Weekly Digest: India Buys Gold, Pandora’s Box Opened
07/10/21: India’s gold imports jump 658%, journalists publish documents revealing the inner workings of a shadow economy, post-Covid economic recovery slows. And more.
Despite dropping slightly in the past few days, the gold price saw an overall gain of 1.03% over the week.
While the gold price is currently being pressured by a stronger U.S. dollar, experts remain bullish for the yellow metal: “Risk appetite will continue to provide short-term direction in terms of safe-haven demand ahead of the U.S. nonfarm payrolls report on Friday,” Ricardo Evangelista, senior analyst at ActivTrades, told Reuters.
⭐ “In gold we trust”: India's gold imports in September jumped 658% from last year's lower base as jewelers stepped up gold purchases for the upcoming festive season, a government source said. Higher imports by the world's second-biggest gold consumer could support benchmark gold prices. (Reuters)
India imported 91 tons of gold in September, compared to 12 tons a year ago, the source said on Monday on condition of anonymity.
If no new deposits are found, Russia could run out of gold in just 20 years, warned the CEO of Russia's largest gold producer Polyus, Pavel Grachev.
According to the gold miner's data, Russia's current gold deposits are equal to about 8,000 metric tons.
Crypto to the Moon? On Tuesday Bitcoin rose above the $50,000 mark for the first time in four weeks, adding to a series of gains since the beginning of October. (Reuters)
The world’s biggest cryptocurrency fell below $50,000 level on September 7 amid a broader selloff in crypto shares and blockchain related firms, and continued to fall in September, hitting a low of $40,596 on September 21.
Oil in New York jumped to the highest level since 2014 following OPEC+’s decision to keep increasing oil output gradually. U.S. crude futures advanced 2.3% on Monday. (Bloomberg)
In July, OPEC+ agreed to increase output by 400,000 barrels per day (bpd) each month until at least April 2022 to phase out 5.8 million bpd of existing production cuts.
Debt default threat looming: Joe Biden could offer no guarantee the U.S. wouldn’t breach its legal debt limit in two weeks, blaming Senate Republican Leader Mitch McConnell for what he described as a “meteor” headed for the U.S. economy. (Bloomberg)
In recent weeks, Senate Republicans, led by McConnell, have blocked twice the action to raise the debt limit. The move comes amid numerous warnings from Treasury Secretary Janet Yellen, who said that the consequences of failing to act on the debt limit would be “catastrophic.”
But on Wednesday, pressured by Biden, McConnell offered a short-term suspension of the U.S. debt ceiling to avert the default. The Senate will still have to find a way to resolve the situation before time runs out on October 18.
The global economy is entering the final quarter of 2021 with an increasing number of risks pointing to a harder-than-expected recovery from the pandemic. The risks include higher food and energy prices, supply squeeze, and persistent Delta variant outbreak. (Bloomberg)
“Expectations of a swift exit from the pandemic were always misplaced. Full recovery will be measured in years, not quarters,” said Frederic Neumann, co-head of Asian economic research at HSBC Holdings Plc in Hong Kong.
As the U.S. debt default looms, the Senate could use a parliamentary maneuver known as budget reconciliation, which would allow Democrats to act without Republican votes. (Bloomberg Opinion)
“Democrats will pay a political price for increasing the [U.S] debt limit by themselves, so they should boost it so much it will no longer matter.”
What else is happening
Pandora’s box opened: in the biggest leak of financial information since the Panama Papers, the International Consortium of Investigative Journalists (ICIJ) published 11.9 million confidential documents exposing how politicians and billionaires all over the world hide their wealth. (ICIJ)
For example, one of the most “troubling revelations” for the U.S. was the information that South Dakota, Nevada and other states have adopted financial secrecy laws that “rival those of offshore jurisdictions” and show America’s “expanding complicity in the offshore economy,” said the Washington Post, one of the ICIJ’s media partners.
Mark Zuckerberg lost more than $6 billion in a few hours after outages took Facebook’s flagship products offline and a whistleblower came forward to reveal that Facebook executives were aware of negative impacts of their platforms on some young users. (Bloomberg)
A selloff sent the social-media giant’s stock dropping 4.9% on Monday, adding to a decrease of about 15% since mid-September.
Brexit tensions escalating: France threatens U.K. power supply in an effort to force London to grant access to British fishing waters. The United Kingdom is a net importer of power from France. Any interruption to power flows would threaten a British grid already under pressure. (Reuters)
The army has started supplying service stations across the United Kingdom in an effort to end more than a week of shortages that left many without fuel.
🚀 Captain Kirk is heading to space. Jeff Bezos' Blue Origin announced Monday that Star Trek actor William Shatner will be on the next Blue Origin flight. (CNN)
"I've heard about space for a long time now. I'm taking the opportunity to see it for myself. What a miracle,” Shatner said in a press release.
Argentine artist Leandro Granato, famous for his “eye painting” technique, has destroyed five of his works that he valued at $70,000 to create non-fungible token (NFT) artworks. Granato blew them up using homemade explosives. (Reuters)
"Two out of these five works are already sold, two are booked, and there's only one left to sell. This means that I have to start working on a second piece and also think of how I am going to destroy them," Granato said.
Don’t play with explosives!
See you next week!