India Cabinet OKs Hallmarking in Gold Jewelry

By RAJESH ROY And BIMAN MUKHERJI

NEW DELHI -- Jewelry buyers across India may soon be able to get a guarantee of the quality of the gold they're paying for, with the federal cabinet approving an amendment to a law which could lead to compulsory hallmarking.

The amendment has to be ratified by parliament before it becomes law. "This will take at least seven to eight months," a top government official said Wednesday.

The move is significant in that jewelry accounts for 80% of gold sales in India, the world's largest consumer of the precious metal. India's gold demand in 2011 was estimated to be around 960 tons by the World Gold Council.

Government officials say traditional handcrafted pieces, with their many joints and alloys used for soldering, leave room for dubious claims on caratage. Currently, hallmarking of gold jewelry is optional for retailers.

Implementing the law could prove to be tough as much of India's jewelry is handmade and fashioned in small workshops, often using blowpipes and candles or oil flames.

Also, although even the smallest of towns have at least one jewelry shop, hallmarking centers so far exist only in the bigger cities, said Dinesh Jain, director of the All India Gems and Jewellery Trade Federation.

"We support hallmarking, and we want it to be made mandatory," he said. "But they have not given us a copy of the draft [law], so we really don't know what is there in it."

In the absence of compulsory hallmarking, even some leading gold jewelry retailers opt out of hallmarking, relying on their brand name alone to win customers' trust.

But it isn't unusual for a customer buying gold jewelry labelled 22 carats to find out that it was only 18 carats when trying to sell or exchange it.

Mr. Jain said his federation, which represents the local jewelry industry, had asked the government to allow even trade bodies to hallmark gold jewelry besides state-run centres to simplify the task. "Hallmarking shouldn't lead to a licence [regime], riddled with red tape."

Gold jewelry can now be certified for purity only at government centres.

The government tried to introduce such a law about three years ago, but deferred the proposal as it didn't have adequate number of hallmarking centers for certifying the jewelry. The number of centers are still around the same.

JANUARY 4, 2012, 4:17 A.M. ET Read more: http://online.wsj.com/article/SB10001424052970203513604577139841630893810.html?mod=googlenews_wsj

Gold in 2012 - Precious Metals - Resource Investor

Read more: Gold in 2012 - Precious Metals - Resource Investor

We all understand that the future is unknowable. Events yet to come cannot be predicted. Nevertheless, the outlook for 2012 is probably set in stone, and the reason is simple. The financial crisis imperiling the globe for the past several years has not been solved. Until it is, we can expect more of the same – specifically, serial bailouts of governments and banks that, if not already insolvent are bordering on insolvency. It is a distressing prospect.

Perhaps the outlook for the months ahead can be best summarized by the Governor of the Bank of England, Sir Mervyn King. In a recent interview on British television, Sir Mervyn in a rare candid moment made a remarkably bold statement: “This is the most serious financial crisis we’ve seen, at least since the 1930s, if not ever. We’re having to deal with very unusual circumstances.”

It is somewhat odd that Sir Mervyn chose the word “unusual” to describe the present situation. After all, banking crises and defaults on their debts by sovereigns – princes and kings as well as countries – have been a recurring feature of monetary history even before the founding of the Bank of England in 1694. So there is only one reasonable conclusion from his comment. He was obviously referring to the severity of the today’s circumstances, meaning that the depth and long duration of this present crisis have few parallels.

Sir Mervyn went on to add that it is necessary for central bankers “to act calmly to [these circumstances] and to do the right thing.” While his comment reads well, and may even extract a sympathetic response from some people, do his actions confirm his words? More generally, are central bankers doing the “right thing”? For the answer, we only need to look at the price of gold.

Gold is a barometer of the ill winds stirred by monetary problems. It is as reliable as a canary in a coalmine. The rising price of gold flashes for everyone a clear warning signal. And a rising gold price is what we can expect in 2012, for the same reasons that it has been rising for a decade.

First, central bank money printing continues unabated. It is the repeated answer that central bankers offer to address all of today’s financial problems, with the only outcome being the continual erosion of the purchasing power of national currencies – what is usually referred to as inflation.

