India in mood to buy gold on lower prices, jewellery demand Jewellers took advantage of a drop in gold prices to stock up, with main consumer India abuzz with activity during the wedding season and ahead of a religious festival, dealers have said. In other parts of Asia, the bullion trading cities of Hong Kong and Singapore noted steady buying from jewellers in Indonesia, Thailand and Vietnam. Dealers in the Middle East also reported physical buying, albeit limited. Gold had hit a record US$1,032.70 an ounce in London on 17 March, four days after the yellow metal broke through US$1,000 for the first time. On the London Bullion Market, gold dropped back to US$891.50 per ounce at Friday’s late fixing from US$908.75 a week earlier. "Since the market traded back below US$950, it seems like for the last two, three weeks, the demand in Asia is quite good," said Ellison Chu, Senior Manager at Standard Bank London in Hong Kong.
Economy grows by only 0.6 percent in first quarter The bruised economy limped through the first quarter, growing at just a 0.6 percent pace as housing and credit problems forced people and businesses alike to hunker down. The country's economic growth during January through March was the same as in the final three months of last year, the Commerce Department reported Wednesday. The statistic did not meet what economists consider the definition of a recession, which is a contraction of the economy. This means that although the economy is stuck in a rut, it is still managing to grow, even if slightly. Many analysts were predicting that the gross domestic product (GDP) would weaken a bit more -- to a pace of just 0.5 percent -- in the first quarter.
U.S. could have recession without drop in GDP The U.S. economy is in a recession, most analysts say, even though the government reported Wednesday that the economy managed to grow, albeit very slowly, in the first quarter. Gross domestic product increased at a 0.6% annualized rate in the quarter after a 0.6% gain in the fourth quarter. That's awfully slow, but is it compatible with a recession? While some people use the old rule of thumb that a recession is defined as two consecutive quarters of declining GDP, the actual working definition is a bit more nuanced. According to the economic historians at the non-profit National Bureau of Economic Research, a recession is defined as "a significant decline in economic activity spread across the economy, lasting more than a few months."
Administration brings back one-year Treasury bill to cope with soaring budget deficits The Bush administration, moving to cope with soaring budget deficits, says it is bringing back the one-year Treasury bill that it stopped issuing seven years ago when the budget was in surplus. The administration said Wednesday it would begin selling the one-year bill, also referred to as a 52-week bill, at an initial auction in June. New one-year securities will be auctioned every four weeks. The government is looking for various ways to borrow the billions of dollars in extra cash it will need to cover a budget deficit that is expected to jump to an all-time high this year, surpassing the old mark of $413 billion set in 2004. A big part of the increased borrowing reflects the need to pay for economic-stimulus rebates to 130 million households. The government began disbursing the payments on Monday in an effort to give the economy a jump start.
Official says Iran has stopped using US dollar for oil deals Iran, OPEC's second-largest producer, has stopped conducting oil transactions in U.S. dollars, a top Oil Ministry official said Wednesday, a concerted attempt to reduce reliance on Washington at a time of tension over Tehran's nuclear program and suspected involvement in Iraq. Iran has dramatically reduced dependence on the dollar over the past year in the face of increasing U.S. pressure on its financial system and the fall in the value of the American currency. Oil is priced in U.S. dollars on the world market, and the currency's depreciation has concerned producers because it has contributed to rising crude prices and eroded the value of their dollar reserves. "The dollar has totally been removed from Iran's oil transactions," Oil Ministry official Hojjatollah Ghanimifard told state-run television Wednesday. "We have agreed with all of our crude oil customers to do our transactions in non-dollar currencies."
GM swings to a first-quarter loss General Motors Corp. said Wednesday that it swung to a first-quarter loss as strong overseas growth, particularly in Latin America, failed to make up for losses in the automaker's home market and another hit from its financing division. The world's biggest car maker posted a net loss of $3.25 billion, or $5.74 a share, vs. a profit of $62 million, or 11 cents a share, a year earlier. Excluding charges, GM said its first-quarter adjusted loss was $350 million, or 62 cents a share, compared with an adjusted loss from continuing operations of $10 million, or 1 cent share, a year ago. Revenue came to $42.7 billion, down from $43.4 billion.
Citigroup Increases Stock Offering to $4.5 Billion Citigroup Inc., seeking to bolster capital depleted by mounting losses, raised $4.5 billion in a stock sale, 50 percent more than it planned after ``strong demand'' from investors. Citigroup, the biggest U.S. bank, sold 178.1 million shares at a price of $25.27 each, it said in a statement today. Shares of the New York-based company fell 2.9 percent in New York trading. The sale represents about 3 percent of Citigroup's shares outstanding as of March 31. The world's biggest banks, grappling with more than $300 billion of losses on mortgages, bonds and loans, have sought new capital to stave off credit-rating downgrades that might jeopardize client relationships and access to financing. Companies usually try to avoid forced stock sales because they dilute the earnings power of current shareholders.
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