Russia restructures Venezuela debt
Russia came to the aid of crisis-ridden Venezuela in November, offering to restructure US$3.15bn of the country’s debt. The move allowed President Nicolás Maduro to meet immediate obligations to creditors, but the country remains deeply indebted, with outstanding sovereign debt totaling almost US$90bn.
The oil-rich nation also allowed a US$1.7bn gold swap with Deutsche Bank to lapse, a decision criticised by Maduro’s opponents for weakening Venezuela’s international reserves.
New gold spot contract for India
India has taken a significant step in the formalisation of its gold trading industry, with the launch of the country’s first gold options contract on Dhanteras, the first day of Diwali. Traded on India’s Multi Commodity Exchange (MCX), the new contracts are expected to help local users to manage risks associated with gold exposure.
“The introduction of options gives a strong impetus towards the systematic development and transformation of commodity derivatives market in India,” said MCX Chairman Saurabh Chandra.
Powell nominated for Fed Chair
President Donald Trump has nominated Jay Powell as the next Chair of the Federal Reserve (the Fed). A trained lawyer and former partner at private equity firm Carlyle, Powell is regarded as a pragmatist with centre-leaning views on monetary policy. Trump is also said to be considering Mohamed El-Erian as Vice-Chairman of the Fed. Currently Chief Economic Adviser at Allianz, El-Erian is known to believe that gold can play an important risk mitigation role in a diversified portfolio.
Diwali gold demand falters
Indian gold demand rose in October, as consumers celebrated Diwali, one of the most important festivals in the Hindu calendar and traditionally associated with gold purchases. However, sales were 15% lower than in 2016, after an 8% rise in local gold prices during the first 10 months of this year. The new Goods & Services Tax (GST) was also blamed for falling sales, as small business owners struggled to adjust to the new levy, which transformed India’s 29 states into a single customs union.