 24, 2014 - reuters.com

By Karin Strohecker LONDON, Oct 24 (Reuters) - Emerging stocks were on track to clock up their first weekly gains in seven weeks, though Russia bucked the trend with investors nervous ahead of a credit ratings decision that could see Moscow's debt cut to junk. MSCI's main emerging market index .MSCIEF ticked 0.2 percent lower, following U.S. futures and Asia where markets had been rattled by the news that a doctor returning to New York from Guinea had tested positive for Ebola. ID:nL2N0SI2LX Nonetheless, emerging stocks looked on track for their first modest weekly rise since early September. "We have seen some kind of stabilisation over the last week following the turmoil in emerging markets recently," said Stanislava Pravdova, emerging markets analyst at Danske Bank. "Though looking ahead we are still very cautious ... markets are still nervous about the health of the global economy." Russia remained a flashpoint for investors, and both stocks and the rouble looked poised to end the week in the red. Standard and Poor's was due to release its latest assessment of Russia's debt later in the day and could cut it to junk in what would bring a second downgrade from a major agency in as many weeks. ID:nL6N0SJ0HE Russia's rouble-denominated MICEX index .MCX fell 0.38, while the dollar-based RTS .IRTS lost 0.75 percent and touched its lowest level since March. The rouble weakened 0.57 percent on the day to a new low against the dollar. "Markets are completely right to be nervous," said Pravdova. "And oil prices are slightly inching down today, so that could add to the rouble being weighed down." ID:nL3N0SJ258 Emerging market fund flows over the past week showed Russian stocks saw outflows of 0.5 percent, compared with 0.36 percent for the EMEA region and a global outflow of 0.3 percent, according to analysts citing EPFR data. Elsewhere in Europe, Hungarian shares .BUX traded down 1.1 percent and hit a fresh seven-month low as plans for a new tax on internet providers weighed on the market. The Budapest stock index has lost almost 7 percent since the start of the year. For GRAPHIC on emerging market FX performance 2014, see http://link.reuters.com/jus35t For GRAPHIC on MSCI emerging index performance 2014, see http://link.reuters.com/weh36s For GRAPHIC on MSCI emerging Europe performance 2014, see http://link.reuters.com/jun28s For GRAPHIC on MSCI frontier index performance 2014, see http://link.reuters.com/zyh97s For CENTRAL EUROPE market report, see CEE/ For TURKISH market report, see .IS For RUSSIAN market report, see RU/RUB ) (Editing by Emelia Sithole-Matarise) ((karin.strohecker@thomsonreuters.com +442075427262))

Keywords: MARKETS EMERGING

Rouble weakens to new all-time low of over 42 rbls/dlr

October 24, 2014 - reuters.com

MOSCOW, Oct 24 (Reuters) - Russia's rouble RUB= weakened to a new all-time low of 42.01 roubles per dollar on the Moscow Exchange on Friday, hurt by risk aversion linked to an upcoming review of Russia's debt rating by Standard and Poor's and weaker oil prices. The rouble has been pressured for months by falling oil prices, Western sanctions over the Ukraine crisis and strong demand for dollars from Russian firms shut out of international capital markets. (Reporting by Alexander Winning, editing by Jason Bush) ((alexander.winning@thomsonreuters.com; +7 495 775 1242; Reuters Messaging: alexander.winning.thomsonreuters.com@reuters.net)) Keywords: RUSSIA ROUBLE/

Poland's c.bank head: zloty is undervalued but provides stimulus

October 24, 2014 - reuters.com

WARSAW, Oct 24 (Reuters) - Poland's central bank chief Marek Belka said on Friday the zloty currency was slightly undervalued, but it was providing a stimulus to the economy. Asked by reporters if he saw the zloty as slightly undervalued, Belka said: "Yes." "It is a stimulus for the economy," he added. (Reporting by Michal Janusz; Writing by Adrian Krajewski) ((adrian.krajewski@thomsonreuters.com; +48 22 653 97 09; Reuters Messaging: adrian.krajewski.thomsonreuters.com@reuters.net)) Keywords: CENBANK POLAND/ZLOTY

Sterling up on UK GDP, eyes first weekly rise in four

October 24, 2014 - reuters.com

By Jamie McGeever LONDON, Oct 24 (Reuters) - Sterling rose on Friday after figures showed the UK economy slowing but in line with forecasts and still growing at a healthy pace, a relief for those worried that weakness overseas could be a heavier drag on activity. The pound moved further above $1.60 and on a broader trade-weighted basis was on track for its first weekly rise in four. Britain's economy grew by 0.7 percent in the third quarter, down from 0.9 percent the quarter before but in line with economists' expectations, preliminary figures showed on Friday. That put annual growth at 3.0 percent, also down slightly but among the fastest rates in the developed world, prompting British finance minister George Osborne to tweet: "The UK is leading the pack in an increasingly uncertain global economy." Sterling money markets continued to price a first interest rate rise by the Bank of England around the middle of next year, potentially the first post-crisis hike by any big central bank. "With easing inflation providing a timely boost to real incomes, firms' employment and investment intentions still strong, and private sector balance sheets in improved health, the recovery seems unlikely to suddenly stall," said Samuel Tombs, senior UK economist at Capital Economics. At 0900 GMT sterling was up a quarter of a percent against the dollar at $1.6065 GBP= , and the euro was down a 10th of a percent at 78.78 pence EURGBP= . This put sterling on course for its first weekly gain in four against the single currency and on a trade-weighted basis. From a chart perspective, sterling looks set to close the week on a strong footing too. It is currently trading comfortably above a long-term technical support level at the 200-week moving average of $1.6016. There is a degree of uncertainty surrounding the strength of the economic recovery, however, and by extension the timing of the BoE's first rate hike. There are several reasons why British growth might continue to slow into the end of the year, including the recent burst of financial market volatility and growing signs of renewed stagnation in the euro zone. A persistently wide current account deficit, deteriorating public finances and weak wage growth that dampens consumer spending are also factors. Earlier this week, BoE chief economist Andy Haldane said he was "gloomier" on the economy, implying that interest rates could remain "lower for longer". ID:nL6N0SC0UG (Editing by Catherine Evans) ((jamie.mcgeever@thomsonreuters.com)(+ 44 207 542 8510)(Reuters Messaging: jamie.mcgeever.thomsonreuters.com@reuters.net)) Keywords: MARKETS STERLING/

