Aussie gold stocks smashed again

Gold bars stacked at the plant of gold refiner and producer Argor-Heraeus in Mendrisio, in the southern Swiss canton of Ticino. AFP PHOTO / FILES / Sebastian Derungs Source: AFP

SHARES in Australia's gold miners are being punished for a second consecutive day after the price of the precious metal was smashed overnight.

The price of gold plunged more than nine per cent to a two-year low in overnight trading - its biggest fall in three decades.

Since last Thursday, gold prices have dropped by more than $US200 to $US1,360.60 an ounce on the Comex division of the New York Mercantile Exchange.

The rout continued in early trading in Australia on Tuesday, with the price falling by more than $US100.

Gold stocks in Australia tumbled nearly 10 per cent amid worries that a prolonged lower gold price will wipe out their margins.

Shares in Australia's largest gold miner, Newcrest Mining, had tumbled seven per cent, or $1.25, to 16.67, following an eight per cent fall on Monday.

Other gold stocks were faring even worse by 1100 AEST.

Evolution Mining, plunged 22.5 cents, or 18.5 per cent, to 99 cents, Alacer Gold was 30 cents, or 10 per cent, weaker at $2.77 and St Barbara shed 10 cents, or 11.1 per cent, to 80 cents.

PanTerra Gold tried to calm investors, saying that the falling gold price would not affect its expected income from its Las Lagunas project in the Dominican Republic.

It had sold at hedged prices of $US1320 an ounce, the company said.

Its shares still lost 0.3 of a cent, or 3.5 per cent, to 8.2 cents.

Fat Prophets resources analyst David Lennox said he could not see gold getting much support in the short term.

Exchange-traded funds were dumping their gold holdings amid a more pessimistic outlook for gold, which was spooking the market, he said.

Rivkin global analyst Tim Radford said investors were favouring US dollars over gold and silver as a currency amid lowered future expectations for global economic growth rates and inflation.

Another factor was Cyprus's plans to sell gold to resolve their debt situation.

View the original article here

Savers squeezed again by rates

Interest rates on term deposits continue to fall. Source: National Features

INTEREST rates on fixed deposits have been squeezed recently and longer-term savings are among the hardest hit.

Australian homeowners have welcomed plummeting rates but the same cannot be said for savers.

An analysis by comparison site Mozo has found the average rate on a 180-day term deposit this month is 3.89 per cent, compared with 5.45 per cent two years ago.

In March 2011, 12-month term deposits attracted an interest rate of 6.07 per cent compared with 4.03 per cent now, while two-year fixed deposits had an average rate of 5.97 per cent compared to 4.07 per cent now.

Mozo spokeswoman Kirsty Lamont says the battle for deposits has slowly eased.

"One and two-year rates in particular have fallen sharply and by more than the fall in the cash rate since March 2011," she says.

"The banks are not competing as hard for deposits as they were in 2011 and 2012."

However, ING Direct's executive director of customer, John Arnott, says the "savings habit has stuck".

"The average term deposit has slightly shortened to about eight months ... that's shortened from a month or two," he says.

"Customers out there are looking for certainty and also flexibility when their term deposits mature."

UBank general manager Alex Twigg says he has seen a 10 per cent growth in the amount of term deposit accounts since October, but he has seen the opposite customers opting for longer terms.

"The average length that people are taking TDs out has grown, currently the average length is over seven months," he says.

"They are moving away from the three to six month terms to six to 12 months."

View the original article here

EU on edge again with France debt fears

EUROPE releases its latest economic forecasts tomorrow - with a weak growth outlook likely to push France into overshooting EU budgetary targets and possibly triggering an intensification of the eurozone debt crisis.

After months in which the twin threat of government debt and recession appeared to be receding, recent data suggests the French economy will fail to rebound this year.

France's financial woes pose a pointed political problem as the EU strives to maintain momentum for tough economic reforms and balance painful austerity with anger over high and mounting unemployment.

The French economy has a gloomy outlook, going by a closely watched survey of private business activity released overnight, with purchasing managers suggesting a downward spiral sharper than at any time since March 2009.

The French government said this week that it will soon revise down its 2013 growth forecast, which will hinder its efforts to meet its EU obligations to cut its deficit.

More broadly, the latest feedback implies that the eurozone "is on course to contract for a fourth consecutive quarter in the first three months of the year", said the London-based Markit survey's boss Chris Williamson.

The French economy could be heading in the first quarter of 2013 for its worst performance in four years - putting pressure on Brussels to act, or explain leniency under EU rules tightened since the crisis first erupted in Greece.

The European Commission forecasts will show how far off the pace France and other countries are when it comes to an obligation to get public deficits back within the nominal EU limit of three per cent of gross domestic product (GDP) this year.

Within the eurozone, only Belgium, Italy, Austria and the Netherlands appear to be on the right track, said Amsterdam-based Carsten Brzeski of ING Bank in a note to investors.

Leaders across the EU are concerned about total unemployment of 26 million people, with the bloc's budget already tweaked to redirect billions towards reducing chronic youth unemployment in Spain and Greece especially.

The Group of 20 major world economies also now wants a softer approach to austerity cutbacks.

Street demonstrations and strikes remain a recurrent EU backdrop. About 50,000 people protested in Greece yesterday, and the EU capital of Brussels was also thronged by 30,000-40,000 demonstrators overnight angered by a salary freeze.

View the original article here