BAMAKO, June 29 (Reuters) – Mali exported more than 16 tonnes of artisanally mined gold in the first four months of this year, the mines minister said on Thursday citing customs data, and is on track to export 50 tonnes for the year, equalling industrial output.

Mali is the third biggest gold producer in Africa behind South Africa and Ghana, and the informal mining sector has grown in recent years. The West African nation has also become an export hub for gold mined by artisanal diggers in neighbouring countries.

“This year, between January 1 and April 30, we are at more than 16 tonnes exported and recorded by customs,” Tiemoko Sangare told Reuters on the sidelines of a mining conference in the capital Bamako. “If we extrapolate for the full year, that’s 50 tonnes.

Mali enforces an annual suspension of gold panning from June to September.

It exported 67 tonnes of gold valued at $2.2 billion in 2016. Of that, 46.9 tonnes was mined by industrial producers with the remaining 20.1 tonnes considered artisanal exports. Sangare said that from October the government would put in place offices at gold panning sites in order to improve traceability and improve tax collection on informal output.

* Central bankers signal end to ultra-loose policy
* Bond yields climb, dollar slips to 14-month lows vs euro
* GRAPHIC-2017 asset returns: (Updates prices; adds comment, second byline, NEW YORK dateline)

By Marcy Nicholson and Jan Harvey

NEW YORK/LONDON, June 29 (Reuters) – Gold prices fell on Thursday as signs that central banks may scale back their ultra-loose monetary policy pushed bond yields higher on both sides of the Atlantic, though a decline in the dollar to its lows for the year lent support.

Gold is highly sensitive to rising interest rates, which increase the opportunity cost of holding non-yielding bullion. However, losses in the dollar , in which it is priced, have been offsetting the impact of higher yields to keep gold rangebound.

Spot gold was down 0.3 percent at $1,245.34 an ounce by 2:25 p.m. EDT (1825 GMT), while U.S. gold futures for August delivery settled down 0.3 percent at $1,245.80.

“It is a battle between U.S. dollar weakness and expectations of central banks removing monetary stimulus. U.S. dollar weakness is supportive but the latter not,” ABN Amro analyst Georgette Boele said.

A raft of hawkish comments from central banks this week signaled the era of easy money, which helped gold hit record highs at $1,920.30 an ounce in 2011, might be coming to an end in more places than just the United States. Benchmark U.S. Treasury yields and German 10-year government bond yields hit five-week highs and the euro touched a 14-month peak as investors geared up for the prospect of the European Central Bank scaling back monetary stimulus. Traders were also reevaluating the prospects for U.S. President Donald Trump’s policy agenda. “With part of Trump’s travel ban going back into effect, there may be a partial re-pricing of the rest of Trump’s agenda (i.e., economic reform) in the market, this time to gold’s detriment,” RBC Capital Markets said in a research note.

“That could either be helped or hurt by how the latest in the long-running healthcare legislation saga plays out, but we think the interplay between politics and economics remains at the forefront for the gold market.”

Gold is poised to end the second quarter less than $5 an ounce from where it began, its flattest quarterly performance in more than two years.

“To a substantial degree, the latest U.S. dollar weakness is thus due to the strength of other currencies, meaning that gold has been profiting to a below-average extent,” Commerzbank said in a note.

Autocatalyst metal palladium has been the best performer of the major precious metals this quarter, rising more than 6 percent.

Palladium was down 1 percent at $846.55 an ounce.

Silver was 0.8 percent lower at $16.63 an ounce, while platinum was up 0.1 percent at $920.20 per ounce.

(Kitco News) – Goldman Sachs has a “balanced” outlook on gold, looking for the metal to be around $1,250 an ounce six months and a year from now.

The investment bank’s forecast is relatively in line with current prices, with Comex August gold futures hovering just above a six-week low from earlier this week, last trading at $1,243.70 an ounce. The gold market has seen significant selling pressure recently after it hit a seven-week high of $1,298.80 an ounce June 6. Goldman blames the price retreat since on higher U.S. real rates, driven by more hawkish-than-expected Federal Reserve commentary.

“We have a balanced gold outlook, with our 6/12 month forecasts at $1250/oz,” Goldman said in a commodities outlook released Thursday. “On the one hand, we expect higher U.S. real rates and Fed balance-sheet reduction to put downward pressure on gold.”

However, analysts said they look for this to be offset by three other gold-supportive developments. For starters, U.S. economic growth is expected to moderate. The bank’s economists also expect economic growth – meaning more gold-purchasing power — in emerging-market nations that tend to be gold buyers, such as India, China, Turkey and Indonesia. Also, Goldman said it expects gold supply to peak in 2017 and then decline over the next several years, thereby improving the attractiveness of the metal to investors.