London gold 1030 fix - Oct 24 - 1231.75 dlrs

October 24, 2014 - reuters.com

Siluanov says rating downgrade fears exaggerated

October 24, 2014 - reuters.com

MOSCOW, Oct 24 (Reuters) - Russia's Finance Minister Anton Siluanov said on Friday that fears of Russia's sovereign rating being downgraded are exaggerated. Rating agency Standard and Poor's is reviewing Russia's rating later on Friday, fuelling concerns that Russia could be downgraded to "junk" status. Siluanov also said that the amount of state aid that would be offered to oil producer Rosneft ROSN.MM would differ "significantly" from amount company has asked for. On Wednesday, Siluanov had said that Rosneft had requested more then 2 trillion ($49 billion) from the state's National Wealth Fund (NWF). "The overall volume of the NWF is a little more than 3 trillion roubles and not such a large part remains unused, inactive. Therefore, undoubtedly, the result of considering (the request) will differ significantly from the request," Siluanov said. (Reporting by Darya Korsunskaya, writing by Jason Bush; Editing by Lidia Kelly) ((jason.bush@thomsonreuters.com; +7 495 775 1242; Reuters Messaging: jason.bush.reuters.com@reuters.net)) Keywords: RUSSIA ECONOMY/RATINGS

Kenya's central bank seeks to mop up 4 bln shillings

October 24, 2014 - reuters.com

NAIROBI, Oct 24 (Reuters) - Kenya's central bank said on Friday it was in the money market to mop up 4 billion shillings ($44.77 million) in excess liquidity, using repurchase agreements (repo) and term auction deposits. By mopping up liquidity, the bank makes it relatively costlier to hold onto long dollar positions, which in turn helps strengthen the shilling KES= . (1 US dollar = 89.3500 Kenyan shilling) (Editing by James Macharia) ((james.macharia@thomsonreuters.com; Tel: +254 204 991 232 ; Reuters Messaging: james.macharia.thomsonreuters@reuters.net)) Keywords: KENYA MARKETS/CENBANK

London platinum/palladium 0945 fix - Oct 24

October 24, 2014 - reuters.com

India gold sales jump about 20 pct for Diwali - trade body

October 24, 2014 - reuters.com

By A. Ananthalakshmi SINGAPORE, Oct 24 (Reuters) - Gold sales in India during the festivals of Diwali and Dhanteras celebrated this week rose by about a fifth, a senior official at the country's biggest gold trade group said on Friday. Premiums in India, the second biggest buyer of bullion, jumped to $17-$18 an ounce this week, compared with $12 last week, on surging demand. Dhanteras, associated with Lakshmi - the goddess of wealth, and Diwali, the festival of lights, are both considered auspicious to buy gold. "Diwali sales across the country were very good. It was about 20 percent higher compared with last year," Bachhraj Bamalwa, director at the All India Gems and Jewellery Trade Federation, told Reuters. The trade body represents more than 300,000 jewellers. The strong demand from India could support global gold prices XAU= . GOL/ India set a record high import duty on gold last year to curb its trade deficit, and made it necessary for importers to re-export a fifth of all their purchases. The moves contained imports into the country, with the resulting supply shortage sending local premiums to about $160 an ounce over the global benchmark at one point. Some of the rules were eased earlier this year, leading to higher imports and a fall in local prices. "This year prices were low, sentiment was good and we have a stable government in the centre; all of these helped boost sales," Bamalwa said, referring to this year's election of Narendra Modi as the prime minister. Though the major gold buying festivals of the year are over, Bamalwa said sales could continue to be strong due to the wedding season that will extend until early next year. In anticipation of strong demand during the festivals, India had imported $3.75 billion worth of gold in September - a 450 percent jump from the same period last year. The jump in imports weighed on the country's trade deficit again, sparking fears that the government could tighten the screws again on overseas purchases of gold. India's finance minister was quoted in local media as saying that he could look at curbs on gold imports after the festive season. ID:nD8N0RJ00R Any further curbs could hurt imports and push up premiums, Bamalwa said. In other parts of Asia, buying interest for gold was quiet, with premiums slipping in some regions, dealers said. "I think prices have to fall toward or below $1,200 before people come into the physical markets again," said a trader in Hong Kong, where premiums slipped to $1.10-$1.20 an ounce from about $1.50 last week. In China, premiums fell to about $1.50 an ounce on Friday from $2-$3 an ounce. GOLD/ASIA1 (Editing by Anand Basu) ((ananthalakshmi.as@thomsonreuters.com; +65 6870 3726; Reuters Messaging: ananthalakshmi.as.thomsonreuters.com@reuters.net)) Keywords: INDIA GOLD/DEMAND

Sterling edges up after in-line UK GDP data

October 24, 2014 - reuters.com

LONDON, Oct 24 (Reuters) - Sterling rose to the day's high against the dollar on Friday, after data showed the British economy expanding in line with expectations in the third quarter and wrong-footing some who had positioned for a softer reading. Gross domestic product expanded by 0.7 percent in the July-September period, compared with 0.9 percent in the second quarter. Growth slowed as services output growth eased and manufacturing expanded at its weakest pace in 18 months. ECONGB Sterling GBP=D4 rose 0.15 percent to $1.6056 from around $1.6032 beforehand. The euro edged lower to 78.82 pence EURGBP=D4 , down from 78.90 pence before the data was released. Britain's FTSE 100 .FTSE briefly extended losses and was down 0.3 percent at 6,396.78 points by 0837 GMT. (Reporting by Anirban Nag and Atul Prakash, editing by Nigel Stephenson) ((anirban.nag@thomsonreuters.com; +44 20 7542 8399 ; Reuters Messaging: anirban.nag.thomsonreuters.com@reuters.net)) Keywords: MARKETS FOREX/STERLING

Burundi tea revenues fall 6 pct pct in first 9 months of 2014

October 24, 2014 - reuters.com

BUJUMBURA, Oct 24 (Reuters) - Burundi's revenues from its tea exports fell 6 percent in the first nine months to September from the same period a year ago due to higher volumes of the commodity on the global market, a tea board official said on Friday. Tea is Burundi's largest hard currency earner after coffee and supports some 300,000 smallholder farmers in the landlocked country of nearly 10 million people. The country's state-run tea board (OTB), earnings dropped to $16.7 million in the period, while export volumes rose 5.2 percent to 7,743,972 kg from last year. "Overall earnings as well as the export price for Burundi's tea dipped due to high quantities of tea available on the regional market, especially higher volumes from Kenya," said OTB's export official, Joseph Marc Ndahigeze. Kenya is the top tea producer in the East African region, as well as the world's leading exporter of black tea. Revenues from tea exports by Kenya have tumbled during the 2013/14 financial year due to a global glut of the commodity. ID:nL6N0RI29Q Burundi sells 80 percent of its tea through a regional weekly auction held in the Kenyan port city of Mombasa. The average export price per kg for Burundi's tea declined to $2.16 in the nine months to September from $2.42, the tea board said in its report. In 2013, revenue from the commodity dropped to $20.8 million from $26.3 million in 2012, due to weaker global prices. (Reporting by Patrick Nduwimana; Editing by James Macharia) ((james.macharia@thomsonreuters.com; Tel: +254 204 991 232 ; Reuters Messaging: james.macharia.thomsonreuters@reuters.net)) Keywords: BURUNDI TEA/