Second, people everywhere are increasingly worried about the safety of the bank in which they have money deposited. Ever since the collapse of Northern Rock in the UK four years ago, confidence in banks has been diminishing. The failure of Bear Stearns, Lehman Brothers, MF Global in the United States and the near collapse of Dexia, the Belgian-French bank, have only provided more evidence that there is real reason to worry. These failures also illustrate that the problem of insolvent banks is a global phenomenon.

Third, the interest income one can earn on a bank deposit is not sufficient compensation for the counterparty risk being taken. Even worse, the interest income is less than the rate of inflation, with the consequence that bank deposits result in the loss of one’s purchasing power.

I could go on, but these observations made my point. To all of these problems, and indeed, all the problems that plague national currencies, gold provides a safe refuge.

To end as I began, the future is unknowable. Consequently, we do not have solutions for today’s problems; we only have choices. For 5,000 years, gold has been the world’s preferred money. Being tested time and again over the millennia, gold’s proven record continues to make it the preferred choice for a future that is always uncertain.

James Turk is founder and chairman of GoldMoney, which provides a convenient and economical way to buy and sell gold, silver and platinum online using digital gold currency for which he has four US patents.

Gold production surpassed for Guyana

2011 gold production surpassed target - Minister Persaud

Written by Kwesi Isles  
Thursday, 29 December 2011 21:34

Guyana has surpassed its 2011 gold production target recording some 350,000 ounces declared in a year that has seen record prices offered for the precious metal, according to information from newly-minted Natural Resources Minister Robert Persaud.

He made the announcement at a news conference on Thursday at his ministry in the Office of the President.
"Gold production yesterday (Wednesday) was 350,000 ounces, surpassing the target by a significant amount, 30,000 ounces, and that is declared and not necessarily production,” Persaud noted.

He added that there is a sizable amount of production not being declared with even the Guyana Gold and Diamond Miners Association (GGDMA) expressing concern.

Gold declaration recorded for 2010 was pegged at 308,438 ounces, a 2.9 percent increase on the previous year’s figure.

Gold peaked at US$1,920 per ounce in September and has since fallen to below $1,700 but along with the explosion in prices has come rampant criminality in the interior mining districts. According to Persaud, it is a concern to both the government and the industry.

“Gold attracts the good and bad because the criminal elements know that there’re gold mining activities and there’s a high incentive for them perhaps to go raid camps and even to intercept persons. Unfortunately we’ve seen the loss of lives in this regard,” he said.

The minister noted that prior to him assuming the Natural Resources portfolio the Prime Minister, the Home Affairs Minister, the GGDMA, the police and the army were meeting to hammer out a coordinated security approach.

“We intend to continue that and even to look at some innovative ways, getting the miners themselves involved too in terms of security because if you look at the reach of our security forces and you look where mining is taking place, it’s sometimes far away from police locations, police outposts depending on the areas where we mine.

We will also have to talk to the Guyana Police Force to perhaps looking at establishing temporary even permanent outposts in this regard,” Persaud stated.

He added that the policing of these areas will have to be reorganized.

“The Chairman of the GGMC, former chief of staff Joe Singh himself is taking the lead at the board level but also in engaging stakeholders in this regard,” the minister said.  
    
The Guyana Police Force for its part has commented on the growing level of criminality in the hinterland areas and responding to concerns from the GGDMA recently stated that it has been sending teams into the interior to support those ranks already on the ground.

According to the force, it has also been doing roving air, terrestrial and riverain patrols. Additionally, it noted that several miners have been granted permission to have guards established with Supernumerary status and also individual firearm licences.

Source

Market closed higher again today

Petronas net profit surges

Kuala Lumpur: Higher crude prices and robust demand for major products have led to Petroliam Nasional Bhd (Petronas) posting better revenue and profit for its financial year ended March 31 2011.

