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Gold Hits Record High and Bitcoin Surpasses $40,000 in Asian Markets Despite Fed’s Cautious Stance

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gold bars - Investors King

Gold rose to a record high of $2,135.39 per ounce on Monday during the Asian trading session while Bitcoin broke $40,000 a coin resistance levels. 

This was despite Federal Reserve Chair Jerome Powell’s cautious reminder that policymakers are not in a rush to ease interest rates.

Market analysts observed an influx of investments into gold and Bitcoin, attributing the trend to mounting expectations of Federal Reserve interest-rate cuts in the coming year.

Kyle Rodda, a senior market analyst at Capital.com in Melbourne, noted, “Markets are piling in on the rate cut bets. Gold can run higher and will do so at the earliest sign of a recession.”

The rally in these alternative assets persisted even as the dollar experienced a slight uptick, and two-year Treasuries retraced some of Friday’s robust gains.

Traders maintained their bets on a potential Federal Reserve rate cut, with swaps pricing in a full reduction by May and projecting a full point of easing by December 2024.

Powell, while stating that the central bank is ready to hike further if necessary, emphasized that policy is “well into restrictive territory.”

This surge in gold and Bitcoin comes on the heels of US stocks closing at their highest since March 2022. However, concerns linger as signs emerge that American households, after a period of exuberant spending, might be starting to pull back.

Shane Oliver, head of investment strategy and chief economist at AMP Ltd. in Sydney, cautioned that the recent rebound in shares leaves them technically overbought and at risk of a consolidation or short-term pullback.

As the global economy continues to face uncertainties, all eyes will be on key events this week, including Australian growth, Chinese inflation, and US non-farm payrolls data.

Meanwhile, the cryptocurrency market anticipates potential approval of US spot Bitcoin exchange-traded funds, adding another layer of excitement to the financial landscape.

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Agric Industries Take Interest In Unlocking Nigeria’s $10bn Palm Oil Export Potential

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Some agric-focused industries and firms have indicated interest in enhancing Nigeria’s agricultural productivity and competitiveness through the nation’s $10 billion palm oil export potential.

At the launch of a new report by a research and advisory firm, Vestance, significant untapped opportunities within Nigeria’s oil palm sector were revealed.

Discussing how the nation could regain its lost glory in palm oil production and exportation, stakeholders in the sector emphasised the need for government agencies, private sector investors, smallholder farmers, research institutions, and development partners to work together to help change the narratives in the palm oil sector.

Titled “Reclaiming Lost Glory: Nigeria’s Palm Oil Renaissance,” the report, which was unveiled in Lagos disclosed that Nigeria, despite being a major producer historically, currently exports only $1.34 million in palm oil, ranking 78th globally, while importing $372 million annually

Vestance’s Research Lead, Razaq Fatai, said the report illustrates the immense opportunities lying dormant in the country’s underutilised oil palm plantations, noting that by capitalising and rejuvenating these plantations, Nigeria could generate over $10 billion in export revenue alone.

He explained that Nigeria’s palm oil production began to decline during the country’s civil war between 1967 and 1970, saying, it is now time to begin to reverse the decline and put the sector back on track.

Speaking at a panel session on ways to revitalise the oil palm sector, experts proffered means by which challenges confronting the palm oil sector could be tackled.

In his submission, the Managing Director, SWAgCo (O’dua Investment Group), Dr. Adewale Onadeko, said Nigeria should embrace an agro-industrial cluster strategy, adding that essential infrastructure such as seeds, fertilisers, extension services, processing, and storage facilities should be prioritised if the expected gains could be realised.

Another panellist, Dr. Bayo Ogunniyi, Country Programme Analyst for International Fund for Agricultural Development, highlighted the myriad challenges facing smallholder farmers, particularly the lack of access to finance and the prevalence of old, low-yield seeds.

He underscored the urgent need for Nigeria to distribute high-quality seeds to smallholder farmers to enhance production levels.

Ogunniyi also pointed out that the oil extraction rates of smallholder palm oil processors are alarmingly low, often falling below 15 percent, compared to the 25 percent extraction rates achieved by modern processing mills. Improving these extraction rates is crucial for maximising the output from Nigeria’s palm oil sector.

In his own contribution, CEO of BulkDirect, Ramses Najem, emphasised the importance of situating processing facilities closer to the farms to reduce transportation challenges.

Other speakers at the report launch called for a nationwide adoption of high-yield seeds to boost production, investment in modern processing facilities to increase oil extraction rates, and the development of strategic transportation networks to streamline the supply chain.

 

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Cooking Gas Prices Surge Amidst Import Reliance, NIPCO CEO Calls for Local Refinery Support

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Just like the surge in fuel pump prices, the price of Liquefied Petroleum Gas (LPG), commonly known as cooking gas, has increased.

The Managing Director/Chief Executive Officer of the Nigerian Independent Petroleum Company (NIPCO) Plc, Suresh Kumar, has urged the Federal Government to encourage Dangote Refinery and other domestic refineries to produce LPG to help lower the soaring price of cooking gas.

According to experts, the increase in cooking gas prices was due to insufficient local production.

Meanwhile, at the recently concluded National Conference of the Nigerian Association of Liquefied Petroleum Gas Marketers 2024, held in Lagos, Kumar revealed that over 60 percent of the cooking gas consumed in Nigeria is imported, which is a major factor behind the price hike.

Kumar acknowledged that support for local refineries would boost cooking gas production and reduce LPG importation.

“There is hope that reliance on imported LPG will decrease, which will positively influence domestic prices. Greater local production will make LPG more affordable since it reduces exposure to foreign exchange fluctuations and international pricing dynamics,” he stated.

Kumar further noted that the Federal Government should provide financial aid by investing in local refineries to accelerate LPG production, meet public demand with adequate supply, and reduce costs.

“We must work with the Nigerian Midstream and Downstream Petroleum Regulatory Authority and other stakeholders to end gas flaring in the country. Substantial investments are needed to capture and process flared gas to increase domestic supply beyond the current 1.5 million MT to at least 5 million MT annually,” he reiterated.

As of the time of this report, Investors King gathered that in the Osogbo area of Osun State, the price has risen from N1,400 to N1,500. In Ilorin, Kwara State, it is currently being sold for N1,500.

Meanwhile, in Lagos State, the current price is N1,400, compared to the previous price of N1,300.

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Federal Government Expands Subsidized Rice Program to Lagos, Kano, and Borno

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Rice mill

The Federal Government has announced that Lagos, Kano, and Borno will be the next states that will benefit from its subsidized rice program aimed at addressing economic hardship in the country.

The initiative aims to sell a 50kg bag of rice for ₦40,000.

According to a director at the Federal Ministry of Agriculture and Food Security, plans are already underway to roll out the food subsidy program in these states.

Investors King learned that since the launch of the subsidized rice program in September, only civil servants in Abuja, the Federal Capital Territory (FCT), have benefited from it.

However, the director revealed that the government is ready for the next phase of the program, which will help address growing food insecurity in Nigeria.

The source disclosed that the next phase, set to begin shortly, is part of a broader strategy by President Tinubu’s administration to ensure that no Nigerian goes to bed hungry.

The official also dismissed reports that the sale of subsidized rice has been suspended in Abuja, clarifying that the intervention is still in its early stages.

According to him, while the ministry is actively coordinating with other states, sales are ongoing in Abuja.

“As I speak to you now, we are about to activate sales in Lagos and Kano states, with Borno State also set to be addressed,” the agriculture ministry official stated.

“We’ve barely started; how can we stop? Sales are ongoing, and we are actively engaging with other states,” he added.

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