India Slashes Gold, Silver Taxes and Apple's New Flip-Phone

Morning Rundown

VBL

Jul 24, 2024

∙ Paid

Housekeeping: Good Morning.

India is printing fiat explicitly to buy Gold and Silver now

Today:

Commentary: Indian Gold demand, and Foldable Phones
Premium: The India/China Gold Cooperative

Equity Recap:

US equities mostly fell on Tuesday amid a slew of corporate earnings reports.

Premium Markets:

India slashes import tax on gold, silver

A few days ago we described why it is extremely significant that India’s Gold demand has been inelastic for the last 3 years in India Needs The Gold. Today Reuters reports yet another uptick in Indian demand

MUMBAI, July 23 (Reuters) - India slashed import duties on gold and silver on Tuesday in a move industry officials said could lift retail demand and help cut smuggling in the world's second-biggest bullion consumer.

This is bullish for price demand and one reason the market stopped dropping Tuesday. Beyond that, we tell you how to interpret it in context of China/BRICS as well as global demand in a note at bottom.

More at bottom

China’s Structurally Resilient Gold Demand

In a report put out by Goldman’s precious metals analysts Lina Thomas and Daan Struuyven dated July 22 ( the day after the $50+ selloff), The bank reaffirms its case for stronger gold prices reinforced by resilient Chinese demand. Their focus for this report is on physical demand in China, and within that narrower subsection, China household demand.1

Full Goldman Sachs Gold report and GoldFix Analysis HERE

Market News:

"Apple is working on a foldable iPhone that could be released as early as 2026 and in recent months reached out to suppliers in Asia to make components for the device... the Phone would fold width-wise like a clamshell... That would make it similar to the Samsung Galaxy Z Flip, which was released in 2020." Source: GizmoChina

"Google’s advertising sales growth slowed in the second quarter, putting a damper on parent Alphabet’s primary revenue engine as it pours more money into artificial intelligence investments. Shares in Alphabet were down 1.4% during after-hours trading after Chief Financial Officer Ruth Porat indicated third-quarter operating margins would be crimped by investments in technical infrastructure and the cost of launching new hardware products, such as the Pixel phone." Source: WSJ

"Tesla profits slumped 45 per cent in the second quarter as the world’s largest electric vehicle maker faced slower sales, soaring costs from employee lay-offs and ever-greater investments in its artificial intelligence infrastructure. Elon Musk... also used the company’s quarterly earnings announcement on Tuesday to officially postpone the planned unveiling of Tesla’s first “robotaxis”... Musk claimed the project to turn all Tesla vehicles into a “giant autonomous fleet” could take the company’s valuation as high as $5tn — about six times its current market value." Source: FT

"US consumers’ embrace of low-cost ecommerce sites brought a “quite explosive” volume of shipments for UPS in the second quarter but failed to prevent the delivery company’s profits from falling by almost a third. UPS chief executive Carol Tomé told analysts on Tuesday that the company had seen “customers trade down between services” in the quarter to its “more economical products”, with new ecommerce entrants “highly leveraging” SurePost, one of its cheaper services." Source: FT

"General Motors is raising several key financial targets for 2024 after easily beating Wall Street’s earnings expectations for the second quarter, while it restructures money-losing operations such as autonomous vehicles and its China business." Source: CNBC

"The first US ETFs that invest directly in Ether made strong debuts, with some seeing relatively high trading volumes for their opening sessions. Over $1 billion shares traded between the nine exchange-traded funds. While that’s far from the $4.6 billion traded during the launch of spot-[BTC] ETFs in January, it’s still a robust start for first-day ETFs. Several of the funds are finishing the day among the top 50 highest-traded US ETF debuts of all time." Source: Bloomberg

"Home prices hit a new high in June for the second straight month, the latest sign that the housing market is unaffordable to millions of Americans. The spring home-buying season, usually the busiest time of year for the housing market, was a dud this year. Home sales declined in June for the fourth straight time on a monthly basis. The combination of high prices and elevated mortgage rates has made homeownership less attractive to renters and deterred current homeowners from moving. But low inventory of homes for sale in much of the country is pushing prices higher." Source: WSJ

"Wiz has walked away from a $23 billion deal to be bought by Google, in what would have been the search giant’s largest-ever acquisition, telling employees it would pursue an IPO as previously planned." Source: CNBC

Politics/Geopolitics:

IDF launched a new incursion into West Bank’s Tulkarem, according to a source cited by Times of Israel.
Artillery shelling and Israeli tank fire was reported on east of Khan Younis, according to Al Jazeera.
Islamic Resistance in Iraq said it conducted a drone attack on a vital target in the north of Eilat, according to Al Jazeera.
French prosecutors said a Russian was arrested over 'destabilisation' plot during Paris Olympics, according to AFP.
Japanese Chief Cabinet Secretary Hayashi said Russia's decision to restrict 13 Japanese individuals' entry including Toyota Motor's Chairman is "totally unacceptable" and they filed a complaint against Russia over their decision to restrict entry.

Some headlines via NewSquawk or DataTrek