FOREX-Euro dips on caution ahead of banks' stress test results, yen firm

October 24, 2014 - reuters.com

(Recasts, adds fresh quotes, details) * European bank stress test results awaited * Sterling eyes Q3 UK GDP data * Yen firm on safety bids after NY doctor tests positive for virus By Anirban Nag LONDON, Oct 24 (Reuters) - The euro slipped on Friday, as investors were cautious ahead of the results on Sunday of stress tests on euro zone banks, while the yen was underpinned by safe-haven flows due to a fresh Ebola scare in New York. In the European session, sterling GBP=D4 is likely to be in focus before British third-quarter gross domestic product numbers. Forecasts are for growth to moderate in the third quarter, which would bolster expectations that interest rates will stay lower for longer. ECONGB The euro was slightly lower against the dollar at $1.2638 EUR= , not far from a two-week low struck on Thursday. It fetched 136.70 yen EURJPY=R , down about 0.1 percent. The euro zone's 130 biggest banks received the European Central Bank's final verdict on their finances on Thursday after a review aimed at drawing a line under persistent doubts about the health of the region's banking sector. They will not be made public until 1100 GMT on Sunday. Generally investors are expecting few failures and surprises, especially amongst household names, but going into the weekend, most preferred to be cautious about the euro. ID:nL6N0SI47Y "Evidence that a significant number of banks -- say more than 15 percent of total-- among them large European lenders, failed and the capital shortfall is substantially above consensus of 25 billion euros could fuel concerns about future credit growth and the economic outlook, weighing on the euro," said Valentin Marinov, currency strategist at Citi. "If only a handful of smaller banks fail and the capital shortfall does not exceed market estimates, this may help euro stabilise. The longer-term risks for euro could remain on the downside, however." YEN FIRM The yen was helped by safe-haven bids after news that a doctor had tested positive for the Ebola virus in New York City after returning from West Africa. ID:nL2N0SI2LX The first confirmed case in the city worried investors because of the possible repercussions in the global financial centre, although some said the market focus could soon shift. "The volatile move was a good chance for some to buy the dollar on dips," said Kaneo Ogino, director at Global-info Co in Tokyo, a foreign exchange research firm. "I think, next week the market will be more event-driven, with the FOMC and the Bank of Japan, so the downside should be limited," he said, adding that dollar support at 107 yen was likely to hold for now. The greenback was about 0.1 percent lower at 108.15 yen JPY= after earlier dropping as low as 107.86. The U.S. Federal Reserve will meet next Tuesday and Wednesday, and the consensus view is that the central bank will decide to wrap up its asset purchases under its third round of quantitative easing. The BOJ appears set to resist pressure for more stimulus measures or to accept its inflation target is unrealistically high at its next policy meeting on Oct. 31, people familiar with its deliberations have told Reuters. ID:nL3N0SB47X The yen had faced overnight pressure after a Wall Street Journal report sparked talk of more easing from the Bank of Japan. The article, citing people familiar with the central bank's thinking, said the BOJ saw "a much bigger possibility of inflation slipping below 1 percent" due to falling oil prices. Sterling was flat against the dollar GBP=D4 and the euro EURGBP=D4 , but could come under pressure if GDP numbers miss estimates. Sterling has eased against the dollar this week hurt by soft economic data and dovish minutes from the Bank of England. (Additional reporting by Lisa Twaronite; Editing by Catherine Evans) ((anirban.nag@thomsonreuters.com)(+44 20 7542 8399; Reuters Messaging: anirban.nag.thomsonreuters.com@reuters.net)) Keywords: MARKETS FOREX/

CNH Tracker- China's overseas investment schemes set to freshen offshore yuan pool

October 24, 2014 - reuters.com

By Michelle Chen HONG KONG, Oct 24 (Reuters) - China is studying pilot schemes that will allow domestic investors to make overseas investments using the Chinese currency, a move that could pump fresh oxygen into the stagnant offshore yuan pool. "The central bank is designing RQDII (Renminbi Qualified Domestic Institutional Investor) and QDII2 schemes to enable investment in offshore markets," said Wang Dan, deputy director general in the monetary policy department at the People's Bank of China. Yuan deposits in Hong Kong, the biggest offshore yuan hub, stood at 937 billion yuan ($153 billion) at the end of August, the lowest level since February. The yuan pool expanded much more slowly this year than market participants expected, mainly because of new ways for foreign investors to use yuan in China to buy high-yielding assets, as well as yuan being cheaper in offshore markets. As an example of foreign investors' interest in onshore yuan assets, the 270 billion yuan Renminbi Qualified Foreign Institutional Investor (RQFII) quota granted to Hong Kong was exhausted in less than three years. The accumulation of yuan deposits outside of China has for years relied heavily on cross-border trade settlement, with some additional flows from Renminbi overseas direct investment (ODI) and Chinese travellers converting currency overseas. It worked well in the first few years of the offshore yuan market, given the premium the so-called CNH enjoyed over its onshore CNY counterpart, encouraging companies to bring yuan funds to the former British colony. However, as the premiums have reversed in the past few months, the measure that allows Chinese investors to use yuan to buy shares and other investment products abroad will no doubt open a crucial new channel for the "redback" to flow into offshore markets. Offshore yuan reserves will have to reach 11 trillion yuan for the currency to achieve one-third of the US dollar's international status within 15 years, based on the experience of internationalising the dollar, the Hong Kong Financial Services Development Council said in a report. It is also expected to help balance international payments for the world's second-largest economy, which has recorded surpluses in its current and capital accounts for years. The surplus in the two accounts amounted to $80.5 billion and $77.8 billion, respectively, for the first half of the year, the State Administration of Foreign Exchange (SAFE) said. "The size of overseas assets that mainland China holds is not only smaller than developed countries and some emerging economies, but these assets are highly concentrated in foreign reserves," said Nathan Chow, an analyst at DBS in Hong Kong. During next week's Reuters China Summit, Reuters journalists will interview some of the region's leading business figures and decision makers on a range of cross-border investment issues, generating exclusive stories available first to Thomson Reuters clients. Get the latest updates by using the Eikon RSUM code or online at: http://www.reuters.com/summit/China14 WEEK IN REVIEW: * Hang Seng Indexes Company and Markit announced the launch of the Hang Seng Markit iBoxx offshore RMB bond index on Monday, covering 260 bonds from 150 issuers with an aggregated notional value of more than 300 billion yuan. * A multibillion-dollar currency swap between Argentina and China will launch in November, bolstering the South American country's diminished foreign reserves, the central bank chief was quoted as saying in a local paper. ID:nL2N0SE0JS * Citi announced the implementation of its first RMB cross-border auto sweeping structure from China to London, which allows it to have live automated RMB cross-border sweeping capabilities in China, Hong Kong, Singapore and London. A sweeping system enables a company to integrate its daily working capital balances into its global cash pool. * The United Kingdom sold the first foreign sovereign offshore yuan bond last Tuesday. The 3 billion yuan three-year bond was priced at 2.7 percent, well inside the initial guidance of around 2.9 percent. CHART OF THE WEEK: China's inbound and outbound investment schemes: http://reut.rs/1yiHVgs RECENT STORIES: CNH Tracker- Yuan payments progress may slow due to bureaucracy ID:nL3N0S41GR More stories about the CNH market CNH Daily onshore yuan reports CNY/ Daily China money market reports CN/ Offshore yuan rate CNH= Onshore yuan rate CNY=CN Offshore yuan dealt CNH=D3 Onshore yuan on CFETS CNY=CFXS THOMSON REUTERS SPEED GUIDES CN/OFFSHORE CN/HIGHLIGHT NDF/3 NDF/4 0#CNHBOND (1 US dollar = 6.1174 Chinese yuan) (Editing by Eric Meijer) ((michelle.chen@thomsonreuters.com; +852 2843 6587; Reuters Messaging: min.chen.thomsonreuters.com@reuters.net)) Keywords: MARKETS OFFSHORE/YUAN