“Gold net speculative positions are substantially lower than they were during 2016 but remain above their historical average, while gold ETFs [exchange-traded funds] have continued their gradual upward trend, albeit not at the same pace as in 2016,” Goldman said.

The bank listed six- and 12-month silver forecasts of $17.20. Around mid-morning, Comex July silver was at $16.575.

Meanwhile, Goldman analysts said they look for platinum to come under pressure, citing a peak in the auto market and downward trend in diesel-related demand. The main industrial use of the metal is auto catalysts. A wild card, said Goldman, will be the South African rand. Moves in the currency impact the profitability (and thus amount of output) of miners in the world’s main platinum-producing nation, which are paid in dollars but pay their operating expenses in rand.

Barring major moves in the rand, Goldman listed six- and 12-month platinum forecasts of $900 an ounce. Nymex July platinum was trading at $912.80 as of mid-morning.

Analysts also look for palladium to retreat after a strong rally so far in 2017, which was helped by a projected supply deficit. However, the U.S. demand outlook is weaker and there is heavy bullish positioning in the futures market, meaning selling potential when these speculators eventually exit. As a result, Goldman looks for palladium to fall back to $750 in six months and $725 in 12 months, down from the Nymex September palladium price of $851.40 around mid-morning.

“Although in the very near term palladium could briefly price above platinum, we expect this to be short-lived as it would incentivize substitution of palladium for platinum in auto catalysts and holders of physical palladium stocks to sell their metal,” Goldman said.

By Marc Jones | LONDON

Major central banks should press ahead with interest rate increases, the Bank for International Settlements said on Sunday, while recognizing that some turbulence in financial markets will have to be negotiated along the way.

The BIS, an umbrella body for leading central banks, said in one of its most upbeat annual reports for years that global growth could soon be back at long-term average levels after a sharp improvement in sentiment over the past year.

Though pockets of risk remain because of high debt levels, low productivity growth and dwindling policy firepower, the BIS said policymakers should take advantage of the improving economic outlook and its surprisingly negligible effect on inflation to accelerate the “great unwinding” of quantitative easing programs and record low interest rates.

New technologies and working practices are likely to be playing a roll in suppressing inflation, it said, though normal impulses should kick in if unemployment continues to drop.

“Since we are now emerging from a very long period of very accommodative monetary policy, whatever we do, we will have to do it in a very careful way,” BIS’s head of research, Hyun Song Shin, told Reuters.

“STAY THE COURSE”

“If we leave it too late, it is going to be much more difficult to accomplish that unwinding. Even if there are some short-term bumps in the road it would be much more advisable to stay the course and begin that process of normalization.”

Shin added that it will be “very difficult, if not impossible” to remove all those bumps.

Good communication from central bankers will be important, but even more crucial is the need for banks to be strong enough to cope with any turbulence.

The BIS identified four main risks to the global outlook in the medium-term.

A sudden flare-up of inflation which forces up interest rates and hurts growth, financial stress linked to the contraction phase of financial cycles, a rise in protectionism and weaker consumption not offset by stronger investment.

The first seems unlikely for now at least, with Shin saying that the BIS, like many, had been surprised that inflation and wage growth has remained so subdued as growth in major economies has picked up.

The question for central bankers, therefore, is whether new technologies and working practices had fundamentally changed the inputs in their economic models and whether it is right to keep such a heavy focus on keeping inflation at certain levels — near 2 percent for likes of the European Central Bank and U.S. Federal Reserve.

“Inflation is certainly not the only variable that matters … and we should keep one eye at least on financial developments,” Shin said.

A broadening away from inflation-targeting to financial market conditions would require a mindset change in large parts of the world and could speed up interest rate cycles.

When the U.S. Federal Reserve last embarked on rate increases more than a decade ago, it took two years to raise them from 1 percent to above 5 percent, with hikes at 17 consecutive meetings. In the current cycle, it has taken 18 months for a 1 percentage point increase.

PROTECTIONISM

The BIS report added that the lack of clarity over inflation also makes it far harder to judge how far rates could go up before they start coming down again.

“In practice, therefore, central banks have little alternative but to move without a firm end-point in mind,” it said.

The report also touched on another current global theme — protectionism, potentially one of the most damaging of the four main risks it identified.

One piece of research based on the U.S. transport industry estimated that if 10 percent tariffs were put on imports from Mexico or China, U.S. labor costs would have to drop by about 6 percent to compensate for the higher costs of “imported inputs”.

