International News 13/06
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The Vietnam Gold Company has been granted permission to import gold, with the aim of reducing the price gap.
Vietnam is planning to allow companies to import gold for the first time in over a decade in order to address the disparity between local and international gold prices. The Vietnam Gold Traders Association (VGTA) has been in discussions with the government to rectify the imbalance in gold supply and demand. Since 2012, the Vietnamese government has had complete control over gold bullion imports and sales, with some exceptions for large companies that could import in the form of jewellery as long as they subsequently exported it. The VGTA believes that the government will officially start allowing gold imports in July or August and hopes that companies will be permitted to import directly. This change would signify a departure from the current policy where importation is tightly regulated by the central bank. The State Bank of Vietnam has not yet issued a statement on the matter.
Japan's economy is better than expected.
Japan's economy grew less than expected in the first quarter of this year. This was due to changes in data about spending on buildings and stock. The revised GDP shows a 1.8% contraction, beating analysts' projections of 1.9% and initial estimates of 2%. This shows the Japanese economy has bottomed out in the first quarter. This means the Bank of Japan can raise interest rates again this year. The revised GDP data could delay the Bank of Japan's interest rate hike. The Bank of Japan may also cut its purchases of Japanese government bonds to reduce monetary stimulus and weaken the yen.
https://internasional.kontan.co.id/news/ekonomi-jepang-lebih-baik-ketimbang-asumsi-awal
Oil prices rise 3% on hopes of high summer fuel demand.
Oil prices rose by around 3% on Monday to their highest level in a week, driven by expectations of increased fuel demand during the summer. This was despite a stronger US dollar and expectations that the Federal Reserve will keep interest rates higher for longer. Brent crude oil futures for August 2024 delivery closed at $81.63 per barrel, up $2.01 or 2.5%. Similarly, West Texas Intermediate (WTI) crude oil for July 2024 delivery closed at $77.74 per barrel, up $2.21 or 2.9%. These were the highest closing prices for both crude oil benchmarks since 30 May. The Fed's aggressive interest rate hikes in 2022 and 2023 have raised borrowing costs, potentially slowing economic growth and reducing oil demand. In addition, a stronger US dollar can make oil more expensive for holders of other currencies, potentially reducing demand. Despite these factors, expectations of increased summer demand are supporting prices, although the overall macro outlook remains less optimistic than in recent weeks.