Read more: Petronas net profit surges http://www.btimes.com.my/articles/ronasf/Article/#ixzz1Opx8M5TK


Despite the strengthening of the ringgit against the US dollar and rising costs, the national oil company saw its revenue increase by 14.4 per cent to RM241.2 billion from RM210.8 billion and net profit rise 38.5 per cent to RM63 billion. Petronas president and chief executive officer Datuk Shamsul Azhar Abbas said gross profit was higher by 18.7 per cent at RM97.8 billion compared with RM82.4 billion previously. Speaking at a press conference here yesterday, he said earnings before interest, taxes, depreciation, and amortisation (Ebitda) improved by 29.5 per cent to RM107.9 billion. The Ebitda included proceeds of RM9.2 billion from the listing of its two units - Petronas Chemicals Group Bhd and Malaysia Marine and Heavy Engineering Holdings Bhd. Dividend payment to the government was maintained at RM30 billion, an amount that has been earlier been agreed by the government, he said. The dividend policy, however, is expected to be capped at 30 per cent of Petronas' net profit, most likely beginning from the financial year ending December 31 2013. "This may not mean that it would be lower than RM30 billion, especially if we perform well, but (the new policy) will give us some certainty in planning our business," said Shamsul. Petronas has been paying the government RM30 billion since 2009, up from RM24 billion in 2008. In 2005 it paid only RM9.1 billion and this was increased to RM13.0 billion in 2006 and RM20 billion in 2007. Petronas executive vice-president for finance Datuk George Ratilal said cash from operations was higher at RM70.8 billion compared with RM56.1 billion previously, due to higher earnings. Cash balance by end-March 2011 was also higher at RM155.3 billion compared with RM140 billion in the year before - this after deducting RM34.9 billion for capital expenditure, RM30 billion for dividend payment, RM6.5 billion in dividend payment to minority interests and about RM900 million on other investments. Ratilal said return on revenue for the year just ended was 37.5 per cent, from 32 per cent previously despite rising costs. The strengthening of the ringgit, he said, was quite a setback, resulting in the group's US dollar revenue to come down by 10 per cent, but "lucky for us, oil prices went up by more than 10 per cent". He said Petronas' performance was in line with its competitors, "indicating another year of resilient performance by the group". Shamsul, when asked for his forecast on Petronas earnings in the current financial year, said: "Last year I predicted we would make a pre-tax profit of RM80 billion and I was wrong. So I will not make it a habit to forecast." Petronas made a pre-tax profit of RM90.5 billion in 2011. For the current financial year ending December 2011 (nine-month period), Petronas will be planning its business at a basis oil price of between US$75 and US$80 (RM225.8 and RM240.8) per barrel.

Bank Muamalat still in merger mood

Kuala Lumpur: Bank Muamalat Malaysia Bhd is still keen to merge with a rival to build a mega Islamic bank, despite its failed attempt at courting Bank Islam Malaysia Bhd.

Its chief executive officer Datuk Mohd Redza Shah Abdul Wahid said the bank's pursuit of Bank Islam was driven by its largest shareholders' need to pare its stake in the bank and the desire by both its shareholders to create a bigger entity that is more relevant in the market.

Late May, Bank Islam's parent, BIMB Holdings Bhd, said it was no longer interested in a union with smaller rival Bank Muamalat.

DRB-HICOM Bhd owns a 70 per cent stake in Bank Muamalat, while Khazanah Nasional Bhd owns the other 30 per cent.

"That was the idea (behind it) and that idea is still with them (DRB-HICOM and Khazanah Nasional), that perhaps being a bigger and more relevant bank in this market will bring about faster growth.
"As to whom they go with and what they are going to do I am not privy, and I have no answers to that," Mohd Redza told the NSTP group newspapers on Wednesday.

The bank, however, is not in talks with any party currently.

Mohd Redza ruled out looking for a partner abroad, expressing his wish to build a "little more" expertise in the local market before venturing abroad.

On the qualities Bank Muamalat would look for in a partner, he said it would be partial to one with interest overseas, and that is strong in the area of corporate or investment banking.

Mohd Redza, who is also Association of Islamic Banking Institution of Malaysia president, is a proponent of a local mega Islamic bank himself.

"Size is important. It's important to go abroad too, and secondly, to fund large Economic Transformation Plan projects, which runs in the billions of ringgit. If you are a small bank you can't lend your balance sheet to do big sukuk issuance like that and this is why I feel there is a need for it," he said.

Mohd Redza believes that rather than issuing mega Islamic banking licences and crowding the market further, existing players should get together and form a bigger and more relevant mega Islamic bank.

There are 22 foreign and local Islamic banks operating in Malaysia currently.

Read more: Bank Muamalat still in merger mood http://www.btimes.com.my/articles/pmua1-2/Article/#ixzz1OpwC86gC