TABLE-Foreign trading in South Korean stocks

October 24, 2014 - reuters.com

FOREX-Yen rallies on safe-haven bids on news of New York Ebola case

October 24, 2014 - reuters.com

* U.S. stock futures drop after NY doctor tests positive for virus * European bank stress test results, Ukraine election awaited * Wall Street rally, higher U.S. yields lifted dollar overnight By Lisa Twaronite and Ian Chua TOKYO/SYDNEY, Oct 24 (Reuters) - The yen pulled away from two-week lows against the dollar on Friday on safe-haven bids after news that a doctor had tested positive for the Ebola virus in New York City after returning from West Africa. ID:nL2N0SI2LX The first confirmed case in the city worried investors because of the possible repercussions in the global financial centre, although some said the market focus could soon shift. "The volatile move was a good chance for some to buy the dollar on dips," said Kaneo Ogino, director at Global-info Co in Tokyo, a foreign exchange research firm. "I think, next week the market will be more event-driven, with the FOMC and the Bank of Japan, so the downside should be limited," he said, adding that dollar support at 107 yen was likely to hold for now. The greenback was about 0.3 percent lower at 107.98 yen JPY= after earlier dropping as low as 107.86. S&P e-mini futures ESc1 were off their lows but still down 0.3 percent. Adding to the cautious mood, Chinese home prices fell for a fifth straight month in September, wiping out a year's gains and raising expectations the government would have to add stimulus to cushion the blow to the economy. ID:nL3N0SJ1DE The U.S. Federal Reserve will meet next Tuesday and Wednesday, and the consensus view is that the central bank will decide to wrap up its asset purchases under its third round of quantitative easing. The BOJ appears set to resist pressure for more stimulus measures or to accept that its inflation target is unrealistically high at its next policy meeting on Oct. 31, people familiar with its deliberations have told Reuters. ID:nL3N0SB47X The yen had faced overnight pressure after a Wall Street Journal report sparked talk of more easing from the Bank of Japan. The article, citing people familiar with the central bank's thinking, said the BOJ saw "a much bigger possibility of inflation slipping below 1 percent" due to falling oil prices. "We still see a stronger dollar, and weaker yen," said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo. "We don't expect additional easing from the BOJ, and the U.S. economy remains steady, and the U.S. Fed is likely to hike U.S. rates in 2015, so we have not changed our basic scenario." The yen also faced pressure on Thursday from a Wall Street rally, as upbeat earnings from the likes of Caterpillar CAT.N and 3M MMM.N helped drive U.S. stocks .SPX to a two-week high. That in turn lifted U.S. Treasury yields. Higher yields usually have the effect of boosting the greenback against the yen, and it duly climbed as high as 108.36 yen JPY= overnight, gaining more than 1 percent on Thursday. But the yield on benchmark 10-year notes US10YT=RR slipped to 2.246 percent in Asian trade after the Ebola news, compared to Thursday's U.S. close of 2.277 percent. The euro fetched 136.72 yen EURJPY=R , down about 0.1 percent, having briefly popped above 137.00 overnight for the first time since Oct. 10. The Australian dollar dipped about 0.2 percent to 94.65 yen AUDJPY=R after coming within a whisker of 95.00 yen overnight, reaching a high last seen on Oct. 9. Against the U.S. dollar, the euro edged up about 0.1 percent to $1.2661 after dipping to a two-week low of $1.2614 EUR= on Thursday. Investors are likely to be cautious ahead of parliamentary election in Ukraine on Sunday, as well as that day's release of the European Central Bank's stress test results on the euro zone's 130 biggest banks. ID:nL6N0SI47Y (Editing by Shri Navaratnam and Alan Raybould) ((lisa.twaronite@thomsonreuters.com)(+81 3 6441 1870; Reuters Messaging: lisa.twaronite.thomsonreuters.com@reuters.net)) Keywords: MARKETS FOREX/

South Africa's rand holds onto gains, seeking direction

October 24, 2014 - reuters.com

JOHANNESBURG, Oct 24 (Reuters) - South Africa's rand held near recent highs against the dollar early on Friday, looking for direction after hitting the 10.92 area currently serving as a resistance barrier for rand bulls. Dealers said the rand was outperforming its peers after a well-received interim budget from the finance minister earlier this week, however the strong gains could overstretch the currency and result in a bounce back to weaker levels. "The dollar is temporarily struggling against the euro and Australian dollar, which could see dollar/rand dip towards 10.86 first before the bottom we have been looking for materialises," said Judy Padayachee, technical strategist for Barclays Africa, adding she was looking for the 11.39-11.50 area in the next two months. The rand was slightly firmer at 10.9625 to the dollar at 0625 GMT, off a 10.9755 close, its first close firmer than the psychologically key 11 level since September. ZAR=D3 It will need to break through the 10.92 area to try for stronger levels at 10.90. Yields on government bonds tracked the sideways move in the currency, ticking up 1.5 basis points to 7.93 percent on the 2026 bond to trade within the week's range. The bond is coming off a year high hit on Thursday. ZAR186= South Africa's Treasury will sell up to 800 million rand ($73.00 million) in 2022 ZAR212= , 2038= ZAI2038= and 2025 ZAI2025= CPI-linked bonds in the session. Dealers expect the positive momentum in bonds this week will result in a decent auction result. Results are due after auction closes at 0900 GMT. (1 US dollar = 10.9591 South African rand) (Reporting by Xola Potelwa; editing by David Dolan) ((xola.potelwa@thomsonreuters.com; +27 11 775 3098; Reuters Messaging: xola.potelwa.thomsonreuters.com@reuters.net)) Keywords: MARKETS SAFRICA/CURRENCY

