Speculation Fed Decision Lift Gold

Gold Lift Speculation Fed Decision

Gold rose in London on speculation the Federal Reserve will continue its stimulus and after gold prices fell to the lowest in more than two weeks of increased physical demand.

Gold fell for a fourth day in the session yesterday, the worst performance since October. Minutes of the Fed meeting on December 11 to 12, released January 3 showed officials began debating ending bond purchases earlier this year. The central bank, which started its two-day meeting on Selalsa yesterday, will renew its commitment to asset purchases after determining the benefits of the program outweighs the risk of inflation or financial instability, according to economists surveyed by January 24 to 25.

Gold for February delivery rose 0.4 percent to $ 1,661.70 an ounce by mid-morning in London. Prices reached $ 1,652.09 an ounce yesterday, the lowest level since January 9. Gold for April delivery rose 0.5 percent at $ 1,663 on the Comex in New York.

Product gold ETF holdings fell for a third day yesterday, falling 1.7 metric tons to 2610.3 tons, data compiled by Bloomberg. The lowest number in two months and 0.8 percent below the record set on December 20.

In other trading, silver rose 0.5 percent to $ 31.0275 an ounce. Palladium was little changed at $ 738.50 per ounce level, after hitting $ 749 yesterday, the highest level since September 2011. Platinum rose 0.3 percent to $ 1,678 per ounce.

HK Shares End Flat, ICBC Falls 2.2%

Hong Kong shares ended flat on Tuesday yesterday, weighed by weakness in the Industrial & Commercial Bank of China Ltd. after Goldman Sachs cut its stake in China's biggest lender.

Blue-chip Index Hang Seng Index edged down 16.71 points, or 0.1%, to close at 23655.17, with ICBC in focus. The worst-performing blue chip, ICBC fell 2.2% to HK $ 5.82 after Goldman sold about U.S. $ 1 billion stake in the bank at HK $ 5.77 each.

Kim Eng said in a note that this is the fifth time that the Wall Street bank has cut its stake in ICBC since 2009, and interestingly, it was exactly one placement in each year from 2009 to 2012. The broker added that the placement price this time was the highest of the five release, although this is the smallest size of the deal.

"ICBC is currently trading at 7 times 2013 earnings and 1.3 times book value," and offers a dividend yield of about 5% in 2013, says Kim Eng, who recommends buying the stock on any weakness. Stock price impact of the release of the past by Goldman is "small and short-lived," he added.

Trading volume fell 11570000000 ICBC Hong Kong dollars (U.S. $ 1.5 billion) Tuesday accounted for 15% of the total market capitalization of HK $ 75.55 billion. Shares worth HK $ 67.50 billion traded Monday.

Chief operating officer at KGI Asia Ben Kwong said that China's A-share rally failed to stimulate the Hong Kong Tuesday, reflecting the mood of the more cautious among local investors. "Along with fundraising activities recently, we expect market consolidation will continue."

A-shares are traded Chinese stocks in Shanghai and Shenzhen. The Shanghai Composite Index ended up 0.5% Tuesday, above the 2.4% rally on Monday.

Defensive stocks outperformed, pointing to the pressure correction for the Hong Kong market. Blue-chip utilities trio CLP, HK & China Gas and Power Assets increased between 0.5% and 1.9%.

Analysts said some revolving fund for defensive names in anticipation of a market decline of short-term maturities given that the HSI does not have trading sessions so far in 2013 in which he reported a loss of more than 1.0%.

Elsewhere, Gome Electrical Appliances rose 1.1% to HK $ 0.96, ignoring the warning of the resulting loss of income to net sales of lower 2012 rates, rising rents and profitable e-commerce business enterprise.

Network operator China's second-largest retail home reported nine-month net loss of CNY687 million, the profit warning does not come as a surprise to investors.

JAKARTA. Entering 2013, the Commodity Futures Trading Supervisory Board (Bappebti) will focus crackdown on problematic brokers who allegedly harmed investors.

Head of Legal Bappebti, Alfons Samosir, said the current Bappebti has bagged a list of 10 active foreign brokerage illegal alias is not listed as an official broker in Bappebti and in Jakarta Futures Exchange (BBJ). Illegal brokerage firms are based outside the country and on average have a branch office in Indonesia. Ten Master Forex broker is Indonesia, Indonesia Instaforex, FX Open, Alpari, NordFX, EXNESS, Islamic Forex, Robo Forex, FX Optimal and Forex4you.

Alfons admitted today Bappebti still struggling to crack down on illegal brokers. The police also difficult tracking them, although some brokers have a branch office in Indonesia. "Usually they disguise trading activities with educational activities and others in his office," said Alfons to KONTAN this week.

Bappebti head Syahrul R. Sempurnajaya, said total local customers are captured by these illegal brokers reach 400,000 customers. The average customer who netted it attracted as tempted by trading small lots under 1 lot.

However Alfons says, until now no customers who report being duped by illegal brokers. Even so, Bappebti not remain silent.

Currently, Bappebti is coordinating with the Ministry of Communications and Information Technology (Ministry of Communication) to block illegal websites broker or a local broker license was revoked. "We hope that in early February this step can already be done," said Alfons.

