Tendencias de mercado-Informe de Metal Pages

Indian election prevents changes to import rules until at least mid-May.This year, speculation has grown that the Indian government would announce some easing of their import restrictions on gold. However, with the election timetable now formally announced, the country’s “model code of conduct” has immediately come into effect. This restricts the incumbent government from introducing what might be construed as populist policies. As such, attention now shifts to mid-May (at the earliest) and whether this will see any revision to the import legislation.

In the intervening period, attention will shift to the CAD and if this affords the government any room for manoeuvre once the model code of conduct is lifted. The latest official data release reveals that the third quarter CAD (in the 2014 financial year) fell to just 0.9% of GDP, a level last seen eight years ago. A key reason for this has been the drop in official gold imports. However, if we factor in what appear to be substantial unofficial flows, the CAD would undoubtedly be well above current levels. Even so, a growing view is that the CAD appears to be under control. This may therefore signal to the new government that the import regulations on gold can be eased in some fashion.

This aside, market conditions appear to be easing. The country’s gold market has now entered a seasonally weak period, reflected in a drop in premiums, which now stand at around $60-$80/oz, against the highs of $160/oz seen last year. As such, for the duration of the off-season, lasting the next couple of months, this will translate into softer gold bullion imports.

Lower imports are also likely to emerge given the tightening of rules concerning non-resident Indians (NRIs) bringing gold into India. Prior to the latest change, NRIs were allowed to bring 1kg of gold into India and pay the import duty on arrival. However, gold brought in through this route had a tendency to flow into the open market and so has been increasingly used to side step import regulations. Recognition of this has now seen the government tighten the regulations concerning NRIs. As a result, these individuals are now only allowed to bring gold into the country with full purchase and income documents. In our view, this is likely to further impact official gold imports, to the benefit of the CAD.

Further helping the government’s cause to reduce gold demand, relates to the upcoming elections. In India, elections tend to see huge flows of cash appear in the open market. However, with the model code of conduct now in force, the Election Commission of India is likely to be increasingly focused on these flows. This should lead to lower big ticket cash purchases as people are not allowed to carry more than Rs.50,000 in cash without proper documentation. (It is worth noting that a large portion of gold purchased in India is on a cash basis.) The model code of conduct will only be relaxed after 12th May, the last day of polling. Leaving aside the election, this May is likely to see a recovery in gold premiums in the run up to Akshaya Trithiya, the most auspicious day in the calendar to buy gold and when Indian consumers return to jewellery stores. This in turn could see official bullion imports pick up, although we would not be surprised to see unofficial flows increase more significantly.

Platinum, the South African stand-off

The present stand-off in the South African platinum sector has its origins in 2012, before the Marikana incident. That year, Implats and Lonmin offered increases to certain job categories outside of the bargaining process. Rock-drill operators are skilled workers and are in short supply in the mining industry so competition is fierce. In this environment AMCU increased its popularity, but also especially with the less skilled entry level miners who did not receive salary adjustments. Furthermore, the high levels of indebtedness of these workers has led to a search for a quick-fix answer to their problems, further boosting AMCU’s popularity.