Czech Republic - Factors To Watch on Oct 24

October 24, 2014 - reuters.com

Sri Lanka rupee forwards slip on importer dollar demand pre-budget

October 24, 2014 - reuters.com

COLOMBO, Oct 24 (Reuters) - Sri Lankan rupee forwards weakened slightly as importers' dollar demand and banks' short-covering weighed on the local currency although the central bank prevented a sharp fall before Friday's 2015 budget announcement, dealers said. President Mahinda Rajapaksa, also the finance minister, is expected to present a populist election budget for 2015 that manages to contain borrowing mainly to an expected pickup in the pace of economic growth. ID:nL3N0SG5V1 The budget speech will begin at 0800 GMT. "There is importer dollar demand and some banks are buying dollars to cover their short positions. But largely the market is waiting for the budget," a currency dealer said. The spot currency LKR=LK was quoted at 130.80/131.10 per dollar but not traded, dealers said. It was not traded during the week after closing at 130.60/80 on Oct. 17. The three-day forwards, or spot-next, actively traded in the absence of spot, were at 131.05/131.15 per dollar at 0617 GMT, tad weaker than Thursday's close of 131.00/05. Exporters were reluctant to sell dollars ahead of the budget announcement, dealers said. Dealers said the central bank's moral suasion was not seen on the spot, but it persuaded some banks not to trade the spot-next below 131.10. Central bank officials were not available for comment. Nandalal Weerasinghe, a central bank deputy governor, said on Monday the monetary authority would intervene to prevent short-term volatility in the rupee and said moral suasion was to prevent sharp changes. Weerasinghe said the central bank has been preventing a sharp appreciation in the currency by intervening to maintain some stability over the last 12 months. Sri Lanka's stock market index .CSE was up 0.2 percent, or 13.93 points, at 7,203.44 as of 0625 GMT. Turnover was 397.5 million rupees ($3.04 million), with 27.6 million shares changing hands. (1 US dollar = 130.9000 Sri Lankan rupee) (Reporting by Shihar Aneez; Editing by Richard Borsuk) ((shihar.aneez@thomsonreuters.com; +94-11-232-5540; Reuters Messaging: shihar.aneez.thomsonreuters.com@reuters.net twitter:@shiharaneez)) Keywords: MARKETS SRI LANKA/

Russian assets weaker at opening ahead of S&P rating review

October 24, 2014 - reuters.com

MOSCOW, Oct 24 (Reuters) - Russian assets weakened at market opening on Friday, with investors nervous ahead of a ratings review by Standard and Poor's, which could potentially downgrade Russia's debt to 'junk' status, and a weekend parliamentary election in Ukraine. At 0625 GMT, the rouble was 0.18 percent weaker against the dollar at 41.79 RUBUTSTN=MCX and lost 0.21 percent to trade at 52.91 versus the euro EURRUBTN=MCX . That left the currency 0.19 percent weaker at 46.79 against the dollar-euro basket RUS=MCX the central bank uses to gauge the rouble's nominal exchange rate, implying the bank had already intervened to defend the currency in early trade. The central bank said early on Friday that it had shifted the rouble's trading band by 40 kopecks a day earlier, the largest daily shift in the rouble's trading band so far this year, to 37.70 to 46.70 against the basket. Once the rouble goes beyond the limits of its trading band, the bank automatically conducts market interventions. "The market will be watching closely for the S&P review of its rating on Russia's sovereign credit following the recent downgrade from Moody's," analysts at Sberbank CIB said in a note. Analysts at Sberbank CIB and ING Bank said they expected Russia's current BBB- rating to be affirmed, however. Russian assets have been shaken by falling oil prices and risk aversion over the Ukraine crisis, while the rouble has been hurt by strong demand for dollars from Russian firms shut out of international capital markets. Russian shares were also slightly weaker at the opening. The dollar-denominated RTS index .IRTS was down 0.1 percent at 1,034 points, while its rouble-based peer MICEX .MCX was flat at 1,373 points. For rouble poll data see FXRUB FXEURRUB FXRUS For Russian equities guide see RU/EQUITY For Russian treasury bonds see 0#RUTSY=MM Russia in graphics: http://link.reuters.com/dun63s (Reporting by Alexander Winning and Lidia Kelly, editing by Jason Bush) ((alexander.winning@thomsonreuters.com; +7 495 775 1242; Reuters Messaging: alexander.winning.thomsonreuters.com@reuters.net)) Keywords: RUSSIA MARKETS/

BRIEF-Drdgold posts 10 pct rise in quarterly gold production

October 24, 2014 - reuters.com

Oct 24 (Reuters) - Drdgold Ltd DRDJ.J : * Revenue increased by 18 sequentially to R528.5 million * Q1 gold production up 10 pct to 37 005 oz * AISC down 9 pct to $1 237/oz * Q1 EBITDA up 87 pct to R48.0 million * Q1 operating profit up 11 pct to R79.7 million * Q1 gold sold was 17 pct higher at 38 291oz Source text for Eikon: ID:nJseX0001a Further company coverage: DRDJ.J ((Bangalore Newsroom +91 806 749 1130)) Keywords: DRDGOLD /BRIEF

INDICATORS - Kazakhstan - Oct 24

October 24, 2014 - reuters.com

S.Korean shares edge lower on NY Ebola scare; won inches lower

October 24, 2014 - reuters.com

(For the midday report, please click ID:nL3N0SJ1O2 ) SEOUL, Oct 24 (Reuters) - South Korean shares reversed early gains to edge lower on Friday, after the market was spooked by reports that a doctor who returned to New York City from West Africa has tested positive for Ebola. The Korea Composite Stock Price Index (KOSPI) .KS11 shed 0.31 percent to close at 1,925.69, wrapping up the trading week with a 1.3 percent gain from last Friday. The South Korean won KRW= was a shade lower against the dollar as the greenback found support from upbeat U.S economic data, although falls were limited following the Ebola scare in New York City. The local currency KRW=KFTC was quoted at 1,057.5 to the dollar at the conclusion of onshore trade, compared with Thursday's close of 1,056.1. (Reporting by Joonhee Yu; Editing by Anupama Dwivedi) ((joonhee.yu@thomsonreuters.com; 822 3704 5643; Reuters Messaging: joonhee.yu.thomsonreuters.com@reuters.net)) Keywords: MARKETS SOUTHKOREA/