Well, to lead a keen interest in retail clients to trade with small lot size, Bappebti has issued rules for customers to be able to trade with a minimum 0.1 lot on the local bourse. The rule stated in Decree / Decision of the Bappebti Number: 99/Bappebti/Per/11/2012.

Step as well as a way to divert 400,000 customers who have successfully curbed illegal brokers, to move trading in the local bourse legally.

Currently, there are only nine brokers who are ready with the online system this small lot. They are Askap Futures, Futures Danpac, Inter Pan Pacific Futures, Jalatama Artha Futures, Milennium Stylists Futures, Futures Monex Investindo, Solid Gold Futures, Futures and Topgrowth Valbury Asia Futures.

Local broker

In addition to cracking down on illegal foreign brokers, Bappepti also will act decisively on the local brokers who do not comply.

Earlier this month, Bappebti has frozen and operating license revoked three local brokers. The three brokers are PT Artha Gading Futures, PT Jireh Trillions Futures and Futures Quantum PT.

However, Alfon can not be sure where the brokers are still frozen and that have been revoked license. "If it had been frozen edges will also be revoked," said Alfons.

Freezing and local brokerage license revocation is related to the company's internal problems, such as limited capital. They report to the BBJ and asked not operate while. Because, if they are still operating, the local broker could be fined Rp 100,000 per day by Bappebti.

(source: Kontan)

Oil Trades Near Highest Level in Four Months on Economic Outlook

Oil traded near the highest level in four months, after a seventh weekly gain, as signs of economic growth that may boost fuel emand countered speculation supplies are ample.

West Texas Intermediate crude was little changed after climbing 0.3 percent last week. Chinese industrial companies’ profits rose for a fourth month in December, the National Bureau of Statistics in Beijing said yesterday.

U.S. government reports today may show durable goods orders and pending homes sales advanced last month, according to Bloomberg News surveys. The oil market is “well supplied,” Khalid al-Falih, Saudi Arabian Oil Co.’s chief executive, said Jan. 26 in Davos, Switzerland.

“The outlook on demand seems to be more positive,” Robin Mills, the head of consulting at Dubai-based Manaar Energy Consulting and Project Management and a former Middle East specialist at Royal Dutch Shell Co., said by telephone Jan. 27. “Last week the outlook seemed to be looking up.”

Crude for March delivery was at $95.91 a barrel, up 3 cents, in electronic trading on the New York Mercantile Exchange at 8:09 a.m. Singapore time. The contract fell 7 cents to $95.88 on Jan. 25. WTI has posted the longest run of weekly gains since April 2009 and closed at $96.24 on Jan. 22, the highest since Sept. 17.

Brent for March settlement rose 3 cents to $113.31 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $17.39 to West Texas Intermediate futures for the same month. The gap was $17.40 on Jan. 25.

U.S. durable goods orders probably climbed 2 percent in December from the prior year after rising 0.7 percent in November, according to the median estimate in a Bloomberg survey. Pending home sales probably gained 12.5 percent, a separate survey shows.

(Source: Bloomberg)

Soros favors US monetary policy, warns of "currency war" -CNBC

Jan 24 (Reuters) - Billionaire investor George Soros said on Thursday that he favors U.S. monetary easing policy, but warned of a "currency war" because of differences in how countries manage national deficits.

"I think the policy, basically, pioneered by Bernanke is actually the right policy," Soros told CNBC in an interview from Davos, Switzerland.

Soros was referring to the monetary easing policy of the U.S. Federal Reserve and its chairman, Ben Bernanke, of buying $85 billion in Treasury and agency mortgage securities per month.

Soros warned, however, that Germany's belief in tackling deficits through austerity clashes with other nations' preference for monetary easing, and could spur a "currency war."

"I think the biggest danger is actually, potentially, a currency war," Soros said.

"The rest of the world follows a different recipe from the Germans. Germans believe in austerity, and the rest of the world believes in quantitative easing," Soros added.

Stock Indexes Futures

Stock Index Futures Contracts is a financial instrument that has been widely known at this point. According to the data bank for International Settlements (BIS) transactions that occur in the global market for these products has reached U.S. $ 221,200 million in 2005. Stock index futures contracts used as hedging tools (hedge), investment and speculative trading.

Hedging activities (hedging) in stock index futures contracts for hedging include the ownership of the shares or options over the index. Speculative trading in stock index futures contracts is done by utilizing price volatility, the greater the volatility, the greater the potential for profit, although usually the traders tend to take a little advantage but done continuously. While investing in the stock indices means investing in a particular market or sector without having to buy shares directly.

Stock index essentially is a statistical value that reflects the combined value of the shares that are the components that make up the index value. So the stock indexes can be used as a tool to describe the changes in the characteristics of the stock component therein. Many stock indexes that exist on the current drawn by a news agency or a financial services company which they use as a benchmark for the performance of many investment portfolios such as mutual funds.