For some of the largest emerging markets there were also concerns about dollar debt and protracted credit expansion, often alongside rising property prices, storing up risks. Low interest rates, though, have generally kept debt-service ratios below critical thresholds.

“The policy challenge is to take advantage of the current tailwinds to put the expansion on a sounder footing,” said Claudio Borio, head of the BIS monetary and economic department.

“First and foremost, that requires building resilience, domestically and globally.”

The BIS’s financial results, which were also published on Sunday, showed the Swiss-based bank had made a net profit $1.124 billion over the year to March 31 and had a balance sheet worth $329 billion.

(Kitco News) – A relatively light week for economic data could leave gold in no man’s land and vulnerable to outside markets, particularly oil and the U.S. dollar, according to some analysts.

The gold market is preparing to end a two-week downtrend as it ends Friday in neutral territory compared to last week. August Comex gold futures settled the day at $1,256.40 an ounce, relatively unchanged from last Friday’s settlement price.

Silver is also ending a two-week losing streak with July Comex silver futures settling the week at $16.660 an ounce, also relatively unchanged from last week.

To the surprise of some analysts, gold has been fairly resilient as it has managed to hold initial support at $1,240 an ounce despite hawkish comments from regional Federal Reserve presidents — most notably, New York Fed President William Dudley.

“The price action in the gold market is encouraging because gold was able to withstand hawkish central bankers,” said Adam Button, senior currency strategist at Forexlive.com.

For many traders, the sentiment in the global marketplace — which includes relatively lower bond yields, and a struggling U.S. dollar — highlights growing uncertainty that the U.S. central bank will be able to follow through with its plan for further rate hikes and a reduction in its balance sheet, at least through the summer.

“There are a lot of issues, like the debt ceiling, that still need to be addressed and not everyone is convinced that the Fed will be able to raise rates in this environment,” said Colin Cieszynski, senior market analyst at CMC Markets Canada. “That is why we are seeing the U.S. dollar struggle and that will be good for gold in the near-term.”

Markets See Only a Slim Chance Of A Rate Hike

It’s not just analysts who are reluctant to believe the Fed’s hawkish sentiment, CME’s 30-Day Fed Fund futures are pricing in a 53% chance of a rate hike, which is just above what is seen as the minimum threshold. Traditionally, the Fed doesn’t raise interest rates if market expectations are below 50%.

Along with low market expectations, Button noted that spreads between U.S. 10-year bond yields and 2-year bond yields continues to narrow.
“The yield curve is so flat that it is signaling trouble down the road.”

It’s Not Just Interest Rates, Oil Uncertainty Helping Gold
Along with a weaker U.S. dollar, weaker oil prices are helping boost gold prices. Crude oil futures saw a sharp drop this week as prices fell to its lowest level in nearly a year. While crude is showing some stability, analysts noted that the market looks vulnerable to further loses with prices below $50 barrel, which is seen as an important psychological level.

“Weaker oil is creating some risk-off sentiment in the marketplace, which is hurting equities and helping gold,” said Fawad Razaqzada, technical analyst at City Index.

Razaqzada said he is neutral on gold as he expects equity markets to remain its biggest competition.

“Gold continues to be undermined by equities. We need to see a really big risk-off event that pushed equities lower and unless we see that I am struggling to find reasons to buy gold,” he said. “Whether that comes from lower oil prices, we will have to wait and see.”

Button agreed that weaker oil prices could continue to be bullish for gold. He noted that weaker oil prices raises deflationary and economic risks for the U.S. economy, both factors would stop the Fed from raising interest rates.

“Inflation expectations could suffer because of low oil prices. Right now, the world is struggling to create inflation and that will ensure central banks maintain loose monetary policies and that ultimately is good for gold,” he said.

Button noted that the last time oil bottomed out at around $30 a barrel, gold prices rallied almost 15%.

Levels to Watch

With gold prices showing some resilience at $1,240 an ounce, analysts said that this is still just a moderate support level. They noted that the major support level to watch in the near-term is $1,230.

“If gold kicks below $1,230 an ounce then it raises the risk that the market drops to $1,200 an ounce,” said Button.

On the upside, Cieszynski said that he needs to see prices back above its 50-day moving average, which comes in around $1,260 an ounce, to signal a push back to $1,300.

“With so much uncertainty, I don’t think gold can break above $1,300 an ounce just yet,” he said. “I think we are entering a trader’s market for this summer and we could see prices swing between support at $1,230 and $1,300 an ounce. Right now, I am bullish on gold in the short-term strictly as a technical play.”