UPDATE 1-Massive gold nugget goes on sale for $400,000 in San Francisco

October 24, 2014 - reuters.com

(Adds common weight of nugget, will be on display until Sunday) By Alex Dobuzinskis Oct 23 (Reuters) - A 5-pound gold nugget dug up in Northern California this past summer and believed to be the largest privately held piece of its kind from the state was offered for sale at $400,000 on Thursday. The chunk of gold, which is the size of a misshapen baked potato and weighs 72 troy ounces, or about 5 pounds (2.3 kg), is on display at the San Francisco Fall Antiques Show from Thursday through Sunday, said David McCarthy, senior numismatist for Kagin's Inc. The California-based numismatic firm was billing it as the "Butte Nugget" because it was unearthed in Butte County in Northern California by a man prospecting for gold on public land in July, according to the company. The firm did not identify the man for whom it is selling the nugget or where in the county it was discovered. "There are bigger ones in museums and there were bigger ones certainly near the Gold Rush period, but today it's believed to be the largest gold nugget in private hands in California," said Donald Kagin, president of Kagin's. McCarthy, who evaluated the find, said the man who found it photographed its excavation step by step and took McCarthy to the spot where it was unearthed, but not before blindfolding him. "I've seen the pictures of the nugget being slowly exposed as he was digging it up, it was very obvious it had been in the ground for a very long time," McCarthy said. Kagin's earlier this year offered for sale pieces from a trove of rare Gold Rush-era coins that were discovered in California last year by a couple walking their dog and assessed at more than $10 million. Many of the coins were offered on Amazon.com. Adrian Ash, head of research at gold and silver exchange company BullionVault, said in an email the gold content was largely irrelevant and that the nugget's value derived from its unusual size. "Unlike a big diamond, its price would be destroyed by working it into an objet d'art," Ash said. McCarthy said that if someone agreed to pay the $400,000 asking price for the nugget before Sunday, he would seek to have it remain on display until then. (Reporting by Alex Dobuzinskis in Los Angeles; Editing by Dan Whitcomb, Lisa Shumaker and Peter Cooney) ((alex.dobuzinskis@thomsonreuters.com; 1-213-955-6781; Reuters Messaging: alex.dobuzinskis.thomsonreuters.com@reuters.net)) Keywords: USA GOLD/SANFRANCISCO

BRIEF-Eldorado Gold gives drilling update

October 24, 2014 - reuters.com

Oct 23 (Reuters) - Eldorado Gold Corp ELD.TO : * Announces drilling update * At white mountain, over 7,500 metres of exploration drilling, over 12,400 metres of delineation drilling are completed year-to-date * At the jinfeng operation, year-to-date, a total of 3,600 metres of drilling has been completed * Has completed over 6,000 metres of exploration drilling this year at our piavitsa project in the halkidiki mining district, Greece * Source text for Eikon ID: * Further company coverage ELD.TO ((Bangalore Newsroom; +1 646 223 8780))

Massive gold nugget goes on sale for $400,000 in San Francisco

October 23, 2014 - reuters.com

Oct 23 (Reuters) - A huge gold nugget dug up in Northern California earlier this year that is believed to be the largest privately held piece of its kind from the state was offered for $400,000 on Thursday, said the president of the company behind the sale. The chunk of gold, which is larger than a human palm and weighs 72 troy ounces, was being put on sale at the San Francisco Fall Antiques Show at Fort Mason on Thursday afternoon, said Donald Kagin, president of California-based numismatic firm Kagin's Inc. Kagin's Inc was billing it as the "Butte Nugget" because it was unearthed in Butte County in Northern California by a man prospecting for gold on public land in July, according to the company. The firm did not identify the man or say where exactly in the county the nugget was discovered. "There are bigger ones in museums and there were bigger ones certainly near the Gold Rush period, but today it's believed to be the largest gold nugget in private hands in California," Kagin said. David McCarthy, the senior numismatist for Kagin's Inc who evaluated the find, said the man who found it photographed its excavation step-by-step. "I was able to use his pictures to positively identify the location where the gold was discovered," McCarthy said in a statement. "Nuggets like this don't come along every day. I really didn't believe that I would see a California nugget of this size unearthed during my lifetime." Kagin's Inc earlier this year offered for sale pieces from a trove of rare Gold Rush-era coins discovered in California last year by a couple walking their dog and worth more than $10 million. Many of the coins were offered on Amazon.com. Adrian Ash, head of research at gold and silver exchange company BullionVault, said in an email that the gold content is largely irrelevant to the rarity value of the large nugget Kagin's Inc was set to offer for sale on Thursday. "Unlike a big diamond, its price would be destroyed by working into an objet d'art," Ash said. (Reporting by Alex Dobuzinskis in Los Angeles; Editing by Dan Whitcomb and Lisa Shumaker) ((alex.dobuzinskis@thomsonreuters.com; 1-213-955-6781; Reuters Messaging: alex.dobuzinskis.thomsonreuters.com@reuters.net)) Keywords: USA GOLD/SANFRANCISCO

