Navtej Kohli Business Blog

Navtej Kohli found an interesting piece of news. Are gold prices really heading towards a record high?

 As oil price is rising and dollar declining, gold has climbed back over $900. But there’s not much more headroom.

Gold, which typically rises during times of economic uncertainty and inflation, hit an all-time high of more than $1,030 an ounce back in mid-March.

The price started to slip soon after that as credit crunch fears subsided. But it has been back on the rise this week partly due to the dollar’s weakness and stubbornly high oil prices.

A week ago, gold futures were trading at $866 an ounce. Today, they hit nearly $909 in mid-morning trading. That’s a 5% jump in just a couple of days.

As oil prices go off the chart, many Americans are taking u-turn towards the railroad. Navtej Kohli Business Blog shares the word with its readers.

Amtrak, America’s struggling passenger railroad, saw record numbers in May when ridership rose 12.3 percent from a year earlier, and ticket sales rose by 15.6 percent.

Amtrak President Alex Kummant said the numbers point to a sixth straight year of record passengers. He estimated a more than 11 percent rise this year on its 21,000 miles of track, building on last year’s 26 million passengers.

He attributes about half that growth to higher gas prices. “It depends on the service but certainly our ridership growth is linked to the fuel prices,” he said in an interview. “We are up against capacity limits.”

The Bush administration has sought to scrap direct federal funding for Amtrak, a for-profit federal corporation that has bled red ink since its 1971 creation. Its backers contend that passenger rail services in other countries also lose money.

The White House threatened on Monday to veto legislation to fund Amtrak for the next five years, saying the U.S. House of Representatives failed to include language that would make the railroad more accountable.

Rising fuel prices diverting traffic to the railroad

The House legislation would authorize Amtrak funding of $14 billion and set up a program of federal matching grants to states for projects to improve passenger service, an arrangement Kummant says is crucial for any expansion.

“That would have a huge impact,” Kummant said. “We are in a different world than even just three or four years ago with gas prices at these levels, with the congestion we face on the highways and with the difficulty in air travel.”

Rail advocates say the rise in passenger numbers underlines the need for greater federal and state funding in railways to bring the United States in line with Europe and Japan and give Amtrak the muscle to compete with commercial airlines.

Courtesy: Reuters

Additional resources: Navtej Kohli

‘Dollar boosted by Bernanke inflation comments’, that goes the headline on Reuters business news section.  Navtej Kohli business blog looks closely into the matter.

The dollar strengthened broadly, reaching a three-month high against the yen after Federal Reserve Chairman Ben Bernanke warned on the risks of inflation, stoking expectations of U.S. interest rate rises.

Bernanke said that the central bank would strongly resist rising inflation expectations, and that the latest surge in energy prices is adding to the dangers from price pressures.

He added that the risk of a substantial downturn in the U.S. economy has receded, sparking broad dollar gains and sending U.S. bond yields soaring.

“Bernanke’s the only thing moving markets. There’s been a big shift in expectations towards … Fed rate hikes and this has lifted the dollar,” said Adam Cole, global head of FX currency strategy at RBC Capital Markets.

The interest rate futures market is now pricing in 70 basis points worth of rises in U.S. rates from the current 2 percent by the end of the year FEDWATCH.

By 0806 GMT the dollar was up 0.3 percent to 106.65 yen, having earlier hit a three month high of 106.83 yen <JPY=>.

The euro was down 0.43 percent at $1.5571 <EUR=> while the dollar was up 0.45 percent against a basket of currencies to 73.209 .DXY.

Courtesy: Reuters

If you’re looking for the latest news in Global Business Arena, Navtej Kohli business blog is a place to be.

The Bank of England will keep interest rates on hold at 5pc, according to economists.

The Bank of England’s nine-strong monetary policy committee is likely to take no action in a bid to combat inflation driven by soaring oil and food prices.

The move will come despite concerns over slowing growth and the current slump in the housing market.

The European Central bank also meets tomorrow, with economists again expecting no change in interest rates.

Now when global inflation is roaring aloud, engulfing entire global economy in its vicious spate, here come another reason for government to worry. Navtej Kohli blog features the report:

For the government, that is contemplating a hike in fuel prices, there is more disturbing news as the annual inflation rate breached the eight percent mark to reach 8.1 percent for the week ended May 17.

At this level, the inflation, as measured from data on official wholesale price index, was the highest in three-and-a-half years. The latest rise was due to a 0.6 percent increase in prices of food articles during the week under review.

The data released by the commerce ministry on Friday showed that the annual rate of inflation moved up to this level after having eased slightly to 7.82 percent for the week ended May 10 from 7.83 percent for the week before.

“There are no easy solutions to these issues. But we will find solutions to the pressing problems,” Finance Minister P. Chidambaram told a news conference in the capital.

“It is worrisome, but we are confident of gaining mastery over inflation.”

The data came against the backdrop of the Indian cabinet being set to bite the bullet by hiking prices of transport fuels to bail out state-run companies that are having to retail petroleum products at below cost.

The state-run oil companies have warned that their losses on account of selling fuels below cost could top Rs.200 billion ($5 billion) for the current fiscal year. They said they have money to buy fuels for only two-three months.

And the Award goes to…

Navtej Kohli business blog brings the entire report.

Gazelle Sports aims to connect with the community in various ways, and its effort has been recognized by the Grand Rapids Area Chamber of Commerce, which named the Kalamazoo-based retailer its its 2008 Small Business of the Year.
The sporting goods retailer, which has stores in Grand Rapids, Holland and downtown Kalamazoo, is to be honored at a luncheon May 20.

“We recognize our success is directly related to our community’s success,” said Melissa Chillag, community programmer for the Grand Rapids store.

The store is committed to training employees to quickly address customer needs, said co-owner Ken Sung. Ask a question of anyone working on Gazelle’s 7,000-square-foot sales floor at 3930 28th St. SE, and you’re likely to get an answer on the spot.

“It helps develop people and gives them a greater sense of responsibility,” Sung said. “If they understand the philosophy of what we’re trying to do and they’re the right people, they’re going to make the right decisions.”

The Grand Rapids store, which opened in 1989, notched an 11 percent sales increase from 2006 to 2007. Manager Scott Sneller chalks it up to “great customer care.”

And he said workers are trained in biomechanics — the movement of the body.

Sneller said Gazelle isn’t a ‘running-only’ store.

Gazelle, he said, also emphasizes a community presence. “Our mission in doing our business is to promote fitness and healthy living,” Chillag said.