Chris Beauchamp, market analyst at IG Markets, said that with if gold holds $1,240 an ounce, he could see a push back to $1,280 in the near-term.

“It would take a move back below $1,240 to negate the positive outlook here,” he said.

The Final Say

While most investors and traders will be watching key outside markets next week, there are a few U.S. economic reports that could create some volatility for gold.

Monday, the markets will receive U.S. durable goods data for May, which are important as the report gauges the health of the manufacturing sector.

Also early next week, markets will receive consumer confidence data for June.
Markets will also be interested to hear what Fed Chair Janet Yellen has to say as she speaks at an event Tuesday in London. This will be the first time she speaks after her hawkish June 14 press conference.

Markets will also receive the final estimates for first quarter GDP.

Kitco News
By Silvia Aloisi and Steve Scherer | MILAN/ROME

Italy began winding up two stricken Veneto-based banks on Sunday in a deal that will see their good assets transferred to Intesa Sanpaolo (ISP.MI) and could cost the state up to 17 billion euros ($19 billion).

The government will pay 5.2 billion euros to Intesa, Italy’s top retail bank, to take on Popolare di Vicenza and Veneto Banca’s best parts. But Economy Minister Pier Carlo Padoan said the total funds “mobilized” by the state would be for up to 17 billion euros – three times more than what had initially been estimated to recapitalize the banks with public money.

The deal, which received preliminary approval from European authorities on Friday, allows Italy to solve its latest banking crisis on its own terms, ensuring that the two Veneto lenders are not wound down under potentially tougher European rules. The cost for Italian taxpayers, however, is hefty.

“Those who criticize us should say what a better alternative would have been. I can’t see it,” Economy Minister Pier Carlo Padoan told a press conference after the government spent the weekend drafting an emergency decree to liquidate the two banks.

The decree effectively means that the Veneto banks’ branches and employees will be part of Intesa Sanpaolo by Monday morning, a move designed to avoid a potential run on deposits that could have spread chaos across the whole banking industry.

The decree will have to be voted into law by parliament within 60 days.

Under the plan, the banks’ soured loans, as well as legal risks stemming from a mis-selling scandal, will be moved to a bad bank, partly financed by the state. Junior bond holders and shareholders will also be hit, but senior bonds and depositors will be shielded from any losses.

Padoan said that on top of the 5.2 billion euros payment to Intesa, which includes 1.2 billion euros to cover for job cuts, the state will offer additional guarantees for up to 12 billion euros to fund potential losses stemming from a due diligence of the two banks’ soured and risky loans.

‘TOUGH CONDITIONS’

Intesa Sanpaolo, Italy’s best-capitalized large bank, said last week it was open to purchasing the rump of the good assets for one euro on condition Italy’s government passed a decree agreeing to shoulder the cost of winding down the two banks.

Setting tough conditions for the deal, Intesa CEO Carlo Messina has insisted that his bank’s capital ratios and dividend policy would not be affected by the transaction.

“Without Intesa Sanpaolo’s offer – the only significant one submitted at the auction held by the government – the crisis of the two banks would have had a serious impact on the whole Italian banking system,” Messina said in a statement on Sunday.

The European Central Bank, which supervises the two lenders based in the country’s north-eastern Veneto region, had declared on Friday that they were “failing or likely to fail”, setting in motion the process that led to them being wound down.

After months of tense negotiations between Rome and EU regulators, Italy has been allowed to use national insolvency procedures rather than EU rules meant to prevent the use of state money to deal with bank crises.

Those rules could have imposed losses on senior bondholders and large depositors, a politically unpalatable prospect ahead of national elections next year given that Italian households hold a large chunk of bonds issued by banks.

Some European officials have voiced exasperation at the way Italy has dealt with a string of trouble spots in its banking industry, which is weighed down by nearly 350 billion euros of soured debts – a third of the euro zone’s total.

The country’s fourth-biggest bank, Monte dei Paschi di Siena (BMPS.MI), is being bailed out by the state to cover a capital shortfall of 8.8 billion euros. Four other smaller banks were wound down in 2015.

The future of the Veneto banks had hung in the balance over the past two years since the ECB uncovered a capital hole caused by a surge in bad loans and a mis-selling scandal whereby the banks’ customers were given shares in exchange for loans.

The dragged-out negotiations between Rome, Frankfurt and Brussels and their outcome on Sunday have raised serious questions about the effectiveness of banking supervision and the credibility of Europe’s own rules for dealing with bank crises.

(Additional reporting by Stefano Bernabei in Rome and Gianluca Semeraro in Milan; editing by Susan Thomas)