UPDATE 2-Hochschild Q3 output falls, but on track for annual target

October 23, 2014 - reuters.com

* Q3 attributable production 4.8 mln silver equiv ounces * Keeps FY production target of 21 mln silver equiv ounces * Sees further cost savings next year * Shares fall as much as 3.6 pct (Rewrites first paragraph, adds detail) By Esha Vaish Oct 23 (Reuters) - Peruvian precious metals miner Hochschild HOCM.L posted a decline in third-quarter production, hit by lower grades at its Pallancata mine and a two-week strike at its Arcata asset, but said was it was still on track to reach its annual target. The company, which gets the bulk of its production from underground mines in southern Peru, said attributable production dropped to 4.8 million silver equivalent ounces in the three months ended Sept. 30, from 6.3 million silver equivalent ounces a year earlier. ID:nRSW0641Va However, thanks to strong output in the first half, Hochschild kept its production target of 21 million silver equivalent ounces for the year. "Everybody was thinking that they're going to beat their numbers quite strongly for the year, and it doesn't look like it's going to be quite so strong," Numis Securities analyst Cailey Barker told Reuters. Analysts on average are expecting full-year EBITDA of $155.9 million, on revenue of $516.18 million, according to Thomson Reuters I/B/E/S. Last year, a sudden and sharp drop in bullion prices to their lowest in a decade knocked miners cold, putting their balance sheets under stress and forcing many of them to slash costs to limit the damage. Hochschild responded by halting dividend payments, slashing directors' salaries and cutting costs at its mines -- measures that ultimately helped it exceed its target of saving $200 million this year. ID:nL4N0PR20D The company, which also operates in Argentina, said on Thursday it had already saved about $270 million so far this year and expected all-in sustaining costs per silver equivalent ounce to fall by 0-5 percent. Further cost savings of about $50 million has been identified for 2015, said Hochschild. Barker said given the weakness in prices, the company's 2015 savings needed to be close to the 2014 amount, although it would be a "tall order for them". Silver XPT= , which lost 36 percent in value in 2013, has fallen yet another 8 percent since the beginning of the year. Gold XAU= has risen 2.9 percent, barely denting the impact of the 28 percent tumble it took last year. "They're still under water at these prices ... It's all predicated on Inmaculada coming in and what sort of costs that will eventually come out with," analyst Barker said. Although Hochschild had expected its Inmaculada project in southern Peru to be commissioned at the end of the year, analysts at Barclays said the company was still a "bit behind" on plant construction. "It appears first production will probably be slightly delayed compared to the original (plan of) Q4 2014," Barclays analysts said, but kept their price target of 163 pence on Hochschild stock. The company's shares, which have been trading near their lowest in more than five years, closed down more than 3 percent. They have shed 13 percent in value since the start of the year. (Reporting by Esha Vaish in Bangalore; Additional reporting by Silvia Antonioli in London; Editing by Gopakumar Warrier and Mark Potter) ((esha.vaish@thomsonreuters.com; within UK +44 20 7542 1810, outside UK +91 80 6749 1136; Reuters Messaging: esha.vaish.thomsonreuters.com@reuters.net)) Keywords: HOCHSCHILD MIN RESULTS/

London gold 1500 fix - Oct 23 - 1232.75 dlrs

October 23, 2014 - reuters.com

Swiss gold referendum holds risks for franc

October 23, 2014 - reuters.com

* "Yes" vote could see volatility in Swiss franc * Right-wing Swiss party opens campaign on Thursday * Share of gold in SNB's reserves has been falling By Anirban Nag and Alice Baghdjian LONDON/ZURICH, Oct 23 (Reuters) - The Swiss franc has been a haven of relative calm in choppy currency markets in recent weeks, but a referendum next month on "saving" Switzerland's gold reserves could change all that. The Nov. 30 vote, called by the right-wing Swiss People's Party (SVP), is aimed at preventing the Swiss National Bank from offloading its gold holdings. It would also require the central bank to bring back gold parked abroad and hold at least 20 percent of its assets in gold. The SNB opposes the initiative, saying it would curb its ability to shape monetary policy. The central bank now holds less than 8 percent of its assets in gold, so a "Yes" vote - which is possible but not likely, polls suggest - would probably send gold prices XAU= rocketing. The SNB would have to buy about 1,500 tonnes over the next five years. For currency investors, though, the new requirement could generate volatility in the franc and threaten the three-year-old cap on its value against the euro, which the SNB imposed to prevent the Swiss currency from appreciating, ward off deflation and boost growth. The bank now invests the bulk of its currency reserves of around 500 billion francs in euros and about a quarter in dollars. The share of gold holdings has been coming down over the past few years as it stepped up its intervention in the currency market. A "Yes" vote would see it more than double the quantity of gold holdings. Given the preponderance of euros in its FX reserves, that would most likely entail selling euros. The single European currency EUR= would probably drop, threatening the SNB's 1.20 francs per euro floor EURCHF= , analysts said. "Even if considered a remote tail risk, some investors might want to take out insurance, particularly if the polls ... were to suggest more support than is currently expected," said Beat Siegenthaler, currency strategist at UBS, Zurich. "If it (the initiative) came through, the market would immediately conclude that the (euro/Swiss franc) floor is less viable, less sustainable." The SVP also backed an initiative against mass immigration, which proposed quotas for European Union immigrants and was backed by a narrow margin of voters in February. The gold initiative's committee began its campaign in the Swiss capital, Berne, on Thursday. Posters showing a red and white piggy bank - the colours of Switzerland's flag - and the slogan "Save our Swiss gold" can already be seen around the country, including Zurich's main railway station. SCOTLAND AGAIN? The latest polls show the initiative does not have huge support - about 45 percent, which is expected to decline as the vote comes closer - and is controversial even within the SVP. ID:nL6N0SG2XK It is also not prominent on investors' radar. "The lack of attention being given to the upcoming referendum in Switzerland on the SNB's gold holdings has similarities with the lack of attention given to the Scotland referendum until just two weeks before the vote," said Derek Halpenny, European head of global market research at Bank of Tokyo Mitsubishi. "And like the independence vote in September, a `Yes' result in the gold referendum could have considerable foreign-exchange implications going forward." Sterling GBP=D4 hit an 11-month low and options to hedge against swings in the currency rose to four-year highs as the pro-independence camp gained support in the two weeks before the Sept. 18 vote. Scotland eventually voted against independence. So far, euro/Swiss franc options EURCHFVOL= show little desire to hedge against sharp moves in the franc. One-month risk reversals EUCH1MRR= , which gauge demand for options on a currency rising or falling, shows a bias for euro calls - bets the single currency will rise. COSTLY GOLD CRIMPS POLICY Higher gold holdings would escalate costs for the SNB and impair its ability to intervene freely in the currency market. Four years ago, the SNB came under strong criticism domestically after its currency interventions led to sharp losses. The SNB also reported a loss for 2013, as profit from its foreign currency reserves failed to offset a decline in the value of its gold holdings after prices slumped. ID:nL6N0M40GH A "Yes" vote would not prevent the SNB from expanding its balance sheet. It could still print Swiss francs to stop the currency from rising, but that would entail considerable cost as it would need to buy more gold to meet the new requirements. SNB vice-chairman Jean-Pierre Danthine said earlier this month that had the terms of the initiative been in force three years ago, it would have obliged the SNB to buy gold as well as euros in large quantities to defend the currency floor. "Our defence of the minimum exchange rate would thus have involved huge costs, which would almost certainly have caused foreign exchange markets to doubt our resolve to enforce the rate by all means," he said. ID:nL6N0S41XH Marvin Barth, a currency strategist at Barclays, said given the considerable balance sheet costs, the SNB was likely to impose negative interest rates to reduce the franc's appeal. "We expect that the SNB's first policy step in the event the gold referendum is passed would be to cut deposit rates to or below the ECB's negative 20 basis points," he said in a note. (Reporting by Anirban Nag; Editing by Larry King) ((anirban.nag@thomsonreuters.com; +44 20 7542 8399 ; Reuters Messaging: anirban.nag.thomsonreuters.com@reuters.net)) Keywords: MARKETS FOREX/SWISS GOLD