Common stock index are classified in various ways. The index number itself actually represents the overall performance of the stock market. The indices are regularly published index covering usually are shares of large companies. Industrial index combined Dow Jones (DJIA / AS), S & P 500 (U.S.), FTSE 100 (UK), CAC 40 (France), DAX (Germany), Nikkei 225 (Japan), Hang Seng (Hong Kong), Kospi-200 ( Korea), Sensex (India) including JCI (Indonesia) and many others.

Forex Traders (2)

Investment Management Firm

Investment management company (which usually is a lot of accounts manager on behalf of customers such as pension funds and foundations) transactions in the foreign exchange market for foreign currency needs in order to make purchases of shares abroad. Foreign exchange transactions for them is not a primary investment objective so that it does not deal with speculative purposes or in order to obtain maximum profit.

Hedge funds

Hedge funds are an investment company that runs business activities speculative transactions for profit, such as George Soros whose reputation rose due to currency speculation does aggressively since 1990. He manages trillions of U.S. dollars and is still able to borrow more trillions of U.S. dollars and is therefore able to make intervention by the central bank of a country to maintain its exchange rate to be helpless if the economic fundamentals are dependent on the "mercy" of hedge funds.

Foreign Exchange Broker

Foreign exchange broker is a company that is established to carry out activities for the benefit of its clients brokerage services in the field of financial markets by gaining a reward for his services. According to CNN, a foreign exchange broker has a volume between 25 and 50 trillion U.S. dollars per day, or about 2% of the total value of the transaction.

Forex Traders (1)

According to Galati and Melvin, pension funds, insurance companies, mutual funds and institutional investors is a player who has a big role in the financial markets in general and in particular the foreign exchange market since the decade of the 2000s.

Bank

Interbank money market (interbank market) to meet the needs of the majority of the velocity of money in the business and the needs of daily transactions speculators can reach a value of trillions of dollars. Some of the transactions carried out on behalf of their clients, but most are for the benefit of the owner of the bank or banks for the benefit of themselves.

Until recently, foreign exchange brokers are the culprits of currency circulation in large numbers, facilitating interbank trading and matching sellers and buyers to "reward" (fee) is small. But today many businesses are turning foreign exchange to a more efficient electronic systems such as EBS (now owned by ICAP), Reuters Dealing 3000 Matching (D2), the Chicago Mercantile Exchange, Bloomberg and Tradebook (R)

The Business World

One of the cast of the foreign exchange market is the need of the company's activities in making payments for goods or services denominated in foreign currencies. Currency foreign exchange needs of a company is often only a small value compared with the needs of the banks and speculators and foreign exchange trading does often only a very small impact on the value of the currency exchange market. Nevertheless foreign exchange trade flows of these companies over the long term is an important factor for the direction of the exchange rate of a currency. Transaction some multinational companies can bring unexpected consequences when they close a position (buy or sell position) once huge transaction which is not widely known by the market players.

The Central Bank

The central bank of a country holds a very important role in the foreign exchange market. The central bank is always trying to control the money supply, inflation, and interest rates or even sometimes they have a target both official and unofficial exchange rates currency country. Often the central bank uses its reserves to stabilize the market.

With market expectations or the issue of intervention by the central bank alone has been enough to stabilize the local currency, but aggressive intervention conducted several times each year in a country whose currency exchange rates fluctuate.

Various sources of funds in the foreign exchange market when combined can easily "play" the central bank (withdraw or sell a currency in very large once so that the central bank can no longer intervene) in which this scenario appears in 1992-1993 where the European exchange rate mechanism (European Exchange Rate Mechanism - ERM) crash and several times falling exchange rate of the currency in Southeast Asia.

Forex trading Process

In exchange forex (foreign exchange) one can buy or sell currencies are traded, the goal is to make a profit or gain from the position of transactions. In Stock exchange recognized term Lot and Pip. 1 Lot value is $ 1000 and 1 pip value is $ 10. While the value of the dollar in the foreign exchange market is different from the value of the dollar as we know it in banks. Value of the dollar in the foreign exchange market is very varied, 6000/8000 and 10,000 rupiah.

Two-way transaction

Transactions in foreign exchange can be done by way of two-way in taking advantage. One can buy the first (open), and closed with a sell (sell close) or otherwise, to sell first, and then closed with the purchase.

Foreign exchange market players

Unlike the stock market where the members have the same access to the stock price, foreign exchange market is divided into several levels of access. At the highest level of access is the inter-bank money market (interbank) consisting of investment banking firms besar.Pada interbank market, the difference between the bid / selling price (ask) prices and demand / purchase price (bid) is very thin so even normally does not exist, and this price only applies to their own ranks who do not know foreign players outside their group.

At the access level below, the range of difference between the selling price and the purchase price be large depending on the volume of transactions. If a trader can guarantee the execution of foreign exchange transactions in large numbers, they can request that the difference between the selling and purchase reduced-called better spread (thin difference between the buy and sell price). Level access to the foreign exchange market is largely determined by the size of the exchange transaction is done.

Top ranked banks dominate "the interbank money market (interbank)" up to 53% of the transaction value. And after the top-ranked banks are the next rank is a small investment banks and multinational corporations large (requiring hedge transaction risk and pay employees in different countries), hedge funds, and retail merchants and their speculators that determines the foreign exchange market.