London platinum/palladium 1400 fix - Oct 23

October 23, 2014 - reuters.com

UPDATE 2-African Barrick tightens full-year costs target

October 23, 2014 - reuters.com

* Sees full-year all-in sustaining costs at $1,100 per ounce sold * Third-quarter AISC falls 14 pct to $1,098 per ounce * Third-quarter EBITDA rises 17 pct to $75.8 million * Gold production up 16 pct to 190,986 ounces in third quarter * Cuts 500 jobs at Bulyanhulu mine in third quarter (Adds details, CEO and analysts' comments; updates share movement) Oct 23 (Reuters) - African Barrick Gold Plc ABGL.L tightened its costs target for the full year as it increased output while also cutting jobs to beat the sharp drop in gold prices. The miner reported a fall in overall expenses for an eighth successive quarter after it cut more than 500 jobs at its flagship Bulyanhulu mine in Tanzania in the third quarter ended Sept. 30. African Barrick's stock was among the top percentage gainers on the FTSE-250 Midcap Index .FTMC on Thursday, rising as much as 4.8 percent in early trading. To beat shrinking gold prices, African Barrick has been accelerating production at Bulyanhulu, the largest of its three operating mines in Tanzania, by increasing its use of technology. Many gold and silver miners were forced to shelve new projects and slash costs last year after prices of precious metals fell to their lowest in a decade. Gold XAU= fell 28 percent and silver XAG= plunged 36 percent in 2013. "By the end of next year we expect Bulyanhulu to produce 350,000 ounces at $900 per ounce," Chief Executive Bradley Gordon told Reuters. The mine, which produced 198,286 ounces of gold in 2013 at an overall cost of $1,344 per ounce sold, now employs around 1,900 people, compared with 3,400 a year ago. African Barrick, which reported a 17 percent jump in third-quarter core profit, said it anticipates full-year costs at the lower end of it target range of $1,100-$1,175 per ounce sold. All-in sustaining costs (AISC) - a widely used measure that includes production and exploration expenses - fell 14 percent to $1,098 per ounce sold in the third quarter. The company also reiterated it was on track to exceed planned cost savings of $185 million this year. "Every part of the business has been under review and we're still seeing lots of opportunity (in terms of reducing costs further), but mainly in the mining part of the business, the actual physical mining cycle," Gordon said. Job cuts at the corporate level have also helped African Barrick reduce its cost base. "The number of people in the business has reduced significantly; the number of expats has gone from 550 down to 200 and we see that number going lower," Gordon said. African Barrick, which operates primarily in Tanzania, initiated an operational review last year after parent Barrick Gold Corp's ABX.TO failed attempt to sell the business to a Chinese buyer. Core earnings, or earnings before interest, taxes, depreciation, and amortization (EBITDA), rose to $75.8 million in the third quarter from $64.8 million a year earlier. Revenue rose 9 percent to $240.9 million. African Barrick said gold production rose 16 percent to 190,986 ounces and reiterated its full-year target of more than 700,000 ounces of gold. Shares in the FTSE-250 company were up 3.4 percent at 201.7 pence at 1136 GMT. (Reporting by Roshni Menon in Bangalore; Editing by Feroze Jamal) ((roshni.menon@thomsonreuters.com; within UK +44 20 7542 1810, outside UK +91 80 6749 1136; Reuters Messaging: roshni.menon.thomsonreuters.com@reuters.net;)) Keywords: AFRICAN BARRICK RESULTS/

London gold 1030 fix - Oct 23 - 1240.50 dlrs

October 23, 2014 - reuters.com

London platinum/palladium 0945 fix - Oct 23

October 23, 2014 - reuters.com

Silver miner Hochschild keeps full-year output target

October 23, 2014 - reuters.com

Oct 23 (Reuters) - Precious metals miner Hochschild Mining Plc HOCM.L kept its production target of 21 million silver equivalent ounces for this year despite posting a fall in third-quarter production. The Latin American company, which has been slashing costs as precious metal prices remain weak, said it had identified further cost savings of about $50 million for 2015. Hochschild has already achieved about $270 million of cost savings this year. Attributable production dropped to 4.8 million silver equivalent ounces in the three months ended Sept. 30, from 6.3 million ounces a year earlier, as the company shut its ageing Ares mine in Peru. ID:nRSW0641Va Hochschild gets the bulk of its production from underground mines in southern Peru and has operations in Argentina as well. (Reporting by Esha Vaish in Bangalore; Editing by Gopakumar Warrier) ((esha.vaish@thomsonreuters.com; within UK +44 20 7542 1810, outside UK +91 80 6749 1136; Reuters Messaging: esha.vaish.thomsonreuters.com@reuters.net)) Keywords: HOCHSCHILD MIN RESULTS/

African Barrick Gold's third-quarter core profit jumps 17 pct

October 23, 2014 - reuters.com

Oct 23 (Reuters) - African Barrick Gold Plc ABGL.L reported a 17 percent jump in third-quarter core profit as it sold more gold than a year earlier and costs fell. Core earnings, or earnings before interest, taxes, depreciation, and amortization (EBITDA), rose to $75.8 million from $64.8 million a year earlier. Revenue for the three months ended Sept. 30 rose to $240.9 million from $220 million a year earlier. African Barrick said gold production rose 16 percent to 190,986 ounces, with gold sales rising 11 percent. Cash costs fell 7 percent to $679 per ounce during the period. The FTSE 250 company, which operates primarily in Tanzania, reiterated its full-year production forecast of more than 700,000 ounces of gold. ID:nPRrN5C6Aa The company, which is in the midst of a massive cost-cutting drive, said it remained on track to exceed planned cost savings of $185 million. (Reporting by Roshni Menon in Bangalore) ((roshni.menon@thomsonreuters.com; within UK +44 20 7542 1810, outside UK +91 80 6749 1136; Reuters Messaging: roshni.menon.thomsonreuters.com@reuters.net;)) Keywords: AFRICAN BARRICK RESULTS/

BRIEF-African Barrick Q3 core profit rises

October 23, 2014 - reuters.com

Oct 23 (Reuters) - African Barrick Gold Plc ABGL.L : * Q3 revenue up 9 percent at $241 million * Q3 EBITDA rises 17 percent to $76 million * Q3 gold sales 11 percent higher at 178,490 ounces * Q3 gold production up 16 percent to 190,986 ounces * Says on track to exceed planned cost savings of $185 million by end 2014 * Continues to expect full-year production in excess of 700,000 ounces * Sees FY cash costs of around $740 per ounce sold, AISC costs around $1,100 per ounce sold Source text for Eikon: ID:nPRrN5C6Aa Further company coverage: ABGL.L ((Bangalore Newsroom +44 20 7542 1810)) Keywords: AFRICAN BARRICK GOLD /BRIEF

INDICATORS - Kazakhstan - Oct 23

October 23, 2014 - reuters.com

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